February, 2020
Washington – This month, New America released Stephen Burd's latest work, "Crisis Point: How Enrollment Management and the Merit-Aid Arms Race Are Derailing Public Higher Education."
It is a sobering look at how too many colleges and universities have willfully failed in their mission to provide, as best they can, affordable higher education. They have allowed themselves to be distracted by institutional prestige rankings and other baubles antithetical to the purposes for which they were established.
Two passages in the report stand out in particular. The first shows how the distorted priorities of the institutions have contributed to the nation's student loan crisis:
[T]he data suggest that a
substantially larger share of students take out student loans at schools that spend
their aid primarily on non-needy students than at those that devote most of their
aid to meeting financial need, and they take out far heavier debt loads. In 2016–
2017, for instance, an average of 69 percent of seniors graduated with an
average debt load of $27,893 at schools that devoted 90 percent or more of their
aid to non-needy students. In contrast, an average of 55 percent of seniors
graduated with an average debt load of $22,214 at schools that spent 10 percent
or less of their aid budgets on non-needy students that school year.
The second suggests what might be done about it: prioritize federal appropriations to student-aid programs that "make demands on the colleges...to do their part in helping [low-income] students."
[F]ederal intervention is needed to rein in the enrollment management
industry and put the brakes on the merit-aid arms race for good. The federal government clearly has an extremely compelling interest in curbing
these harmful practices. It spends tens of billions of dollars annually through the
federal Pell Grant program trying to keep college accessible and affordable for
low-income students. But the Pell Grant program has a major design flaw. It makes no demands on the
colleges that receive the funds to do their part in helping these students. The federal campus-based aid programs—the Supplemental Educational
Opportunity Grant program (SEOG) and Federal Work-Study—are many
magnitudes smaller than the Pell Grant program. But they do not contain its
design flaw. They require colleges to at least partially match the money they
receive from these programs.
Despite the commendable analyses and the insightful policy prescriptions contained in "Crisis Point," Congress seems bent on continuing only more of the same that has resulted in the crisis. This week, House appropriators will begin hearings on FY 21 higher education spending. The first hearing questions to testifiers should be in reference to this new Stephen Burd report, to start to move public policy back in a direction to decrease student loan burdens and to make sure institutions are doing their part in the effort.
