Fickle finance

Access and affordability are the latest buzz words among higher-education policymakers and officials.

With the release of the much-anticipated report from the federal Commission for the Future of Higher Education, as well as a recent audit by Missouri Auditor Claire McCaskill, increasing the amount of need-based financial aid that universities provide has never been a higher priority.

Like every university, MU has struggled to balance its desire to attract the best students with the obligation to ensure that higher education is available to all residents.

Need-based financial aid at MU has jumped from $5 million in the 2000-01 academic year to $9.7 million in the 2004-05 academic year, which means in the 2000-01 academic year, need-based financial aid accounted for 9.8 percent of total aid provided by MU; in 2004-05, 14 percent of all financial aid awarded was need-based. Last year, MU gave $26.7 million in merit-based financial aid — almost three times more than the $9.7 million it offered in need-based financial aid.

Joe Camille, director of financial aid for MU, said that between 40 and 45 percent of all merit-based aid is awarded to students with financial need.

MU Provost Brian Foster acknowledged that the university needs to provide more for need-based aid. However, he said, higher education in Missouri has been under a lot of financial pressure in the past five years. Faculty salaries, building maintenance and financial aid are some of the areas that have suffered from a lack of funding. Universities cannot hope to compete for the best students without setting aside a significant amount of merit-based financial aid, Foster said.

“The need-based aid is really important, and it’s a complicated issue because universities like to use some of their financial aid money to bring in some great students,” Foster said. “The reality is that when one competes to get those high-achieving students, then financial aid is really an important piece.”

According to the U.S. Advisory Committee on Student Financial Assistance, each year about 400,000 academically qualified students do not go to college because they cannot afford it. The committee estimates that, in this decade, between 1.4 million and 2.4 million bachelor’s degrees will be lost because of financial barriers.

Danette Gerald, the senior research associate for higher education at the Education Trust, said low-income students should be just as important to colleges and universities as other students.

“As a nation, at one point in time, we made a commitment for our young people to access all the education that they were entitled to,” Garland said. “And we really walked away and backed away from that historic promise that we made to lower-income students and students of color.”

As financial aid has become more of a necessity in order to attend college, getting it has grown more complicated. Ann Landes, director of counseling for Hickman High School, said that often families are surprised by the amount they are expected to pay out-of-pocket for college. Financial aid formulas are typically based on tuition costs minus “estimated family contribution.” However, while financial aid opportunities have decreased and tuition costs have increased, the amount families can afford has not really changed.

“Regardless of if the tuition is $20,000 or $10,000, if the estimated family contribution is only $5,000 a year, then one of the schools you’ll be able to afford and others you will not,” Landes said. “It does get harder and harder for families based on family income.”

Moreover, Landes said, the application process can be intimidating.

“Occasionally we will have students doing it themselves and it may be scary; that’s why we really try to talk them through it,” she said.

Hickman offers workshops on how to fill out the Free Application for Federal Student Aid — known as FASFA — the application students must complete to be able to receive financial aid. Counselors will sit down with parents and go through the application, step-by-step.

Counselors also advise college-bound students to think realistically about their finances. Sometimes community college is the best option until more money can be saved for a four-year institution. For students who have the funds to go to a four-year college or university, Landes said counselors may advise them to attend a Missouri school rather than going out of state, where tuition costs are likely to be higher.

“We want to encourage students to go where they’ll get their very best eduction and the best for their dollar,” Landes said. But, she added, “if we have a student who wants to go to the University of Illinois, that will cost them two times what it will cost them to go here.” Counselors at Hickman encourage students to use every means possible — whether it be through sports or academics — to get help with the cost of attending college. “If you have a talent, whether it’s academic or athletic, you want to take advantage of every talent and opportunity you have,” she said.

Foster said that, in the future, one solution to the need-based shortage would be to create aid packages that incorporate funding from several sources, including universities, the state and loans. Many experts, and some lawmakers, have condemned the increasing reliance on loans to fund college. Sen. Edward M. Kennedy has urged Secretary of Education Margaret Spellings to reform what he calls “our dysfunctional student loan system.”

In Missouri, the average student borrows about $3,400 a year to pay for college. That’s not likely to change. “That’s just a practical reality,” Foster said, “although not a desirable one.”

Gerald, of the Education Trust, said fixing the financial aid system is in the nation’s best interest. Barring low-income and minority students from attending college will have not only an impact on their lives, but on society as a whole. She pointed out that the number of jobs that require a college degree will likely increase, while those with only a high school education will find it harder to get meaningful employment.

Foster said increasing opportunities for low-income families to send their children to college is important, and need-based financial aid is necessary to meet that goal. However, he does not think it should come at the expense of merit-based incentives.

“I don’t know what’s more important,” he said, “oxygen or water.”