MR. STEVE ROBERTSThanks for joining us. I'm Steve Roberts, sitting in today for Diane Rehm. She's at a public radio conference and will be back in this chair next week. At a time when many say the U.S. need more people earning college degrees, a new survey shows more colleges are seeking out students who can pay the full tab.

MR. STEVE ROBERTSJoining me this hour to talk about how fundamental changes in the college admissions process may be squeezing out low- and middle-income students: Nina Marks, who runs a company called Collegiate Directions, Kim Clark, who covers higher education for Money magazine and Brian Fitzgerald of the Business-Higher Education Forum. Welcome to you all. Thanks for joining us.

MS. NINA MARKSThank you.

MS. KIM CLARKThanks.

ROBERTS1-800-433-8850, as always, is our email -- is our phone number and our email address, drshow@wamu.org. Call in, particularly if you have some personal experiences or -- with the college admissions process and this changing face of it. Give us a call. Contribute your views and your experiences. We're happy to have you on the show.

ROBERTSKim, start with the survey, which got a lot of attention, a story in The New York Times and been covered by a lot of blogs. What did it say?

CLARKOkay. Well, it found that something like 10 percent, I think, of colleges or admissions officers did actually admit that they were -- would accept a slightly less qualified kid if he was more likely to be able to pay the full freight. To me, this is not that shocking. I mean, no school has ever been what they call wealth-blind.

CLARKI mean, every school has always had a few seats reserved for the kids of somebody who might donate, you know, a building or something. So the fact that wealthy get -- the wealthy get an advantage in college admissions is not, frankly, rather very new. It just may be people are being more open about it.

ROBERTSWell, I must say, when I read it -- and harking back to my experiences at Harvard in the '60s, there were a whole lot of kids who were there more for their names than their brains.

CLARKRight, exactly.

ROBERTSAnd their names tend to be chiseled in marble on various buildings around the campus. But The New York Times quoted an expert, Nina, saying this is a fundamental change in the way things operate. Is that an overstatement, is there a change here? What's your best view?

MARKSI don't think it's necessarily a change. I do think the process has become more conflicted and confusing. We focused recently in a Department of Education meeting last week, for example, on issues of clarity and comparability around financial aid offers. But there's much bigger confusion, I think, both on college campuses and more broadly in schools and among families.

MARKSWhat are students expecting in college readiness, in the admission and financial aid process, and thereafter in a college experience? We work both with -- directly with a relatively affluent population in my educational counseling business and also with extremely underserved students. Our Collegiate Directions families typically have an average income of $36,000 a year, so they're really needy.

MARKSSo we see both people who are sophisticated and people who are lost.

ROBERTSBrian, is there -- where do you come down on this? I mean, is this pretty much business as usual? Or are you seeing a change that we should be taking note of?

MR. BRIAN FITZGERALDI think it's -- I think what's happened is that three factors coming together have accelerated, you know, realities that have existed for decades. I mean, let’s face it. The first -- for public institutions, the first full pay, so to speak, were out-of-state students. And you saw, you know, legislatures having to put caps on the number of out-of-state students that they could accept, et cetera.

ROBERTSBecause of political pressures from inside the state, yeah.

FITZGERALDPolitical pressures from citizens. So, I mean, this has been around for a while. But I think three things have very rapidly accelerated this. First is the effect of the recession on families, more families needing more sources of support. The second is, at least for the public sector, significant declines in state support for those institutions.

FITZGERALDAnd the third is the rocky stock market has influenced endowments that are an essential source for some of those institutions, even purportedly need-blind institutions. And so I think you've seen practices that have been a reality at tuition-driven institutions kind of spread more broadly, discounting, for example.

ROBERTSCan you even make the argument that by bringing in at least some students who can pay the full freight, even if they're not quite at the same level of quality, that that makes the financial aid more possible for the more needy students?

FITZGERALDWell, that's...

ROBERTSSomeone's got to pay that bill, right?

FITZGERALDThe large number of institutions that do not have endowments fund their institutional financial aid budgets through tuition discounting. Full-freight families provide resources to lower income and middle-income families.

ROBERTSSo there is a kind of an income shifting process going on, right?

FITZGERALDAbsolutely, and there always has been.

ROBERTSYeah.

FITZGERALDWhat's happened is that the recession and the factors I talked about earlier have both deepened the need to do it at an individual institution and broadened the pressure across the range of institutions.

ROBERTSWell, one of the things I've noticed -- I teach at George Washington, Kim. And one of the things I've noticed is the enormous pressure on us as a School of Media and Public Affairs and every (unintelligible) university to create new revenue streams -- new certificate programs, increase the number of students in a classroom to amortize teaching costs, use the classrooms in the summer.

ROBERTSI mean, there are -- every institution, as Brian said, is under great financial pressure, even the richest ones.

