This viewpoint is taken, for example, in the College Entrance Examination Board report, Toward Equal Opportunity for Higher Education, which takes the position that low-income and especially minority students in particular should have access (through large grants) to more expensive universities and not be "forced" to go to "lower-cost" public colleges.

There has been some discussion on the part of the members of the National Commission on the Financing of Postsecondary Education about this same point. Some members have talked of the necessity of "a trade-off between access and choice"-for example, putting less federal and state dollars into access at lowtuition public colleges, and more into student aid to help students go to more expensive colleges. One implication is that if there is not enough additional public money for institutional support, public colleges will have to charge higher tuition. For most students except the very poor, such a "diversity of choice" plan is likely to mean simply an opportunity to borrow more money at higher rates.

AASCU believes that the resources available to higher education can and will be expanded in the decades ahead. The American people should not accept the argument that tuition must rise in order to expand “choice."

AASCU also believes that federal and state governments should consider very carefully the extent to which public funds should go into making it possible for students to attend very expensive institutions, whether private, or proprietary, particularly if funds used for this purpose are taken away from public colleges, resulting in higher tuition.

7. "Student power".-The view that students should have more power over higher education—and that they will have it if they pay more—has won some adherents in recent years. Some of the more radical critics of higher education, still waiting for the "greening of America" which student power is supposed to bring, have used this as a reason for high tuition and large loans.

There are at least two strong arguments against this point of view. One is that most higher tuition-plus-student-loan plans would lead only to the student paying a somewhat greater share of the instructional cost. Students in this situation would have all the disadvantages of high tuition and larger debts-but none of the presumed advantages of really "controlling" the institution.

The stronger argument is that while students might like greater control over the educational process, very few believe that they should pay for it with much larger debts. They do not want to begin their early post-college years with heavy debt repayment schedules-nor do they wish their spouses to be burdened with such debts. Most would also be unhappy at a situation in which the well-to-do and some of the poor avoided debt, but no one else did.

Most students also believe that a greater share of the Gross National Product should be devoted to higher education subsidies, and that tuition should be kept low.

8. Social benefits versus individual benefits. After spending some six million dollars in six years and involving what were purported to be some of the best minds in America, the Carnegie Commission was unable to come up with a way to quantify the benefits of higher education to the individual or to society. It was their general conclusion that since the individual and his family now pay about two-thirds of the cost, and the individual keeps about two-thirds of the additional income result from college (the rest going to increased taxes), the present funding pattern is generally an acceptable one. Nevertheless, they urged higher tuition at public colleges."

Several recent books and articles make a very persuasive case that the social benefits of higher education are very great, and that this justifies keeping tuition as low as possible. The reader is referred to articles by Howard R. Bowen and Paul Servelle, and to a Carnegie study by Stephen B. Withey. All of these publications deserve much more attention than they have so far received."

IV. CONCLUSION: SOME PUBLIC POLICY IMPLICATIONS

1. Both federal and state policy makers should seek alternatives to higher tuition and larger student debts. These alternatives must include adequate student aid programs as well as adequate support for institutions.

College Entrance Examination Board, Toward Equal Opportunity for Higher Education (CEEB: Princeton, New Jersey, 1973).

$ Carnegie Commission, op. cit., pp. 3-4.

9 Withey, op. cit.; Howard R. Bowen, "Finance and the Aims of American Higher Education," in M. D. Orwig, op. cit.: Bowen and Paul Servelle. Who Benefits from Higher Education and Who Should Pay? (Washington: American Association for Higher Education, 1972).

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2. Student aid policies should emphasize grants, work-study, and low-interestrate, subsidized loans along the lines of the National Defense Student Loan Program.

3. Federal and state policy makers should review very cautiously all proposals for long-term student loans, contingency repayment, and loan banks, as well as any changes in the Guaranteed Loan Program, to be sure that they are not based on "hidden agenda" plans to shift public college students to higher tuition and larger debts. The same is true of efforts to use the state scholarship incentive program, or any other federal program, as a way to pressure the states to raise tuition.

Hon. JOHN DELLENBACK,

Longworth House Office Building,
U.S. House of Representatives,
Washington, D.C.

AMERICAN ASSOCIATION OF
STATE COLLEGES AND UNIVERSITIES,
Washington, D.C., May 7, 1974.

