By the mid 1800s, another American president had captured the hearts of the American people: President Abraham Lincoln.  Coincidentally, Lincoln’s birthday is February 12th.  In 1865, one year after President Lincoln’s assassination, the nation officially honored his presidency and character by commemorating his birthday.  In 1880, George Washington’s birthday became a federal legal holiday, making Washington the first American to have a federal holiday named in his honor.  Though Lincoln’s birthday did not become an official federal holiday, many states began celebrating it either in addition to or in conjunction with George Washington’s birthday.  Those states that celebrated Lincoln’s birthday in conjunction with Washington’s began calling the holiday Presidents Day.

In 1968, Congress passed legislation, known as the Uniform Monday Holiday Act that gave federal employees some fixed three-day weekends.  With this legislation, the observance of Washington’s birthday was moved from February 22nd to the third Monday in February.  In the same year, Congress debated the issue of renaming the holiday to Presidents Day.  The motion failed and the holiday is still officially known as Washington’s Birthday even though it is popularly called Presidents Day around the country.

Beginning in the 1900s, few Americans celebrated the holiday with the type of zeal that their ancestors did.  Most businesses closed and for most Americans, the holiday became simply a day off work.  With the advertising boom of the 1980s, however, media executives saw an opportunity to promote the holiday as a “shopping holiday.”  True to the American spirit of consumerism, businesses reopened their doors on Presidents Day in the 1980s and coaxed shoppers with huge sales.  Today, the holiday is synonymous with shopping and sales.  Given the state of the economy, however, it will be interesting to see how retailers fare this Presidents Day compared to those past.

This proposal correctly cites the number of Americans studying in higher education programs. However, the figure of 18 million includes a significant number of part-time, working adults (36% of all undergraduates and 61% of students at two year institutions), and historically, the part-time working adult cohort has been excluded or overlooked by many higher education lobbying efforts. Regrettably, this letter, although widely endorsed by a great number of reputable associations, is no exception.

Part I relating to student aid is a request to increase the maximum Pell Grant award by 15 percent.  This is a laudable request, particularly since part-time students enrolled at least on a half-time basis are eligible for the Pell Grant program. The suggestion to increase the Supplemental Education Opportunity Grant (SEOG) also appears to be both reasonable and appropriate.  I suggest that Congress consider an alternative to extend Pell Grants to less than half time students.  Recent IPEDS data suggests that only half of America’s college students graduate in six years. Half-time rules are designed for the six year degree completer, but if we are not meeting the needs of half of the population, we should evaluate changing the system design.

The second part of the letter relating to Infrastructure Grants seeks to establish a Higher Education Infrastructure Block Grant (HEIBG), the proceeds of which would be used to rebuild infrastructure at non-profit higher education institutions. These allocations would be based on full-time students residing within the state in which the institution receiving the grant is located.  I have two issues with this request, the first of which is that the allocation of money is based on full-time students.  The clear implication is that the substantial number of part-time students and the many institutions that serve them do not do not warrant consideration, much less inclusion, even though their numbers are included in the 18 million figure used to justify the six percent request. Unless a way is found to include institutions that serve part-time students, this aspect of the proposal is fundamentally flawed. 

The second issue is that the request is limited to infrastructure initiatives at non-profit institutions only.  This is a unfortunate oversight that fails to account for the fact that for-profit institutions are engaged in providing comparable educational opportunities to learners as do their not-for-profit counterparts, and they provide those opportunities “on the ground” as well as online.  Moreover, for-profit institutions pay income taxes, property taxes, and a myriad of other taxes and fees, with the not-for-profit institutions often being the beneficiaries of those taxes, as well as from tax deductible donations from their alumni.  It would seem that a strong case could be made in support of the proposition that if the government funds the reconstruction of buildings on non-profit campuses, those building should go back into the property tax pool so that taxpayers can be repaid.  Furthermore, given the fact that accredited, for-profit institutions pay property and income taxes, why should they be excluded from participating in this grant program, particularly since the government will quite likely receive a meaningful return on its investment in the form of additional revenue resulting from higher property taxes and/or income taxes? 

Part II is also troubling in that it indicates that money for these grants should be allocated to the states based on full-time enrollment, while suggesting that the governor of each state should allocate the money according to full-time equivalent (FTE).  The latter metric makes much better sense than does the former, but regardless, the proposal should have avoided the inconsistency between these two accounting methods.  I also endorse the suggestion that priority should be given to sustainability and green building projects. In summarizing my position regarding this section, I would reiterate  my original recommendation, which is to avoid excluding those sectors of the higher education community that were an inherent component of the algorithm used to justify the proposal.

