Senators Question College Costs
WASHINGTON — Democrats and Republicans don’t agree on much, but members of both parties struck a unified theme at a recent U.S. Senate hearing: College costs are rising too high, and no one knows what to do about it.
“The most puzzling thing about this problem — astronomically rising tuition — is that no one seems to have a handle on why the problem is occurring,” says Sen. Fred Thompson, R-Tenn., chairman of the Senate Governmental Affairs Committee that convened a series of hearings on the topic. A congressionally mandated commission created in 1997 “couldn’t figure out the problem either,” he notes.
The problem, Thompson says, is that the federal government already provides students with $41 billion a year in educational grants and loans annually to promote college attendance, and a lack of information about costs makes it difficult to study the effectiveness of such spending – much less justify increased federal funding.
“Colleges and universities must work to control costs,” he says.
Thompson’s Democratic counterpart, Sen. Joseph Lieberman, D-Conn., also questioned whether colleges are pricing themselves beyond the reach of most Americans.
“If college becomes a luxury that an increasing percentage of our population cannot afford, the economic divide between higher-education haves and have-nots will widen to the point where it undercuts the American dream and stunts our economic growth,” he says.
Also confusing are the various “discounts” that colleges offer on tuition, which seem to lend credence to the belief that parents can negotiate tuition costs down from a “sticker price,” according to Lieberman.
“Annual tuition increases hurt low-income students the most,” says Jamie Pueschel, legislative director for the United States Student Association. Low-income families in 1971 had to pay 42 percent of their income to cover college costs; today, the rate has increased to 61 percent.
Asked to identify potential solutions to the problem, Pueschel and other witnesses offered an array of proposals such as:
nIncreased financial aid, particularly grant programs, as well as early intervention and tutoring programs such as TRIO and GEAR UP that help students get to college;
nLower fees for student loans and greater deductibility of interest and other loan costs;
nStronger oversight of colleges by state higher education coordinating boards, so that colleges provide more cost-effective benefits;
nMore and better information from the federal government to inform consumers about college costs.
Colleges also could provide the public with annual reports about their efforts to link quality and cost, added William Massy, a researcher who has studied college cost systems in the United States and overseas. Because of demand, colleges can charge as much as they believe the market will bear, Massy says. Yet more expensive institutions do not necessarily mean higher-quality institutions, he says.
“The real sticker price of tuition at colleges and universities will continue to grow, probably at rates averaging as much as one or two points over inflation, unless imperfections in the educational marketplace can be mitigated,” he says. Moreover, colleges spend more money to bolster their reputations, which Massy terms an “arms race of expenditures” to gain greater prestige.
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