Kyle Wingfield

Political commentary and opinion from The Atlanta Journal-Constitution's conservative blogger

Why college aid isn't making college more affordable for students

From the Department of Unintended But Widely Predicted Consequences (via the Wall Street Journal ):

"The federal government has boosted aid to families in recent decades to make college more affordable. A new study from the New York Federal Reserve faults these policies for enabling college institutions to aggressively raise tuitions.

"The implication is the federal government is fueling a vicious cycle of higher prices and government aid that ultimately could cost taxpayers and price some Americans out of higher education, similar to what some economists contend happened with the housing bubble." (links original throughout)

As the article goes on to say, this consequence has been predicted at least as far back as 1987, when then-Secretary of Education William Bennett warned of the aid-fueling-tuition-hikes phenomenon in a New York Times op-ed . "Higher education is not underfunded," Bennett wrote back when tuition was actually a bargain compared to now. "It is under-accountable and under-productive. Our students deserve better than this. They deserve an education commensurate with the large sums paid by parents and taxpayers and donors."

And the beat goes on, as these WSJ charts based on the Fed report's data show:

It doesn't take a conservative like Bennett to see the story those charts tell. Here's Kevin Drum of Mother Jones :

"As you can see (in the charts), federal aid increased very modestly from 2000 to 2009. Then it went up sharply starting around 2010. If this aid were truly helping make college more affordable, out-of-pocket expenses for students (i.e., actual cash outlays net of loans and grants) would start to flatten out or even go down.

"But that hasn't happened. You can lay a straightedge on the red line in the bottom chart. Basically, families received no net benefit from increased federal aid. Actual cash outlays rose at exactly the same rate as they had been rising before."

Exactly. Every bit of increased aid has simply been consumed by higher costs, rather than reducing the amount students and their families have to pay. Nor do recent higher-ed budget cuts by state governments explain the long-term rise, because budgets weren't cut during the entire time period.

Higher education, along with housing and health care, is one of the markets that has had the most government intervention over the past several decades. And, like housing and health care, it has developed in a way that shows how too many government interventions hurt the same low- and middle-income people they're intended to help.

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About the Author

Kyle Wingfield joined the AJC in 2009. He is a native of Dalton and a graduate of the University of Georgia.