by Isabell Sawhill
February 20, 2014
The federal government has tried to soften the impact of rising college costs by providing more financial assistance. For the academic year 2011-12, a total of $173 billion was spent for these purposes. The largest items were loans ($105 billion) and grants ($49 billion). Another $18 billion was devoted to tax subsidies. We should be asking what exactly we are getting for the large sums being spent. And are there more effective ways to spend the money? Unlike grants, there is no evidence that loans and tax credits have increased enrollment; they may simply be raising tuition levels. Conditioning aid on performance would encourage students to work harder in high school, put more emphasis on achieving national benchmarks, and make tax dollars go further by reallocating existing funding toward those students most likely to benefit from college-level work.