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Paying the Price: Michigan

Book talk
by

Minh Mai

on 7 November 2016

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Transcript of Paying the Price: Michigan

Sara Goldrick-Rab
@saragoldrickrab

Professor of Higher Education Policy & Sociology
Temple University

Prezi by:
@minhtuyen
@saragoldrickrab
sgr@temple.edu



Paying the Price:
College Costs, Financial Aid, and the Betrayal of the American Dream


http://amzn.to/1S3F0Fm
Yet we spend about $200 Billion a year on financial aid.
“I just knew that you get out of high school and you go to college. That’s what you do, and that’s what I did….It just feels like you can’t get a decent job…I knew I had to get an education.”

-Chloe

74% of 9th graders from low-income families expect to attend college.
Today’s financial aid system focuses on Pell recipients. Other students just get loans. So at least the Pell recipients are ok. Right?
Purchasing Power of the Pell Grant at Public Institutions, by Type: 1974-2013
Total Pell Expenditures, Maximum and Average Pell Grant, and Number of Recipients: 1994-1995 – 2013-2014
Chloe is not alone. Her price is similar to the national average.


% of students with loans

% of students with work-study

% of students working

2-year
4-year
25
7
73
77
15
63
Two-thirds of students not currently working are nonetheless seeking work
Stay in touch
24% of students were food-insecure

16% had trouble paying rent on time



“I want to have a good job and enough money to support my family. To have everything paid, all of their bills, and help my parents and my family in Nepal.”

-Nima
Chloe's mom made $25,380 per year.
Her “expected family contribution” was $2,520. But her mom couldn't pay it.
Her community college charged $15,512 per year.
(including $3,196 in tuition).
Grants helped—to the tune of $2,958.
She still needed to come up with the other $12,554.
and the federal loan limit was $5,500.
But just 51% of those who graduate from high school will ever make it to college.
Only 2 in 5 will get a degree of any kind within 6 years.
Would more grant aid have helped?

We examined a private program that offered some of these students more money— another $3,500 a year.

Even with the financial aid, few students finished—because financial aid does a bad job of delivering money.


If Chloe attended college the year she was born, her net price would have been close to $0.
The living expenses included in the university’s COA are often under-estimated.
In addition, we watched as students faced rising prices over time:

 As they did not re-file FAFSA
 As state aid became scarce
 As institutional aid was removed, since it was for 1st year students
 As they faced difficult meeting academic requirements

Over 6 years we tracked those 3,000 students.

50% of them completed degrees, including 42% who started at 2-year colleges.

WHAT WE NEED:

1. Address living costs:
• Accurate estimates
• Federal, state, and local programs to make food and housing
more affordable
• Emergency aid

2. Make work pay:
• Fix the work-study program
• Raise the minimum wage
• Work with local employers

3. Develop a more inclusive, less judgmental system
• Undocumented students & those without family support
• Middle-class

GIVE:

All of my book proceeds are going to the search for solutions.

I created the FAST FUND to help students immediately, by identifying and supporting them with faculty in their local schools

Go to http://saragoldrickrab.com for more info.

3,000 college students across Wisconsin agreed to help us find out.
What’s going on?
Every last one got a federal Pell Grant, which is supposed to make college affordable.
We got to know them over the next 6 years—their classes, their grades, their financial aid, their jobs, their lives.
Wrong. Pell no longer covers the cost of college.

That’s the official price—but many times it was inaccurate.

Sometimes the EFC is over-estimated.

For students who support families, it should be negative, once earnings devoted to family are considered.


And if students attend elite schools, they face additional costs of keeping up with the Jones’s.

Given all of this uncertainty, financial aid was very hard to trust.

It was also hard to make sense of, and slow to deliver.

Government assumes an “Expected Family Contribution”—parents are supposed to pay.
But many get no help with the EFC.

And 33% said that they felt obligated to support their family financially.

Just 41% finished anything.

Instead, more than 2 in 5 ended up with no degree—but they had debt.

66% borrowed for their first year of college, but never got a credential.

Chloe’s efforts to cover her college price with two jobs failed.

Her grades sank—fast.

When she applied for a loan, it came too late.

One option: First Degree for Free

• Focus on making public higher education free and high quality —this is about students not schools.

• Carefully examine the resource costs associated with delivering education—and the consequences of a lack of diversity among students. Use this information to provide resources to lower price.

Overpromising….under-delivering

Rules and requirements, exclusions, and surprises!

And it’s just plain slow--- by the time the money arrived, Chloe was gone.

We can do better than this!

Talent development requires education—and today education is too risky.

Improving academic preparation will only do so much. College readiness must be matched with reasonable college prices.
Full transcript