CLARKThat's true. And I did want to point out that Brian makes an excellent point. The wealth -- the desire for wealthy students has always been true at private schools. But what's happening is there's more and more pressure on public schools.

CLARKI mean, University of California, for example, Berkeley, it reduced the number of seats for in-state students by -- I forget -- 1,000 or something and increased the number of seats for out-of-state students by 2,000 or something. So, in other words, they just want people who are going to pay more. They're going to reduce the number of seats for people who are actually contributing their taxes just to get more money.

CLARKSo what we're seeing is really a lot of pressure on the public universities to follow the same things that the private universities have been doing.

ROBERTSNow, Nina, you were talking about the families that you deal with. And a lot of this, Brian, as you say, comes down -- and one of the key variables here is what's happening in individual families, including a lot of people listening to us right now. And one of the things that I've noticed, Nina, is that the poorest of the poor in some ways are better off. They get full packages.

ROBERTSI'm head of our awards committee. We tried to give money last year to an African-American student from D.C. The university wouldn't let us give him any money 'cause he was maxed out. His tuition bill was about 15 bucks. It tends to be, in my experience, the families just above that level, who are right on the edge, and their ability to pay for college is fragile.

ROBERTSIf someone loses a job or the college fund drops in value that they've put away, or there's a family illness, that seems to be the level where this tremendous anxiety, and often causing people either to leave school or do all sorts of things to compensate.

MARKSAbsolutely. What we see also is that those are frequently the families that don't have access. They have great need to understand more complicated offers from colleges. It's not, you know, everything is covered, all you have to pay is 15 bucks. They -- they're looking at more complicated awards from colleges, and they have very little help.

MARKSOne of the issues cited, I think, in some of the recent literature is that people tend to go to their high school college counselors. Well, the national average, you may be fortunate and be in a private school. But if you're not, then the average ratio is 476 students per college counselor. For people who are overwhelmed with other responsibilities, where do you get help?

MARKSThis is where being able to have some kind of a clear dialogue with a college admission and financial aid office makes the difference. Our -- one of the issues that we look at most critically are two issues. One is merit scholarships, which, in this report, in this study, more than, I guess, 88 percent of admission offices cited that merit scholarships were pegged to the strength of a student's performance as opposed the relative size of his or her bank account.

MARKSAnd, you know, how does that -- does that -- is that helping or hurting the students who really need financial aid? For, you know, other students the -- well, let me stop there and let you address that.

ROBERTSLet me ask you, Brian. You were talking about the pressures on universities. Talk also about the pressures on families, the kind of thing that Nina was talking about. One of the things that I've noticed is that people -- even people who have planned for college don't have enough. They don't understand the full cost or -- you talked about the endowments.

ROBERTSBut one of the -- it's also individual savings account endowments that have lost value, and then you factor in the decline of housing prices. The wealth of a lot of families is tied up in their house. And with the decline of housing prices, that has a large impact on family wealth and, therefore, their ability to pay for college.

FITZGERALDAbsolutely. I think what's happened, really, is that 20 years ago, we were worried from a policy perspective and aid officers about low-income students. And I think what's happened as a result of globalization and other forces, those financing concerns have migrated up to middle-income families as well. But make no mistake about it. Low-income students are at risk, too.

FITZGERALDI mean, we've seen a huge a shift from the early '90s to the early part of 2004, for example, in the number of highly qualified low-income students who graduate from college -- high school and go to no college at all. The rate doubled. And we think that's attributable to net price.

FITZGERALDBut, you know, for those of us who either don't have children or our children are grown and we see the drop in 401 (k) s, we can be -- take some measure of hope in being able to earn that back in the next 10 or 15 or 20 years before we retire. Families facing tuition bills in a month, or in two years, don't have that luxury. And it's really having an impact on aspirations and where students go to college.

FITZGERALDThere's a tremendous downshift, if you will, from elite privates to publics, and from four-year publics to two-year colleges. And the reality is that those choices have very significant implications on the likelihood of success, which is to say a college degree, especially for minority students.

ROBERTSSo you are seeing -- you're seeing a downsizing of aspirations?

FITZGERALDAbsolutely. And just couple of quick...

ROBERTSHold that thought because we're going to have to take a break. Kim Clark of Money magazine, Nina Marks of Collegiate Directions, Brian Fitzgerald of the Business-Higher Education Forum. I'm Steve Roberts, sitting in for Diane. We'll be back with you phone calls, so stay with us.

ROBERTSWelcome back. I'm Steve Roberts, sitting in today for Diane while she's away at a public radio conference. And our subject this hour, a new study -- and I should say that it's a study from Inside Higher Education. It's a website that services college administrators. We have a link on our website, drshow.org, to this survey, and we appreciate Inside Higher Ed's cooperation with us on this.

