Change the College Affordability Rhetoric By Putting Students First, Lumina Foundation Says

By Allie Arcese, Director of Communications

By Allie Bidwell, Communications Staff

There’s recently been much discussion about the importance of college affordability, and how policymakers should make the issue more of a priority. The problem with moving forward, however, is that college affordability means something different to everyone involved.

For colleges, the affordability discussion stems from what they need to meet revenue goals, according to a new report from the Lumina Foundation. But by putting students at the center and starting the discussion with what they should pay – not what college should cost – it can get the ball rolling, according to the report, which outlines an affordability benchmark to spark conversations.

“The meteoric rise of higher education costs – and the growing student debt that has come with it – threatens the vitality of our postsecondary system and thwarts many Americans from earning the education beyond high school that is so critical to success,” said Jamie Merisotis, president and CEO of the Lumina Foundation, in a statement. “We must make it a national priority to address this issue. The Affordability Benchmark is designed to reset the national dialogue around how to fix the problem by providing a clear, concrete definition of what ‘affordable’ means for today’s students and families.”

Lumina’s proposal is based on “The Rule of 10” for college affordability: “Students should pay no more for college than the savings generated through 10 percent of discretionary income for 10 years and the earnings from working 10 hours a week while in school,” the report says.

While the report says the benchmark isn’t applicable to every student in every situation, it should serve as a general guideline and broad framework for where the conversation can begin to move, and provides an exception for families that can’t realistically save for college. A student who comes from a family with an income below 200 percent of the federal poverty line, for example, is expected to contribute no more than what he or she can earn working 10 hours per week, under Lumina’s proposal.

“The idea behind this framework isn’t to create a one-size-fits-all approach, but rather to provide guidelines that can be easily understood and tailored to individual students,” said Zakiya Smith, strategy director at the Lumina Foundation, in a statement. “By clearly defining affordability, we hope this benchmark has the potential to dramatically change the national conversation around what families should be expected to pay for college and bring us closer towards making college within reach for all.”

The report also gives examples of how the benchmark could affect students in different family situations. In each scenario, the student would also contribute $14,500 in total – or $3,625 each year – from working 10 hours per week at minimum wage.

  • An adult student who makes $30,000 on average over 10 years before returning to school would be expected to contribute $53.83 each month, $646 each year, or $6,460 in total toward the full cost. 
  • A single parent with one child who makes $35,000 could contribute $26 each month, or $3,410 over the course of 10 years to save for college. 
  • The average family of four, making $50,000 annually, could save $1,500 in total by saving $12.50 per month for 10 years.
  • An upper-middle-income family of four making $100,000 annually could contribute $51,500 by saving $429 per month for 10 years.

Ideally, the system would create a scenario in which students would not have to take out loans to go to college, the report says. The benchmark was created in a way that defines “affordable” as what students and families could reasonably contribute, without relying on loans. Though the benchmark does not determine how colleges and universities will set tuition levels and other costs, or how financial aid will be distributed, the authors of the report write that it could serve as a reference point for future discussions.

“Not only do low-income students borrow more than middle- and upper-income students, black students borrow more than other students. Also, an aversion to borrowing may cause Latino students to work more or attend part time, compromising their ability to focus on school,” the report says. “These demographically linked trends in borrowing are troubling and suggest that we should consider the policy impacts of unequal resources from the start of conversations about affordability.”


Publication Date: 8/20/2015

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