An Impossible Burden

Accusations of fraud are not new to the vast, multi-billion-dollar college industry. In 1991, the Justice Department accused the Ivy League of price-fixing, a charge that it neither denied nor admitted: In a settlement, the eight colleges simply agreed to stop sharing information on student financial aid. The issues of why tuition rate hikes occurred in virtual lock-step across the Ivy League or why financial aid officers were producing nearly identical financial aid packages were not addressed. While some institutions have since taken demonstrable steps to improve affordability for the country’s smartest but poorest students, the status quo for paying for college nationwide is a labyrinthine culture of secrecy. Endless paperwork requirements, convoluted financial application procedures, and complex loan packages not only complicate students’ lives but are also significant barriers to entry.

This secrecy, coupled with consistent and significant increases in tuition bills, may hinder growing numbers of poor Americans from ever reaching the gates of higher education. It is not trivial that the Higher Education Act of 1965, which established the first federal college aid policies, piggybacked off the Civil Rights Act of 1964. In some sense, college finance is not just a financial issue; given the tremendous stakes for college applicants with poor backgrounds, it is also a civil rights issue.

According to the College Board, more than two out of every three undergrads graduated in 2008 with some debt, with an average cumulative debt of over $27,000. To put that figure in perspective, the average annual cost for a public university is $17,452 as an out-of-state applicant and $25,143 for a private college. In contrast to grants and scholarships, loans are demanding and inflexible. They must be repaid with interest and on a predetermined schedule, are often administered not by universities but by third-party vendors, and have important implications for an individual’s financial health long after receiving a diploma. For several decades, the student lending industry was an almost exact replica of the subprime mortgage market, a “Wild West” of lending, in which predatory lenders, exorbitant interest rates, and collusion between colleges and companies abounded.

The overhaul of the student loan industry signed into law Mar. 31 by President Obama, in which banks were removed as middlemen in loans, was long overdue. While this was a positive step toward greater transparency, the core issue of college affordability remains unaddressed. Some critics have pointed out that the legislation itself inadequately addresses the issue of solely private lenders, who may capitalize on the government’s failure to cover all demonstrated need. Moreover, the Obama administration has not yet seriously challenged private colleges on tuition pricing structures. It makes little sense that college tuition is countercyclical, increasing most quickly during recessions and at faster rates than inflation.

As for the paperwork and toil requisite in applying for both federal and college-provided financial aid, the Department of Education has only now revised the Free Application for Federal Student Aid. The New York Times estimates that 1.5 million applicants don’t even bother to fill out the form due its intricacies. Yet FAFSA is just one piece of the puzzle. Another common form, the College Scholarship Service Profile, is administered by the College Board, and individual colleges often have their own proprietary datasheets. Standardizing, simplifying, and overhauling the unnecessarily complex web of forms would do much to ensuring that applying for financial aid is not only accurate but also fair.

It is easy to lose sight of college’s original purpose in the debate over college finances. We must not forget that colleges have a privileged status as nonprofit organizations. In exchange for exemptions on taxes, which can run into the billions of dollars, they are obligated to ensure the accessibility and quality of education for students. Instead of acting as profit-driven corporations, universities should and must return to these roots. Instead of citing colleges’ “sovereignty” as a pretense for inaction, the federal government should investigate the civil rights implications of exorbitant tuition and logistical hurdles to financial aid. Let us complete the work of the civil rights activists that preceded us and open the gates to higher education to all Americans.

Thomas J. Hwang ’13, a Crimson editorial writer, lives in Lowell House.