One other consideration

The NCES data also, at least in the summary chart, does not separate grants by type. A good deal of the grant money in the private non-profits comes from institutionally funded grants which come from money raised by the institution.

Drtaxsacto, at 10:20 am EDT on August 24, 2006

Tax breaks not good

Sandr’s comment says a lot about the values of our society and misses the long-term view of human capital development. The research is clear — people without degrees are more likely to be unemployed, be on welfare, use drugs, smoke cigarettes, be in prison, etc. — the things that cost society money in increased taxes. Research also clearly shows that the price of higher education is a barrier to entry. So, by shifting resources away from low-income students to high-income students (who are likely to be successful in life anyway due to inheritance and cultural capital), society is actually incurring longer long-term costs in the form of higher taxes. As a society, I would rather devote $8000/year in taxes for a kid to go to college for four years than $30,000/year for a person in prison or millions in health care costs for a smoker with cancer. I agree with Sandr that making higher-income people pay more may not be “fair,” but personally I would rather pay lower taxes than worry about how “unfair” life is for the millionaire next door.

RS, at 2:55 pm EDT on August 24, 2006

As a parent who falls in the $92,000+ combined income, my child’s only option for paying for college is loans. Our EFC is approximately 25% of our income, and I had to choose between funding my child’s college education or my retirement. The small tax break we receive is a mere pittance compared the grants and other freebies given to low-income students. As usual for the middle class, we pay, and pay, and pay, and the money we pay goes to those who don’t pay. If I was unwilling to take out parent loans for my child, he would not be able to go to any college. So we’ll pay for his education, with interest. Our family has worked hard to achieve the success we have, and we started off as a “low-income” family. So spare me the stories of what happens to “low-income” students. They’re getting all the breaks, and I’m paying for them.

Middle Class Parent, at 3:25 pm EDT on August 24, 2006

Access vs Choice

Interestingly, average cost of attendance increases monotonically with family income. While some may argue that the higher education tax benefits for wealthier families are justified by the higher costs paid, this is perhaps confusing cause and effect. In other words, the education tax benefits are providing wealthier families with greater flexibility in their choice of a college. This allows them to choose to attend more expensive institutions than they might otherwise have attended.

The primary objection to education tax benefits has to do with inadequate need-based financial aid. These benefits are unavailable to lower income students because they are not refundable. So they do nothing to help improve access to higher education. Equally qualified lower income students enroll and graduate from college at less than one-fifth the rate of upper income students. Need-based student aid is inadequate, and continues to lose ground. For example, the maximum Pell Grant has remained flat at $4,050 for four years in a row, and will likely continue unchanged for a fifth year.

It is also difficult to see what public policy objective is being accomplished by the education tax benefits (with the exception of the tax incentives for college savings plans). These benefits are not based on financial need, nor are they based on academic merit.

Mark

Mark Kantrowitz, Publisher at FinAid.org, at 4:00 pm EDT on August 25, 2006

HOORAY...Middle Class Parent

Kudos to the “Middle Class Parent". They hit it right on the nose. Today’s middle class student will be tomorrow’s poverty stricken class, graduating in 2010 with the most debt ever in student loans. Where is the billions in financial aid that everyone is talking about??? My husband and I, both self-employed, had a 75% reduction in salary...we were told that we still don’t qualify for ANY financial aid, not even a subsidized Stafford Loan. A family of four has to make less than $30000 annually to qualify for ANY aid. It just isn’t fair and balanced. Look at the stats.Frustrated Middle-Class Parent

Faye, at 7:15 pm EDT on August 28, 2006