In January of 2017, the National Conference of State Legislatures (NCSL) published a list of the top 10 issues that will be before state legislatures across the nation this year. While we’re just over a quarter of the way through the two-year 2017-2018 legislative session, it’s worth a look to see what our own elected officials are doing to address each of the issues. The next topic up for consideration: affordability of higher education.
According to a national study conducted by the University of Pennsylvania last year, Pennsylvania ranks 49th out of 50 states in college affordability. The study states that “Pennsylvania has moved from a system of high tuition, high financial aid to a system of high tuition, high debt for students”. The Commonwealth has repeatedly been one of the top states (if not the top) with the highest average student debt per borrower. For the class of 2016, that number was just over $35,000. Utah, the state with the lowest average debt per borrower, left graduates with around $18,000 in debt.
PHEAA, the Pennsylvania Higher Education Assistance Agency, is the entity that helps Pennsylvania students pay for college. The agency will provide grants to about 128,000 students, with awards reaching up to $4,318. This is down $60 from last year’s maximum grant award, which is due to level funding and increased tuition.
Just last month, the Pennsylvania State System of Education (PASSHE) received a highly anticipated report on the status of the struggling system. The national consultant recommended that all 14 state-owned colleges and universities should be kept open. However, they did recommend that the PASSHE Board raise tuition by 3.5%. The Board did just that at their July meeting. This tuition hike means that full-time students will pay $127 more per semester.
The Pennsylvania Treasury Department offers 529 College Savings Plans to help families save for college. These plans receive special tax breaks to encourage saving. They provide for state tax deductions, tax-deferred growth, tax-free withdrawals, and gift and inheritance tax benefits. Money in 529 accounts can be used to pay for college, many technical and career schools, and qualified expenses. Pennsylvanians have over $4.3 billion saved through these plans.
The legislature is attempting to tackle the issue of college affordability. Sen. Anthony Williams (D-Philadelphia) hopes to ensure high school students understand the concepts of personal finance before graduation and before they are legally responsible for incurring debt. S.B. 364 would require students to complete a capstone course in personal finance before graduation. Sen. Daylin Leach (D-Montgomery) introduced S.B. 245, which would create a public fund that qualifying students could use to attend a state university with no money down. Students would pay back the amount borrowed, interest free, through a small percentage taken off their monthly salary. Lastly, S.B. 631 (Reschenthaler, R-Allegheny), would require institutions of higher education to send annual letters to students with updated information on their debt. This would allow students to make more informed decisions and a realistic idea of their future by making them away of their estimated student debt upon graduation and monthly loan payments.
Furthermore, Rep. Bryan Cutler (R-Lancaster) has introduced the Higher Education Accountability and Transparency Act, H.B. 1448. Rep. Cutler’s bill requires the Pennsylvania Department of Education to create a comparison tool on its website that will allow students and parents to search through factors that help them decide between institutions of higher education. Factors include average tuition, graduation and transfer rates, percentage of students receiving federal aid and average borrowing amount. The bill unanimously passed in the House of Representatives and is awaiting consideration by the Senate Education Committee.
The rising cost of tuition and student debt are factors that college students and their families consider on nearly a daily basis. All branches of government in Pennsylvania are working towards a solution that will try to take money out of the equation when a high school senior is deciding whether to attend college. Stay tuned to this blog and follow us on Twitter @BuchananLobbyists for any updates.