Getting There: Finding the cash to go to college is turning out to be almost as tough as attending

Jun 1, 2003

Ashley Hustava is candid. A decision about where she attends college may come down to cost.

The senior at Springfield’s Southeast High School has been accepted at four schools. Now she’s waiting to find out what financial aid and scholarships are available. Her family started putting money away for her education when she was little, but it’s still not enough.

Hustava’s dream is to go to Millikin University, a private school in Decatur, but she’s looking to Southern Illinois University’s Edwardsville campus or Lincoln Land Community College in Springfield as options. Her family’s income of about $41,000 is too high to qualify for federal grants, but the state chipped in $2,000 toward her expenses. 

The decision on financing her college education has caused several family arguments, Hustava says. Her mom favors Millikin; her dad wants her to attend a public university for a year or two to save money. Even less expensive — and the option she may have to choose — is attending community college her first two years. She could live at home and avoid room and board costs.

Across the country, college-bound high school students and their parents, like the Hustavas, are experiencing “sticker shock” at the cost of higher education. Though private colleges and universities remain more expensive, the cost of attending a public university has increased at a faster pace over the past decade. 

The Hustavas are fortunate in one regard. Illinois is still among the states with the most affordable higher education. But soon it may no longer be able to make that claim. Illinois’ higher education funding, including student aid, is dwindling, while tuition at Illinois’ colleges and universities is rising. The result is that the gap between the cost of attending college and what Illinois families can manage to pay is widening. As that gap grows, so does concern about whether college will become unattainable for low- and lower-middle income students. 

Consequently, education officials, along with law- makers and the governor, are wrestling with ways to rein in tuition costs and stabilize, if not close, the affordability gap. Foremost among the proposals is one that would guarantee a tuition rate through four years of college so that families like the Hustavas can plan ahead.

Illinois isn’t alone in this. Other states are looking for ways to limit tuition hikes in an effort to keep higher education affordable for students in all income brackets. But, for now, this state remains among those offering the most affordable higher education because of the need-based financial aid it offers its students. 

In 2000, the National Center for Public Policy and Higher Education gave Illinois an “A” in a nationwide report card on affordability. The centerpiece of the state’s success is the Monetary Award Program. Enacted in 1957, the program provides need-based grants directly to students that can be used to pay for tuition and fees at either public or private universities in this state. Most of the grants go to students with family income under $47,000.

But in 2002, Illinois’ affordability grade dropped to a “B,” primarily because of rising costs at private and community colleges. And the state’s budget woes forced a $38 million reduction in the amount appropriated for the Monetary Award Program. This meant that the maximum grants had to be reduced by 5 percent per recipient, and grants to fifth-year students had to be eliminated. But Larry Matejka, executive director of the Illinois Student Assistance Commission, says even with the cuts the maximum grant available was $4,720. The assistance commission gave out more than $333 million in need-based aid for the 2002-2003 academic year. 

Nevertheless, concern is growing that if the Monetary Award Program funding stagnates and costs continue to rise, Illinois may drop out of the ranks of states with the most affordable college education. Over the past decade, the total cost of attending a public university — tuition and fees, plus room, board and extra expenses — has risen 69.5 percent to more than $11,000 in 2002, the Student Assistance Commission reports. Further, tuition and fees at seven of the state’s 12 public universities are greater than the maximum grant for the Monetary Award Program. “We have done a better job in Illinois of keeping pace,” Matejka says. “But even with our efforts, tuition and fees, books and supplies, room and board costs have all gone up faster than one, inflation, and two, availability of student grant aid.”

And the commission concludes that over the past decade higher education has become least affordable for lower-middle income families, those earning between $26,200 and $46,870. That’s because these families must contribute a greater share of the costs of a college education before any need-based aid can be awarded. The cost that remains after the aid — the affordability gap — for those families has grown by almost $1,300 between 1992 and 2002. 

Families are fighting to cross the gap, though, because they realize that a college education is a prerequisite to many jobs. Studies show a college grad can net a return of more than $1 million over a lifetime. “It’s not a bad deal,” says Sue Kleemann, director of research, planning and policy analysis at the commission. “The stock market doesn’t give that kind of return.”

Liz Moran, a sophomore at the University of Illinois at Springfield from southwest suburban Burbank, says her father always encouraged her and her brothers to go to college to have successful careers. Though she says her parents encouraged her to go to the school she thought would best fit her, Moran says she had to rule out schools that would have forced her parents to take out loans. As a high school senior she filled out applications for scholarships.

College students, and the schools they attend, are facing greater pressure these days because the state’s share of higher education funding is shrinking. For the fiscal year that begins next month, Gov. Rod Blagojevich proposed $102.7 million in cuts to higher education, bringing the total higher education budget to $2.46 billion. 

Therefore, colleges and universities are turning to tuition increases to fill gaps between state fiscal support and operational needs. Illinois isn’t alone in this. “Nationwide, public higher education is less [state] funded, and there’s a high correlation with increases in tuition,” says Salme Steinberg, president of Northeastern Illinois University in Chicago. Tuition there has increased 5 percent for next year, higher than the 3.1 percent to 3.6 percent it enacted in recent years. 

Maintaining affordability in higher education — especially for lower- middle income families — is stirring debate. The governor is keen on capping tuition increases to 5 percent and favors a tuition cost guarantee.

At press time, the cost guarantee idea, referred to as “truth-in-tuition,” was working its way through the legislature. Two bills, sponsored by Sen. Larry Walsh, an Elwood Democrat, and Rep. Kevin Joyce, a Chicago Democrat, would lock in the rate of tuition and fees a student pays as a freshman for four years of continuous enrollment. “If the governor’s plan goes into effect and the locked-in tuition plan also takes effect, that would be the ultimate plan for families,” says Walsh. 

