With rising college costs widening the tuition gap between private and public colleges, a group representing private schools has proposed restructuring federal aid to low-income students to give more to students attending the more expensive schools -- usually the private ones.
The National Association of Independent Colleges and Universities, representing private institutions including the Ivy League schools, unveiled its proposals yesterday for redirecting grants to low-income students and limiting the popular student loans to those who need them most.
Under the plan, the Pell grant program for low-income students would be restructured to take into consideration the actual cost of the college the student attends, in addition to a living allowance. This would make the program more "price-sensitive," the group said.
"We need to restructure the aid programs in a way that redresses the serious and growing imbalances that threaten their effectiveness if not their very existence," said John Phillips, president of the group.
The group's proposals come amid a growing national debate about escalating college costs, which keep increasing faster than the rate of inflation. Education Secretary William J. Bennett started that debate in February when he said many schools are raising tuition too fast and the quality of the education may not be worth the price.
A College Board report last weekend said the average cost of a college education is up 7 percent this year. The most expensive school in the nation is Bennington College in Vermont, with tuition and expenses totaling $17,210 for one year, according to that report.
Yesterday, Phillips said the average cost of a private school is only $9,600, and public schools can keep tuition lower because they receive an average $4,000-per-student subsidy each year from state legislatures.
At a separate breakfast meeting yesterday with reporters, American University President Richard Berendzen also defended private schools against the accusation, by Bennett and others, that they may be charging too much. "What he's suggesting is that there's price-gouging," Berendzen said.
Berendzen blamed rising tuitions on decades of neglect, in which faculty salaries were held artificially low and colleges' physical plants and infrastructure were left to crumble.
Moreover, he said, most expensive schools are now practicing their own form of "internal socialism," meaning that they charge a high tuition, which a few wealthy students pay, so that the majority of students can pay a discounted price after receiving some form of financial aid.
Overall, Phillips said, about half of the 2.6 million students enrolled in private schools get some financial aid.
The debate over college costs and the proper focus of federal aid comes as part of the discussion over extending the Higher Education Act, which is to expire over the next two years.
Congress is now debating the future shape and character of almost every aid program. As college costs climb, the question beneath the surface of the debate is whether future aid programs should include cost containment provisions as incentives for colleges to keep costs down.
Also, Bennett, in his earlier, unsuccessful proposals to cut college aid this year, raised a new question challenging the basic assumption of the old aid program: does the federal government have a right to pay for every American student to attend the college of his choice, no matter how expensive?
Said Phillips, "We are in the midst of a policy discussion in which there are fundamental policy directions at stake."