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of all the major deciders as they interact. In this case the output of the model is not a single calculated answer but the report of the results of an experiment using the model which is run several times and to which are attached the probabilities of being correct.

3. Improvement of estimates of the behavioral responses of students. As George Weathersby pointed out, continuous development of the model will require updating and further refinement of the underlying estimates of the student responses to various sets of choices which they have. The only studies of these responses which we currently have were made during periods of sustained enrollment growth in the 1960s, but before the sharp expansion of the two-year institutions and before the introduction of student financial assistance programs for low-income students. I understand new work is underway on these student responses, in particular by David Mundel at Harvard.

4. Another modification of the model would involve making refinements to take into account how people differently situated in different areas of the country might respond. As you pointed out, the National Commission necessarily started with a national model, but it is known that the kinds of choices students can make and their likely responses may well differ region by region or even state by state-given, for instance, the differing private-public mix of institutions or the availability of two-year options as we move from east to west across the country.

In addition, income is, but race or sex are not, taken into account explicitly in the current formulation of the model-and they should be, if blacks and women cannot be assumed to respond similarly to white males to different educational options.

5. To refine the basis for making projections used in the model. Projections of important variables in the model are currently made outside of the model and then fed into it. We might want to examine the ways in which these projections are made to see if they could be refined. It might be feasible, for instance, to make the projections of enrollment internal to the model and affected by what happened in earlier periods.

In addition, the essential projections might be linked more explicitly to assumptions about the development of the general economy and the place of postsecondary education among national priorities.

AMERICAN ASSOCIATION OF
STATE COLLEGES AND UNIVERSITIES,
Washington, D.C., October 24, 1973.

FINANCING POSTSECONDARY EDUCATION: THE CASE FOR LOW-TUITION
PUBLIC HIGHER EDUCATION *

I. INTRODUCTION: A STATEMENT OF PRINCIPLES

1. The American system of public higher education is a precious national resource. Since its beginnings almost 150 years ago, this network of land-grant universities, state colleges, and community colleges has grown so that it now provides access to millions of people-today, to about three-fourths of all college students.

2. Like our free public school system, of which it is a logical outgrowth, public higher education is the envy and wonder of the entire world. It has contributed enormously to our well-being, through research and public service as well as instruction, and it is today a principal hope for resolving many of the problems which confront us.

3. The alternatives to low tuition proposed by the Carnegie Commission, the Committee for Economic Development, and others rest in varying degree on shifting the financial burden of higher education to the student and his family. For most middle-income and lower-middle-income students, and quite possibly for low-income students as well, higher tuition means heavy borrowing, probably at high rates, and large debts-or not going to college at all.1

*This is a staff paper prepared by the American Association of State Colleges and Universities for the National Commission on the Financing of Postsecondary Education.

For further discussion of long-term loans and loan bank approaches, see Robert W. Hartman, Credit for College (New York: McGraw-Hill, 1971) D. Bruce Johnstone, New Patterns for College Lending (New York: Columbia University Press, 1972); and John P. Mallan. "Current Proposals for Federal Aid to Higher Education." in M. D. Orwig, Financing Higher Education (Iowa City: American College Testing Program, 1971), especially pp. 311-314 and 322-330.

4. No amount of rhetoric about helping low-income students, saving private higher education, or increasing student choice should be allowed to mask the effects of high public college tuition and heavy debts on millions of Americans. 5. Increased student aid is not and cannot be a substitute for low tuition, although it should be a supplement. Federal and state student aid programs are subject to the annually shifting political and economic priorities of federal and state bureaucrats, politicians, and bankers. Low tuition is a long-term guarantee of access to higher education; student aid cannot be.

6. Student aid alone cannot provide institutions with the resources needed to plan ahead, to provide new instructional programs, research programs, and services to meet changing needs. Institutional aid is necessary, both for institutional stability and to help keep tuition down-thus aiding millions of middle-income and lower-middle-income students who are eligible for little or no student aid.

7. Student aid programs for lower-income groups alone, combined with higher tuition, would bring about a new and highly undesirable class discrimination in American higher education. Well-to-do students would be able to pay their way and graduate debt-free; lower-income students might also obtain a subsidized education and graduate without debts. Middle-income and lower middle-income students would have to pay much more and take on large-scale debts after graduation.

