House bill may cost NU funding

Dalia Naamani-Goldman

Universities like Northwestern could find themselves with less federal funding for financial aid if a congressional proposal is passed to punish schools that increase tuition too much.

Rep. Howard McKeon, R-Calif., introduced legislation late last week that would cap tuition increases at schools and withdraw federal funding if universities don’t comply. Although some students and parents have given support for the bill, many university officials are worried about the damage it could do.

“We believe it’s self-defeating,” said Bruce Layton, NU’s special assistant to the president for government relations. “It would punish students with the greatest financial need. We hope the Congress will take a different approach and will work with (higher education) associations to come up with a more reasonable approach.”

Under the bill’s most recent draft, schools would be divided into public, nonprofit and for-profit institutions. The categories would be further broken down into four-year, two-year and less-than-two-year schools.

Each institution would be compared to its peers within the same category and the bottom quarter would be exempt from price controls. All other schools could only raise tuition every three years by less than two times the Consumer Price Index — currently 2.3 percent for the 12 months ending in September — plus $500. If the legislation passes, the policy would take effect in 2008.

NU receives about $4.4 million in Pell Grants and Supplemental Educational Opportunity Grants. NU’s work-study program receives about $5 million, of which the federal government pays 75 percent. The Perkins Loan Program lends about $8 million to NU students, but the university re-lends money collected from borrowers.

“Congressman McKeon believes the federal government, the states and parents and students all need to come together to address the crisis in higher education,” said Vartan Djihanian, McKeon’s press secretary.

A recent economic recession has affected the national economy, and both federal and state budgets have suffered as a result. Schools such as Ohio State University have raised tuition in the past few years by as much as 19 percent for in-state residents, sparking outcry among legislators and residents.

Nearly everyone seems to agree that schools’ tuitions are on the rise — as are university expenses. But university officials said policy makers are going about a solution in the wrong way.

“I don’t think it’s a sensible idea,” said Rebecca Dixon, NU’s associate provost for university enrollment. “I guess (McKeon) wants to limit increases, but I don’t know how they could possibly do that, and I don’t know they have the right to do so.”

According to Dixon, state legislatures — not the federal government — regulate tuition increases. She said it is unlikely McKeon’s bill will pass without drastic changes because, under current provisions, the government would have to establish an elaborate regulatory system and implement sanctions.

Still, Dixon said the legislation has produced the effect its supporters intend.

“Most of us universities need and want federal aid,” Dixon said. “It’s a threat they can use.”

Although NU President Henry Bienen and other Big Ten presidents sent a letter last week to McKeon protesting the legislation, universities’ positions on the issue have received little attention.

Stanley Fish, dean of arts and sciences at the University of Illinois at Chicago, published a letter in The New York Times in September and a more recent piece in The Chronicle of Higher Education but said he has seen few other university officials protesting the bill. Even if schools were to begin showing their opposition now, he said it will be difficult to “counteract the machine.”

“In general, higher education does not know how to speak for its interests,” Fish said. “It offers a stance that is defensive, cowardly and likely to be ineffective.”

Mark Smith, director of government relations for the American Association of University Professors, said his organization has joined with others in protest of the issue.

“There’s real concern that they’re not addressing the real issue of affordable education,” he said.

Economists also have taken an interest in the issue. Mark Witte, an economics lecturer at NU, said he is surprised a Republican is condoning price controls on tuition. He said in the long run, such a policy could severely affect schools’ financial aid policies.

“It’s encouraging schools to beat the lock-in by raising tuitions right away,” Witte said. “Financial aid would be squeezed.”