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College Tuition and Financial Aid (last updated October 1, 2002) (back to top)
College tuitions have increased roughly 4 percent above the rate of inflation over the past decade, but any discussion of this issue involves differentiating between types of colleges and students, examining how revenue sources and expenditures have changed, and understanding the changing demographics which has increased demand for a college education.
As a July 2002 federal study warned, public concern "seems to be largely based on perception of prices at selective, private not-for-profit institutions, which tend to have the highest sticker prices overall but represent only a fraction of the universe of American postsecondary education," and this narrow focus can lead the public to "overestimat[e] the cost of college in all sectors and underestimat[e] the availability of financial aid."
In 1999-2000, the tuition and fees for a full-time, full-year undergraduate at a research/doctoral, four-year institution was about $4,300 at a public school and about $15,000 at a corresponding private one (Yale, by contrast, charges about $25,000 in tuition and fees), though these costs are often offset by the school via scholarships and fellowships. To help meet such tuition costs, as well as the additional costs for room, board and books (another $6-8,000), about 73 percent of all full-time, full-year undergraduates received some financial aid in the 1999-2000 school year, largely from the federal government. At public, 4-year institutions, such students received an average of $7,100 that year, and at corresponding private institutions, such students received an average of $13,700.
The following table shows relevant costs and aid for full-time, full-year undergraduates at several kinds of institutions during the 1999-2000 school year :
| Kind of School (% of all students)
| Tuition : Total Price
| Receiving Some Aid
(avg. amount)
| Receiving Grants
(avg. amount)
| Receiving Loans
(avg. amount)
|
| All institutions
|
| 73% (n/a)
| 59% (n/a)
| 45% (n/a)
|
| Public, 4-year (16%)
| $4,300 : $12,600
| 72% ($7,100)
| 55% ($3,800)
| 48% ($5,000)
|
| Private, 4-year (8%)
| $15,000 : $23,600
| 84% ($13,700)
| 75% ($8,400)
| 60% ($6,300)
|
| Public, 2-year institutions (10%)
| $1,600 : $9,100
| 57% ($3,900)
| 50% ($2,600
| 17% ($3,900)
|
Additionally, about 5 percent of all undergraduates (not just full-time, full-year undergraduates) held work-study jobs, and another 7 percent of all undergraduates received other types of aid.
Rising Tuition Costs
According to a study by the National Center for Education Statistics (NCES) released in February 2002, average tuition charges have increased over the past decade at rates faster than inflation in both public and private not-for-profit sectors. Tuitions increased by 4.1 percent at public research/doctoral institutions, and by 3.6 percent at corresponding private research/doctoral institutions.
Such rising tuition costs have a host of explanations, owing not just to higher expenditures per student but to shifts in revenue streams.
Tuition increases at public institutions seem largely a response to shifts in revenue. From 1988-89 to 1997-98, state appropriations decreased in real dollars and as a share of total revenue (about 48.7 percent down to 38.9 percent), and tuition revenue is thus becoming more important (18.4 percent of total revenue up to 23.8 percent). Correspondingly, higher costs per student seem less important as a factor: faculty costs increased 1.0 percent from 1988-89 to 1997-98, scholarship and fellowship costs went up 4.5 percent, and overall educational and general costs per student up 1.2 percent.
On the other hand, private, not-for-profit research/doctoral institutions, which depend much more on tuition for revenue (about 40-50 percent of their revenue), seem to be responding to a combination of factors. From 1988-89 to 1995-96, scholarship costs per student went up 6.6 percent and faculty costs 1.9 percent, and income from endowments and philanthropic revenue has also decreased. These schools also seem to be responding to the high demand for admission, based on the increasing value of a college education and on changing demographics.
In general, public institutions' revenue comes primarily from state funding (about 40-50 percent of total revenue), and then from tuition (about 18-24 percent) and federal grants and contracts (about 15-16 percent). Private institutions, on the other hand, rely for revenue first and foremost on tuition (about 50 percent of total revenue), then on federal grants and contracts (about 16 percent), and finally on private gifts and on endowment income (about 17-19 percent combined).
As for expenditures, both public and private institutions spend about a third on faculty and about 15-18 percent on research. Scholarship and fellowship costs have become greater expenses for both public and private institutions, about 5-7 percent of expenditures at public institutions and 11-14 percent at private ones.
Financial Aid
About 73 percent of all undergraduates in 1999-2000 received some federal aid, with 39 percent receiving some aid from the federal government, about 17 percent from institutional funds, 14 percent from state funds, and 9 percent from private organizations. About 29 percent of all undergraduates in 1999-2000 took out loans and about 44 percent received grants.
