Helping Haiti

Across the nation, colleges and universities are reaching out to the victims of Haiti's earthquake in ways as diverse as their various missions.  We are posting news stories summarizing those efforts on this Web site.  If you want to help with cash or in-kind donations, we suggest you visit the USAID Help for Haiti Web site.

Rep. McKeon's Federal Price Controls Would Damage the Quality of America's Colleges and Close Their Doors to Needy Students

March 5, 2003

FOR IMMEDIATE RELEASE       

CONTACT:  Tony Pals, tony@naicu.edu

o: 202.739.0474     c: 202.744.3904  

Rep. McKeon.s Federal Price Controls Would Damage the Quality of America.s Colleges and Close Their Doors to Needy Students

Congressman's Proposal Ignores Fundamental Truths Underlying College Costs  

Statement by David L. Warren, President,  National Association of Independent Colleges and Universities   

I am dismayed and perplexed that a rational, informed leader like Congressman McKeon, chairman of the House subcommittee with jurisdiction over higher education, would propose legislation with such obvious negative consequences for America.s college students and their families.  

Keeping college affordable for a diverse array of American families is a critical national priority, but deputizing the Department of Education to use a blunt instrument like tuition price controls will only be contrary to the nation.s interest. While the consequences would be painful for colleges and universities, they would be devastating for those who attend these institutions, and the most financially needy students whom they serve.  

Does anyone really believe that taking away student loans, grants, and work-study programs from college students and their families in the middle of their academic careers will make college more affordable or accessible for them?  

The concept behind this proposal is federal price controls, pure and simple. This nation tried that approach to wages and gasoline prices in the 1970s, with disastrous results. We can anticipate similar results if the concept is applied to higher education.  

Colleges and universities are already dealing with significant cuts in state budgets, endowments, corporate philanthropy, and alumni gifts. This proposal would force them to slice into the academic muscle that provides students with a quality education, or slash the generous amounts of institutional grant aid that allow students from all backgrounds to earn a college degree.  

How will Congress ensure that the coming influx of low-income, first-generation, and minority students will be able to attend the college of their choice? How would it explain to the nation’s business leaders that the federal government is implementing a policy that will reduce the quality of education and training for tomorrow’s innovators in science, technology, and industry?  

Colleges and universities prepare the leaders and workers who drive our economic growth, and produce the research and technology that provide for America’s security. Federal price controls would hobble our ability to meet these national priorities.  

The focus on published price is also misguided. Eighty-four percent of full-time students at private colleges and universities receive financial aid, which reduces their out-of-pocket costs. In fact, according to the National Center for Education Statistics, the average tuition students pay at private colleges has actually declined over the past decade, once you subtract grant aid and adjust for inflation.  

The fundamental fact is that higher education’s leading cost drivers run at a rate substantially higher than the Consumer Price Index. Labor costs, including salaries and benefits, modern learning and living facilities, science laboratories, up-to-date information technology, new periodicals and other library materials, and student financial assistance all surpass the CPI in annual rates of increase. (Also significant is the cost of complying with unfunded federal mandates.) These institutional investments mean that students from all backgrounds can afford to attend the institution of their choice, their academic experience is among the best in the world, and their out-of-pocket costs are kept as low as possible.  

Private colleges and universities are already deeply engaged in cost containment. Through targeted cost reductions, increased outsourcing, and more cost-sharing consortial arrangements with other institutions, private colleges and universities have greatly enhanced their operating efficiency during the last decade.  

As a result, they have been able to keep their rate of published tuition increase at about 5 percent in each of the past eight years, while maintaining academic quality. At the same time, they have increased the amount of grant aid they provide at a rate substantially higher than tuition increases and the CPI.  

Rep. McKeon’s one-size-fits-all approach ignores the enviable diversity of America’s 3,600 institutions of higher education in their missions, student profiles, and resources. Management of cost drivers, as well as decisions on transferring credits, is best left to institutional leaders, not bureaucrats in Washington.  

America’s private colleges and universities are committed to providing affordability, access, and quality to America’s students. Congress can best serve students and their families by renewing the federal government’s commitment to fully funding proven student aid programs.  

American higher education is the envy of the world. Let’s solve the problems of affordability and access, not multiply them through ill-conceived and damaging government controls.

 ###

Related Material McKeon Response PDF

Contact

• Tony Pals
  (202) 785-8866
  tony@naicu.edu