Brochure To Make College More Affordable State

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Brochure to make college more affordable state

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Summary

TO MAKE COLLEGE MORE AFFORDABLE,
STATE LAWMAKERS SHOULD RAISE
NEW REVENUE, EXPAND AID
Accessible, well-funded higher education is crucial for
residents’ quality of life, a strong state economy, and
thriving communities, but after the Great Recession hit
over a decade ago, states weakened their futures by
sharply cutting higher education funding and raising
tuition, making college less accessible—especially for
students with low incomes and students of color

In the school year before the pandemic struck, state
support for public colleges and universities was still
way down, adding to long-standing racial and income
disparities in higher education. In the COVID-19 recession,
half of the states are choosing to cut higher education
again. However, there is still time for states to choose a
better path that prioritizes people, communities, and
the state’s long-term future by:
• Strengthening the taxation of wealth and high incomes
to generate revenue to boost funding for public two- and
four-year colleges. High-income and high-wealth households
have largely been insulated from the economic hardship
caused by the pandemic. States can increase taxes on these
households by taking steps such as raising their top income
tax rates, raising taxes on capital gains, and enacting or
expanding estate and inheritance taxes

• Significantly increasing need-based aid. Research shows
that aid targeted at low-income students can boost college
retention and graduation rates. Merit-based programs, in
contrast, often benefit students who would have attended
college even without the aid. And because merit-based aid is
typically awarded based on GPAs and standardized test scores,
it reinforces the structural inequities inherent in standardized
testing, which advantage white and wealthy students who
benefit from well-resourced K-12 schools and expensive
college test prep

About us:
The State Priorities Partnership shapes state policies that reduce poverty,
advance equity, and promote inclusive economies that pave the way for
widespread prosperity. It is coordinated by the Center on Budget and
Policy Priorities. For more information, email: [email protected]
For a deeper dive, read the full report online at http://bit.ly/cbpphighered2021
STATES CUT HIGHER EDUCATION IN
GREAT RECESSION; MANY CUTS REMAIN
Heading into the COVID-19 recession, state higher
education funding nationally was still below its level
in 2008 (just before the Great Recession took hold),
and tuition at public two- and four-year colleges was
dramatically higher. Between school years 2008 and
2019, after adjusting for inflation:
• Funding fell by $3.4 billion nationally
• 37 states cut per-student funding, six of them by more
than 30 percent
• On average, states cut spending by $1,033 (11.6 percent)
per student
• Annual published tuition at public four-year colleges rose
by $2,576 (35.2 percent), and in ten states it rose by more
than 50 percent
• Annual published tuition at community colleges rose by
$1,098 (37.5 percent)
The recession spurred by the COVID-19 pandemic has already led to a new round of cuts to public colleges
and universities: 27 states have imposed cuts for state fiscal year 2020 or 2021. Recent declines in undergraduate
enrollment, especially for low-income students and students at community colleges, further strain these
institutions’ finances

FAMILIES HARD PRESSED TO ABSORB
RISING COSTS, ESPECIALLY FAMILIES
OF COLOR
The state funding cuts and rising tuition that followed the
Great Recession fit into a longer-term trend in place since
the 1980s. Over time, students and their families have
assumed a much greater responsibility for paying for public
higher education

In 1988, students—through tuition—provided about a quarter
of public colleges’ and universities’ revenue, while state and
local governments provided the remaining three-quarters

Today, that split is much closer to 50-50. Nearly every state
has shifted costs to students, with the most drastic shift
occurring since the onset of the Great Recession. In 1988,
average tuition exceeded per-student state expenditures in
only two states (New Hampshire and Vermont); today it does
in 31 states

For a deeper dive, read the full report online at http://bit.ly/cbpphighered2021
This has coincided with an increase in the number of students from communities of color attending college. In 1980,
students of color—that is, Black, Latinx, Asian, Pacific Islander, and American Indian students—made up roughly
17 percent of students at public colleges. Today they make up over 40 percent

Additionally, the cost shift from states to students has happened over a period when many families—particularly
families of color—have had trouble absorbing additional expenses due to stagnant or slowly rising incomes