Loans usually come from the federal government, in particular the Stafford loan program that was started under a different name in 1965. Nearly every undergraduate who borrows money borrows some through the Stafford loan program, borrowing an average of $4,500. About 23 percent of all undergraduates took out subsidized Stafford loans (which are based on need and which are interest-free during students' enrollment) and about 15 percent took out unsubsidized Stafford loans (which are not based on need but which charge interest during enrollment). Students can also borrow money from the federal government through Perkins and PLUS loans, and from other sources such as home states and the institutions themselves.
Grants, on the other hand, come from the federal government and other sources. About 23 percent of all undergraduates received federal grants (averaging about $2,100), 17 percent received institutional grants (about $3,700), 14 percent received state grants (about $1,700), and 7 percent received private grants (about $2,100). The largest source of grant aid is the federal Pell Grant program, which provided about 7.3 billion to 3.8 million students in 1999-2000, and which targets the lowest-income students. Several states now offer grants and do so based on different combinations of need and merit.
As costs have grown over the past two decades, many have tried ways to help families and students pay for a college education. Some of the various ideas that have come about include:
- Encouraging savings through tax incentives. Families can achieve some tax benefits by saving for their children's college education via federal tax credits and some state programs. In 2002, families paying for a college education could deduct up to $1,500 through a Hope credit and up to $1,000 through a Lifetime Learning credit (higher-income families are not eligible for the Lifetime Learning credit). Some families can also invest money in education investment retirement accounts that will accumulate tax-free and from which they can withdraw without penalty, and can invest in state-sponsored tuition plans from which they can also withdraw without penalty.
- Alternative loan programs, such as loans offered from nonfederal sources and loans where repayment is based on one's post-college income.
- Loan forgiveness programs that encourage students to take certain kinds of public-service jobs after graduation by forgiving part or all of their loans.
- Tuition prepayment plans. Some schools have offered varieties of ways for students and families to pay for a college education entirely in advance, doing so when the student is very young or when the student first matriculates at college. These plans allow the institution access to funds in advance of actually incurring the costs of educating a student, and allow families to avoid future tuition increases.
- Systemizing the way colleges calculate financial aid. Several major private, non-profit institutions, including Yale, Columbia and Stanford, announced that they would use a common set of standards when determining financial aid needs, and re-affirmed that these standards would focus on need and not on merit. This effort is possible due to an antitrust exemption that Congress created in 1994, which allowed schools practicing need-blind admissions to make agreements on aid practices.
The federal government began funding students' higher education costs with the post-World War II GI Bill, and then began shifting to providing aid to increase opportunity in the 1960s and 1970s. In 1965, the federal government began offering loans through what is now the Stafford loan program, and in 1972, the federal government began making what are now known as Pell grants based on economic need. These programs have continued, as have campus-specific programs by which the government provides financial aid which is then allocated through Perkins loans, work-study jobs, or supplemental educational opportunity grants.
Sources: The two main studies used for this article are both by the National Center for Education Statistics, and are Study of College Costs and Prices, 1988-89 to 1997-98 (released in February 2002; on-line via the Department of Education's press release here), and Student Financing of Undergraduate Education: 1999-2000 (released in July 2002). The College Board, on-line here, also has information on college costs. The National Commission on the Cost of Higher Education's January 1998 report, "Straight Talk About College Costs and Prices," is on-line here. Thomas J. Kane, The Price of Admission: Rethinking how Americans Pay for College (Brookings Institution Press, 1999). Arthur Hauptman, The Tuition Dilemma: Assessing New Ways to Pay for College (Brookings Institution, 1990). Yale University provides tuition information via its Office of Undergraduate Admissions here. More information on tax benefits for higher education can be found via the Department of Education here.
Title IX (last updated October 2, 2002) (back to top)
For almost three decades, schools that operate athletic programs and receive federal funding have been required to provide equal athletic opportunities for both men and women under Title IX of the Education Amendments of 1972 and subsequent regulations issued in the late 1970s and re-clarified in 1996.
Title IX has long been criticized for its effects on men's athletic programs, but is now facing renewed scrutiny in the Bush administration. Blaming wrestling's decline in college settings on Title IX, the National Wrestling Coaches Association has challenged the implementing regulations; that lawsuit was first filed in January 2002 and is pending. Apparently in response, Secretary of Education Rod Paige announced in June 2002 a new commission that will issue a report on Title IX's effects by January 2003.
