College tuition is chomping its way through students’ finances. But with an increase in payments granted to students based on honorable academics and low income, paying for college may not be as bad as it seems, Quartz reports.
Colleges and universities are awarding scholarships and financial aid at the highest rate ever recorded. At this point, the average cost of tuition is 50 percent less than the advertised sky-high price tag.
This is not to say that the absurdly overpriced cost of schools should be disregarded. Between 1982 and 2007, expenses for colleges rose 439 percent. This did not work in favor of middle-income families whose earnings increased only 147 percent. But to ameliorate the agonizing price of college, schools are offering more scholarships and grants.
Sadly, financial aid is not going to the students who truly need it. Instead of being awarded to the lowest-income students, they are given to those who simply need some extra cash to supplement their payments. For colleges, this is more cost-effective; they can distribute smaller amounts of need-based aid to more students.
But why are colleges choosing to award more grants instead of just lowering the tuition prices and other fees? American labor economist, Ronald Ehrenberg, explains that the answer lies in the schools’ reluctance to cut costs: they are choosing to spend more to satisfy the influx of “high quality” applicants. “Alumni also tend to discourage institutions from cutting almost anything by threatening to withhold contributions,” he said, as reported by Quartz. It’s just a lot easier to issue more scholarships to students rather than reallocating funds and reconstructing the budget to reduce tuition costs.
Do you think the higher distribution of financial aid and scholarships is making a positive difference?