Sunday, October 6, 2013
Abolishing student aid could force schools to lower prices - wisdom from a former student
By Holly Jean Soto (economics major, George Mason University) Special to the Orlando Sentinel
Abolish government financial aid for students.
My dear friend, who is a statistics major and a government-aid borrower, is fearful of this statement.
"Don't try to get rid of that," he says. "I need that money for school."
What he fails to realize, as I am sure many other federal-student aid borrowers do, is that getting rid of aid would improve the lives of American students today.
The first harsh reality that student borrowers fail to see is that any government giving begins with government taking away. Government is the only institution legally allowed to take by force.
Government does not send a letter to each American saying, "Hello, fellow American, would you like to take a fraction of your income to fund another person's education?" No. It is taken, whether I'm willing to contribute or not.
Another harsh reality of students taking government aid is that progress, efficiency and effectiveness don't begin with someone else's money.
If students had to pay for school out of their own pockets, we would see fewer students hanging around campus on their 100th credit hour still trying to decide on their majors, fewer students accepting C's and D's as passing grades, and more students going into successful majors.
Also, we would see a portion of students concluding at a faster rate that they would benefit more in an occupation than in school.
Why is all this true? Because it is the students' own money on the line.
Now some people may have concluded that students' providing the funds for their own education allows them to reach a better long-term result, but it is still difficult for students to pay out of their own pockets because tuition is too high.
However, the final harsh reality is that when we participate in taking away from another to pursue our own dream of a college education, we engage in the same act that raises the cost of education. Colleges see that more students than ever before are attending their institutions because the students are able to pay for it with someone else's money.
The CollegeBoard Advocacy & Policy Center in its "Trends in Student Aid 2012" report, found that during the 2011-12 academic year, $236.7 billion in financial aid was distributed to undergraduate and graduate students in the form of grants from all sources. Also, students borrowed $8.1 billion from private, state and institutional sources to help finance their education.
The report also states that in 2011-12, undergraduate students received 98 percent of federal grant aid, 99 percent of state grant aid and 67 percent of federal loans.
As long as these statistics remain so, colleges will continue to raise their prices. What do students with financial aid care? They are not the ones paying those fees.
If we were to abolish financial aid for students, at first we would see fewer students going to college because of lack of funding.
However, colleges and universities observing a lower student population on their campuses, and observing that students who pay out of their own pockets would attend their school when tuition cost is low, would now compete with other schools to offer the lowest possible price.
Ultimately, even the poorest of families would attend school at their own expense because getting rid of government financial aid gives universities the incentive to compete, and just as with any product or service, when competition breaks out, suppliers lower their prices.
If a 21-year-old student can understand the harsh realities of federal financial assistance, why can't the rest of American students?