Access and affordability: The surprising facts at Purdue

By Martin C. Jischke

In recent months, government leaders, the news media and many private citizens have expressed deep concern about the cost of a college education. It should surprise no one that this topic is a matter of discussion in Indiana and throughout the country. In a knowledge-based global economy that demands not only high levels of skill, but also the ability to adapt quickly to changing circumstances, a university degree is the best preparation for a successful career and a productive life.

At Purdue, we watch each graduating class depart campus with full confidence that the university experience and the diplomas our students have earned will make them successful as individuals and valuable members of society. Businesses need them; communities need them; government and non-profit organizations need them because they are leaders, problem solvers and contributors to progress. Higher education is the greatest force for positive change the human race has ever conceived.

The people who developed America's public university system understood this when they were inspired to invest public funds in the education of private individuals. The Land Grant Act of the mid-19th century and the G.I. Bill of the mid-20th century had vast economic and social impacts on the nation because they increased access to higher education. In doing so, they challenged and eventually refuted the idea that a university degree was the prerogative of a privileged few. Today, we know that everyone who has the ability and motivation to go to college should have the opportunity, and we have seen over and over the power this access has to transform lives and drive economic change.

This is why we are justified in being concerned if access to our campuses is being threatened by rising costs that deny people the opportunity to pursue university degrees. But is this really happening? Is price really a barrier to earning a college degree? Some facts about the cost of a Purdue education may surprise you.

Purdue is committed to its land-grand mission of access and affordability. Evidence of success in fulfilling this mission on the West Lafayette campus is compelling. This fall's enrollment includes 415 more freshmen from the state of Indiana than a year ago. More Hoosiers are enrolled at West Lafayette this year than at any other campus in the state. Enrollment at Purdue's regional campuses also has increased over the past five years.

And going to Purdue today doesn’t cost a student any more today than it did 10 years ago.

Are you surprised at that statement? How can that be true if the university's tuition for Indiana residents have increased 111 percent over the past 10 years? The answer lies in what has happened to financial aid and federal tax policy over the past decade.

This fall, tuition for Indiana residents, plus room and board, books and other expenses for the academic year total an average of $15,322 at West Lafayette. However, thanks to scholarship support from generous donors to Purdue, federal Pell grants and other sources of aid, the average student received $3,500 in financial aid. And because of federal and state tax benefits for education (e.g., the Hope Scholarship and Lifetime Learning tax credits, and the tuition and fees tax deduction), we estimate that a typical student’s family receives $1,500 in associated tax reductions. This estimate is consistent with those made by the Indiana Commission for Higher Education. Taking these tax reductions into account makes the average net cost per student $10,322. If we include loans made available to students, out-of-pocket expenses drop to an average of $5,551 per year.

Ten years ago, the net cost (measured in 2004 dollars) was $10,408, almost exactly what it is today. With student loans taken into account, the out-of-pocket expenses were $7,803 in 1994 -- almost 41 percent higher than today.

Here's another way to look at it: In 1994, the net cost of sending a son or daughter to Purdue was 29 percent of the median family income in Indiana. Today, it is 24 percent. By these measures, a Purdue education is more affordable today than it was a decade ago.

The data are also reassuring for lower-income families in Indiana -- say with family income below the median family income of about $43,400. Purdue West Lafayette provides various forms of grants, loans, and employment to cover 100 percent of the financial need for students with family incomes below the $43,400 level. The percentage of low-income people enrolled in the Purdue system actually is higher than their proportion in Indiana's overall population.

In evaluating the impact of tuition on access to our universities, it is important to take into account all the complex factors involved when a family finances a student's education. While tuition has indeed increased over the past decade, financial aid has gone up even faster. In fact, non-loan financial aid for undergraduates has nearly tripled during that time. When these changes are coupled with state and federal tax benefits for educational purposes, the net cost to Hoosiers has remained nearly constant. At the same time, a 157 percent increase in loan availability has actually reduced out-of-pocket expenses.

As Indiana’s land-grant university, Purdue is deeply committed to access and affordability. These data on cost, the record number of applicants for admission and the increased number of Hoosiers in this year’s freshman class all suggest that the university is being true to its land-grant heritage. With steadfast support from the State of Indiana and continued generosity from our alumni and friends, we are confident Purdue will maintain its academic excellence and remain affordable and accessible in the future.

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