I do not often find myself praising President Barack Obama, particularly on education issues. However, during last Tuesday's State of the Union address, he outlined a sensible proposal to address the problem of college affordability. This contrasts with his administration's previous expansions of federal student grants and loans which, by subsidizing students attending college, have contributed to the enormous increase in higher education costs. Universities, aware of the employment and cultural premiums placed on college degrees as well as students' increased ability to afford education, have been more than happy to raise their tuition fees "to the limits that markets, regulators and public opinion will allow," former Stanford University Vice President William Massy said.
These new tuition funds are used to finance increased expenditures on research and new facilities, such as the Black Family Visual Arts Center, in order to boost prestige, as well as to support the ever-growing cost of administration. While such expenditures can be valuable, they often fail to increase the quality of education given to students and may even interfere with it if professors are concentrating on research rather than teaching. Meanwhile, students still end up paying more than they did before from 1986 to 2006, the inflation adjusted price of a college education went up by 29 percent, even after taking into account grants, tax credits and loans, which were all greatly expanded over that time period.
In his address, Obama correctly pointed out that student aid serves as a subsidy to the higher education industry, saying that "taxpayers cannot continue to subsidize the soaring cost of higher education," a due acknowledgement of the necessity of fiscal prudence. He went further though, asking colleges to "do their part to keep costs down" and stating that "it's our job to make sure they do." Subsequent White House documents outlined a plan to take affordability and quality into account when loans and grants are awarded. This is a very welcome change that offers the administration an opportunity to reign in federal expenditures while promoting best practices in the higher education sector.
Currently, federal student aid depends solely on a student's income and not the quality of education he or she is receiving. This problem is best illustrated by the for-profit education sector, where the average institution receives 70 percent of its revenue from federal aid. This flow of cash goes uninterrupted despite low graduation rates for example, the Maryland campus of the University of Phoenix only graduates 15.2 percent of its students within 6 years. The fact that such an institution continues to feast on federal dollars is a disgrace and illustrates a serious need for reform.
While Dartmouth does not risk having its students denied monetary assistance due to low graduation rates or poor quality of education, its high tuition seventh highest in the nation may attract federal scrutiny, government professor Joseph Bafumi said ("Obama moves to alter financial aid structure," Feb. 14). Such scrutiny may force the College to reduce costs, which would be welcome for students whose families may not be able to afford the continually rising cost of our tuition.
Reform of federal university subsidies should not stop there. Federal research grants to universities, while helping fund important discoveries, have prompted institutions to shift their emphasis further away from education and toward research in order to absorb the new federal dollars. In addition, much of this spending is wasteful federally subsidized researchers often seek grants for projects that are nearly complete or undertake research that a for-profit industry is willing to carry out, according to Ohio University economist Richard Vedder. Cutting back on these grants would save the federal government up to $31.2 billion per year savings welcome at a time when the projected federal deficit for 2013 is $900 billion.
The president's plan is not without danger. The proposal to scrutinize universities' expenditures may snowball into an attempt by the federal government to control them outright. However, given the ballooning of higher education costs, the federal government must be extremely cautious as to where it puts its money in order to avoid exacerbating the problem. Besides this, universities themselves have become distorted by these funds and have turned their focus to building prestige instead of improving the minds of future generations. Thus, the president has made an important step in the right direction.