Consider this dilemma: The Obama administration, the Lumina Foundation, and numerous state governors have set goals for increasing sharply the proportion of college graduates (or at least the proportion of people with some form of postsecondary training) by 2020-25, while for more than a decade, state-government support for higher education has been diminishing, leading to ever-higher tuition charges and escalating student debt.
The federal government lacks effective tools to change this contradictory financial context because penalizing colleges by threatening to withhold student aid harms only students. That leaves “jawboning” as the main (and ineffectual) recourse. The most recent administration proposal, to redirect campus-based aid (Supplemental Educational Opportunity Grants, Federal Work-Study, and Perkins Loans) to colleges that moderate tuition, is a classic case of trying to wag the dog, as the dollar amounts are too small to offset gains from tuition increases. So what to do?
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