When Miami teen Joshua Forges got his acceptance letter to Harvard University, it was the culmination of a stellar secondary school career, one that promised a future of success and prestige.
He had achieved what only 2,022 other students had achieved, 5.9 percent of 34,295 applicants from around the nation.
But he declined to go.
The family of the New World School of the Arts alumnus, whose 6.39 grade-point average made him a standout among his classmates, was too well-off to earn any financial aid to the nation’s top university.
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His family makes about $300,000 a year, putting his expected family contribution at $79,700 a year, according to his Free Application for Federal Student Aid.
His mother, Cassandre Forges, a nurse anesthesiologist, was outraged.
“I was like, ‘Wait a minute, are they serious?’ ” she said. The family has three younger children, dependent grandparents and medical expenses, making Joshua Forges’ Ivy League dream a financial impossibility.
Forges is one of a generation for which a debt-free education is nearly unattainable. It’s a doom spiral fed from every angle. Tuition has skyrocketed while financial aid has only inched along, prompting schools to raise the income percentages they expect in family contributions. And while educational borrowing was once capped by law at $4,000 per family a year, the amount now allowed is unlimited.
It begs the age-old question, the one shouted, hissed and sighed by students and parents alike: “Why is student debt so high?”
Nationally, college graduates who borrowed for bachelor’s degrees granted in 2012 owe an average of $29,400, according to a December report from the Project on Student Debt at The Institute for College Access and Success. All in all, outstanding student loans command a whopping $1.2 trillion of the national debt.
A generation ago, in 1989, student debt averaged $9,634, according to the Pew Research Center. That’s a third of what it is now.
About seven in 10 college seniors who graduated in 2012 had student debt, a rate that grew about 6 percent a year from 2008 to 2012, according to the report.
The major drivers vary based on income group. Inefficiencies in the financial aid system have led students like Forges, who accepted a full tuition scholarship to Vanderbilt University, to opt for more affordable schools or accept the debt. Students in lower income brackets have been left with no choice but to accrue debt in a system that was meant to avoid the very thing.
The common complaint across middle-income households is that they make too much money to qualify for much financial aid and too little to fulfill the expected family contribution developed by the FAFSA application.
Financial aid experts consider middle income to be between $40,000 and $65,000.
These students often don’t qualify for federal Pell grants, or free money often awarded to students with family incomes below $40,000. They’re also out of luck when it comes to federal work study programs, available to low-income students with substantial need after their expected family contribution has been deducted from the cost of tuition. Nor do they qualify for subsidized loans that begin to accrue interest six months after a student graduates.
Middle-income students are left with few options, say experts. They can pay the expected family contribution. They can take out unsubsidized loans, which accumulate interest while the student is in school. Or they can take out private or direct PLUS loans, which are unsubsidized loans available for parents.
The source of the problem, argue middle-income parents, is that the FAFSA inaccurately calculates the expected family contribution.
The FAFSA form takes into account the student’s and parents’ income and assets, household size and the number of family members attending college to produce the expected family contribution, the number colleges use to award aid.
Cassandre Forges said the FAFSA fails to ask for information on outside costs, like paying for dependent grandparents or medical bills.
If a family has outside costs or has had a severe drop in income, a divorce or other matter that could greatly affect their need, they can appeal their FAFSA award, but it isn’t included in the original tabulation.
“I think the problem is that families aren’t educated on how this works,” said Tom Bottorf, founder of GetCollegeFunding.org, a nonprofit organization that provides student with financial aid advice. “The federal government and schools don’t make it easy to find out this stuff.”
Educational consultant Paul Wrubel, who has 30 years of experience helping families pay for college, said the form’s other inefficiencies include penalizing families that save for college by reducing their financial aid eligibility by about 5.6 percent of the money they have saved.
He and other experts said the fundamental problem with this form is that it is made to be filled out by students, who often don’t understand the terminology or have any concept of what their parents earn.
This year at the University of Miami, financial aid experts are looking for ways to more accurately assess a family’s ability to pay by implementing the CSS/Financial Aid Profile, a College Board-developed application that about 350 universities use to assess aid and that takes a family’s full assets into account.
“The federal government will ignore if you have less than $50,000 of income but you have a huge asset,” said Ray Nault-Hix, associate dean of enrollment management at UM. The CSS profile, “allows us to see everyone on a level playing field.”
Meanwhile, tuition rates are rising far more quickly than income.
