Paying the Price: College Costs and the Betrayal of the American Dream

by Sara Goldrick-Rab

If you are a young person, and you work hard enough, you can get a college degree and set yourself on the path to a good life, right?
 
Not necessarily, says Sara Goldrick-Rab, and with Paying the Price, she shows in damning detail exactly why. Quite simply, college is far too expensive for many people today, and the confusing mix of federal, state, institutional, and private financial aid leaves countless students without the resources they need to pay for it.
 
Drawing on an unprecedented study of 3,000 young adults who entered public colleges and universities in Wisconsin in 2008 with the support of federal aid and Pell Grants, Goldrick-Rab reveals the devastating effect of these shortfalls. Half the students in the study left college without a degree, while less than 20 percent finished within five years. The cause of their problems, time and again, was lack of money. Unable to afford tuition, books, and living expenses, they worked too many hours at outside jobs, dropped classes, took time off to save money, and even went without adequate food or housing. In many heartbreaking cases, they simply left school—not with a degree, but with crippling debt. Goldrick-Rab combines that shocking data with devastating stories of six individual students, whose struggles make clear the horrifying human and financial costs of our convoluted financial aid policies.
 
America can fix this problem. In the final section of the book, Goldrick-Rab offers a range of possible solutions, from technical improvements to the financial aid application process, to a bold, public sector–focused “first degree free” program. What’s not an option, this powerful book shows, is doing nothing, and continuing to crush the college dreams of a generation of young people.

Genres: Education, Nonfiction, Sociology, Politics, Economics, School, Teaching

Unknown Binding

First published September 1, 2016

Reviews

[Roy Lotz · Rating 4 out of 5]

Soaring rhetoric about the value of hard work obscures the fact that family money has long been one of the best predictors of college success.

Among the so-called developed nations, the United States is unique in many respects, not least in higher education. Whereas going to university is either free or quite cheap in most of Europe, in America college can often be a serious financial burden. Admittedly, America also has many of the best universities in the world, so perhaps the extra cost is justified for the small fraction of students who attend these elite institutions. But costs are also high in public universities; indeed, even our community colleges are expensive by European standards.

This book is not primarily concerned with why the cost is so high. Instead, sociologist Sara Goldrick-Rab focuses her attention on how students go about paying for it. To do this, she conducted Wisconsin Scholars Longitudinal Study, in which she and her team followed 6,000 low-income students from 2008 onwards. The study involved many surveys and much statistical work, but also in-depth interviews of selected students. Her aim was to find out how the various forms of financial aid—grants, loans, work-study—affect graduation rates. With such a wealth of evidence, Goldrick-Rab can speak with quite a bit of authority about the challenges faced by low-income students.

The picture that emerges is of a complicated and often ineffective financial aid bureaucracy, which allows too many low-income students to fall through the gaps. Much of this is due to financial aid being outpaced by the rising cost of college. Consider the Pell Grant, the primary economic subsidy provided by the federal government to low-income students. When it was passed into law, in 1965, it covered 80% of an undergraduate degree. Nowadays, however, a Pell Grant covers less than 1/3 of that price. Meanwhile, contributions by state governments have steadily dropped off, leaving students with ever-higher tuition costs.

Federal loans have arisen as a way to bridge the gap between the rising price of attending college and the decreasing purchasing power of grants. Though better than private student loans, even the federal loans cannot be discharged through bankruptcy. To qualify, the student must fill out a FAFSA application every year, which determines what types of loans the student qualifies for, how big a loan, and the “expected family contribution”—the amount the government expect the student’s family to be able to pay.

In Goldrick-Rab’s telling, there are many ways in which this system fails. One obvious difficulty is the expected family income. Most obviously, even if a student’s family has the available money, they may not be willing to pay; and of course the government cannot force families to make the expected contribution. What is more, the formulas used by the government to determine how much a student’s family can pay are not always realistic. They do not account for the reality that, rather than being financially supported by their families, many students financially contribute to their families while they are studying.

