The Truth About the Crisis in Higher Education Finance - Report Example

High College/ Tuition College tuition fees have been on an upward trend for the last decade. The rising of costs of education has been questioned because of the impact it has on students who cannot access some schools because of the high cost of tuition fee. What is the effect of rising college tuition on the dreams of many students? Will the increasing tuition fees make it impossible for students to reach their dreams? They are some of the questions that should be asked to understand the level of impact that the increasing tuition fees for the education. It is essential for all stakeholders in the education sector to formulate strategies on how to keep a cap on the rising tuition costs to make education more accessible and reduce the stress of costs on parents. Most colleges and universities and college cite inflation, reducing funding from the states and the need for research as some of the factors, which lead to high tuition costs. Many institutions have been forced to increase the tuition fees to cover the deficit that was caused by the reduction in the amount of money sent by the state to each student. The private institutions demand high tuition costs because it will facilitate the provision of high-quality education and support services. Weisbrod and Asch (24) say, “Beyond endowment losses, college and universities are being struck by a perfect storm of falling investments, credit tightening, declining private contributions from private individuals and corporations, declining state funding and increased student financial need leading to decreased tuition revenue.” Based on all these, it seems the increase in the tuition fee is justified. In the past decade, the average cost of tuition has increased by approximately 60%, which is almost three times the rise in income in the same period. Currently, an average tuition cost is about $42,000 in dollar per year. The same trend has been noted in public colleges, which have almost doubled their tuition cost (Clark and Penelope). The average tuition cost at a typical public university currently stands at $21,000 for students from the same state as the school. Based on the current trends, it seems by 2020 the average tuition cost will be about $240,000 and $155,000 for the public colleges and universities (Clark and Penelope). The situation gets worse because the trends in scholarships and other financial aids cannot match the rate of increase seen in tuition fees. The government and college institutions have cited different types of financial aid that have been put in place to ensure students can still access quality education. Scholarships are available for the few students who can achieve excellent academic records. It leaves many students who have the passion for getting a university education but lacks the needed excellent academic records. In addition, the rate of increase in tuition costs is higher than the rate of increase in the amounts covered by scholarships, grants and other systems of financial aid. Student loans have been able to provide the much-needed financial assistance to a number of students. However, most of the students finish school with huge amounts of debts waiting to be paid. For example, it is not strange to find a medical doctor who pays almost $1000 every month to repay his student loans. The high-interest rates make it impossible for many people to complete paying their student loans. In effect, countless people end up paying their loans for the rest of their life. It is imperative to realize that the higher the tuition fees, the higher the amount of loans and the interest accrued. The increasing cost of tuition is only putting an additional burden on the students. A burden that bears alone. Some people are forced to bear until they take their last breath (McCollum 23). The path to higher education is fraught with financial hurdles and traps. It does not matter whether these students attend public universities or private colleges. The most important things are the questionable trends noted in financial aids and lending terms. Financial aids and questionable lending terms have placed many students and their families in financial perils that last a lifetime. Sean McCollum (23) says, “…shifts in financial-aid policies and questionable lending practices have put a growing number of students and their families in long-term financial peril.” The most vulnerable students are the ones from the minority groups and first generation college attendees. The high debts incurred due to student loans has driven many people into the hands of private lenders, which only makes the situation worse. It is funny that many of the students from the vulnerable groups work hard to go to get University with plans of getting a good job and improving their living standards. Unfortunately, the toll of huge debts from student loans does not allow them to achieve their goals. Turning to private lenders only makes it worse because it increases the chances of losing everything (McCollum 24). A reduction in the cost of tuition would help because it will reduce the potential burden of debts that await students who seek for student loans There has been increasing pressure on colleges and universities to consider lowering their costs. The reasons cited by many stakeholders in higher education to explain the rising cost of tuition make sense. It is true that inflation has led to an increase in the prices of many products, which means an increase in the average amount a university requires to support a single student. In a survey by Mood Investor Services, three hundred colleges and universities expect