Even as the “financial burden” of most goods and services has decreased over time, the price tag of a college tuition just keeps on growing.
But while pointing out that fact, Richard Vedder, director of The Center for College Affordability and Productivity, writes in The Wall Street Journal there’s a way to fix the ever-rising cost of higher education. It’ll take overhauling the student-loan system:
Since about 1980, the price tag of attending university has soared faster than overall inflation and the growth of family incomes. Recent “free tuition” proposals would be nothing more than extremely expensive Band-Aids. The way to address rising college costs is to rethink the entire government student-loan system.
For Vedder, the rising amount of student financial aid is linked to the growing costs of a college education. He points to Bill Bennett, President Ronald Reagan’s education secretary, who wrote in 1987 “that tuition was rising partly because of the explosive growth of federal financial assistance.”
There’s proof Bennett was correct, Vedder writes:
Researchers at the New York Federal Reserve suggested in 2015 that a common result is a tuition increase of about 60 cents for every increased dollar of student aid. A paper last year by Grey Gordon and Aaron Hedlund for the National Bureau of Economic Research also strongly supports Mr. Bennett’s theory.
How can this problem be fixed and help decrease college costs? One idea is getting rid of student aid altogether, but Vedder writes “abolishing federal aid would impose severe short-term hardships, and it is politically infeasible.”
Instead, he proposes a more feasible path forward:
First, simplify. Everything about the federal aid system is too complex, starting with the Fafsa. There should be only two programs: a grant program to replace the Pell Grant and a federal loan program to replace Plus loans, tuition tax credits, work study and the litany of other schemes.
Vedder also suggests the idea of student vouchers that would “empower the recipients to weigh costs more closely and reduce colleges’ incentive to increase spending.”
And colleges should have “some skin in the game”:
Many colleges now knowingly accept marginal applicants who ultimately drop out and fail to repay their loans. The schools collect tuition, but the taxpayers get burdened with delinquent debt. Colleges should be required to share some of that burden.