The Right Opinion
The Government's College Money Pit
If insanity is doing the same thing again and again but expecting a different outcome, then the federal government's strategy for keeping higher education affordable is crazier than Norman Bates.
For decades, American politicians have waxed passionate on the need to put college within every family's reach. To ensure that anyone who wants to go to college will be able to foot the bill, Washington has showered hundreds of billions of dollars into student aid of all kinds -- grants and loans, subsidized work-study jobs, tax credits and deductions. Today, that shower has become a monsoon. As Neal McCluskey points out in a Cato Institute white paper, government outlays intended to hold down the price of a college degree have ballooned, in inflation-adjusted dollars, from $29.6 billion in 1985 to $139.7 billion in 2010: an increase of 372 percent since Ronald Reagan's day.
Most of that prodigious growth is very recent. The College Board, which tracks each type of financial assistance in a comprehensive annual report, shows total federal aid soaring by more than $100 billion in the space of a single decade -- from $64 billion in 2000 to $169 billion in 2010. (The College Board's data, unlike Cato's, includes higher-education tax credits and deductions.)
And what have we gotten for this vast investment in college affordability? Colleges that are more unaffordable than ever.
Year in, year out, Washington bestows tuition aid on students and their families. Year in, year out, the cost of tuition surges, galloping well ahead of inflation. And year in, year out, politicians vie to outdo each other in promising still more public subsidies that will keep higher education within reach of all. Does it never occur to them that there might be a cause-and-effect relationship between the skyrocketing aid and the skyrocketing price of a college education? That all those grants and loans and tax credits aren't containing the fire, but fanning it?
Apparently not.
"We've got to make college more affordable for more young people," President Obama declaimed during campaign appearances at the universities of Iowa, North Carolina, and Colorado last week. "We can't price the middle class out of a college education." Like George W. Bush and Bill Clinton before him, Obama argued for keeping the aid spigot open. He hit all the usual notes ("extend the tuition tax credit ... cap student loan payments ... make sure the Pell grants are there"), and for good measure used the federal student-loan interest rate -- which will double in July unless Congress acts -- to paint Republicans as clueless Grinches. Yet Mitt Romney also wants to extend the current rate. The myth that government can control the price of higher education by driving up the demand for it commands broad and bipartisan belief.
"It's not enough just to increase student aid. We've also got to stop subsidizing skyrocketing tuition," Obama said to applause in Iowa City. He might as well have declared that it's not enough to keep flooring the accelerator; we've also got to stop the car from going faster. Reality doesn't work that way. Rising government aid underwrites rising demand for higher education, and when demand is forced up, prices follow suit.
Federal financial aid is a major source of revenue for colleges and universities, and aid packages are generally based on the gap between what a family can afford to pay to send a student to a given college, and the tuition and fees charged by that college. That gives schools every incentive to keep their tuition unaffordable. Why would they reduce their sticker price to a level more families could afford, when doing so would mean kissing millions of government dollars goodbye?
Directly or indirectly, government loans and grants have led to massive tuition inflation. That has been a boon for colleges and universities, where budgets, payrolls, and amenities have grown amazingly lavish. And it has been a boon for politicians, Republicans and Democrats alike, who are happy to exploit anxiety over tuition to win votes.
But for students and their families, let alone for taxpayers who don't go to college, it has been a disaster. The more government has done to make higher education affordable, the more unaffordable it has become. Doing more of the same won't yield a different outcome. By now, even Norman Bates would have figured that out.
© Copyright 2012 Globe Newspaper Company
7 Comments
mumsie
Monday, April 30, 2012 at 6:16 AM
"Free" money for college isn't the only factor raising costs. Open admissions, affirmative action and unrealistic expectations have played a major part. Is it reasonable to expect taxpayers to foot the bill for remedial education for someone who couldn't be bothered to attend high school? Is college really supposed to be about learning fractions and decimals? Should colleges be teaching the parts of speech?Federal aid is tied only to income, not achievement or potential. The middle class is being squeezed out.
Abu Nudnik
Monday, April 30, 2012 at 11:54 AM
The diagnosis and prognosis are brilliant but what is the treatment, Dr. Jacoby?
