Higher Education Stakeholders Join McKeon for Roundtable Discussion on College Cost Crisis

October 2, 2003 – Participants Discussed Rapidly Rising Cost of Higher Education in America, Implications for Students and Families, and Potential Solutions to Help Keep College Affordable

Joining Rep. Howard P. “Buck” McKeon (R-CA), chairman of the U.S. House Subcommittee on 21st Century Competitiveness, members of Congress and several representatives of the higher education community on Tuesday gathered for a roundtable discussion on the rapidly rising cost of higher education in America.

“I am grateful that my colleagues and friends from the higher education community were able to come together for this frank and constructive discussion about the college cost crisis. This forum allowed me to hear from many different perspectives on the cost issue and reinforced my belief that it is incumbent on all of us — the federal government, states, institutions of higher education, the lending community, parents and students — to take our roles in addressing this crisis seriously,” said McKeon.

“The statistics are shocking but speak for themselves,” continued McKeon. “Cost factors prevent 48 percent of all college-qualified, low-income high-school graduates from attending a four-year college and 22 percent from pursuing any college at all. At the rate we are going, by the end of the decade, more than two million college-qualified students will miss out on the opportunity to go to college.”

“I believe this is a great idea to have this discussion today,” said Jim Boyle, president of College Parents of America. Boyle described the cost of higher education as a major concern for parents and applauded McKeon for his interest in the topic.

The roundtable was organized as a forum for the various stakeholders in higher education to discuss higher education affordability issues, including the College Cost Crisis, a report released by McKeon and Education & the Workforce Committee Chairman John Boehner (R-OH) in September.

The College Cost Crisis includes an analysis of decades of tuition increases that have consistently outpaced growth in family incomes or the rate of inflation. In addition, it cites evidence showing that millions of students stand to lose out on higher education opportunities because of cost factors, and that the issue has reached a crisis level as a concern among American families. In fact, the report showed significant findings that the public is losing patience with dramatic cost increases that regularly come without justification.

Scott Sudduth with the University of California noted that “we very much agree with your assessment” that there is a crisis of college costs.

“Higher education has not done a very good job of explaining what it’s doing to control costs,” acknowledged Dr. William Kirwan, Chancellor of the University System of Maryland.

Everyone in the discussion concurred with that point, and there was widespread agreement that the consumers of higher education – parents and students – need access to more easily understandable information in order to make informed decisions in the college marketplace.

Student representatives explained the unique burdens facing students as they struggle to afford dramatic tuition increases. “Students are paying more and getting less,” said Scott Ross, executive director of the Florida Student Association. “We aren’t getting creative answers out of the universities.”

Ross also explained that increases in the Pell Grant and other federal student aid programs alone cannot and will not solve the problem. He pointed out that even dramatic increases in such student aid programs can do little to make college more affordable for students when tuitions continue to rise.

Some participants equated increasing costs to dramatic increases in student enrollment. Yet Boyle pointed out that institutions must be experiencing some economy of scale which could help offset increased costs.

Participants often pointed to increased federal aid, particularly for the need-based Pell Grant program, as an easy solution. However, Ross described another reason that this is not an effective solution for keeping college affordable for all students.

Ross described students as belonging to three groups: low-income students who qualify for significant need-based aid which helps to offset the cost of higher education; high-income students whose families can afford to pay for college; and middle-income students who he believes are being hurt most by rapid tuition increases.

Middle-income students, Ross noted, do not qualify for many financial aid programs, yet all too often their families cannot afford the cost of higher education. These students are left with no choice but to take on high levels of student debt. “What are we going to tell those students?” asked Ross.

“I think Mr. Ross has hit the nail squarely on the head,” said Rep. Phil Gingrey (R-GA), a member of the subcommittee. “That’s the group being hurt the most by this escalation in college prices.”

Thomas M. Macon, Chairman and CEO of Grantham University agreed. “The middle class is being marginalized.”

And the roundtable participants all agreed that simply adding money to the Pell Grant program would do nothing to help students that cannot afford college, yet do not qualify for Pell Grants.

“Blindly throwing more money into the Pell Grant program is both reckless and irresponsible. We have a bigger problem here – our nation’s higher education system is in crisis as a result of exploding cost increases and unless we start taking decisive action, the dream of a college education will continue to slip out of the reach of low and middle income students.”

Reps. Johnny Isakson (R-GA) and Max Burns (R-GA) both urged institutions to think outside of the box and questioned whether the time has come for higher education to adopt a new “business model” that reflects the changing needs of students in the 21st Century.

Rep. John Carter (R-TX) echoed that sentiment, and explained that institutions would do better to begin thinking more like businesses and less like government. Carter also questioned what seemed to be an endless pattern of cost increases leading to aid increases, and a feeling that however large the federal investment in higher education may be, it will never be enough.

The group overwhelmingly agreed that increasing transparency and making more information available to parents, students, and taxpayers would be an important first step in the right direction. “Our industry did not respond well to recommendations five years ago” that would have increased transparency in college costs, said Sudduth. “An informed consumer is what we’re lacking here,” he continued.

The roundtable discussion is part of ongoing efforts by the Education & the Workforce Committee to engage the public in efforts to help keep higher education affordable and ensure every American who strives for the dream of a college education has the opportunity to achieve it, through the reauthorization of the Higher Education Act.

The “College Cost Crisis” report can be viewed on the Education & the Workforce Committee website at http://edworkforce.house.gov/issues/108th/education/highereducation/CollegeCostCrisisReport.pdf (no longer available).