ROBERTSAnd this survey has gotten a lot of attention and has talked about how many colleges are now seeking out full-paying students, whether they're out-of-state in public colleges, foreign students in private colleges, because of the financial crunch that every college is under. And I want to bring in Victor Sanchez. He is the president of the United States Student Association, a recent graduate of UC Santa Cruz. Victor, welcome to the show.

MR. VICTOR SANCHEZThank you very much for having me.

ROBERTSTell us your experience with financial aid. And we've got a panel of experts here. But you've just lived through it. What's -- what does it look like from the point of view of an individual student who's just gone through this?

SANCHEZYeah, I guess, the correct way to frame it is that I'm still living with it. You know, I'm currently saddled with around $14,000 in debt. In many ways, I should be grateful because the average, you know, that our graduates are graduating with is around $25,000. And I don't think that, you know, this is a small, narrow thing that is happening in America today. I think students across the country are graduating with mortgage-sized loans and no homes.

SANCHEZAnd that's just the unfortunate reality, is that, you know, we graduate with debt for a degree that is supposed to get us a job. And then we walk into an economy where youth unemployment is 14 to 17 percent, you know? And that, you know -- that, coupled with debt, you know, doesn't really put us in a bright spot to kind of reach our aspirations in the future.

ROBERTSAnd do you find, Victor, that your fellow students are having to make choices about the career paths they follow, the jobs they take, because of the debt burden?

SANCHEZOf course. I mean, I think the unfortunate reality is that, you know, you have to curtail what exactly it is that you wanted to go about studying, right, you know, going to school and seeking those professions that would provide you with, you know, the best position economically, you know, once you graduate, you know, and what's that risk and, you know, what really kind of comes out of compromises, those true values and those true kind of goals that you wanted to kind of pursue in college, you know?

SANCHEZAnd most of us who graduate, you know, with, you know, social science degrees or arts and humanities degrees don't even often go into the same line of work, right, you know, to go about and utilize our degree like they should have been utilized. And I think that's what's unfortunate. You're seeing people having to readjust, if not second-guess, what exactly it is they want to do in life.

ROBERTSYou know, one of the things that I've noticed, Victor, is that college teachers, that internships are terribly important for students, the single, best way for my experience to get a job after college. But the kids who have others paying for it, whether parents or scholarships, can afford to take unpaid internships, whereas the kids who have to work, you know, the late shift at the local pizza to pay their bills can't take those internships and fall behind in the job search.

ROBERTSIs that -- sound familiar to you? You think that's true in terms of your friends?

SANCHEZYeah, I think that's very true. And, you know, it's unfortunate that it's disproportionately affecting our low income. It's, historically, right underrepresented communities of color. Those folks who get into college can't afford to stay into college and have to work multiple jobs, and then, to stay competitive, need to take on an internship, but if an opportunity is unpaid, can't afford to do so.

SANCHEZAnd I don't think -- and we firmly believe in the United States Student Association, you know, that education is a right, and everybody should be afforded, you know, the opportunity, you know, to an educational experience that will allow them to be competitive, you know, once -- upon leaving an institution of higher learning and -- you know, and that's what we're encouraging, and that's what the market is bearing, right.

SANCHEZIt's unfair to communities who have been marginalized in the past and don't have the same opportunities financially, right, to go ahead and take an unpaid internship in Washington, D.C., or New York or in a line of industry that would, you know, that would allow them to put them in a better spot, you know, to get a job.

ROBERTSVictor, if you were called to testify before a congressional committee, and they said to you, how could we fix this? What are some of the things that we could do to make it better, from your experience? You got any ideas that could be helpful here?

SANCHEZYeah, I mean, you know, as a young person, it's not rare to think lofty in terms of what we would want. And, you know, ideally, in an ideal world, we would forgive all loans for students, you know, all loan debt for students. But I think that -- of course, you know, it's different when -- with a political context, I think, right now, most immediately, I mean, there are a few solutions out there.

SANCHEZI think one is Sen. Sherrod Brown from Ohio. You know, a lot of students take out, you know, Federal Family Educational Loans and direct loans and take on that debt. Well, his bill is something that would give us the option to convert these loans, you know, during a specific time period into more federal direct loans. And, you know, this would result in about $1.8 billion in savings over 10 years.

SANCHEZYou know, and that, of course, lifts up the burden of students having to deal with two different payment systems and -- which often kind of, you know -- for us coming out of college, you know, makes it more difficult because of, you know, one, we don't have jobs or we're not getting the jobs that are paying us enough.

SANCHEZAnd, two, you know, paying payments month -- on a monthly basis to two different agencies can get us tied up. And it has shown that. I mean, our default rates have increased. You know, another one, you know, obviously is not a solution because we don't want to go into bankruptcy. We don't want to be drowning further into debt, but, currently, student loans are the only type of loan that can't be discharged during bankruptcy or during loan defaults.

