Broad Based Subsidies to Education Cause Tuition Increases

by Jim Wallace
(Houston. TX)

It should not be extended. It will increase the cost of a college education.

If $5,000 were given to every college student, expect a $5,000 rise in the cost of college. The cost of college will always be at the limit of the funding source. The rise in the cost of college is due to the increases in grants for low income people, loans, credits, scholarships, tax deductions, etc.

Forty years ago, I paid $280/year for tuition and fees. In the summer before I started college, I made $1,000 as a land surveyor helper; never took a loan. The state funded the colleges an appropriate amount, and everybody was happy. The college could demand more money from the legislature, but it was in competition with other state colleges on cost/student, graduation rates etc. The state colleges were not a substantial drain on the taxpayers. I got a very good education and have done well.

Now the colleges set tuition, and I am paying $7,600 per year for tuition for my son to attend a state college. Many (or most) of the students receive grants & loans that increase what they can pay; so the tuition is high enough to capture it all.

ANSWER:

I do not agree that the college tax credit increases tuition costs. In the case of loans and grants, the money goes directly to the school, so, yes it does have that type of impact.

But the tax credit goes into the student (or parent's) pocket. Although it is based on the money spent on college expenses (from the previous year) most students' expenses already total way more than $2,500. (Federal student loan limits are 2 to 3 times that.)

And the credit does not go to the school. It goes directly towards the income taxes owed by the taxpayer, not to college expenses or debts. And if there is a refund, it does not have to be spent on anything related to college.