On Thursday the House voted to renew the Higher Education Act, which provides guidelines for colleges and universities that receive federal aid. It's not clear whether the bill would achieve its main purpose - making college more affordable for students - but the measure would shine a light on college costs and apply at least some pressure on the schools to control spending and hold down tuition increases.
In a 2004 column, Terry Eastland, the publisher of The Weekly Standard, posed a question that families all over the country are asking: “Why is it that college must cost so much?”
Over the past 15 years, a period marked by low inflation in the general economy, tuition at state universities has been rising by more than 10 percent a year. Since 2000, tuition increases have been running about four times higher than the inflation rate.
The cost of attending college in Kentucky began to soar after the legislature approved the higher education reform law in 1997. Although college costs in the state remain below the national average, annual tuition increases of more than 14 percent are causing more students to go into debt to pay for their education.
The rising cost of college also forces some high school graduates to abandon their plans to obtain a degree. A study cited by David Wessel, a columnist for The Wall Street Journal, found that every $1,000 increase in tuition reduces the fraction of 18- to 24-year-olds in college by 3 or 4 percentage points.
Recently, skyrocketing college inflation has captured the attention of Congress. Congressional leaders have a stake in the issue because the federal government pumps tens of billions of dollars each year into the higher education system, with most of the aid taking the form of student loans and tax breaks.
A report issued by Congress in 2003 noted that “tuition increases are outpacing the rate of inflation, increases in family income, and even increases in state and federal aid, which have grown tremendously in recent years.”
Some observers believe the availability of government-subsidized financial aid provides an incentive for colleges and universities to continue raising tuition. Student loans are a form of third-party payment that helps to reduce accountability for costs by enabling students to pay the higher bills, although to do so they must go deeply into debt.
The House version of the renewal of the Higher Education Act seeks to supply some accountability by forcing colleges to justify double-digit tuition increases. Colleges that raise tuition more than twice the rate of inflation over three years would have to explain why their services cost so much.
Also, the bill requires colleges to submit detailed information on their costs to federal education officials. The information will be posted on the Education Department Web site so that families can compare institutions.
If the House bill becomes law, it's likely that all of Kentucky's public colleges and universities will have to explain why their tuition increases are far outpacing inflation. The explanations should go further than the claim that 3 percent to 4 percent increases in base funding by the legislature haven't been sufficient to cover the school's costs. The question university officials need to specifically answer is why the expense of running their institutions is rising much faster than other costs in the economy.
The House higher education bill isn't strong enough to assure a lower rate of college inflation. But it has the potential to shed light on excessive administrative spending and empire-building on some campuses.
An article in a publication of the Federal Reserve Bank of St. Louis highlighted the shift toward administrative spending in college budgets over the past 30 years. In 1976, 30 percent of instructional expenditures went to administration; by 2001, colleges were devoting 50 percent of their instructional expenditures to bureaucratic functions.
Congress needs to pull back the curtain on college costs. If recent trends continue, millions of young people will be priced out of the college market, leaving them with diminished hopes for the future.
- The Paducah Sun