Tom Reed’s answer to the high cost of college education: force institutions with large endowments to sell them to fund scholarships. Tom writes:
Reed’s proposal would require colleges and universities with endowments larger than 1 billion dollars to distribute a portion of that money as scholarships for students from working and middle class families or face heavy tax penalties.
Tom also target’s educator’s salaries:
“This is just another step toward cost containment. If a university can pay their employees this well (more than $200,000 per year), they can probably afford to make some adjustments in their spending to keep costs for students low,” said Reed.
Surprisingly, Tom, who says he favors small government and decries business regulations, would have no problem imposing regulations on educational institutions and their employees. What else is wrong with Tom’s suggestion that educational institutions sell off their endowments?
- Selling would produce a short term cash bubble at the cost of long term income–not an attractive possibility.
- Reducing the value of endowments would have no effect on college costs other than to cause the cost to the student to rise in the future.
- Those persons who contributed to university endowments expected their contribution to be lasting. Selling would violate a trust and likely discourage future giving.
Selling would do nothing to hold down the actual cost of education, nor would it reduce the cost to current students for more than a few years. It would do nothing to help families currently struggling to pay off student loans.
“Tuition, fees and room and board expenses continue to rise above the rate of inflation year after year,” Reed continued. “In the meantime, colleges and universities across the country are harboring stockpiles of money that should be used to help keep these costs in check and we must hold universities accountable for their spending. In light of record high student loan debt, we have to begin turning things around for the sake of the financial stability of our country.”
What, if anything, that Tom wrote is right? Not much.
- if the cost of providing an education has remained fairly stable, why does the price students pay keep rising? The reason, say researchers, is that deep budget cuts in state funding for public higher education and shrinking subsidies at private schools have pushed a greater share of the cost onto students and their families. — CNBC article cited
- harboring stockpiles of money that should be used to help keep these (college) costs in check. — Really Tom, like harboring fugitives?
- we must hold universities accountable for their spending. — Who is we Tom? Shouldn’t the market perform that function?
- In light of record high student loan debt, we have to begin turning things around for the sake of the financial stability of our country. — Student loan debt may be a problem for students and their families, even for the Reed family, but has it destabilized our economy? I think not–Reed’s press release exercises the politics of fear once again.
What Tom seems to be about is rabble-rousing — frightening the public, scapegoating universities and educators, while diverting attention from the failure of Congress to address these issues.