October 22, 2004

More on tuition freezes

Robert Archibald and David Feldman bring up a solid argument against tuition freezes. (See my discussion below.) The problem, according to them, is that universities facing price controls tend to raid their own financial aid budget in order to hold down increases in list-price tuition. That's a valid concern, especially since what students pay after financial aid is a much more important (and less often-cited) figure than what the sticker price is.

But I have a hard time believing that states couldn't force universities to cut down on frivolities if they really tried. How hard would it be to say, "Look, you need to cut costs, and we're not letting you touch the financial aid budget or cut faculty salaries. So ditch your football team, or fire a dean, or cut your psychology program, or something." Of course, I'm assuming that a) there are "extras" that can be cut and b) cutting these "extras" is actually cost-effective. (Some sports teams, for instance, bring in more money than they cost.) But still, prove me wrong!

Archibald and Feldman, on the other hand, want to see more financial aid targeted at low and middle-income families:
Kerry could achieve a worthier goal -- increased access to higher education -- at far smaller fiscal cost by funneling money into larger federal Pell Grants or by enlarging the matching grant program that encourages states to augment their own aid budgets. Aid could be extended further into the middle class by raising the income thresholds at which families can qualify.
That's fine, but I'm not sure they have the economics right. You'd have to go pretty far up the food chain before you find families who aren't struggling to pay for higher education. How massive is this grant program going to be? (Massive.) How much extra cash does the federal government have to spend? (None.) I think I'll try to pick up Archibald's book on the subject, but he certainly hasn't convinced me that effective price controls are impossible or that we can afford, over the long term, an aid-heavy higher-education policy.

-- Brad Plumer 4:09 AM || ||