Making College Affordable for All

The benefits of a post-secondary degree are plentiful.  For example, an employee with a four year college degree earns 60 percent more than a worker with only a high school diploma. Paying for college, however, has become a daunting task and strain for many American students and families.  The cost of higher education across the country is rapidly increasing, at almost double the rate of inflation, outpacing increases in financial aid and many families ability to pay.  The combination of these factors result in too many students being unable to earn or complete their degrees due to financial constraints.

A report of the Delta Cost Project finds, that as tuition rises, undergraduate students from low-income families (with parental income below $20,000) are particularly finding it harder to meet the rising cost associated with attaining a post-secondary degree.  "Despite increasing racial and ethnic diversity in enrollments, most of the growth in dependent undergraduate enrollments is centered around students from high-income families (with parental income of $80,000 and above)." In fact, only 13% of dependent undergraduate students are from low-income families. Further, "low-income, black and Hispanic students are increasingly concentrated in public two-year institutions.  By comparison, the proportion of higher-income students at public two-year institutions has declined."

Many state governments are also experiencing a budgetary pinch.  State budgets and fiscal policies greatly impact affordability and access to higher education.  The recent difficult state economic conditions threaten to put a squeeze on the amount of appropriations state legislators can allocate to assist higher education institutions in keeping tuitions down and providing financial aid to students.  The result is that today's post-secondary education is quickly being placed out of reach for the neediest students.  Even those students who manage to attend and graduate a post-secondary institution are not unaffected by soaring tuition and related fees.  Instead, these students leave school with debt, which impacts major life decisions for years to come.

On August 14, 2008 President Bush signed H.R. 4137, the College Opportunity and Affordability Act (COAA), a 1,158 page piece of legislation which reauthorizes the Higher Education Act of 1965.  The Act helps students and the public, but the changes are not revolutionary.  Two highlighted provisions of the COAA, efforts to reduce the cost of textbooks and lender reform, gained a lot of momentum from state efforts over the last few years. 

This Dispatch will discuss the newly enacted College Opportunity and Affordability Act, along with independent actions states are taking to promote affordability and what policies they can implement to make these programs stronger.  Particular focus is given to state financial aid appropriations and policy suggestions that help structure innovative programs, like dual enrollment, in the best way possible to ease the costs of post-secondary education and ensure that all demographics have equal opportunities.




State Efforts on Textbooks Set Precedent for New National Textbook Affordability Measures

Soaring costs of textbooks put further financial strain on college students who already struggling with increasing tuition bills and escalating expenses.  A June 2007 Advisory Committee on Student Financial Assistance (ACSFA) report, Turn the Page, stated that the average U.S. student spends $700-$1000 per year on textbooks approximately 20 percent of tuition at an average university and half of tuition at a community college. Textbook prices have increased at four times the rate of inflation since 1994 and continue to rise, often due to specific ploys by publishers to protect profits.  US PIRG research demonstrates that the trend of higher textbook costs do not need to continue that there are policies that can make textbooks more affordable. 

In recent years state legislators have introduced or passed legislation to address soaring textbook costs.  Examples of state legislative action include requiring that bookstores and publishers offer both bundled and unbundled course materials; that publishers provide summaries of changes in updated text editions; and that faculty consider cheaper options or submit their course material lists by a specific deadline so students have the opportunity to shop around for the best price.

To date at least 34 states have introduced or enacted legislation to control textbook costs, including measures to prohibit inducements to professors for adopting a particular textbook.  At least five states have passed price-disclosure bills and about 10 states mandate and regulate how college textbooks are packaged by publishers, chosen by faculty or sold by bookstores.  A sampling of introduced and passed state legislation are:

