By Bob Hildreth
Tuition increases are at the very center of today’s college financial crisis. They must be turned back if any reform is to take hold. As a first step, Washington should ask all institutions of higher learning to accept a five-year moratorium on raising tuition.
In return the government should guarantee colleges that it will hold steady its financial aid, both grants and loans, for five years. States should join in and pledge to maintain or preferably increase their support of their public colleges.
As the colleges’ principal source of revenue, the government has the power to make this demand. Some may say that imposing a moratorium would be a government intrusion into private colleges. But that train left the station decades ago when the government became the most important funder of colleges though subsidies of student grants and loans. The sad truth is that we no longer have private colleges.
Instead of a penalty, a government imposed moratorium would be an opportunity for all parties involved to sit down and hash things out. It would provide time to reach a compromise and to implement it gradually. Stakes are high for all parties. Colleges cannot remain open without government aid. The government cannot collect the $1.4 trillion due the taxpayer from students. Together they must figure out a viable path forward to keep colleges funded.
Colleges should take advantage of this period to figure out a sustainable financial model. They will have to increase productivity through the introduction of technology and meaningful cost cutting measures. A new financial order may allow them to reduce their very expensive front offices. Their task is no less than reimagining what they will teach and how long it should take. The latter should involve industry. For- profits must learn from not-for-profits and visa a versa.
Reform will not be painless, but a moratorium offers a chance to manage the pain. The present system has tied everyone into contortions trying to convince themselves that the emperor is wearing clothes. Their only solution has been to have students shoulder greater debt only to forgive much of it later. The truth is that the emperor stands naked before us.