Howard Dean’s Class Action

Howard Dean’s plan to broaden access to America’s colleges fought for attention last week through a crowded news patch. The candidate scooped up two major labor union endorsements, ramped up his attacks on the Bush presidency, and celebrated his birthday, all while the Confederate flag controversy still fluttered. A new Gallup poll finds that although Dean is technically the front-runner, registered Democrats are still far from their decision, and just a few percentage points separate the top five Democratic hopefuls.

But the announcement drew much praise from observers of the higher-education scene, if only for the light his proposal may shine on the sorry state of student finances.

“The Dean College Commitment” owes its pedigree to a number of similar proposals floated during the Clinton administration. In Dean’s version, students could count on a minimum of $10,000 a year in financial aid—a mix of loans and grants—and after they graduate, pay no more than 10 percent of their income toward their college loans.

The need for change, say analysts, is acute. One recent study points out that in 2008, the largest class in American history—the baby boomer’s children—will complete high school. A high percentage of this class, according to the study by the Advisory Committee on Student Financial Assistance (ACSFA), will come from low-income minority families.

“Demographics show,” wrote the report’s authors, “these students will be disproportionately dependent on student aid, and increasingly qualified to attend college.”

But the Dean plan needs to be understood in another context. Higher education today is a partisan war zone, and the battles are over affirmative action, equal access, rising tuition rates, and calls to reform financial aid, among others. And while the release of the education plan might be seen as trawling for minority votes, Democratic strategist Phil Noble believes it may have more to do with the early support Dean received from the 335,000-strong California Teachers Association. Dean is also the favorite of college professors, raising $864,000 from their ranks.

Nevertheless, the Dean campaign hopes its simple formula will be a popular one. For current and future students, it removes the existing limits on aid, and makes debt repayment easier. For parents, it allays the penalty on earning money, and provides a guarantee of a consistent amount of help every year. The Dean plan also expands AmeriCorps, boosting the appeal of public service, and it promises that those entering professions such as nursing and teaching would pay an even lower percentage of their income toward school debt. Consumer banks seem to like the idea, perhaps because the plan would presumably increase the number of federally guaranteed loans, bringing more no-risk business.

But like many early campaign pledges, the Dean plan will, sooner or later, smack into reality. American colleges and universities today, in the words of one analyst, are in the midst of their “perfect storm,” and the dimensions of the crisis are such that no one formula—no matter how elegant or intuitive—will escape political scrutiny, much less fix a broken system.

My plans are not necessarily aimed at African Americans or Latinos,” Dean said on a conference call with supporters minutes after announcing his higher-education plan late last week, “but they may help them especially.”

Polls suggest that the doors of higher education are still not open to minorities, especially for Latinos. A study released last month finds that while minority enrollments are up over the last two decades, the rates remain virtually unchanged over the last five years. Today, 46 percent of whites enroll in college, compared to 39 percent of blacks, and only 34 percent of Latinos.

“We’ve found that on average, a low-income student is $8,000 short of being able to go to college,”says Brian Fitzgerald, staff director of ACSFA.

Adding up grants, loans, and work-study, he says, there is still a third of the cost to pay.

“That’s the picture that confronts all low-income students. When we talk about the types of institutions Hispanics and African Americans attend,” he says, “these [places] have the least institutional aid, and are wholly dependent on federal aid.”

Exacerbating this problem, he says, is some evidence showing Hispanics are reluctant to borrow money.

Natalia Sanchez, a freshman attending Lehman College in New York, says she decided simply to attend the school that gave her the most financial aid. New York is among a handful of states that provide large amounts of grant aid, especially to minority students. Natalia says she’d reconsider school if she had to take out school loans.

“A lot of people I know live check to check,” she says. Natalia and two friends, who are also attending college on full scholarships, say they all have relatives who have skipped college because they didn’t receive enough aid.

The Dean plan—and some of the research conducted by Fitzgerald’s organization—stresses the need to keep students on a “pathway” to higher education, partly by assuring students as early as middle school that they will be able to attend college. Still, there are a number of other obstacles keeping some people of color out. Most prominent among these reasons is academic preparation. Put simply: The poor quality of schools and teaching in urban and low-income areas means many students aren’t prepared for the next level.

“At the end of the day, money is the biggest concern for an awful lot of minority students,” says Becky Timmons of the American Council on Education. “It’s nationwide, and it’s across the board. [Minority students] frequently don’t recognize that there is help available, and they know their own circumstances make it difficult to consider college.”

Underpinning Dean’s strategy is another simple, important premise: The responsibility to provide equal access to education—once the province of the federal government, but in recent years left to institutions—should be returned to the government.

Of course, not everyone welcomes a bigger federal role in higher education.

“The problem is,” says Richard Vedder, a professor of economics at Ohio University, “we drop all this money on kids before they go to college. We increase the demand for higher education and this aggravates the market, pushing up the price [of tuition].”

“Tuition fees have been rising past the rate of inflation every year since 1981,” says Vedder, who is writing a book for the American Enterprise Institute on the cost explosion in higher education. He says his research has found that state spending on higher education has a negative impact on income growth.

“Strongly negative,” he notes.

Vedder’s claim, if true, undermines one of the strongest arguments for getting everyone to college—the idea that higher education is an investment in the future.

“I guess what happens is we take money away from the private sector, and we use it to subsidize a governmental activity that has proven to be inefficient,” says Vedder. Despite this view, he admits to liking at least one aspect of the Dean proposal.

“It puts money in the hands of students—or consumers,” Vedder says, noting that it strongly resembles the voucher systems used in private schools.

“You find a college that fits your income level, and you make it work,” says Casey Lartigue, an education policy fellow at the Cato Institute. But Lartigue needs more details of Dean’s plan. “It’s like a lot of election-year pledges: all preamble and no constitution.” In general, he says, “When you subsidize something, costs go up. When you subsidize, people delay their decisions.” Howard Dean is betting the decisions will go his way.