SANCHEZYou know, you can get rid of your gambling debt, but you can't get rid of your student loan debt. So there's also legislation out there that would go ahead and, you know, and work towards that problem. The other is just generally expanding financial aid. We are relying too much on loans in this country. Student debt is now -- has now surpassed credit card debt in this country, and nobody is talking about it.

SANCHEZEight hundred and fifty billion dollars, you know, are credited towards student loans, and we need to be providing. The federal government needs to step up and provide more federal financial aid in the form of grants or money that we don't have to burden ourselves with after we graduate. You know, we have to lower interest rates.

SANCHEZBut we just basically have to expand the safety net that is there. You know, the conversation right now is we don't want to burden the generation...

ROBERTSRight.

SANCHEZ...with taxes, you know, with debt. That's exactly what's happening with our students at institutions of higher learning, is that we're being saddled with $25,000 in debt on average.

ROBERTSRight. Victor Sanchez, he is the president of the U.S. Student Association and a recent graduate of University of California Santa Cruz. Congratulations on graduation, and thanks for joining us on "The Diane Rehm Show."

SANCHEZThank you very much.

ROBERTSOkay. So, Kim, talk about what Victor said in terms of some of the federal policies.

CLARKOkay. I'm just going to correct a few things. The bill that Sherrod Brown has proposed would allow people to take private student loans and refinance them federally, not federal loans...

ROBERTSOkay.

CLARKSo…

ROBERTSBut the larger question...

CLARKYeah.

ROBERTSWe all understand the economic reality. We're in the middle of Washington. We're talking about cutting the federal budget.

CLARKRight.

ROBERTSAnd he's talking about expanding student aid, not particularly realistic in the short run. But talk about the federal programs that do exist. And there are fights over Pell Grants...

CLARKReally, there are. I mean, the Pell Grant is a great example of a countercyclical program. I mean, it's just increased dramatically as the recession has made more and more people qualified for this need-based aid. You have to have an income of below about $45- or $50,000 to get this grant to pay for college, and it's just shot up.

CLARKNow, I think something like 8 million students are getting these federal grants, and it's really kind of busting the budget. I mean, I think it's doubled in the last four years or something like that. So...

ROBERTSThis is true of a lot of programs.

CLARKRight.

ROBERTSAs you say, they are countercyclical, where there's a greater demand. Food stamps is another example.

CLARKRight.

ROBERTSGreater demand when the economy sinks.

CLARKRight, right, right. And, of course, the fundamental problem is tuition inflation. You've seen, for example, if the Pell Grant was going to pay for the same amount of tuition today that it paid for in the 1970s, it would have to be $12,000. The maximum Pell Grant today is $5,500.

ROBERTSSo it's lost purchasing power.

CLARKOh, my gosh, because tuition inflation has just gone nuts.

ROBERTSMm hmm. And, Nina, when you -- the students you counsel, is federal help still a significant dimension? Is it falling behind, as Kim says, in terms of the role it plays?

MARKSIt cannot keep up.

ROBERTSUh huh.

MARKSIt's got to be supplemented by a variety of other resources and support. And one of the questions is how that's communicated when you are making a choice as a student and as a family. So, you know, this is where being able to talk with somebody and actually to understand what a college aid offer is becomes critical. I need to know -- Kim has referred to -- you know, what is the actual cost of attendance? What's it going to cost me to come?

MARKSAnd then what is the likelihood of continued support when I'm on campus? You mentioned internships. Critical, absolutely. But in a broader sense, we also need to think about the things that keep kids in college because, you know, 11 percent of the kids who actually get there from our low-income, first-generation population are graduating in six years, compared to 55 percent of their more affluent peers.

MARKSSo what's keeping kids there is money and support. Money is the biggest issue. But support beyond that networking within the school, and to your very good point about not being able to take internships, there are so many other extracurricular opportunities year-round that you cannot take advantage of if you're trying to make a buck every moment you can.

ROBERTSNow, let's point out that there's nothing wrong with kids working and contributing.

MARKSNo, no, absolutely not.

ROBERTSIn fact, it can be an enormously beneficial part of anybody's college education to take responsibility for herself.

MARKSAbsolutely.

ROBERTSBut, really, the problem we're talking about is when it becomes such a burden that it really diminishes your college experience and the opportunities you have.

CLARKWell, the research shows, actually, that students who work part-time, maybe less than 15 hours a week, get better grades, and they're more likely to graduate. Students who work more than 20 hours a week are much more likely to drop out because there's a certain number of hours at which, you know, you can't study anymore.

CLARKAnd the problem is, out of the $200 billion we spend on financial aid of all sorts, only $1 billion goes to the work-study program. It's a tiny portion, and that's something that could really be increased.

ROBERTSNow, one of the dimensions of this, Brian, that a lot of people talked about is the growth of community colleges as a lower cost, more manageable alternative. You can often work. You get more flexible class schedules.

