JIM LEHRER: Now, the college affordability story. Jeffrey Brown has our report.
JEFFREY BROWN: As the cost of higher education keeps climbing, so does the amount of money parents and students are borrowing. A handful of the country’s most elite private schools and a few public ones have begun to address the problem in recent years.
The latest announcement came from Harvard University yesterday. It plans to provide more aid for students from middle-class and some higher-income families.
Families who earn between $120,000 and $180,000 a year will pay on average no more than 10 percent of their income. Families earning between $60,000 and $120,000 will see their contributions decline on a sliding scale from 10 percent of income and on down. Costs will be waived completely for families earning $60,000 a year or less.
And for those who do need financial aid, students loans will be replaced with grants.
For a look at this, we turn to Richard Kahlenberg who follows these issues for the Century Foundation, a not-for-profit research institution, and Scott Jaschik. He’s the editor of the publication Inside Higher Ed.
Welcome to both of you.
Scott Jaschik, starting with you, Harvard gets far more applications than it could possibly fill. So why is it doing this?
SCOTT JASCHIK, Inside Higher Ed: Well, Harvard has a few concerns. One is that the students who are at Harvard who are on financial aid, who have to borrow a lot, feel limited in what they can do, in terms of extracurricular activities while they’re there and in terms of taking perhaps low-paying, but well-serving jobs in society after they leave. So they’re concerned about the current students.
They also think they’re missing some students, students who don’t even apply because they hear how expensive it is and instead opt to attend some of the better public universities all over the country.
JEFFREY BROWN: Richard Kahlenberg, are there studies that tell us how the make-up of the class, say, at Harvard is affected by income?
RICHARD KAHLENBERG, The Century Foundation: Well, clearly, there is tremendous stratification throughout higher education, but particularly in the elite institutions like Harvard.
The Century Foundation commissioned a study recently that found that at the 146 most selective colleges and universities, 74 percent of students come from the richest economic quartile and only 3 percent from the bottom economic quartile. So in other words, you’re 25 times as likely to run into a rich kid as a poor kid on campus.
But Harvard is recognizing that the middle two income quartiles are underrepresented, as well. They’ve got 50 percent of the population, but only 23 percent of the slots. And so I think what Harvard is doing here is taking a step in the right direction and trying to democratize higher education a little bit more.
Redefining middle income
JEFFREY BROWN: Just to be clear, the emphasis up to now usually has been on that bottom tier, right, which remains a problem? Nobody is saying that.
RICHARD KAHLENBERG: Right.
JEFFREY BROWN: But the emphasis now is to move it up in terms of income level?
SCOTT JASCHIK: Move it up quite a bit. I mean, Harvard is describing this as a program to help middle income. But the...
JEFFREY BROWN: Redefining middle income, right?
SCOTT JASCHIK: Yes, but the assistance goes all the way up to families who are earning $180,000 a year. To many Americans, that would not be middle income, but doing quite well.
Obviously, if you're a Harvard student or a prospective Harvard student, this is great, but it's a complicated issue on the impact it will have elsewhere.
JEFFREY BROWN: Explain. Explain that.
SCOTT JASCHIK: Well, let's say you're at a college that has a fraction of Harvard's financial resources, and you're struggling to help students from families that maybe earn $40,000 a year. And Harvard has defined "middle income" as $180,000 a year. You're going to have parents on the phone earning that wanting to know why they're not getting aid.
Harvard has a disproportionate impact on the public perception of what higher education is. What Harvard says matters. But the realities of Harvard's finances are just totally another world from most colleges.
JEFFREY BROWN: What do you think about that?
RICHARD KAHLENBERG: Well, I think that's right, but we have to think of, in Harvard's context, $180,000 actually is middle class. Incredible as it may seem, more than half the students at Harvard are coming from incomes, family incomes of more than $180,000.
JEFFREY BROWN: More than half?
RICHARD KAHLENBERG: Yes. And so they need to reach out to these middle-class families, as well.
