From the U.S. Government Accountability Office, www.gao.gov

Transcript for: State Funding for Higher Education and College
Affordability

Description: Audio interview by GAO staff with Melissa Emrey-Arras,
Director, Education, Workforce, and Income Security 

Related GAO Work: GAO-15-151: Higher Education: State Funding Trends and
Policies on Affordability

Released: December 2014


[ Background Music ]

[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's
December 2014. As higher education costs rise, state support can help
make public colleges more affordable. A team led by Melissa Emrey-Arras,
a director in GAO's Education Workforce and Income Security Team
recently reviewed state funding trends and policies affecting college
affordability. GAO's Jacques Arsenault sat down with Melissa to talk
about what they found.

[ Jacques Arsenault: ] Over the past decade, what have been the trends
for state funding of public colleges and for tuition rates?

[ Melissa Emrey-Arras: ] That's a really interesting question Jacques.
What's been happening is that state funding for colleges has actually
decreased over time. And we looked at the years 2003 to 2012, and we
found that state funding for these public schools decreased by 12%. And
during that time, tuition prices actually rose by about 55%. So what
you're seeing is more tuition going to state schools then state funding.

[ Jacques Arsenault: ] So how have these changes impacted students and
families?

[ Melissa Emrey-Arras: ] Sure. I think what's happening here is that
college has generally become less affordable for students and families,
and you see that in the cost of tuition. For example, if you look at a
four year public school, the median tuition and fees were less than
$5,000 in 2003, but by 2012 that price had gone up to over $7,000 a
year. So there's been a real jump in the cost of tuition, and that's
taken a larger chunk out of family budgets.

[ Jacques Arsenault: ] So what is the federal government doing to work
with states to improve affordability?

[ Melissa Emrey-Arras: ] The federal government primarily spends money
giving loans and grants and work city funds directly to students. So
it's that direct relationship to students and to families currently. And
they invest a lot in helping students in that way. In fact, they spent
over $136 billion recently in a single year to do just that. However,
again that's a very direct relationship. In terms of partnering with the
state to improve affordability at public colleges, there's a lot less
money going to that effort. And you see that with the numbers. So you
have this 136 billion going directly to students and their families from
the federal government. And in contrast, you have about 158 million
going to two small grant programs that were focused on working with
states to improve affordability at the college level.

[ Jacques Arsenault: ] And are there other things that the federal
government could be doing here?

[ Melissa Emrey-Arras: ] We think so. We spoke with experts in the field
and did a lot of interviews with organizations and reviewed literature
and came up with three potential options to work with states to improve
college affordability. Those options are one, create new grant programs,
two, provide information on college affordability to individuals, and
three, make changes to have the student federal aid program work.
Naturally, with any kind of option, there are always pros and cons and
implementation issues to consider. For example, you know, you could
develop new grants to encourage states to make college more affordable.
The government certainly has done a lot of grant making work,
particularly for K-12 education. However, making grants cost money. So
there's this issue of, you know, are there federal funds available for
that purpose. And once you do have a new grant program, you know, you
need to monitor it and make sure that it's administered appropriately.
So there are issues to consider and how to proceed going forward.

[ Jacques Arsenault: ] And then finally, what do you see as the bottom
line of this report?

[ Melissa Emrey-Arras: ] The bottom line is that college has become less
affordable for students and their families. So it's not just a
perception thing. There really is truth to that in terms of the numbers
that we've seen. And I think the importance of this report is
documenting that trend and also helping the Congress consider what
options may be available to work with states to improve that situation
and make college more affordable going forward.

[ Background Music ]

[ Narrator: ] To learn more, visit GAO.gov and be sure to tune in to the
next episode of GAO's Watchdog Report for more from the congressional
watchdog, the U.S. Government Accountability Office.