AEI’s James Pethokoukis looks at plans by progressives to help get young voters to the polls in 2016. How about “free” college for everyone?!
This is exactly the kind of proposal which should make people skeptical of government. That’s right, make no demands on the higher education industry to improve affordability and value. Just open the spigot of taxpayer money to full blast. And when that happens, tuition will go up even more. Among other studies, work by Stephanie Riegg Cellini of George Washington University and Claudia Goldin of Harvard find that that aid-eligible institutions “charge much higher tuition … across all states, samples, and specifications” which suggests “institutions may indeed raise tuition to capture the maximum grant aid available.” As AEI’s Andrew Biggs has put it, “Much of federal student aid is corporate welfare for colleges.” Economist and college president Howard Bowen has described the inflationary dynamic this way: Colleges raise and then spend all the money can. And why not? Students are at an information disadvantage. They equate higher prices with higher quality and are unable to accurately gauge the value of specific institutions or programs.
Unless we break the money cycle, there will be no incentive for colleges to provide a competitive product, and for parents/students to shop for value and quality.