Basing financial aid on last year’s tax returns can also subject students to sudden shifts in their aid. If a parent gets a new job, for example, a student may suddenly find that they no longer qualify for grants or subsidized loans, and that their expected family contribution has drastically risen. To take an example from my own life, FAFSA also factors in whether a student has any siblings in college; and the graduation of a sibling can also cause a dramatic reduction in financial support.

The call for increased financial aid has sometimes been met with the response that students ought to work more in university. But this advice is misguided for a multitude of reasons. For one, students are already working a great deal. But the days when students could pay their way through college by stacking boxes during the summers are long gone. The students in this book did work, often for long hours, making the minimum wage of $7.25 an hour. At that salary, it is difficult to even make a significant dent in the cost of attending college (the average debt of a graduating student is about $37,000).

Working while in school presents other difficulties, too. Scheduling is an obvious example. Most college classes are during normal work hours, which forces many of the students in the study to work night shifts and weekends. Time spent working is time spent not studying, and often time spent not sleeping, which hinders academic progress. The requirements on loans and grants only compound the problem of balancing work and study, since many forms of financial aid require a minimum GPA and full-time enrollment. This can result in a double-bind, since if a student drops one class to focus on the others, she may switch from full-time to part-time; and if she keeps all her classes, her GPA may suffer.

The Federal Work-Study program provides financial assistance to students working on campus, and according to Goldrick-Rab is a beloved program. However, the rules for applying to the program are somewhat confusing. Many students assume that acceptance into the program means that they will be given a job. But this only means that they can start applying to jobs that are covered under the program. Aside from this, work-study depends on the amount of funds and work available at a given moment, and so has not proved to be a reliable way for most students to pay for college.

College is meant to be a stepping-stone to a greater life. But for many of the people in this book, their time at university became a weight around their neck. As low-income students struggle to balance family, jobs, and study—negotiating a complex financial aid system that relies heavily on loans—they often found themselves unable to keep up with their classes and unable to pay for even basic living expenses. Indeed, since there is no university equivalent to subsidized school lunch programs, many of the students were literally too hungry to focus.

Worst of all, if a student decides that they cannot complete their studies, then they do not only lose the opportunity of a degree: they are saddled with debt, without the job opportunities to pay it off. As a result, the decision to study in university carries considerable financial risk in the United States, especially for low-income students. If a student succeeds in graduating, they will have significantly better job opportunities than their peers; but if they fail, they will be significantly worse off than their peers who did not even try.

To me it seems clear that the American system for funding higher education is not working. Student debt is the fastest growing type of debt, and the second highest private debt category in the country, after house mortgages. This was not true twenty years ago. Collectively, $1.5 trillion is owed by 45 million students—about 7.5% of America’s GDP. Roughly one in ten students defaults on their loan payments within three years, and, unsurprisingly, default rates are three times higher among students who did not complete their degrees. When you consider that education has one of the highest returns on investment of any government expenditure, our failure to support it is especially baffling.

Why has higher education become so outrageously expensive? I am still unclear on this, and it is not the main focus of this book. But we are not powerless to change it. In so many other countries, the decision to study in university is not nearly so fraught with financial peril. Indeed, the phrase “Student Debt,” like “Medical Debt,” is virtually unknown here in Spain. Of course, this is not an isolated problem. Even if we fixed financial aid, students from poorer neighborhoods would still be at intense disadvantages, not least because American public schools are funded by property taxes (and so reflect a neighborhood’s wealth). But making higher education affordable and financially risk-free would go a long way in bolstering the economy and widening opportunity.

[Jonna Higgins-Freese · Rating 5 out of 5]

A few striking quotes:

"failure to complete does not reflect intellectual ability but, rather, an inability to pay" (239)
"too many students are dropping out of college because they cannot cover their rent, utilities, childcare, gas, or other critical basic needs" 246
"debt is the symptom, not the disease -- the real problem is that college is unaffordable" (241)
"the main barrier to college entry [and completion] is price" (256)

She does not recommend expanding financial aid as we know it, but reconceptualizing higher education as a public good

Suggests extending free and reduced lunch to colleges -- we recognize that students can't learn if they're hungry before they're 18, why do we think they can after that age?