DEAR JOHN: I am writing in response to your letter of March 6, which invited AASCU to comment on the report of the National Commission on the Financing of Postsecondary Education.

I enclose an AASCU staff report which comments on some aspects of the report, particularly on the analytical model. See also the attached comments of Dr. Lyman Glenny, which he has made public.

We are very much aware of the hard work and dedication which you and the other members brought to the work of the Commission. We are particularly impressed with the Commission's call for the establishment of a better data system, on a permanent basis, for higher education. We hope that some mechanism can be developed, either in the Office of Education or elsewhere, to make this possible.

In this connection, we have been interested in the proposal in the current Senate bill on elementary-secondary education to elevate the National Center on Educational Statistics to the same level as the Office of Education. This might help the Congress and the public to work more closely with NCES, to assure its doing a better and more up-to-date job of data collection and dissemination. If we can be helpful as you and other members of Congress consider next steps. please let us know. We are taking the liberty of sharing these materials with others who may be interested.

Sincerely,

Enclosure.

ALLAN W. OSTAR.

MAY 1, 1974.

STAFF PAPER ON THE REPORT OF THE POSTSECONDARY FINANCING COMMISSION

The recent report of the National Commission on the Financing of Postsecondary Education is an impressive attempt to bring together data and analysis for a fresh look at the financing of postsecondary education in the United States.

The report has now been extensively analyzed by the United States office of Education, by many higher education associations, and by a number of individuals. Yet there is still need for further analysis by specialists-literally, a pageby-page review of data, assumptions, and methodology-if the report is to serve either as a basis for decision-making, or as a methodological model for further research efforts.

To our knowledge, few specialists in educational research or analytical models have yet analyzed the report. Some who have, like Dr. Lyman Glenny at the University of California, have been very skeptical. (See his attached report of February 12, 1974, to the Education Commission of the States.)

Those who support the principle of low tuition at public colleges have particular reason to be concerned about the model, since several of the generalizations which flow from it, and which have been widely publicized, can be interpreted as questioning the value of low tuition.

Here are some specific comments on the report.

I. THE ANALYTICAL MODEL

The comments cited by H. Reed Saunders, Deputy Assistant Commissioner at the Office of Education, and quoted in Commissioner John Ottina's statement of

April 8 to Congress, sum up the doubts which many observers have about the model. See for example the following sentences:

The model was improperly used to examine the enrollment and cost impact of large changes in net charges to the student without any caution to the reader of the report . . . The description of model purpose, structure, limitations, input data, and output results did not meet standards for publication in a professional journal.

Similar comments are made in a February 12, 1974 report by Dr. Lyman Glenny, Director of the Center for Research and Development at the University of California, Berkeley. In a report to the Education Commission of the States, Dr. Glenny raised doubts about the data upon which the model was based, the "literally hundreds of assumptions and arbitrary adjustments" which must be made in such a model (few of which are explained in the report), the mathematical techniques used, the particular enrollment projections, the ignoring of a downturn in college enrollment over the past several years, and other factors. Nevertheless, as Dr. Glenny points out, the report then provides "generalizations" about student aid, tuition, enrollment, institutional aid, and so on, drawn from this "simplistic mathematical model."

Some supporters of the report have stated that the model is intended only as an example of a new methodology, a new approach to determining the effects of higher education financing, more sophisticated than existing approaches. Had the report been a purely scholarly exercise in methodology, so identified (and with all of the assumptions, data sources, and so on carefully spelled out), there could be no criticism. But the report linked the model to generalizations which bear directly on policy-making and which may well influence federal or state policy-makers. It is for this reason that such serious doubts have been raised. 1. Radner-Miller and college choice.-The report does not clearly identify the principal source of the research upon which the model and generalizations are based. It is apparently a single article by R. Radner and L. S. Miller, "Economics of Education: Demand and Supply in U.S. Higher Education: A Progress Report," American Economic Review (May, 1970), pp. 326–334.

The same article also apparently serves as the principal basis for a second model, being developed by NCHEMS with Office of Education funding. A similar model is being developed by RAND Corporation with National Science Foundation funding, based so far on similar data, but not on the Radner-Miller analysis as such.

