President Obama wants to expand Pell Grants, the college aid program for low-income students, in hopes of making college more affordable. But the move will fuel tuition inflation, argues Neil McCluskey on Cato @ Liberty.
On the New York Times’ Room for Debate blog, Richard Vedder, an economics professor who directs the Center of College Affordability and Productivity, and Arthur M. Hauptman, an education and public policy consultant, agree that colleges respond to increases in student aid by charging more.
“Federal student financial assistance is more a cause than a consequence of rising college costs,” Vedder says.
Work done at my research center reinforces findings of others that exploding student loan programs have contributed to higher tuition charges, and if Pell Grants grow more inclusive and generous, the same effect will occur with them.
Hauptman compares student aid to easy mortgages.
. . . just as one couldn’t imagine house prices being as high as they now are if mortgage financing were not available, it is difficult to believe that colleges and universities could have increased their charges so rapidly over time without the ready availability of students’ ability to borrow.
Pell Grants aren’t to blame, Hauptman writes, because recipients tend to enroll in the least-expensive colleges. However, he predicts that if low-income students get more federal aid, colleges will provide less, shifting scholarship help to middle-class students.
Most Pell recipients do not earn a college degree. To raise the number of college graduates, K-12 schools have to do a better job of teaching the reading, writing, math and analytical skills required to take advantage of higher education opportunities.