More than ever, higher education means expensive education. The costs of operating colleges and universities in an inflationary economy have risen, while the typical family’s ability to meet those costs has been slipping. Tuitions next fall are expected to jump 15 to 20 percent, bringing the average annual cost of undergraduate schooling at private colleges to $6,500, with universities like Harvard and Stanford topping $12,000. Yet Congress cut student aid programs by $1 billion in fiscal 1982. And the Reagan Administration is bent on paring federal support more than 15 percent in 1983-84. How will these cuts affect colleges? How can parents hope to cope with staggering tuition bills? Is the dream of a college education becoming broadly unreachable? PEOPLE took these questions to Virginia Hodgkinson, executive director of the Washington-based National Institute of Independent Colleges and Universities, who has made an impact study of the Reagan proposals. Hodgkinson, 40, benefited from scholarships and federal loans during her education. A New Yorker, she earned her master’s in English (summa cum laude) from Fairleigh Dickinson in 1964 and her Ph.D. in education from Southern Illinois in 1976. She lives in Alexandria, Va. with husband Harold, president of a management consulting corporation, and Heather, 9, the youngest of her three children from a prior marriage. She examined the college cost crunch with Washington correspondent Garry Clifford.
Will the average parent be able to send children to college five years from now?
Assuming an average family makes $20,000 a year, and assuming the President’s budget cuts go through, it will be very difficult to afford a land grant university or private college education. What may happen is that only the rich and the very gifted will be able to attend the colleges of their choice. Others may have to go to state universities. If they can’t get in, they will have to consider community colleges, or not go at all.
How many students may forgo college?
It depends on how much families are willing to sacrifice. One estimate given by the National Committee on Higher Education is that, if all the cuts go through, enrollment could drop about 10 percent by 1984. Those unable to attend college will probably be minorities and disadvantaged.
What about middle-income parents?
The federal cuts will hit hardest among families making $15,000 to $24,000 a year. Their eligibility for student loans is being restricted, and more than half a million students are expected to have an unmet annual need of $2,000 or more. The Guaranteed Student Loan (up to $2,500 per year), which used to be available to literally all students, has already been cut back to families with incomes under $30,000. Those over the limit have to demonstrate need. As of this year, everyone getting a GSL loan is immediately charged with a 5 percent processing fee on any money borrowed. The President is proposing that fee be increased to 10 percent. Added to this would be the standard 9 percent interest.
How much fraud is there in the Guaranteed Student Loans?
It is fiction that people default on their student loans. This nation has a commitment to education. The GSL is the way to open doors to everyone, and the program has only a 5 percent default rate. Defaults on small business loans and bank loans are much more.
How can families find out what aid they are eligible for?
The College Board has an excellent guide, The College Cost Book, which outlines all major aid programs and gives step-by-step help on ways to meet costs. Another publication I find fascinating and readable is Your Own Financial Aid Factory, put out by Peterson’s Guides in Princeton, N.J. It’s the most comprehensive directory for locating your share of college money.
Is military service gaining as a way to finance an education?
Yes, the Reserve Officers Training Corps (ROTC) is becoming very important again on many campuses. It’s open to females as well as males now; and if you agree to serve on active duty for four years after you graduate, you can get most of your education paid for. The services are raising their recruiting standards, however, because so many people are applying, largely because of the nation’s high unemployment rate.
What about work-study programs?
Many colleges are expanding them, so just about everyone can get work now. Until recently, when students got part-time on-campus jobs, the federal government paid 80 percent of their wages and the school picked up the rest. Now, to make the dwindling government money go further, schools are increasing their portion to 30, 40 or even 50 percent. To drum up more off-campus jobs, schools are enticing corporations and organizations to do the same, footing half the bill instead of 20 percent. It’s a smart investment in more than one way. Research today shows that students who work on-or off-campus tend to stay in college longer than those who don’t.
What are colleges doing to help?
Loyola University in New Orleans is one of several schools subsidizing a program at a local bank to get parents loans below market interest rates. In California, the Private College Association chapter just got legislation passed allowing members to create their own loan authority and float bonds up to $50 million as a pool for student loans. Other states (like Wisconsin and Pennsylvania) are considering similar consortiums.
Is it true that the higher-priced schools have the most money to hand out?
They may give more aid per student, but the aid isn’t any easier to get than it is at a less well-endowed school. The percentage of students on aid at select private colleges is lower than at other private colleges, where as many as 75 percent of those enrolled may be receiving some support.
Why does the cost of college keep going up?
There are a lot of items that colleges use that are rising in cost: books, the publication of professional journals, library operations and advanced laboratory equipment, including lasers. A decade ago you could get a good microscope for $500; today you are talking thousands of dollars for a state-of-the-art unit. On top of this are fuel and energy costs, payrolls, maintenance, food services, housing, insurance—it’s like running a small company. But teaching is labor-intensive; colleges can’t do much to improve productivity. It still takes a long time to teach a student a new language.
What regions are most affected?
The Northeast tends to be highest in tuition because of energy costs. The Washington area, for instance, has been hit by the deregulation of natural gas. At George Washington University they’ve been passing costs along to students by labeling them an energy surcharge. In the South, costs tend to be lower all around, and private college tuitions can be $2,500 a year.
Why do schools oriented to science and technology tend to be most expensive?
Engineering schools have to compete with industry for faculty and wind up paying higher than normal salaries, which then get passed on as higher tuitions. Research universities have the same problem.
Has the cost spiral influenced the quality of higher education?
Double-digit inflation has forced many colleges to defer important maintenance work. Faculty quality is another concern. During the last decade faculties have lost 22 percent of their buying power because their salaries have not kept pace with inflation. We now have to ask whether we can continue to attract, or even keep, qualified individuals in higher education.
Is a college degree still the best ticket to a job?
Absolutely. The unemployment rate today for college graduates is only 7 percent. For minority college graduates, the out-of-work rate is 3 percent, as opposed to a national average for minority noncollege graduates of up to 19 percent. So going to college is an important investment for the person as well as for the nation.
Why is it important for the nation?
There is a study I’ve always wanted to do, and I think it would answer the question. We ought to look at how much it costs to educate a person with public money and how much that person is likely to return in taxes over the course of an employed lifetime. Then we should compare those figures with the cost of supporting someone on welfare, or in prison, where they have little future to look forward to. It seems to me very clear that educating people leads to less crime, more voluntary involvement, better citizenship and basically more government revenues.