Increases in aid reduce net cost of college for low-income students

The net cost of education for University of California students receiving the federal student aid remained virtually unchanged from 2008 to 2012, despite about a 70 percent hike in tuition during the time, according to a study released last week.

The net cost of education includes tuition, room and board and other education expenses. Grant and scholarships are also included in the cost.

Hans Johnson, a researcher at the nonpartisan think tank Public Policy Institute of California who drafted the study, said an increase in grants has offset the tuition increase over the years.

“The answer is very simple,” Johnson said. “The amount of grant aid for low-income students has increased sufficiently, so it has kept the net cost from rising.”

The study examined financial aid for low-income students attending California universities between 2008-2009 and 2011-2012. The University raised its tuition from about $7,000 in 2008-2009 to about $12,000 in 2011-2012 due to decreased state funding during the recession.

But since 2011-2012, tuition has remained the same.

Though students from higher-income families take out federal loans such as the Parent Loan for Undergraduate Students, the majority of students receiving federal grants, such as Pell Grants, come from low-income backgrounds. About 60 percent of UC students receiving federal aid come from low-income families.

Johnson said an increase in Cal Grants typically accompanies an increase in tuition. He added that the University increased its institutional aid as it increased its tuition.

About one-third of undergraduate tuition at the University goes toward funding financial aid programs in line with UC policy, said UC spokeswoman Shelly Meron.

“The UC tends to have more high-income students, as well as students paying out-of-state tuition, that … fund low-income students (than other systems),” Johnson said.

According to the University’s Annual Report on Student Financial Support, which Meron said uses a slightly different calculation and has data from a different system than the study used, the net cost for students with family incomes lower than $26,000 decreased by about $1,500 from 2005-2006 to 2012-2013.

During those years, the net cost for students from families who make more than $155,000 went up by about $6,500, according to the report.

Yet, students from low-income families still use a higher share of their family’s income to pay their tuition.

Students from low-income families pay more than one-third of their family’s incomes on college education, compared to the 20 percent for students from high-income families, according to the study.

The study also found that the net cost for students receiving federal aid and attending private, non-profit universities has decreased by about $1,000 in the same time.

The net cost for middle-income students at the UC remained high, with students with family incomes between $75,000 to $110,000 paying more than $21,000 a year. Johnson said he thinks a newly created Middle Class Scholarship, which provides scholarships for up to 40 percent of tuition to students with family incomes up to $150,000, may help.

“Right now, the middle class scholarship isn’t probably making a huge difference,” Johnson said, as the scholarship will not be fully funded until 2017-2018.

Some students said they have seen their net costs increase while at the university.

Zeus Fernandez, a medical student, said he saw his net cost increase as an undergraduate student coming from a middle-class family. Fernandez attended UCLA as an undergraduate student from 2010 to 2012 when the University increased its tuition by about 20 percent.

“It was tougher. I had to work more,” he said. “I had to cover the increase as the Cal Grant didn’t change by much.”

Although he received some money from a Cal Grant, he said the grant did not match the increase in tuition he had to pay.

The study also called for colleges to make it easier for students to fill out the Free Application for Federal Student Aid, or FAFSA, form and direct more grants to low-income students.

“Providing the right incentives to attend four-year colleges could be achieved through improvements in grant programs,” the study said.