Under Title IX and its regulations, equal funding for men's and women's sports is not required, nor are identical athletic programs. Instead, each school must show compliance by providing "participation opportunities" such as funding and scholarships in ways that are "substantially proportionate" to the school's male-female breakdown. Schools that have historically had one sex underrepresented in college athletics can also show compliance by expanding programs for that underrepresented sex or by showing that available programs fully accommodate the interests and abilities of members of that sex.
In part because of Title IX, the number of women participating in intercollegiate athletics increased from 90,000 in the 1981-82 school year to 163,000 in the 1998-99 school year, more than twice the rate of growth in female undergraduate enrollment. During the 1980s and 1990s, the number of women's teams increased by about two-thirds. Title IX also has had some effects at the high school level: 2.4 million high school girls made up 39 percent of all high-school athletes in 1996, compared to 300,000 girls making up 7.5 percent in 1971.
Title IX has had some effect not just on the number of sports teams available, but the kind; the number of wrestling and women's gymnastics teams has fallen, and the number of both men's and women's soccer teams has increased from the early 1980s to the late 1990s. According to a March 2001 study by the General Accounting Office, 948 schools reported adding one or more women's teams (301 reported adding both men's and women's teams) between the 1992-93 and 1998-99 school years, and only 283 reported discontinuing one or more men's teams (99 discontinued both men's and women's teams) in the same period. Schools that discontinued men's teams cited insufficient student interest as the main factor, and meeting gender-equity requirements a close second. Schools that did not discontinue teams did so primarily by obtaining new revenue and also through cost-cutting measures such as limiting the football team roster and reducing travel expenses.
Even with the additional women's teams, schools in the National Collegiate Athletic Administration still spend more on men's sports than on women's and have more male than female participants, according to a NCAA report examining gender equity in the 1999-2000 school year. For example, Division I-A schools (the most active) on average spent about $1.85 million in operating and recruiting expenses for men's teams, and on average about $910,000 for women's. Division I schools spent more on football than on any other sport (an average of $1 million in operating and recruiting expenses); women's basketball by comparison received about a quarter that amount.
However, NCAA schools also reported in the 1999-2000 survey that men's sports, especially football, generally bring in more revenue. Among Division I schools, football brought in about 33 percent of sports revenue, men's basketball brings in 14 percent, and women's basketball just 2 percent.
Sources: The Department of Education oversees the implementation and enforcement of Title IX and its regulations, and is on-line here; the Secretary's Commission on Opportunity in Athletics established in June 2002 is on-line here and the Department of Education's 1997 report on Title IX's 25th anniversary has a section on athletics here. The National Collegiate Athletic Administration has Title IX-related materials such as the 1999-2000 gender equity report available on-line here. June Kronholz, College coaches press Bush on interpretation of Title IX, Wall Street Journal, August 27, 2002. The March 2001 report by the General Accounting Office, Intercollegiate Athletics: Four-Year Colleges' Experiences Adding and Discontinuing Teams, is available via the GAO's site here.
Standards and accountability (last updated January 1, 2002) (back to top)
Standards-based reform emerged in the late 1980s and early 1990s, and has taken on a slightly different aspect in President George W. Bush's education policy.
Standards-based reform began as an effort by the federal government to encourage the development of education standards in each state. In 1989, President George H. Bush convened a national summit of governors to set national goals for education, which included a target of improved student performance in basic subject areas. In 1994, President Clinton's Goals 2000 program allocated funding to the states to create standards and assessments. In 1996, governors and business leaders formed an organization, Achieve, to help states create standards, compare them against each other, and hold schools accountable for performance.
Under Goals 2000, most states developed content standards and performance standards to define more clearly what students should learn by certain levels of their education. By 1998, 48 states had plans under Goal 2000 for education reform; 36 had established content standards and 18 had defined performance standards. By 2001, 48 states had established content standards and 24 had defined performance standards.
Schools also developed accountability systems in the 1990s. By 1998, 29 states authorized the use of sanctions against schools that failed to meet minimum standards of progress and 23 had academic bankruptcy or intervention policies.
President George W. Bush's education policy, "No Child Left Behind," focuses less on developing state-specific standards than on creating an overarching federal accountability system focused on specific results in reading and math. Whereas the Goals 2000 program aimed to develop local assessment and accountability programs involving a range of ways to measure progress and to punish a lack thereof, Bush's plan sets a unitary system that uses the threat of vouchers and competition to encourage public school development.
Under Bush's plan, students' reading and math skills will be assessed annually via the National Assessment of Educational Progress (NAEP) tests to track students' growth as well as school effectiveness. If a school fails to make adequate progress for disadvantaged students for three consecutive years, such disadvantaged students will receive Title I funds to use either as vouchers to transfer to a higher-performing public or private school or to receive supplemental educational services.
