A Freer Free Ride
Maybe it’s because a wintry mix has shut down every major St. Louis roadway, or maybe it’s because I’m still disappointed by a scholarship offer from a legal institution I’m going to elect not to identify, but yesterday seemed like the single biggest day of collegiate financial news in years, and it would be remiss of me not to comment.
We start, as all things should, with the alma mater: Washington University announced yesterday that it would be eliminating loan programs for students whose families annually earn less than $60,000. Financial aid for these students will instead come in the form of University-sponsored grants that will not have to be repaid.
However, this news was upstaged later in the day as the little junior college that could, Stanford University, announced that it would eliminate tuition entirely for all students whose families earned less than $100,000 a year (students would, however, still have to contribute on their own behalf through work-study programs).
Both of these programs are designed to ease the financial burden of a top-tier education so that such an education is accessible for all those who desire it and have proved themselves worthy. While tuition breaks and loan forgiveness may not reach the benefit of Yale’s financial aid extension to undergraduates whose families make up to $200,000 annually, they do make college considerably more affordable to the middle and lower classes of American society. However, one glaring truth comes to light when I look at these programs from an objective standpoint: All of these universities are private and exorbitantly wealthy (Wash U’s endowment is $4.4 billion, Stanford’s is $12.4 billion, and Yale’s hovers around $15 billion).
So why can’t public universities compete?
Public, four-year colleges (possibly because of the restraints of taxpayer financing or larger student bodies) have not made the same effort to reduce the financial burden of higher education for low- to middle-income families. Granted, resident tuition at the University of Missouri is a quarter of that at Wash U, but that doesn’t mean that Mizzou isn’t competing to attract the same bright students in every round of the admissions process. Why can’t state educational institutions, which don’t exactly have measly endowments themselves (MU’s stands at $511 million), offer breaks on loans?
The immediate answer seems to be that the money just isn’t there when taxpayers are involved, but I’m not entirely sure I believe that. Even if public universities simply replaced loans with grants, as Wash U did, there is significant research to suggest that such an investment in human capital eventually yields higher returns for the state economy itself. After all, both loans and grants eventually have to get paid back somehow, and students with "scholarships" have been shown to be more likely to complete degrees and contribute to boosting the economy of the states where their universities were located.
If nothing else, there is a hope that the competition of the free market could help advance this claim. The sooner that state institutions realize they are losing elite middle- and lower-class students to private universities, the sooner they will adapt their financial aid packages to extend offers that turn out better for all those involved.