The result is that in 2018, the average net price—that is, published tuition and fees, room and board, and books and
supplies, minus the average aid received by a student—of a public four-year college accounted for 24 percent of
median household income nationally. In 24 states, it accounted for at least 25 percent of median household income

And it accounted for 40 percent or more of the median household income for Black households in 17 states, and for
Latinx households in five states

STATES CAN DO MUCH MORE TO MAKE COLLEGE AFFORDABLE AND ACCESSIBLE
Public colleges and universities educate and train future professionals who are critical to our communities, like
teachers, nurses, HVAC technicians, social workers, and public health officials. People who complete a bachelor’s
degree also have higher earnings, lower rates of unemployment and underemployment, lower rates of incarceration,
and higher rates of civic engagement. State funding and policies for higher education must ensure that all people
and communities share in the benefits that higher education provides, including groups that have historically faced
and currently face barriers to accessing and completing higher education, such as people with low incomes and
Black, Latinx, and Native American people. Here are two key ways:
Strengthen Taxation of Wealth and High Incomes to Increase Higher Education Funding
Public colleges and universities are still recovering from the drastic cuts made during the Great Recession. To reverse
this disinvestment and protect against additional cuts, states should raise revenue, including by increasing taxes for
wealthy people

High-income and high-wealth households have largely
been insulated from the economic hardship caused by the
pandemic: several types of wealth have maintained or even
increased their value; the stock market has recovered; and
home values have risen (especially luxury homes). State
policymakers can strengthen taxation of wealth and high
incomes by:
• Raising top income tax rates and creating additional top
tax brackets
• Raising taxes on capital gains
• Raising taxes on the purchase and sale of expensive homes
• Enacting or expanding estate and inheritance taxes
For a deeper dive, read the full report online at http://bit.ly/cbpphighered2021
Increase State Financial Aid and Target Students in Need
About 74 percent of the $14.1 billion in grant aid that states awarded for the 2019 academic year was need-based
(a slight decrease from the previous year), meaning it went to low-income students who struggle the most to
pay for college. The other 26 percent was merit-based, meaning it was awarded to students who meet certain
criteria—typically measured by high school GPA or college entry exam scores—regardless of household income

Need-based aid is intended to expand access to higher education for low-income students. Financial aid is critical
for their access to higher education and graduation. One study found that a $1,000 increase in grant aid reduced
the likelihood that a student would drop out of college by 9.2 percentage points. Other studies have found similar
effects, noting that aid targeted at low-income students can boost college retention and graduation rates

States should increase their investment in need-based aid and increase the share of aid that is need-based. They
should also make need-based aid available to all students attending public college and universities, including
those who are undocumented or currently incarcerated. State need-based aid should be awarded to students on
a first-dollar basis (meaning that grant awards would not be reduced if a student received other grant aid), and
students should be able to use it to cover college costs beyond tuition and fees

For a deeper dive, read the full report online at http://bit.ly/cbpphighered2021

Should also make need-based aid available to all students attending public college and universities, including those who are undocumented or currently incarcerated. State need-based aid should be awarded to students on a first-dollar basis (meaning that grant awards would not be reduced if a student received other grant aid), and

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Frequently Asked Questions

What are the most affordable pathways to a bachelors degree?

One of the most affordable pathways to a bachelor's degree is to start out at a community college. Annual tuition at community colleges is a fraction of what you would pay at four-year institutions — even at public colleges paying in-state rates.

How does out of state tuition compare to private college?

Colleges assume you and your family pay taxes in your state of residence; those tax dollars support education, so in-state students get a break. Barring any state agreements (common among public colleges in neighboring states), out-of-state students can pay two or three times as much in tuition costs — closer to private college rates.

Will the president make college more affordable for families?

While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement. The President and his administration have a long track record of taking steps to make college more affordable and accessible for families.

Is college out of reach for low income families?

Despite these benefits, the cost of attaining this education has skyrocketed over the past few decades, putting college out of reach for too many low- and middle-income families. Over the past three decades, the average tuition at a public four-year college has more than a tripled, while a typical family’s income has barely budged.