the net tuition revenue to decrease or increase at a rate that cannot keep pace with the current inflation rate. The state funding for public universities fell by 9% in 2013. At the same time, the amount that a student pays to cover tuition fees rose by 8.3%. The amount accounted is the one being paid after scholarships, state grants, and institutional grants have covered part of the total tuition fee. Various solutions have been advanced to help reduce tuition fees and make education more accessible. The same sentiments were reiterated by President Barrack Obama in his inauguration speech in 2013. The President promised to ask Congress to add details in the Higher Education Act. Only high education institutions that keep their costs down will be eligible for federal funding. The pressure being mounted on the universities has prompted some innovative ideas to help reduce the rate of tuition cost increase. First, colleges and universities can reduce the cost of supporting students if they focus on academics. The period between 1999 and 2009 saw the cost of spending in big public universities rise by approximately 10%. The cost of supporting student services rose by 19% and the cost of operations rose by 20%. The 20% increase in costs is attributed to the comfortable dorms and high-end gyms that have been made for school administrators (Clark and Penelope). In addition, the number of administrators needs to run universities are very high. It explains why research confirms managing a university can be likened to running a small city (Wiener 224). Reports have shown that higher education institutions can keep tuition costs low without influencing academic programs. Some of the ideas advanced can help in cutting costs are embracing online services, outsourcing some functions like IT and catering. Some of the measures will help improve the overall academic experience for the students. Universities can consider starting programs to advise students on how to spend money and keep their overall living costs relatively low (Clark and Penelope). The move has proved successful in a mentoring program that his hosted by the Southern New Hampshire University, which is located in Manchester. Academic calendar changes can also help in reducing the tuition fee cost. For example, a university that has an all year active calendar will enroll more student, which helps reduce the overall cost of tuition. Colleges and universities can also reduce overall university costs by cutting the spending that goes to sports teams. Many institutions spend substantial amounts of resources to support sports program with the hope that they can increase admission and attract donors. However, many schools have been known to support failing programs. The money can be directed at covering the cost of hiring professors and providing efficient services to all students. The cost cutting alternative has been active in some institutions already. Institutions have been seen dropping unprofitable programs and cutting all non-essential costs. The adoption of high-end technology that are aimed at cutting costs can help institutions greatly reducing spending. The use of sophisticated software has helped in reducing cost attributed to electricity and stationaries. The benefits have trickled down to the students who can now use e-books, which are relatively cheaper than the hardcover books. Professors in many institutions allow students to use peer-reviewed journals and books found online. In some instances, technology has facilitate improved learning experiences for students. For example, some universities lower costs by reducing the number of lectures and implementing an alternative that involves skill drills meant to give students practical experience in problem-solving. The government can start a program that allows students to study and pay their tuition after getting a job. The payment of the tuition will be deducted from salary as part of government tax. The program has helped many Australian students to access quality education. The number of graduates in Australia has sharply risen since the introduction of the program. Some aspects of the program have been seen in the United States too. The federal government has introduced funding programs that put the amount to be taxed in future at a maximum of 10% disposable income. In conclusion, the increasing tuition costs presents many challenges to students, parents and the nation. Universities attribute the increase costs to inflation and other costs that are needed to run a university successfully. Some cost cutting practices have been suggested to help in cutting the overall cost of running a university. First, universities should focus on academics. The construction of lavish dorms and expensive gyms for administrators does not have an impact on academics. The other alternative is to cutting spending on sports programs that are failing. The amount of money needed to support academics is very little compared to the amount required to support the other services. The adoption of cost cutting technologies serves to cut costs on electricity and stationery. It also saves time, which has its costs. The implementation of these cost-cutting ideas will help in reducing the stress of high tuition costs for both students and parents. References Clark, Kim and Wang Penelope. Stop the Tuition Madness. 2011. Web. 20 April 2015. McCollum, Sean. "Drowning in Debt." Education Digest (2014): 23-27. Web. Weisbrod, Burton A. and Evelyn D. Asch. "The Truth About the “Crisis” in Higher Education Finance." Change (2010): 23-29. Print. Wiener, Jon. "Aiming Higher: Make College Tuition-Free." Nation (2015): 224-226. Print. Read More