by U.S. Senator Chuck Grassley
Statistics have shown that obtaining higher education generally indicates strong economic returns in the future, although this varies considerably depending on the college major students pursue. At the same time, double-digit tuition hikes in recent years have strained family budgets to the brink and often require burdensome student loans that make it tough for the next generation to get ahead after graduating from college.
As a federal policymaker, I’m working to improve price transparency among the nation’s colleges. Whether a consumer is in the market for health care insurance, cars or college, competition in the marketplace helps drive down prices. Providing parents and students with better tools to comparison shop when conducting their college search will save them time and money, two commodities that too often are in short supply for busy households. Every family who has navigated the college selection process knows it can be a daunting project. Making tuition price calculators user-friendly would make it easier for parents and students to wrap up this assignment.
This spring I joined Sen. Al Franken, of Minnesota, to introduce a bipartisan bill that would improve the on-line net price calculator tools on college websites. Our bill would update and standardize requirements to make it easier for families to calculate the price tag for multiple colleges, by factoring in financial aid and other information, to get the fiscal facts out on the table before sinking their time and money into the college application process. Sen. Franken and I also have a pending bill, the Understanding the True Cost of College Act, that would create a universal financial aid form to help students understand exactly what college will cost.
More transparency is one way to help address the issue of rising college tuition. Double-digit increases year-after-year aren’t keeping pace with household incomes and, arguably, do not deliver the best bang for the buck that students are paying to strengthen their employability, earning potential and career readiness.
As a fiscal conservative and taxpayer watchdog on Capitol Hill, I work hard to make every dollar count and to count every dollar. For example, from my position on the tax-writing Senate Finance Committee, I have scrutinized the tax-exempt sector’s use of their tax-advantaged status, including non-profits, hospitals, colleges and universities. These important institutions anchor good works in many of our communities and provide a valuable service to society. However, it’s important to ensure these organizations are not abusing the public trust or the taxpaying public by misusing these tax benefits and shirking a responsibility to serve the public good. For example, colleges sitting on well-funded endowments ought to consider their valuable tax breaks when making decisions about lifting the lid on tuition, year after year. Non-profit hospitals need to fulfill their mission of charitable care. By subsidizing these tax-exempt groups, the taxpaying public takes on a heavier tax burden. Is it possible that the tax benefits enjoyed by colleges are influencing tuition growth and costing students more? For example, could it be that federal tax benefits are fueling tuition increases by subsidizing high salaries or high-dollar, non-educational amenities. I will continue to raise these issues from the Senate Finance Committee. Transparency and disclosure are critical tools of good stewardship that can help policymakers connect the dots on tuition rate increases.
Likewise, families can make better decisions when they have better price comparison tools. Improvements to the on-line tuition estimate calculators will help ramp up academia’s efforts to compete for the best and brightest, and that could help drive down prices and drive up values.