  • Connecticut HB 5527, sponsored by Roberta Willis, requires textbook publishers to disclose their prices and history or revisions to faculty who order books and requires state universities to make financial aid available by the first day of the term, to expedite the purchase of books.
  • Virginia HB 1478, sponsored by Glenn Oder, requires the governing boards of public institutions of higher education to implement policies, procedures, and guidelines that encourage efforts to minimize the cost of textbooks for students at colleges and universities.  The guidelines must ensure (i) that faculty textbook adoptions are made with sufficient lead time to university- or contract-managed bookstores to allow for the maximum opportunity to purchase used textbooks; (ii) that, in the textbook adoption process, faculty affirmatively confirm their intent to use all items ordered, particularly each individual item sold as part of a bundled package, before the adoption is finalized.  If the faculty member does not intend to use each item in the bundled package, he must notify the bookstore, and the bookstore must order the individualized items when their procurement is cost effective for both institutions and students and when such items are made available by the publisher; (iii) that faculty members affirmatively acknowledge the bookstore's quoted retail price of textbooks selected for use in each course; (iv) that faculty be encouraged to limit their use of new edition textbooks when previous editions do not significantly differ in a substantive way as determined by the appropriate faculty member; and (v) that the establishment of policies must include provisions for the availability of required textbooks to students otherwise unable to afford the cost. 
  • Washington HB 2300, sponsored by Rep. Bob Hasegawa and Sen. Derek Kilmer, requires publishing companies to disclose both the price of textbooks and change-of-edition information when presenting material to faculty.  
  • Oregon SB 365, requires publishers to disclose prices and plans for new editions and also enables students to buy books separately from the bundled material (CD-ROMS and workbooks, for instance).
  • Arizona SB 1175 introduced in 2008, would have required publishers to disclose a book's wholesale or suggested retail price and provide a summary of any substantial content revisions made over the book's previous version.  The bill also would have prevented faculty and staff from receiving compensation for selecting course materials.
  • Colorado SB 73, requires that when a publisher provides a faculty member, instructor or other person selecting course materials at a state institution of higher education with information regarding a college textbook or supplemental learning material, the publisher should provide the following information at a minimum: the price of textbooks, history of substantive revisions, and whether the college textbook or supplemental learning material is available in another format and the price of the materials in the alternative format.  Additionally, a publisher that sells a college textbook and any supplemental learning material accompanying that textbook as a single bundle to state institutions must make the textbook and supplemental materials available as separate unbundled purchase items.

Seeing the benefit of state initiatives to curb textbook costs, Congress under the College Opportunity and Affordability now:

  • "Requires that publishers include pricing information with any other information they provide to faculty about a textbook."  Previously, faculty members, who chose required and recommended textbooks, were unaware of the associated costs.  In fact, a recent study released by The StudentPIRGs found that "77% of faculty reported that publishers rarely or never report the price of a book during sales interactions."  When price is removed from the textbook selection process, the more expensive items were often selected.  Textbook publishers were capitalizing on the situation by withholding price information.   
  • "Requires that publishers offer all "bundled" textbooks for sale as unbundled items."  Often, publishers will combine supplemental items and textbooks into one package in order to force students into buying both the text and supplemental material, to support higher prices, or to circumvent the used book market.  Supplemental items, however, often do not contribute to the educational value of a textbook.  In fact, PIRG research found that "65% of professors report they hardly ever use the supplemental items included in bundled textbooks." According to the Student PIRGs about "half of all textbooks are bundled." 
  • Requires institutions to the maximum extent possible, to provide the prices and ISBNs of required and recommended textbooks when students register for classes.  Textbooks are often a hard expense to plan for with student not able to figure out the total costs of their textbooks until the walk on campus.  Also, since it can be difficult to get a booklist in advance of the school year, students often have limited if anytime to shop for books online. 
US PIRG -- Affordable Textbooks
Price of course materials rises faster than tuition, adds to debt
Make Higher Education More Affordable by Reducing the Cost of Textbooks




Federal Lender Reforms Targeting Conflicts of Interests Followed State Investigations

Taking a page from New York Attorney General Andrew Cuomo, lender reform provisions in the College Opportunity and Affordability Act create protections for students from the college loan industry.  Cuomo's investigation in New York centered around the allegedly "inappropriate relationships between lenders and schools."  He alleged that certain lenders were put on schools' "preferred lender" lists because they offered institutions a cut of their profits.