ROBERTSI've spoken recently to community colleges in this area, and I've been very impressed with the dynamism and the richness of their offerings, including a very high percentage of foreign-born immigrant students in suburban Maryland and suburban Virginia. Talk about the role of community colleges. Is there a growing world for them in this universe, given the financial pressures you described earlier?

FITZGERALDAbsolutely. And the reality is that in many states, university systems are putting caps on enrollment, which means that low-income students and many others have to attend community colleges. They're an absolutely essential ingredient of our both learning the human capital formation strategy and our workforce strategy. They are relatively inexpensive. The problem is that they are so under-resourced.

FITZGERALDIf you look at state appropriations, for example, in California, you see UC is at the top and CSU is next. And the unfortunate reality is the community colleges have the highest percentage of low income and minority students, and they are the most under-resourced. And it has real implications for students' success.

FITZGERALDIf you look at students who start community college, especially in the STEM discipline -- science, technology, engineering and math -- the challenges of actually finishing are very, very significant. Less than 10 percent of students who start in a STEM discipline at a community college, six years later, have (unintelligible).

ROBERTSAnd why is that?

FITZGERALDIt's complex. The courses aren't always the same. The University of Maryland's system, for example, has gone through an alignment process with Montgomery College and the other community colleges in the state so that the faculty at Montgomery College in College Park are literally teaching the same courses.

ROBERTSRight. So that there's a logical progression (unintelligible).

FITZGERALDThere is a logical progression. You can often transfer your credits to a university. But they don't count towards your major because the courses are different. So making that work is critical.

ROBERTSI'm Steve Roberts. And you're listening to "The Diane Rehm Show." What's your experience, Nina -- you counsel a lot of people -- with the role of community colleges here?

MARKSCommunity colleges are terrific. We actually, in our work in Maryland, send kids with great pride to -- you know, to take classes at Montgomery College. The issue is indeed beyond the difficulties of whether your credits are accepted or not. What funding is left for you if you seek to enter a four-year college as a junior? In our experience, funding gets allocated primarily for entering freshmen and what's left over for kids.

MARKSThis is yet another, you know, issue for them to consider. Secondly, you know, what is the community that you have built at the community college? If it's a core of people who are older, who are, you know, have a fitting community college into other pieces of their lives, if we send students to community colleges who could go to four-year colleges from the start -- not everybody can.

MARKSBut if they could, that is something that ought to be a very high priority for us.

ROBERTSLet me read some emails from several of our listeners. This is from Philip in Baltimore. "I'm a PhD student." And he references an article he read in NPR News. And he says, "The article even suggests that we will be considered 'the lost generation.' Can your panel discuss the job market for college graduates and what the impact of changing admissions processes will have on the job market for recent college grads?

ROBERTS"Are college degrees really necessary for all students?" Kim.

CLARKYeah, I mean, there's a lot of talk about whether colleges are, "bubble," but the numbers are very clear. If you don't have college education, you're really behind the eight ball in this economy. I'll just give you some examples. If you have just a high school diploma and you didn't go to college, the unemployment rate for that group of people is 9.6 percent.

CLARKUnemployment rate for people with bachelor's degrees is 4.3 percent. So it's true a bachelor's doesn't guarantee you a job. But go to monster.com and don't have a bachelor's and look what jobs are available.

ROBERTSAnd, Brian, this is only going to get worse, right? I mean, given the transfer of the American economy away from a manufacturing economy where someone without an education could support a family in a unionized factory job, today, the demands for being able to run computers and be fluent in information technologies is only getting greater, right?

FITZGERALDAbsolutely. You know, you take local utilities, for example. And given the, you know, the emergence of the smart grid, et cetera, when utilities who test all of their applicants, test current employees or current aspiration employees, they very often find that fewer than 10 percent or 15 percent of students with just a high school education qualify for the lowest level job, which is a lineman.

FITZGERALDWe have -- our members very often say that kids coming out of high school don't have just plain work skills, that everyone needs post-secondary because we're just not doing enough. It would be a fundamental mistake not to get post-secondary education.

ROBERTSNina, let me read you another -- this is a posting on Facebook from Mike. He says, "Predatory lending in for-profit schools are leaving students heavily indebted and unable to pursue creative things like start-ups." Talk about this dimension, the for-profit schools and, in the words of Mike, predatory lending.

MARKSWe, you know, we actually do not steer our students to for-profit schools. We have focused quite closely over a number of years not only on, where possible, four-year institutions, but institutions that really monitor their retention rate, provides sustained support, which includes not only monitoring continuing funding but all the other networking and kind of guidance.

ROBERTSBut would you warn people? There are a lot of ads, you know? They're on TV all the time for all of these schools. Is this a potential danger, as Mike says?

