This report in Roll Call on a Congressional failure to renew a Federal student loan facility named Perkins Aid reminds me of a short discussion I had on Facebook years ago concerning the entire college/aid ecosystem. Basically, I was, and remain, suspicious of the attempts to provide more and more aid, whether it be loans or grants or scholarships to students, because it reminds me of the classic definition of inflation.
Inflation, informally, is the printing of money without reference to any set standard of goods or other standard measure of wealth; often times, governments will print money without such controls in order to satisfy governmental debts. The classic example is that of the Weimar Republic, faced with World War I reparations, printing money with such abandon that citizens were paying for loaves of bread using wheelbarrows of money.
If I might abstract this, this is the injection of money into a system.
The result of such injections is that the price of goods also rise. Now, this isn’t a problem if all the citizens’ income is similarly affected, but it’s a problem, even a disaster, for those on fixed incomes.
Now let’s map these elements into the student/aid ecosystem. The printing of money maps easily enough to scholarships and grants, perhaps even loans. The common citizens are the students. And the goods?
The goods are the seats in the school systems.
Here’s the problems: the schools see greater and greater injections of money into the system. They can do either, or both, of two things: increase the number of seats, or increase the price of each seat. Why the latter?
Because they can.
After all, it’s manna from heaven. So both prices and seats (remember this) have increased. And that’s not a problem for those students with income that adjusts to the increase in prices, that is, loans/grants/scholarships, or in other words student aid, because those will all increase as the suppliers see the increase in prices – because that was triggered by the earlier wave of increases.
But this is hell for the student with no access to student aid. And it’ll just keeping getting worse.
Any solutions? Well, nothing palatable, I’m sure – but I have to wonder what would happen if student aid was severely curtailed. Certainly, scholarships are immune to suppression because they are often provided by private sources or by the institutions themselves. But loans and grants? These could be suppressed.
And now remember all those seats? Consider this: the students can no longer get the aid. Those seats go unfilled. Now you have educators, first class people, often with Ph.D.s, suddenly without teaching duties.
And while those who are researchers might think it’s time to cheer – no rascally students! – the truth of the matter is that students are always the future, from research assistants to tomorrow’s Nobel Prize winners.
And prestige, prestige, prestige. Most schools, or more properly school administrators, crave it. That’s a good reason to have school rankings, because they bring prestige.
But a school shrinking in enrollment loses prestige. People will ask Why is the school being avoided?
So what happens? The money has been cut off from the system, and the system must adjust – either shrink seats, which is doable but not attractive, or drop prices.
To be honest, the other side of the discussion claimed to have years of experience in college administration and didn’t think it would work out that way. I don’t recall if he gave an explanation, but if he did, it clearly didn’t stick with me.
But whenever I hear a proposal to increase student aid yet again, I always quiver a little and wonder if we’re just wandering down the path to a slightly uglier hell.
