Does Federal Student Aid Help Students – Or Colleges?
One of the most important lessons anyone can learn about politics is that when government sets out to accomplish some objective, it often winds up doing the opposite. Rent control laws, for example, are supposed to help the non-wealthy who want urban housing, but the effect of rent control is to diminish both the quantity and quality of rental housing available.
With that point in mind, let’s consider federal student aid programs. Congress has established a variety of grant and loan programs (budgeted this year at some $73 billion) which were supposed to help make college more affordable to millions of non-wealthy families. As the cost of attending college has risen, politicians have increased the amount of aid available. The trouble is that by doing so, the government gives colleges an incentive to further increase tuition charges.