A r c h i v e d I n f o r m a t i o n

This is a Working Document
The Seven Priorities of the U.S. Department of Education (July 1997)

Priority Three:
By 18 Years of Age, Being Prepared For and Able to Afford College

Importance of Priority Three

A college education has never been more important than it is today and will be in the years to come. Between 1992 and 2000, 89 percent of the new jobs created in this economy will require post-high school levels of literacy and mathematics. In fact, most high school graduates of the next century will need a solid foundation of skill even to be able to benefit from college and specific technical training across a lifespan. Moreover, whereas fifteen years ago the typical worker with a college degree made 38 percent more than a worker with a high school diploma, today, he or she makes 73 percent more. People who finish two years of college earn 20 percent more each year and a quarter of a million dollars more than their high school counterparts over a lifetime.⁽¹³⁾

Only half the people entering the work force are even nominally equipped for the 21st century world of work. And, although higher education is more important than ever, it has become harder for American families to afford it. Between 1979 and 1993, many middle class families' income decreased while college costs increased by 165 percent.⁽¹⁴⁾ Moreover, in 1994, only 45 percent of high school graduates from low-income families and 58 percent from middle-income families went directly from high school to college, compared to 77 percent from high-income families.⁽¹⁵⁾ This difference is important since those who immediately enter college upon high school graduation finish college at far higher rates than those who delay entry. There is also a gap in college attendance rates and graduation rates between minorities and whites, as well as between higher and low-income persons.⁽¹⁶⁾ Priority three calls for making two years of college -- the 13th and 14th years of education -- as universally available for young Americans as the first 12 are today. It also recognizes the importance of financial aid and incentives in encouraging families and their children to learn for a lifetime and thus to keep this nation moving forward in an age of information and technology.

Strategy for Supporting Priority Three

The Department of Education's strategy for supporting priority three involves two critical steps. First, students must be able to afford the cost of attending at least two years of college. Second, the ethic and public expectations about higher education must change; middle and high school students' must think about college early, understand the importance of going to college, and recognize the role of hard work in getting there.

Step 1: Helping Students and Families Pay for College

The Department of Education, primarily through the Office of Postsecondary Education, supplies 70 percent of the financial aid to U.S. college students through Pell Grants, work-study aid, and college loans. President Clinton already has achieved substantial success in making college more accessible and affordable to Americans than at any time in their lives, while also reducing fraud and abuse and reducing costs to taxpayers. Over the next five years, President Clinton's budget will more than double the federal aid available for postsecondary education from the time he entered office --going from $24 billion a year in 1993 to $58 billion in 2002.

Existing Department Programs

This Administration's commitment to expanding access to college already has taken many forms. The Direct Lending Program, which the President signed into law in 1993, gives student loans directly to people who need them, with new flexible repayment plans. The program now provides $10 billion in loans at over 1,500 schools, making loans to students and their families more affordable and debt more manageable, while saving taxpayers billions of dollars. Between 1993 and 1997, the President also secured bipartisan support for a $12 billion (or 48 percent increase) in Pell Grants, the foundation of student aid for lower-income students and their families. FY97 saw the largest Pell Grant increase in recent history, a $230 increase (9 percent) in the maximum grant to $2,700. This represents a full $400 increase, more than 17 percent, in the maximum grant since 1993. In fiscal year 1997, with strong bipartisan support from the Congress, the College Work-Study program also received an unprecedented one-year increase of 35 percent, with a new emphasis on community service, especially tutoring elementary school children to read. The President has proposed increasing funding for College Work-Study 50 percent by the year 2000, so that one million students would be able to attain part-time employment.