[Mehrsa · Rating 4 out of 5]

Really useful survey data and stats on student loans and how they affect students. My impression after reading the book is that the system is a mess, that students do not have the right information, debt is psychologically and emotionally destructive, and yet it's really important that student loans be available and easy to get because most of these students will not be able to attend college otherwise. And yes, not everyone needs to attend a fancy school, but that's not what they are talking about here. They are talking about normal state or community schools and standard programs.

[Terry Brown · Rating 5 out of 5]

Must read for anyone who cares about the future of higher education in the United States.

[Brady · Rating 5 out of 5]

This is a phenomenal, in-depth look at the way that financial aid functions in the state of Wisconsin and in the United States generally. It is not, as some have suggested, propaganda for free college but a data-driven look at the effectiveness of financial aid systems. Goldrick-Rab does suggest that ultimately, in order to remain competitive globally, a tuition-free system is going to be necessary but the vast majority of the book focuses on the inefficiencies of the financial aid system, the failures in the algorithms used to calculate financial aid, the outdated approach to funding mechanisms, and the ways in which the current system often hinders rather than helping students toward degree completion and the serious financial costs of such failures. This books is based on an intensive, longitudinal study of a variety of Pell grant students and presents a very damning critique of the ineffectiveness of federal and state funding mechanisms and their inability to meet the needs of today's college students. It's vital reading to anyone who wants a clearer picture of the way that financial aid works in this country and some of the fixes that we could attempt (both major and minor) to improve the situation for the vast majority of college students and parents. It's also incredibly accessibly written and uses an excellent mix of analytical data and individual anecdotes to convey its message.

[Molly · Rating 4 out of 5]

Even though I work in higher education I learned a lot from this book. Some of it was frustrating- e.g. that Ivy League schools with billion dollar endowments receive more work study funds than community colleges where there are more students in need. Some of it was enlightening- e.g how expected family contribution is computed and assumes that parents (including parents who are divorced) will be willing to contribute to their child's education. Some of it hit close to home. The students profiled in her book match many I see on a day to day basis. They are working- often to help support their families- yet still food insecure and sometimes homeless. These students value education and push through these obstacles to get to class, to learn, and try to make a better life. As Sara Goldrick-Rab argues, they deserve better from our financial aid system.

[Liz · Rating 4 out of 5]

If you are at all interested in the process of financial aid in higher education, this is a useful book. I work with a lot of college students who depend on financial aid to make higher education and its resulting benefits possible. Goldrick-Rab does a good job explaining why our current system isn't working for many students, why this is so, and she presents some alternative options. I do think it could benefit from additional research into the realities of developmental first year students and the financial realities faced by rural students, but that reflects more of my own day to day reality. I appreciate the author's detailed attention to important financial issues faced by our current students.

[Lisa · Rating 5 out of 5]

Important and informative look at America's financial system, the ways people use and perceive it, and suggestions for how to fix it. Debunks the idea that poor and underserved people just aren't cut out for college.

[Janelle · Rating 5 out of 5]

Goldrick-Rab deftly weaves together statistics, policy analysis, history, and personal stories in this book about how much college really costs in the U.S., why, and how it affects students. I often had to set it aside because it lays bare the many ways Americans are failing the next generation and ensuring that wealth inequality will only increase.

I'm so disappointed with and furious at state legislatures. Also, I understand the labyrinth of financial aid a lot better now. If you received financial aid to attend college but it was more than 5 or so years ago, you probably don't know how much it has changed.

I wish I could make my state representatives read this book. Institutions of higher education are working hard to meet student needs, but the problem is systemic and won't be able to be fixed at the institutional level.

Americans: we have valued education so much in the past and understood it as more than an individual good. What happened? Can we really not see beyond ourselves and our own interests?

