Higher Education: the Affordability Quest

THE improving national economy has eased a cycle of budget cuts on campuses from Boston to Berkeley.

Beneath this surface calm, however, lurks a long-term question: Is American higher education becoming a tougher financial hurdle for students even as it becomes more critical to their career success?

Andrew Roth, an expert on college demographics, sees the nation's colleges and universities at a pivotal point.

''Do we want to continue the historic American tradition'' of giving educational opportunity to the maximum number of people?, asks Dr. Roth, who is dean of enrollment at Mercyhurst College in Erie, Pa.

The question is an economic as well as a social one. Some observers, such as President Clinton, say a well-educated work force benefits the whole country and thus should receive generous taxpayer subsidies.

Rising tuitions at state-funded colleges are of particular concern, since those institutions are the most affordable ones. But experts say it is important that prestigious private colleges, too, remain accessible not just to the wealthy.

''We're especially concerned about the federal government's retreat from financial aid,'' says David Warren, president of the National Association of Independent Colleges and Universities in Washington, D.C.

Many analysts worry that current trends are moving in the wrong direction:

*State spending on colleges has not grown as fast as enrollment. State funding will likely remain tight due to rising costs in other areas, such as health care and prisons.

*Burdens on family bank accounts are rising. Since 1977, disposable income per capita has risen 16 percent (after inflation), while average tuition is up 54 percent at state-funded colleges.

For a public university or community college, families now pay almost one-third of the annual cost of education (the tuition they pay averages $2,000), up from one-fifth in 1982. This does not include other costs, from room and board to textbooks and mascot-adorned sweatshirts.

''Once you get beyond a third [of the cost on families] that great open door'' of accessibility has begun to close, argues Kent Halstead, who studies higher education for Research Associates of Washington.

*Cost-cutting may be harmful to universities. As an alternative to tuition hikes, budget cuts can limit access and affect educational quality, such as by preventing deployment of new technology. California's system has seen particularly harsh cuts.

*Demand is growing. Increasingly, higher education is seen as the key to finding secure, high-wage jobs. As people change careers more frequently, more people go back to school for retraining.

Moreover, an ''echo'' of the baby boom will cause a significant rise in college-age youths, starting in 1997 and lasting about 15 years. In some states, especially in the Sun Belt and West Coast, the increased pool of education-seekers will be dramatic and dominated by minorities.

Is college necessary?

Mr. Clinton weighed in with a proposal for making public or private higher education more affordable: a tuition tax credit of up to $10,000 a year. Some analysts speculate that the tax give-back would be absorbed by universities in the form of lower financial-aid offers or higher tuition, but it could still have an impact on higher education.

Not everyone agrees that America faces a college affordability crisis.

Allyson Tucker, manager of the Heritage Foundation's center for educational law and policy in Washington, D.C., takes issue with the scenario on two fronts.

First, she says colleges could be better managed. She sees little reason why college costs should rise faster than prices in the economy at large. Rising health-care costs are not a burden unique to college faculties, for example.

Second, Ms. Tucker questions the notion that as many people as possible should earn a four-year college degree. High school graduates who get job-specific training can land better paying jobs than many of today's university graduates and are not left with enormous debts to pay off, she says.

''There's a German system by which the parent and child decide in seventh grade whether the focus is vocational or college-prep,'' Tucker says. She suggests reducing the federal college loans that ''distort the market'' by pulling more people into four-year institutions.

Republicans in Congress are talking along these lines with an idea to help balance the federal budget by charging full interest on federal loans. Currently interest is charged only after the student finishes school.

Dr. Warren laments that this change would increase the cost of loans by 25 percent to 30 percent.

State budgets as indicators

To see if the burden on students and their parents will keep rising, the place to watch is state budgets. States cut spending heavily in the last recession, and universities are just catching their breath.

''The fiscal situation is not quite as dire as it was a year or two ago,'' says John Hammang, director of state and campus relations for the American Association of State Colleges and Universities, based in Washington, D.C.

''Things have stabilized,'' agrees C. Peter Magrath, who heads the National Association of State Universities and Land Grant Colleges, also based in Washington. The group's members include large research institutions, while the former association represents most public universities.

But the cuts are the order of the day at the University of Washington in Seattle (see related story, left).

In California, this year's increase in state funding hasn't kept pace with inflation. And it doesn't do anything to remove the roughly 20-percent drop in per-student funding since 1990.

Barry Munitz, chancellor of the 22-campus California State University system, is lobbying the Legislature for a tuition hike.

''Our price is still extremely low,'' $1,600 a year for a full-time student, Dr. Munitz says. He says campuses have ''dangerously deferred'' needed maintenance.

Then there's what he calls ''Tidal Wave II,'' the coming demographic boom expected to begin in 1997 and last about 15 years.

According to Roth, California will see a 77-percent rise in high-school graduates. Washington State will see a 53 percent rise. Arizona is building three new campuses, and the former Fort Ord in California's Monterey Bay will become part of the California State system next fall.

Achieving racial diversity

The racial implications of this demographic boom will need to be addressed in many states. Texas has already seen a lawsuit alleging that the community colleges, where Hispanics tend to go, are not getting their fair share of funds compared with four-year colleges, Dr. Halstead says. Nationwide, only about 8 percent of blacks earn a college degree, versus 26 percent of whites.

Some states are expanding their emphasis on less-expensive, two-year institutions that provide vocational education and can lead into a final two years at a university for a four-year degree.

Washington State, for example, has added 8,000 students to its community-college system in the last four years.

Private colleges also face the challenge of achieving racial diversity amid rising costs. Warren notes that, where the 1980s saw soaring tuition, this decade is one of cost-containment.

This belt-tightening mirrors the national economy, where businesses are learning to do more with less and focusing on ''core competences.''

America's system of universities and colleges is still the world's best-regarded. Halstead says the state subsidies mean that public higher education ''remains one of the best buys in the country.''

The challenge will be to keep it that way.

Rising tuitions at state-funded colleges are of concern, since they are the most affordable ones. But experts say it is important that prestigious private colleges, too, remain accessible not just to the wealthy.