Star Tribune (Minneapolis, MN), March 17, 2007, Saturday

Copyright 2007 Star Tribune

All Rights Reserved

Star Tribune (Minneapolis, MN)

March 17, 2007 Saturday

Metro Edition

SECTION: NEWS; Pg. 1A

LENGTH: 2122 words

HEADLINE: Back in the day, it was easier to pay;

As higher-education costs continue to skyrocket, sticker-shocked Minnesota families scramble to cope

BYLINE: Norman Draper, Staff Writer

BODY:

When Lois Johnson graduated from Augsburg College in 1968, tuition and fees were $1,400. How things have changed. Tuition and fees for her son, Aaron, a current Augsburg student, are $22,900 a year.

Thousands of Minnesota families are facing that sticker shock as financial-aid packages arrive in the mail. In the span of a generation, the cost for Minnesotans to go to college has soared far beyond the rate of inflation. Minnesota kids - more than the national average - are going deeply into debt to pay for the education that is now considered a prerequisite for getting a good job and making good money.

As college bills pile up, pressure is building to contain costs. Congress is currently considering lowering student-loan rates. In Minnesota the Legislature is considering several bills to limit college cost increases.

For a closer look at the situation, the Star Tribune talked to five families where parents and children attended the same college. They illustrate the tradeoffs being made as college costs shoot into the stratosphere.

Lois and Bruce Johnson, both retired teachers, have decided to foot most of the bill for their children.

"We've seen tuition rise yearly since we started paying for it," Bruce said. "It would be nice if [the costs] were less ... but we still feel it's important that we do our part."

Statistics kept by the Minnesota Office of Higher Education show steep increases for the state's colleges. The average cost of undergraduate tuition and fees at the University of Minnesota climbed from $522 a year in 1971 to the current $9,432. Four-year MnSCU universities went from $379 a year to $5,656. Private colleges jumped from $1,671 to $24,744. Even when adjusted for inflation, those costs are about three times what they were in 1971. That doesn't include room and board costs. Those have generally risen more slowly, though still often above the rate of inflation.

Income has risen, but ...

Family income has risen over those years, too, but not enough to absorb the rise in college costs. A report issued last year by the National Center for Public Policy and Higher Education showed that a public, four-year college or university siphoned off 26 percent of the average Minnesota family's annual income, compared with 19 percent in 1992.

Higher costs translate into more student loans. Minnesota students are especially prone to taking on debt. Office of Higher Education statistics show that 49 percent of Minnesota college students took out loans in 2003-04, compared with 35 percent nationwide.

Mikki Tuohy, a freshman at Winona State University, is already thousands of dollars in debt for college, with more debt looming on the horizon.

"We told our kids from the beginning that they are going to pay for their own college," said her mother, Mary, a 1986 Winona State graduate.

Mikki reaped about $2,000 in scholarships, and took out loans to pay the remaining $12,000 bill. She figures that she'll have to work full time this summer to pay off at least one semester's cost and reduce next year's borrowing. Now, she worries that if the debt piles up too high, she may have to change her career plans.

"I want to be a teacher as much as I can," she said. "But if something happens and I can't pay for things, I will have to look for another job."

Why is tuition so high?

Many families facing these five-digit dilemmas wonder why tuition has risen so high so fast.

For public colleges, the answer has a lot to do with state spending priorities. Both in Minnesota and nationwide, the state contribution to higher education is dropping as both a percentage of the state colleges' and universities' budgets, and as a percentage of state spending. For instance, in 1967, 17.3 percent of the state's general-fund budget went to higher education. By this year, that had shrunk to 8.9 percent.

At the same time, the pressure for colleges to spend more is increasing. At larger universities, getting and keeping faculty "stars" requires higher salaries and such costly benefits as bigger laboratories and other resources.

"Yes, absolutely, the cost of retaining and getting faculty are a cost driver here," said Richard Pfutzenreuter, U vice president and chief financial officer. Even now, Pfutzenreuter said, a U professor being recruited by another university is asking for an additional $120,000 in salary and $300,000 a year for five years in research support as the price for staying. In such high-profile fields as biomedical research, getting coveted professors can be "million-dollar deals," he said.

Beyond that, colleges large and small are spending money on amenities that help attract the best and brightest students: recreation facilities, single dorm rooms, wireless computer connections. In the classroom, technology upgrades at the U cost $1.5 million a year, Pfutzenreuter said.

"Our students of today aren't the same ones that came to school with a suitcase and alarm clock," said Larry Christenson, director of residential life for St. Cloud State University.

Ronald Ehrenberg, director of the Cornell University Higher Education Research Institute in Ithaca, N.Y., said many private colleges have gotten sucked into "an arms race of spending, in which each institution wants to be the very best it can, competing for students, for faculty, for research grants. ... It's fueled by the U.S. News and World Report rankings, in which how much a university spends is part of the rankings."

Some observers question whether colleges have the will to keep a lid on costs.

"I don't think colleges have collectively developed their muscle for cutting costs," said James Boyle, president of the Arlington, Va.-based College Parents of America.

For instance, in 2002, the U instituted a minimum wage of $12 an hour for about 1,000 employees that cost about $2.9 million a year. Then-President Mark Yudof "felt it was the right thing to do," Pfutzenreuter said. And the Board of Regents had little hesitation last December about boosting President Robert Bruininks' salary by nearly $39,000, to $423,000 for 2007-08.

That's not to say colleges don't trim their budgets. In 2004, after a bad year at the Legislature, the U laid off nearly 500 employees and froze wages, Pfutzenreuter said.