[La'Tonya Miles · Rating 4 out of 5]

Reading this book reminded me of watching a seasoned heavy weight fighter, one who grabs you and holds you through 11 rounds and then suddenly--bam!--starts swinging. Hard. Here, the author also takes time to build her argument, to carefully present her argument and then ends with fire. If you have the time, by all means, read the entire thing. But if you want to cut to the chase, skip right to the last chapter (90 footnotes!) and you will find gems like these: "[The financial aid system] allows liberals to feel good and the poor indebted, while at the same time providing a scapegoat for conservatives to blame" (236). And yet Betsy DeVos is our Secretary of Education . . .

[Bryan Alexander · Rating 4 out of 5]

I've been blogging extensive notes, reflections, and questions about this important book here.

[Jewel · Rating 5 out of 5]

Great read on the challenges that college students and grads face as they navigate the costs of higher education in the US.

[Bryan Alexander]

I'm blogging about this book here.

[Morgan · Rating 3 out of 5]

Really interesting look at financial aid's many issues and how they directly impact students' lives in very direct and tangible ways. If you work in higher ed (regardless of position), are thinking of advancing your degree, and/or have kids in or nearly in college, this is a must-read.

Goldrick-Rab examines a diverse group of students in WI and tracks their time in public colleges in the state. Being from WI, I was particularly interested in chapter 8, "City of Broken Dreams," about Milwaukee--the city, the university, and the residents there.

Students are impacted by financial aid in many ways--some aren't allowed to work much for fear of receiving less aid. Students are forced to work more because they don't have parents who can meet the expected parent contribution. Students are torn between being part-time students and staying in subsidized housing, or being full-time and losing their home. Students' ability to graduate in 4 years (or at all) was jeopardized in nearly every case study, and the bottom line is that financial aid is not working. I guess I knew that, but seeing it laid out in a researched way was at times heart-wrenching. Many students are torn between family and school, family expectations and self-fulfillment, and are ultimately making decisions that most of us couldn't have imagined when we went to college.

This is a timely look at financial aid, and the research, graphs, data, and study results are balanced by the real-life students' stories. Even if you don't know what Pell Grants are, or how a FAFSA works, this book will explain it for you.

[Andrea · Rating 4 out of 5]

Sara Goldrick-Rab is such a rock star advocate for students, I had to read this book. I've long been confounded by how financial aid really works, and how and why tuition has skyrocketed lately in a way that outpaces inflation and rising incomes. As someone who is saving for a kid to go to college, it feels unattainable (like retirement!). How could I save $25-70k per year x 4? In 10 years will it be $70-120k per year? More?

One idea she touches on that I love and that I've seen is for public 4 years to award associates degrees when someone completes what could amount to an associate's but while they are enrolled in a bachelor program. So they start and don't finish; but technically they could have gotten their associates with those credits/requirements. Instead of having 2 years of college and 0 degree. It's a little complicated records-wise and maybe FERPA wise but worth exploring and solving.

I worked through college although it wasn't absolutely necessary. But I never could have supported myself completely or meaningfully supported my family with that income. The students profiled in this book were working so hard, with odds stacked against them, and I know it's hokey but they were inspiring.

[Lisa · Rating 5 out of 5]

Filled with the research results to back up concrete public policy suggestions to improve college access and credential/degree attainment for those with limited financial resources. The author discusses the many costs involved in attending college aside from tuition: transportation, housing, food, books, supplies, clothing/laundry as well as the perils of working while in college and the lost contributions (income, daycare, chores, etc) a family can suffer when a child goes to college. This is magnificent fodder for discussions at the local level. While legislators debate the public policy issues that will take some time to sort out, communities can roll up their sleeves and get to work. The application is not necessarily limited to college. Many of the same barriers college students face are faced by K-12 students. The book left me feeling confident that the barriers have been inventoried by legitimate research. Now communities can take on the job of helping students scale or skirt them while legislators and boards attempt to eliminate them altogether.

[Cassie · Rating 4 out of 5]

Dr. Goldrick-Rab has a lot of interesting ideas. She's right about the financial aid system being inadequate and in desperate need of an update. This is a must-read for anyone interested in higher education finance and policy.

