Federal aid programs allow colleges ‘blithely to raise their tuitions’

by Grace

New York Times economics pundit Eduardo Porter explains “Why Aid for College Is Missing the Mark”, allowing ‘colleges “blithely to raise their tuitions,” at little benefit to students’.

In 1987, when he was Ronald Reagan’s education secretary, the conservative culture warrior William J. Bennett wrote a famous essay denouncing federal aid for higher education because it allowed colleges “blithely to raise their tuitions,” at little benefit to students.

Nearly two decades later, it seems, he was broadly right. Indeed, he didn’t know the half of it.

It’s not just that many colleges and universities are bleeding taxpayers. The government’s overall strategy to subsidize higher education is failing at its core task: providing less privileged Americans with a real shot at a college degree. Alarmingly, it is burdening low-income students with risks they cannot bear and steering them into low-quality educations.

“Institutions of higher education in the United States extract a lot of money without delivering value but the government has no way of influencing that,” said Andreas Schleicher, the top education expert at the Organization for Economic Cooperation and Development, the research organization for the world’s major industrial powers. “It has very few levers of control over equity-related issues.”

Porter comes down on for-profit colleges, leaders in enrolling low-income students.  But their higher tuition does not produce consistently successful outcomes.

Low-income students in the United States often end up with the short straw: no degree, no job and a bundle of debt that they must pay anyway.

The level of government spending on higher education does not seem to be at the heart of the problem.

State and local financing for public higher education fell to some $76 billion last year, nearly 10 percent less than in 2003 after inflation. On a per-student basis it is 30 percent less than it was a decade ago.

But that doesn’t mean there is less government money in the system. Federal aid to college students more than doubled over the period, to some $172 billion last year. Of that, nearly 25 percent went to private, for-profit colleges.

More accountability is needed.

Porter believes the “case for government financing of college is as strong as ever”, but the method of allocation is “wasting both money and opportunity”.  Although I may disagree with his specific recommendations to fix the problem, I wholeheartedly agree with the need “to curb abuses arising from the haphazard distribution of billions of dollars of taxpayer funds with very little accountability”.

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Eduardo Porter, “Why Aid for College Is Missing the Mark”, New York Times, October 7, 2014.

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