Fred Schwarz at Phi Beta Cons has a post up today arguing that student aid (along with “all the diversity deans and transgender studies departments”) is to blame for the huge increases in tuition that we have been witnessing in recent years. It is a common conservative argument, and one which contains a kernel of truth.
He rightly points out that the tuition costs are not a simple reflection of the costs of running a college. There is a (wonderlandesque) market mechanism going on that is based more on absurd notions of prestige than educational value.
But Schwarz is wrong to single out student aid as the primary culprit behind rising prices. I have recently addressed this argument, often used in an attempt to argue against increases in financial aid. Basically, rising student aid and loan limits do make students more willing to pay outrageous prices, and schools sometimes respond to increases by raising tuition. Limiting federal financial aid, however, is not a good way to deal with college costs.
As the below graph (click to enlarge) shows, when financial aid has been stagnant or has declined (in real dollars), tuition has still increased rapidly. That means doing nothing to increase aid results in fewer students being able to afford an education as tuition rises.
If, on the other hand, financial aid were drastically cut or eliminated, then it’s possible we would indeed see a drop in tuition costs. This would not make other college costs, such as room, board, transportation, and books any cheaper, however, so you would still have plenty of people priced out of a college education. And that’s not to mention the effect this would have on the ability of colleges—especially the majority of colleges that cannot rely on large donations from alumni—to provide the kind of education or research that we need.
Schools, states, and the federal government should work to control college costs while keeping colleges adequately funded and making them more affordable, but cutting aid is not the solution. There are other tools at our disposal that are better suited to the task, and that will not price even more promising young people out higher education.