Subsidized tuition adds to rising costs

Issue 24, opinions, Sean Bahar, subsidized tuition, Opinion - By Sean Bahar on Thursday, April 5, 2012 - 23:15

College tuition costs will continue to rise as long as the Federal government continues to blindly pour money into the system in the form of financial aid. Over the past decades, the large amount of government funding has not been making college more affordable. The idea that tuition increases are due completely to inflation is simply untrue, as rising tuition rates have always outpaced that of inflation.

Much like our health care system, the effects of government subsidies has carried many negative aspects. The “bloating” of the system has shielded colleges and universities from having to make market-driven cost-cutting measures that would cause them to improve their productivity and efficiency.

The Center for College Affordability released a report earlier this year concluding that “financial aid pushes costs higher inevitably puts upward pressure on tuition.” The result of this is the affordability of college lessens and aid will increase in response, further feeding the vicious cycle.

According to the Department of Education there was a 17 percent increase in student aid between 2010 and 2011, leading to a 2011 total of $157 billion. During this same time-span, however, the average cost of public university increased 8.3 percent during a period of 3 percent inflation. While aid is not the sole force driving tuition up, it is a considerable factor. The amount of money colleges are able to raise outside of government or student origin like donations has much to do with it, but still subsidies need to be more worthwhile to justify the use of funds.

The College Board has also released a study on the topic. “Total student aid has increased 84 percent in inflation-adjusted dollars over the decade spanning 1997-2007.” Taxpayer subsidies have, in other words, been costing taxpayers more and more without doing much of anything to make college more affordable.

The Federal Reserve Bank of New York announced in 2011 that the amount of student loans in the U.S. surpassed $867 billion. This news was of great significance because student loan indebtedness had surpassed credit card debt, which was $704 billion at the same time. The New York Reserve Bank also included in this announcement that at least 15 percent of all borrowers were past-due on at least one account. Some economists speculate that this could make the U.S. a ticking debt bomb.

The current state of higher education is not underfunded, but rather unaccountable. Even President Barack Obama has vocalized this fact in this year’s State of the Union Address.
“We can’t just keep subsidizing skyrocketing tuition,” Obama said. “So let me put colleges and universities on notice. If you can’t stop tuition from going up, the funding you get from taxpayers will go down.”

We, as a country, and as taxpayers, cannot continue to fund a broken system. The financial aid efforts that our tax dollars fund need to be more effective and better serve those trying to afford an education. Accessibility to quality education is talked about so often in this country, but it needs to happen now. Schools should not keep getting away with sucking up taxpayer subsidies by raising tuition almost indefinitely.