In today’s slumping economy, a higher education is seemingly out of reach for more families than ever. Donald E. Heller, a professor in Penn State University’s College of Education who studies the economics of higher education, has been looking at college affordability for the past 15 years.
Heller acts as a financial policy consultant to Penn State and has also studied and written extensively on how tuition prices relate to issues of equal access to higher education. He spoke about that issue and others in a recent interview.
Financially speaking, what do you think are the greatest problems facing higher education today?
From a student’s perspective, it is definitely the constant rise in tuition prices compounded by a lack of adequate financial aid. From a broader perspective, the issue is trying to find how to cut costs while still maintaining institutional growth to match a rising number of applications and a rise in the cost of labor. Most colleges are labor intensive, employing thousands of professors, researchers and other administrative personnel and that will definitely drive up the cost of an education. A lot of faculty members are very high skilled people, both in and out of academia, so it will be very difficult to control costs while still retaining those big names. If you look at the financial services, for example, they’ve been able to do a lot with technology and cut their costs in the process. Universities haven’t been able to do that because it would in some ways compromise a student’s education to be taught by a computer. We have only been able to use technology as a way to enhance students’ education.
What are the long term effects of rising tuition on the university?
The biggest concern is that we will turn into a university that poor or moderate income students will not be able to attend. There is evidence that this has already started as we’ve been seeing data that show the incomes of our student’s families are consistently on the rise. Some of it is related to the fact that we have become a more select institution. For example, we are the Pennsylvania State University and we like to think that we are there for all residents of the university. We don’t have a lot of institutional financial aid and that is combined with being a very expensive public university. State and federal grants are just not adequate for low income families. Maximum state PHEAA grant is $3,500 and maximum federal Pell grant is around $4,000. The problem is that we don’t have enough institutional aid to make up the difference. A few years ago the trustees announced $100 million trustee scholarship campaign. It’s a hard battle to convince donors that they need to give money to students rather than put their name on a building or a classroom, which seems to be a more lasting and more concrete contribution.
What can public universities do to try and make it more accessible to low-income students?
Universities needs to do everything they can to hold down tuition increases. There have already been efforts made to cut costs and reduce spending, but that can only go so far without compromising the quality of education a student receives or the caliber of faculty we are able to attract. We also need to make sure that all of the financial aid given out is based on need, not merit and continue to lobby for more state and federal funding.
What about online education? Can it help bridge the gap between low and high income students?
So far, the online programs aren’t priced any cheaper than on campus programs. They may be more convenient for some students but there doesn’t seem to be any real financial benefit to getting a degree online rather than on campus. If we did go to a pricing structure where an online education was less expensive, we would create a stratified system in which poor students would only have an online available to them while wealthier students would get to come to a nice campus like Pen State and have all of the amenities available to them. A situation like that is definitely not good for preserving the equity of higher education.
What advice would you give to parents who are saving for their child’s education?
I would tell them to try to save as much as they can. The problem with that is poor families don’t have as much disposable income to put into savings. I would also encourage them gather as much info as they can about what’s out there and available for their student. Look at all of the different options and avoid the temptation to look for the most expensive thinking it will be the best school. That is definitely not the case for every student.
Is there anything students can do now to help themselves out?
Yes, get out as fast as you can. If you’re from Pennsylvania you’re paying $20,000 per year to attend Penn State when you factor in all of your expenses and the longer you stay here, the more debt you’re going to be in when you leave. A lot of students get themselves into the trap of going to school part time to try and save money. In most cases, they would be better off finishing sooner with benefits of bachelor’s degree rather than stretching their education out over a longer period of time.