8. Raising public tuition as a way to "help private colleges" would force millions of middle-income and lower-income families to pay more and take on debts. Direct institutional aid and student aid to private colleges is a far more equitable way to help these institutions.

9. In conclusion, it would be both tragic and foolish for the American people, at this point in history, to abandon a century of unparalleled success with lowtuition public colleges for a dubious and untried system based largely on higher charges to students.

The paper which follows develops some of these points in greater depth, and also examines some of the arguments for and against raising tuition.

II. SOME ARGUMENTS FOR RAISING TUITION

Here are some of the most frequent arguments for increasing tuition: 1. Because present state taxes are often regressive, the burden of support for public higher education falls disproportionately on lower-income families which are less likely to send their children to college and therefore do not "benefit." Conversely, many upper-income families who benefit could afford to pay more.

2. Raising tuition would "make available" more funds for public higher education, which could be used to provide aid to lower-income students.

3. The most efficient way to aid lower-income students is to give them direct federal and state aid, while charging everyone more tuition.

4. Some middle-income and lower-middle-income students now attend private, higher-tuition colleges. If these students can afford to pay higher tuition, why can't other middle-income students do so?

5. Raising tuition would decrease the gap between public and private college costs, and thus help private colleges attract more students.

6. Students should have more choice of the type of institution they attend. They should not be limited to a low-tuition public college close to home for financial reasons, but should be able to go to a more expensive public, private, or proprietary school. But, because federal and state government resources are limited, this choice is only possible if tuition is raised to obtain more overall revenues, and if students are able to obtain grants or loans to go to any college they wish.

7. Raising tuition will give the student more power over the institution, since he will pay a greater share of costs. This will force colleges to become more responsive to student demands.

8. It is unclear to what extent higher education benefits the individual graduate, and to what extent it benefits society in general. To the extent that the individual benefits, he should pay more.

There are other reasons for raising tuition, of course. The most frequent reason in practice is simply that a given Governor or state legislature is hardpressed financially. However, an ad hoc pressure to raise tuition in one state in one year-often by a relatively small amount-is very different from a concerted nationwide campaign to raise tuition in all states.

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A great danger in the tuition controversy is that hard-pressed or fiscally con servative politicians at the federal or state level will seize upon dubious theoretical justifications for raising tuition, as a way to balance their own budgets.

III. REBUTTAL: THE CASE AGAINST RAISING TUITION

Dealing in depth with the arguments against low tuition is not easy. Each calls for substantial research and analysis; but in most cases adequate information is unavailable, fragmentary, or subject to widely varying interpretations. The millions of dollars spent on research by the Carnegie Commission and other governmental and non-governmental groups have not provided the country with a firm data basis for either accepting or rejecting many of the arguments made for or against low tuition.

Given such uncertainty among research scholars, decision-makers should move very cautiously in recommending radical changes in a system which involves so many millions of people.

Here is a rebuttal of each of the points made in Part II of this paper:

1. Regressivity of state tax burdens.-Scholars such as Dr. Joseph Pechman, Director of Economic Studies at the Brookings Institution, have raised serious doubts about the charge that low-income families are bearing a disproportionate part of the costs of public higher education. Dr. Pechman believes that, on the average, lower-income people receive greater direct benefits from public higher education than the taxes which they pay.'

The Carnegie Commission report, Higher Education, Who Pays?, makes a similar point on pages 43-47. The Commission points out that while lower-income families which do not send a student to public colleges do not receive a direct subsidy, those who do receive a considerably larger subsidy than the taxes which they pay.

Some further points about the problem of regressivity:

Today, federal, state, and institutional programs are making a major effort to attract more low-income and minority students-with considerable success. As more such students go to college, part of the existing regressivity will be eliminated.

To the extent that regressivity is seen as an inequity, it should be corrected by changing the tax system, rather than charging higher tuition to all students. College graduates pay higher federal, state, and local taxes. In this way, most college graduates repay the subsidy they received in the form of low tuition. Many of them repay it several times over.

