Student Financial Aid News

From NASFAA:

“Two William & Mary professors tackle the ‘hot-button issue’ of the skyrocketing cost of higher education in a new book to be published by Oxford University Press next year,” Motley Fool reports. Author David Feldman says that he and his colleague Robert Archibald have developed new evidence suggesting that increases in federal financial aid actually lower the list price of tuition. “You need to understand that college is a service. As opposed to manufacturing, where labor is just one input in pricing and improvements in productivity generally lead to lower costs, labor is the primary input in service industries like higher education … [you cannot compensate for universal rising wages of educated workers because] every move you make to decrease the amount of time a professor spends with students is viewed not as ‘improved productivity’ but as less personal service … costs rise faster than inflation in any service-intensive industry — higher education, law, or medicine … federal aid reduces each school’s need to discount tuition for its own needy students, and this allows the school to cut the list price tuition faced by everyone else.”

Commentary

The original full article is worth a read. Do the economics make sense to you? Is there a conflict of interest in the authors’ position? Leave a thought in the comments.

Scholarship Update

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