Harvard and Yale recently have made pronouncements regarding increased middle-class affordability and access. It is well within their rights to do as they wish, but their decisions could increase costs for the thousands of universities without huge endowments, drive up the tuition price, and reduce access for low- and middle-income students.
Exchanging student loans for grants inflates cost. The “free” grant money must come from somewhere. If one has a large endowment, it comes from taking a greater percentage as payout, leaving the tuition price unchanged. If one has a smaller endowment, or is state- and taxpayer-supported, it is likely to come from tuition increases.
Targeting more grants to upper-income students without a change in how financial aid is determined will also inflate costs. Many colleges, which cannot afford to ignore tuition revenue, will be forced to increase discounts to compete for students. These schools will either have to cut program quality to reduce costs or increase tuition price to fund additional grants. These inflated tuition prices also could force more students into public colleges at a higher cost to taxpayers.
The negative effects of these policies will further be felt as students who cannot get into super-selective universities have their expectations raised regarding a loan-free aid package. When the college to which they apply cannot offer such a package, low-income students might opt out of higher education altogether rather than take out a loan, which they have now been told is “bad.”
The elimination of loans by wealthy schools will increase the tuition price students pay “systemwide,” not decrease it. Current financial aid formulas are imperfect and expect far more from upper-middle income families than they can afford. Harvard, Yale and other megarich universities should not, however, act unilaterally to “fix” this problem. They are acting because they can afford to do so — not because it is right.
They should be leading a national discussion on reforming the way parent contributions are determined. Flawed policy disguised as affordability and access will do more harm than good, and when Harvard and Yale do it, it has credibility beyond what it deserves.
MorganLighter
William G. Durden is president of Dickinson College; Robert J. Massa is Dickinson’s vice president for enrollment and college relations are the ones who authored this piece.
MorganWrites 