Federal AId = Increased College Tuition?

I don't like to do this, but since this article is only available via the Chronicle of Higher Education subscription I am going to reproduce a large section of the article:

If the U.S. Congress wants to curb the growth in college prices, it should put "the brakes" on spending on federal student aid, a scholar from a conservative think tank told lawmakers on Tuesday.

Speaking at a hearing of the House of Representatives Committee on Education and the Workforce, Richard K. Vedder, an adjunct scholar at the American Enterprise Institute and a professor of economics at Ohio University at Athens, charged that by continually increasing the budgets of federal grant and loan programs, the government is making it easier for colleges to jack up their prices.

"Universities raise their tuition a lot because they can get away with it," Mr. Vedder stated. He urged the lawmakers to practice "tough love with American higher education" and "stop the growth in the money flow."

The committee's Republican leaders had invited Mr. Vedder, author of the book Going Broke by Degree: Why College Costs Too Much, as they begin work once again to renew, or reauthorize, the Higher Education Act, the law that governs most federal student-aid programs.

Over the past two years, Republican lawmakers have repeatedly warned college lobbyists and leaders not to come begging for more money for student aid. They say it has become increasingly frustrating to increase spending on those programs, only to see colleges continue to raise tuition at rates significantly higher than inflation (The Chronicle, May 2, 2003).

At Tuesday's hearing, Rep. John A. Boehner, the Ohio Republican in charge of the committee, took issue with the "assumption" that "increased federal spending on higher education would ease the burden" on students and families who are having difficulty paying for college.

"College tuition rates been spiraling upward for decades at hyperinflationary levels," he said. "The federal government has consistently responded by increasing spending. But college access for far too many families remains an elusive goal."

Mr. Boehner has pledged to keep legislation to renew the Higher Education Act "budget neutral," meaning that any money added to one federal student-aid program would have to be offset by cuts in another such program (The Chronicle, May 21, 2004).

Counterarguments From Across the Aisle

But Democrats on the committee have criticized that approach. "The federal investment in higher education is absolutely part of the solution," Rep. George
Miller of California, the panel's top Democrat, wrote in a statement. "Since the passage of the Higher Education Act in 1965, federal grants, loans, and work-study have helped to send millions of students to college, many of whom would not have gone without the help."

The witness the panel's Democratic leaders invited to the hearing -- Donald E. Heller, an associate professor at Pennsylvania State University's Center for the Study of Higher Education -- disputed Mr. Vedder's assertion that lowering spending on student aid would force colleges to reduce the growth in their tuition. He noted that public colleges have been forced to increase their prices significantly over the past several years as states have reduced their budget allocations to the institutions.

Without federal and state funds, he said, "colleges and universities would have no choice but to increase tuition prices at rates even faster than have occurred in recent years."

Mr. Vedder's proposal, Mr. Heller said, "is akin to suggesting that eliminating the Medicaid and Medicare programs would by itself alleviate the skyrocketing growth of heath-care costs. More likely, this would leave millions of poor families and senior citizens without access to adequate health care."

During the hearing, Democratic lawmakers also took aim at some of Mr. Vedder's statements, calling them "outrageous" and "intemperate." They were particularly unhappy with the suggestion that "as federal and state dollars have rained down on college campuses, universities have been generous in compensating themselves." For example, Mr. Vedder said that the compensation of full professors at four-year colleges had risen more than 50 percent over the past 20 years while faculty members themselves had become less productive.

"Faculty have quietly but effectively lowered their teaching loads, ostensibly to increase time for research," he said. "It is simply more pleasant to do research, or in some cases, play golf, than to teach more classes and grade more papers."

Rep. Timothy H. Bishop, a New York Democrat who worked for almost 30 years in various administrative posts at Long Island University's Southampton College before coming to Congress, took exception to those charges. "I am not familiar with the colleges you describe -- lacking in accountability, populated by underemployed and overpaid administrators, and underemployed and overpaid faculty," he said.

Amazing, isn't it? That such a ridiculously simplistic analysis with a market-based twist ("They know they can get more money so they raise the rates... colleges are flush with cash!!!") can get a hearing before congress is just astounding. It is almost not even worth rebuttal it is so stupid, but I have some this far, so what the hell.

Most of my statements are meant to apply towards public institutions because that is what I know and is, I believe, the real source of the problem here. First, most states' taxes are linked to the federal rates; the lower the federal rates, the lower the state taxes. Add on a few years of sketchy economic performance and state revenues are dropping all over the place. In order to maintain their core missions, public institutions are forces to cut programs, faculty, and raise tuition.

Secondly, there is a large imbalance in salaries (both faculty and TA/RA/GA) between private and public institutions, and a great variety of levels of compensation among public schools as well. This creates competition for top talent, made all the more dire by the fact that industry can generally compensate faculty well more than any institution, private or public. Without support for education at a federal and state level, tuition is again one of the few mechanisms that schools have left to them.

Finally, in contrast to what Vedder stated, the productivity demands on faculty and staff is getting higher and higher. This is not only due to the fact that colleges aren't as able to increase positions due to budgetary restrictions, but also because the traditional relaxed collegial life of pondering deep questions and spending large amounts of time mentoring students you know by name is decades in the past... academic competition for grants, publications, students, etc. is fierce, and is getting even worse now that budgets for the NSF and NIH are being cut instead of expanded.

This is cutting off the head to spite the nose, but what is worse is that's exactly what they want to have happen... like Norquist said, they want to reduce government to the size that they can drag it into the bathtub and drown it. If it happens to wreck our educational system and undo years worth of strides of making a college education more realistic to the lower classes, well, screw 'em... there is a price for everything, and right now they need a bigger tax break so they can buy a second yacht for the girlfriend they are keeping on the side.

One might think that the rise of China and India as competitors in the global market as a result of the rise fo their educated middle classes might remind us that education and the strength of our own middle classes are some of the big reasons we got to the point we are at... but I guess that would assume that some amount of samity exists among the extremist elements which control the Republican Party, so no dice.