Cruzado was invited to testify, along with four other witnesses, by Finance Committee Chairman and senior Montana Senator Max Baucus. In her written remarks, Cruzado focused on the mounting challenges students and their families have in paying for college and how tax policy can play an important role in making higher education more accessible.
"Overall, a dramatic decline in the finances of students and their families has forced them to borrow more," Cruzado said in her written remarks.
"Today's students are tomorrow's innovators, small business owners and employers. So when rising tuition costs keep families from affording college, it hurts our whole economy. We have a responsibility to give our future job creators all the tools they need to succeed, and giving working families tax breaks to send their kids to college is part of that effort," said Baucus, whose Finance Committee has sole jurisdiction over the tax code.
The cornerstone form for applying for all federal financial aid for higher education is the Free Application for Federal Student Aid, commonly known as the FAFSA, which allows students to qualify for loans, grants and work-study. At MSU, the number of FAFSA forms received has grown 43 percent in just three years and shows no signs of slowing down, Cruzado said in her testimony.
"When students and their families use the FAFSA form, those students with the greatest financial need qualify for Pell Grants. As such, Pell Grants are a good indicator of the financial stress students and their families face," Cruzado said. "The number of students receiving Pell Grants has jumped 65.6 percent (at MSU) in just three years."
Another trend corresponding to the recession is the amount of debt students have when they graduate. From 1999-2007 the average amount of debt for MSU graduates who borrowed remained relatively flat at between $17,000 and $18,000, Cruzado said.
With the recession, student debt grew dramatically - by 35.7 percent - so that now, of students who borrow at MSU, their average debt is $25,682. Sixty-six percent of all MSU graduates borrow.
"Anecdotally, I am meeting more parents who are sending their children to college while still trying to pay off their own college debts," Cruzado said.
The federal tax code and financial aid plays an important role in helping students afford college, but needs to be simplified, Cruzado said.
"The number one obstacle to students and their families taking full advantage of federal financial aid and tax benefits is the complexity in understanding and applying for these programs and tax advantages," Cruzado said. "Even tax accountants find the tax credits and deductions for higher education confusing."
At MSU, Cruzado has instituted a number of programs to help students avoid debt. In April, Cruzado appointed an executive officer to oversee financial literacy training for new students and their parents, an expansion of tutoring and advising services to help students graduate, and a renewed effort to help students graduate more quickly.
In June, Cruzado also launched the "Freshman 15" an effort to encourage students to take a minimum of 15 credits each semester. At MSU, there is no cost for additional credits after a student pays for the first 12. Also, a minimum of a 15-credit-per-semester load is required to complete most degrees in four years at MSU. A resident student will save $816 per semester by taking 15 credits.
Cruzado is also helping students graduate by creating the MSU Office of Student Success, which offers tutoring, advising, study-skills training, and incentive programs to help students stay in college. More than 560 students utilized 6,500 hours of tutoring during the past academic year.
Contact: Tom Calcagni, executive director, MSU Communications, (406) 994-4571, firstname.lastname@example.org