College students find it tougher to cover tuition

By Amy Forliti

Associated Press

MINNEAPOLIS -- Shanda Stracek worked on campus, got state and federal grants and took out two loans. But she still had trouble making ends meet as she worked toward a marketing degree at St. Cloud State University.

So Stracek, 20, picked up a second job last year, at Kmart. Between the two jobs, she'll work more than 30 hours a week this fall while going to school full time.

"Sometimes it gets kind of overwhelming," she said. "At the end of the semester, you're pretty much broke, and you know a new semester is going to start and you're going to have to pay more tuition and get books. ... I would like to spend more time studying."


Public college students in Minnesota have faced double-digit increases in tuition and fees each of the past four years, and the average state grant awards haven't kept up. As a result, students like Stracek are taking on more jobs and more debt.

"As tuition rises, it becomes more and more difficult for students, for all students, to afford to come to school, and grant aid has not kept up the pace," said Kris Wright, director of the office of student finance for the University of Minnesota's Twin Cities campus.

Tuition up, aid down

Based on figures from the Minnesota Higher Education Services Office, the average annual resident undergraduate tuition and fees at MnSCU's four-year schools increased by about 10.5 percent for the school year ending in 2002 and by about 13 percent the following year. Meanwhile, the average state grant declined more than 2 percent and then rose by 5 percent for the comparative years, the most recent for which breakout data is available.

In the University of Minnesota system, tuition and fees at the flagship Twin Cities campus increased 13.5 percent for the school year ending in 2002 and 16 percent the following year. The average state grant wasn't available by campus, but across the University of Minnesota system, it increased by almost 4 percent and then by nearly 16 percent.

A look at another substantial source of financial aid, federal Pell grants, doesn't change the picture much. Increases in that program haven't kept pace with the rising tuition, either.

The state invests in higher education in primarily two ways: By allocating funding to public universities up front and by giving need-based grants to students for use at any public or private institution in the state.

"Our tuition increases have moved absolutely in concert with the decline in state support," said Laura King, vice chancellor and chief financial officer of the Minnesota State Colleges and Universities system. "It troubles us greatly because we are, at our hearts, an access institution. ... We're not happy to find ourselves raising tuition like this."


While the 2003 Legislature was cutting MnSCU's appropriation by $191.5 million, and the University of Minnesota system by $190 million, for the current two-year budget cycle, it increased funding for the state grant program by $20 million per year for 2003-2004 and 2004-2005, HESO said.

Even a generous state grant program like Minnesota's -- which ranked seventh nationwide in 2002-2003 -- doesn't help offset the costs, Wright said.

"The gap between what the grant covers and what a student has to pay grows," Wright said. "They can't earn enough money working for it, so they have to borrow more money."

Going into debt

Borrowing money was something Brad Krasaway did as a last resort.

Krasaway, chairman of the Minnesota State University Student Association, and his wife are students at Winona State University. They both work, get financial aid, and between the two of them, they have about $14,000 in loans so far.

"When you take out loans, you go to college, you're obviously taking a risk," said Krasaway, 23. "You hope in the end that there's a job out there for you."

Borrowing by undergraduates in Minnesota institutions increased 40 percent from 2001 to 2003, HESO said.


"There is a concern about the growing amount of borrowing," said Phil Lewenstein, spokesman for HESO. "Families need to view it as an investment that hopefully will pay a good return."

Officials from various university systems say college is a wise investment, but the burden is increasing for middle-class students, who don't meet the lower income threshold to receive grants and don't have limitless funds to spend on tuition.

"Most of their aid, in the past, and now, continues to be loans," Wright said. "Those students begin to have difficulty affording an education. While there are tax credits available for those families, it's still a lot of money to come up with."

Other resources

Lewenstein said HESO works to educate students about other ways they can save money for higher education.

Planning ahead is important, Lewenstein said, and the state has a college savings plan that helps many families. In addition, there are numerous scholarships available, and many institutions offer their own grants.

"My parents always told me just pick what you want and the money will come eventually," said Stracek, the St. Cloud student. "Without financial aid, I wouldn't be able to go to college."

Tom Schmit, a counselor at North High School in North St. Paul, said he gives the same advice, and tries to persuade students and parents to at least apply for schools, even the ones they think they can't afford.

"You have no idea how much it's going to cost you to attend St. Thomas University until you apply to St. Thomas University" and apply for financial aid, Schmit said.

Meanwhile, lawmakers continue to examine the state grant program. Many bills are expected to be introduced next session, including proposals to allow each college system to handle its own grants, and proposals designed to undo tax cuts that resulted in budget cuts to schools in the first place.

"The financial aid system, I think, is good, but it has to continually be increased as the costs go up to make sure we ensure access," said Rep. Lyndon Carlson, a DFLer from Robbinsdale.

"When the public universities were first set up ... I think they wanted to make sure that everyone could afford a public education," Krasaway said. "I don't think that's happening right now."

BOX; Some of the resources for students of all incomes looking for financial aid; for more information, visit the Minnesota Higher Education Services Office at


Pell Grant. The federal government's largest grant program for low- and moderate-income families, sending $167 million to 76,500 undergraduates at Minnesota schools in the 2003 fiscal year.

Supplemental Educational Opportunity Grant: A federal program that can provide additional money to students demonstrating financial need. Priority is given to students already receiving a Pell Grant.

Minnesota State Grant: Helps students from low- and moderate-income families. The grant is based on a "shared responsibility" formula that looks at the total price of attending a specific college, including tuition and fees, room and board, books and supplies, transportation and other expenses. A student is required to use income, loans, savings or other award money to cover at least 46 percent of the price of attendance. The remaining 54 percent is met through a contribution from the parents and the federal Pell Grant and State Grant awards. The maximum award in 2004-2005 ranges from about $4,800 at a public technical college to $7,662 at a private four-year college. The average award is about $1,845.


Loan programs include the Federal Perkins Loan, the Federal Stafford and the Federal Ford Direct Loan Programs, Federal Parent Loans for Undergraduate Students, and others. The state also offers a loan program.

Work study

The state and federal governments offer work study programs to students of need. The school's financial aid office determines how many hours a student is eligible to work. Most students average about 15 hours a week and may earn $3,000 or more per year.

Tax incentives

Hope Tax Credit: A federal individual income tax credit of up to $1,500 for tuition and related expenses for each eligible student.

Lifetime Learning Tax Credit: A federal individual income tax credit of 20 percent of the first $10,000 of qualified and related expenses.

Student Loan Interest Deduction: Individuals might be able to deduct up to $2,500 of the interest paid on student loans.


-- Minnesota College Savings Plan: Individuals at any income level can contribute to the plan, and account earnings are free from federal and state income taxes when withdrawn to pay the beneficiary's qualified higher education expenses. Individuals who meet certain requirements may qualify for a matching grant from the state. or

Coverdell Education Savings Account, formerly the Education IRA: Earnings on a Coverdell ESA grow tax-free until withdrawn to pay for qualified expenses.

Scholarships and other resources

Education officials warn students to be wary of any scholarship search programs that guarantee a scholarship or ask for credit card or checking account data. Some useful Web sites include:

CollegeNet Mach 25:

Marine Corps Scholarship Foundation:

NCAA Scholarships and Internships:

ROTC Military Scholarships:

Source: Minnesota Higher Education Services Office

What To Read Next
Fundraising is underway to move the giant ball of twine from the Highland, Wisconsin, home of creator James Frank Kotera, who died last month at age 75, 44 years after starting the big ball.