The Federal Role in College Pricing

Persistently rising college tuitions, high spending per student, and mounting student debt burdens have re-emerged as key issues in Washington. Secretary Arne Duncan has called on college and university officials to show more urgency in keeping down their prices and spending, the House subcommittee on postsecondary education has held another hearing to wring its hands about college unaffordability, and President Obama has now summoned a select group of college presidents and higher education thought leaders to consider what can be done.

Federal efforts in the past have focused on shining a spotlight on institutions with the highest rates of tuition growth and exhorting college officials to do more to restrain their spending growth and rein in their price increases. Recent news stories indicate that these largely symbolic approaches will continue to dominate the debate as the focus seems to be on extolling the virtues of those schools or states that freeze or reduce their tuition levels, move to three-year degrees, measure learning outcomes, or find ways to use technology to lower their costs per student and hopefully their prices.

But these efforts are unlikely to yield satisfactory results, just as previous efforts have failed to slow cost and price growth or to reduce the amount students must borrow to pay for their education and related expenses. They will continue to fail unless the aim is to reshape the relationship between governments and institutions and the rules that determine how much students can and do borrow. Federal and state officials must recognize that the signals embedded in a number of policies have contributed to the past growth in costs, prices and student debt -- and then do something about it.

Posted by Jim Zellmer at December 9, 2011 1:54 AM
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