The increasing cost of college is a national enemy we’re all fighting. Each article shouts about the student loan debt crisis, and the public institutional pressure to do everything possible to make education affordable is high. One common rallying cry is for mandated, across-the-board increases in financial aid, a tempting but clear-cut solution to a tangled issue. What if I told you that this well-intentioned solution would unfortunately end up doing more harm than good?
I vividly recall when I first started planning for college. With the sticker price of some universities hitting me like a gut punch. So, yeah, financial aid was squarely on my mind, and the prospect of more it sounded wonderful. As I've followed the debate and dug into the data, I've come to believe that mandating more financial aid is a road paved with good intentions that leads to… well, higher tuition.
Here's the core issue: Colleges are businesses, whether we like it or not. They have huge static operating costs, faculty salaries, and all those shiny new facilities to pay for. So where does that money come from? A large portion of that is from tuition. If you pressure colleges to provide more financial aid but don’t give a permanent funding stream, they’re left with the Hobson’s choice. To recoup that money, they’ll need to increase tuition for all of the other students. It’s like economics 101.
Imagine it similar to a balloon. You can squeeze one end (mandated fin aid), but the other end (tuition) is gonna pop up. It’s not a great analogy, but it gets at the heart of the issue.
Now, I know what some of you are thinking: "What about the low-income students who can't afford college without more aid?" It's a valid and crucial point. The way we do it now, set in the deeply flawed patchwork of 50 different state aid programs, is a clear recipe for inequity. There’s no question that some states do a much better job than others in supporting their students. Don’t forget about the Pell Grants’ eroding purchasing power. Once a bipartisan bedrock of financial aid, these grants can no longer afford to keep up with costs.
According to OverTraders.com's analysis, state financial aid remains a key factor for students from low-income backgrounds choosing to pursue higher education. The federal Pell Grant and Direct Loan programs provide the core funding for student financial aid packages. State financial aid is critical for low-income students too.
I’ve witnessed from way too close how this unfolds. A friend of mine, bright as could be, almost didn't go to college because the financial aid package she received just wasn't enough. Fortunately, she was able to find a smaller, less prestigious school that gave a much larger scholarship. It doesn’t have to be like this. Access to a higher education shouldn’t be based on lucking out and drawing the right institutional funding lottery ticket.
Requiring even more aid isn’t the solution. It’s a band-aid on a gaping wound. We should focus on why tuition is getting so expensive. How else to explain why colleges are spending billions on administrative bloat and overpriced, luxury amenities? Why is it that faculty salaries are soaring while adjunct professors are on food stamps? These are the hard questions we should be asking ourselves.
Let’s stop pretending that financial aid is the only way to make college affordable. There are better paths to take for alternatives like these.
School and private organization scholarships and grants provide needs or merit-based funding. Contributions to 529 college savings plans can grow tax-free and be used for qualified higher education expenses including tuition and fees. Veterans benefits offer important educational resources for active duty military members and their families, serving as a valuable supplement to the FAFSA.
Students and families need to be better informed consumers. Rethinking college as the default option is important, making sure there’s a variety of colleges at various price points, and other cost-benefit analysis.
I do get why a tempting simple solution like mandated financial aid is taking off. It just feels like we’re making a real difference in students' lives. We must be cautious of creating unintended consequences. What seems like a great policy idea on paper can fail epically once it hits the ground.
There are those who claim that colleges can cover the cost of additional financial aid. They think that schools could do this by spending less on other things. While that may be true theoretically, it won’t happen practically. Colleges are famously loathe to make those cuts, particularly in areas like faculty salaries and research funding.
Furthermore, requiring an expansion of financial aid might be a recipe for worse education. When colleges are forced to spend more on financial aid, they’ll be given even less to invest in core priorities. That would jeopardize their ability to make needed investments in faculty, facilities and academic programs. If implemented, this would be detrimental to all students, not just low-income borrowers.
We have to ask ourselves that.” So, what’s the alternative? We require a multi-pronged approach to address the root causes that inflate tuition in the first place. In addition, we need to offer more focused support specifically for low-income students. This includes things like:
Let's shine a light on where tuition money is actually going.
Incentivizing cost-cutting measures: Reward colleges that find ways to operate more efficiently.
Expanding access to Pell Grants and other federal aid programs: Make sure these programs are adequately funded and indexed to inflation.
Supporting state-level initiatives that promote college affordability: Encourage states to invest in their public higher education systems.
So is our ultimate goal—to see college become truly affordable to all. Our goal is to do this, even beyond the students who get federal financial aid. Mandating increased financial aid sounds like an easy answer, but that’s a mirage. It’s a very expensive solution that makes many more problems than it fixes. It’s time to work toward real, sustainable solutions that tackle the underlying causes of the college affordability crisis. Let's not make the perfect the enemy of the good, but let's not settle for solutions that ultimately make things worse. Our students’ — and our country’s — future depends on doing so.