Colleges are still in demand

And while rising college costs are creating difficulties, today's students and parents are willing to pay the price. Applications at the U of M Twin Cities campus for the freshman class hit a record 24,658 last year, the fifth consecutive year such a record has been set. In 1996, 6,239 students applied for admission to Winona State University. Last year, that figure soared to 8,186.

While many students will work or borrow for their education, there are limits to the sacrifices they'll make.

Anne Auger, 54, of White Bear Lake, went to White Bear Lake's Century College back in 1970 when it was Lakewood Community College, and has some thoughts about how things have changed.

"We didn't go buy and download tunes on an iPod; we didn't own one. I would say out of everybody I went to school with, nobody had a new car; we all drove Flintstonemobiles. ... We had to sacrifice. ... When they sacrifice, they give up designer clothes, and partying out at bars, and department-store makeup."

And how does daughter Lindsay, a part-time student at Century, reflect that?

"I had a total of four pairs of shoes," Anne Auger said. "And my daughter has the whole bottom of an 11-foot closet filled with shoes, and overflowing out of the shoe bag that hangs off the bedroom door. She probably has jeans that cost $250. My God!"

Lindsay, 25, who wants to go on to a four-year school, responded that she's cut back a lot on her shopping.

"When you talk about paying $10,000 to $15,000 for a year of school, the $1,000 in a six-month period that I spend on coffee, clothes, and shoes wouldn't help me much with school."

`Typical student is doing fine.'

Some researchers argue that a college education is so fundamental to making a decent living these days that the rising price tag is still worth it.

"Yes, it has gotten more expensive, definitely," said Sandy Baum, senior policy analyst for the College Board and a professor of economics at Skidmore College in Saratoga Springs, NY. "However, it's also true that the income differential between high-school graduates and college graduates is greater."

It's important to remember, Baum said, that students mired in bottomless debt are in the minority. "The typical student is doing just fine," she said. Financial aid, tax credits and generous merit awards for top-performing kids mean there can be big gaps between a college's sticker price and what actually gets paid.

"We're not in a crisis situation," she said.

But college costs are certainly creating pressure for 18-year-old St. Cloud State University freshman Nils Badrul, and his dad, Badrul Bakar.

"Oh, man!" exclaimed Nils when told that his grandparents paid the freight for his dad when he went to St. Cloud State. Things have changed. Nils figures his dad gives him about $20 every two weeks to help with incidental expenses. He pays for the rest, which he calculates to be about $11,000 a year. Nils managed to get $5,000 a year in grants, and has to cover the rest with $6,000 in loans. That debt will grow if Nils pursues an M.B.A.

"My parents paid for my education," said Badrul Bakar, from Apple Valley, who entered St. Cloud State in 1983 as a foreign student from Malaysia. "I came out of college with a lot of gratitude for my parents." Back then, Bakar said, attending St. Cloud State only cost "a few hundred dollars a quarter. Wow!" Now, Bakar said, the bill is too high for him to be able to put much of a dent in Nils' bill.

"At this time we have no choice because we can't afford it," he said.

Norman Draper - 612-673-4547

WHAT THINGS COST THEN AND NOW

% change

1980 2006 (adjusted)

Tuition and fees at U $1,060 $8,622 232%

Tuition/fees at MNSCU four-year schools $648 $5,251 231%

Tuition and fees at private four-year colleges $3,284 $23,246 189%

New car $7,530 $28,800 56%

Gallon of gas $1.25 $2.40 -22%

White bread (1 lb.) .50 $1.05 -14%

Median home price (Midwest) $51,900 $222,000 75%

Percent change numbers adjusted to account for inflation between 1980 and 2006.

Sources: Minnesota Office of Higher Education, Bureau of Labor Statistics, National Auto Dealers Association and National Association of Realtor

A LOOK AT HOW FAMILIES APPROACH THE TUITION CHALLENGE

MARY TUOHY, 43, of Albert Lea graduated from Winona State University. Daughter Mikki, 18, is a freshman at Winona State.

Mikki agrees, in theory, with her parents' expectation that she pay for her own college. But she worries that the $12,000 in college loans she's taken out will grow.

"I always feel it's important for students to pay for the education they're getting. I try not to think about it because I'm getting a good education. But it's hard not to think about the money issue."

MARY NELSON, 47, of Winthrop graduated from the University of Minnesota's Twin Cities campus. Daughter Brenda, 20, is a junior at the U. Brenda's savings and scholarship money are running out.

"I might actually have to take out a loan for next year," Brenda said. "If there's any way around it, I'll try to find a way around it."

"We'll figure it out," Mary said. "We might help, but it won't be a gift." That means more work on her parents' dairy farm, where Brenda says she already works weekends to pay her cell phone bill.

BADRUL BAKAR, 48, of Apple Valley graduated from St. Cloud State University. Son Nils Badrul, 18, is a freshman at St. Cloud State.

At the rate Nils is borrowing to pay for college, he will be $24,000 in debt when he graduates. Getting the MBA degree he wants will cost him many thousands more.

All these big expenses are making Nils think he might want to work a few years after he graduates from St. Cloud State.

"To get an MBA at the U is about $80,000," Nils said. "Two years at about $40,000 a year."

LOIS and BRUCE JOHNSON, both 60 and from Plymouth, graduated from Augsburg College in Minneapolis. Their oldest daughter, Leah, graduated from Augsburg. Son Thomas attended Augsburg for a year. Son Aaron, 24, is a senior at Augsburg.

Lois Johnson's mom and dad knew what to do when her college bills came due in the mid-'60s: They sold a steer. Lois still needed grant money, loans and a job. Four decades later, Lois and Bruce are footing most of their kids' college costs. Bruce says they "look at it as an investment."