On April 19 House lawmakers working to reauthorize the Higher Education Act (HEA) heard widely divergent views on how - and to what level - the federal government ought to be involved in providing fiscal support to the student aid programs.
At an afternoon hearing of the full Committee on Education and the Workforce, lawmakers listened to testimony from two witnesses on the topic of "College Access: Is Government Part of the Solution, or Part of the Problem?"
Testimony was given by Richard Vedder, an adjunct scholar at the American Enterprise Institute (AEI) and economics professor at Ohio University, and Donald Heller, associate professor and senior research associate at the Pennsylvania State University's Center for Study in Higher Education.
Vedder - citing research done for his recently published book entitled Going Broke By Degree: Why College Costs Too Much - recommended that legislators "put a brake on the costs to the federal government of helping finance higher education." He also urged committee members to use "tough love" when setting higher education policy and budgets.
Vedder argued that "the double digit increase in student financial assistance has contributed mightily to the tuition price explosion, and the solution is to reduce the money that is flowing to institutions and members of their academic communities."
Institutions currently have no incentive to keep costs low, and often spend money wastefully on non-teaching staff and opulent facilities, Vedder contends. "There is evidence that greater spending at the state and local level on colleges and universities is associated with negative, not positive, economic growth," he said.
Vedder told the committee that "Costs are rising because you are dropping dollars over college campuses and student homes and they are recycling those dollars to the campus community, where relatively unaccountable administrators and faculty are spending the money largely to promote the good life for themselves."
Vedder's ideology jibes at least in part with statements made by Republicans working to reauthorize the HEA. GOP leaders have repeatedly stated an intent to examine the federal aid programs for cost-savings and other efficiencies before they would advocate funding increases.
In his opening statement, education committee Chairman John Boehner (R-Ohio) echoed some of Vedder's points, noting "it sometimes seems the more we spend in higher education, the further we fall behind."
"In fact, some believe government spending may be a hidden culprit in the ongoing inflation of college costs," Boehner said. "They point to what seems to be a vicious cycle: colleges increase tuition; government responds by increasing spending; and colleges respond by increasing tuition again."
Vedder's suggestions for ways to curb cost increases include:
- Restrict tuition tax credits by greater use of income tested eligibility, or let tuition tax credits expire;
- Limit a student's loan or grant eligibility, by putting a lifetime limit on years of loan or grant eligibility, for example;
- Include a performance dimension in eligibility for loans and Pell Grants, and tie performance to class rank;
- Set an aggregate ceiling on various or all forms of federal financial assistance, and if legitimate requests for the aid exceeds the ceiling, pro rate the aid to fit the ceiling; and
- Phase out the FAFSA form and prohibit the solicitation of financial information from prospective students and their parents.
Donald Heller disputed many of the statements made by Vedder to the committee, noting that increasing tuitions were largely the result of decreased state-level commitment to higher education, and not caused by frivolous expenditures on the part of institutions, as Vedder charges. Heller also noted that contrary to Professor Vedder's assertions, "research evidence demonstrates that eliminating governmental support will result in even more rapidly escalating prices." Heller noted that in "those states where appropriations grew more slowly, or as happened most recently, were actually cut, prices in the public sector grew the fastest. In simpler terms, as state support drops, public institutions have few options other than to increase tuition prices."
Vedder's proposal "is akin to suggesting that eliminating the Medicaid and Medicare programs would by itself alleviate the skyrocketing growth of health care costs," Heller said. "More likely, this would leave millions of poor families and senior citizens without access to adequate health care." Similarly, Heller said, "the impact of eliminating government funding for higher education would be felt most greatly by this nations lower- and middle-income students."
Heller also cited a Department of Education study mandated by the 1998 HEA reauthorization that "concluded that there was no relationship between either federal or state financial aid and tuition price increases."
Committee Democrats were also quick to disagree with Vedder's comments.
"The federal investment in higher education is absolutely part of the solution," Ranking Member George Miller (D-Calif.) said in a written statement. Since passage of the HEA, "federal grants, loans, and work-study have helped to send millions of students to college, many of whom would not have gone without the help," he said.
By Elizabeth B. Guerard
NASFAA Assistant Director for Communications
Posted April 21, 2005 on www.NASFAA.org, the Web Site of the
National Association of Student Financial Aid Administrators (NASFAA).
Copyright 2005. Redistribution to non-NASFAA institutions is prohibited
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