WASHINGTON, July 23 (UPI) -- Rising higher education costs are damaging the United States' ability to compete globally, especially in the areas of science and technology, according to experts who testified before the Senate Finance Committee Thursday.
Less student interest in the fields of science and math, and decreases in the number of doctorate degrees being awarded in science are also harmful, said panelists at the hearing. And the complexities of federal aid programs make it less likely those programs will be beneficial.
"We either drive it [higher education] or we're going to be driven by the global competition," said Sen. Charles Grassley, R-Iowa, who chaired the hearing.
The hearing focused on the effect of federal tax incentives designed to lower the cost of higher education, which were implemented in the last several years. Among these are the Hope tax credit and the Lifetime Learning credit, which allow income tax deductions, for those who meet certain criteria, to offset tuition costs. Another is the 527 Plan, which allows families to save money that can later be withdrawn tax-free.
But these tax incentives offer relief mainly to middle- and upper-class families, who are already sending their children to college, said Dr. Susan Dynarski of the Kennedy School of Government at Harvard University. The incentives need to be restructured to encourage more people overall to attend college, she said.
"The folks we need to focus [incentives] on are those who aren't sure they're going to go to college," Dynarski said. This is especially important for students from low-income families. "An extra boost can get them across the [funding] threshold," she said.
The complexity of these incentives decreases their effectiveness, Dynarski said.
"Families can't respond to an incentive if they don't understand it," she said.
Randall Edwards, the Oregon State Treasurer, implored the Senators to make the tax exemption on 529 withdrawals permanent. It is due to expire in 2010.
The expiration of the 529 tax exemption "is creating a climate of confusion," Edwards said. "Students assume they will get [the tax exemption] regardless of when they withdraw."
According to The College Board, which administers Advanced Placement programs and the SAT, the cost of attending college rose about 35 percent for public and private four-year colleges in the last 10 years. Sixty-eight percent of four-year college students go to colleges with tuition (which does not include room and board) below $8,000 a year.
A changing global economy is making a college education more important in the United States, according to several of the panelists. Though the majority of jobs that have moved abroad in the past few years have been in the low-tech arena, that is now changing, said Dr. Watson Scott Swail, president of the Educational Policy Institute, a Virginia-based think tank. Engineering and IT jobs are now moving overseas as well, he said.
Though cost is a major reason companies move jobs abroad, the United States is also hurt by lagging higher-education enrollment. Between 1990 and 2000, higher-education enrollment in South Korea more than doubled. China and India also saw huge increases in enrollment during the 1990s, but higher education enrollment in the United States grew only 11 percent during the 1990s.
"The sheer size of these countries' populations mean that these countries are now producing as many, if not more, higher-education graduates than the U.S.," Swail said.
This is especially harmful to the United States in the science and technology fields, said Dr. Peter B. Corr, senior vice president for Science and Technology at Pfizer, the pharmaceuticals manufacturer in New York.
"[A] workforce with higher education is absolutely crucial to the ability of the United States to maintain its leadership position in science, technology and business," Corr said. But recent drops in the number of doctorate degrees being earned in the United States and in students' interest in science should be taken as a "wrong-way sign," he said.
Future scientists need to be encouraged before they reach college, Corr said. More teachers trained in science and math, higher funding for these subjects and more involvement by private companies are needed.
At the same time, science is getting more complex and scientists need to be cross-trained in several fields, ranging from biology to physics to mathematics. While the United States will have difficulty filling future science and technology jobs, "it does not appear that our international competitors will have as much problem as we do," Corr said.
