Cost of higher education on verge of rising dramatically for hundreds of thousands of students

James Dale just wrapped up his sophomore year at Southeast Missouri State University, moving a step closer to graduation while trying to hold the line on college debt.

The communications major has had a helping hand in defraying his higher education costs, living at his parents' Jackson home during his first two years at Southeast. He won't have the luxury of those room and board savings this fall, when he transfers to Missouri State University in Springfield, Mo.

But Dale, vying for a federal Stafford Loan of $7,000, remains hopeful he'll be able to keep the cost of his bachelor's degree to around $20,000.

"That's a very optimistic goal," he said.

The high cost of higher education is on the verge of rising dramatically for hundreds of thousands of current and potential college students of limited means, facing deep cuts in federal and state grant programs.

In what one Southeast administrator described as a "financial aid funding cliff" ahead, students on the edge of a college education could be forced out of school because they can no longer get enough help to afford it.

"Need-based aid in the state of Missouri is in a critical place for [fiscal year] 2013," said Southeast president Ken Dobbins at May's meeting of the board of regents. "It's really a perfect storm when you have Access Missouri not being funded, base budget-wise, and Pell Grants going down."

Looming federal cuts

The popular federal Pell Grant Program, referred to as the backbone of financial aid to the nation's most needy, paid out maximum individual grants of $5,550 to hundreds of thousands of eligible undergraduate and postbaccalaureate students -- including 3,762 at Southeast -- in the latest academic year. An estimated 189,000 students are expected to receive some Pell award in the 2011-2012 year.

Looking to hack away at the U.S. deficit and debt, House Republicans recently announced plans to cut $30 million from the day-to-day budgets of Cabinet agencies, which would have a diminishing effect on Pell Grants and other low-income aid.

The program was on the chopping block this year, but some last-minute negotiating kept the funding maximum at $5,550. Talk of cuts in the next couple of years that would drive down Pell maximum awards to as low as $1,400, is unnerving the higher education community.

"Those of us in this part of the world find that a pretty frightening number to talk about," said Leroy Wade, assistant commissioner for financial assistance for the Missouri Department of Higher Education. "We haven't had a Pell that low in a couple of decades, and it's going to have an impact on needy students to attend college."

Renee Huffman, a Southeast freshman, dropped out in the spring semester, but plans to go back in the fall. The 23-year-old prepharmacy major and single mother said she depends on Pell Grants. Without them, she said there's no way she could afford college.

"It's difficult. You have to work and stuff, too, and be a parent," she said. "It's important to education."

The Academic Competitiveness Grant and the National Science and Mathematics Access to Retain Talent (the National SMART Grant) Programs launched in 2006 to meet the growing need for improved math and science instruction. Those programs disappear after this academic year. ACG provides $750 per semester for freshman, and $1,300 for sophomores, while SMART grant participants receive $4,000 per semester. At Southeast, 694 students received ACG money, and 125 got SMART grants, according to the university.

End of state bailouts?

Of equally pressing concern, higher education officials say, is the funding gap expected in the Access Missouri needs-based financial aid program. The appropriation this year is tentatively set at $61 million, essentially flat from the previous year, but held harmless, so to speak, thanks to another $30 million bailout from the Missouri Higher Education Loan Authority.

More than 54,500 students received an Access Missouri grant in the 2010-2011 academic year, including 2,828 at Southeast, according to the Missouri Department of Higher Education.

While the grant program is funded at the minimum level for the upcoming academic year, Wade said fiscal year 2013 is another matter altogether.

"I don't have a crystal ball, but I would assume it is not logical to expect that MOHELA funding will continue indefinitely," the higher education official said. "Barring an increase in funds, we're going to see a substantial reduction in that program."

Missouri universities are facing a double-edged fiscal sword. Projections show declining high school enrollment as much as 5 percent in the next few years. The impact of smaller incoming traditional students and low-income students priced out of a college education could hit Missouri universities square in the pocketbook. Add rising tuition and student fees to the mix, and the enrollment problem could be more pronounced.

There's hope in the financial aid gloom, Wade said. The legislators he's spoken to express support for need-based aid and the role it plays in higher education.

"But they are faced with a lot of competing demands," he said. "How do we weigh one against the other? Who gets what and who's left out?"

No free rides

In these days of broken debt ceilings and what many argue are bloated federal budgets, checking spending is a top priority for a majority of Americans and the lawmakers who serve them. Entitlement programs are squarely in their crosshairs. A place to start, some argue, is a federal Pell Grant system that had substantially expanded taxpayer commitments, growing at a 58 percent clip between 2008-2009 and 2009-2010, from $17.9 billion to $28.21 billion.

William Macbeth, 38, a television engineer from Cape Girardeau, is facing the college funding question head on. His daughter, Brittany, begins her freshman year this fall, and the family is still waiting on the letters declaring her financial aid.

Despite the costs of a college education and the impact on his budget, Macbeth said states have to survive the "economic reality of where we are at."

"Simply giving away money that isn't theirs to give away isn't going to help our future," said Macbeth, himself a college student until recently. "It's not a free ride, it shouldn't be a free ride. The country is not built on that."

While he's looking at some fairly hefty debt upon graduation, James Dale said the cost of his college education should still be worth the price of admission, an argument more Americans are struggling to justify.

"The cost of higher education is rising faster than the rate of inflation, and I don't believe that's a good thing for the economy in the long term," Dale said. "But yes, if college costs stay the same as they are now, it would be worth it."

mkittle@semissourian.com

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