The absolute amounts paid by many low-income families as taxes used for public higher education are small-in many states, probably only a few dollars per year.

Low-income families benefit from public higher education even if their children do not go to college. Public colleges train most of the teachers, social workers, health professionals, businessmen who create jobs, and a host of others whose work helps the poor in many ways.

Lower-income families benefit greatly from the increased willingness of collegeeducated middle-class people to support social and civil rights programs which benefit the poor. This is shown very clearly in an important Carnegie Commission on the social benefits of higher education, a study which has not received the attention it deserves-Stephen Withey's A Degree and What Else?1

It is not necessary for every public service to benefit every income group proportionately, in order to have overall equity. While lower-income people as a group may pay more in taxes than they receive as participants in public higher education, they also receive more benefits from other programs than they pay taxes for. This is unquestionably true for public welfare and elementary and secondary education, and to some extent for public health services, public housing, any many other government programs. A realistic picture of taxes and benefits should show the flow of all government benefits to each income class.

2. "Making available" more resources for poor students.-This argument is based on the serious misconception that increased tuition revenues will somehow be "recycled" to provide student aid for the poor. This is simply not the way the system works in most states. Such funds usually revert to state or local treas

2 Joseph A. Pechman, "The Distributional Effects of Public Higher Education in California," Journal of Human Resources, 5. Summer, 1970.

3 Carnegie Commission on Higher Education, Higher Education: Who Pays? Who Benefits? Who Should Pay? (New York: McGraw-Hill. 1973).

Stephen B. Whithey, A Degree and What Else (New York: McGraw-Hill, 1971).

uries, where they may be used for any government purpose. Even when the institution is allowed to keep the funds, the legislature will take notice, and is likely to subtract them from appropriations. Further, even if a particular state passes a law earmarking increased tuition revenues for student aid, there can be no guarantee that the next state legislature will continue the commitment. 3. Using student aid to make up for tuition incrcases. Both the Carnegie Commission and the Committee on Economic Development report seem to believe that tuition increases-voted on separately by 50 state legislatures and by hundreds of local community college districts-can somehow be "coordinated" with increased federal and state student aid, in such a way that student aid grants will make up for tuition increases, for very low-income students.

Middle-income and lower-middle-income students-with family incomes as low as $10,000 in some plans—would not receive grants adequate to offset tuition increases; they would have to pay more and probably go into debt, along with all students with family incomes above the median, now around $11,000.

All federal student aid programs have been funded far below the level of need in the fifteen years since the passage of the original National Defense Student Loan Program. Present student aid programs are inefficient and inequitable in many ways: many states do not get a proportionate share of available funds; some colleges within each state do not receive a proportionate share; funds have become available too late in the year, because of political and budgetary controversies; federal regulations, guidelines, and procedures have involved inordinate delays and resulted in great confusion and red tape.

Further, student aid programs have been the target of various "hidden agenda" plans to do away with aid to all students except the very poor, and force most students to rely on expensive high-interest loans.

Indeed, at least one prominent economist associated with the high-tuition, large-student-debt approach has publicly recommended that the new state scholarship incentive program be used as a device by which the federal government can pressure state legislatures to raise tuition in the 50 states!

These policy shifts and bureaucratic delays in student aid programs have involved many different players in the political game-Office of Education bureaucrats, bitter opponents of low tuition in some high economic and fiscal planning offices in the federal government, OMB officials attempting to cut the budget in any way possible, and others. These shifts have not been limited to one administration, but involve years of controversy under Presidents Eisenhower, Kennedy, Johnson, and Nixon.

To the bureaucratic in-fighters on student aid must be added the varying political factions in both houses of Congress and both political parties, on the Education and Appropriations committees. Individual personalities on the Congressional committees and their staffs have also influenced the direction taken by student financial aid programs.

Finally, there are the bankers-the private lenders who are essential to any private loan program like the Guaranteed Student Loan Program. The bankers' own fiscal priorities, their willingness to lend to students, has varied over time with the money market, the overall economic situation, and other factors.

