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Other People's Money

Education Funding Has Too Many Negative Externalities

By Emil J. Kiehne

Last month a group of students held a rally to protest the cuts in federal funding for student financial aid that are being considered in Congress.

In my opinion, cuts in student aid are a good thing. Actually, I think it is bad that any federal funds are given to Harvard at all. We would be better off without them.

First of all, I can certainly sympathize with students whose financial aid packages may be cut. I myself have received the Stafford Loan Interest Subsidy before. At one point, I had to take a semester off and go to work because of my family's inability to pay Harvard. I know very well that some students may not be able to continue their educations here at Harvard.

And even though I am a senior, I will not be unaffected. After all, I am still considering whether to attend graduate school. Cuts in aid from Washington will probably make it more difficult for me to pay that tuition.

Nevertheless, I think that the cuts are good, and will eventually have a beneficial effect on Harvard.

The national government has no business funding student aid programs. The Constitution does not give Congress the authority to appropriate funds for that purpose, no matter how good and beneficial it might seem.

Federal funding of education, besides being unconstitutional, has three negative effects. First of all, it encourages a damaging sentiment of entitlement among those who receive it. Students come to feel that they have a right to a college education, even if others have to pay for it. This is a completely wrongheaded attitude. Education may be good and wonderful, but it can by no stretch of the imagination be called a right.

The high price of a private college education can also be traced in large part to federal funding. When considering how much aid to give to a particular student, the financial aid officers of a college must first calculate what the student's family can afford in light of its income and assets. This is called the "expected family contribution." Federal aid programs will only pay to make up the difference between this amount and the tuition, room and board charged by a particular institution.

This creates an incentive for colleges to cash in on the government. As John Hood wrote in the latest issue of Reason magazine, "Since a college knows the average expected family contribution of their student body, it makes sense for administrators to boost their charges above that amount--thus making more students eligible for aid. Families will pay more, but a good portion of the tuition hike will be picked up by the government. Hence, colleges and universities can get more money for providing exactly the same service." (Didn't you always wonder why tuition is so high?)

The most damaging effect of federal funding is that it leaves Harvard and its students at the mercy of whomever happens to be in power.

That is to say, Harvard, by consenting to receive federal aid, can in effect be controlled by the national government. This is a danger which real conservatives have never tired of pointing out to uncomprehending liberals. It threatens the very independence and academic freedom which makes the existence of a university such as ours worth while in the first place.

For example, take the ROTC Campus Access Act, which was introduced in Congress last month by Rep. Richard Pombo (R-Calif). This bill would deny all federal monies, including funds for financial aid and scientific research, to universities like Harvard that refuse to allow ROTC programs to operate on campus. If passed and signed into law, Harvard would almost certainly have to reinstate ROTC on campus, because it depends so much on cash from Washington.

I am personally in favor of the establishment of a ROTC program at Harvard. It would be fun to watch liberals here being hoisted on their own petard. But I am horrified that the national government has so much influence over Harvard. Liberals ought to be made to draw the proper lesson from this affair: that centralized power is always a threat to liberty.

When the U.S. government began to fund education, liberals oohed and ahhed. "Isn't it great," they said, "that so many more people will be able to attend college?" They accused conservatives of meanness. "How can they object to such a worthwhile program? They must hate poor people and minorities."

The real reason that conservatives oppose federal funding of higher (and lower) education is because they know that the act of funding gives the government effective control over whatever is funded. Conservatives also know that there is no guarantee that the government's intentions will always be benevolent as liberals proclaim them to be.

Today the government wants Harvard to have a ROTC program. Who knows what the government will want in the future? Ten years down the road it may demand that all Harvard students take four semesters of Expository Writing, or that all administrators come to work in hot pink jumpsuits. If the current situation continues, there is no doubt that Harvard will have to comply.

This situation ought to be considered intolerable. Hence, I propose that the administration--instead of lobbying Congress for the continuation of federal funds--begin working on a plan to lessen Harvard's dependence on the federal government, with the eventual goal of refusing to accept any federal funds for any purpose whatsoever.

Such an effort would be very difficult. Some programs and departments might have to be eliminated. Some students might not be able to attend. Need-blind admissions would probably have to be sacrificed. Harvard would probably not be able to maintain its current level of socio-economic, racial and geographic "diversity" among its students. On the bright side, Harvard would also have an incentive to find ways to reduce the exorbitant cost of its tuition.

By whatever means necessary, Harvard must find some way to get the yoke of the government off its neck. Diversity and need-blind admissions may be nice things to have, but they are worth nothing if Harvard has to sacrifice its freedom to get them.

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