Colleges and politicians love the Big Dance, but not the one you’re thinking of. No, I’m talking about the constant, nationwide tap dance around the mere possibility that super-abundant student aid might fuel rampant tuition inflation. Case in point, a lengthy article in the Boston Globe this weekend that flitted and twirled around higher-education costs but completely ignored the possibility that ballooning aid might abet mega-inflation. The closest the Globe came to tackling that very real possibility was this bit buried deep in the article:
It must be said that parents are not entirely blameless. For their money, they demand amenities like state-of-the-art gyms and dormitories in a dog-chasing-its-tail spiral.
The real problem, of course, is that much of the money parents are waving around to demand the best isn't theirs at all: it belongs to taxpayers, a little tidbit that got nary a nod in the Globe. In the 2003-04 school year (the latest with available data), 48 percent of undergraduates received some sort of federal aid, including grants, loans, work study, or some combination thereof. Overall, inflation-adjusted aid coming through Washington rose 77 percent over just the last ten years, from $48.7 billion to $86.3 billion. Add to that $7.8 billion in state grants in the 2006-07 school year, $26.3 billion in grants from institutions, and $10.2 billion in private/employer grants, and two things are abundantly clear: there are tankers full of aid dollars out there, and they have to be playing at least some role—and probably a huge one—in driving up college costs.
So when will the media stop taking the higher education/politician party line that aid is the key to college access and has no impact on prices? I’m not sure, but I have a bad feeling that lots of the enjoyable big dances will have passed before it starts to happen.