Tuition and student aid

Josh Mitchell at the Wall Street Journal recently looked at the connection between student aid and rising tuition. Unfortunately it’s now behind a paywall, but here’s the opening: “Federal Aid’s Role in Driving Up Tuitions Gains Credence: Imagine a scenario in which the federal government helps households pursue the American dream with ultra-loose credit, only to see prices skyrocket and families take on loads of debt they can’t repay.”

Mitchell is addressing the fact that when college administrators understand that federal aid in the form of student loans, scholarships, etc. are easier to obtain, they’re more likely to increase their own institutional growth which drives up tuition costs.

This echoes some of my thinking from earlier this year on the impact that growth in scholarships probably has in driving growth in tuition:

I’m concerned, for instance, that we’re reaching the point where donors who support scholarships, for instance, effectively underwrite the corporate spending of university leadership. When a donor supports student access through a scholarship, what related controls are there to lessen increases in tuition? If there are none, then the incentive for university leadership is to grow costs while relying on scholarship subsidies to alleviate their impact. So the utility of scholarships as a way to improve student access to education is probably decreasing, which is a shame.

We need a sensible way within academic or administrative departments to tie incentives for scholarship gifts to incentives for cost controls. It’s probably easier to try this model in the humanities than in tech or science, because the costs of research and instruction in the former seem likely to be more stable than the latter.

In any event, the present model is a poor one.