Therefore, a very careful analysis by competent specialists of the limitations of Radner-Miller and similar approaches is needed for any layman who attempts to understand these models.

The Radner-Miller research is an attempt to determine the reasons why certain students chose to go to certain educational institutions, based on data collected by the SCOPE project in 1966 in four states; California, Massachusetts, North Carolina, and Pennsylvania. It should be emphasized that in 1966 federal student aid programs, except for the National Defense Student Loan program, had not yet got underway, there were few state student aid programs, the TRIO programs were just beginning and there had not yet been a serious effort in most states to attract minority students. Further, many states (including Massachusetts, North Carolina, and Pennsylvania) had much less well developed systems of community colleges and comprehensive state colleges than is now the case, tuitions were much lower in both the public and private sectors, and the draft was just beginning to affect enrollment patterns.

For these and other reasons, the use of 1966 data is questionable in making generalizations about 1974, or projections to 1980.

Further, the whole "science" of why and how students select certain colleges, or decide to go to college at all, is in a very primitive state. It is our strong impression that most students act with very imperfect consumer knowledge of the alternatives open to them. They choose a college on the basis of vague impressions gathered from their parents, peers, teachers, and others. They may be unaware of many alternatives open to them. This appears to be true even for children of well-educated and professional parents, and much more true for children of working-class, poor, and minority families.

Indeed, a recent study of proprietary and public postsecondary education by Wellford Wilms of the Berkely Center for Research and Development in Higher Education found that more culturally disadvantaged students were more likely to attend a high-cost proprietary school rather than a low-cost public community college offering the same courses, when both were available-acting against what might be presumed to be their economic interest.

Wilms found that disadvantaged and minority students, including many who had done poorly in high school and/or dropped, often chose the proprietary school, while white students who had done better in high school often chose the community college for technical and vocational courses.

One reason for choosing the proprietary school appeared to be poor consumer knowledge of alternatives. Those who made this choice were likely to have gotten their information about the school from the Yellow Pages or late-night TV commercials, while those who chose the community college were often advised by their high school teachers and guidance counselors. Wilms adds that there were other factors-for example, many disadvantaged high school students were turned off by public high schools and carried this attitude over to public colleges.

Nevertheless, the Wilms study indicates that "real world" choices of college or post secondary school may be very complicated, and that simple explanations based on rational economic choices are probably in error. Many more studies of college choice are needed, by higher education specialists and social scientists as well as economists and systems analysts-before we can state with assurance the reasons students choose particular colleges, and the importance of financial considerations in their choice.

2. Interchangeability of tuition and student aid.-The model assumes (page 255 of report) that changes in student aid can be treated like changes in tuition. It is by no means certain that this is so in the real world. Tuition levels tend to be established for relatively long periods of time, and to be easily perceived by potential students, their parents, and their teachers. Student aid, on the other hand, is subject to the annually shifting priorities of federal and state officials, legislatures, and private lenders-and to fluctuate greatly in amount and form over the years. It is not at all clear how students perceive the availabiliy of student aid.

Experience with a long-term system of low tuition or zero tuition, like that in California, indicates that a very large proportion of students, including many older people, will continue their education when they clearly perceive that this system is available to them. Experience with the Vietnam-era G.I. Bill (not referred to in the report) indicates that college-going, even with a grant of $220 per month, varies greatly from one state to another, depending on the tuition charged in the state and related factors. (The present G.I. Bill grant of $1980 a year is much higher than the projected maximum BEOG grant of up to $1400 for the poorest students, but not more than one half of college costs. Yet even with this grant there is great variation by states in college going, related to tuition.)

3. Alternatives to student aid. The report concentrates on the use of increased student aid to encourage more students to attend college. There is some discussion of the need to avoid early tracking of high school students as a way to encourage college-going, though this is not emphasized. But there is no discussion of programs like TRIO-Upward Bound, Talent Search, and Special Services for the Disadvantage as a way to encourage more low-income and disadvantaged students to go to college.

Almost all authorities on the disadvantaged emphasize that low family income per se is not the only reason why students fail to continue their education. A cluster of reasons related to discrimination based on race and sex (a much smaller proportion of qualified women go to college than men), parental and peergroup attitudes, poor elementary and secondary education and guidance counseling, suspicion of "establishment" or "white-oriented" institutions such as high school and college, all play a part in the decision of many lower-income and minority students not to continue.

