Trends of Financial Aid
For well over a century, the American higher education system has set the world standard for academic excellence and equitable access for all citizens. The Morrill Act of 1862, which created the land grant university, guarantees that all citizens who can profit from higher education will have access to it. Today, however, there are signs that this far-sighted social contract may soon be broken. The higher education sector - by which we mean both public and private institutions of postsecondary education and training - faces challenges unprecedented in its history, and it is floundering in response.
The monetary difficulties of colleges and universities, thought for a time to be temporary, now appear to be part of long-term trends in the demand for enrollment and the supply of funding. Demand has increased sevenfold since World War II and is expected to continue growing over the next two decades. At the same time, operating costs have escalated and public-sector financial support has flattened. As a result, many colleges and universities have had to sharply increase tuition and fees and look for ways to control costs in order to avoid financial disaster. To examine the dimensions and implications of these trends, the Council for Aid to Education (CAE) launched the Commission on National Investment in Higher Education in 1994. As members of the Commission, we addressed two major questions: Will the current revenue base and funding sources be sufficient for meeting higher education's future needs? If not, what steps can be taken to avert a fiscal crisis?
What we found was a time bomb ticking under the nation's social and economic foundations: At a time when the level of education needed for productive employment is increasing, the opportunity to go to college will be denied to millions of Americans unless sweeping changes are made to control costs, halt sharp increases in tuition, and increase other sources of revenue. As service-related jobs have come to dominate the workplace, the college degree - or at least some form of postsecondary education and training - has replaced the high school diploma as the entry card into rewarding employment. Those who only finish high school - or drop out - start on the lowest rung of the wage ladder and will see their real hourly wages actually decline over their working lives. Unless the nation makes a concerted effort to raise the level of education and skill of these Americans, the wage disparity between the rich and the poor will become so large that it will threaten both America's social stability and its core democratic values. Widespread access to higher education is therefore critical to the economic health and social welfare of the nation.
Latest Articles