Economy, debt make college less affordable
More states may cut higher education funds

By Ledyard King • GANNETT NEWS SERVICE • November 20, 2008
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WASHINGTON — A flagging economy, tight credit and rising tuition are teaching college students some hard lessons these days. And their reward for surviving until graduation? A lean job market and plenty of debt.

"We are in a daunting time, not only because of the financial crisis and the credit crunch, but also because state budgets are being pinched as well," said Kim Anderson of Got Tuition?, a nonprofit group that advocates college affordability. "One of the first places that gets cut when there's a downturn is support for higher education."

At least 12 states have announced or enacted tuition hikes after cuts to state budgets this year, and at least nine more, including Tennessee, might do the same, according to the Center on Budget and Policy Priorities.

Roughly 80 percent of the nation's 18 million higher education students attend two- or four-year public institutions.

The rest attend private colleges and universities dependent on endowments that are shrinking rapidly, making it tougher to provide needy students with financial aid, said Terry Hartle of the American Council on Education.

Tuition and fees for in-state students attending a public or private school rose slightly more than the 5.6 percent rate of inflation this year, according to a new report from the College Board, which tracks higher education expenses.

For in-state students at a four-year public university, those expenses will average $6,585 this academic year, according to the College Board. For out-of-state students, the average will be $17,452. The average bill for private colleges will total $25,143.

Students who pay for their education by taking out a loan are rethinking career choices in an economy that offers fewer options.

Debt forces change

Anthony Ratliff of Chicago might become a paralegal instead of a Web designer because he's carrying $64,000 in debt and can't afford to continue studying at the Illinois Institute of Art. Instead, he's pursuing legal studies at a local community college.

"My dreams of doing what my talents allow me to do has been pretty much put on hold until the economy improves," said Ratliff, 25.

A recent report by The Project on Student Debt found that nearly three of five members of the class of 2007 left school with debt. The average debt graduates carried that year was $20,098, a 6-percent increase over the previous year.

Debt levels are higher in New England, where students are more apt to attend private universities, the report said.

Congress is trying to help with legislation that would raise the maximum Pell Grant by $169 to $4,900, according to the American Council on Education. The grants are given to eligible families based on income.