Part III of the letter is entitled “Additional Student-Centered Recommendations,” and it deals primarily with student loan issues.  While I agree that some of the suggestions may provide a measure of student loan relief, I am concerned that this section is not, in fact, student-centered.  We do not have a student-friendly higher education environment when the FSA regulations and the actions of institutions themselves have increased the rate of tuition at more than twice the rate that the average family income has increased during the past ten to fifteen years.  Higher education should be affordable, but for many families at the lower end of the economic ladder, it is not. I would propose that funding benefits be granted to students who attend institutions whose tuition and fees are less than the federal loan limits.  This approach would increase the support to this population while limiting or reducing the loan obligations that are both a deterrent to pursuing higher education and a burden if pursued. Admittedly, this recommendation carries with it the implication that colleges and universities will need to do a much better job of  managing their costs in order for their students to maintain their eligibility for such grants While loans are necessary, non-subsidized loans are a disadvantage to all, and the less indebtedness   that a student must bear upon  graduation from college, the more likely he or she  will be financially able to spend their earnings on a house and other economy-stimulating goods and services.

One of the merits of our higher education system is that there are options for everyone.  If the fifteen association signatories to this letter would presume to speak for the broad, inclusive spectrum of higher education, they would do well to reconsider some of the fundamental elements of this proposal. Failing that, they should candidly acknowledge  that while their proposal accounts for a substantial sector of the 18 million higher ed students, it does not come close to accounting for the entire cohort. Having clarified that point, the authors need to choose between making their proposal all-inclusive, or reducing their funding recommendation by a factor of one third.

The College Board states that all costs of college attendance are important and that often, costs such as room and board and books influence the ability of a student to afford college more so than tuition and fees.  The College Board encourages readers to cite or reproduce the data as long as they are given proper attribution, so I’ll list a few facts that I found interesting in this year’s report.

In 2008-2009, the average published tuition and fees increased:
 Public four year   6.4%
 Private four year  5.9%
 Public two year    4.7%
 For profits           4.5%
The public four year in-state tuition and fees averaged $6,585 plus $7,748 room and board for a total charge average of $14,333.

Page 7 of this year’s report has an interesting chart called “Variation in Tuition and Fees, 2008-09.”  This chart shows the distribution in tuition and fees by category.  For example, 78% of public four year colleges have tuition and fees less than $9,000 annually whereas only 7% of private four year colleges and universities fall into that category (note that APUS‘ full-time undergraduate tuition and fees would be $7,500 per annum).  Another interesting chart examines the variation in tuition and fees and notes that while public four year colleges increased their tuition and fees on average 6.4% versus the 5.9% at private colleges, the dollar increase average at public four year colleges was $380 versus $1,484 at private colleges (due to the substantially higher tuition).

Net price is another area where the data collected is interesting.  In 2008-2009, private college full-time students received an average financial aid award of $10,200.  This amount reflects all sources (institutional and federal) and includes the federal tax benefits.  Thus, the net tuition and fees average is reduced to $14,900 from $25,100.  At public four year colleges the average financial aid is $3,700 which reduces tuition and fees to $2,900 (net) from $6,600.  At two year colleges, full time students received $2,300 in aid reducing the $2,400 in tuition and fees to $100 net.

The net pricing data confirms other theories about college access including “the higher the tuition, the less affordable college attendance is for students in the lower income group.”  Measuring Up 2006 is a report published by The National Center for Public Policy and Higher Education.  In December, Measuring Up 2008 will be published.  That group breaks out the cost of college attendance by quintiles of family income.  The College Board states that “the federal Pell Grant program provides about half of the grants received by full-time students at public two year colleges and a quarter of the grants received by full-time students at public four year colleges, but only about 10% for students at private colleges.”  With the wide disparity in net price cited above (from $14,900 to $2,900 to $100), it’s understandable why students from families with lower incomes would choose more affordable options or no college at all.

Concerns about the cost of college attendance caused Congress to act.  The Higher Education Opportunity Act (HEOA) passed in July of this year has a number of cost-related disclosure and reporting requirements for colleges.  Among them, HEOA introduces the concept of net price (similar to the above except it does not include the federal tax benefits received by a student), requires the Department of Education to publish on its website the top five percent of colleges and universities with (1) the highest tuition and fees for the most recent academic year, (2) the highest net price for the most recent academic year, (3) the largest percentage increase in tuition and fees over the most recent three academic  years, and (4) the largest percentage increase in net price over the most recent three academic years.  These reports will be categorized among nine institutional categories.  Schools in the lists on (3) and (4) will have to submit a written report to the Department of Education explaining the increases and the steps that they’re taking to reduce future costs of attendance.

Affordability can expand access to college.  It will be interesting to see if the current economic downturn will change the pricing trends or if they will accelerate upward due to some of the budgetary crises at the state level and the endowment issues at the private college level.