Financial Aid: An Unfortunate Model for Health Care Reform


As college admissions’ offices are gearing up to flood the USPS with acceptance packets and rejection letters, parents of college-bound teenagers are shifting through their piles of “I’ll read it later” to pull out the US News & World Report that’s been out of sight since last August, when parents and their kids bought it to program the GPS for the ritual that has become the “college tour.”

For many would-be undergraduates, those few short months between then and now are a maelstrom of questions: What schools are on my list? What schools can I get into? How much will it cost? Will my parents veto my decision? What if I don’t get into my first choice? Will mom insist I go to her alma mater?

How students answer these questions is a process educational consultants, marketing experts, and SEO gurus regard as the Holy Grail of their professional achievements. Figure out how kids make their decision about which college to attend, and you will soon finding yourself making a pit stop at one college business office after another to pick up your hard-earned cash as you wend your way to Easy Street. Staid, crusty academic administrators will be competing for your services with the same ardor that faculty seek out an office with windows and a 10 a.m. to 1 p.m. schedule, Wednesdays only.

For parents the decision is no less agonizing, but the questions are different: Will my kid get a job after she graduates? Will she fit in? Do well? Will he be safe on campus? Will the education set up my child for a better life? And of course, the big two: Can we afford this choice and is it worth it?

To answer many of these questions, students and parents alike reach for US News & World Report, a helpful but flawed resource, to aid in the decision-making. Students pore over the choice of majors and the male:female ratio. HINT to horny guys: Go the route of the four-year liberal arts college. You are guaranteed to be a big man on campus. You might even be the only man on campus, given the disproportionate number of women you’ll encounter. Trust me, if you want to perk up your social/dating life, think “four-year liberal arts.” HINT to women: Consider the women’s colleges, since you’re not likely to get a date on a co-ed campus anyway, but you will find the women’s colleges offer you academically challenging programs and a boatload of self-confidence and independence. Alternatively, think about universities: you’ll still be in the majority, but the margins are better if you’re determined to get a date on a Saturday night.

Parents, on the other hand, tend to zero in on more mundane statistics: graduation rates, tuition and fees, endowment, and, of course, financial aid. Armed with these bottom-line figures, a great number of parents have learned to play “let’s make a deal” when considering an offer of aid. A student who has been accepted by more than one college and offered aid as well may attempt to pit the institutions against each other to up the offers. Unsavory, yes. Unproductive, usually.

Before and during and the financial meltdown, colleges made heroic efforts to keep funds flowing into the financial aid budget in order to build a class that has academically talented students, males, people of color, athletes, and artists. If, as many students do, you have the good fortune to fall into more than one of these categories, your attributes will be rewarded by a more robust offer of aid. But students and parents would do well to keep in mind that as financial aid budgets increase, the dollars that bulk up those budgets are more than likely dollars that otherwise would have funded improvements to the campus, additional faculty, students’ and faculty research or creative projects, books and electronic subscriptions for the library. Institutions that lack endowments in the hundreds of millions or the billions, and even some that do, are playing a zero-sum game in order to provide some students with a substantial discount off the “sticker price.”

Is this social engineering? Of course it is, although the college will use the elegant language of a “well-rounded class,” or some such to justify charging one family more than another. It will also raise tuition in order to fund additional increases to the financial aid budget. It is a sanctioned, even lauded, transfer of wealth: you pay more, so I can pay less. Works for me. Do some students get shut out? Of course: those whose parents cannot or will not pay the full freight, and those whose family cannot or will not make up the remaining charge after financial aid has been deducted. The wealthy can pay; the most under-privileged are awarded the largest grants.

When I worked in higher education and the topic turned to financial aid policy, I often wanted to plead a sick headache and flee the meeting. Determining the financial aid budget is an incredibly complicated balancing act, one that many people of good will labor over mightily to meet the lofty goals and impossible benchmarks they set for themselves. And no matter how hard they try, they go into this grueling exercise knowing its outcome: everybody will not be happy, many people will be very unhappy, and the “well-rounded class” may or may not materialize.

Now I get headaches from the fetid air that’s circulating in Washington to breathe life back into the mouldering corpse of health care legislation. It’s dawned on me that many of the suggested improvements to our current system are similar to the way financial aid is distributed now. Very similar, in fact. Some will pay a sticker price in the form of new taxes or some other fee linked to the cost of a policy so that others can get a discounted price. After a few years, a pattern similar to enrollment demographics will emerge: great choices for those who have the wherewithal to pay the ever-increasing sticker price and terrific subsidies that will make good insurance available to those who establish their neediness. Meanwhile, in the middle, parents will be reaching for US News and wondering how to tell their child that he can go to college, or the family can be insured, but it can’t afford both…because mom and dad’s combined incomes are at once too little and too much.

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2 thoughts on “Financial Aid: An Unfortunate Model for Health Care Reform

  1. Pingback: This is Getting Serious, Folks! Vassar’s Short $1.9 Million–More Academic Embezzlers Out on Bond! « Call Me "Miss"!

  2. Pingback: Where are the OTHER Kardashian Sisters? « Call Me "Miss"!

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