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Arne Duncan, Free Marketeer

May 21, 2009

WASHINGTON -- If you'd had to bet on whether Education Secretary Arne Duncan or Republican Congressmen like Howard P. (Buck) McKeon and Michael Castle would have been more likely to tout the power of the market in setting college tuition prices, the smart money probably would not have been on the representative of the Obama administration that Rush Limbaugh likes to deride as "socialist."

But as lawmakers from both parties rather gently questioned (and often lectured) Duncan on a range of subjects as he testified on the administration's education priorities Wednesday before the House of Representatives Committee on Education and Labor, among his most interesting answers were to several queries about whether the Education Department was doing enough to get colleges to restrain their spending and their tuitions.

While the Obama administration is doing much to ensure access to college by significantly expanding financial aid for students, said Castle, a Delaware Republican, "my concern is the cost of higher education.... Is there anything we could be doing to keep the pressure on" colleges to contain their prices? he asked, adding: "We cannot continue to afford to underwrite it with Pell Grants."

McKeon, a California who is the senior Republican on the House panel, noted that the administration's 2010 budget proposes tying funds from a reconfigured Perkins Loan Program in part to colleges' success in "keeping tuition down. McKeon pointed out with some irony that he had suggested a roughly similar idea in the past but that it was "rejected by the higher education community.... I hope you have better luck than I did," he said.

In response to a similarly themed question from Rep. John F. Tierney, a Massachusetts Democrat, Duncan insisted that the administration was fully committed to enforcing provisions in the Higher Education Act renewal Congress passed last year that reward colleges that restrain their tuition and withhold funds from states that cut their spending on public higher education.

But Duncan suggested that today's economic realities seemed likely to compel more changes in colleges' behavior than anything the government might do. Compared to 2003 when McKeon proposed withholding Perkins and other campus-based student aid from colleges that significantly raised tuition, "things have really changed, and students and parents have more options than I think they have ever had, and are going to vote with their feet," Duncan said. With lower-cost community colleges gaining in stature and colleges experimenting with three-year degrees and "no frills" campuses, he said, "smart consumers" will stop going to schools where costs are skyrocketing."

He added: "Where costs are escalating, I think you'll see those colleges lose market share.... There are too many low-cost options."

The only other higher education issue that garnered meaningful attention at a hearing that was largely dominated by K-12 matters was, predictably, the Obama administration's proposal to shift all federal lending from the Federal Family Education Loan Program to the Direct Loan Program and use the savings to make Pell Grants an "appropriated entitlement," ensuring a consistent and growing stream of funds for the country's main need-based student aid program (see related essay).

But the snippets of discussion about the proposal, most of which was critical, was a mere appetizer for today's hearing on the Obama plan and other such proposals before the same House committee. The hearing features a diverse group of witnesses who will speak from a wide range of perspectives.

 

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