Growing Cost of Higher Education

Rising Tuition and Less Financial Aid for New Jersey Students

Jan 6, 2009

Many New Jersey college students are being forced to make difficult decisions in financing their education due to the dramatic increase in their college costs.

Yet as tuition rises yearly along with the costs of room and board, the federal and private loans many students depend upon are becoming scarce due to the recent financial crisis. As a result, both incoming college freshmen and current students will be facing greater challenges in the next few years to meet their financial obligations.

Increasing New Jersey Tuition

Tuition and school fees for the state of New Jersey have been increasing steadily over the last fifteen years, far surpassing the rates of family income. As a result, attending college becomes more expensive for students and parents, especially those from the middle and lower income bracket.

In the May 11th, 2006 report "Making Public Higher Education Affordable in New Jersey," Robert P. Haney, Jr., Trustee of the Hall Institute of Public Policy, describes a 7.1 percent annual increase in tuition for New Jersey state colleges. At the same time, the annual median family income has only increased by 0.7 percent. As these differences in college costs and family income become more pronounced, students must resort to part-time jobs and costly loans to make ends meet.

"While New Jersey leads the nation in sending its students to college, it also leads the nation in students that do not finish four year programs within six years, an indicator of financial distress," said Haney in the report.

Since multiple part-time jobs may not be feasible for busy students, federal and private loans are needed.

Student Borrowing and the Credit Crunch

Due to limits on the amount of federal grants and loans available, students and their families were forced to seek out more expensive private loans with stricter penalties and less protection in the last few years. The damaged financial system has even made these loans hard to come by.

In Susan Todd's September 18th, 2008 Star-Ledger article, "Credit Crisis Limits Students Seeking College Loans," Barmark Nassirian, the associate executive director of the American Association of Collegiate Registrars and Admissions Officers, compared the private loan companies to the damaged mortgage sector.

"They were not federally regulated. They tended to have harsh conditions," said Nassirian. Following in the footsteps of the mortgage companies, more than 70 private college lenders have closed their doors.

Todd explains that as a result of these factors, the surviving private loan providers are setting stricter standards and higher price tags on loans for prospective students. Students who only last year were approved for their college loans may be denied this time around.

With no other options, lower and middle class families will not be able to send their children to New Jersey colleges and universities. Unless the lending system receives the attention it needs, New Jersey may lose its valuable source of students to fill its professional occupations.

The copyright of the article Growing Cost of Higher Education in American Universities is owned by Rachel Martin. Permission to republish Growing Cost of Higher Education in print or online must be granted by the author in writing.