As state’s slash funding for higher education, tuition at two- and four-year colleges and universities is increasing. Recent data shows a 24% tuition increase at public colleges over the last 5 years, a 17% tuition hike at private colleges, and an 11% increase at public 2-year colleges in the same time period. In 2010 alone, tuition and fees at public and private colleges have seen hikes spanning from 4.5 to 8%. Luckily for students, with an increase in tuition comes an increase in financial aid.
The 2010 “Trends in College Pricing” and “Trends in Student Aid” reports show that rising tuition costs have been supplemented with large increases in grants and federal financial aid. Sandy Baum, an economist and author of the report notes that “in 2009-2010, students got $28 billion in Pell grants, and that’s $10 billion more than the year before. When you look at how much students are actually paying, on average, it is lower, after adjusting for inflation, than five years earlier.” Additionally, the nation’s colleges and universities are awarding student’s significantly more aid than in past years in an attempt to help keep students enrolled amidst tuition spikes.
Federal aid increased so significantly in the past year that, for the first time ever, government aid exceeded institutional aid. Regardless, notes Baum, this trend won’t be sustainable. The fact that federal financial aid surpassed institutional aid and grants is simply because the tuition at colleges is so extraordinarily high. Heightened tuition also won’t be sustainable and, Baum advises “we have to figure out how to educate students in a more cost-efficient way. We haven’t yet figured out how to use technology to make it cheaper. But we will.”
Online education can be part of the solution. Online education’s low overhead model can help to make higher education more affordable for current and future generations: tuition can go to instructors and administrators alone, instead of to football stadiums, office towers, and janitors. The challenge is to convince the for-profits who dominate the online space that making education more affordable is worth a reduced profit margin.
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