Students Pinched By Recession

The effects of the recession have been far reaching –that is no secret of course –but the picture for students in this downturn is only beginning to be painted more clearly. According to the Higher Education Research Institute’s annual survey of college freshman, students are really feeling the financial squeeze unlike ever before.

About two-thirds of incoming students said they had “some” or “major” concern about their ability to pay for their education. The percentage of those with “some” concern — 55.4 — was at its highest level since 1971. Financial concerns also affected students' college choice, with 41.6 percent reporting that cost was a "very important" factor in choosing which college to attend, the highest level since this question was added to the survey five years ago.

These worries among entering freshman are understandable. Students were more likely than previous freshmen to have a parent who was unemployed and less likely to find employment to help cover costs. Coupled with rising tuition, over 60 percent since 2000, and cuts to state supported financial aid, students have been forced to borrow more and more to finance their education. In 2008 (the latest available data), students have taken out nearly $100 billion worth of loans –this is a 95 percent increase from 2000. This rise was not because of an enormous influx of new students either, in the same period total enrollment at degree granting institutions rose by only a third.

Unfortunately, the mood of the next incoming freshmen class will likely be no better. State budgets for the coming fiscal year will be equally anemic or even weaker, as the recession takes a bigger bite out of state treasuries. This will surely lead to another round of budget cuts, including funding for higher education and tuition hikes –driving up student debt or shutting the door to higher education completely because of the lack of affordability. Just one example, the University of California system announced last November, a 32% tuition hike for fall 2010.

There is a bright spot though, the Campaign for College Affordability, our partner, is working on behalf of students to help pass the Student Aid and Fiscal Responsibility Act that expands Pell Grants and ends billions in wasteful bank subsidies, instead reinvesting much of it in students. Visit their site here.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future