Phi Beta Cons

More Evidence that the Feds Are Pushing Up Tuition

Even the New York Times is now recognizing that federal funding of colleges and universities raises tuition. In a column last week discussing Hillary Clinton’s plan to provide free college for families earning less than $125,000, Binyamin Applebaum gathered some of the evidence that has been building over the past decade.

The strongest case was made in 2015 by the New York Federal Reserve. Looking at a wide range of schools, it found that as the federal government raised the per-student maximums on subsidized loans, those colleges and universities raised their tuition on average by 60 percent. For Pell grants, the figure was 40 percent and for unsubsidized loans, 15 percent.

Applebaum, quoting Andrew Gillen, has now found “another piece of evidence”:

The government limits the total amount undergraduates can borrow, but for the last decade it has allowed graduate students to borrow unlimited sums. Before the change, undergraduate tuition was rising more quickly than graduate school tuition. Since the change, the pattern has reversed, according to Andrew Gillen, an independent education analyst based in Washington.

So far, that’s anecdotal, but the mounting findings should poke a hole in “free college” promises. It would help some students but would wreak havoc on the taxpayer. (For other reasons why the “free college” proposal is a bad idea, see George Leef’s recent column.)

Jane S. ShawJane S. Shaw retired as president of the John W. Pope Center for Higher Education Policy in 2015. Before joining the Pope Center in 2006, Shaw spent 22 years in ...

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