The proof: The median household income rose by 20.3 percent between 2002 and 2012, the most recent year from which data is available, according to the U.S. Census Bureau. By comparison, in the same time period, the average cost of tuition, fees and board for an in-state student at a public, four-year university rose by 66 percent, from $5,213 to $8,655, according to a report from the College Board. Tuition, fees and board at a private, nonprofit four-year institution rose 26.5 percent.
In Florida, tuition and fees and the University of Florida more than doubled in the last decade. At the University of Miami, tuition and fees increased by 30 percent during the same time period.
At UM, Nault-Hix said the rise in tuition is largely attributed to investments in infrastructure and technology that make schools more appealing to prospective students.
“Sometimes these enhancements are going into better facilities, better dorms and more meal plans,” he said.
At UM, accommodations like Kosher meal plans for students with specialized diets and a renovated cafeteria with more vendor variety have driven tuition up to fulfill student wants.
Schools without sufficient endowments place an even greater part of the burden of those improvements on the students, he said.
Jamie Dickenson, a certified educational planner, said schools are doing a lot for students that hasn’t been done before, like building additional swimming pools and adding more accommodations to dorms.
Improved facilities and increased security, especially after the uptick in school shootings, have been major touch points for colleges that want to draw students, Dickenson said.
In the end, upgrades feed costs. And costs feed the need to borrow to pay for higher education.
To make matters worse, on July 1, the interest rates increased from 3.86 to 4.66 percent on undergraduate Stafford loans.
A generation ago, the effect of rate increases brought far less impact. In 1994, Congress agreed to do away with the borrowing limit of $4,000 per year. Families can — and often must — borrow the entire difference between the cost of college and the aid awarded to students.
“We started getting these $30,000, $40,000, $50,000 annual loans to parents,” Bottorf, of GetCollegeFunding.org, said. “Families are borrowing money that they can’t afford to pay back.”
And, say experts, too few students understand what their monthly payments will be after graduation or whether their post-graduation jobs will pay enough to cover the cost.
“This is due to students chasing a dream and not paying attention to the affordability of the debt,” said Mark Kantrowitz, student financial aid expert and publisher of edvisors.com.
Aston Liyanarchi, a freelance industrial designer who graduated from the Art Institute of Fort Lauderdale in 2006, said he barely had a clue that his debt would come out to $101,000 when he graduated.
The Chicago native said he was sold on the idea that the Institute would make finding a job after graduation easier and didn’t realize what his loan payments would mean in monthly payments.
“The student loan thing wasn’t a huge deal,” Liyanarchi said. “I knew it was coming. I knew it was inevitable.”
But what he wasn’t expecting was the hefty monthly payments.
“If I had known when I was 18 that I would have to pay $500 a month for the next 18 years, I would have been like, ‘Wow, that’s going to suck,’ ” he said.
At 31, he still has about $45,000 in student loans to pay back.
For low-income students, the deficiencies in the financial aid landscape pose obstacles that can make higher education impossible. In fact, low-income students are expected to come up with a higher proportion of their family income for college costs than middle or high income students, said Lauren Asher, president of The Institute for College Access and Success.
“What it actually costs to provide a public college education hasn’t risen nearly as much as the share of that money that students are expected to pay,” Asher said.
The percentage of incomes low-income families are expected to pay after grant aid has risen from 41 percent to 48 percent over the last two decades according to “The Rising Price of Inequality,” a 2010 report on the inadequacies of grant aid.
The Tuition Tracker database, compiled by a team of journalists from The Education Writers Association, The Dallas Morning News and the nonprofit Hechinger Report, found that the out-of-pocket contribution expected from families with incomes below $30,000 rose at a higher rate between 2008 and 2012 than for students with family incomes above $110,000.
The trend was reflected at nearly every Florida public university.
At the University of Florida alone, the net price — cost minus grant aid — more than doubled for the poorest students and increased by just a third for families in the highest income bracket.
“There is a common misconception that low income students are getting enough grant aid, and that’s not true,” Asher said.
Programs like federal grants and work study intended to help low-income students have failed to keep up with tuition hikes, say experts.
The Health Care and Education Reconciliation Act of 2010 sought to increase the maximum award of the federal Pell Grant until 2020 in accordance with inflation. But Kantrowitz, publisher of eadvisors, predicted the increases will fail to keep up with inflation.
