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Why college costs soared as more students enrolled

Stock photo / Pexels

Today's college students and recent alumni often look wistfully to the 1960s.

By today's standards, the price of a college education at the time was amazingly low. A student applying to a state university that charged no tuition had total annual expenses ranging from $1,100 to $1,500, or the equivalent today of $9,460 to $12,900. By contrast, today's state university students typically spend $30,000 per year on tuition and expenses. Even at elite private colleges, tuition in 1963 was a mere $1,760 - the equivalent today of $14,500 for tuition. That pales in comparison to what actual students pay in 2018: about $55,000 to $60,000 per year for an Ivy League undergraduate.

But the situation for students looking to go to college in the 1960s wasn't all good. While the decade witnessed an explosion in the number of young Americans who were able to go to college - the percentage of high school graduates continuing to a college education increased from about 25 percent to 50 percent - higher education still had accessibility issues. Going to college remained largely a middle-class activity. In fact, it was efforts to address that lack of access that helped send costs skyrocketing, while fundamentally reshaping the college experience.

The means of paying for college educations in the 1960s were as different as the cost. A student could whittle down college expenses by working a summer job. It was a teenage "rite of passage" to earn roughly $500 from June through August doing jobs like bagging groceries or scooping ice cream.

The low cost meant that there was little demand for the federal government to fund college educations as it does today through massive student loan programs. Also, Congress was reluctant to intrude on state prerogatives in education. But the lack of federal student aid programs resulted in a bifurcated system: Many college applicants in the 1960s could not go to college because they could not pay for it.

Money for college was scarce, as suggested by a high school senior in Roanoke, Virginia, who applied to college in 1966 and recalled the "choices and money being limited." Even though he had an outstanding high school transcript, he recounted, "I really didn't know until three weeks before I was to enter Emory & Henry if I would have the money to attend my freshman year. The alternative, at least as I saw it, was the military. But with the Vietnam War underway, that option was not very attractive."

These limits stemmed from more than just a lack of federal government programs. Banks refused to grant loans for which the collateral was a student's future degree and earnings. Most colleges in the 1960s did not provide a great deal of grant aid to students, either. Directors of admissions offered only loans and "bursar jobs." Colleges did not guarantee students a need-based financial aid package that met costs, nor did most offer "merit scholarships" to top academic students. Only about 25 percent of Ivy League students received some financial aid, ranging from $200 to $2,800 per year.

On balance, 75 percent of students paid full price, suggesting that attending a prestigious private college was largely limited to the affluent.

So limited were the funding options that local community groups worked to raise scholarship money for students. A good example was the Dollars for Scholars program, which originated in Fall River, Massachusetts, in 1957, when optometrist Irving Fradkin collected $5,000 from neighbors and awarded college scholarships of about $200 to 24 graduating high school seniors.

Another fundamental element of the college experience was different in the 1960s as well. Costs were low because what colleges offered to students - and how many students they offered it to - was far more limited. Even with the decade's admissions expansion, state universities such as the University of Massachusetts and Rutgers in New Jersey each only had a total enrollment of about 6,000. And colleges spent little on students. They handled expanding enrollments by increasing the size of lecture classes or other expedient measures like adding bunk beds to double the capacity of dorm rooms. They offered little in the way of advising, career placement, activities outside the classroom, recreational facilities and mental-health services.

Limited capacity to accommodate prospective students often also dictated where students went to school: Many students on the East Coast ended up enrolling at colleges in the Midwest. The paucity of seats left students with little leverage with college admissions and financial aid offices.

This landscape prompted demands for change.

The landmark bipartisan 1972 reauthorization of the Higher Education Act reflected a genuine national commitment to expanding access and affordability. Lobbying by grass-roots student groups shaped the scope and character of the new programs toward giving a large percentage of young Americans increased choice and resources in making decisions about applying and enrolling. The result was approval and funding for need-based grants, later known as Pell Grants, and low-interest student loans.

One innovative feature was the portability of these grants and loans: Students could use them at whichever college they enrolled in. This increased student choice and prompted colleges to compete for students. The 1978 Middle Income Student Assistance Act was also viewed as a game-changer, because it awarded low-interest loans to college students.

These programs completed a progression begun after World War II that transformed colleges. No longer were they just for the elite; for the first time, many Americans had access to various kinds of postsecondary education.

When combined with state and institutional increases in student aid, the programs actually worked fairly well.

However, more than a decade of double-digit inflation, combined with multiple rounds of reductions in state appropriations for higher education, meant that during the 1980s universities had to spend unexpectedly large amounts to cover deferred maintenance expenses and to absorb inflationary costs into their budgets. By 1985, college competition for applicants also meant extraordinary investments in facilities, services and need-based financial aid that would be attractive to a new generation of college-bound high school seniors. As a result, the price of going to college soared. Admissions and financial aid offices were hard-pressed to meet the needs of many students.

Over time, federal student loans, once celebrated as a solution to access issues, became a burden because of the progressively larger amount of debt each generation of college students has to take on.

In many ways, this skyrocketing debt exposed the paradox of student consumerism. Increased competition led college officials to conclude that increased spending for elaborate residence halls and recreational facilities was necessary to lure students away from the competition. But an education more like the one provided in the 1960s would have kept costs - and student debt loads - far more reasonable.

This choice meant that many of the optimistic and generous plans for higher education put into place around 1960 eventually fell short. While they made college far more accessible to millions, universities are still plagued by unresolved issues of disparity related to affordability and choice. Just as important, today's graduates are saddled with exorbitant student loan debt: recent analyses show that on average a college graduate owes about $29,000.

These problems are a reminder that reformers pushing to make college educations more affordable today must be mindful that the changes they make could have unanticipated consequences. While many fewer students had access to a college education in the 1960s, and those who did had a much more bare-bones experience, costs were far lower and students didn't enter the working world burdened with massive debt. Trying to fix one problem ended up creating a whole new one.

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This article was written by John Thelin, a professor at the University of Kentucky.