Slide 1

Sandy Baum Higher Education Policy Analyst Professor of Economics Emerita, Skidmore College AGB March 2010 Colleges and Students in Difficult Economic Times: Prices, Student Aid, and Student Debt www.agb.org

Slide 2

Funding Sources

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State Tax Appropriations for Higher Education: Total Appropriations in Constant 2008 Dollars (in Millions), Appropriations per Public FTE Student in Constant 2008 Dollars, and Public FTE Enrollment (in Thousands), 1971-72 to 2008-09 Source: The College Board, Trends in College Pricing 2009 3

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Inflation-Adjusted Endowment Assets per FTE Student at Private Not-for-Profit Four-Year Colleges and Universities Relative to FY2000, FY2000 to FY2008 Sources: The College Board, Trends in College Pricing 2009; NACUBO Endowment Study; Commonfund Institute; NCES, IPEDS; calculations by the authors. Data are from NACUBO and Commonfund Institute where available.

Slide 5

Prices

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Average Published Charges for Undergraduates by Type and Control of Institution, 2009-10 (Enrollment-Weighted) Source: The College Board, Trends in College Pricing 2009; Annual Survey of Colleges.. 6

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Average Annual Percentage Increase in Inflation-Adjusted Published Prices by Decade, 1979-80 to 2009-10 Source: The College Board, Annual Survey of Colleges; NCES, Integrated Postsecondary Education Data System (IPEDS). 7

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Distribution of Full-Time Undergraduates at Four-Year Institutions by Published Tuition and Fees, 2009-10 Source: The College Board, Annual Survey of Colleges. 8

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Average Published Charges for Undergraduates by Carnegie Classification, 2009-10 (Enrollment-Weighted) Source: The College Board, Annual Survey of Colleges. 9

Slide 10

What Students Pay

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Average Estimated Undergraduate Budgets, 2009-10 (Enrollment-Weighted) Source: The College Board, Trends in College Pricing 2009 11

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Net Price: Published Tuition and Fees, Net Tuition and Fees, and Room and Board in Constant 2009 Dollars, Full-Time Undergraduate Students, 1994-95, 1999-2000, 2004-05 and 2009-10 12 Source: The College Board, Trends in College Pricing 2009; Annual Survey of Colleges.

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Net Price by Income: Private Four-Year Colleges Net Tuition & Fees, Net Room & Board and Other Costs, and Total Grants in Constant 2007 Dollars by Income Group, Full-Time Dependent Students : 1992-93, 1995-96, 1999-2000, 2003-04 and 2007-08 Sources: The College Board, Trends in College Pricing 2009; NCES, NPSAS, 1993, 1996, 2000, 2004, 2008; U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2007.;

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Student Aid

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Undergraduate Student Aid by Source (in Billions), 2008-09 15 Source: The College Board, Trends in Student Aid 2009

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Average Institutional Grants and Average Federal plus State Grants per Full-Time Dependent Student by Parent Income Public Institutions, 2007-08 Sources: NPSAS, 1993, 1996, 2000, 2004, 2008; U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2007. 16 Distribution of Full-Time Dependent Students in Public Institutions by Parent Income, 2007-08

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Average Institutional Grants and Average Federal plus State Grants per Full-Time Dependent Student by Parent Income and Price Level of Institution, 2007-08 Private Not-for-Profit Four-Year Institutions Sources: The College Board, Trends in Student Aid 2009; NPSAS, 1993, 1996, 2000, 2004, 2008; U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2007.

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Only Need-based Aid? Defining need-based aid Ability vs. willingness to pay Does non-need-based aid take dollars out of the pockets of low-income students? Rawls

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Meeting Full Need Meeting need vs. gapping Packaging Rationing funds / competing priorities

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No Loan Promises Promises made in better times: Is it always right to keep them? What will be sacrificed to keep these promises? Are there negative externalities for the vast majority of students who must borrow to go to college?

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How Students Pay

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Percentage Growth in Mean Family Income by Quintile in Constant 2008 Dollars, 19781988, 19881998, and 19982008 Sources: The College Board, Trends in College Pricing 2009; U.S. Census Bureau, Current Population Survey, Table F-1, Table F-3, and FINC-01; calculations by the authors. 22

Slide 23

Distribution of Total Undergraduate Debt by Sector and Type of Degree or Certificate, 2007-08 Source: NPSAS, 2008; The College Board, Trends in Student Aid 2009 23

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A Problem Temptation to view ethical principles such as equity in admissions and financial aid policies as a luxury we cant afford in these hard times.

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The Solution? Thoughtful leadership A balancing act