MARKSYes, I think so. And I think it's a danger because people don't necessarily understand what they're getting and getting into.

ROBERTSOkay. That's Nina Marks. She runs Collegiate Directions Inc. Kim Clark of Money magazine is with me and Brian Fitzgerald of the Business Higher Education Forum. I'm Steve Roberts, sitting in for Diane. When we come back, your phone calls, so stay with us.

ROBERTSWelcome back. I'm Steve Roberts, sitting in today for Diane, and our subject this hour is the rising cost of college and the changing policies on the part of some colleges where they're trying to recruit more full-freight, full-tab students in order to pay the bills and what that impact is having on colleges. And let's go to our callers now. Mike in Springfield, Va., welcome. You're on "The Diane Rehm Show."

MIKEHi there. Can you hear me?

ROBERTSLoud and clear, please, go ahead.

MIKEHey there. I am -- so in this interest of full-freight, I'm paying Virginia prepaid tuition for three children. And I'm curious whether the admission boards are going to look at me as full freight. Or am I going to be one of those endangered state funding situation?

ROBERTSInteresting question. What do you think?

CLARKYeah, I think, actually, you're fine. University of Virginia actually, I think, would -- I think will be perfectly fine.

ROBERTSAnd are most -- these prepaid plans, Nina, is this a good buy for a lot of families?

MARKSI think so, especially if you're in a state where you have wonderful options like Virginia.

ROBERTSMm hmm. Let's go to Detroit. And, Denea, (sp?) you're on the air.

DENEAGood morning. Thank you.

ROBERTSGood morning.

DENEAI am happy to hear you talking about this today. I know today that young people are much more critical of how they spend their time, i.e., whether or not to go to college. And when I was in school, long time ago, you absolutely had to have a bachelor's degree to be competitive. Now, it's more like a master's.

DENEAAnd yet a lot of people don't want to go through that because they feel that what they're studying, what they're spending their time doing is not necessarily relevant to what they're going to be doing with their lives. And so my question to you is this. Is all of this still just about weeding out competition?

DENEAAnd, B, are there more universities and colleges, or will there be more that will create interdisciplinary studies, that will create curriculum for an undergrad that is going to be more relevant to what they want to do?

ROBERTSOkay. Thank you very much. Brian.

FITZGERALDYes, I think so. I think, actually, this is a national movement. If you look at what Larry Summers tried to do -- you know, Harvard is well-known for its every tub on its own bottom, to quote Derek Bok. Larry tried to force very aggressively interdisciplinary studies. There's an increasing recognition by looking at what employers demand, that there are a core set of skills.

FITZGERALDAnd interdisciplinary studies are very effective in achieving those workforce skills that employers say they need.

ROBERTSAnd there's a difference between workforce skills and education for a particular job. It's not the same thing.

FITZGERALDI don't think so. No. I think it's very much the same thing. I mean, you -- for example, there was a recent Hart survey of 300 employers. And the number one knowledge outcome of higher education -- these were not tech companies -- was knowledge of new discoveries in science and technology of every worker, not just STEM workers.

ROBERTSInteresting. Let's go to Bobby in Denton, Texas. Bobby, welcome to "The Diane Rehm Show."

BOBBYOh, thank you so much for having this discussion. I think it's appropriate that this is happening. I'm on my way to a community college right now to discuss transfer issues with students, so this is something I do for a living.

ROBERTSGood.

BOBBYYes, sir?

ROBERTSYeah, please, go ahead.

BOBBYMy concern was that, you know, the -- as relevant and as wonderful as the conversation has been so far, and I -- all I can say is more, please.

BOBBYI think we're missing a larger potential issue down the road with competitiveness as a society when we compare what we do with higher education in our young people and how we have, you know, withheld or started withholding funding from higher education so much in the last few decades that we're going to find out that the United States is the next emerging third world as opposed to preparing our young people to lead us into the future and stay on top of the heap here.

BOBBYThat's what concerns me the most, but it's not discussed a lot.

ROBERTSBobby, thank you so much for your call. We were talking about this off the air, Kim, that one of the big debates in Washington, argued by the president on down is that some of these expenditures, whether on Pell grants or research for universities, might cause something now, but they pay off down the line in terms of increased competitiveness and job skills. So address Bobby's point.

CLARKRight. I mean, the OECD numbers just came out recently, and America, yet again, slipped. I mean, more and more countries are graduating more and more -- a higher percentage of their population from colleges. So we really have a problem here. And a part of it is just the rising cost, but also it's the lack of preparation by the K-12.

ROBERTSAnd it also relates to another big debate in Washington, which is over immigration. And you have a lot of companies saying that if -- for America to be competitive, you have to expand the visa possibilities, particularly for foreign students who study here and want to stay here and often find it very difficult to get a green card and a visa to work here.

CLARKOr do what Canada does, which is have a point system and attract people who have gotten those great degrees from other countries. And then, you know, have them come here and start jobs.