Pros: Dr. Goldrick-Rab identifies a lot of crucial issues regarding college students that are often ignored. The book is clear, concise, and her argument is well-supported by her study. She bring attention to food insecurity, housing, and the way families support each other; these are focal points often ignored by college administrators.

Cons: She does not address why college has become so expensive, nor does she address certain inadequacies in how students are prepared for it (such as the expectation of athletic scholarships, etc.). Since she only interviewed five financial aid administrators, it feels as a though the financial aid counselor is absorbing a lot of blame for the system's shortcomings.

[Shuva · Rating 5 out of 5]

As a first-semester adjunct at community college I was incredibly impressed with the research that went into this book. Reading this book made me empathize and be curious about my students' lives beyond the classroom. I was left wondering if my students who didn't show up for class or who fell asleep or had late assignments did so because of the many similar circumstances presented by the students featured in the author's study. This book is a must-read for every educator, college administrator, parent, but moreso every legislator. We need to make college not just affordable but accessible if we want to improve our chances at enhancing our workforce. Goldrick-Rab does a great job of outlining some key suggestions at the back of the book that need to be taken seriously in order for this conversation to move forward so we can make progress as a country.

[Sharron · Rating 2 out of 5]

This is the second book I've read this year where the study was done in Wisconsin and the author believes it's representative of the country. Wisconsin is scraping the bottom of the barrel; not to say these aren't massive problems, but you may lose some power in your argument by using the worst case situation. In this instance, the biggest differential is probably how many of the students weren't academically prepared for college, in addition to the monetary problems.

The facts about the downfall of financial aid are laid out in great detail. The case studies followed are interesting. The solutions offered just simply will never happen.

[Chris · Rating 2 out of 5]

Another must read for parents sending children to college.

The message I received from this book is that Financial Aid is a myth, and though I received it as a college student because I came from a poor family and I was a first generation college student, if you are a college graduate and your spouse is and have a family of 4 and make more than $50,000 per year don't expect financial aid.

This book also details just how rigged the sticker prices of colleges are and that government assistance (Financial Aid) just drives up the price of attendance by driving up the sticker price, which is the same thing that happens in Healthcare.

[Bookforum Magazine]

"Which situation is more intolerable–one in which someone can enjoy a few extra vacations courtesy of the taxpayer, or the current one, in which, according to Goldrick-Rab, large numbers of working class students go hungry? When we're starving students by policy, the policy needs to change."

-Malcolm Harris on Sara Goldrick-Rab's Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream in the Dec/Jan 2017 issue of Bookforum

To read the rest of this review, go to Bookforum:
http://bookforum.com/inprint/023_04/1...

[Amy Hageman · Rating 4 out of 5]

I read this book during our "ice day." It focuses on the lives of first-generation college students who are Pell-grant eligible, intersected with all kinds of data from a representative survey study. I felt like I previously had a good pulse on the struggles and limitations of college costs/affordability, but the book was very well done and eye-opening in many accounts. Recommended if you are interested in understanding higher education.

[Erika · Rating 5 out of 5]

By using Wisconsin's higher educational system as a microcosm, Goldrick-Rab's book adds to the conversation about re-imagining how students afford college. It certainly isn't trying to solve all the problems, but open up dialogue about it.

If you are a student, parents of a college student, or a taxpayer; if you work on a college campus, teach students, or are a policy-maker, this book can arm you with evidence to change the way we approach how we fund higher education.

[Tasha · Rating 4 out of 5]

Thoroughly researched and clearly written, I loved the overview of college costs and financial aid that Sara presents in this illuminating book. As someone that's worked in higher ed for close to ten years, I found this book so helpful in understanding the politics and policy involved in the rising college costs. If you're interested in understanding how the cost of higher education is impacting the lives of students, this book is for you.

