So does the new GOP budget proposal cut higher education? The short answer: Yes. Republicans generally love cutting social programs while democrats go after the military, none of this is new. Reports have come out revealing that $200 billion dollars would be taken from the Pell Grant program which helps many low-income students afford attending those super pricey colleges. Additionally, the Education Trust finds that over 1 million students would lose their grant money. As far as this budget inhibiting meteorologists from predicting the weather is concerned, that’s a bit far-fetched even for a layperson as myself, but I digress. This is definitely not welcoming news for those in college. But since there are always two sides of a story, I’ll explain why many republicans believe that federal aid actually increases the cost of tuition.
Yes, I know that sounds strange, but here are the details. It all stems from an op-ed piece titled “Our Greedy Colleges” from former US Secretary of Education William J. Bennett. In it he suggests that colleges and universities are taking advantage of the extra income given to them by the government. Proponents of this belief say institutions charge higher so they can receive more federal aid. He says that there is no accountability and that they’re just out to increase profits. But why would a non-profit university do such a thing?
Whether non-profit or not, universities still need money; salaries need to be paid, departments need renovating and athletic facilities need equipment. They’re in a unique position as the government understands that the country needs a good educational system and so are willing to stream a steady flow of money their way. Yet, just like those investment bankers on Wall Street, administrators are susceptible of taking advantage of a system to enrich their own pockets. Here’s one example:
A Businessweek story revealed that Harvard University, with a total cost of attendance being $62,950 for the 2012-13 school year, owns a hotel business on the side charging visitors $300 a night while paying no taxes on the revenue. Institutions of higher education are exempt from paying taxes on educational related expenses like tuition, but are required to pay on unrelated business income like any revenue from hotels and bookstores. This has prompted the IRS to begin reviewing universities and their adherence to tax regulations to ensure they aren’t skimping on their obligations. Lack of accountability is one of the main points in the Bennett hypothesis.
Whichever side you find yourself on the debate, it’s always a good idea to plan accordingly when news like this arises. Whether or not there’s corruption in the school system or lawmakers are ideologically driven, you still have lookout for yourself. If you’re a college-bound student, you could avoid applying to colleges in states that have already raised tuition. Some of these include Iowa, Wisconsin and Arizona with tuition hikes of up to 40, 20 and 19.7 percent respectively. Otherwise easy scholarships are always available.