Federal Piper May Call for New College Tunes
Upper-income American pay the largest percentage of federal income taxes, so perhaps feel justified when they children benefit from federally-subsidized universities.
Federal funding has taken the major role in funding higher education, and also that funding has also pushed tuition and student debt higher. See, for example “Student Loans Might Be Driving Up the Cost of College. So What Do We Do About It?,” (Slate, September 8, 2015) and “Financial Aid Helps Colleges More Than Students,” (Forbes, July 13, 2015).
“Impact of Pell Surge,” (Inside Higher Ed, June 12, 2015) reports:
Federal spending has surpassed state spending as the main source of public funding in higher education, and the primary reason is a surge in Pell Grants in the last decade.
State governments used to provide most of the subsidies for college and universities (65% of subsidies over 25 years), but:
In 2013 the federal government spent nearly $76 billion on higher education, while states spent about $3 billion less, according to the “Federal and State Funding of Higher Education” study. Federal support include nearly $25 billion in research funding obligations, which are paid over a series of years depending on the length of a research project.
On the financial side, reforming federal higher education policy could reduce Pell Grants, research grants, or guaranteed student loans. The article reports the huge federal funding (and enrollment) increases from 2000 to 2012:
Yet during that time, federal funding nearly doubled while state funding fell — federal funding grew from $43 billion to $83 billion, while state funding dropped from $78 billion to $71 billion.
Meanwhile, enrollment skyrocketed, growing by 45 percent.
Who benefits with taxpayer funds are transferred to subsidize higher education? “Higher Education Subsidies” (Downsizing Government, November 1, 2015) outlines the history of federal higher education funding with the 1862 Morrill Act (land-grant colleges) and 1917 Smith-Hughes Act (funding vocational education teachers). But the major step into federal education funding was the G.I. Bill in 1944 offering free college educations to World War II veterans.
Though the G.I. Bill is often presented as a success, the article notes:
…studies have found that at least 80 percent of people who used the G.I. Bill would have gone to college anyway, and that it disproportionately helped higher-income veterans. [Studies in footnote: Marcus Stanley, “College Education and the Midcentury GI Bills,” The Quarterly Journal of Economics 118, no. 2 (2003). And see Keith W. Olson, “The G.I. Bill and Higher Education: Success and Surprise,” American Quarterly 25, no. 5 (December 1973).
This is a key justice concern for all federal funding of higher education. Most of those who benefit would have gone to college anyway and their college education enables them to earn higher incomes. If the goal is to help lower-income family send kids to college, then scholarships or student aid could be directed toward them rather than to the wider range of middle and upper income students.
After this history of earlier federal funding, “Higher Education Subsidies” notes:
The year 1965 was a landmark for federal expansion into both K-12 and higher education. The Higher Education Act of 1965 is the basis for many of today’s postsecondary education subsidies, including student loans, Pell grants, college library aid, teacher training programs, and other subsidies.
Expanded federal student loans are expanding student debt and are misrepresented in the federal budget:
While new federal student loans are running about $100 billion a year, the ultimate cost to taxpayers will be some fraction of that. The federal budget includes an estimate of the expected subsidy value of loans on a present-value basis, based on projections of interest rates, defaults, and other factors. The budget currently shows that the government is making money on student loans, but that is a fiction stemming from the flawed accounting used in the official estimates. Using more sensible “fair value” accounting, the Congressional Budget Office found that federal student loans are expected to cost more than $10 billion a year in coming years.7
Federal funding for higher education allows those in control of federal agencies to call for new tunes (“He who pays the piper calls the tunes.”) Now conservatives have influence in the Trump Administration and in Congress. A recent blog post shared widely on Facebook, “the mass defunding of higher education that’s yet to come,” (the ANOVA, July 11, 2017) cites Pew Research on the rapidly rising negative perception of colleges and universities
“Sharp Partisan Divisions in Views of National Institutions: Republicans increasingly say colleges have negative impact on U.S.” (Pew Research Center, July 10, 2017):
A majority of Republicans and Republican-leaning independents (58%) now say that colleges and universities have a negative effect on the country, up from 45% last year. By contrast, most Democrats and Democratic leaners (72%) say colleges and universities have a positive effect, which is little changed from recent years.
“Conservatives Are Souring on Colleges. Blame Colleges.” (Bloomberg View, July 11, 2017) discusses various possible explanations, and notes:
Compare the welcome that the socialist Senator Bernie Sanders received at fundamentalist Liberty College to the chaos when right-wing provocateur Milo Yiannopoulos spoke at Berkeley. If Sanders had gotten the Milo treatment, liberals might start to question whether academia is an unalloyed good. Conservatives have seen one disturbing incident after another in a short period of time. Whose fault is that? Not conservative media. Blame the rioters and the universities that allow them — and the smartphones that have made it easy to capture the misbehavior in vivid, viral videos.