Sources: Department of Education, Goals 2000: Reforming education to improve student achievement (April 30 1998 report). President George W. Bush, No Child Left Behind, available via the Department of Education's page here. Achieve, 2001 National Education Summit Progress Report (available on-line through Achieve's website, available here). A collection of links to state standards is available here.
School Vouchers (last updated October 30, 2002) (back to top)
Under school voucher programs, students who are either low-income or at low-performing schools are given state or private funds to subsidize their transfer to private schools or to supplement their public education. Proponents say that vouchers give poor students the same choices that wealthier students always had, and that the resulting competition will force moribund schools to improve. Critics say that vouchers simply undermine already-troubled public schools and are de facto ways of funding religious institutions.
Vouchers are currently available only in some areas. Milwaukee and Cleveland continue to run programs, and Cleveland's program was upheld as constitutional by the United States Supreme Court in June 2002. Florida implemented a program in 1999 but continues to face different kinds of court challenges; a state judge held that vouchers violated the state's constitutional guarantee of a publicly funded education in August 2002.
Politically, vouchers are still very much in the air. Polls have shown growing support, especially among minorities, but Michigan and California voters did reject referenda allowing for vouchers 3-1 in November 2000. President George W. Bush supported them during his campaign and, once in office, initially called for plans to make vouchers available nationwide for students at failing schools. He backed away from this plan in 2001, but has continued to praise voucher programs.
Legally, states and the federal government generally can direct education funds as vouchers (though some courts have ruled that individual state constitutions require the direct funding of public education). The only legal argument that can prevent voucher programs is one based on the Establishment Clause of the First Amendment. Religious schools, at least for now, comprise most of the institutions ready and willing to accept students with vouchers, which means that state money for vouchers goes and would go predominantly to religious institutions. Too much intermingling of church and state can violate the Constitution's Establishment Clause, but a 5-4 majority of the United States Supreme Court approved Cleveland's program as constitutional in a June 2002 decision that Bush called historic.
Milwaukee, Cleveland, and the CSF are geared towards low-income families, while Florida targets students in low-performing schools. Milwaukee, Cleveland and the CSF cap the number of participants (Milwaukee to 15% of the student population, Cleveland and the CSF by funding limits) and use lotteries to decide who gets vouchers; Florida would take everyone who qualified.
- Milwaukee: The oldest voucher program, Milwaukee's began in 1990 and has survived several constitutional challenges thus far. The program started small in the 1990-91 school year, with about 300 students at six private schools receiving $2,446 each, for a total funding of $733,800. By 1999-2000, there were about 7,600 students participating at about 90 schools, receiving $5,106 each, for a total funding of $38.9 million. For the 2000-01 school year, the program provided vouchers (maximum $5,326) to 9,600 students at about 100 schools. It is geared towards low-income families, caps the number of participants, and uses lotteries to decide who gets vouchers.
- Cleveland: In 1995, the state legislature enacted a pilot scholarship program that was then struck down by the Ohio Supreme Court because the legislation violated a procedural rule in the state's constitution, not the Establishment Clause. In 1999, the program was reenacted in all pertinent respects and 3,671 students enrolled in the program for the 1999-2000 school year. Cleveland provided vouchers (maximum $2,500) to these students, but Federal District Judge Solomon Oliver Jr. ruled in December 1999 that the program violated the Establishment Clause because so few secular schools were participating in the program that parents "cannot make a genuine, independent choice of what school to attend" and are effectively forced to participate in a religious institution. In the 1999-2000 school year, 46 of the 56 private schools participating were church-affiliated. This ruling was upheld 2-1 at the appellate level on December 11, 2000, but was reversed by the United States Supreme Court in June 2002.
- Florida: In 1999, Florida instituted the Opportunity Scholarship Program (the nation's first statewide educational voucher program) as part of its A+ Plan for Education. Under the program, the state will grade public schools each year. If a school receives a "F" for two consecutive years, students there will receive vouchers - what the plan calls "opportunity scholarships" - to transfer to a better public school or a private school. The state's program started off small in 1999-2000, with 53 students receiving about $3,400 each. State-court judges have ruled in March 2002 and again in August 2002 that the program violates the state constitution because Florida was required under its own constitution to provide a public education directly, and not through intermediaries such as vouchers; the March 2000 ruling was reversed by an appellate court in October 2000 but the issue is again being fought. In any case, no additional vouchers would have been authorized in the 2000-01 or 2001-02 school years since none of the 78 schools failing in 1999 received a second F grade. Vouchers for students at 10 schools would have been authorized but for the August 2002 ruling.
