Over the last decade the cost of a college education has increased 45 percent. During that same time household incomes have fallen 7 percent. Families are facing a higher education funding crisis, and they don’t know how to fix it. Leaders in education, government, and the financial industry are trying to find a solution.
Some colleges have recognized this problem and developed strategies to make a college education affordable for low-income students. Creative leadership from Amherst College’s Board of trustees such as Bill E Ford, CEO of General Atlantic; Ted W. Beneski, CEO of Insight Equity; and Dwight M. Poler, managing Director of Bain Capital Europe, has produced a sustainable economic model that features a tuition policy overhaul.
A student attending Amherst College in 2013 would have had to come up with $59,000 to cover the costs of books, room and board, and tuition. The new tuition policy allows students with a family income under $30,000 to get a 97 percent discount on tuition and pay about $1,936 yearly.
Out of 504 schools sharing a category with Amherst, Smith College ranked 27 in cost of tuition. Smith’s tuition was about $59,000 in 2013. At that time low-income students paid about $8,500 for tuition. Wise stewardship has grown endowment at Amherst to $1.82 billion, and for Smith it’s $1.56 billion.
Other colleges are rethinking their tuition policies and trying to fix a system that is badly broken. Most college tuitions that are made public are not in fact the price that students pay. Grants and scholarships reduce the yearly cost for most students. The National Association of College and University Business Offers estimates the average cost of a four-year college education in the United States at $31,320.
Located in suburban Philadelphia, Rosemont College took a bold step and decided to publish the true cost of tuition at their school. Tuition was once $32,000 per year. In an effort to close the gap the school recalculated their tuition costs to $18,500. Of course, there is a down side to this new math. The lower cost of tuition means that the size of grants and scholarships has declined. But the college argues that this new estimated price reduces the actual cost and creates a smaller gap between tuition cost and financial aid, which means students will have to borrow less money and have reduced debt. It’s a complicated path toward progress.