In last week’s State of the Union address—somewhere in between the standing ovations, talks about deficit reduction, reminders that SEAL Team 6 killed Osama Bin Laden, and Joe Biden’s constant tweeting (Seriously, Mr. VP, the President of the United States is a few feet away giving one of the most important speeches of his presidency—maybe put a pin in it.), President Barack Obama spent a few minutes discussing the future of higher education in America.
The idea is simple enough: he wants college to be more affordable. That’s an idea most Americans can get behind. No one wants to take out a second mortgage to pay for their sons or daughters to go to school and the younger generation doesn’t want to go to school for four years and bust their asses to get a quality job just to forward their paychecks to lenders. But, right now, the price of obtaining a degree deters many people from attending college and financially cripples many that do.
Even if society is on board with lowering the cost of college, people are taking issue with the “how.” Reducing the price of attaining a degree is no easy task; especially when state funding has already put a vice on university budgets across the country—and especially here in Pennsylvania.
In the State of the Union, President Obama said that he wants to double the amount of work-study jobs and expand the pool of money used for Perkins loans. An effort that Bill Schilling, the Director of Student Financial Aid at the University of Pennsylvania, thinks could have a significant impact.
“We’ve seen an increased demand for work-study jobs and big growth in the number of students eligible for aid in general,” he said. “The demand has been stretching our capacity and [doubling work-study jobs] could certainly help.”
But President Obama didn’t stop with work-study jobs and loans. He also indicated he was prepared to use federal funding as a bargaining chip in an effort to get universities to lower—or quell the rise of—tuition prices. But, Schilling isn’t necessarily convinced that extorting money from the universities will have an immediate impact on students and their families.
“It’s about net price rather than sticker price,” he said. “Convincing schools to lower tuition will help with the sticker price, but we really need grants to get at the issue of net-cost. Most of the people who can’t afford $55,000 in tuition wouldn’t be able to afford $25,000 in tuition either.” And that makes sense. It’s not like a student who can afford a $25,000 a year tuition is going to pass up an ivy league school because he or she can’t swing the extra $30,000. The problem lies in lowering the total cost of college across the board.
Schilling said that the average net-cost for in-need students at Penn has decreased over the past few years. So, Penn is pleased with its recent progress. But, that probably isn’t the case with public schools that have seen their state allocated funds diminish significantly.
And while President Obama’s concept may not immediately slay the financial dragon here, it seems to be on the right path. Too many people are setting themselves up for financial ruin to earn a degree. The recession has decreased the hiring rate for recent graduates and lowered their average starting salaries. That adds to the chasm between what they owe and what they can reasonably afford to pay back. Recent graduates are working unpaid internships or financially unrewarding jobs that make it extremely difficult to keep up with student loan payments.
While the Obama administration may be heading in the right direction, it’ll be sometime before Americans know whether or not higher education will be more affordable. In order to decipher whether or not this type of legislation would be effective, Schilling said that more specifics would need to surface.
“The devil is in the details. College affordability is a critical issue and these are high level proposals,” he said. “Until we know what’s included in the legislation, everything will just be speculation.”