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The good news for President Barack Obama’s college completion agenda: college enrollments are up from last year. And the good news for students: even as increases in the cost of college continue to outpace inflation, students are actually paying less to attend college now (when financial aid is taken into account) than they were a year ago.

Trends in College Pricing 2010” and “Trends in Student Aid 2010,” both released today by the College Board’s Advocacy and Policy Center, track data about college cost and financial aid going back to the 1980s. The key findings?

  • College costs are on the rise, regardless of the type of institution. In-state tuition and costs rose the most, jumping $555 since last year.
  • Federal grant dollars also rose; in particular, Pell grants increased almost $10 billion from 2008-09, reaching 7.7 million students total. Overall, undergraduate grant aid increased an average of $1,100 per student.

This doesn’t necessarily mean college is becoming more affordable, though. The number of students who take out loans is increasing and almost all families are earning less.

Sandy Baum

The Hechinger Report talked with Sandy Baum, a co-author of the reports, to get her take on some of the findings – and discuss how complicated these issues can be.

The Hechinger Report: What does this report tell us, if anything, about how President Obama’s goal of getting more people through college is faring?

Baum: We know that more and more students are enrolling in college, and that’s certainly one step on the way to completing, although it’s hardly the whole story. We know that the federal government has dramatically increased the financial aid that they are providing to students to help them pay for college. There was a huge increase in Pell grants in 2009-10 and a huge increase in the education tax credits. We quite don’t have the data to document precisely that. So those are two positive steps in the direction of increasing the number of college graduates. But that’s only part of the story, of course.

The Hechinger Report: Were there any negative signs that you saw?

Baum: We see that tuition [and] public prices continue to rise, particularly rapidly in the public sector, and that has a lot to do with the fact that state appropriations are not keeping up. And so the federal money, what a lot of that is doing is replacing the subsidies that students were getting in the form of lower tuition from the state. So it’s going to take greater effort on everybody’s part if we’re going to be able to provide the necessary funding to really get more students not only into college but also through college.

The Hechinger Report: So, what would be some of the most important takeaways for policymakers from this report?

Baum: Seeing how much, how rapidly public prices continue to rise – that’s important. We need to think about why that is and if there’s anything to do about it. I think that looking at the structure of financial aid and who’s getting the financial aid. The federal grants go primarily to low- and moderate-income students, but many states are taking their grant aid to help students who should otherwise be able to pay. Many institutions are helping, are providing more help to students who could afford to pay without that help than might be desired if their goal were really to help more students to afford college. So we need to think about how we allocate our resources. And we also need to think long term about looking at how state funding is going. State funding is just not keeping up. It’s obvious that we’re spending a lower proportion of state monies on our education. We have to decide what the priorities are.

increase in college costs

The Hechinger Report: In an ideal world, what would be the state’s role?

Baum: That’s an interesting question. There’s history and then there’s the ideal world. We’re not starting from scratch. We live in a country where historically the funding of public higher education has been a state responsibility. And we could debate that. … Some states have much higher college going rates than others. Some states have much higher tuition than others. Some states provide much more generous funding than others. Where you’re born, which state you live in, has a big impact on your educational opportunities. I don’t know whether that’s optimal or not. That’s the way our system works, and we have to think about whether the system is a sufficient system, whether there are ways to modify it. In the end, somebody has to pay, and it’s either taxpayers in the state, taxpayers nationally, students and families. Somebody has to pay.

The Hechinger Report: In the two reports, one showed that overall the net costs for students have declined and then one showed that federal grants are going up and that can partially explain it. Is this a change that can last? Is it sustainable?

Baum: Well, no. The thing is this increase in federal grant aid – that big leap – was a one-time leap. So even if they continue to spend as much in future years as they’re spending now, they’re certainly not going to continue the rate of increase. Unless the rate of increases in prices slows down, you are going to see increasing net prices. Something is going to have to change and it would be great if we could stop and think about what the optimal system would really look like.

The Hechinger Report: I know the College Board has been looking at this for years now and tracking it. But did any of the findings surprise you this year?

Baum: It is sort of surprising to see how net prices have, on average, not risen faster than inflation. And that’s true over the long run. Really, when you look five years ago, 10 years ago, 15 years ago, on average the net price that students are paying is no higher in inflation-adjusted dollars. And I think that’s sort of surprising. That doesn’t tell the whole story. That’s only tuition and fees. Students have to pay living costs as well when they’re in school. And, of course, looking at family incomes is very depressing – the fact that people just have less money now. So they’re going to be struggling no matter what happens to prices and certainly struggling in the face of these steep price increases. And the net prices – it’s very important – those are averages. Some people do pay the full sticker price and they don’t get any help and it’s not very encouraging to them just to know that other people are getting all that help.

The Hechinger Report: Is there anything else you want to add – things that people should think about while reading this?

Baum: I think that the important thing is that this is very complicated and everyone wishes it were simpler, but it’s very important and we have to help families and students understand how to make college affordable. That they shouldn’t be scared off by these sticker prices or the rate of increase of these sticker prices. There is a variety of institutions, many different institutions offering many different experiences and with many different prices, lots of financial aid. And for most people, there’s a way to do this and it’s just you really need help trying to figure out what the best way is.

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