March 5, 2003 The Honorable John A. Boehner U.S. ... - NACUBO

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Recommendations for the Reauthorization of the Higher Education Actto the U.S. House of Representatives Committee on Education and the Workforceregional and state economies by generating jobs, attracting and helping create new businesses,and increasing state tax revenues in addition to providing a well-educated workforce. And,academic research has driven economic progress in the U.S. over the last century.It is important that the administration share information with the public about the availabilityof higher education opportunities. And, as part of the message, to make clear that opportunitiesfor a college education are available to all regardless of an individual’s socioeconomic background.The Affordability of U.S. Higher Education. Research has consistently demonstrated thatAmericans badly overestimate the price of a college education and underestimate the amount offinancial assistance that is available to help them meet college expenses. Low-income and minoritygroups are especially likely to misjudge the price of higher education and the availabilityof financial aid. Inaccurate information leads to uniformed decisions. In the case of higher education,it leads some individuals to write-off higher education because they “know” that it isunaffordable.Price Affordability. Students from low-income families experience the greatest difficulties payingfor college and it is important that viable options be provided by increasing federal studentgrant and loans to reasonable levels that will ensure all students will have access to higher education.Many affordable options are available to students regardless of their economic status ortheir parents’ income.The College Board reports in its annual survey of colleges, Trends in College Pricing, that for thecurrent academic year (2002-2003) “about 38 percent of undergraduate students attending fouryearcolleges and universities full-time are at institutions charging less than $4,000 in tuitionand fees, and almost 70 percent face tuition charges of less than $8,000.” The table below providesinformation on the average (enrollment-weighted) tuition and fees for undergraduatestudents in 2002-2003.Tuition & Fees Room & Board Full-time enrollment(dollars) (dollars) students (% of total)Two-year public institutions $1,735 No data 1,707,552 (24%)Two-year private institutions 9,890 $5,327 20,190 (>1%)Four-year public institutions 4,081 5,582 3,721,202 (52%)Four-year private institutions 18,273 6,779 1,747,885 (24%)Note: Data are based on published prices.Source: The College Board, Trends in College Pricing, 2002It is important to point out that these data are based on annual published tuition and other educationalexpense rates and do not show the net price or actual amount students pay after studentaid is awarded. Also, the price charged for all student expenses related to paying for an undergraduateeducation does not cover the full cost the college or university incurs in delivering theeducation. Students, regardless of the type or control of the institution they attend or receipt offinancial aid, typically receive a general subsidy.National Association of College and University Business Officers 8
Recommendations for the Reauthorization of the Higher Education Actto the U.S. House of Representatives Committee on Education and the WorkforceCost/Price Confusion. As the National Commission on the Cost of Higher Education reportedin 1998, there is great confusion about the terms cost, price, and general subsidy. They noted specificallythat the term “cost” is used interchangeably to mean at least four different things: it canmean the production cost, or cost of delivering education to a student; it can mean the “sticker”price or posted nominal price students are asked to pay in tuition and fees; it can describe thecost to the student to attend college; and finally it can mean the net price paid by the student afterfinancial aid awards are subtracted from the full cost to the student.The Commission chose to define these terms not just as a “technical side note, of interest only topolicy analysts” but to respond to the “major semantic challenge” that exists in the national discussionof college costs. It is important that these terms and their meanings be clearly definedfor the public to present clear and consistent data about college costs and prices. NACUBOhighly recommends that the Department of Education ask Congress to adopt the commission’sdefinitions of cost, price and general subsidy and use the terms in discussions and materialsthat provide information about “college costs.”Certainly a strong message about affordability and access to higher education is important forall prospective students including adults and lifelong learners. But it is particularly critical thatelementary and secondary school students, their teachers, school administrators, and parentsreceive information throughout the K-12 years about higher education affordability and access.It is also important to clarify the meanings of the terms cost and price used in the disseminationof the information to promote a common understanding of them.The aspirations of children and their parents depend on knowing that opportunities to attendcollege exist for everyone regardless of their financial status and that there are many ways thatthe education can be financed. We need a national mantra about higher education that breaksthrough the information barriers, especially as the nation’s college age population—and theproportion of students coming from low-income families—continues to increase.Recommendation: NACUBO recommends that Congress authorize the Secretaryof Education to conduct a large-scale public affairs initiative that highlights theimportance of higher education, uses a common set of terms and definitions,publicizes the availability of student financial aid, and provides resources for obtaininginformation and assistance in pursuing a college education.PART V. RECOMMENDATIONS FOR NEW INITIATIVESNACUBO has considered several new concepts that may benefit higher education and wouldbe appropriate for consideration under the HEA reauthorization.Shared Services Delivery Demonstration Project. NACUBO recommends that Congress authorizeNACUBO’s proposal for the Department of Education to conduct a demonstration projecton “Shared Services Delivery.” We believe that this project would improve the efficiency ofthe federal student aid delivery system. The project would employ “top-of-the-curve” technologicalconcepts improve web services and systems protocols as well as the hardware and softwareto deliver Title IV programs more efficiently and cost-effectively. The project would targetidentifiable, measurable cost savings of delivering Title IV programs on campus, e.g., loan disbursement.A pilot group of institutions would be selected to apply innovative technology solu-National Association of College and University Business Officers 9
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March 5, 2003 The Honorable John A. Boehner U.S. ... - NACUBO

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