During the presidential campaign last year, Barack Obama said the rising cost of college tuition meant the federal government needed to make more loans available for college students because that would make college more affordable. This is standard Democratic policy, and a lot of Republicans favor it, too. Except it won’t work – and may actually make things worse. This article in Thursday’s Wall Street Journal explains why:
"Also, the rising levels of borrowing may ironically be contributing to the accelerating cost of college, say some college-finance experts. Loans can give colleges an artificial sense of a family's ability to pay tuition. … Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, says this phenomenon is playing a role in why tuition grows at about twice the rate of inflation. ‘Instead of imposing tougher choices’ on college costs, he says, it's ‘easier to raise prices … because this additional loan amount is made available.’"
It’s very logical. If students, and their families, have more money available to pay tuition, colleges will increase the tuition they charge. College won’t get cheaper until people refuse to pay constantly increasing tuition.
Comments