The result of this cost increase spiral: The net cost of attendance (after adjusting for grants and certain tax benefits for students) at a four-year private college now exceeds $19,000 a year. That's a lot to swallow, even for middle-class families. But for poor students, the bite is much, much bigger: It takes a staggering 83% of a poor family's annual income to fund the annual costs at a private four-year college -- up from 60% a decade ago. To be sure, most of the poorest students receive financial aid. But increasingly, aid is shifting toward loans, so today's education sticker shock and the prospect of decades of college-debt repayment is causing many bright, poor students to seek cheaper two-year community college schooling -- or simply to eschew higher education altogether.
Another College Board study on the impact of education on incomes shows that neither option is a great one. It found four-year college grads make roughly $20,000 more than their high school-trained counterparts. And people who earn two-year degrees make only about $7,000 more a year than high school grads. The bottom line: A four-year degree is becoming America's most-reliable elevator of class and key to a middle-class standard of living.
That's why Washington must do more to make sure college is a real option, financially, for more people. A good place for Congress to start would be by finishing up reauthorization of the federal Higher Education Act, which would provide at least $420 billion in federal student loan guarantees over the next six years. Deliberations over competing House and Senate versions of the bill risk falling victim to lawmakers' post-Katrina hunt to find funds to shrink the budget deficit. While we're certainly not against reforming student aid programs -- the bill's move to save $6 billion to $10 billion by lowering certain ridiculously high lender incentives is long overdue, for instance -- it's wrongheaded to consider big cuts in student aid at a time when it's needed more than ever.
Indeed, in an era in which Congress routinely wastes taxpayers' money on million-dollar missiles that repeatedly miss their targets and $315 million bridges to nowhere, America can surely afford to invest more in upgrading the skills of its most important resource: its workers.