On Friday, December 19, 2014, the Department of Education released its much-awaited “College Ratings Framework” paper. One key goal of the proposed ratings system is to help students, particularly those who are underprivileged, make better, more affordable college choices. Will the new ratings system help achieve this goal?
There are reasons to believe that students from the middle- and lower-income tiers of society are not making affordable college choices. College debt has been rising sharply over the past several years, with $33,000 now being the average amount owed by a graduating student. For poorer students, college debt is even higher, even with financial aid factored in. Furthermore, this figure does not account for the nearly 50 percent of freshmen who will never graduate, in many cases because high college debt forced them to drop out.
Such debt seems high compared with what it should be, especially for lower-income students. The national average for annual college tuition at a four-year public college is a little less than $7,500. At a public community college, it is $3,000. However, the “net price” (i.e., including living costs and supplies), for a stay-at-home, in-state, low-income student, after considering grants and scholarships and living costs, is substantially lower. For example, while tuition at San Jose State University (which, incidentally, is the single largest source of engineers who work in Silicon Valley) is $7,500, equal to the national average, the net price for a stay-at-home student with a family income of $40,000 is $5,500. And the net price for such a student at Foothill College, a community college from which students may transfer to San Jose State University, is $3,300. In such a case, over a four-year period, a student who spends two years at the community college and then transfers to the four-year college will accumulate debt of $17,600, even if the student and his family are unable to contribute anything.