Business pays steep price when cost of college rises.

• Position: Economic Outlook - Joni Finney of National Center for Public Policy and Higher Education discusses North Carolina's performance in higher education - Interview

Joni Finney is vice president of the San Jose, Calif.-based National Center for Public Policy and Higher Education, which recently studied state performance in higher education. North Carolina, which earned an A for affordability in 2000, got a C this year. However, its community colleges still rank among the cheapest for poor families, requiring just 8% of annual family income. Among other findings: The state leads the nation in percentage of students who take at least one higher-level math course, but it ranks 27th in percentage who enroll in college right after high school. It tied for 13th in percentage of students who get a bachelor's degree within six years of enrolling. It tied for 12th in percentage increase in income attributable to earning a bachelor's.

BNC: Why did the affordability grade fall?

Finney: North Carolina actually did improve its performance, but because other states improved more, its grade dropped for 2002.

How did those other states improve?

They reduced the percentage of family income required to attend public two- and four-year colleges and universities. North Carolina did that a bit, but other states invested more in need-based financial aid. North Carolina went up slightly, but it is really weak in that area.

What does that mean for business?

It means it's going to be harder to pay for higher education, so the students that do enroll will probably have to borrow more money. It could mean fewer students will enroll. And that's where businesses should be concerned. If you have fewer qualified people going on to higher education because of the costs, then you're going to have fewer workers with the necessary degrees and credentials to employ. Also, if students come out with too much of a debt burden, they're going to look for the best-paying jobs, whether they're in North Carolina or anyplace else.

What does North Carolina need to do to raise its grade?

It needs to make sure tuition growth doesn't exceed growth in family income over the coming years. To link tuition to some kind of index related to what families earn is really important. The second thing it needs to do is increase its commitment to state need-based financial aid, to make sure the neediest families are not being discouraged from attending higher education because there's not some kind of financial assistance.

Why do we have such a high percentage of students in advanced math classes?

That's where the state has really focused its reform agenda in...