New strict policy ultimately solves nothing

By admin Feb 4, 2012


Rising tuition costs have become a reality at many colleges, and Illinois Wesleyan University is no exception.  For this school year, tuition increased by $1,316—a 3.75 percent raise.

With many families struggling to cope with the recovering economy, President Obama recently warned universities to control their tuition costs or face losing federal funding.  Though this would primarily affect public institutions, it could also affect private institutions like IWU.

By doing this, the President hopes to incentivize universities to keep their tuition affordable for the American public. “President Obama is trying to provide a negative incentive for colleges and universities to keep their tuition raises from ‘skyrocketing’ ([Obama’s] words),” said Dr. Diego Mendez-Carbajo, Associate Professor of Economics at IWU. “Incentives beat command-and-control arrangements in a market economy.”

The President’s intentions are undoubtedly pure.  Monetary constraints can keep qualified students from attending the university of their choice, and high tuition costs leave many students with crippling debt post-graduation.  But while the President’s idea aims to achieve beneficial ends, it isn’t the right course of action.

What’s important to know is that rising tuition costs are not arbitrary.  “It’s not rising faculty salaries or benefits programs and health care that are the causes of rising tuition.  New technology, administrators and infrastructure are some of the bigger contributors,” said Tari Renner, professor of political science.

The federal funding IWU receives comes in the form of campus-based financial aid.  “Those are funds we must spend on work study,” said Dan Klotzbach, Vice President for Business and Finance at IWU. “All other federal money flowing to the University are provided to the students in the form of financial aid grants (such as Pell grants) or loans (such as Stafford loans).”

This means that under Obama’s proposal, IWU would be losing money for aid if the government deemed the tuition to be rising too steeply, which would hurt families already struggling to pay the cost of college.  This would be counter to what the plan seeks to achieve.

Seeing as cutting financial aid isn’t a viable option, IWU would have limited choices if forced to make budgetary cuts to make up for lost tuition revenue.  “In a small liberal arts college like IWU, or even a school like ISU that doesn’t have a large research program, areas in which to cut costs aren’t going to be as apparent,” Renner said. “We have no research budget to cut and we can’t cut our financial aid budget if we want to maintain the school’s diversity.”

So while President Obama’s proposed plan attempts to solve a real issue, it seems that withholding federal funding from universities will do more harm than good.  If the plan is executed as Obama stated, IWU and similar universities may have to make difficult budgetary choices that could be detrimental to the quality of education they provide.

Luckily, though, right now Obama’s statements are nothing more than rhetoric.  Hopefully, the White House can formulate a more beneficial plan to make college affordable to students without harshly punishing universities.


By admin

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