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It Fails the Smarts Test

November 03, 2003

Unending increases in the cost of a college education frustrate families trying to save and can be a barrier for students whose families can't help them. But it's not a problem that can be solved by taking a ruler to college officials' knuckles.

A particularly useless piece of federal legislation tries to do just that, in the most ineffective possible way. A bill by Rep. Howard "Buck" McKeon (R-Santa Clarita) would withhold federal funds from schools, both private and public, that raise fees by more than a certain margin. The bill does nothing to address the causes of price increases, such as higher energy costs, more expensive health insurance, shrunken endowments and diminished state funding. Its approach to this complicated issue is so simplistic that canny college administrators could easily evade it. What's the point?

The bill would put colleges under "watch" if their annual tuitions and other fees went up by more than twice the inflation rate for three years in a row. At that point, colleges would have to give the Department of Education an explanation of their expenses and an extensive plan for changing. If they failed to follow that for three more years, they would face sanctions. Under this formula, the clock would start ticking for the University of California system after its $1,000 increase this year, caused not by campus profligacy but by a staggering state deficit.

Such unavoidable increases are one reason for the recent College Board finding that price increases at public colleges have outstripped those at private colleges. Private colleges provide more financial aid every year, helping to offset their increases. They compensate by raising prices to students who can afford it. McKeon's bill would worsen the situation by taking away such federal funds as student work grants, leaving the colleges to provide even more financial aid out of their own pockets.

The bill is based on defective thinking. Any institution could raise its prices by four times the rate of inflation two years in a row, then the third year do a small increase. That would be enough to keep it off the list.

Some colleges do spend wildly on frippery. Check out the new $53-million student center at the University of Houston -- a state school -- with its hot tubs, five-story climbing wall and waterfalls. The feds could rightly tell such colleges that taxpayers won't fund luxury spas. But if Congress wants to do something about the far more common college expenses, it can tackle the reform of health insurance and energy. It's too easy to pretend that high-priced colleges are the result solely of out-of-control academics, not congressional inaction on major issues.

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