ROBERTSI mean, Tom Friedman has written -- repeatedly saying, on the diploma of every STEM graduate -- science, technology, engineering and math -- we should staple a green card application.

FITZGERALDAbsolutely. It's one of the biggest mistakes we make.

ROBERTSLet's go to Brad in Tampa, Fla. Welcome. You're on "The Diane Rehm Show."

BRADHi. Did you say Brad?

ROBERTSI said Brad. Please go ahead.

BRADOkay. My initial call -- initial thought that I talked to you about was the concept that it's very easy for, you know, a college age kid to think about $22,000, which is the total of four years of the Pell Grants of $5,500 of the loan -- that's a lot of money. But in a lifetime, when you add up the increased income that you get from a college degree, I think it ought to be looked at as an investment in the near future.

BRADBy the way, I happen to agree with the previous caller that the problem is that our policies on education are leading towards us becoming a third world country. And I think it's very classic. I think there's a concept that the people that have don't really want to take care of the people who don't, so it's doing away with the people of access to that ability in the society.

ROBERTSBrad, thanks for your call. Nina.

MARKSYou know, I think part of the problem is that we're looking at this at the tip of the iceberg point, which is the moment of college admission, you know, what money you're being offered, what's going on, what are the opportunities there. And I think Kim put her finger on a critical issue, which is the readiness. We really have to look at -- and both Brian and Kim have touched on this -- the preparation up to that point.

MARKSYou know, with SATs back in the news recently, that scores have declined again, one of the critical questions is how are kids who aspire to go to college being prepared to go there? We know that despite the information recently that more admission offices would like to consider scores to be test -- you know, to be test optional. Scores do matter. That core content knowledge has to be displayed one way or another. And we need to do a better job.

ROBERTSLet me read a couple more emails. Garrett writes to us, "Can you discuss the facilities arms race that is taking place among both public and private schools? It seems that some of the money spent on gyms and cafeterias could be spent on scholarships." Another dimension of this, Brian, is often this aspirations of universities to be major research organizations and raise their visibility.

ROBERTSAnd that also has an impact on cost as well. Talk about what Garrett...

FITZGERALDSure. I think there is -- there are multiple arms races in tuition and financial aid and facilities, et cetera. But let's be clear. I mean, if there were no demand, institutions would not be doing this. I mean, this -- I think at every...

ROBERTSI must say at our university, we built a new fitness center, in part, because students -- one of the first things applicants ask these days, about your exercise facilities.

FITZGERALDWell, and that's great. At least they're concerned about that, being healthy.

ROBERTSBut is this -- how was this affecting the financial picture? Is Garrett's point -- we've had several emails on this point. Is there a distortion of college expenditures going on here, Kim?

CLARKYeah, I just -- I call it the resort-ification of campuses. And, in fact, I was just looking at some numbers. The average cost for room and board at a public university has risen by 35 percent or so over the last 10 years. CPI has only risen by 25 percent. So what you're seeing is, you know, more people getting single rooms where people used to have to double up. You're getting, you know, organic food in the cafeteria, which is great, but it's more expensive.

ROBERTSHere's another email what -- it gets at some of these related issues. Katie writes to us, "I graduated from college with a degree in chemical engineering two years ago, and I'm currently employed in the oil and gas industry. I think my generation," she writes, "has been raised with a mentality of do what makes you happy and get a job in what you love. However, this is really practical."

ROBERTS"And I think it has led to many people my age holding degrees in art history, philosophy, photography, et cetera. I can't say that I love it, but I have a well-paying job, no student debt and significant financial security." Your reaction to this, Nina?

MARKSI think we have to accept that a lot of us are going to be -- you know, have degrees that may not relate to what we eventually end up directly doing. I still think the training and the opportunities are totally worthwhile. We see with our Collegiate Directions students, a number of them, who know exactly what they want to do. They're going into that...

ROBERTSI know. But what I think what's she's asking is, are students being sort of too impractical or unreasonable in their aspirations, and that maybe in a tighter economy, being more realistic would be a better course?

MARKSYes, it would. If you are looking toward the income, yes.

ROBERTSAnd here's a related question. We have a lot of email -- we already talked about this a little bit, but we have a lot of emails on this question you talked about earlier, Kim. "As a college student," Howard writes to us, "I keep hearing how the diminished worth of degree in the world today. That, in conjunction with the current job market basic question, if what colleges are selling isn't worth as much anymore, why is it still so expensive?"

ROBERTSYou were talking earlier about the figures show that, in fact, it's pretty clear that it is worth it, but maybe not worth the inflated -- talk about how it's...

CLARKRight. Well, no. I mean, it's true that there are some college degrees that are probably not worth it. If you're paying $200-, $300,000 for a degree from a school that nobody -- the name is not very impressive and is not going to help you, and then you're majoring in poetry, you shouldn't expect a financial return. But, on average, the degree -- college degree is basically necessary to hope for a middle class life.

