When President
Obama talked about unaffordable college tuition, he failed to point out that
federal subsidies are responsible for much of the unaffordability. In his State
of the Union message, he said, “If you can’t stop tuition from going up, the
funding you get from taxpayers will go down.” However, since tuition is
dependent on federal aid, it cannot remain stable or go down unless federal aid
is reduced.

Presumably the
president is intent on campus-based aid when–only when–universities set
responsible tuition policy. But what precisely does that mean? For private
colleges and universities, the tuition rate is fixed based on the competition.
NYU is likely to set tuition increases near the Yale rate and Yale is likely to
set its tuition at the Princeton rate and so
the beat goes on.

Now if there
were real interest in “providing good value” as the president noted, there
would be longitudinal studies on graduates. But what would one say about Bill
Gates, Steve Jobs, Ralph Lauren and others who were college drop-outs?
Moreover, what does it mean to talk about “good value” when students can design
their own course of study avoiding mathematics, chemistry, American history,
even Shakespeare?

If the
government denies assistance to colleges, many would collapse. Would that be a
bad thing? It is if one of the colleges is your alma mater, or if your son or
daughter goes there. But President Obama is not really serious about reducing
aid, and most university officials know that the award for Pell grants is
likely to rise and eligibility to loosen.

Many parents are
caught in an ideological dilemma. On the one hand, they want to reduce the size
and influence of federal authority; on the other hand, they realize that
without Pell grant and other federal subsidies, they may not be able to afford
tuition for their children.

Universities
should tighten their ever-loosening belts by refusing government aid. This
might encourage curriculum reform, a return to basics instead of the present
curriculum which includes the fashionable and the trifling. In my experience
there isn’t a major university in the United States
that couldn’t cut 10 percent of its budget without in any way adversely
affecting the delivery of programs and services. These cuts might also serve to
catalyze institutional reform such as on-line programming and independent study
projects.

The trick is to
unleash market forces. Let curriculum reform dictate marketability. Let online
courses serve as a credible alternative to classroom study. Let some
universities fail–some certainly should. And let parents and students make
choices based on the trade-off between taxes and tuition.

The President
could make a difference if he said it is time for the federal government to get
out of the way so that market forces can flourish. There was a time when
tuition rates were affordable for even working class people, but that was
before federal intervention. It may be time to turn the clock back to that
period.