After the passage of the COAA, Cuomo stated "[t]his historic legislation allows the rest of the nation to follow New York State's lead in cracking down on the deceptive student loan industry."  According to Cuomo, the COAA addresses "widespread conflicts of interest in the student loan industry by requiring colleges and universities to develop a code of conduct with respect to federally guaranteed loans" that:

  • Prohibits "revenue sharing," a practice where a lender provides a payment or other benefit to a school in exchange for the school's promise to recommend that lender to students;
  • Prohibits financial aid officers from accepting any favors, meals, entertainment, or other gifts from a lender;
  • Prohibits financial aid officers from assigning first-time borrowers to particular lenders and from refusing to certify loans based on a borrower's selection of a particular lender; and
  • Prohibits the college and university from using a lender's employees to staff the financial aid office or a financial aid call center.

The Act also includes requirements related to private loans, such as:

  • Prohibiting private lenders from offering gifts or other items of value to colleges or financial aid officers in exchange for advantages related to the lenders' loan activities;
  • Prohibiting private lenders from charging prepayment or repayment penalties;
  • Prohibiting misleading 'co-branded' marketing, where a lender or marketer uses a school's name, emblem, mascot, and/or logo to create the false impression that the school has endorsed the lender;
  • Requiring private loan providers to inform borrowers of the availability of federal aid and the interest rates available in connection with federal loans; and
  • Requiring private loan providers to provide uniform, detailed, and timely disclosures to borrowers regarding the interest rate and other terms of offered loans, enabling borrowers to better understand the cost of their loan and to comparison shop for the best deals.
Cuomo looking into student loan marketing
New York AG alleges student loan corruption
New York AG Applauds U.S. Congress For Passing Legislation To Protect College Borrowers


Other Key Provisions in College Opportunity and Affordability Act

Building on New Federal Student Aid and Tuition Transparency Provisions: The new federal legislation includes improvements in financial aid and tuition transparency.  States should consider how their programs can build on and reinforce these new provisions, including:

  • Increased Grant Money:  The legislation increases the maximum federal Pell Grant (grants that do not have to be repaid and are awarded based on financial need and college cost) to $9,000.  Previously it was a little less than $5,000.  Additionally, Pell Grants will now be available throughout the entire year, instead of just during the traditional school year.  This will help nontraditional students who take summer classes, or students who want to take summer classes to get their degree faster, reduce the overall cost associated with post-secondary education.
  • Easier Financial Aid Application:  The bill will also tries to make it easier to complete the Free Application for Federal Student Aid (FAFSA).  A more streamlined FAFSA process will hopefully increase the number of low-income families, first-generation college students, or other demographics that often have less assistance when filling out such forms apply for federal aid.  According to a Study conducted by the American Council on Education, up to "1.5 million college students that might have qualified for Pell Grants in 2003-4 did not apply for federal financial aid."  This figure highlights that more steps need to be taken to make students more aware about financial aid opportunities and the application process.  
  • Loan Forgiveness: Students who choose to serve the public interest can receive partial loan forgiveness under the Direct Loan Program.  
  • Increased Accountability:  In an effort increase the transparency of tuition costs, the legislation establishes a University and College Accountability Network (U-CAN).  Schools will be required to report detailed information, regarding "institutional mission, student-faculty ratio, tuition fees, graduation rates, and safety plans."

College Opportunity and Affordability Act



College Affordability and Financial Aid: What States are Already Doing

Providing Financial Aid

Regardless of the current economic slump, many policymakers believe it is essential to maintain (or even improve) access to higher education a belief crouched largely in their understanding of the social and economic benefits of an educated citizenry.

The average tuition fees of public colleges have risen over the last year.  "Compared to the 2006-2007 school year, students are paying 6.6 percent more at four-year in-state schools and 5.5 percent more at four-year out-of-state schools." Two-year schools, saw a 4.2 percent increase.

There are three major types of monetary awards that states generally award: need-based grants, non-need and merit based grants, and loans.  Grants do not need to be paid back, while loans do. 

