In today’s Harvard Crimson, President Obama lists the ways in which he’s making college more affordable:
We’re tripling the investment in college tax credits for middle class families. We’re raising the value of Pell Grants, and we’ll make sure they increase each year to better keep up with inflation. We’re making loan repayments more manageable for more than one million more students.
No need to thank him. As Cato’s Neal McCluskey told me months ago, all these things raise tuition:
“Government provides lots of aid to students so that they are not the ones paying these additional costs. Taxpayers are. Colleges are nonprofits, so they want to maximize revenue. The more aid you offer, the more they raise their prices to get that aid, because it doesn’t make students worse off.”
His evidence? Between 1986 and 2006, the average cost of attendance at private schools in real dollars jumped by 68 percent. Once the average grant, loan, and tax credit are subtracted, however, the cost jumped by only 29 percent. True, it’s not a slam-dunk case, but it is cause for suspicion.
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