Last week, in her article, “MTV and College Board Unite in Name of College Education," Kathryn Watson mentions how President Obama has taken measures to increase federal aid to alleviate the well-known problem of college affordability. Unfortunately, it is not well known that increasing federal financial aid is a major culprit in rising tuition costs. Let me tell you a parable.
Suppose I, being extremely wealthy and kind-hearted, give all Biola students one dollar to purchase a cup of coffee at Bitter Beans, a fictitious, local coffee shop. My good will continues for several weeks, and Bitter Beans learns of my noble deed. Seizing the opportunity to make larger profits, Bitter Beans raises their prices by 25 cents.
Despite this, I continue providing one dollar subsidies because I cannot bear the impending reality that not all poor college students will be able to have their daily cup of coffee. All students, then, continue using the subsidy to purchase coffee because they want their coffee, even if they do not need it, and a slight increase in price is virtually unnoticeable given the one dollar subsidy.
Since Azusa students (bless them) do not get my subsidy, many of them are now unable to afford their daily cup of coffee.
Of course, analogies always break down at some point, but college financial aid provided through the federal government is starkly similar. Although it may help particular students who otherwise would not be able to attend college, providing federal financial aid has also increased the overall cost of tuition, hampering all students.
Actual tuition rates have increased significantly more than the resulting cost after all financial aid is subtracted from the tuition rates. This suggests that tuition increases are largely due to increased financial aid. Former Harvard president Derek Bok states, “Universities share one characteristic with compulsive gamblers and exiled royalty, there is never enough money to satisfy their desires.”
So where does all the extra money go?
More often than not, these extra funds are spent on elaborate projects that have nothing to do with providing students with a quality education. Colleges across the country are providing extravagant amenities such as Jacuzzis, massage centers, golf-course simulators, water parks, movie theaters, towering rock-climbing walls, and other goodies that one expects to find at luxury resorts.
Furthermore, other funds are spent on funding a professor’s research rather than teaching students. Colleges may offer lavish salaries for a famous professor to raise the prestige of the school, but usually, such a professor is a poor instructor.
In general, institutions have attempted to secure more money by competing to attract students who are receiving federal aid. They have focused more attention on increasing revenue and less on actually educating their students.
Moreover, by providing a subsidy in the form of financial aid, students frequently do not count the cost of attending college. For instance, some students who are unmotivated for college may find enough incentive to attend because a third party is picking up their tab. It is always easier to spend someone else’s money. Sadly, many of these students drop out. Money has been wasted. Years of their lives have been lost, not to mention a possible stigma that remains after.
College affordability is a crucial issue, and I applaud efforts to make it more affordable. However, the public must also be aware of how Pell Grants and other forms of federal financial aid have contributed to the rise of higher education costs.
I am not arguing for the abolishment of financial aid. Rather, there are better ways to help others than placing the role of charity in the hands of the state. Biola can be a forerunner in this area. Christians should be the most generous people on earth, especially when we have a God that always has abundance.
