While some wealthy families, ensnared in a pay-to-play scandal revealed this week, have paid tens or hundreds of thousands of dollars to insure their child gets enrolled in the college of their choice, thousands more students are struggling to pay for a college education.
Student debt has exploded to $1.5 trillion as a result of increasing costs, declining state funding and federal programs that have failed to keep up with college cost inflation.
Average state funding per student at public colleges is 16% below pre-recession levels, and the purchasing power of Pell Grants has fallen from covering 39% of college costs in 2000 to just 30% in 2016, according to James Kvaal, president of The Institute for College Access & Success (TICAS), and is likely even lower today.
Janae Parker, a 29-year-old undergraduate at Franklin University who is a Pell Grant recipient and single mother, testified in Congress that “the only way to attend college and eat is to use food stamps” and cited a report from the Government Accountability Office that found about 2 million college students at risk of not being able to afford to eat while paying for college.
Parker and Kvaal were two members of a panel testifying before the House Committee on Education and Labor in a hearing, The Cost of College: Student-Centered Reforms to Bring Higher Education Within Reach, the first of five bipartisan hearings to be used for a comprehensive reauthorization of the Higher Education Act, last renewed over 10 years ago.
Chairman Bobby Scott, D-Va., noted that a decade ago states paid about two-thirds of the cost of higher education; today they pay less than one-third the cost, essentially doubling the cost for students attending public colleges.
For every $1,000 state budget cut in college funding, tuition rises a little over $300, said Douglas Webber, associate professor of economics at Temple University.
Several recommendations and proposals were discussed along with current state programs to help students afford college and minimize debt during the hearing, which lasted over three hours.
Rep. Joe Courtney, D-Conn., said he would be reintroducing a bill, along with Sen. Elizabeth Warren, D-Mass., that would reduce the interest rate on federal Stafford loans from between 4% and 5% to near 3.7%, which would add about $50 billion to the pockets of students.
“The government is charging more than market rates,” which provides the government of windfall of $66 billion, said Courtney, noting that the 10-year Treasury yield is near 2.6%.