Dept. of Education: Student Aid More Expensive than Just Subsidizing Everyone’s Tuition

Federal Pell Grant program is more expensive than just subsidizing all public universities
image credit: APUS

In January 2013, the U.S. Department of Education released a startling find: to completely subsidize the tuition for all public universities in the U.S., taxpayers would be on the hook for a mere $62.6 billion.

Compare this to the $69 billion cost of running the Pell Grant and other loan, grant, and scholarship programs for low-income students, and we’d actually be saving money footing the bill for all public universities, versus partially subsidizing the tuition for only some students.

As The Atlantic points out, an additional benefit of this policy change would be to counter the rising presence of ruinously expensive for-profit universities, which consume roughly 25% of federal aid dollars.

Also factor in the tremendous cost of bailing out financial institutions that participate in issuing or guaranteeing student loans. A 2010 estimate of the total amount spent by the federal government to purchase defaulted student loans exceeded $100 billion in a 3-year period.




Category: EducationGovernance


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Article by: Dave

Dave Cannon is a Seattle-based entrepreneur and consultant to nonprofits and small businesses. He loves Thai food and takes terrible photographs. You can follow him on Linkedin.
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