Spending: House subcommittee lobbies to protect Perkins Loan program
Continued from page 1
Grants and loans
The U.S. House Subcommittee on
21st Century Competitiveness ap
proved a bill last Thursday to per
suade Congress to protect the Perkins
Loan program for universities in re
sponse to the complete elimination of
the program in the President’s pro
posed fiscal year 2006 budget, ac
cording to a press release.
Perkins Loans are a type of finan
cial aid given to 5 percent of the na
tion’s college students. These loans
provide up to $4,000 a year for under
graduate and $6,000 for graduate stu
dents, depending on eligibility. They
are particularly appealing to students
coming in from lower-income house
holds because the loans have low in
terest rates and require students to be
enrolled in only six credit-hours per
term, allowing them to work and go
to school simultaneously.
If Congress approved this section of
next year’s budget, more than 700,000
students would be affected and at least
$6 billion would be sent back to Wash
ington, and that cost would be picked
up by universities with Perkins loans,
according to the release.
The decreased affordability of col
lege for incoming freshmen has led to
a decline in the enrollment rate for
students coming from low and mid
dle-income households.
Grants and loans aimed at lower
and middle-income households con
tinue to lose federal funding, creating
an affordability issue for incoming
freshmen and other students seeking
aid. Meanwhile, historical statistics
show that education directly relates
to income, unemployment, crime
and poverty.
Education affects earnings
and unemployment
A report from the National Center
for Education Statistics (NCES)
shows that the median annual earn
ing of full-time, full-year wage and
salary workers decreased between
1979 and 2003 for black, white and
Hispanic workers between the ages
of 25 and 34. Black workers who
completed high school but did not at
tend college saw a $2,200 decrease in
salaries and wages. Whites experi
enced a $4,800 decline, while His
panics lost $5,200 in annual earnings.
Highlighting the importance of a
college education in relation to
salaries and wages, black and white
workers who completed college
with a Bachelor's degree saw in
creases of $3,100 and $1,300 respec
tively. Salaries and wages declined
$2,000 in 2003 for Hispanic college
graduates, but at a slower pace than
the $5,200 decrease for those with
out a degree.
Median annual earnings of full-time, full-year wage and salary workers age 25-34 (in constant 2003 dollars)
WHITE BLACK HISPANIC
2003
2000
1999
1989
1979
Net Change in Salary from 1979-2003
Bret Furtwangler | Graphic artist
Statistics from the report show that
9 percent of people between the ages
of 29 and 34 with less than a high
school diploma were unemployed in
2004. Six percent of people with a
diploma and 5 percent of people with
“some college” were unemployed.
For people with a Bachelor’s degree
or more, only 3 percent were unem
ployed in 2004,
The relationship between educa
tion and unemployment has been
constant since the 1970s, according
to a NCES report. It states, “generally
speaking, the more education a per
son attains, the less likely that person
is to be unemployed.”
In Oregon in 2000, more than 85
percent of citizens 25 or older had a
diploma and more than 25 percent
had a Bachelor’s degree or higher. For
Lane County these statistics are
slightly higher. A 2002 report pub
lished in “The Review of Economics
and Statistics” found that the average
wages of non-college-educated men
— those with a high-school diploma
or less, fell 23 percent from 1979 to
1993. A 2000 NCES report found the
same thing, stating, “there is a strong
positive relationship between educa
tion attainment and earnings. ”
Annual earnings,
unemployment and crime
MIT research found that a decline
in wages offered “increases the rela
tive payoff of criminal activity.” The
study found that a 23.3 percent fall in
the wages of non-college-educated
males from 1979 to 1997 predicts a
12.5 percent increase in property
crime and a 25.1 percent increase in
violent crime. This correlation is ex
plained in their conclusion: “al
though crime rates are found to be
significantly determined by both the
wage and unemployment rates of
less educated males, our results indi
cate that a sustained long-term de
crease in crime rates will depend on
whether the wages of less skilled
men continue to improve.”
Therefore, the correlation between
attainment of education and earnings
have a direct relationship with the “rel
ative payoff of criminal activity” for
those experiencing wage decreases.