CLARKI'll give you some numbers from -- Georgetown recently did this great study that showed that only 14 percent of people who had a high school diploma earned more than the median of somebody who has a bachelor's. So this idea that, you know, there are these Bill Gates out there who -- they don't need a college degree. They're going to make a lot of money.

CLARKWould you rather be part of the 14 percent? You know, is that where you're betting on? Or would you rather be part of the, you know, the 86 percent?

ROBERTSI'm Steve Roberts, and you're listening to "The Diane Rehm Show." Time for a couple of more callers. And let's go to Bill in Washington, N.C. Do I have that correct, Bill?

BILLHello.

ROBERTSBill, you're on the air.

BILLI would like to hearken back to an idea that President Clinton had where -- a well thought-out idea, version of President Clinton's idea where you would have the students, after graduation, contribute in some way in his field to the community, provided, of course, that you have that student go to college in a field that is much needed in the society.

ROBERTSMm hmm. That's an interesting -- Bill, that's an interesting idea. And there's a lot of talk now about how can tuition forgiveness, say, for people going into teaching or other useful community work. Brian, what's the picture here? Is there -- are people listening to the kind thing that Bill Clinton and our caller, Bill, talked about?

FITZGERALDWell, certainly, students are. I think there's a real surge in interest among college students and graduates today in service. And I think that it's something that we should nurture. There are forgiveness opportunities everywhere, from law schools to go into public defender programs, to teaching. There are federal loan forgiveness for teachers.

FITZGERALDI don't think we do enough of it. Having said that, I'm not sure how we'd do that in this budget situation.

ROBERTSWell, one of the areas here is private philanthropy. I actually know a family who used their considerable wealth to endow a fund at a law school, where -- to help pay the tuition of students who then go into public service.

FITZGERALDSure. Absolutely.

ROBERTSAnd it struck me as a very useful and helpful philanthropy as opposed to building one more building with their names on it.

CLARKCan I just point out there is a terrific program that people don't know about. Its called income-based repayment. If you just take out your federal loans -- don't take out any private loans. Take those out, consolidate them after you graduate, you only have to pay no more than 10 percent of your disposable income on your student debt.

CLARKSo if you have a very low-paid public service job, your payment might be $1 a month. And so, I mean, it's a wonderful program, and it is a sort of a way of giving back.

ROBERTSI want to give each of you a chance to talk directly to our listeners here. We've got a lot of families listening, a lot of people struggling with these problems, either approaching college-age kids, as people you counsel, Nina, or families who have kids in college. And as we were talking earlier, these crises can come about. Someone loses a job in the middle of their college, or there's family illness, or, as we were talking earlier about the stock market, taking a whack at your 529.

FITZGERALDIt's probably worse today.

ROBERTSYeah. What advice would you give to people out there who are struggling with this question? You start, Nina, since you're the expert on this.

MARKSWe've got to start much earlier than we do. We've got to reach kids and families, you know, before they get to high school, ideally. But begin these conversations earlier in high school. And we have to have very directed conversations. General conversations are useless.

MARKSTo sit down with a student and think specifically about interests, strengths, family values, constraints, and then give some help and time, if possible, to finding a series of potential outcomes, which may include community college, which may include a four-year -- selection of four-year schools, and then connecting those kids, if we can, from high schools to colleges. That transition is a critical one.

ROBERTSNina.

CLARKKim.

ROBERTSOh, Kim. I'm sorry.

CLARKWell, first thing I would like to speak to -- I'm not a parent, but I am -- so anybody who has kids, you can just tape this right now. Your -- the parents are correct. The more you study, the better grades you get, the more aid you get. The more aid you get, the better school you can afford. It's -- the numbers are very clear.

CLARKSo you actually have to study in high school and do your homework. Secondly, you have to apply to a lot of schools. The more schools you apply, the more aid you get.

ROBERTSBrian.

FITZGERALDDon’t give up on higher education. Do anything you have to do to get some. A certificate at a community college is better than no college. An associate's degree is better than a certificate. And consider lifelong learning. I mean, you look at a program like Learn and Earn at UPS, where their employees can get a baccalaureate degree for free.

ROBERTSExcellent. I would add one thing to grandparents, which is -- as I am now with six grandchildren -- save money the instant a grandchild is born.

FITZGERALDRight. Exactly.

ROBERTS529 accounts are excellent values. Money can be mount tax free. 529s, every state household. Excellent conversation. Nina Marks of Collegiate Directions, Kim Clark of Money magazine and Brian Fitzgerald of the Business Higher Education Forum, thanks so much for joining us this morning on "The Diane Rehm Show." And thank you, our wonderful listeners, for contributing to the program and spending an hour with us.