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Monday, November 3, 2014

In-State Tuition as a Subsidy for the Rich

Ideally, higher education equalizes opportunity between rich and poor. In practice, it can entrench inequality.  Fred Hiatt explains at The Washington Post:
States across the country subsidize higher education for their residents by paying the difference between in-state tuition rates and what a college education really costs. This is so much a part of the American fabric that few stop to think about its regressive aspect.
“We are subsidizing affluent people,” says Sandy Baum, an expert on higher education finance and a senior fellow at the nonprofit Urban Institute. “Young people from affluent families are much more likely to go to college, and more likely to go to four-year colleges, and more likely to go to the flagship colleges.”

And flagship colleges are where the subsidy is largest. Wallace Loh, the thoughtful president at College Park, said during a recent visit to The Post that in-state tuition plus fees at College Park (now $9,400) are well below the median of peer research universities. Meanwhile, the state appropriates $19,000 for each Maryland student to help pay for their education, he said. Does this represent sound policy?
“I think that is the million-dollar question,” Loh responded. “Maryland has the highest median income in all the nation, and we give proportionately the least amount of financial aid. We have a model of low tuition and low aid. So the state is subsidizing those who can easily pay higher.”