Students Requiring Financial Aid & University Tuition Spikes

A report by the University of Massachusetts Donahue Institute attributes two primary factors for the decline.  One is sheer numbers: As the baby boomer generation retires, the generation replacing is simply smaller in number.  The second and more controllable factor is the trickle-down effect of state funding cuts to higher education.

Only in the past year have states begun to restore post-recession losses, while eight states are still making cuts to higher education. The Center on Budget and Policy Priorities reported that state funding per student is 23 percent lower than it was pre-recession.  Since 2008, 48 states are paying less per student, with the exception of Alaska and North Dakota.  Despite these drastic cuts, public universities still rely on state funding to provide 53 percent of their revenue. The consequences are soaring tuition costs and a loss in services and quality education. 

The State Council for Higher Education for Virginia reports 78% more students require financial assistant than they did in 2011. However, tuition increases are still being made to fund maintenance costs and salary increases for faculty. Just this year, in-state tuition and fees were raised an average of 5.8 percent. But raising tuition comes with its own price, as declining enrollment causes even more revenue problems.  The fact is that there are just fewer college-aged students available to fill classrooms and meet the population quota public universities need to remain financially stable. New restrictions to Federal PLUS loans could also play a factor in the decline.

To offset the tuition spikes, Virginia’s education council has asked the General Assembly to approve a $30 million aid package to provide funding for high-need students.  A $1.5 million package was requested to provide aid for students who do not fit this category. Massachusetts officials have requested an additional $210 million over the next five years to support low-income students after undergraduate enrollment dropped for the first time in a decade.  However, a drop in the high school population could mean a shortage of college graduates is inevitable, regardless of state aid increases.

Despite the efforts made by states to make up for recession losses, funding for higher education still falls far below pre-recession levels.  Large funding cuts have led directly to spikes in tuition, which exacerbate an already troubling enrollment decline.  With a dwindling college-age population nationwide, the need for financial aid packages is even more serious, especially if states want to maintain a highly educated workforce.

Sources

https://www.wbur.org/2014/10/28/report-shortage-college-grads

http://www.dailyprogress.com/news/local/number-of-va-students-seeking-financial-aid-soars/article_e891e70a-5f08-11e4-81ee-0017a43b2370.htm

http://www.bostonglobe.com/metro/2014/10/19/number-state-residents-with-bachelor-degrees-expected-ebb-report-says/45jPRKTlERy0UFFRpuIZUJ/story.html

http://www.cbpp.org/cms/?fa=view&id=4135