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Two weeks ago report cards were distributed at America's colleges, but students were not the ones receiving grades.
On Sept. 15, the National Center for Public Policy and Higher Education, a nonprofit research group, released its annual report card for American colleges and universities. The center gave American postsecondary schools an "F" in affordability. Last year, American schools received a "D" for affordability, according to a Sept. 15 cnn.com article.
The report directly contradicts findings the U.S. Department of Education released in the July 2004 Results Agenda, which stated that increases in financial aid have kept pace with tuition raises, thus making college costs stable. According to the agenda, in 2003 $320 billion was distributed to more than 13 million students in the nation. That amounts to only 59 percent of the 22 million postsecondary students in the country receiving financial assistance from the state. Overall, only 2 percent of America's gross domestic product goes toward postsecondary education, according to a Sept. 28 Time Europe article.
For affordability, Illinois received a "D" in the report. Affordability was based upon the net college costs as compared to average family income. While tuition in Chicago-area colleges has increased in the past few years, in 2002, the Chicago Department of Human Services found that the number of working poor in Chicago was on a steady incline. In July, CNN deemed Chicago the 35th most expensive city in the world.
According to a Sept. 16 New York Times article, these results on affordability are troubling for students.
"We have a system of financing of higher education that is probably dysfunctional, both nationally and in most states," president of the National Center for Public Policy and Higher Education Patrick M. Callan said in the article.
Tuition makes attending college difficult
For some students, the amount of financial aid received from the government and other sources is a deciding factor in whether the student can attend a university. Sophomore Guerdy Regis, had to say good-bye to friends at Loyola who transferred to community colleges because of high tuition.
"Two of my good friends left because their financial aid wasn't enough to keep them here," Regis said. "I just don't think it's fair."
High tuition has led many students nationwide to take out loans, according to the Department of Education. For some, paying off loans is not a problem, but others end up going into default or falling behind on repayment, according to the director of financial aid Eric Weems. In 1990, the national cohort default rate was 22.4 percent. Last year, it was 5.4 percent.
However, this was mainly because of a drastic new policy the U.S. Department of Education implemented, as outlined in their results agenda. The policy allows the department to match the default loan portfolio with the National Directory of New Hires, a database that contains employment and income information on all persons employed in the U.S. Essentially, the Department of Education can see how much money a person makes and determine what he must pay back. From this, the department was able to recover more than $429 million in defaulted student loans.
Loyola attempts to help
Loyola has some of the lowest default rates in the country, according to Weems. The latest statistics on the Federal Stafford Loan program at Loyola show an average cohort default rate of 2.1 percent. For the Perkins Loan, Loyola has a rate of 6.54 percent. While this amounts to more than $1.8 million, according to the Information for Financial Aid Professionals Library, this is still very low.
"Loyola is among the best in the country for default rates," Weems said. "Our low default rates result in better terms for private alternative student loans."
Because of Loyola's low cohort default rate, students have an easier time receiving loans. Lenders generally trust an institution more than those with higher default rates, Weems said.
Loyola's department of financial aid has been doing its part to help students fund their education, Weems said. On average, Loyola distributes $45-50 million in financial aid per year. That amounts to roughly 30 percent of the university's overall budget. Last year, an average student received $17,000 in scholarships and grants from Loyola.
Loyola's president, the Rev. Michael J. Garanzini, S.J. believes that Loyola has kept up a level of excellence with regard to financial aid.
"Loyola has maintained its commitment to providing a reasonable pool of financial assistance," Garanzini said.
FAFSA creates problems
Loyola's financial aid department is not the only factor that determines how much aid students receive. Many Loyolans have had issues in the past with the Free Application for Federal Student Aid, which the federal government uses to allocate funds for students. Some students believe the FAFSA does not paint an accurate picture of their financial situation.
Senior Mike Moothart lost a state housing grant because he received a merit scholarship from Loyola, which made his financial situation appear to change on the FAFSA. Eventually, Moothart figured out the situation, but it was no easy task.
"They put it back eventually, but my parents had a lot of problems finding people to talk to," Moothart said. "It was a lot like the left hand talking to the right hand."
Weems said that a high percentage of student problems with the FAFSA can be attributed to students simply forgetting to turn in the form each year.
"It seems like such a simple thing, but students sometimes just forget that they need to reapply for their federal funds each year," Weems said.
European schools have lower tuitions
In Europe, the postsecondary education system is very different from the American system. At most public universities, students do not have to pay tuition, according to the Time Europe article. At private universities, there is a cap on how much students can be asked to pay. This is done to enable most students to attend college.
For example, England has the highest public university tuition at $1,971.66 per year. In the U.S., however, tuition can cost more than $30,000 per year for some schools.
In the past few months, governments in several European countries proposed instituting mandatory tuition at all universities, the article said. Students in Europe believe the lower and middle classes will be prevented from having the opportunity to go to college since this will eliminate all "free" universities. Some argue tuitions may be too high for such students to afford.
The proposed tuition change also will require students to pay back loans once their income exceeds between $25,000 and $35,000, according to the article. The main reason Europe wants to make this change is the decrease in the quality of education and facilities in European schools. According to the article, charging tuition would allow European universities to improve their campuses and provide better curriculum.
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