College of Agriculture and Life Sciences. Academics. Research. Extension

Perspectives Online

« YOU DECIDE: Are we moving fast enough on transportation? | Main | 4-H Gala to spotlight Rick Hendrick, Dr. Carlton Blalock»

YOU DECIDE: Is higher education still affordable in North Carolina?

June 01, 2007

By Dr. Mike Walden
North Carolina Cooperative Extension Service

MEDIA CONTACT: Dr. Mike Walden, 919.515.4671 or michael_walden@ncsu.edu

Dr. Mike Walden
Media representatives: For a black-and-white or color copy of this photo, call 919.513.3127 or e-mail dave_caldwell@ncsu.edu.
As my 84-year-old father is fond of saying, "You need to get an education today to get ahead."

You see, my father dropped out of high school after tenth grade. Of course, that was in the 1930s, when high school dropouts could still get good-paying jobs and expect a decent standard of living.

Today, as my father and most people know, those times are gone. The wages (after taking out inflation) of high school dropouts have been falling, and the salary gap between dropouts -- and even high school graduates -- and college-educated workers has been growing.

So when my dad says people need an education today, he means a college education. Perhaps never before in history has a college degree been so valuable in terms of the additional income a graduate can earn over his or her lifetime.

Yet it appears we've been making it harder for young people to go to college in North Carolina.

In the last 30 years, tuition and required fees at the state's public universities have increased 90 percent (again, after taking out general inflation) and tuition and fees at the state's community colleges jumped 120 percent ahead of the cost of living.

Fortunately, even with these increases, the cost of North Carolina's public higher education remains a bargain compared to other states.

In 2005, tuition and fees at UNC system campuses were 12th-lowest, and they were sixth-lowest for our two-year community colleges. Also, revenue from student tuition and fees accounted for only 18 percent of academic costs for UNC system schools and 13 percent of the costs of North Carolina's community college system.

Even so, North Carolina's rising public tuition and fees would suggest it's harder for someone to go to college today than in the past. But in numerous situations, appearances can be deceiving. A big overlooked element in the tuition comparison can dramatically change the results and conclusions.

This missing element is student financial aid. At the same time that college tuition has been rising, so too has financial aid.

Student financial aid funded by North Carolina rose an incredible 2,400 percent in inflation-adjusted terms between 1989 and 2003, and North Carolina ranked sixth among all states in the percentage increase in such aid during the last decade. There were also large increases in aid from federal sources.

And when financial aid is included, you can reach a much different conclusion about trends in college costs in North Carolina. Adding scholarships and grants, public university tuitions and fees (adjusted for inflation) are little different from three decades ago. If you include loans, costs are actually lower. Including financial aid makes community college tuition and fees lower today than in the past.

These findings raise one interesting question.

If greater public financial aid has largely offset the rise in tuition and fees, then why haven't public decision-makers simply kept tuitions constant and avoided paying more in aid? Wouldn't this have been simpler and more direct?

The answer is probably obvious to most of you.

If the objective of publicly supported universities and colleges is to be open to as many academically qualified persons as possible, then charging different tuitions to different students makes sense. In this case, the full tuition is charged to students who have sufficient incomes to pay it, while students from families with lower incomes have their tuitions effectively reduced by financial aid.

My dad was right: education is more important today.

You decide if the system for funding and attending higher education in North Carolina is doing the job to meet an 84-year-old's wise advice.

-30-

Dr. Mike Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University's College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The Department of Communication Services provides his You Decide column every two weeks. Earlier You Decide columns are at http://www.cals.ncsu.edu/agcomm/writing/walden/decide.htm

Related audio files are at http://www.ces.ncsu.edu/depts/agcomm/writing/walden/index.html

Posted by Dave at June 1, 2007 08:55 AM