More aid equals more expense

Why don’t individuals show car dealers their bank statements? Because if car dealers know what people can really pay, they’ll charge it.

Two recent Oregonian opinion pieces have called for the state legislature and Congress to increase higher education spending because higher education is just too expensive—a well-meaning goal that ASPSU shares in its lobbying efforts.

I’m afraid, however, that this is something akin to showing your cards too early. While increased spending—in the form of grants directly to the student and Oregon’s universities—may be able to keep tuition low for a bit, ultimately increased spending will make an overall larger expense in the long run.

We, as students, need to get off our addiction to federal money and ignore the falsities that state and federal spending on higher education have dwindled. Both are lies.

The Oregonian explained how state funding for universities has dropped: “Time and again in the past, when faced with similar funding shortfalls, lawmakers have chosen to reduce public support for Oregon’s system of higher education, and instead leave the universities with little choice but to raise tuition,” writes Rick Attig. [“Oregon Must Stop Pushing Higher Education Out of Reach,” Dec. 6, 2008.]

A University of Oregon economist says, “At the University of Oregon the percentage of state support is 13 percent, down from 32 percent in 1990 and the share of that from tuition, i.e. out of student’s pockets, has risen substantially during that time,”—but this doesn’t mean a thing!

The state’s budget has nearly tripled since the 1989-91 biennium: The Oregon University System received $565 million out of a total state budget of $3.73 billion—about 15 percent of the total. For the 2005-07 biennium, the OUS got $737 million out of $11.6 billion, “dwindling” to 6.3 percent. State support is not down—colleges are charging more.

Dollars spent by the state per student have dropped, from $4292 in 1990, to $3858 in 2006, a decrease of about 11 percent.

But this is because full time enrollment has gone up by about 26 percent. It’s a wonder that state dollars cover what they do!

Of course tuition has outpaced general inflation, but Neal McLuskey of the Cato Institute writes, “Adjusting for inflation, state [federal] higher-education expenditures rose from $46.8 billion in academic year 1990-91 to $53.9 billion in 2003-04, a 15-percent increase. Despite that, the average real cost of in-state tuition and fees at public four-year institutions rose 86 percent in that time, from $2,460 to $4,587.”

Meanwhile, total federal aid in the last decade has actually kept pace with tuition increases. The College Board “Trends in Student Aid” study notes that total “student aid increased by about 84 percent in inflation-adjusted dollars over the decade from 1997-98 to 2007-08.”

And further, McLuskey writes that dividing this aid by number of recipients, aid for full-time students “rose from $6,627 to $9,499, a 43-percent increase,” while tuition in public schools rose by 41 percent.

Is it any sort of coincidence then, that increase in tuition accompanied a similar increase in federal aid? It’s simple inflation—throw in more money, and things start to cost more.

The Pell Grant and Hope Credit may have helped many individual students pay for school, but they have driven the cost up for everybody.

There are two ultimate needs to meet regarding keeping college costs low. One is keeping the overall cost low, which includes what average students pay directly, and what the taxpayer pays. The other is keeping individual tuition low.

When The Oregonian talks about college cost, it only talks about keeping individual tuition low. Likewise, when low tuition in the 1970s is nostalgically remembered as the benefit of more state spending on education, only individual tuition is thought of. They are ignoring the overall cost.

And when nostalgia hits, they forget to tell students today what they didn’t have then: computer labs (including computers, rolling, reclining and well-padded office chairs) Astroturf, information systems, auto-flush toilets, etc.

Maybe these things attract students to spend their money at an institution, and are worth the money required for a quality education.

The point is that we should realize some of the main reasons that colleges charge more are because, 1) we have more money in terms of federal aid, 2) we are getting more, and 3) more of us attend. If you want to cut tuition, cut aid and cut expenses.

Portland State and Oregon are pretty frugal with higher education expenses and because of that we often get our money’s worth. We just have to decide whether or not we can keep it up. If we get more financial aid—we’re going to keep paying more. And that would hurt the lowest income groups disproportionately.