| As 2007 drew to a close, four of the nation's most | | | | cost of college? |
| selective colleges: Harvard, Duke, Swarthmore and | | | | I guess they could hope their child gets into Harvard, |
| Pomona, all announced plans to revamp their financial | | | | or its kin. |
| aid policies by replacing loans with grants. Other | | | | Or they could hope that colleges loosen their purse |
| institutions, most notably Princeton and Columbia, had | | | | strings; according to the National Association of |
| already implemented similar plans. | | | | College and University Business Administrators, the |
| Harvard's policy is novel; according to the Chronicle of | | | | average institution spends only 4.6 percent of their |
| Higher Education, the university announced that | | | | endowment. The approach of Congress and the Bush |
| families with incomes between $120,000 and | | | | Administration has been to slap colleges on the wrist |
| $180,000 would be asked to contribute no more than | | | | and tell them to or loosen purse strings so that |
| 10 percent of their student's total expenses for | | | | financial aid spending can be cut. The finger pointing is |
| college, while the neediest families would pay nothing. | | | | useless; the colleges have little to no incentive to |
| Harvard will raise its student financial aid budget by | | | | cooperate. |
| $22 million to implement this policy. With a $35 billion | | | | The way I see it, we need an incentive to encourage |
| endowment, highest in the nation, Harvard can afford | | | | schools to make more scholarship aid available, to |
| to do it; the added monies for aid are just a drop in | | | | encourage students and parents to become more |
| the bucket. | | | | financially prudent, and encourage students to do |
| This is good news for anyone wishing to apply to | | | | their best in the classroom. Grades are still important |
| Harvard; cost is less of a detriment to well-qualified | | | | interview selection criteria; recruiters ask career |
| candidates in upper middle class families. A $180,000 | | | | centers to filter resumes by GPA before they see |
| family income gets spread awfully thin when there's | | | | them. |
| more than one child in college and the family lives in a | | | | Therefore, I propose a new incentive that I call the |
| high-cost metro area. But if cost is less of a | | | | Federal Scholarship Match. |
| detriment to going to Harvard, than Harvard will | | | | It works like this: for every dollar, up to $7,500, |
| become more selective, because the number of | | | | earned through an academic or service scholarship, |
| applications will surely rise. | | | | the federal government would match it, up to the |
| This has a ripple effect, students apply to more | | | | total cost of tuition, fees, room and board. This |
| colleges, so they're sure they will be admitted | | | | would not preclude a student from receiving other |
| somewhere; other institutions become more selective | | | | assistance; if the match doesn't meet the total |
| too. Few can afford to do what Harvard has done. | | | | financial need, the student can receive loans or other |
| Imagine the resentment in a household where a | | | | aid. |
| Harvard reject must attend their safety school - and | | | | Thus, for example, a bright student who receives a |
| must pay more than they would have paid to go to | | | | $3,000 scholarship to Rutgers (from any source other |
| Harvard, even if the safety school is their state | | | | than the federal government: private, state, the |
| university. | | | | school) would receive an additional $3,000. If he |
| It's difficult to pity families in this predicament; the | | | | received a full-tuition ($8,500 today) scholarship, he'd |
| parents earn a good income and their child has not | | | | receive an additional $7,500 in federal match, so he |
| wanted for much, until this point. There are small tax | | | | and his family would be responsible for the balance, |
| credits; the Hope Tax Credit allows a deduction of | | | | or $4,000. |
| $1,650 per student for the first two years of college, | | | | The family with the six-figure income could pay the |
| and the Life Long Learning Tax Credit may cover up | | | | $4,000 out of their pocket - or the student could |
| to $2,000 of tuition for the remaining years. The cap | | | | earn it through employment. |
| on family income for these credits is $114,000. | | | | I can just see the head spins and eye rolls in some |
| The relief is paltry when I consider that Rutgers, my | | | | quarters of the higher education community; this |
| home state university, costs $20,000 for tuition, | | | | proposal redefines the idea of need-based aid. This is |
| fees, room and board for an in-state student. It's | | | | what I'd hear: The match puts the needs of the |
| reasonable to expect the entering freshmen and their | | | | brightest, regardless of income, over the truly needy. |
| parents to spend $100,000 for a bachelor's degree | | | | It would also reduce the number of full-ride |
| after four years, and certainly after five. | | | | scholarships offered out of college coffers because |
| Government loans can't cover the total cost of a | | | | the government would chip in. |
| Rutgers degree; the maximum undergraduates may | | | | I disagree with the first point; if a student was |
| borrow ranges from $7,500 to $10,500 - and that's | | | | motivated enough to earn a scholarship, they |
| for a combination of interest-subsidized and | | | | deserve the opportunity to go to college. They also |
| unsubsidized loans. The maximum they may borrow | | | | deserve to stay, if they were motivated enough to |
| for four years is $37,000; this principal is unlikely to | | | | maintain the grades to keep it. |
| rise as fast as Rutgers' tuition. | | | | The second point is true, but colleges could offer an |
| The federal government allows borrowers to | | | | affordable education to more students. The matching |
| consolidate those loans and repay them over 20 | | | | program needs a catch: colleges must loosen their |
| years; our $37,000 borrower repays $295 a month. | | | | purse strings to qualify for the match and agree to |
| Assuming they qualified; there are needs tests | | | | aid more students. |
| associated with these loans. | | | | In effect, the federal government would give every |
| Assuming they have no other loans at higher interest | | | | college the incentive to follow Harvard's lead. |
| rates; the interest on interest - subsidized loans is 6.8 | | | | Who knows: a success match program could |
| percent, and 7.9 percent for unsubsidized loans. Lord | | | | encourage Congress to offer young taxpayers a tax |
| help any college student or parent who pays more | | | | credit to help sustain it; thankful recipients could apply |
| principal and interest on student loans; it's not worth | | | | some of the money that they might be applying to |
| it. | | | | student loan debt. |
| So what's a family to do, if federal loans can't cover | | | | And they'd help future generations, including their |
| the difference between their resources and the total | | | | children, pay for college. |