College costs/prices

Essay challenging article that said Cal State more expensive than Harvard

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.

Library budgets continue to shrink relative to university spending

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Decades of Education Department data show universities allocating less money to libraries as overall spending has ballooned.

Study finds increasing numbers of public colleges with differential tuition

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In public higher education, growing number of institutions charge based on major or class year.

For-profits that receive federal aid charge more, study finds

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For-profit colleges that participate in federal financial aid programs charge more than those that don't, according to new study, which also finds the for-profit sector much larger than most think.

Essay on role of encouraging savings in efforts to reduce debt

Student loan debt was a problem long before Occupy Wall Street protesters added it to their list of grievances. The recession hit the younger end of the workforce particularly hard: the combination of a jobless recovery, rising tuition bills and mounting debt have become a crushing burden. Total student debt today is approaching one trillion dollars — exceeding the balance due on credit cards — and is second only to mortgage debt in American households. In fact, it's the only class of debt in which defaults are increasing. Given the state of the economy, much of this debt will never be repaid. It will remain an albatross weighing down an entire generation.

It's time to look ahead to a new paradigm, in which student loans are not the only answer. Let's consider the power of savings. Currently, we know scores of students never make it to college because they perceive it as financially out of reach. Others bail when they realize the debt burden will be too high. The cost proportionality of getting an education compared to the amount of borrowing necessary to finance it is way out of line. Students need a way to finance college without compromising their future financial well-being. Beyond efforts to limit tuition growth and create affordable educational options, there are significant advantages for placing a greater emphasis on savings.

A growing body of compelling research has illuminated the connection between savings and educational outcomes. Even modest-sized savings and asset holdings have the potential to alter the way people think about the future, which can lead to productive changes in behavior. For example, children with a savings account in their own name are more likely to have higher math scores than children without a savings account — scoring on average almost 9 percent higher.)

Studies have also shown savings are linked to expectations of high school graduation, academic achievement, and pursuit of postsecondary education.

Providing access to savings accounts can create a financial stake in college for students, and it’s a more effective strategy than simply advising them to save: if students have a tangible place to store funds, they are three to six times more likely to attend four-year colleges than youths with no savings. These accounts impel children to think about their postsecondary education. Opening the door to college motivates performance in certain ways, like staying in school and studying harder. And the earlier this starts, the better. Account ownership helps make the savings purpose more salient. We have observed that a college-bound identity takes shape long before children fully understand what it even means to go to college.

The concept of children's savings accounts has begun to take hold in a diverse set of countries including Britain, Singapore, Canada, and South Korea. In the U.S., 529 College Savings Plans have proven to be popular vehicles as earnings on deposits are tax-free. Unfortunately, to date they have had a limited reach among many households with modest incomes. That’s largely because the strength of the incentive to save is based on how much a family earns. If the family has a small tax bill or gets a refund, the incentive is particularly weak.

We should look for ways to advance more inclusive policies that create opportunities for more children. Early investments by the federal government in children’s future college plans may be less costly than bailing them out as young adults.  Instead of waiting for parents to open accounts, let's make sure every child has an account to call their own.

One legislative proposal seeks to do just that. The America Saving for Personal Investment Retirement and Education (ASPIRE) Act would create accounts for every newborn. Each account would be seeded with a $500 contribution, and children in families earning below the national median income would receive matching funds for contributions of up to $500 each year. After account holders turn 18, they would be able to make tax-free withdrawals for multiple purposes, including the costs of postsecondary education. This is an approach that casts a wide net and allows all kids, regardless of the circumstances of their birth, to have a foundation for building their future.

How can the government fund these children’s savings accounts in the current economic slowdown? Through a system of tax preferences and direct spending, we already allocate $56 billion a year helping students pursue postsecondary education. Compare this to the $3.5 billion estimated cost to fund the ASPIRE Act during its first year. This approach can be tried at the local and state level. In fact, the City of San Francisco has begun offering each child entering public school a savings account. Their Kindergarten to College initiative (K2C) is a relatively low-cost investment designed to trigger significant returns, through increased savings, greater college access and degree completion, and lower debts.

If we think of children's savings accounts as a way to reduce ever-rising public expenditures on student loans, we can envision a more efficient, more hopeful, and more productive strategy for funding higher education. Instead of going into debt, young people could save money in advance.      

Reid Cramer directs the Asset Building Program at the New America Foundation. William Elliott III is a New America Foundation Fellow and an assistant professor in the School of Social Welfare at the University of Kansas.  This op-ed coincides with the release of a four-part series of reports, "Creating a Financial Stake in College,"  which focuses on the relationship between children's savings and improving college success, which is authored by Elliott and published by the New America Foundation and the Center for Social Development at the Washington University in St. Louis.

Senate HELP committee hears college affordability testimony

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Senators agree tuition can't keep growing, though their ideas differ on how to address the problem.


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