UC System Considers “Free” Tuition for Lower-Income Families

Student Loan Girl — Tue, 27 Jan 2009 23:02:00 GMT

The University of California is considering a program which would offer certain students free tuition, reports The Chronicle of Higher Education (“U. of California to Consider Covering Tuition for Families Below State’s Median Income,” Jan. 22, 2009).

As part of a series of measures intended to “broaden the reach of the university during the recession,” the university would cover the tuition and fees at any of its nine college campuses for an estimated 50,000 qualified students whose families have incomes below the state’s $60,000 median household income level.

The proposed tuition plan, known as the Blue and Gold Opportunity Plan, is intended to encourage more low and middle-income students to attend a UC school, at a time when tuition costs are rising and state funding for colleges has been significantly reduced.

Estimated to cost the school $3 million a year, the plan will likely be funded from tuition increases, as well as from existing state, federal and institutional aid, said university system president Mark Yudof. The University of California’s Board of Regents must first approve the proposal, a process that The Chronicle of Higher Education reports could take several months.

It’s possible that the regents could vote to raise undergraduate tuition by as much as 10 percent, the Chronicle suggests, at the same time that regents approve the “free tuition” plan.

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Student Loan Debt Is on the Rise, and College Grads Face Growing Financial Obstacles

Student Loan Girl — Sun, 04 Nov 2007 20:10:00 GMT

Money. Some of us have it. Some of us need more of it. Particularly recent college grads transitioning from their campus to the workspace, from having student loans available that help pay their living expenses to having to make it on their own—all while paying back those student loans that paved their way to graduation.

With the surge in student loan debt outpacing the growth in starting salaries, and with tuition increases far exceeding increases in federal financial aid, a growing number of college graduates are facing barely manageable levels of student loan debt.

Tuition Hikes Outstrip Increases in Federal Financial Aid Awards

“Student aid continues to grow, but not as fast as tuition, and not enough to make up for the difference between family incomes and the price of college,” says Larry Abramson in a story for National Public Radio (“Tuition Hikes Outpace Student-Aid Increases,” Oct. 26, 2007).

According to the College Board’s “Trends in College Pricing” 2007 report, average published tuition and fees for in-state college students at four-year schools climbed by 6.6% for the 2007–08 academic year, a hike that “outpaced increases in the financial aid that lowers what most students actually pay” writes Erica Perez in the Milwaukee Journal Sentinel (“College Costs Outpace Inflation,” Oct. 23, 2007).

Starting Salaries Increasing More Slowly Than Student Debt

With more tuition to have to pay, students are graduating with more student loan debt than ever. In 2004, two-thirds of college graduates left school with student loans, and between 1993 and 2004, the average debt for college graduates with student loans soared a staggering 107%, according to a report by Luke Swarthout, a Higher Education Associate for the U.S. PIRG Education Fund. Student loan debt, Swarthout notes, is rising faster than both the cost of living and the cost of health care (“Student Debt and Consumer Costs in the Minneapolis–St. Paul Area,” July 2006).

Student debt levels are also eclipsing income gains. The “rapid rise in student debt comes while the real median income of younger Americans has only modestly increased” by 4.4% between 1995 and 2004 for household earners under 35, writes Swarthout.

Starting salaries for recent graduates can’t keep pace either. A report on “Student Debt and the Class of 2006” released by the Project on Student Debt found that for graduating seniors, average student loan debt rose 8 percent between 2005 and 2006, while starting salary offers rose only about 4 percent.

“Too many young people leave college saddled with heavy debt burdens and struggle to cover their loan payments on top of basic living expenses,” says Robert Shireman, Executive Director of the Project on Student Debt, in a press release for their recent study. “Students need better options and counseling when they’re deciding how to pay for college.”

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UC System Considers “Free” Tuition for Lower-Income Families

Student Loan Debt Is on the Rise, and College Grads Face Growing Financial Obstacles