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U.S. universities tailoring financial aid to lure well-to-do families

University-of_Nebraska

Students from low-income families in Nebraska have seen the net price of college rise faster than their higher-­income classmates’, an analysis of federal data shows.

The rise came despite initiatives in the state college and university systems to make tuition free for low-­income students in Nebraska, one of 21 states where the biggest percentage increase in net costs at public universities was borne by the poorest families.

But while attending most public colleges in Nebraska became more expensive for low-income students, it was a different story in Iowa.

Though actual dollar amounts rose slightly, Iowa’s public four-year colleges decreased the net price for low-income students when the numbers are adjusted for inflation.

College leaders in Nebraska say the numbers don’t reflect their commitment to keeping college affordable for all Nebraskans, and that decreases in available federal aid have contributed to the trend. Iowa administrators say their net prices reflect a long-standing commitment that they have backed up with dedicated aid.

The findings come from an analysis of data that institutions are required to report to the U.S. Department of Education on net price.

Though the total cost of attending college usually includes the average of tuition, fees, room and board, books and other expenses, the net price tells a slightly different story: how much is left of the total cost for families to pay or borrow after federal, state and institutional scholarships and grants are deducted.

The numbers have their limitations. They include only first-time, in-state freshmen who apply for federal grants and loans. In 2012, that included about 63 percent of freshman students at Nebraska colleges.

Even with the cost increases, students in the lowest income bracket — those whose families make less than $30,000 — pay less on average than their peers, and the biggest percentage jump is not typically the biggest dollar amount jump. But the gap in cost is shrinking.

University of Nebraska President J.B. Milliken said in an emailed statement that NU’s tuition remains below average among its peers and that its track record for expanding access to low-­income and first-generation students is strong.

“We’re continually developing new strategies to make sure that high-­quality education remains accessible to students and families in the state,” Milliken wrote.

It should be noted that Iowa’s colleges have historically been more expensive than Nebraska’s. The net price for the lowest-income students at Iowa’s public institutions didn’t dip below Nebraska’s average net price until 2011-12.

Nationwide, the net price rose for all students by an inflation-adjusted average of $1,100 at public and $1,500 at private universities between the 2008-09 and 2011-12 academic years, the most recent period for which the figures are available.

National experts said the costs rose because universities increasingly used their own financial aid to court families higher up the income ladder. Taxpayers are left to subsidize those at the bottom, with federal grants filling in some but not all of the gap.

Kaeli Sedlak-O’Connor, 17, of La Vista doesn’t know yet how much she will need in loans to pay for her education, but she knows her only choices are low-cost schools with good pre-veterinary medicine programs.

To be a veterinarian she will need to take out even bigger loans in vet med school, and knowing that has left the Ralston High senior deciding between Iowa State University in Ames and Wayne State College in Nebraska for her undergraduate degree.

ISU’s sticker price for an out-of-state undergrad — $31,470 a year — was a lot more than the family brings in each year. In-state tuition at Wayne State looked more realistic to Sedlak-­O’Connor and her mother, Brenda Sedlak. The family can’t contribute to her costs beyond the pennies Kaeli is diligently saving. The burden of the costs will be in loans.

“How can a kid make it having that kind of loan?” Sedlak said of the tuition costs at Iowa State. “We’re 90 percent sure she’s going to Wayne because she thinks that’s all she can afford.”

Federal figures show that students from families earning more than $100,000 a year got an average of $10,200 in institutional financial aid while students from families earning under $20,000 got an average of $8,000.

“Institutions are really allocating resources to attract those not full-paying but close to full-paying students to secure the revenue they need,” said Laura Perna, a professor at the University of Pennsylvania’s Graduate School of Education and an expert on higher-education financing.

“They’re making decisions in their own self-interest, but those are not necessarily in the public interest,” she said.

Colleges and universities last year gave about $8.3 billion in merit aid to students whose family incomes were too high for them to qualify for government-issued Pell Grants, the College Board reports.

At the University of Nebraska-­Lincoln, where the campus has set an aggressive goal to reach 30,000 students, the net price has risen about 24 percent for the poorest freshmen. That translates to a $1,938 increase for the 15 percent of freshmen in that income bracket — and $567 more than the average cost increase campuswide.

Students from families making more than $75,000 saw a bigger dollar rise. Middle-income families saw a smaller increase than the low-income students.

Craig Munier, financial aid director at UNL, said affordability for low-­income students is still a priority. But federal aid hasn’t increased much in recent years, and offering scholarships to out-of-state students has become a priority at UNL, too.

As UNL tries to attract more students from Big Ten states, Munier said, the growth is disproportionately coming from outside Nebraska — students who aren’t reflected in the net price data and who are a relatively new focus for institutional aid awards. They’re generally more affluent, Munier said, but it’s typical to discount the much larger sticker price for the targeted students.

“We are still the best alternative in most cases for low-income students who want this type of educational experience,” Munier said.

Though net costs rose for most students at the University of Nebraska at Omaha, the lowest-income students there didn’t have the biggest increase.

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