States Short Change Students
There is a new report out today that says the states increased their spending on student aid by six percent. Sounds good until you have to go pay your tuition bill, which was rougly 10% higher for public colleges and universities or you figure that the increase will barely cover the increased number of students. Also, the Congress has kept a lid on the size of the Pell Grant for the last three years so no relief there.
Basic math here is higher costs plus no additional aid equals more debt.
P.S. Kudos to Rock The Vote, New Voters Project, Declare Yourslef, MTV, Citizen Change, WWE and all the tens of thousands of people who helped to contribute to the historic increase in youth turnout mentioned in Hans' post.
Basic math here is higher costs plus no additional aid equals more debt.
P.S. Kudos to Rock The Vote, New Voters Project, Declare Yourslef, MTV, Citizen Change, WWE and all the tens of thousands of people who helped to contribute to the historic increase in youth turnout mentioned in Hans' post.
posted by Anonymous at 3:42 PM
5 Comments:
You do realize, of course, that the more student aid is given out, the more colleges increase their fees, correct? The aid gives them an excuse to boost the cost, so they can make more money. They're just sucking up the aid that is given out as a free financial boost.
This is part of the reason why tuition has went up so much over the past two decades or so. Aid isn't free money. It actually cancels itself out- or even makes the situation worse, like you've pointed out. All aid does is increase the supply of money, creating a situation of 'artificial inflation' when it comes to college tuition.
Where did you get that? There has been a lot of analysis on this and "aid" does not have an impact. Check out the Commission on College Cost before you start making stuff up.
Loans are another issue and while you can debate the point, there is no hard evidence to support the argument even here waht the numbers might make intuitive sense.
It's basic economics. Just think about it for a second, and you'll see exactly what I'm talking about.
When you artificially increase the amount of money in a given pool, the value of that money is lessened, and the services that charge for that money increase their prices. With more and more government handouts taking place (more financial aid is given out today than ever before, and I'm sure you know that), colleges are able to take advantage of that aid and charge higher prices. They're essentially milking the government and parents alike for all the money they can.
Furthermore, if you're at a state school and the state is handing out a lot of aid, the state still needs to pay for the school. Therefore, all they're doing is diverting money to aid, which will later be recouped through increased tuition prices (and taxation). It becomes a circle.
Are colleges increasing tuition faster than aid can keep up? Definitely. But are they using that aid as an excuse to implement those increases? Absolutely. The more artificial money you throw into a system, the more things are going to cost. Nobody is "making anything up" here, it's basic economics.
I think what anon1 is referring to is an artificial increase in demand of university services through the increase in government subsidies (ie Pell Grants). If you increase demand on a particular item or service the price for that item or service increases, especially among top tier schools where their services are in less supply than those of the local community college. By "leveling" the playing field for college the government has in fact increased the demand and inflated costs.
Of course universities are also to blame here since many of them overrate their services to begin with. How many colleges around the nation charge outrageous fees per semester hour only to find that a TA is scheduled to teach the class? Do you honestly think that TA's services cost the same as the full time professor's? If colleges worked more like other businesses and we the students treated them as such there would be more demand for flexible pricing on a per-class basis (low level classes cost less to take than high level due to the experience of that professor/TA).
Unfortunately this is not a topic that will be easily solved.
General economic theory doesn't make it fact. The sad reality is that the recipients of aid, even when they get this aid, don't have enough money to cover the costs of college. So it is hard to imagine that this aid is driving up costs.
Oh, I forgot, that is the point. You don't have to imagine it. A bunch of actual economists studied in and concluded it.
But because you like theory, here goes. If you have no money and need to buy a car, a third party giving you a coupon for a free car radio and floor mats isn't going to incentivize the car dealers to start raising prices.
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