The University of Pittsburgh, Penn State and Temple universities are reported to be up in arms over a legislative proposal that would redirect some of the $580 million in public money they suck up annually into a voucher program for low- and middle-income students.
But while well-intentioned, such a program likely would only serve to perpetuate one of the biggest culprits in the commonwealth’s (if not the nation’s) higher education racket – government subsidies that give institutions of higher learning cover to keep jacking up the cost of tuition, oftentimes far in excess of inflation.
(And given the economy’s apparent sustained inflation situation now, things could only get worse.)
In essence, the proposal would merely transfer who gets to do the “tuition-jacking,” so to speak.
State Rep. Eric Nelson, a Hempfield Republican, told the Tribune-Review that he has “ethical” issues with the commonwealth spending more than half-a-billion dollars each year to support the three universities in a state where they compete with the 14 state-owned universities, as well as scores of private colleges and universities.
Do remember, these universities – formally known as the Pennsylvania State System of Higher Education – are in such a world of declining enrollment and debt hurt that they’ve been forced into a massive (and long overdue) right-sizing effort.
“(Nelson would) like to reroute the money from the three research universities to direct vouchers to students,” the Trib reports. “(B)y rerouting the money to a voucher program, aid could be provided to more than 124,000 low- and middle-income students,” it says Nelson contends.
The voucher could be used to defray costs at any Pennsylvania college, university, community college or trade school, the Trib adds.
And, again, give the institutions all the cover they need to keep raising rates? No thanks.
Oh, the major universities talk about how taxpayer dollars are used to “discount” student tuition rates. But it too often appears to be more akin to the furniture dealer who raises prices by X amount then later offers up a sale with a “discount” of a lesser Y amount.
This tuition-jacking phenomenon is well documented in scholarly literature. In fact, a Federal Reserve of New York study of federal aid in 2015 found that “colleges pocket most student subsidies.”
As a Wall Street Journal review of the analysis noted at the time:
“The New York Fed study found that for every new dollar a college receives in Direct Subsidized Loans, a school raises its price by 65 cents. For every dollar in Pell Grants, a college raises tuition by 55 cents.
“This is one reason tuition has outpaced inflation every year for decades, while the average borrower now finishes college owing more than $28,000.”
No doubt the phenomenon knows no borders and does not discriminate between federal and state dollars.
Back to Rep. Nelson.
“Pennsylvania simply has too many seats at our universities and not enough students to fill them,” Nelson told the Trib.
But isn’t that the marketplace sending the signal that there are too many seats for a declining population? Of course, it is. So why should taxpayers be forced to subsidize such a mismatch and pad the pockets of the educratic establishment?
And that’s not an ethical issue? Well?
Talk about rearranging the deck chairs on the Titanic. Talk about a vicious cycle.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