Undoubtedly, financial aid-through low tuition as well as student aid-is one principal and essential way to encourage students to continue. But the model places all of its attention on the financial incentive, on additional increases in aid as a way to "lure" more students (to quote comments made at several Commission meetings). This approach also leads to estimates which would require extraordinary public expenditures to achieve modest increases in enrollment, as will be shown below.

Student aid (and low tuition) appears to be a "necessary but not sufficient" way to attract minority students. It is quite possible, for example, that an incremental 50 to 100 million dollars might better be used, not in additional student aid grants, but in expanding and improving the TRIO programs and helping support similar programs established in some states like New York and California. This key question is never raised in the report.

4. BEOG versus SEOG: the flat grant approach versus the college-based aid approach: The model's approach, increasing enrollment simply by increasing the grants available, has a very important side effect: a small increase in tota enrollment requires a very massive increase in student aid.

This has major consequences not only for the model, but for a key question before Congress in 1974 and later years: the extent to which student aid should be based on direct entitlement grants like BEOG, or on discretionary collegebased aid like SEOG.

This particular point is best made by reviewing a commentary on the report by Dr. George Weathersby, who served as Associate Director, in a paper given at a U.S.O.E. conference at Marco Island, Florida on February 17-18, 1974. To quote Weathersby, giving an example of the impact of aid:

However, $2 billion in additional need-based grants would increase low income enrollment by about 6% in 1980 (approximately 200,000 students) costing about $10,000 per additional student, which is surprising. Congress and the taxpayers might well raise their eyebrows at the suggestion that $10,000 per student should be spent in aid funds to attract additional students, when the actual cost of instruction for each student might vary from $1500 to $3000 per year, and when a student can now attend Harvard or Stanford for $5000 a year.

But the "$10,000-per-student" figure is actually based on an assumption which shows some of the limitations of modeling-and, more important, some of the problems of a BEOG flat-grant system versus an SEOG college-discretionary system. Congress, in reviewing the future of BEOG and the college-based aid programs, should be aware of such assumptions.

The assumption made in the report is as follows (using hypothetical figures). If-say-one million students will attend college with an average BEOG-type grant of $1000, we might hope to attract another 200,000 students if we raise the average grant to $1500. However, because BEOG-type grants are based on an entitlement formula related to family income, we cannot simply pay special grants of $1500 to the additional 200,000 students we seek.

Instead, we will have to increase the average grants for the one million aided students already in college from $1000 to $1500, as well as giving $1500 grants to the 200,000 additional students we seek.

Thus the total additional cost of this program to the government will not be 200,000 times $1500, or $300 million. Rather, it will be 1,200,000 times $1500 or $1.8 billion!

There are ways to avoid spending such astronomical sums to attract more students into the system. In addition to utilizing programs like Talent Search and Upward Bound, and other approaches to recruitment through high schools, parents and the community, the government can continue to utilize discretionary programs such as SEOG-which give the individual college the authority to tailor grants to particular situations, rather than giving all students a flat grant based on income. Then, individual colleges could choose to give certain students $1500 rather than $1000 based on individual circumstances-without giving all federally aided students $1500.

5. Institutional aid.-One of the most controversial generalizations in the report appears on pages 316-318, and is related to Table 7-11 on page 317. This states that if institutions were to take large numbers of additional federally aided students, they would need only a miniscule increase in institutional aid per student in order to make up the additional instructional costs.

The figures given are as follows: If $1.2 billion in additional student aid is made available by 1980, public four-year colleges would require only $37 per student aided, and private colleges would require only $120 per student aided. These estimates are in direct contradiction to figures which appear on page 254, based on HEGIS data, which show that the average instructional cost per student in 1971-72 ranged from $1533 at the lower division of public four-year colleges to $3029 at the upper division of a private four-year institution. Such costs have already sharply increased for 1973-74, of course, and will no doubt be much higher in 1980.

The estimates of $37 and $120 are apparently based on dividing the estimated increased institutional cost incurred by adding these students not by the increased number of students aided, but by the total of all students aided, including those aided before the $1.2 billion was made available.

This calculation results in the ludicrously low estimate for additional institutional aid needed per student. On the other hand, if we simply assume a large