Expanding Financial Aid for College

The historic balanced budget agreement between the President and Congress preserves President Clinton's proposals to help middle class families pay for college and working people trying to upgrade their skills over the course of their lives. In fact, promoting educational opportunity -- the centerpiece of the President’s budget and his middle class tax cut proposal from the beginning -- is the centerpiece of the final tax cut bill. The major provisions include:

The biggest increase in Pell Grants in 20 years. The budget agreement accepts the President’s proposal to increase the current maximum grant by $300, from $2,700 to an all-time high of $3,000 per student per year. It also expands eligibility for Pell grants to more poor independent students. This single largest Pell Grant increase in two decades would benefit approximately four million students.
$1,500 HOPE Scholarship to make the first two years of college universally available. The final agreement includes the President’s program to advance the goal of making the 13th and 14th grades as universally available as a high school diploma is today. Students will receive a scholarship of 100% on the first $1,000 of tuition and fees and 50% on the second $1,000. The credit, available for college enrollment after January 1, 1998, is phased out for joint filers between $80,000 and $100,000 of income, and for single filers between $40,000 and $50,000.
20% Tuition tax credit for college juniors, seniors, graduate students and for working Americans pursuing lifelong learning to upgrade their skills. The 20% tax credit will be applied to the first $5,000 of tuition and fees through 2002, and to the first $10,000 thereafter. The credit is available for college enrollment after July 1, 1998. The credit is phased out at the same income levels as the HOPE Scholarship.
Using Individual Retirement Accounts (IRAs) for Educational Savings. The budget agreement also allows penalty-free IRA withdrawals for undergraduate, post-secondary vocational, and graduate education expenses. Taxpayers also are given the opportunity to deposit $500 into an education IRA. Earnings would accumulate tax-free and no taxes will be due upon withdrawal for an approved purpose.

Step 2: Changing the Ethic about Postsecondary Education: Think College Early

While expanding financial aid is critical to opening the doors to college, making two years of college as universal as a high school diploma is today will also require changing the attitudes and expectations of students, parents and families, teachers, counselors, and other school personnel. Students may not take advantage of the increasing higher education opportunities unless the ethic regarding college attainment evolves. Students and parents need to embrace the importance of going to college, to give priority to the preparation for college, and to learn what it takes to reach the goal of attending and graduating from college. They must be aware of the typical costs of college and their options for paying them. And they must take rigorous courses starting in middle and junior high school all the way through high school so they are prepared academically to enroll and succeed in college. Already programs such as Eugene Lang's "I-Have-A-Dream" are taking on the college ethic directly by providing students with mentors and other assistance as early as the fifth grade, as well as by sending the clear message that college is important. Governor Zell Miller's Hope Scholarship in Georgia and former-Governor Bayh's "Twenty-first Century Scholars Program" in Indiana are other examples of programs boosting college participation.

As part of its higher education efforts, the Department will launch an initiative, in the Winter of 1998, aimed at encouraging early preparation for college. The Department's first step in promoting this initiative is to get students and their parents to Think College Early. This involves making students, parents and middle schools aware of the importance of going to college and of the steps that every student should be taking to get prepared for college. Because the school has a critical role in shaping the attitudes and expectations of students and their parents, the Department has been working with a number of educational associations and organizations, including the National Forum to Accelerate Middle-Level Reform, the College Board, the National Middle School Association, American School Counselor Association, and the National Association of Secondary School Principals. Our goal is to gain the support of school counselors, teachers, principals, and their associations to think college early and to collaborate on similar themes by the time the initiative is announced publicly next March.

Existing Department Programs

In addition, a number of the Department's existing programs can be used to increase students' readiness for and participation in college. For example, Title I of the ESEA, as reauthorized in 1994, places new responsibilities on school districts to provide Title I funding to high-poverty middle and high schools, allowing secondary schools to invest in activities that support college and career awareness and preparation. The School-to-Work Opportunities Act is already expanding educational, career and economic opportunities for more than 500,000 young people in 1,800 high schools by providing school and work-based learning opportunities. Federal vocational education programs will be reshaped in the coming year to bolster these school-to-work activities. The Department's TRIO programs, funded at $500 million in 1997, support postsecondary education outreach and student support services to encourage individuals from disadvantaged backgrounds to enter and complete college. The Department's FY98 budget also requests $6 million to supplement states' efforts to pay for the Advanced Placement fees for low-income students and $5 million to expand tech-prep programs.

End Notes:

Census Bureau, Current Population Reports, 1996.
Digest of Education Statistics.
National Center for Education Statistics, Beginning Postsecondary Students, 1990-94, 2nd follow up.
The Condition of Education, 1996, p. 54.

Your comments on this document are invited, please send them to 7priorities@ed.gov.

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