Wang: Taming Tuition

By Ethan Wang, Staff Columnist

Published on Monday, February 20, 2012

• Print
• Report an Error
• Share

In this election year, the presidential candidates have been trying to appeal to the ever important demographic of young voters. Recently, President Barack Obama has been pushing a line of rhetoric that will resonate with many college students as well as their cash-strapped families: The cost of undergraduate education has soared to unacceptable levels and must be addressed.

Obama’s solution to this issue seems promising on the surface. In his speeches, the president describes his wish to tie college tuition to continued federal funding, so any school that does not restrict its tuition increases will risk losing government funding. Unfortunately, in reality, his plan is not nearly as bold as it seems, and it focuses more on increasing the amount of federal loans available for students and deferring to the states to come up with their own solutions for tackling the problem of high tuition. In any case, given the partisan bickering in Washington, it is unlikely that any sweeping legislation addressing the cost of college will pass any time soon.

Nevertheless, politicians from both parties seem to agree that providing affordable higher education is of paramount importance if Americans want to remain competitive in the global economy. Therefore, the federal government should embrace the opportunity to take bolder steps in controlling the rising cost of college. Attaching tuition to federal funding, as Obama discussed, would provide a surefire means of guaranteeing that schools comply with government mandates. Almost all universities, whether public or private, rely heavily on government grants — especially in the form of research funding and financial aid — as a source of revenue. The threat of losing this funding will cause any institution to think twice before ignoring federal regulations relating to tuition.

To enforce this regulation, the government can simply impose caps on the amount that federal funding-eligible colleges can charge their undergraduate students. Such tuition caps have precedent in other countries: A similar system is currently used for universities in the United Kingdom. Given the diverse array of universities in this country, these tuition caps would not have to be uniform. The system could allow for substantial flexibility by varying tuition limits depending on certain factors, such as whether an institution is public or private, non-profit or for-profit. Regardless of how they are implemented, these limits would provide college students with a safeguard against the unlimited freedom that most schools have in increasing tuition costs.

Whenever there is discussion about increasing regulations, some individuals always express concerns that the government is overstepping its role and could potentially make matters worse through its unnecessary meddling. However, a well-educated population directly contributes to the well-being of a country, and as such, it is the government’s duty to take an active role in making education accessible. People widely accept the need for affordable secondary education and believe the government should play a role in education up through high school. But in today’s world, most agree that a secondary education is not enough and that an undergraduate degree has replaced the high school diploma as the minimum education needed to remain competitive in the workplace. Given the necessity of higher education, it is the government’s role to ensure the affordability of college.

Naysayers also argue that too much government interference — especially in capping tuition — will diminish the quality of education in American universities. They argue that without the support of high tuition, American schools will be unable to remain on top internationally. However, the prestige of American universities is generally based on factors such as research strength and endowment size that are not directly supported by tuition revenues.

In fact, undergraduate tuition only accounts for a small fraction of major research universities’ revenue. Undergraduate tuition at Dartmouth was less than 13 percent of the College’s total $733 million revenue, according to Dartmouth’s 2010-2011 financial statements. Since the revenue share of tuition is so small, even a large percentage change in what individual students pay translates to only a small change in a university’s total revenue. Therefore, government regulation of tuition will likely have only a negligible impact on the overall quality of a school — a small price to pay for making American colleges more affordable and accessible.