The increasing costs of a college education are having a strong impact on the federal budget, as more and more students need help paying for their studies.
A report from the National Center for Education Statistics released yesterday revealed that for the first time, a majority of undergraduate students (57%) received federal assistance, while 71% received some type of financial aid to be able to attend college.
At the same time, the economic crisis put pressure on students, bringing Pell Grants up from $12.8 billion in 2007 to $35.6 billion in 2011.
The number of students who took out student loans also increased considerably in recent years. This is true for 46% of students whose families make more than $100,000 per year and a majority of students whose families make less than $80,000 per year.
Because of the increase in the costs of education, the poorest students are no longer the only ones who need help. As the report shows, 39% of students whose families make less than $20,000 per year received grants directly from their college’s fundsbut so did 38% of students from families with incomes of more than $100,000. As far as Pell Grants, only 2% of students with family incomes between $60,000$80,000 got them in 200708. But that percentage shot up to 18% in 201112.
This is a serious problem that deserves the attention that the White House is giving it. President Obama is currently promoting access to college as part of a comprehensive agenda to help the financially deteriorating middle class.
A college education is a key piece for progressing, both work-wise and financially. However, due to its cost, it is increasingly out of reach for students, especially low-income students who are facing more competition for funds as college prices rise.
The current strategy involves absorbing increases that are way above the inflation index, and also increasing grants and the debt load of students, which today is estimated to total $1 trillion. The solution, in reality, is controlling costs at colleges and universities and making structural changes that shift the paradigm of college education so that it is more accessible for the young.