Who is Paying for Higher Education--and Why?

Abstract

A key debate in the United States, as in other countries, relates to the cost of higher education, whether higher education is affordable, especially for students from lower-income families, and where the responsibility for funding postsecondary education should lie. Recently, the Lumina Foundation, a private research group, released a study claiming that the cost of college is skyrocketing. It is said that low-income students can no longer afford to attend college, that a growing number of graduates are saddled with massive debts after graduation, and that higher costs have led to a growing dropout problem and diminishing access. The implication is that colleges and universities are gouging students and their families. The reality is more complex than the headlines indicate, and it is not true that public colleges are overcharging. Lumina has highlighted a key reality of higher education in the new millennium—in America and much of the rest of the world, the cost of higher education has been shifted from the state to the student. It is not a surprise that costs have shot up. Indeed, it is part of a long-term and deliberate policy initiative by government at all levels. There are three elements to this tectonic shift in public higher education policy over the past three decades. They can be summarized as public good vs. private good, high tuition and high aid, and send the masses to the community colleges.