A tuition system that is fair for everyone

It is commonly claimed that rising tuition is one of the most serious problems facing universities. According to conventional wisdom, skyrocketing tuition, particularly at state schools, makes college unaffordable for low-income students and reduces on-campus economic diversity. Proposed solutions range from increasing state subsidies to passing laws that freeze tuition at current levels.

There's no doubt that tuition is rising. Last year, state university tuition increased an average of 14 percent at public colleges and 6 percent at private colleges, according to The Wall Street Journal. According to a May 25, 2004 New York Times editorial, "Nearly a half-million Americans will be turned away from four-year colleges this year for financial reasons, thanks to rising tuition costs and declining state and federal aid."

Despite the tuition increases, charges to students at state institutions cover only a small percentage of the actual per-capita cost of education. For example, in the University of California system the approximately $6,100 in-state tuition covers less than 37 percent of actual costs; the rest is subsidized by the state.

For students unable to pay the full cost of state school tuition, financial aid is available. Unfortunately, because there is a finite amount of financial aid funds, many programs vigorously limit eligibility. For example, financial aid policies typically expect children from divorced families to obtain financial assistance from both parents. Even if one parent is absent and fails to provide his "expected contribution," there is no additional aid available. Further, many aid schemes fail to account for unusual financial burdens, such as caring for elderly grandparents or supporting family members with expensive medical needs.

In this environment, it's easy to see why well-intentioned people decry rising tuition. They want to make college affordable for everyone. They rightly believe that encouraging economic diversity in higher education benefits society and reflects important American values. Unfortunately, their obsession with sticker-price tuition harms the very students they seek to help.

Popular discourse on "skyrocketing tuition" claims that tuition must be kept low through subsidization to ensure that low-income students can attend college. In reality, though, state school tuition does not need to be subsidized for everyone. It's silly for taxpayers to cover 63 percent of the education of a millionaire's child. And, although most students at state colleges are not millionaires, students from upper-income families comprise a disproportionate percentage at every public college.

It is a waste of money to fund subsidies to keep sticker-price tuition low for all students. The funds spent on across-the-board subsidies would be better devoted to financial aid for students who actually need the help. Moreover, with the money saved by not subsidizing wealthy students, financial aid policies could be liberalized to improve assistance to students who are currently marginalized -- for example, those from divorced families.

Thus, tuition at public universities should be increased drastically. The resulting tuition revenues should be used for increased aid for low- and middle-income students.

Some critics might argue that this plan is unfair, because it essentially requires higher-income students to subsidize the education of low-income students. Although this is admittedly true, it is infinitely fairer than the current system, in which low- and middle-income taxpayers subsidize the educations of the wealthy. Additionally, the higher-income college students actually use the resources of the public college, whereas many taxpayers do not. Moreover, the lack of a subsidy for wealthy students should not be considered an injustice.

A second potential objection is that raising tuition would penalize middle-income students who would struggle to pay the increased sticker price. However, this objection ignores the fact that if tuition were raised, middle-income students would also qualify for financial assistance. Although this might seem to increase overall aid demand, the need would be easily funded by eliminating across-the-board subsidies. After all, for the majority of individual students, the net cost of college would be no more expensive than it is currently.

Even better, shifting the focus away from tuition price would avoid the problems caused by sticker-price obsession. For example, in an effort to maintain the appearance of low tuition, many public universities increase required non-tuition fees, such as "residential fees" and "registration fees." Although these fees do not appear in the tuition price, they are just as burdensome for students. Moreover, in some cases, these fees are not covered by current financial aid schemes.

Best of all, this plan would free up significant funds to help the most needy students -- the former foster children, the recent immigrants and the single mothers for whom even a "low" sticker price is unmanageable. For these students, financial aid could be expanded until college becomes truly affordable. And that would go a long way toward promoting true economic diversity in higher education.

Although it's politically popular to keep overall tuition low at public institutions, it is ultimately a misguided idea. Shifting the focus from sticker-price tuition to financial aid would remedy the budget problems of many universities and make higher education a financially realistic option for everyone.

Jennifer Weiss is a senior Linguistics and Theatre Arts major from Los Angeles. War On Error appears on Wednesdays.

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