According to a report published by the National Association of State Student Grant and Aid Programs, states awarded approximately $9.3 billion in student financial aid for the 2006-2007 academic year.  The majority of state aid came in the form of grants, with more than $3.7 million grant awards made, representing about $7.6 billion in need and non-based grant aid.  Nine states, California ($763 million), Illinois ($446.7 million), Indiana ($331.8 million), Florida ($486 million), New York ($864.9 million), New Jersey ($280.6 million), Pennsylvania ($468.5), Texas ($410.9 million) and Georgia ($493 million), granted about 60% of all grants.

Per capita, South CarolinaWashington DCIndianaGeorgia, and New York provided the largest amount of grant aid.

Dual Enrollment Programs

Financial aid although necessary in order to ensure college is affordable for all, is only one of an array of policies that states can adopt to ensure that earning a post-secondary degree is affordable.  As seen with textbook reform legislation, states can provide students with more than just direct aid by implementing policies which reduce the amount of money students must spend to earn a post-secondary degree.  One such policy, which has gained momentum in the states over the last few years, is the implementation of comprehensive and well-funded dual enrollment programs.

According to the U.S. Department of Education, "dual enrollment programs allow high school students to simultaneously earn credit towards a high school diploma and a post-secondary degree or certificate." Dual degrees programs can help reduce the cost of college and the amount of time it takes students to obtain a degree, by allowing students to earn college credits while still in high-school.

Almost every state has enacted some form of dual enrollment policies, according to the Education Commission of the States.  While dual enrollment programs potentially have enormous benefits, it is important that state leaders consider how to best design their programs, so that it benefits as many students as possible and does not have the unintended affect of creating a divide between different demographics.  The Education Commission of the States lays out some important issues to consider when creating or updating a dual enrollment program are:

  • P-16 Collaboration:  Dual enrollment can not only move academically talented students into a more challenging environment, but it can also help align high school and post-secondary education.  
  • Funding:  It is important to make sure that there is equitable financing to ensure that economically disadvantaged students can garner the same benefits as other students from dual enrollment programs. 
  • Programs Must be Made Widely Available:  Dual enrollment programs should be made available and publicized to all populations in order to ensure all qualified individuals can benefit from such programs. 
  • Transferring Credits:  Transfer of course credits from high school to college and from community college to four-year institutions should be made as uncomplicated as possible.

Some states have recently expanded their dual enrollment programs. 

  • In Indiana, HB 1246 establishes the concurrent enrollment partnership to coordinate dual credit programs among Indiana high schools and state educational institutions.
  • In Louisiana, SB 482 opened the door for non-public and home school high school students to take part in dual enrollment offerings.
  • In North Carolina, Learn and Earn Online, gives high school students access to online college credit courses.  "Qualified students in participating public high schools can take a variety of online college-credit courses at no cost to them or to their families.  Students earn both high school and college credit for completed courses.  Access to these courses is provided during the regular school day and an online course facilitator will assist students in the classroom."
  • In Nebraska, for the 2008-09 year the legislature approved a $65,500 increase to the Access College Early program.  The program pays tuition for low-income high school students taking college classes.   
Prospective students who searched for Public College Costs Up 6.6 Percent
National Association of State Student Grant and Aid Programs
College Board
High School Students Using Dual Enrollment Programs to Earn College Credits, New Reports Say 
Update to State Dual Enrollment Policies: Addressing Access and Quality
Dual/Concurrent Enrollment



A college education provides individuals with the ability to earn a higher income, have more job flexibility and to broaden their skill sets.  Yet, as the cost of higher education across the country is rapidly increasing, too many students are unable to attend institutions of higher education due to financial constraints.  Increasingly, even students who do attend and graduate from a higher education institution are affected by soaring tuition and related fees, leaving school with a lot of debt, which impacts big life decisions like what job to take upon graduation.  The newly enacted College Opportunity and Affordability Act, along with state policies to ease the costs of post-secondary education and to promote affordability are important to ensure that higher education is a possibility for all.