For five out of the 10 years in the period, the maximum Pell Grant will remain the same. On average, the maximum Pell Grant will increase by 0.75 percent less than the Consumer Price Index, totaling only a $350 increase in 10 years, according to Krantowitz, who contributed to “The Rising Price of Inequality.”
According to the Institute for College Access and Success, despite going up to $5,645 for the 2013-2014 school year, the Pell Grant now covers the smallest percentage of college costs for a public, four-year institution since the program began.
Mayli Benitez, 21, is a senior at the University of South Florida in Tampa whose family is in the low-income bracket. Her single mother of four makes about $11,200 a year, placing her with an expected family contribution of $0. Yet Benitez will be graduating with nearly $2,000 in loans.
Benitez has earned the maximum in grant aid money each year since she enrolled in 2011, but the cost of living in a dorm — required for freshmen at USF — forced her to take out loans to cover living and meal plan expenses.
Summer classes, also required for Florida residents attending all Florida universities, weren’t sufficiently covered by financial aid. Benitez again had to take out loans to cover summer costs.
The inefficiencies of grant awards forced her to borrow, she said. That essentially negates the purpose of the grant aid program, especially for families who are expected to pay nothing toward a college education.
Benitez has since taken a work-study position as a receptionist at the Patel Center for Global Solutions, where her earnings go back into paying for book and living expenses.
When she graduates in December, the criminology major with a psychology minor will immediately start looking for a job to pay off her loans as quickly as possible.
Then she’ll be on her own, independent of her mother’s help.
“The loans are on me,” Benitez said. “I don’t expect to her to help me at all. It’s still a lot coming out of college when you don’t have a job at all.”
Even work-study programs are falling behind need, educational consultant Wrubel said.
Such programs have become more competitive as more students apply, and students in the lowest income brackets usually get the few allocated positions. The amount schools give out in work study is at each institution’s discretion.
Rick Wilder, a student financial adviser at the University of Florida, said work study is becoming less popular among students.
“We are seeing a trend in which students would rather take the loan indebtedness instead of work,” Wilder said.
A decade ago, the school awarded an average of $1,500 in work study to 1,544 students. For the 2012-2013 school year, the school awarded work study to 854 students, allocated less money — $2 million as opposed to $2.3 million in the 2004-2005 school year — and gave an average award of $2,381.
At the University of Miami, associate dean of enrollment management Nault-Hix said the school has had to increase the average work study award to draw students.
“We have jobs on campus that we can’t fill,” Nault-Hix said. “There is an apathetic attitude to using this as a resource.”
Apathy and disenchantment with the financial aid process has led more students to stop applying for financial aid at all, many of them sure they won’t qualify.
Scott Weingold, managing director of the College Planning Network, said “a fair level” of the students he works with don’t want to fill out the form.
“A lot are not going through the financial aid process; they don’t bother to apply,” Weingold said. “A lot of these families would get aid, but they don’t fill it out.”
Less state funding to higher education — about 23 percent less per student than before the recession, according to the Center on Budget and Policy Priorities — has left many families tired and looking for changes in the systems.
Some experts suggested doing away with student loans altogether.
“Student loans are a cancer,” Wrubel said
He suggested to get rid of the system and instead base the expected family contribution on the discretionary money families have left free to pay for the cost of college. He said each school could then charge families a percentage of that free income, with more prestigious schools charging a higher percentage.
Bottorf of GetCollegeFunding.org said the government should return loans to the private sector. Students would have to go to colleges they can afford and expensive colleges will be left with empty seats, forcing them to lower the price of tuition.
The Institute for College Access and Success Student Debt and the Class of 2012 report has suggested improving financial aid and debt calculators to help students anticipate the consequences of choosing one school over another. It specifically named the FAFSA4caster, a free financial aid calculator that lets students estimate aid early; the College Scorecard, a one-page form developed by the Obama administration to calculate the chances of completing, borrowing, defaulting or accruing high debt at any school; and the Net Price calculators, which all colleges offer to allow students to gauge what their probable financial award will be and thus use the information to choose the best college to fit their needs.
The report also recommended doubling the maximum Pell grant to decrease students’ need to borrow, solving the issues for the students who are meant to leave college without debt first, and then looking at the middle-income bracket problems.
“It’s a shared responsibility,” Kantrowitz said. “The government needs to do better, the schools need to do better, and the students and their families need to do better.”