Budget Cuts Severely Limit Hispanic Education

June 16, 2007 — States in budget hell are slashing subsidies to their colleges and universities. Those schools educate 80 percent of our students.

As college tuition continues to jump, say a prayer for the able children of working poor Hispanics. They’re being squeezed the most. You might think that Hispanic families with low or moderate incomes would get extra student aid to help cover costs, but you’d be wrong. These days, the majority of aid goes to the offspring of the non Hispanic middle and upper-middle classes.

Consider the Federal Pell Grants, created in 1972 to help low- and moderate-income students get a college education. At first, Pells were large enough to cover 84 percent of the fixed costs at four-year public institutions, reports the College Board. But over the years, Congress let the Pells’ value erode, so now they cover just half as much. Next year, Pell grants will range from $400 to $4,050, depending on your financial need. That steers many of poor Hispanics toward two-year community colleges instead of four-year schools, like it or not.

Meanwhile, the states in budget hell are slashing subsidies to state two-year and four-year colleges and universities. Those are the very schools that educate 80 percent of America’s students. Seeing the handwriting on the blackboard, state schools are downsizing—cutting programs, firing professors, even limiting enrollments. But that’s not enough. Tuition and fees at four-year state colleges will probably rise an average of 12.5 percent for students who live in-state, on top of a 9.6 percent hike last year. Room and board expenses could rise by 6 percent or more.

Not every school budget is getting the chop. In a survey last week, the State Higher Education Executive Officers organization found 18 states likely to raise their spending on higher education—in some cases, restoring cuts that were made last year. But 24 states foresee cuts, averaging 5 percent. (The rest are still negotiating.)

In a few states, tuition has shot the moon. Northern Arizona University will charge $3,596 next year—a 39 percent hike—following a decision by the state’s Board of Regents to end its former low- tuition policy. Students at San Diego State may pay at least $2,410, up 25 percent. Last year, California levied a 10 percent midyear hike in tuition, too. At Indiana University in Bloomington, returning students will pay just 4 percent more, but the bill for new students will rise 22.6 percent, to $6,517. Then there’s room and board.

State grant programs are being battered, too. Last year Illinois cut 8,500 students out of its Monetary Award Program. This year, the number of needy students is up 8 percent, but there’s no extra MAP money on the table.

Two-year community colleges depend more on state funding than any other type of school. New students are banging down their doors—the unemployed needing retraining, immigrants seeking English classes, young adults wanting business or health-service skills. Community colleges educate 44 percent of all U.S. undergraduates, including almost half of the women and a majority of students of color. Still, the knife falls. Average tuitions rose 7.9 percent last year. Guesses for 2007 run from 7.5 percent in Florida to 50 percent in California, says Norma Kent of the American Association of Community Colleges.

The percentages often look scarier than the actual dollars. In California, where fees might not exceed $300, an increase of 50 percent means an extra $150. But the 22.6 percent increase in Indiana means $1,000. 

“Years of research show that upper-income students are virtually unresponsive to tuition increases. They just borrow more,” says Donald Heller, associate professor of education at Penn State. “But low-income students are very sensitive to increases. They’ll drop down to cheaper four-year or two-year colleges, or they’ll quit and get a job.” College-participation rates among low-income students peaked in 1998 and, since then, have been dropping off, says Tom Mortenson, a senior scholar at the Pell Institute in Washington, D.C.

Why such a problem, when Congress authorized a mountain of new student aid in the 1990s? Because that aid came in the form of income-tax credits—great for the middle class but not for families whose taxes may be nil. Tax-free 529 college-savings plans are strictly for those with spare cash. There are always loans—in fact, starting July 1, the rate on federal Stafford loans drops to a low of 2.82 percent while a student is in school. But low-income students aren’t used to loans and hate to take them.

The last source of aid is the colleges themselves. Four-year private schools and some of the publics offer “merit scholarships”—a tuition discount offered regardless of income. They’re typically given by second-tier schools to students they think will help improve their social or academic reputations. That usually means more-affluent kids. During the ’90s the percentage of discounts offered to students with low or moderate incomes remained about the same, reports the National Center for Education Statistics. But “aid” offered to richer kids shot up.

Almost any able person can get a college education today. But more price barriers exist for the poor Hispanics than was true 30 years ago. Government needs to turn back the clock. Put the aid where it belongs.