Will the Aid Be There?
More and more families find themselves in trouble. But there may be bright spots ahead
Like many parents today, Dave and Pam McCorry of Mattawan, Mich., have scrimped, saved, and sacrificed to send their oldest son, Andrew, to college. Indeed, the entire family has pitched in: His forward-thinking grandparents used the prepaid Michigan Education Trust program to take care of freshman-year tuition (just over $5,000) at nearby Western Michigan University; Pam, a registered nurse, has picked up extra 8- and 12-hour shifts; she and Dave have maxed out credit cards and taken on a home equity loan; and Andrew himself has worked upwards of 30 hours a week at a local restaurant. Now 21, the junior business and Spanish major splits his credits between Western Michigan and a less costly community college to save money; this year he also took out a $3,500 Stafford loan, the only government aid he's received thus far.
"I grew up in a family where my parents managed to pay for all five of us to go to college, and we're trying to do the same," says Pam. "We don't want our kids to come out of school with huge loans . . . but at the same time we dig ourselves further and further into debt while we're trying to save for retirement, which just isn't happening." Although she and Dave, who works in the test lab at a medical equipment company, make between $75,000 and $100,000 a year, they are anxiously watching what happens with the myriad proposals now before Congress, given that they have three younger children, ages 13 through 17. Right now, for example, lawmakers are debating the president's new budget, counterproposals, and the long-overdue reauthorization of the Higher Education Act, all of which impact financial aid. "We're just hoping there's a turnaround in government help," she muses. "It's already a daily struggle to manage, and we're obviously better off than a lot of folks trying to do the same thing."
These days, it doesn't matter what your assets look like: It's increasingly difficult for almost everyone to afford college, as tuitions climb and federal aid remains more or less stable. Between 2003-04 and 2004-05, the average cost of four-year public schools rose 10.5 percent to $5,132, and it jumped 6 percent at four-year private universities, to $18,950. At Pennsylvania State University, for one, tuition has increased 8 to 9 percent a year since 2001, in large part because of reduced state funding. There's been no hike in government grants and loan limits during this time period, and the result is a decline in the number of students from less affluent families, says Anna Griswold, assistant vice provost for enrollment management and student aid: "A lot of our lower- and middle-income families are really feeling the burden of this thing called college affordability."
Cutbacks. Much of the legislation being debated in Washington recommends only slight increases in federal aid, along with numerous cutbacks. President Bush's budget proposal, for instance, calls for an increase in undergraduate loan limits from $23,000 to $24,875 and a boost to the maximum Pell Grant by $500 over five years--nearly the same amount the average public school tuition has increased in the past year alone. To help pay for these suggested reforms, some lawmakers are trying to cut the Perkins loan program. "What they're proposing is really to take from Peter to pay Paul," says David Mohning, director of Student Financial Aid at Vanderbilt University, where roughly 1,000 students receive $3.5 million in Perkins loans. He points out that such proposals come on the heels of an update to state tax tables, which will leave fewer families eligible for, say, Pell Grants: "Students are going to be forced to find other, less favorable ways to borrow."