- Children's Scholarship Fund: Funded largely by a Wall Street investor, Theodore J. Forstmann, the CSF provides smaller sums of about $1,000 per student to about 40,00 students around the country. It has clearly tapped into something: 1.25 million children applied for those slots, or more than 30 times the number of open spots.
Since 1970, about 10 to 12 percent of elementary and secondary students are in private schools, with 11.3 percent in 1999. As of 1994, most students in private schools attended religious schools, predominantly Roman Catholic (55 percent) or Lutheran (31 percent). Private-school students at non-affiliated schools accounted for only 14 percent of such students. Roman Catholic schools accounted for 35 percent of all private schools, and other religious schools another 47 percent; non-affiliated schools accounted for 18 percent of all such schools.
Sources: The Milwaukee Parental Choice Program (MPCP) is available on-line here. Florida's Opportunity Scholarship Program is on-line here. Regarding Cleveland, the United States Supreme Court opinion upholding the program as constitutional is on-line here. The Children's Scholarship Fund is available on-line here. Jodi Wilgoren, School Vouchers: a rose by other name?, New York Times, December 20, 2000. The Black Alliance for Educational Options runs a school-choice information clearinghouse, available here. General information about private schools is taken from the Department of Education's "Progress of Education in the United States of America - 1990 through 1994" report, available here.
NAEP (the nation's report card) (last updated January 5, 2002) (back to top)
Long-term assessments conducted by the Department of Education show that students have improved in math and science since the 1970s, but have not achieved significant improvements in reading over the same period.
The National Assessment of Educational Progress (NAEP) is the nation's only representative report card of what students know and can do in various subject areas. Since 1969, assessments have been made as to students' abilities in reading, mathematics, science, writing, history, geography, civics, and the arts.
A congressionally mandated program carried out by the National Center for Education Statistics (part of the Department of Education), NAEP is conducted at several levels and comparing different groups of students. At the national level, NAEP is conducted at grades 4, 8 and 12; state NAEP is conducted at grades 4 and 8. NAEP long-term trend assessments are done at ages 9, 13 and 17 in math, science and reading, and at grades 4, 8 and 11 in writing.
The following charts show how students at age 9, 13 and 17 have done in long-term trend assessments. In order to track trends, the long-term trend instrument used here has not evolved. Generally, the trends in mathematics and science show that scores declined in the 1970s, then increased in the 1980s and early 1990s, and stayed constant since. Reading scores do not show much significant variation.
Sources: The National Assessment of Educational Progress (NAEP) is available on-line here.
Teachers and Classroom Size (last updated January 1, 2002) (back to top)
There were about 2.9 million public-school teachers and other adults in the United States in 1999, or about one adult per 16.2 students. This number includes all adults in a school, such as administrators and counselors, so is not always reflective of actual classroom size. The number of public-school teachers in the United States has steadily increased, while the number of students has decreased, so the ratio of students per teacher has decreased steadily over the past few decades.
 
Classroom size has arisen as another measure of school effectiveness. In 1999, President Clinton proposed hiring 100,000 new teachers to help reduce classroom sizes at the kindergarten through grade 3 levels to 18 students per classroom. Such reduction would arguably ensure the development of stronger reading skills through more individualized attention to students and less teacher time spent on managing large classrooms.
A study in 1993-94 found that nationally there were about 24.1 students per class in public elementary schools, and about 23.6 students per class in public secondary schools. That year, California had the highest number of students per classroom at both the elementary and secondary levels: 29.3 and 29.7, respectively. South Dakota had the lowest number of elementary students per classroom (19.2) and Maine had the lowest number of secondary students per classroom (18.5).
In 1998, about 20 percent of the country's kindergarteners were in classes with 15 or fewer students. The average class size was 20 in public schools, and 18 in private schools.
In FY 1999, as part of Clinton's Class-Size Reduction Program, Congress provided $1.2 billion to hire more teachers. The Department of Education estimated that local school districts were able to hire more than 29,000 new teachers, with most placed in first grade. Congress provided another $1.4 billion in FY 2000. Initial estimates for the program were that it would cost $7.3 billion over five years, or $12 billion over seven.
As part of President George W. Bush's education policy, "No Child Left Behind," the Class-Size Reduction Program will be discontinued and funds instead made available in development grants which schools and state districts can use at their own discretion.
Sources: Data on number of teachers from 1955 to 1999 and on classroom size in 1993-94 taken from tables 65 and 69 of Digest of Education Statistics 2000, available via the Department of Education's page here. U.S. Department of Education Class-Size Reduction Program, available on-line here. President George W. Bush, No Child Left Behind, available via the Department of Education's page here.
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