In Higher Education, Status Quo Is Status Quo

Yesterday, a House subcommittee working on the higher education portion of the 2007 federal budget approved a bill that would add $100 to the maximum Pell grant, bringing the ceiling to $4,150, and save numerous programs President Bush had slated for elimination. According to Inside Higher Ed, committee Democrats were on the warpath from the start, demanding more support for the nation’s college students:

After a few minutes of civility, House Democrats went on the attack, questioning their Republican counterparts’ commitment to helping working-class Americans afford college education.

“Here’s the story as I see it: Families spend more to send their children to college; their costs are not frozen,” said Rep. David Obey (D-Wis.)… “We’re not going to effectively deal with this by keeping the status quo. And this bill is worse than that. People who are supposed to be the focus wind up getting squeezed.”

Obey was right—keeping the status quo is not going to ground higher education’s skyrocketing price. But the problem is that the federal government is putting too much money into student aid, not too little! The political cycle that drives tuition is actually easy to understand: Some people complain that tuition is too high and demand that politicians make college “affordable.” Politicians, to get votes, provide student aid. Then schools, suddenly able to get more money, raise tuition. But wait, that makes college “unaffordable” again! And so it goes…

The data bear out that increases in student aid have driven tuition up. Indeed, aid has actually been increasing faster than tuition over the last ten years. According to College Board figures, between the 1995-96 and 2005-06 academic years, the average, inflation-adjusted, enrollment-weighted, cost of tuition, fees, room, and board rose 31 percent at private, four-year institutions, and 41 percent at public, four-year schools. Meanwhile, inflation-adjusted aid per full-time equivalent student – most of which came from the federal government—rose 61 percent, from $6,261 to $10,119! Tuition ballooned because politicians made sure it could… and then some!

To truly change the status quo, Congress will have to do the exact opposite of what Rep. Obey wants. It will have to cut student aid, not increase it. Unfortunately, that’s not what gets votes.