The Truth about Tuition

By Ed L. Schrader, Ph.D.Originally published on 3/21/10 

The jousting in the General Assembly of Georgia this year over state appropriations as a byproduct focused attention on the issue of tuition equalization grants to students who attend private colleges and universities. The program that has been around in Georgia since the early 1970s currently carries a price tag of about $30 million as it helps some 34,000 students pay for higher education.

In a budget-cutting initiative, the governor proposed eliminating funding for the program. The legislature restored the funding in the supplemental appropriations bill for the current fiscal year. Lawmakers have yet to take final action on current year or future funding from the program.

Ed Schrader

Schrader is president of Brenau University.

In the surrounding discussion of the issue, some analysts suggested that it would be OK to eliminate tuition assistance for private college and university students because they could afford to take the hit. Seemingly, the conclusion was that private school students are obviously wealthier than their public school counterparts because they are already paying higher tuition.These analysts contend current that $775 level of the tuition equalization grants is too small to make much of a difference for students like those at Brenau University who are already paying $20,000 and more each year for tuition. That stereotypical image was compounded by one news report that suggested lawmakers restored funding only because of the behind-the-scenes work of powerful lobbyists and presidents of private institutions that those same wealthy students presumably all attend. 

Now, I am not a lobbyist, but I am president of a private institution. I represent some 2,800 students of Brenau University. Although some of them may indeed come from well-to-do families, I know firsthand that many other taxpaying Georgia students need that tuition equalization grant to stay in school.

The misconception that private colleges and universities are only for the wealthier students masks the reality private institutions through endowments, scholarships and other financial assistance subsidize individuals’ tuition payments dramatically, and that is not counting any loans for education individual students or their parents may secure on their own.

As one example, Brenau University’s 2,800 students around Georgia also include many active duty military personnel, people who have lost their jobs and want more education to help them change careers or improve employment prospects, school teachers and nurses, sheriffs and police officers, “empty-nesters” who put off education to raise families, some of them even attending college classes at the same time as their offspring.

Opponents of allocating any tax dollars for students at private institutions of higher learning are also overlooking another fact: In recent years, Atlanta and Georgia have lost traction and prominence as the economic capital of the South. That distinction now belongs to North Carolina, whose leaders have seen the wisdom in investing substantially in both public and private higher education.

Private institutions provide services that public institutions cannot. For example, that so-called square peg, who may not succeed in the one-size-fits-all round hole that public institutions must be, often finds a more nurturing and expansive environment in the smaller private college. Private institutions also have more flexibility in meeting educational needs of students from disadvantaged or troubled family environments who may not “test well” enough to meet public institutions’ rigid admissions requirements, yet they have great potential that can be developed with the proper educational boosting.

But that is all the unquantifiable, rah-rah, feel good stuff. Let’s talk truth in numbers.

According to the Bureau of Labor Statistics, the unemployment rate for those without high school diplomas is 9 percent. It falls to 5.7 percent for high school graduates, to 2.8 percent for those with a four-year bachelor’s degree and to 1.7 percent for those with an advanced professional degree.

Statistical projections also demonstrate that a person with a high school diploma is likely to earn about $1.1 million over a 35-year period, a median income level of about $32,000 a year. The median income for someone with a bachelor’s degree jumps to $52,000 per year, and a person with a doctoral degree will earn a median income of more than $81,000.

How is that a return on the state’s investment? Obviously, the more people earn, the more they contribute to the state’s economic growth.

But look at it in quantifiable dollars and cents. That wage-earner with a high school diploma pays about $1,022 in state income taxes. At a 6 percent tax rate over 35 years that amounts to about $36,000. The career tax level for a person with a college degree is about $71,000; with a master’s degree that jumps to $86,000 and while advanced degree holders will have paid well above $110,000.

Any state spending to help citizens attain higher education, then, seems to be a great investment.

But here is the kicker: The state failure to fund the tuition equalization grant program will actually cost taxpayers more money in actual dollars spent. Many people assume that state college and university education is funded solely by tuition. It is not. For every student who attends a state college or university, the state government currently supplements their tuition to the tune of $7,000 per year.

If a $1,000 tuition equalization grant makes enough difference in helping a student attend private Brenau University instead of one of the public such as the University of Georgia, Georgia Tech or Gainesville, the net savings to state taxpayers would be about $6,000 a year for that student. Currently there are about 34,000 Georgians – taxpayers and children of taxpayers – enrolled in private colleges and universities. That means the state saves about $204 million a year that it would be spending if those students were enrolled instead in state-supported institutions.

Georgia’s higher education system, including both private and public institutions, is in urgent need of long-term thinking. We should spend tax dollars wisely, and that means investing prudently in programs that provide the greatest return for constituencies and future generations.

Instead of debating eliminating tuition equalization grants or reducing HOPE scholarships for private school students, Georgia elected officials need to work toward increasing both.

 

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