Surrounded by W2s and tax forms, University of Nebraska-Lincoln students and their families are also filing the Free Application for Federal Student Aid for the upcoming school year.
Students who fill out the FAFSA are eligible for government aid. Those who fall in the lowest-income bracket receive Pell Grants, which are based solely on need and don’t have to be repaid.
However, the buying power of the Pell Grant is on the decline, and students who receive them are often required to take out loans or scale back studies to work more hours.
The change is because of a fundamental shift in the way society views a college degree.
Craig Munier, director of Scholarships and Financial Aid at UNL, has tracked the buying power of Pell Grants dating back to the 1979-1980 school year. Included in his data is the amount of in-state tuition, the maximum Pell Grant amount and the federal minimum wage for the year.
Munier said the chart is based on the supposition a needy student would receive the maximum Pell Grant and work 15 hours a week at minimum wage to pay for in-state tuition. Only the neediest students receive the maximum amount, which is reduced the more a student’s family makes.
In 1979, a student could pay almost 97 percent of his or her $3,300 tuition through a $1,800 grant and an income of $1,392 (at $2.90/hour). But a year later, UNL’s tuition rose by $300, the maximum Pell Grant decreased by $50 and minimum wage increased by only 20 cents. The same student could pay only 90 percent of tuition.
This marked the beginning of a trend where tuition would quickly outpace both grant money and minimum wage. From 1979-2009, tuition increased 443 percent, to $17,914. The Pell Grant increased 163 percent, to $4,731, and, for a time, the grant decreased before surpassing its 1979 amount. Minimum wage increased 125 percent, to $6.55.
Thirty years later, a student who received a grant and worked 15 hours a week could only pay for 44 percent of his or her education.
“The single biggest factor was that college education was thought of as an individual good rather than a societal good,” Munier said.
The reasons students go to college have become personal, said Kathleen Prochaska-Cue, an extension family economist for the College of Education and Human Sciences.
“I think most Americans look at (a college education) as an individual good and an individual benefit,” she said. “Some students do need financial help to achieve these goals, and hopefully with a college education, they’ll be paying more taxes in the future.
“But I think it’s a personal achievement and a personal economic situation.”
Munier said UNL was considered “high state aid and low tuition,” meaning aid was available for only the neediest students, but tuition was low for all. Yearly increases were never greater than $500 prior to 1997.
But competing priorities for state funds shifted the burden of paying for college away from taxpayers onto individual families and students, and the idea was to increase the amount of aid money available to students.
The aid, however, didn’t mean more Pell Grants for more people.
“I think people need to realize that money that comes from the government comes from taxpayers,” Prochaska-Cue said. “We really pay for those grants with tax dollars.”
Instead, government-backed student loans have increased in popularity and use among students trying to pay for college.
“The students most dependent on loans are from the lowest-income families,” Munier said. “For some, it can be a deterrent to going to college.”
He said while borrowing isn’t bad as long as it’s not excessive, parents could scoff when their sons or daughters are considering borrowing more money than the entire family’s income. The idea that college is an investment becomes a lot harder to sell.
Munier said UNL’s enrollment has had some unintended consequences because college is simply too expensive for some students.
He also said the recession is fundamentally shifting the focus and strength of the U.S. economy. An educated generation will lead the nation away from manufacturing toward an idea-based economy. People without a college education risk getting left behind, he said.
There is a little relief. The maximum Pell Grant will increase $619 next year, to $5,350, and minimum wage will rise to $7.25. If UNL’s tuition stays the same, a student could pay for 49 percent of his or her tuition next year.
kiahhaslett@dailynebraskan.com
Be the first to comment on this article!