By Richard Vedder
Some of the blogs I do are not terribly inspirational or innovative, but I thought my last epistle on limiting federal student aid to students to three years was a good idea. I still do --but a reader had a stellar idea on how to make it better.
Much federal financial aid goes through college financial aid offices (I wish it did not). Marc Sheer asks, "why put the onus on the students?" Make the colleges feel the pinch for fourth, fifth and sixth year of attendance. Stop providing colleges money for these students (e.g., Pell Grant funds), so that the colleges have to pick up the bills themselves. Actually, there are probably few formal differences in the Vedder vs. Sheer approach, but psychologically, students want some assurance on financial aid, and if the colleges have to bear more of the costs of the fourth or fifth year in a very explicit way, they might respond negatively (cutting off aid to students near the end of their college careers) or positively (providing incentives for students to complete school in timely fashion). The former approach would hurt schools competitively in the long run, so I think schools would be forced to get innovative --lower tuition for summer school, reduce costs for taking overload courses, have higher tuition for the fourth year of attendance, etc. Faculty resistance to this idea -- always high with any new idea -- will cool when they see more summer supplemental teaching pay. The faculty can always be bribed, and often very cheaply.
Accompanying any federal moves should be state moves to lower institutional subsides. Some states-- Ohio for example-- give higher subsidies for students in their fourth or fifth year than their first year, and much higher subsidies for graduate education. Maybe we should reverse that --cut subsidies after the third year of full time residence, and eliminate them after four years of enrollment. Class close outs, arcane distributional requirements, and other impediments to orderly graduation would disappear. Colleges are slow in innovating, in changing, and in researching and measuring what they are doing. But money talks -- colleges will do almost anything for more dollars, and getting more efficient might be one of them. Thanks to Mr. Sheer for improving my idea.