Unlike other types of federal funding, such as K-12 education or health care for low-income individuals, states and institutions are not expected to match student financial aid dollars with their own. Nor are they required to ensure this federal financial aid does not displace other state or institutional aid or cover any out-of-pocket tuition prices students face.
Without such requirements, states and institutions do pretty much whatever they want. Too many institutions use their own financial aid as a recruitment tool to bring in wealthy students and improve their prestige. Those dollars could instead be paired with federal aid to better serve less affluent students. Many states cut higher education funding whenever they face a budget hole, depriving some public colleges of so much money that these schools have had to raise tuition mid-year. Illinois shockingly refused to fund an entire system of public colleges for nearly a year, forcing schools to rely entirely on student tuition or spend down their own reserves, leaving some schools teetering on the brink of collapse.
This simply cannot continue. America’s college financing system leaves students paying too much and taking on too much debt, saddles the federal government with an unfair share of college subsidies and does nothing to arrest ever-growing tuition.
There’s a way to keep college prices in check: Make funding higher education a true partnership between students, schools, states and the federal government — with clear expectations for everyone involved.
A collaborative process needs to start with the student. That means answering a crucial question: What is a fair expectation for students and their families to contribute based on their means? We need to make that number dependable; otherwise, families have no hope of ever figuring out how to save enough or pay for college.
After deciding what students should pay, we can then set binding commitments for how the federal government, states, local governments and institutions work together to fill the gap left over after the families’ contributions.
This partnership approach addresses the college price issue in several key ways. For starters, it refuses to let states off the hook. Today, every dollar withdrawn from state higher education funding leads, more or less, directly to a dollar increase in tuition. Baseline requirements for state funding would prevent price jumps just to make up for state cuts.
Furthermore, colleges would be held accountable for their costs. If institutions weren’t allowed to charge students above a set amount and couldn’t get more funding from the state or federal government (beyond a reasonable increases each year for inflation), they would simply have to figure out how to keep within their budget.
A college education is the ticket to the middle class. Making higher education broadly accessible to young people is what drives the success of each state and, of course, our national economic growth. To make those goals a reality, we need to get college prices under control. And that means asking students, schools, states and the federal government to each take a reasonable share of the responsibility.