3 Arkansas colleges' net-price increases top $1,000

Posted: June 23, 2018 at 4:30 a.m.

Net costs of college increasing

Three of the state's largest public universities reported increases in 2016-17 of more than $1,000 in average net price, a measure of college affordability for first-year, full-time students.

University officials said changes to the state's Academic Challenge Scholarship lowering the amount of grant aid for first-year students explained much of the cost increases.

CollegeNavigator.gov earlier this month published the 2016-17 federal data, the most recent available, showing the University of Arkansas at Fort Smith, Arkansas State University and the University of Arkansas at Little Rock each reporting increases of more than $1,000.

The data for public universities are available only for students paying in-state tuition.

The average net price is calculated by subtracting the average amount of federal, state and institutional grants and scholarships from what's known as the total cost of attendance, which includes expenses such as tuition, fees, books and average room-and-board costs.

By percentage, the jumps in average net price outpaced increases in tuition and fees for all but one of the six largest public universities in the state, Arkansas Tech University. Average-net-price increases, by percentage, also outpaced increases in total cost of attendance expense estimates for in-state students living on campus, as published on CollegeNavigator.gov.

"Net price is in many ways a more meaningful measure of cost than just sticker price alone, because it tells you what, on average, a student would need to save, to earn, or borrow to cover the gap" after grant aid, said Lindsay Ahlman, senior policy analyst with the Institute for College Access and Success.

Published data on average net price by income level showed increases for students from families earning $30,000 or less at each of the state's six largest public universities except for the University of Arkansas at Little Rock.

Students from this lowest-income group pay less than wealthier students, based on average net-price data, but at the University of Arkansas, Fayetteville, their year-over-year increase was higher than for other income groups.

At UA-Fayetteville, average net price regardless of income in 2016-17 increased by 3.6 percent to $15,966 compared with $15,411 the previous year. For students in the lowest $0-$30,000 annual income bracket, average net price increased by 8 percent to $12,424 from $11,501.

"A main contributing factor was that the Arkansas Challenge funding went down by $1,000 for new freshmen from 2015-2016 to 2016-2017," Suzanne McCray, UA-Fayetteville's vice provost for enrollment, said in an email.

Sometimes referred to as lottery scholarships because lottery proceeds help pay for the grants, the Academic Challenge scholarships were adjusted by lawmakers in 2015. At the time, some lawmakers cited concerns about the program's finances.

The changes took effect beginning in 2016-17, with first-year students at four-year schools now receiving $1,000 instead of the $2,000 awarded before the most recent restructuring of the awards.

Academic Challenge scholarship recipients in their second year at a four-year college receive $4,000, then $4,000 for the third year of school, followed by $5,000 in the fourth year. Lawmakers in 2015 did not change the total awarded over four years.

McCray said that in 2016-17 there was an increase compared with the previous year in the number of UA students receiving another source of state grant aid known as Governor's Distinguished scholarships, which provide $10,000 annual awards. The awards are considered the state's most academically rigorous scholarship program.

However, lower-income students as a group "did not benefit" from this increase, McCray said.

Ahlman, with the Institute for College Access and Success, referred to data showing 7 percent of Arkansas' state grant aid to undergraduate students was given out based on financial need.

The percentage was the third-lowest among the 49 states giving out grants to undergraduates, with Georgia and South Dakota giving out a lower percentage, according to data published by the nonprofit The College Board based on survey information collected by the National Association of State Student Grant and Aid Programs.

The association's survey data showed about $8.7 million out of about $121.6 million in state grant aid to undergraduates in Arkansas was given out based on financial need in 2015-16.

"It looks like they're not prioritizing students who need the most help paying for college," Ahlman said.

Ahlman said federal aid as well as institutional aid also play important roles in supporting low-income students.

The federal Pell grant awards for low-income students have a maximum grant award of $6,095 for 2018-19, said Mamie Voight, vice president of policy research at the Institute for Higher Education Policy.

"The maximum grant over the course of the program has lost its purchasing power," Voight said.

McCray said UA is working to raise money for scholarships to help its neediest students.

Based on federal data, UA's tuition and fees in 2016-17 increased by 3.5 percent to $8,820 compared with $8,522 a year earlier.

This year, governing boards for the state's public universities agreed to freeze tuition for the upcoming 2018-19 school year, though some mandatory fees increased. Gov. Asa Hutchinson in January asked public universities to hold the line on in-state tuition increases, citing an increase in funding for higher education.

State lawmakers in March as part of budget legislation approved $9.4 million in extra funding to implement what's been called a productivity-based funding formula that's based partly on the number of credentials earned by students.

Sandy Baum, a nonresident fellow at the Urban Institute who studies education finance, said tuition accounts only for a portion of expenses for college students and their families.

"If you look at the budget for the full cost of attendance -- certainly at two-year colleges, but even at most four-year public colleges -- the tuition and fees are less than half of the total budget," Baum said.

The University of Arkansas at Fort Smith's average net price in 2016-17 increased by 22 percent to $10,809 compared with $8,858 in 2015-16.

UAFS' average net price remained the lowest among the six largest public universities in the state, but increased at more than triple the rate of a rise in tuition and fees, based on federal data. From 2015-16 to 2016-17, UAFS raised in-state tuition and fees by 6.5 percent to $5,390 from $5,062.

John Post, a UAFS spokesman, in an email cited the change in the Arkansas Challenge scholarship plus the tuition increase.

Post also said UAFS raised its estimate for students' "indirect" expenses, such as personal expenses, "to keep pace with the actual amount of expenses students were incurring." Post said this change helped students "to receive the adequate amount of financial aid necessary to complete their degree."

Arkansas State University's average net price in 2016-17 increased by 9 percent to $13,420 compared with the previous year's $12,310.

"While Arkansas State worked to keep costs below the state averages, the main causes in the change were related to factors beyond our control, notably the loss of Perkins Loan funds and the state's change in the amount available to first-year students from the Lottery Scholarships," ASU spokesman Bill Smith said in an email.

The average-net-price calculation does not factor in loan support, although data sorted by income include students who may receive federal loans rather than grant aid.

The University of Arkansas at Little Rock's average net price for 2016-17 increased by 8.8 percent to $13,404 compared with a year earlier, when its average net price was $12,317.

Tracy Courage, news director for UALR's communications office, cited changes to the state's lottery scholarships while noting that UALR also increased its estimates for student cost-of-living expenses.

Drew Anderson, an associate economist at Rand Corp. who studies the economics of education, said trends in affordability can also be thought of in terms of what families can spend.

For those described as lower- or middle-income, "family incomes have not increased as much over the recent past as the net price has, so in that sense, college is getting less affordable, for sure," Anderson said.

But he said whether college is affordable must also be thought of in terms of how it can help students in the job market. College is "a valuable investment in your human capital," Anderson said.

"The overall net benefit of college is still positive for many people, if not most people," Anderson said.

A Section on 06/23/2018