49 States Get F In College Affordability

WASHINGTON (CBS/AP) December 5, 2008 ― An independent report on American higher education flunks all but one state when it comes to affordability - an embarrassing verdict that is unlikely to improve as the economy contracts.

The biennial study by the National Center for Public Policy and Higher Education, which evaluates how well higher education is serving the public, handed out Fs for affordability to 49 states, up from 43 two years ago. Only California received a passing grade in the category, a C, thanks to its relatively inexpensive community colleges.

The report card uses a range of measurements to give states grades, from A to F, on the performance of their public and private colleges. The affordability grade is based on how much of the average family's income it costs to go to college.

Almost everywhere, that figure is up, according to the survey. Only two states - New York and Tennessee - have made even minimal improvements since 2000, but they're still considered to be failing. Everywhere else, families must fork over a greater percentage of their income to pay for college. In Illinois, the average cost attending a public four-year college has jumped from 19 percent of family's income in 1999-2000 to 35 percent in 2007-2008, and in Pennsylvania, from 29 percent to 41 percent.

For public four year colleges average tuition has skyrocketed from $1,600 a year 20 years ago to nearly $7,000 a year now. Private school tuition has shot up from $8,000 to $25,000 a year, as CBS News' Kelly Wallace reports.

Low-income families have been hardest hit, Wallace reports. Families making less than $19,000 a year are now paying a whopping 57 percent of their incomes for college, compared to 39 percent in 1999. The share for middle class families making less than $90,000 also climbed from 18 to 25 percent. For families making more than $90,000 a year, the cost rose the least - from 7 to 9 percent of annual income.

And that's after accounting for financial aid, which is increasingly being used to lure high-achieving students who boost a school's reputation, but who don't need help to go to college.

"For a long time, we just thought about the poor," National Center for Public Policy and Higher Education Chairman Jim Hunt told Wallace. "But now many middle class students just can't go. The tuition is too high."

The problem seems likely to worsen as the economy does, said Patrick Callan, the center's president.

Historically during downturns, "states make disproportionate cuts in higher education and, in return for the colleges taking them gracefully, allow them to raise tuition," Callan said. "If we handle this recession like we've handled others, we will see that this gets worse."

Scott Cristal of Columbia, Mo., said he wasn't surprised by the study's findings. Cristal, who has sent two daughters to college and has another two yet to pay for, said that he is trying to expand his business to help pay the tuition bills, but that it's been hard because of the slowing economy.

"We're going to play it by ear, be optimistic, hope for the best and just ride it out as best we can," Cristal said. "I think that's what everybody in America's doing right now."

States fared modestly better in other categories such as participation, where no state failed and about half the states earned As or Bs - comparable to the report two years ago. One reason for the uptick is that more students are taking rigorous college-prep courses, the study found. In Texas, for instance, the percentage of high schoolers taking at least one upper-level science course has nearly tripled from 20 percent to 56 percent.

But better preparation for college hasn't translated into better enrollment or completion, with only two states - Arizona and Iowa - receiving an A for participation in higher education.

And the discrepancy in enrollment between states is still great: Forty-four percent of young Iowans are in college, while just 18 percent of their counterparts in Alaska - one of three states to get an F in the category - are enrolled.

Callan said the United States is at best standing still while other countries pass it in areas like college enrollment and completion. And as higher education fails to keep up with population growth, the specter lurks of new generations less educated than their Baby Boomer predecessors.

"The educational strength of the American population is in the group that's about to retire," Callan said. "In the rest of the world it's the group that's gone to college since 1990."

In related news:

Harvard University says its endowment has tumbled $8 billion in the four months since the end of the last fiscal year.

The estimated 22 percent decline is the school's sharpest endowment drop in modern history. The endowment was valued at $36.9 billion on June 30.

According to a letter to deans from university heads, Harvard must take a "hard look" at staffing levels and compensation. They're also forecasting a 30 percent drop for the fiscal year ending in June 2009.

The school has said its U.S. stock portfolio and foreign equity portfolio had taken hard hits recently. The school's endowment is the largest in higher education.

The university's president warns that the estimated drop may be conservative because some money managers that have yet to report figures.