[David · Rating 3 out of 5]

reports a study of the college financial aid system as it plays out in the lives of a cohort of students from Wisconsin, richly illustrated by following a handful of them through the experience. How does Jane experience the whole rigamarole of learning about aid, applying for it, getting a combo of loans and grants, negotiating with family, securing a part-time job, making classes and all of college life fit around the job and commute, and so on?

different from the focus we often see on a single component of the aid system (defaults on loans, or nuts and bolts of 529s or whatever) and helpful in giving a sense of how convoluted [even if well-intentioned] current policies are.

For the most part, it's not a light or entertaining read, understandably given the topic, but I did enjoy the characterization of the FAFSA fin. aid form as "a small American bureaucratic tragedy all its own" and the quoting of a student tweet: "why is the financial aid process harder than college itself?" (p. 49). I shouldn't complain, as my kids are through college and basically survived this gauntlet intact, but man the FAFSA was annoying, not to mention supplemental stuff some colleges required during application stage.

[Larkin Tackett · Rating 4 out of 5]

America’s financial aid system is broken. Higher education professor Sara Goldrick-Rab breaks it all down in gory detail. By following a large cohort of students in Wisconsin, she and her team or researchers expose the system’s design flaws (like spending more work study funding at big institutions with big endowments and few needy students) and tell a few moving stories of students and their families. The bottom line: increases in net tuition prices and non-tuition costs combined with growing wage inequality and several perverse financial aid incentives are making attaining a higher education degree increasingly inaccessible to students from low-income backgrounds. “Price, not intellect or effort,” writes Gildrick-Rab, “is the primary sorting mechanism in today’s colleges and universities.” The book also includes a number of common-sense policy improvements, but it remains to be seen whether Congress will take any action on them.

[Johanna Botzet · Rating 5 out of 5]

This book is by the professor, Sara Goldrick-Rab who started the Wisconsin Hope Lab. Her team followed 3,000 college students in the fall of 2008 for six years to see how they faired in college and after. She wanted to know how financial aid did or did not help them during their experience, and why students leave. So many students leave college with debt and no degree and most research on these students end. I highly recommend this book, as it is full of great research and ideas on how to implement changes so that students are fed and able to focus on school instead of working in multiple jobs to hardly make it to ends meet.

Check out her time on the Daily Show - it's only about four minutes!
http://www.cc.com/video-clips/ah40j7/...

[Christopher · Rating 4 out of 5]

Sarah Goldrick-Rab came and talked at our institution. I asked about other means for students to acquire aid such as Income Sharing Plans (ISP) and she was strongly against them. I think this is short sighted if you are for students getting through school without worrying about how to pay for it. I understand her stance that Federal Financial Aid system is broken and needs a big overhaul, but to only rely on the government to fix this, especially in a timely manner, seems to be careless.

ISP are new and we need to be make sure they protect students, but these items also add the risk to the school. This added risk to the school makes them more accountable that the student achieves a well paying job after graduation otherwise they won't be receiving as much money from the student. Freakanomics has a good podcast about Income Sharing Agreements.

[Sidney · Rating 4 out of 5]

If you are concerned about the affordability of college degrees and the rise of student debt this is a really dense study of Pell recipients and their experiences trying to complete college. My own kids are fast approaching college and it is wildly expensive - somehow we'll manage. But kids without resources are finding it harder and harder to pay to play. The book was also quite depressing. I had not thought, for example, of how students suffering food insecurity in high school would manage to eat in college when grants and aid cover a lower and lower percentage of tuition each year. The final chapter has suggestions for policy based on the preceding research.

[Tracy M · Rating 4 out of 5]

Incredibly worthwhile (especially if you're in higher education) and also quite frightening (if you have a child that you'd like to go to college one day). Would have been helpful to have more context/history of the financial aid system, but that's probably just my input-learner-context strengths talking. I'm a little surprised that in the possible solutions she imagined, she didn't even talk about how ridiculous it is that we allow students to be charged higher interest rates than people pay on home loans or car loans. But I guess since all her evidence pointed to students with more cash in hand being more likely to finish school, interest rates were less of a concern.