Attaining a college
education
A report published by the Nation
al Bureau of Economic Research in
2002 found that the bottom 90 per
cent of the labor force saw a drop in
average income from $27,060 in 1970
to $27,035 in 2000, while the top 10
percent saw increases of 88 percent.
Over this 30-year period the average
salaries and wages increased slightly
overall, but even those in the 80th to
90th percentile, workers making up
the bottom 10 percent of high income
households, saw a drop in salaries
and wages. For those representing
the bottom 70 percent, income levels
dropped further while the bottom 20
percent saw the greatest decrease in
average income. These statistics
point to the evolving problem of fi
nancial stability, making it more diffi
cult for the bottom 90 percent of the
labor force to afford, among other
needs, higher education.
Low and middle-income
financial aid scarcity
Federal loans were estimated to
make up 45.5 percent of the total
student aid for the 2003-04 academ
ic year, but actually came out to 56
percent as the number of students
applying for loans increased. The
percentage change in total loans
borrowed from the 1994-95 academ
ic year to the 2002-03 academic year
increased 641 percent, according to
the U.S. Department of Education,
Office of Postsecondary Education.
The number of students borrowing
loans from 1994 to 2003 increased
668 percent for the most popular
Stafford loans and 871 percent for
unsubsidized loans, according to
the U.S. Department of Education.
Federal Pell Grants are another
source of financial aid for low and
middle-income students. Pell Grants
were estimated to make up almost
10.5 percent of the total student aid
for the 2003-04 academic year. The
amount of money spent on the pro
gram was “the smallest real increase
since 1999-2000” at 6 percent, ac
cording to College TYends, 2004.
The number of Pell Grant recipi
ents rose 37 percent over 10 years,
while the maximum a recipient can
receive has remained constant over
the last three. Further, Pell Grants
were originally predicted to cover 34
percent of total costs of a public four
year university in the 2005 budget,
but ended up covering only 23 per
cent. This is a 49 percent decrease
from 1976, when the grants covered
72 percent of total costs. The Pell
Grant program also saw a 1 percent
decrease in the maximum awards in
2003-04. These statistics may be a re
sult of the Pell Grant program’s “3.7
billion funding shortfall” in the fiscal
year 2005 budget, as stated in the Of
fice of Management and Budget.
Funding has risen 60 percent in real
terms since 1999-2000, but because
of a 7 percent increase from 2002-03
to 2003-04 the average grant actually
fell by 1 percent. So while “the aver
age grant has increased by 17 percent
in real terms since 1999-2000,” the
amount of money awarded per stu
dent has actually decreased.
Subsidized loans, for which the
government pays the interest while a
student is enrolled in school, may be
another option for low and middle
income students hoping to pay off
the remaining 77 percent of college
costs. Individual grant recipients
were awarded $27 less in 2003-04
than the previous year. If the number
of recipients continues to rise at the
2000-01 rate, Pell Grant recipients can
expect to be given even less than the
2003-04. Unless a significant increase
in funding for fiscal year 2007 is
passed, the percentage of college
costs covered by the awards will like
ly continue to decline.
Although no correlation is men
tioned between grant funding and
loans, the growth rate in loans per
student in 2003-04 was about three
times the growth rate of grants per
student, according to the College
Ttends, 2004.
Declining rates
of enrollment
Enrollment trends from 1979 to
1989 showed an 18.4 percent in
crease for students from low-income
households, or the bottom 20 per
cent, but only a 1.3 percent increase
from 1989 to 1999. In this case, the
enrollment of students from low-in
come households fell 3.6 percent
from 1979 to 2003, while middle-in
come households saw a 3 percent de
crease. Only students coming from
households in the top 20th percentile
of income saw an increased rate of
enrollment, at 1.9 percent.
EDUCATION, page 12
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v3:15), 5:15,7:15,9:15 0
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Special matinees at 3:30 daily111 Please DO NOT use our parking lot
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Daily (3:30), 5:30.7:30,9:30
(M-F no parking in lot for 3:30 show)
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BIJOU LATENITE Fr-Sat S4 Su S3
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11:30 pm Fri, Sat & Sun nights
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