Competing for students
JEFFREY BROWN: But what about the problem that he's raising of the huge endowment that Harvard and a handful of schools have that most do not have? They don't have the resources to do something like that.
RICHARD KAHLENBERG: Yes, I think Scott is absolutely right about that. I mean, Harvard's endowment is $35 billion, and nationally there are only 60 institutions with endowments of more than a billion.
But it does matter who goes to these very selective colleges. I mean, in the big debates over affirmative action, Justice Sandra Day O'Connor made clear that the leadership class is often coming from these selective universities. And so an effort to broaden the effort to get more middle-class kids, as well as low-income kids, into these selective institutions matters, in my view.
SCOTT JASCHIK: But that can play out in multiple ways. Harvard has always attracted many of the most talented students in America, and it probably always will. But what Harvard is doing is going after some of the best students who might today be at a Michigan or a Chapel Hill or Virginia or Berkeley.
JEFFREY BROWN: This is a competitive business, right?
SCOTT JASCHIK: This is a competitive business.
JEFFREY BROWN: I mean, there's no way around that.
SCOTT JASCHIK: And there's an argument about, is American society better if all of the talent is concentrated in fewer institutions? Generally, one of the big things going on in higher education these days is a widening gap between have and have-not institutions and even among wealthy institutions, or prestigious institutions.
The gap between Harvard and a few others and everyone else is growing. Harvard can pretty much buy up talent to the extent it wants. Again, very good if you're at Harvard, makes a lot of sense. But in terms of the broader impact, I think there are a lot of questions and there are a lot of critics.
A lot of the people I talked to for my coverage today were very dubious of Harvard's motives but didn't want to say so because they didn't want to appear to be just jealous of Harvard's resources.
JEFFREY BROWN: Do you see it having a potential negative impact on other schools?
RICHARD KAHLENBERG: I think Scott's right that there can be some potential negative impacts, but for the most part I think this is wonderful that we're having an arms race among colleges for bright and talented low-income, working-class, and middle-class students.
I mean, there's been for years an arms race over getting the most talented students of color, the most talented athletes, and the like. And I'm glad that we're now doing it on income, as well, given the tremendous stratification that we have in these colleges.
Rising tuition costs
JEFFREY BROWN: If you step back, the question that so many people still wonder about is, why does it cost so much in the first place? Why does it keep going up beyond the inflation rate?
SCOTT JASCHIK: Well, again, you have to separate out Harvard from everybody else. At Harvard, it's going up in part to get money from that half of the class that has a huge amount of money at their disposal, the people from families over $180,000.
JEFFREY BROWN: Even with that huge endowment, they don't want to spend it, and there is some pressure from Congress, I understand, now to perhaps make them.
SCOTT JASCHIK: They don't want to spend it, and there may be a good social argument there, too. If you admit Bill Gates' daughter to Harvard, should she get a free ride?
Harvard is great at everything it does because it has these resources and has phenomenal facilities. But most private colleges are nothing like Harvard. They're getting their tuition dollars in and spending them to pay the bills of the employees, to heat the buildings and so forth.
Most public universities, their tuition policy is largely determined by the state of state budgets. When state budgets are doing well, tuition increases tend to be less. So it's very different trends, depending on where you're at.
JEFFREY BROWN: What's your explanation for why so high?
RICHARD KAHLENBERG: Well, Harvard would tell you that the cost of an education is actually $68,000 and they're only charging, you know, $46,000. But all the resources that it takes to educate kids at that institution, it's quite expensive.
But I think that the larger question Scott raises is absolutely right: Very few institutions have these large endowments. And ultimately, I think it's the responsibility of the federal government to get involved in helping institutions that have fewer resources than Harvard to make sure that these colleges and universities are accessible to kids from all different backgrounds and that talent is sought out from all different circumstances.
JEFFREY BROWN: OK. Richard Kahlenberg and Scott Jaschik, thank you both very much.
SCOTT JASCHIK: Thank you.
RICHARD KAHLENBERG: Thank you.