Why are so many financial aid rules at odds with so many academic policies and goals?

Dean Dad:

Because financial aid is mostly federal, but public colleges are mostly run by states. And the two levels of government have different goals.

Some of that is because the feds are allowed to run deficits and the states generally aren't. (I'm not counting unfunded pensions as deficits; they're more like long-term debts. I'm using deficits to refer to annual operational shortfalls.) So in a recession, the feds can increase spending, but the states have to cut theirs. That showed up over the last few years in a pretty dramatic way. Federal spending on Pell grants increased dramatically, but state spending on operating money for higher education dropped hard. As a result, colleges shifted more of the expense of operations to students. Consequently, the increase in federal financial aid didn't really increase funding for higher ed; it simply made up for part of the state cuts. With the federal foot on the accelerator and the state foot on the brake, it was hard to make real progress in any given direction.

Annoyingly, that kind of unappreciated conflict leads to easy demagoguery, as folks who aren't big fans of higher ed in the first place are able to say things like "we increased aid dramatically, and nothing happened!" Which is true, as long as you only look at one piece of the picture in isolation.

Posted by Jim Zellmer at September 28, 2012 1:31 AM
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