Colleges using federal student aid as an excuse to drive up tuition

The federal government spends an estimated $65 billion on student aid each year, but has the cost of college gotten any cheaper?  As everyone knows, the opposite is true.

For example, in 1991, a Harvard education cost $22,080 per year, but by 2011 that same education cost $50,723 – more than a 100 percent increase in 20 years.

Yet Harvard maintains a $31 billion endowment and receives $5.6 million in aid from the federal government.

According to American Enterprise Institute scholar Andrew G. Biggs, recent economic data suggests that colleges and universities have used student aid as an excuse to increase tuition rather than lower it for their students.

“Simply put, much of federal student aid is corporate welfare for colleges,” Biggs writes  in a new piece in The Atlantic.

Biggs cites data from the College Board showing that tuition at public institutions increased by 5.6 percent, and 2.6 percent at private institutions, in excess of the rate of inflation between 2001 and 2011 despite the fact federal spending on Pell Grants, work-study programs and subsidies  has tripled in the past decade.

Last year, these subsidies reached $65 billion, not including the $100 billion spent on student loans.

Colleges and universities frequently repay this federal assistance by reducing the aid they give students to defray tuition.

Not only that, Biggs suggests that colleges and universities use  the  increased aid to pad the salaries of administrators and college professors.

“The largest increases in both salaries and staffing have been for private universities, bolstering the view that private schools have greater abilities to capture federal dollars,” Biggs  writes.