US: Maintaining access for the disadvantaged

While American Hispanics make up 15% of the US population, they only comprise 12% of higher education enrolments. Along with most other minorities and lower socio-economic groups, they are looking to community colleges and other sources of credits that will assist if they transfer to universities after the present financial tsunami is over.

Most states have made substantial cuts to higher education funding, forcing their universities to act to salvage accessibility for students from low and even medium-income families. In spite of the federal government's education stimulus plan, tax revenue streams continue to shrink, making more cutbacks likely and all university plans to serve disadvantaged students even more tentative.

Before the downturn, costs of university tuition had grown faster than the cost of living at state and private universities, already placing poorer students in jeopardy. In 1980, tuition fees at Cornell University were 28% of median family income; in 2007, these had risen to 57%. This has caused many universities to discuss how to serve low-income students, a discussion that comes down to whether they will cut programmes or cut scholarships.

Each state in America funds its public university systems differently. A handful finance their education institutions on revenue and resources that have not been hit by the onset of the recession, but most have made substantial cuts. Some, however, are taking action to ensure continued accessibility for students from low-income families.

According to the National Governors' Association, the states are facing a $200 billion budget gap in education funding in 2008-2010. Similar to health care costs, university tuition fees in the US have grown faster than the cost of living.

Historically, an economic downturn leads more students to return to college. But today's much higher tuition costs may be dampening this return, especially for those from low-income families.

The states have a variety of tertiary institutions below four-year universities: community colleges, voc-tech schools and university branch campuses. Spring 2009 enrolments are generally showing a migration to local community colleges or branch campuses that charge lower tuition charges and allow students to live at home.

Many state universities have been boosting student aid at the same time they increase tuition costs by using a portion of the increase to offer more scholarships. The University of California, despite being in a state with dire financial shortfalls, is proposing to cover the cost of free tuition and fees for undergraduate students for families earning less than $60,000 per year, with the $3 million cost funded by a tuition increase for remaining students.

This '"Robin Hood'" approach, however, has caused a backlash in Arkansas where the legislature has sent a bill to the governor to cap the portion of tuition and fees that can go to scholarships to no more than 30%, rolling it back to 20% by 2012-2013. Meanwhile, the California State University system moved its admissions deadline forward and is cutting 10,000 student enrolments to cover a $215 million shortfall in education funding.

Nationwide, two federal grant programmes are already in place for low-income students with high academic scores. In 2007-2008, nearly 400,000 students received Academic Competitiveness Grants and more than 60,000 juniors and seniors received national Smart Grants.

But the amount spent was a little over half of what was allocated because students had not completed the rigorous high school coursework to qualify for the grants. These grants, varying from $750 to $4,000, could reach twice as many students in the next few years.

In public and private universities, interest earned from endowments is an important source of scholarships for low-income students. US college endowments lost 3% in the first seven months of 2008 and 22.5% more in the next five! The Chronicle of Higher Education reported last month that endowments at Harvard, Yale, Stanford and Princeton universities had dropped by about 20% and have not reached bottom yet.

Grinnell College in Iowa is planning a significant increase in student aid and remains one of the few truly need-blind-admission schools where parents' ability to pay plays no role. If accepted, the school finds a way for the student to attend. Grinnell has a huge endowment even after the recent loss of more than 25% of its value.

While some local industries have provided tuition assistance for children of employees, the economic downturn has curtailed most company programmes. The big three automakers are no longer making tuition reimbursements for the students of their workers' families.

The effect of the federal stimulus money is hard to calculate since it is required to be on top of prior levels of state funding (called "maintenance of effort"). This is intended to prevent the federal money simply allowing the states to decrease their share of support.

But most state shortfalls are growing and some states are constrained by "balanced budget" requirements that do not let them spend more money than they receive in state tax revenue income.

Current negotiations on how to handle this "maintenance of effort" requirement are taking place and it is possible the federal stimulus will only supplement declining state funding, slowing the downturn rather than being an add-on stimulus.

Declaring that "the best thing we can do is educate our way to a better economy," Secretary of Education Arne Duncan defended the large $16 billion in Pell Grants included in the stimulus package which would make 800,000 more students eligible for these grants.

Money for work-study, assistance that is tied to lower-income eligibility, was also expanded by $490 million and, for low-income students, this should provide temporary support. But the stimulus package money expires in two years and in 2011-2012, the Pell Grants will drop back to earlier levels and more than 160,000 students would then lose their work-study grants.

* John Richard Schrock is a Kansas education writer who also trains biology teachers. The Obama government plans for education can be seen here