Neat fact: If the federal government were to take all of the money it pours into various forms of financial aid each year, it could go ahead and make tuition free, or close to it, for every student at every public college in the country.

Will it ever happen? Ha. Not unless Bernie Sanders somehow leads a Latin American-style coup down Pennsylvania Avenue. But one of the reasons I argued for the idea a couple of months back was that it would allow us to finally stop burning money subsidizing obscenely expensive tuition at dubiously worthwhile private institutions. At the time, I singled out the for-profit college industry, which has been rightfully savaged for devouring federal aid dollars while charging poor students backbreaking prices.

Today, though, I’d like to apologize to the University of Phoenix and its kin. It seems there are plenty of traditional, non-profit colleges leeching off the system as well.

For proof, see the demoralizing report released this week by Stephen Burd of the New America Foundation on the state of financial aid in higher ed. It documents the obscene prices some of the poorest undergraduates are asked to pay at hundreds of educational institutions across the country, even as these same schools lavish discounts on the children of wealthier families in order to lure them onto campus.

And here’s the key bit: Many colleges, he argues, appear to be playing an “elaborate shell game,” relying on federal grants to cover the costs of needy students while using their own resources to furnish aid to richer undergrads.

“With their relentless pursuit of prestige and revenue,” Burd writes, “the nation’s public and private four-year colleges and universities are in danger of shutting down what has long been a pathway to the middle class for low-income and working-class students.”

Give to the Rich, Overcharge the Poor
Burd’s paper isn’t an indictment of the entire higher ed establishment — just a startlingly large portion of it. Many of the worst offenders he identifies are small, private colleges with meager financial resources, or public schools concentrated in a handful of states like Ohio, Pennsylvania, and South Carolina that have moved to what’s called a “high tuition, high aid,” model. The theory was that, in a time of tight state budgets, charging wealthy students exorbitantly would allow them to charge poorer students reasonably.

It hasn’t worked out that way. Unlike twenty years ago, Burd explains, it is now more common for colleges to hand out aid packages based on “merit” rather than financial need. And “merit” is often a rather nebulous concept.

Click here for the full story.