University of Virginia Economist and Curry School Dean Testifies Before House on Lack of Coherence in Financial Aid for Higher Education

Mar. 8, 2007 — David Breneman, dean of the Curry School of Education at the University of Virginia, told a U.S House of Representatives subcommittee on higher education today that “the country must find ways to maintain educational opportunity, or we will all be the losers.”

States and the federal government are failing to make college affordable for lower-income students, Breneman said. In addition, compared with other nations, the drop in the percentage of young people in the United States who finish college is shocking, he said.

“The country is sending decidedly mixed messages to young people, encouraging them on the one hand to prepare for college, and then pricing many of the less wealthy either out of the market, or forcing them to alter their choice of college, to work long hours while enrolled, or to incur substantial debt,” said Breneman, an economist who has focused on higher education for more than 35 years.

Testifying before the 23-member Subcommittee on Higher Education, Lifelong Learning, and Competitiveness, Breneman used data from an advisory committee, which he chaired, to the National Center on Public Policy and Higher Education. The independent, foundation-sponsored group produces national “report cards” on the 50 states’ higher education performance, the most recent being in 2006.

The House subcommittee, which is part of the Committee on Education and Labor, called the hearing to gather information on how students access and finance a college education. Witnesses from several other organizations also testified.

Despite recent efforts on federal, state and local levels to improve student achievement, not much progress has been made in expanding opportunities for minorities and low-income students, Breneman said. The center’s 2006 report card found when it comes to offering affordable postsecondary education, “virtually every state received a failing grade,” due to declining state aid that has resulted in rising tuition costs.

Other factors that have created what Breneman called “a financial aid system that lacks coherence” include:

  • a failure of the Pell Grant program to keep up with the rising cost of college;
  • an increase in scholarships and financial aid based on merit at the expense of aid based on need; and
  • the proliferation of loan packages and the subsequent increase in student indebtedness;

Breneman noted that the intensely competitive higher education market does not operate like supply-and-demand economics. Traditional colleges and universities compete for “quality, prestige and selectivity” and not on price. “Increased competition,” he said, “is not the solution to rising prices in this market, and workable regulatory mechanisms have eluded state and federal officials as well.”

Breneman also said that the National Center on Public Policy and Higher Education’s 2006 report card compared the United States to 26 other countries for the first time. Although the U.S. percentage of citizens, now 35 to 64 years old, who are college-educated (39 percent), was second only to Canada, when looking at the current percentage of Americans aged 18 to 24 who earn degrees, the United States plummets to 16th place among the 27 countries considered.

The data show that “the early advantage this country had historically in assuring mass higher education for the baby boom generation has eroded, as other countries have overtaken us in the production of educated talent,” he said.