Given this political and economic melange, with the further political uncer tainties which affect 50 state legislatures and 50 Governors, there is no way that the Carnegie Commission or anyone else can guarantee a "magic money machine" in which tuition can be raised with the assurance that adequate student aid funds will be available from year to year.

Low tuition, again, is a far more stable guarantee of educational opportunity. AASCU believes that student aid should also be available—especially in the form of grants, work-study and low-cost NDSL loans. But AASCU believes it is dangerous to rely on the promise of student aid as a way either to help students or to provide adequate resources for institutions.

4. Can middle-income students afford private higher education?—A member of the National Commission on Financing Postsecondary Education has referred to Census data which shows that a substantial percentage of the students attending private colleges, especially four-year colleges, are from middle-income and lower-middle-income families. The implication of this data, to him seems to be that high tuition has not been a barrier for college attendance for many middleincome students.

5 Robert W. Hartman, Higher Education Subsidies (Washington: Brookings Institution, 1972), pp. 481-484.

It is difficult to deal in depth with this question because there is very little detailed information from the Census or elsewhere on income class and college attendance. However, here are some points:

The same Census data show that a large majority of middle-income and lower-middle-income students attend public colleges. The fact that some members of the group are able to afford private colleges does not "prove" that all of them

can.

Such aggregate data do not show the actual cost of attendance at such colleges for middle-income students. For example, many students, especially in the urban Northeast, may be commuters; it may be little more expensive for them to commute to a private college than to pay residential costs at a public college.

Many students at private colleges receive substantial student aid, from institutional sources as well as public sources. One estimate is that private colleges may be spending eight times as much institutional aid per student as public colleges. This would bring the cost for many students down substantially."

Such Census data do not indicate family assets or ability to borrow. Some middle-income families may have substantial assets or savings, or better credit than other families at the same level.

Census data based on the family income of dependent students are not relevant to the problems of students who are largely self-supporting, older, often married, working, and attending college on a part-time basis. A large and growing number of students at urban community colleges and state colleges fall into this category; they are heavily dependent on low tuition.

A number of factors other than tuition obviously affect college attendance or non-attendance at each income level. One factor is geographic access to college, and commuting costs versus residential costs. Another is college admissions policies; for example in New York City many more middle-income students are attending public colleges since the open-admissions policy was adopted. Other factors include academic ability and motivation-some academically able lowincome and middle-income students win scholarships to private colleges. Other cultural and motivational factors affect the choice of a college by a student or his parents; for example, some religiously motivated parents may make unusual financial sacrifices to send their children to church-related schools.

In short, tuition alone may not determine whether a middle-income student will attend a public or private college, especially in the urban Northeast. In many parts of the country, however, the public college is the only financially feasible choice.

AASCU continues to believe that higher tuition would bar many middle-income students from college, or force them to take out expensive loans.

5. The "tuition gap".-To AASCU, the weakest and least justified argument for raising tuition is to "make private colleges more competitive." This is a recommendation to tax the 75 percent enrolled at public colleges to help the 25 percent at private colleges-to place a large tax and large debt upon six million students, many of them middle-income and lower-income, to help colleges enrolling 2 million students-some of them quite well-to-do.

Private higher education is concentrated quite heavily in the Northeast and Middle Atlantic states and a few other areas. This policy, if carried out nationwide, would require middle-income students in Florida, Texas, and California to be taxed more heavily to "help" private colleges in Massachusetts and New York! One AASCU President has suggested that this policy is "like raising the price of chuck, to make sirloin more attractive."

There is an alternative. AASCU and other associations representing public higher education have worked consistently over the years for federal programs which benefit private colleges as well as public colleges-student aid, programs for the disadvantaged, graduate fellowships, facilities construction, institutional aid. To the extent that private higher education should be supported with federal funds, this kind of direct assistance is far more equitable than simply taxing all students at public colleges.

6. Student choice.-Some commentators say that equality of educational opportunity means that students must have a choice of several or many public, private, and proprietary colleges, and not simply access to one or a few low-cost public colleges.

• These estimates are based on John D. Millett, Financing Current Operations of American Higher Education (Washington: Academy for Educational Development, 1972). p. 5, Table 2.

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