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Mr. Bennett and Mr. Bumble

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One of my favorite moments in Dickens' fiction comes early in Oliver Twist, when a very young and vulnerable Oliver is brought before the members of the board of the workhouse -- some "very sage, deep, philosophical men" who discern "what ordinary folks would never have discovered" about the institution they oversee:

"the poor people liked it! ... It was a regular place of public entertainment for the poorer classes; a tavern where there was nothing to pay ... a brick and mortar elysium, where it was all play and no work. 'Oho!' said the board, looking very knowing; 'we are the fellows to set this to rights; we'll stop it all, in no time."

So the board sets out with great energy and enthusiasm to make it much less fun to be poor, on the theory that the poor will then elect to be... something else.

Which brings me to William Bennett.

Mr. Bennett is nothing if not consistent. Twenty-five years ago, he articulated what has come to be termed the Bennett Hypothesis: the proposition that the cost of college was rising because needy students were being given too much money by the government and that if the spigot were shut off, colleges and universities would be forced to behave responsibly and lower costs. Now he is making the same argument again. Think of it as his silver anniversary gift to the world of higher education.

The current version of Mr. Bennett's argument would provide Dickens with enough material to compose another novel. He writes that "While increased federal aid does not cause college price inflation, it can be a considerable factor," without ever explaining how or why and while acknowledging that "many other elements influence tuition prices." He cites a 2008 report from the College Board, "Trends in Student Aid," noting with disapproval that "total student aid increased by about 84% in inflation-adjusted dollars over the decade from 1997-98 to 2007-08." "Skyrocketed" is his descriptor of choice. He does not however add the following from the same report: the number of recipients of Pell Grants during that period increased from 3.7 million to 5.4 million due to increased college enrollments, thereby actually "diluting the value of these grants to individual students." In other words, aid increased in large part because there were more students, and more students with financial need, attending college. Elysium indeed.

Here is the change in the Pell Grant, in constant dollars, over the past three decades. Maximum grant in 1979-1980: $5,368. Maximum grant in 2011-2012: $5,550. During most of that period the maximum grant was in constant dollars well below the figure from 1979-1980.

In fact, over the past 10 years, and 20 years, and 30 years, state and federal dollars have declined as a percentage of revenues at both public and private colleges and universities. If the government is contributing to the rise of college costs for individual students, it is by steadily and systematically divesting in higher education, not by over-investing. In my own state of Minnesota, the share of the state's general fund that supported higher education in 1987, when the Bennett Hypothesis was born, was just under 16%. Today it is just over 8%.

If the hypothesis were correct, one would expect to have seen this decline in public support lead to a slowing of the rate of tuition increases. If common sense were correct, one would expect to see the decline in state support passed along to students in the form of higher prices. I will leave it to the reader to guess which scenario has unfolded.

The inspiration for Mr. Bennett's reassertion of his claim seems to be the recent publication by the Center for College Affordability and Productivity of a study by economist Andrew Gillen entitled "Introducing the Bennett Hypothesis 2.0." Personally I was prepared to consider version 1.0 sufficient. The director of the Center is Richard Vedder, who is pretty much to government spending what Grover Norquist is to taxes and who has remarked that "there is no doubt in my mind today that governmental subsidies to higher education are excessive-our nation would be better off if we spent less. Indeed, I suspect no governmental spending commitment at all would be preferable to the situation today."

Take note: our nation would be better off if the government spent nothing on higher education. Here I recommend that you pause for a moment to consider the various implications for our collective future of this particular modest proposal.

Unsurprisingly, Professor Gillen's study concludes that government spending on higher education leads to outcomes that are, in his words, "depressing" and "terrifying." Even he cannot avoid acknowledging, however, that his research suggests that "aid targeted to low income students (such as the Pell Grant and subsidized Stafford loans) ... will ... be more likely to succeed in making college more affordable and therefore accessible (for low income students)" than aid that is not need-based, such as a tax credit. But this point is glossed over rather quickly on the way to "depressing" and "terrifying" and is skipped altogether by Mr. Bennett.

College costs too much and this is a major problem, not only for the most economically disadvantaged but also for those in the middle class who neither qualify for many need-based programs nor can afford the full sticker price. Colleges and universities bear much of the responsibility for this state of affairs because they have been slow to embrace creative change and reluctant to make difficult choices. Public divestment has played a major role. So too has the evolution of the labor market over the past several decades, which has seen the cost of hiring educated workers rise at a rate well beyond the rate of inflation.

In short, this is a complicated problem whose solution will take careful thought and better cooperation among higher education, the government, and the private sector. But this much is undoubtedly true: while we cannot easily say what the solution to rising college costs is, we can say what it is not. It is not reducing support through grants and low-interest loans for those who are most in need. The economic and social cost of not educating these students far exceeds the cost of making education more accessible.

Oliver Twist's most iconic moment occurs when the starving protagonist offers his empty bowl to the workhouse cook and declares, "Please, sir, I want some more." This audacity provokes enormous consternation among members of the staff and the board and especially within Mr. Bumble the Beadle, who responds to Oliver's request by placing him on more or less a starvation diet -- for his own good. This leads Oliver, of course, into a life of poverty, crime, and abuse, from which he is only rescued, in classic Dickensian fashion, by the miraculous intervention of a wealthy benefactor (from the private sector).

My guess is that those high-need students most affected by the economic and educational starvation diet favored by Mr. Bennett, Mr. Vedder, and the Center for College Affordability and Productivity would not in the main be so fortunate.