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Tuition fees, though high, nowhere near cover costs. U.S. colleges need more gifts, more efficiency, still higher fees. A loan system that would make higher tuition fees possible would cause a substantial change in the economics of higher education.
http://features.blogs.fortune.cnn.co...are-too-cheap/
http://features.blogs.fortune.cnn.co...are-too-cheap/
have fun with this one
http://features.blogs.fortune.cnn.co...are-too-cheap/
Editor's Note: Every week, Fortune.com publishes favorite stories from the Fortune magazine archives. In the September 1957 issue, Fortune editor Herbert Solow explored the potential of a federal student loan system that could allow universities to increase tuition rates to support a ballooning college-going population and pay their faculty more than what he describes as "shamefully low pay" (Any of this sound familiar?). As high school students across the country make their college choices this month, many of the challenges Solow describes below still resonate, with several public university systems resorting to tuition hikes to absorb state budget cuts and student loan debt surpassing credit card debt for the first time last year, as recently reported by The New York Times.
By Herbert Solow
FORTUNE -- The mixed U.S. system of public and private higher education must, within a decade or so, greatly expand its resources and improve its methods, or a presently muffled suggestion of broad-scale federal intervention will become a roaring demand. A commission of the influential National Education Association has affirmed that "increased federal aid seems essential." And Congress has before it a number of bills to expand Washington's role through, for example, vast programs of scholarships or student loans. President Eisenhower's Committee on Education Beyond the High School recently declared that Washington should have no permanent economic role in the system -- that is, "not yet." Federal action should be limited to the "residual," said the President's Committee. But this will be the case only if the traditional system can cope with emerging requirements. To do so, it will need a revolution in operations and financing.
[..]
The fees that students paid for their instruction in fiscal 1957 were on the average at least double what they were in 1940. But such fees, totaling about $1 billion, still covered only one-third of the costs of the instruction. The major financial problem, how to make up the difference, becomes more and more aggravated as the student body expands. Can it be solved by expansion of sources of revenue other than tuition fees? Let us look at those sources.
[..]
Of late, support has begun to mount for one plan of student aid that might provide a partial solution to this problem. This is to introduce installment paying and credit into higher education on an order of magnitude never tried before. Students who wanted to pay cash would, of course, be free to do so, but what is being considered now is a loan fund that eventually could take care of everyone, if everyone wanted to use it.
Chairman Devereux C. Josephs of the President's Committee, who was an investment banker, then president of the Carnegie Corporation of New York, and is now chairman of New York Life Insurance Co., finds "obvious advantages to all concerned in borrowing toward an education." Josephs argues: "If all students capable of winning admission to an institution could have access to loans, irrespective of capacity to win scholarships, pressure would be removed when most appropriate and responsibility and independence promoted. " The committee itself has suggested that private foundations do something about "creating new regional or national mechanisms for supplying credit to students through their colleges at low interest and on flexible repayment terms."
[..]
...when colleges have substantial loan funds, make them broadly available at low interest and for long terms, and promote their use, borrowing becomes more popular...
By Herbert Solow
FORTUNE -- The mixed U.S. system of public and private higher education must, within a decade or so, greatly expand its resources and improve its methods, or a presently muffled suggestion of broad-scale federal intervention will become a roaring demand. A commission of the influential National Education Association has affirmed that "increased federal aid seems essential." And Congress has before it a number of bills to expand Washington's role through, for example, vast programs of scholarships or student loans. President Eisenhower's Committee on Education Beyond the High School recently declared that Washington should have no permanent economic role in the system -- that is, "not yet." Federal action should be limited to the "residual," said the President's Committee. But this will be the case only if the traditional system can cope with emerging requirements. To do so, it will need a revolution in operations and financing.
[..]
The fees that students paid for their instruction in fiscal 1957 were on the average at least double what they were in 1940. But such fees, totaling about $1 billion, still covered only one-third of the costs of the instruction. The major financial problem, how to make up the difference, becomes more and more aggravated as the student body expands. Can it be solved by expansion of sources of revenue other than tuition fees? Let us look at those sources.
[..]
Of late, support has begun to mount for one plan of student aid that might provide a partial solution to this problem. This is to introduce installment paying and credit into higher education on an order of magnitude never tried before. Students who wanted to pay cash would, of course, be free to do so, but what is being considered now is a loan fund that eventually could take care of everyone, if everyone wanted to use it.
Chairman Devereux C. Josephs of the President's Committee, who was an investment banker, then president of the Carnegie Corporation of New York, and is now chairman of New York Life Insurance Co., finds "obvious advantages to all concerned in borrowing toward an education." Josephs argues: "If all students capable of winning admission to an institution could have access to loans, irrespective of capacity to win scholarships, pressure would be removed when most appropriate and responsibility and independence promoted. " The committee itself has suggested that private foundations do something about "creating new regional or national mechanisms for supplying credit to students through their colleges at low interest and on flexible repayment terms."
[..]
...when colleges have substantial loan funds, make them broadly available at low interest and for long terms, and promote their use, borrowing becomes more popular...
http://features.blogs.fortune.cnn.co...are-too-cheap/
have fun with this one
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