Where we stand now...
On average, public funding from state government provides about 30 percent of the support for public colleges and universities and less than one percent of the support for private universities (Higher Education at the Crossroads by John Wiley). That’s not much considering all of the things that have to be paid for to maintain a college or university (staff, administration, faculty, space, maintenance, utilities, etc.). The remainder of the financing comes from gifts/endowments, grants (individual, foundational, governmental), and of course tuition and fees paid by students and families.
Where we’re going...
Taxes (sales, property, use, income, other) may be increasing, but so are costs. More and more states are reporting serious deficits in public revenues. Higher education has never been a number one funding priority; and now it is being pushed even further down the list. The National Governor’s Association (NGA) (a sort of professional/networking/support body for state executive leaders) submitted a letter to the US Department of Education on October 30, 2008, asking the department to waive the requirement that states maintain funding for higher education, at least for the next couple of years. Whether Secretary Spellings will approve the request is unknown, but the request has been made.
The impact of decreased funding...
If higher education administrators cannot count on public funding, where will they get the funds they need to operate? From families and students! Yes, colleges and universities will be paying for much more of their costs out of the money you pay them in tuition and fees (including room and board fees). Which means as campus costs increase, families and students will end up paying more to attend college or university.
What it all boils down to...
Shouldn't the government pay for college? Maybe yes, maybe no. The issue of who should pay for a higher education or who should bear the greater burden of these costs is sticky. What it boils down to in most cases is who benefits more: the state or the individual? The state benefits economically and socially from an educated population. Individuals also benefit economically and socially from higher education. Who benefits more? That's a toss-up.
However, the reality is that even though families and students are being asked to shoulder a larger portion of their educational costs, most families and students do not pay the actual sticker price (the published rate for tuition and fees) set by the college. Most families and students can reduce the sticker price and pay a discounted rate. However, to get to the discounted rate, you have to know what and how much is available, who provides the discounts, who qualifies and how you apply.
On top of all of this, credit markets are shrinking making parent and private loans (the loans used to fill in the gaps between state/federal aid and total costs) harder to come by. And just think, next year you'll pay a little more. Isn't life grand?
Until next time!
Lynn Byrne
Preparing for college admissions? Trying to find direction? Need a little help with the planning? Check out my college planning series:
- College Planning Made Easy--the planning and preparation workbook for the take charge, college-bound student,
- Paying for College Made Easy--a college financing guide designed to assist students and families in preparing and planning for higher education expenses; and
- The Great Scholarship Search--my guide for students and parents researching and applying for scholarship funding.
