Obama takes on college affordability in Upstate New York

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By Gabriella Levine

On the second day of his bus tour in Upstate New York, President Obama made a stop at Binghamton University on Friday to address college affordability in a town hall event.

In a small auditorium of a few hundred people, the President explained his plan to curb the rising costs of college tuition and participated in an hour-long question and answer discussion with students and faculty of Binghamton.

“A lot of you know that I wasn’t born into a lot of wealth or fame, there wasn’t a long Obama dynasty,” Obama explained. “And so the only reason I’m here today, the only reason Michelle and I have been able to accomplish what we accomplished is because we got a great education,” he continued.

Obama attributes the “essence of the American dream” to education. But that dream, according to Obama, is now being challenged by the ever-increasing cost of higher education.

“At the time when higher education has never been more important…college has never been more expensive,” Obama said.

The President pointed to the cost of higher education increasing over the last three decades by 250 percent, with family incomes only increasing by 18 percent. According to the President, this gives rise to two potential consequences: college becomes out of reach for many people, or young adults are weighed down by more and more debt.

At Union, the President’s mention of increasing tuition rates holds true. In the 1996-1997 academic year, Union’s tuition, without room and board and fees, was $20,805. The total fees were $27,325. By the 2004-2005 academic year, the college moved to the comprehensive fee, with tuition at $30,725 and total fees at $38,703. The total fee represents the combined cost of tuition, room and board and other fees.

Over the course of a decade, from the 2004-2005 academic year to the current 2013-2014 academic year, Union’s tuition increased by $15, 589, and total fees at the college increased by $19, 545. Today, the total fees to attend Union are $58,248, with tuition alone at $46,314.

Obama’s proposal to solve the rising costs at schools like Union includes rating colleges in such a way that will “create an atmosphere in which college presidents and trustees start thinking about affordability and don’t just assume that tuition can keep going up and up and up.”

Under Obama’s plan, colleges would be rated on factors such as tuition, graduation rates, debt and earnings of graduates, and the percentage of lower-income students in attendance. By 2018, Obama hopes that a college’s rating will be tied to the amount of financial aid it receives, so that students who attend highly rated colleges receive higher grants and affordable loans.

Vice President for Admissions, Financial Aid and Enrollment Matt Malatesta ’91 was confident regarding Union’s potential performance on a ratings system. “I have no worry about this for Union. Our graduates do very well, and our return on investment is very, very strong. There are exceptions to this, but if you look at the averages for general students, people are coming out with manageable debts and good investments in their careers and lives,” Malatesta noted.

In 2010, the Wall Street Journal cited a Payscale study which ranked Union 13th on a list of the 20 best schools for return on investment.

According to Malatesta, a good proxy to determine percentages of low-income students in attendance at the college is the percentage of students who receive Pell Grants.

“Pell Grants generally are awarded to the neediest students in the country with high financial need,” Malatesta explained.

Approximately 17 percent of Union’s students are Pell Grant recipients, a number that Malatesta believes puts the college in good company in terms of how we are measured with other schools.

The integrated Postsecondary Education System (IPEDS) calculates the percentage of Pell Grant recipients on college campuses. For the 2011-2012 academic year, Union’s 17 percent is on par with RPI and Cornell. The IPEDS data shows that 15 percent of students at colleges like Skidmore, Dartmouth and Boston University are Pell Grant Recipients.

Director of Financial Aid and Family Financing Linda Parker believes Union would rate well on most factors. “While our tuition is high when compared to all other private, non-profit institutions, our net price is only $27,003,” Parker said. The net price is what students pay after subtracting grants and scholarships from the cost of attendance.

Parker also noted that Union scores quite high on the college’s six-year graduation rate of 86.4 percent and has a scholarship budget of $38.1 million, and administers $1.7 million in federal grants, $194,000 in federal work-study, and $10.5 million in federal student and parent loans.

In terms of student loan indebtedness, another of Obama’s potential rating scale factors, the class of 2011 had an average loan indebtedness of $26,252.

Obama emphasized that, on average, college students are graduating with over $26,000 in debt, but Parker notes that the more exact national average is $26,600. Union is below that average by a small margin.

However, every student does not walk out of Union with only $26,252 in debt. Maggie Weinreb ’13 owes about $55,000 and joked that she will be paying “forever.” Another student graduating in the class of 2014 who wished to remain anonymous will exit Union with about $60,000 in debt and, like Weinreb, will pursue a career in teaching.

Some students, on the other hand, would prefer to remain entirely oblivious as to the amount of their accumulated debt. One such student remarked that he or she would prefer to become aware only after graduation.

Union requires graduating students to meet with a loan specialist in order to plan on how best to tackle the burden of student debt. Weinreb learned that some of her debt will be forgiven should she seek a non-profit career in STEM teaching, a type of loan-forgiving incentive that Obama encouraged in his discussion.

“Across the board in graduate school, what we want to do is to provide incentives for folks who need specialized education but are willing to give back something to the community, to the country– doctors who are willing to serve in underserved communities, nurses who are willing to serve in underserved communities, lawyers who are willing to work in the State’s Attorney’s Office or as a public defender,” Obama stated.

One recent Union graduate who wished to remain anonymous is currently in law school and is following Obama’s suggestion by pursuing a career in the public sector, either prosecuting or defending. In ten years’ time, this student hopes that some of his or her loans will be forgiven. But, for example, if the student chose to work in a private firm after graduating law school, he or she would owe a combined undergrad and law school debt amount of about $155,000, or $15,000 a year until 2026.

Obama’s overall proposal includes certain ideas, such as loan-forgiving incentives and the pay as you earn program, which caps monthly payments on debt to 10 percent of one’s income, that are currently already in place. He hopes to improve upon these ideas so that students may not only take advantage of them, but become more aware of their existence. Furthermore, the President intends to jumpstart new proposals in addition to the ratings system that include making online learning a cheaper, higher quality experience for students and instituting a requirement for students to finish courses before requesting more loans and aid.

Chief of Staff for President Ainlay Eddie Summers supports Obama’s overall notion of making higher education more affordable, but is skeptical of the Obama administration’s rating scale approach due to the differences between public, private and for-profit institutions. The major difference, according to Summers, is the way in which private and public institutions are funded, with public institutions more able to afford lower tuition rates because they are financed by their respective states.

“We have a diverse higher education sector– with various types of institutions– with various outcomes. Colleges like Union that identify themselves as a national liberal arts institution have very different outcomes compared to public institutions or for profit institutions,” Summers instructed. “A blanket policy approach to deal with a diverse sector is not the appropriate policy approach,” he continued.

Summers believes that it’s too early to tell how Union would fair on Obama’s proposed ratings scale.

The President assured that he’s ready for resistance to his proposals, but hopes that his plans stir conversation and action. “Higher education shouldn’t be a luxury,” he stated.

Weinreb fears that students will become increasingly deterred by the steep costs of college tuition. Upon graduating, Weinreb conceded that the burden of student debt began to complicate things for her future—“I think it is a bit crazy how strapped down my future must be because of all of my debt. I hope the Obama administration can help let everyone have the same college experience as I did in a more affordable way.”

Images used in this article are courtesy of Emily Brower ’14, Concordiensis

 

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