In tandem, these plans could stabilize costs for parents, but they could prove to be a nightmare for the universities. Officials at several of the state’s public institutions and the Board of Higher Education say they worry that limiting tuition increases to 5 percent will strip schools of the resources they need to provide quality education. 

“It’s imprudent to restrict univer-sities’ options with tuition,” says Chet Gardner, vice president for academic affairs at the University of Illinois at Urbana-Champaign. Tuition decisions, he says, should be left to the boards of trustees who are more familiar with the universities’ needs.

In fact, Sen. Steven Rauschenberger, an Elgin Republican and the Senate GOP’s chief budget negotiator, calls the legislative push to hold down tuition a purely political move. “We’re in no place to order universities to cap or manage their tuition,” he says. “We ought to muck as little as possible in higher education finance until we’re a more stable partner.” He notes that over the past two fiscal years, university budgets were cut after appropriations were made, a move that he dubs “disingenuous.” 

Some universities already offer a guaranteed rate of tuition or programs to help students prepare for rising costs. Southern Illinois University at Carbondale offers tuition projections to help students and families plan. Western Illinois University in Macomb has had a guaranteed tuition program in place since fall 1999. The legislative truth-in-tuition proposals were modeled after Western’s plan. And it’s a plan some universities can accept. Such a guarantee, says Gardner, “enhances affordability because you can plan — the tuition is going to stay fixed.”

That solution is one that’s also favored by a joint committee of the Board of Higher Education and the Student Assistance Commission, which is studying the affordability issue. The committee is expected to release its findings and recommendations in late summer. It is proposing 17 ways to lower college costs, assist low-income students and keep the overall cost of higher education affordable. The report advocates predictable tuition, such as a rate guarantee, and increases in funding to the Monetary Award Program to provide more significant awards to more students.

“If we’re going to let tuition rise,” Rauschenberger says, “we ought to address that in the Monetary Award Program and make sure people on the edge can afford it.”

The committee advocates increasing the funding for the monetary awards so that they meet or exceed tuition and fees. In addition, boosting funding could allow the commission to change the award formula to provide larger grants to lower-middle income students. Even if the $38 million in cuts from last year were restored, Matejka says that the program would still lag behind because of cost increases in higher education. An increase in funding above the $38 million restoration could permit full funding of awards or more awards to more students. 

Having to shoulder student loans is already a reality for many Illinoisans. Hustava is savvy about interest rates for loans and how repayment works after graduation. “It’s so hard,” she says. “You want a good education, but you don’t want to be paying off loans until you’re 50.” By the time she graduates from college in the spring of 2007, she expects to be $17,000 in debt. 

Hustava’s mother, Sheila, is concerned about her daughter starting out with that much debt. She worries that if Ashley doesn’t get a good job after graduation, the monthly loan payments will be difficult to make.

Still, for an increasing number of students, that is an option. The interest on most such loans is subsidized by the state or federal government until six months after a student graduates. And the College Board, a national not-for-profit organization that assists students with college choice and financing information, reports that nationally the number of borrowers of subsidized loans has increased 443 percent since 1994, from 264,000 to an estimated 1.4 million for the 2001-02 school year. 

A survey of borrowers found that the loans were the way these students made college affordable, says Sandy Baum, a visiting scholar with the College Board and professor of economics at Skidmore College in Sarasota Springs, N.Y. But the trend toward reduced state support is worrisome because it widens the affordability gap. “If more and more need to borrow to fill the gap, it will reduce access,” she says. 

The Student Assistance Commission’s Kleemann argues, too, that lower-income families are more hesitant to borrow large sums to finance higher education. 

Beyond taking out loans, more students are working while in school to pay for their education. The commission reports that in 1998, 43 percent of Monetary Award Program grant recipients worked an average of 15 to 33 hours a week. By 2002, 55 percent were working at least 21 hours a week and 37 percent were working more than 31 hours. National data shows that students who work more report they have less access to the classes they need and to such educational services as libraries. And their grades can suffer. 

Laura Petrea, a sophomore at the University of Illinois’ Springfield campus, has been able to finance her education through financial aid and scholarships, which means she doesn’t need to work while attending college. Not working, Petrea says, has helped the Marion resident “focus on my studies and not how to pay for my studies.” But her experience is atypical among her classmates, most of whom must work to meet the cost of tuition and books. 

Lawmakers concede that if the affordability gap isn’t closed, or at least narrowed, the consequences could be dramatic: Lower-income students could simply choose not to enroll in college. 

National statistics from the U.S. Department of Education already show that low-income students are less likely to go to college after high school. Because of financial burdens, 22 percent of college-qualified low-income students do not enroll in any postsecondary education. Sixteen percent of lower-middle income students do not enroll. If less aid is available, more of these students will either drop out or not enroll. “If you don’t finance these people properly,” says Brian Fitzgerald, staff director of the Congressional Advisory Committee on Student Financial Aid, “they’re not going to persist.”

Though there’s plenty of concern about the affordability of post-secondary education for lower- and lower-middle income families, most observers say the problem can be corrected before cost barriers become insurmountable.

“There is affordability in Illinois higher education,” Matejka says. “What our job is, is to try to keep it affordable and try to keep students from having to borrow huge amounts of money.’’ But, he concedes, “to keep it affordable, a student is going to have to borrow and probably work at the same time.” 

Illinois Issues,June 2003