A new approach to college affordability
Last week I was in Washington, D.C. attending a meeting of the SEED state policy partners. This is an initiative led by CFED, a national non-profit organization that is a pioneer in the field of asset development, that brings together Oklahoma and other states working on efforts to develop state-level approaches to promote children’s savings accounts (CSAs). CSAs are meant as ways to expand opportunities for children in low- and moderate-income families to save and build assets from an early age towards achieving the pillars of lifelong economic success – attending and completing college, owning a home, starting a business, or saving for retirement.
Our meeting featured a very interesting presentation from Kathie Little of the College Board, which has recently released a report recommending reforms in the system of federal student aid for higher education. For most American families, paying for college is a growing concern. According to the College Board’s annual Trends in College Pricing report, the average cost of a public 2-year college is over $14,000, while for a public in-state 4-year college, the total cost exceeds $18,000. Since 1979, the cost of a 4-year public college, including tuition, fees, and room and board, has almost tripled in inflation-adjusted terms, far exceeding the increase in average incomes. Students from all income groups have become increasingly reliant on financial aid to meet the costs of higher education, with federal student loans making up the largest share of this aid. In 2007-08, federal student loans amounted to $43.8 billion.
