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College tuition is rising faster than financial aid
August 31, 2004

Attending classes at the University of Minnesota -- and most public college campuses -- is more expensive this fall, while financial aid programs to offset tuition are not growing as quickly. (MPR file photo)

College students are returning to campus for the new school year, and many of them are going to pay more for their education. Public college students in Minnesota have faced double-digit increases in tuition and fees each of the last four years, while state financial aid programs have not kept up. As a result, students are taking on more jobs - and more debt.

Minneapolis, Minn. — (AP) - Shanda Stracek worked on campus, got state and federal grants and took out two loans. But she still had trouble making ends meet as she worked toward a marketing degree at St. Cloud State University.

So Stracek, 20, picked up a second job last year, at Kmart. Between the two jobs, she'll work more than 30 hours a week this fall while going to school full-time.

"Sometimes it gets kind of overwhelming," she said. "At the end of the semester, you're pretty much broke and you know a new semester is going to start and you're going to have to pay more tuition and get books. ... I would like to spend more time studying."

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Public college students in Minnesota have faced double-digit increases in tuition and fees each of the last four years, and the average state grant awards haven't kept up. As a result, students like Stracek are taking on more jobs - and more debt.

"As tuition rises, it becomes more and more difficult for students, for all students, to afford to come to school, and grant aid has not kept up the pace," said Kris Wright, director of the office of student finance for the University of Minnesota's Twin Cities campus.

Based on figures from the Minnesota Higher Education Services Office, the average annual resident undergraduate tuition and fees at MnSCU's four-year schools grew about 10 and a half percent for the school year ending in 2002, and about 13 percent the following year. Meanwhile, the average state grant declined more than 2 percent and then rose by 5 percent for the comparative years, the most recent for which breakout data is available.

In the University of Minnesota system, tuition and fees at the flagship Twin Cities campus rose 13 and a half percent for the school year ending in 2002, and 16 percent the following year. The average state grant wasn't available by campus, but across the University of Minnesota system it rose by almost 4 percent and then nearly by 16 percent.

A look at another substantial source of financial aid, federal Pell grants, doesn't change the picture much. Increases in that program haven't kept pace with the rising tuition, either.

Our tuition increases have moved absolutely in concert with the decline in state support. It troubles us greatly because we are, at our hearts, an access institution ... We're not happy to find ourselves raising tuition like this. - Laura King, vice chancellor at MnSCU

The state invests in higher education in primarily two ways: By allocating funding to public universities up front, and by giving need-based grants to students for use at any institution in the state - public or private.

"Our tuition increases have moved absolutely in concert with the decline in state support," said Laura King, vice chancellor and chief financial officer of the Minnesota State Colleges and Universities system. "It troubles us greatly because we are, at our hearts, an access institution ... We're not happy to find ourselves raising tuition like this."

While the 2003 Legislature was cutting MnSCU's appropriation by $191.5 million, and the University of Minnesota system by $190 million, for the current two-year budget cycle, it increased funding for the state grant program by $20 million per year for 2003-04 and 2004-05, HESO said.

Even a generous state grant program like Minnesota's - which ranked seventh nationwide in 2002-2003 - doesn't help offset the costs, said Wright.

"The gap between what the grant covers and what a student has to pay grows," Wright said. "They can't earn enough money working for it, so they have to borrow more money."

Borrowing money was something Brad Krasaway did as a last resort.

Krasaway, chairman of the Minnesota State University Student Association, and his wife are students at Winona State University. They both work, get financial aid, and between the two of them, they have about $14,000 in loans so far.

"When you take out loans, you go to college, you're obviously taking a risk," said Krasaway, 23. "You hope in the end that there's a job out there for you."

Borrowing by undergraduates in Minnesota institutions increased 40 percent from 2001 to 2003, HESO said.

"There is a concern about the growing amount of borrowing," said Phil Lewenstein, spokesman for HESO. "Families need to view it as an investment that hopefully will pay a good return."

Officials from various university systems say college is a wise investment, but the burden is increasing for middle-class students, who don't meet the lower income threshold to receive grants, and don't have limitless funds to spend on tuition.

"Most of their aid, in the past, and now, continues to be loans," Wright said. "Those students begin to have difficulty affording an education. While there are tax credits available for those families, it's still a lot of money to come up with."

Lewenstein said HESO works to educate students about other ways they can save money for higher education.

Planning ahead is important, Lewenstein said, and the state has a college savings plan that helps many families. In addition, there are numerous scholarships available, and many institutions offer their own grants to students.

"My parents always told me just pick what you want and the money will come eventually," said Stracek, the St. Cloud student. "Without financial aid I wouldn't be able to go to college."

Tom Schmit, a counselor at North High School in North St. Paul, said he gives the same advice, and tries to convince students and parents to at least apply for schools - even the ones they think they can't afford.

"You have no idea how much it's going to cost you to attend St. Thomas University, until you apply to St. Thomas University" and apply for financial aid, Schmit said.

Meanwhile, lawmakers continue to examine the state grant program. Many bills are expected to be introduced next session, including proposals to allow each college system to handle its own grants, and proposals designed to undo tax cuts that resulted in budget cuts to schools in the first place.

"The financial aid system, I think, is good, but it has to continually be increased as the costs go up to make sure we ensure access," said Rep. Lyndon Carlson, DFL-Robbinsdale.

"When the public universities were first set up ... I think they wanted to make sure that everyone could afford a public education," Krasaway said. "I don't think that's happening right now."

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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