Multi-state investigation of for-profits includes review of institutional loans and recruiting of veterans. But finding common targets is a problem, and investigators have yet to take on a major for-profit.
By now you probably have read in the news that, according to the Bay Area News Group in San Francisco, an average Harvard University education for a family earning $130,000 annually is less expensive than a California State University education.
As an individual who spends a great deal of time delving into the world of higher education finance, I feel compelled to clarify this very misleading report. The published report stated that due to Harvard’s vast $30-plus billion endowment and substantial tuition discounting practices, a student from a family earning an average of $130,000 per year would pay only $17,000 to attend Harvard, not the listed tuition cost of $36,300. This was compared to the overall cost of a Cal State education, which was listed in the report at $24,000 per year, and to a University of California education, listed at $33,000 annually.
Now for the facts. Despite the fact that we have had to rapidly increase Cal State tuition fees due to unprecedented state legislative budget reductions in previous years, Cal State and CSU-Long Beach remain among the most affordable universities in the nation.
At Long Beach, for example, students in 2011-12 paid $6,240 annually (Cal State average: $6,519) for Cal State system and campus-based tuition fees, plus an additional $10,658 for full campus-based room and board. This means that a full year at CSULB (with room and board) for a student from a family earning $130,000 annually actually costs $16,898 as opposed to the reported $24,000.
Furthermore, when comparing the cost of two different universities, it is common practice to compare tuition and fees of one campus to the tuition and fees of another campus and not to include the additional cost of room and board for only one of the institutions in the report. In fact, in making the basic assumption that a Harvard student also has to eat and sleep and therefore pay room and board, as does a CSU resident student, Harvard’s full price jumps to over $56,000 -- not the $36,300 listed in the report and published in newspapers throughout California.
Additionally, according to recent Delta Cost Study data, when assessing the average tuition and fees, excluding room and board, collected by both Harvard and CSU campuses for students from all family incomes, CSU institutions actually collect around $5,000 for educational purposes while Harvard collects over $20,000 per student -- despite having the world’s largest university endowment of $30 billion.
Finally, do not fall victim to misleading and inaccurate reports regarding actual college and university costs. For students and families making difficult college and university cost comparisons, it is important to find out what the average family pays to attend, the “net tuition” charged per family. It is also important to find out the average student debt load upon graduation and the percentage of students graduating in debt.
As a national leader in making this information available, CSULB and the entire CSU have developed websites as part of our College Portrait and “Public Good” pages where this information can be viewed by all prospective students and families. The CSU and CSULB are proud to be among the nation’s best in having the lowest student loan indebtedness upon graduation, and we hope that all Californians will invest in our students to keep it that way.
Good information in the hands of all consumers will prevent them from falling victim to sensational headlines that have more power to mislead than to educate.
F. King Alexander is president of California State University at Long Beach.
Advocacy groups, including Campus Progress, US PIRG, Rebuild the Dream and other student groups, delivered 130,000 letters from students to Congress on Wednesday, asking the lawmakers to stop the interest rate on subsidized student loans from doubling to 6.8 percent in July. President Obama has urged Congress to stop the rate increase, and Congressional Democrats have called for the change as well. Keeping the interest rate for subsidized loans at 3.4 percent would cost about $5 billion.
The Education Department will track the number of students completing the Free Application for Federal Student Aid and release the data to the public, sorted by high school, the department announced Tuesday. The website, which lists the number of students per high school who have completed and submitted the form, is intended to help high school counselors (and others) and uses data from the Education Department's systems, the first time such data has been made available. The numbers will be updated every two weeks.
Another group of college presidents and chancellors has been invited to the White House for a meeting on college affordability and productivity. Details about the meeting, scheduled for March 23, are scant, including whether President Obama will attend (as he did when another group of college presidents was invited to White House in December).
According to an email forwarded to Inside Higher Ed by a person connected to an invited guest, "administration officials will engage presidents and chancellors in exploring constructive solutions to bringing down college costs, making higher education more affordable and attainable, and regaining America’s global leadership in higher education attainment."
A panel of state legislators in California on Thursday rejected a proposal by Gov. Jerry Brown to reduce spending on CalGrants, the state's generous financial aid program, theLos Angeles Times reported. Brown's plan would have reduced the amount of state aid that could be used at private and for-profit colleges, and also raised the minimum grade-point average for incoming students to qualify for grants.
The outstanding balance on student loans has now hit $870 billion, more than the total credit card balance ($693 billion) and the total car loan balance ($730 billion), according to a report released Monday by the Federal Reserve Bank of New York. The rise in student loan debt is hardly a new trend, but the report documents the extent of the debt and the impact it has not only on borrowers, but their families. The report notes that "unlike other types of household debt such as credit cards and auto loans, the student loan market is incredibly complex. Numerous players and institutions hold stakes at each level of the market, including federal and state governments, colleges and universities, financial institutions, students and their families, and numerous servicers and guarantee facilitators."
The Consumer Financial Protection Bureau began accepting complaints about private student loans Monday, a first step the agency is taking in regulating the private student lending market. The bureau is the sole agency regulating complaints about these loans, and is also preparing a report on the private lending market based on interviews with students, parents, college administrators and others, to be presented to Congress this summer. Before the agency, borrowers with complaints about their loans had to find a bank's regulator in order to lodge a complaint, which was effectively impossible, Rohit Chopra, the bureau's student loan ombudsman, said at a National Association of Student Financial Aid Administrators forum on Monday.
The bureau is also investigating why students borrow the way they do -- including why they don't max out federal loan limits before turning to credit cards, second mortgages and other financial instruments, Chopra said.
Is Harvard University less expensive than public universities in California? A Bay Area News Group article explores the question, using a hypothetical family of four with $130,000 in family income. With Harvard's generous financial aid for middle class families, such a family would pay only $17,000 for a student to spend a year at Harvard. At Cal State, with much lower tuition rates, but much less aid, an in-state resident would pay about $24,000. Many students say these figures illustrate the flaws of California's policy of increasing tuition rates without sufficient financial aid.
The state auditor's office in Texas has found numerous instances of public colleges and universities failing to follow federal rules for managing student aid, The Dallas Morning News reported. Ten institutions were found to be making incorrect calculations of the cost of attendance. Several institutions were found to award too much aid, or to fail to adequately monitor students' academic progress.