Prices at public colleges and universities have risen rapidly in recent years largely because state financing has failed to keep up with growing enrollments. Of course, if colleges were more successful at finding ways to reduce their costs—as they must—they could live with lower per-student appropriations. But cost reduction could lead to further reductions in appropriations, rather than leading to lower prices for students. As we see all too vividly in the current recession, severe budget cuts have a tendency to reduce both the number of students who can be accommodated and the quality of the opportunities available to them.
There is no question that tuition increases must be slowed. But before colleges consider ways to do that, they should keep several things in mind.
To begin with, holding tuition down gives the same benefit to the wealthiest students as to the poorest, and it is an expensive way of assuring that students at the margin will not be priced out of college.
Need-based financial aid is a more appropriate tool, and the price students pay after taking grant aid into consideration is a more appropriate measure of college affordability than is published tuition.
Surveys consistently reveal that people believe tuition is higher than it actually is. This is partly because a tiny number of expensive private colleges make the headlines so frequently. It is also because our complicated financial-aid system makes it virtually impossible for people to predict how much they will have to pay. Simplifying the financial-aid system, and providing more information in advance about what students will owe, would go a long way toward correcting this problem.
People also misperceive the financial benefits associated with education and tend to think of college as an out-of-pocket expense in the year it is due. That makes no sense. No one could imagine buying a house, and few people would own cars, if they thought of those purchases that way. How much you can afford for college depends both on current resources and on the amount of debt you can reasonably pay back out of future earnings. Pinpointing what is affordable is not easy, but it is surely higher than what people would say if stopped on the street and asked how much they could afford to pay for college tuition this year.
Living costs are the largest expense most students face. And little that colleges and universities do to hold down tuition will make the rent cheaper.
Even a 20-percent cut in average published tuition and fees at public four-year colleges and universities would leave the average price close to $5,500. Many would still feel burdened. Real solutions have to include protecting borrowers who can’t afford to repay loans, and helping both students and the general public think of higher education as an investment—one of the best investments both society and individuals can make in the future.
The impressive characteristics of American higher education include the variety of institutions and educational offerings available to students, and the range of price tags. The focus of those concerned with access and affordability should be on assuring the existence of good, reasonably-priced options—not fretting over the existence of high-priced options that may be out of reach for some students.