MAJ USA Ret
Monday, April 30, 2012 at 1:23 PM
Results of recent history of federal aid for tuition also should include the dummying down of the academic rigor. Poster "mac" previously noted this phenomena. It is college's advantage to accept students with federal loans. Loans are guaranteed regardless of student completion, or curricula. Students may fail, or major in basket weaving, and the institution will get the money. Pity any politician who fails to promise college tuition assistance. That politician’s career will be very short. The only losers are taxpayers and the too few students who actually try to repay the loan and/or discover too late they can't get a job with their "easy" degree. SOLUTIONS:STOP THE PARTY!Current plan is an indiscriminate party scattering of confetti dollars. The current federal tuition programs that are especially designed to favor minorities, political constituents, special interests and the politicians who promise more. STOP FINANCIAL MEANS TESTING!Abolish the idea that only the “poor” should be eligible. Why should we discriminate based upon the parent’s financial status? It’s not the parents’ college education. STOP FAVORING BASED UPON RACE, RELIGION, ETHNICITY OR GENDER!Eliminate quotas based upon race, religion, ethnicity or gender. There is no evidence any of these factors, by themselves, are advantageous to education success.START TARGETING. TARGET federal tuition as follows:(1) TARGET selected disciplines. Address shortfalls in workforce skills (sciences, engineering,, medical, mathematics, computer sciences, etc.) The greater the short fall, the more the dollars. (2) TARGET selected schools and curricula.Federal auditors should require selected schools meet higher than common credential standards. Only the top 10% (20%?) should get the tuition. Application of this feature will require no political favoritism. Difficult at best, never perfect, but must be at least attempted.(3) TARGET merit.Tuition only for students with already proven history of responsibility. History in high school, public service organizations (Boy Scouts, Salvation Army, etc.), military service (Honorable Discharge), previous employers. Stop expecting college right out of high school. (4) TARGET the NEA.Abolish the NEA. Public education should stop preaching that college is the only real future after high school graduation. The NEA promotes its own survival by promulgating the lie that unless you go to college immediately after HS graduation, you are a loser. Hogwash! At least one very proven alternative comes to mind: military service! But how many times have you ever heard a high school teacher or administrator even mention military service, much less promote it as competitive or better than college.(5) TARGET US CITIZENS.Must be citizen, born in USA (or territories, exceptions for births of US Citizens working abroad for federal government as in military, US Embassy, or in service such as missionary, etc.), never citizen of another nation. Parents or guardian(s) must be US citizens. EXCEPTIONS: for any and all above for those who have proven conduct through successful completion of military service.RESULTS: (1) Far less Federal tuition to the vast unmerited for skills that are worthless administered through the unaccountable and loaned to the irresponsible.(2) Far more tuition to the far fewer meritorious, for skills that are highly valued through accountable and loaned to those proven to be responsible.The thought of the long-term consequences staggers the imagination of even the dullest imbecile!
Tom D`Asto
Monday, April 30, 2012 at 1:34 PM
Now that the number of colleges in the country has increased to meet the higher demand, would it make sense to eliminate student aid loans all together and force colleges to compete for student attendance? That would drive costs down immediately and possibly improve educational quality. Ahhh, but that is not the true aim of the legislator. Without the government handout, some politicians might lose an election. Even more importantly, without federal aid to colleges, the federal government would not be able to control what is taught, e.g., Hillsdale cannot be controlled.
Tom D`Asto
Monday, April 30, 2012 at 1:36 PM
Now that the number of colleges in the country has increased to meet the higher demand, would it make sense to eliminate student aid loans all together and force colleges to compete for student attendance? That would drive costs down immediately and possibly improve educational quality. Ahhh, but that is not the true aim of the legislator. Without the government handout, some politicians might lose an election. Even more importantly, without federal aid to colleges, the federal government would not be able to control what is taught, e.g., Hillsdale cannot be controlled.
PeaceByJesus
Tuesday, May 1, 2012 at 2:10 PM
You forgot to mention that students can be "forgiven" all their remaining student loan debt if they work for the government or non-profit (but not if involved in religious activity) orgs for 10 years, if they faithfully make al their payments during that time. (Federal Register / Vol. 73, 2008, Section 685.219; http://edocket.access.gpo.gov/2008/pdf/E8-24922.pdf)While this may be justified under the premise that at least the government might get back more money than it would due to the climbing rate of student loan defaults (about 9% in 2009, while 11.2% of student loans were currently more than 90 days past due is of Augest 2011), what it effectively fosters is the government having a majority of (often irreligious) liberals working for it, as the majority of students are.
India
Tuesday, May 1, 2012 at 9:07 PM
"Year in, year out, Washington bestows tuition aid on students and their families. Year in, year out, the cost of tuition surges, galloping well ahead of inflation. "The more government has done to make higher education affordable, the more unaffordable it has become. Doing more of the same won't yield a different outcome."Sounds eerily familiar to our current healthcare problems...