Subsidizing college misses the mark

Election season has arrived and with it an increased focus on issues expected to drive potential voters to the polls. Increasingly popular, particularly on the Democratic side, is the topic of making college education more affordable. As students at USU, this is arguably the most pressing policy debate for us, along with the ability to find a good job upon graduation. Unfortunately most of the solutions being proposed miss the crux of the problem.

A common argument made revolves around the fact that tuition is rising at a much higher pace than inflation. This is true — in the last 20 years the average cost of public universities has increased 296 percent. During the same period inflation rose by 55.1 percent. There is absolutely no question that the cost of school has far outpaced inflation. The question remains, what should be done about it?

The most popular answer to this problem consists of two parts: increasing federal subsidies to cover rising tuition costs and allow refinancing of student loans at lower rates. Many policy makers accept the possibility of reliance on student loans with the requirement that future loans interest rates be cut dramatically. These methods are meant to reduce the burden of education costs on students. The financial burden of education is no joke with an estimated national student loan debt estimated to be around $1.2 trillion. The act of helping current students is commendable but it misses two critical questions. Why is tuition rising almost six times faster than inflation and what benefit do students reap from paying so much more than previous generations?

There is no shortage of explanations as to the first question. Theories abound stating that expanding federal aid, expensive campus construction, and growing bureaucracy at colleges are all causes of disproportionate growth in tuition prices. Each of these three areas do show incredible amounts of correlation with the upward movement of the price of education. While correlation isn’t the same as causation, it is valuable in finding causation.

Rising evidence points to a growing relationship between federal subsidies and tuition rates at universities. Multiple studies have found tuition hikes at certain universities immediately after an expansion in federal funding towards college education. Despite some conflicting studies showing little to no direct relationship, the consensus seems to be leaning towards the idea that federal subsidies enable increased expenses at universities. Even if there is no causal link, calls for the government to foot the bill for education are premature. This is treating a symptom rather than the illness.

In recent years administrative positions within universities have grown at a rate much greater than teaching positions. “According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions” (excerpt from Paul F. Campos, The New York Times). Inquiry is needed to make sure these costs are truly benefiting students.

Probably the most easily observed expense at universities is campus expansion or modification. With increasing enormity, universities nationwide are constructing extravagant buildings with the intention to create a persona of elite education. Outstanding debt at over 200 universities more than doubled from 2000 to 2011, much of it coming from construction. Again the relationship between these costs and what hits the student’s wallet is disputable but this doesn’t mean we shouldn’t look at these costs more closely.

After outlining potential reasons that students pay more for their degrees than previous generations I’m still left with the question of if it’s worth it. For this I went to the St. Louis Fed website and found some startling statistics. In the last 20 years the increase in wages is roughly only 10 percent for degree holders. While I applaud presidential candidates for trying to make school more accessible I cannot embrace their proposals. Unless I know an effort is underway to put students first and the cost to benefit ratio is improving I will not support increased federal subsidies.

— chris.crook@aggiemail.usu.edu