Raise tuition

Winter break brought me home to California and surrounded me with old friends, many now working their way through the bedraggled University of California or California State University systems. The recent spate of massive tuition increases was a common topic of conversation among my friends, the focus of intense anger and despair. Painful stories abounded: a mutual acquaintance forced to drop out by parents unable or unwilling to pay, another rushing to graduate in three years, a third living with grandparents to avoid new campus housing fees. Together these anecdotes sketch a grim future for my fair state—a future of calcifying economic mobility, of an ever-widening chasm between rich and poor, of another slip down the long, oily slope toward oligarchy. The post-war promise of California’s public education system—world-class universities free and open to all Californians—has been almost entirely extinguished. The disturbing plight of my fellow students got me thinking about Columbia’s tuition—what if it were enormously increased? Would a Cal State-style tuition hike of, say, 40 percent have similarly dire consequences on Columbia College, SEAS, and society as a whole? Surprisingly, I believe the answer is no. In fact, a significant tuition increase should have exactly the opposite effect, mainly because Columbia has a significantly better financial aid policy.

First it is important to recognize that the reported cost of attendance (which includes tuition, room and board, mandatory fees, and books) and the actual amount a student spends are two very different things. Columbia estimates the cost of 2011-2012 attendance at $59,208 (for residents, not including travel), but also tells us that approximately 50 percent of CC/SEAS students receive financial aid, with an average package of $38,356 in 2011. So half of Columbia undergraduates are not paying the full $60,000, and it’s likely that most of the 18.7 percent of students who receive Pell Grants aren’t paying the University anything at all. If the University maintains its current financial aid policy (meeting demonstrated financial need without loans), the 50 percent who receive financial aid would see no impact at all from a tuition increase, no matter how large it was. While Californian students are forced to take out more loans or fight for increasingly competitive merit scholarships, so long as a Columbia family’s expected parent contribution does not change, any increase in tuition would be absorbed in additional grants. However, the continuation of the current financial aid policy is not as sure as it once was.

As Spectator reported on Dec. 8, the University is currently reviewing its no-loans financial aid enhancement. The conclusions of that review are forthcoming, and drastic cuts in aid do not seem likely, but the program was announced in 2008, when the University’s and the country’s financial future seemed significantly more optimistic. If the current financial aid system proves unsustainable—either now, or a few years down the line—the University will be forced to choose whether to cut aid to the 50 percent who receive it, find some other place to cut, or raise revenue. The most straightforward way to raise revenue would be to take more money from the 50 percent who do not receive financial aid, and this is the path I would suggest.

Who is this 50 percent? The vast majority must be ineligible for aid due to the wealth or income of their families (there are other ways to be made ineligible, but they apply to a relatively small number of people). The question then becomes: How wealthy must one be to be ineligible for CU financial aid? The financial aid office often gives aid to those households that make $100,000, and we know that the average Columbia Grant recipient has a family income of $88,550. Putting these together, we can very conservatively estimate that the half of Columbia not receiving financial aid is in the top quintile of America’s income distribution (i.e., household income higher than $99,000). This 50 percent is Columbia’s upper half and America’s rich—an upper crust of professionals, financiers, and rent-seekers whose lowered taxes are sinking America ever deeper in debt.

Currently, Columbia’s financial aid system acts like a broken progressive tax: Households making under $60,000 pay nothing; households with incomes between $60,000 and some nebulous upper bound above $100,000 pay a portion of their income and wealth; and rich households who do not qualify for financial aid pay a flat rate whether they make $250,000 or $10 million. A significant tuition increase would be like creating more tax brackets—it would have no effect on poor and middle class students, but would force rich students to pay a larger share.

With wealth inequality soaring, economic mobility stagnating, and public higher education in full retreat, Columbia and other schools with need-blind admissions and full no-loans financial aid are doing a small bit of redistribution against America’s regressive tide. Significantly raising tuition would make that small redistributive effort a little bit larger.

Alex Collazo is a Columbia College junior majoring in creative writing and economics-philosophy. He is the treasurer of CIRCA and a former Spectator head copy editor. I’m Just Saying runs alternate Tuesdays.