Economists Debate at UVM: Why Does College Cost So Much?

Tim Goral's picture
Thursday, March 22, 2012

It was the first day of spring as only academia could spend it.

Outside, on the University of Vermont campus, Frisbees were flying, sunbathers were basking in the unnatural heat, and shrubs were budding in apparent disbelief.

Inside, on the top floor of the Davis Center, two economists were debating why college is so expensive.

 Of course the economists drew the smaller crowd — about 40 in all, fully dressed, including more than a few suits — but tuition-paying sunbathers missed a pretty good show.

The question of the day posed by UVM’s Janus Forum, a series of debates on public policy issues: Does federal support for highereducation make college more or less affordable?

Richard Vedder argued for less. He’s professor of economics at Ohio University and director of the Center for College Affordability and Productivity, a Washington, D.C.-based think tank.

 He pointed out that federal aid, while benefiting some students, proves costly to taxpayers in general. He suggested that federal aid stokes the demand for higher education, which leads in turn to higher tuition and contributes to a decline in academic standards, because the federal grants aren’t awarded based on performance.

By promoting higher enrollments, he said, federal aid helps produce more college graduates than the economy needs, with the result that 17 million graduates find themselves in jobs — like bartending or wood-cutting — that don’t require a degree. He contended that the “byzantine” complexity of the FAFSA, the federal aid form, prevents many first-generation students from even applying to college, and that federal aid actually has the effect of increasing income inequality:

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