Monday, September 26, 2016

“We Refund 43 Percent of What We Take In,” or, An Open Invitation to William Bennett

William Bennett was a prominent figure in the culture wars of the 80’s and 90’s.  He later gained prominence in higher ed policy circles for “the Bennett hypothesis.”  The Bennett hypothesis is the idea that the availability of financial aid dollars drives tuition increases.  If we want to get a handle on tuition, the argument goes, cut off its oxygen.  

The Bennett hypothesis has been treated with an inexplicable respect in policy debates, as if it were somehow true.  

On Monday I had a discussion with one of the financial folks at the college, who mentioned in passing that the college refunds 43 percent of the aid it takes in.  And I thought, hmm.  That’s not what the Bennett hypothesis would have you believe.

But we do.

“The aid it takes in” encompasses the combination of grants -- mostly Pell, though some others too -- and loans.  “Refund” means the aid was in excess of what the college charged, so the extra was given to the student to cover indirect costs, such as transportation, housing, or food.  (Textbooks fall into an in-between zone; the college sometimes issues vouchers based on financial aid awards, and students can use those vouchers in the campus bookstore.)  Refunds are typically given in a lump sum, though there’s a movement afoot in some campuses across the country called “aid like a paycheck,” in which it would be paid in biweekly installments.

The idea behind refunds is that students need to eat, and working too many hours for pay while going to school tends to imperil academic success and completion.  Sara Goldrick-Rab’s recent book Paying the Price is excellent on this point.  Room and board are eligible for financial aid at residential colleges, so it makes sense that there would be some sort of living allowance for commuter students.  If anything, as Goldrick-Rab makes clear, the living allowances are often much too small to be practical.

But if the Bennett hypothesis were correct, we wouldn’t refund anything.  We’d raise our prices enough to keep it all.

We don’t.  And neither do most community colleges across the country.  Our full-time tuition and fees for a year are less than the maximum value of a Pell grant, before even counting loans.  

It’s almost as if Bennett...didn’t look.

Hey, he’s a busy guy.  I get that.  I mean, sure, there are over 1100 community colleges across the country that he could have dropped in on and checked, but hey.  There are over seven universities in the Ivy League alone!  Legwork is tiring.

Or maybe he just wasn’t invited.  I can do something about that.

Mr. Bennett, I’ll be happy to host you on a visit to Brookdale.  I’ll set up a meeting personally with the financial aid staff and some students.  Heck, I’ll even personally set up a meeting with our CFO if you want to talk numbers.  Because this hypothesis that some people are using as protective cover for systematic disinvestment does not square with reality on the ground.  It simply isn’t true.  

We hear a lot about the one percent, or the forty-seven percent.  Let’s talk about the forty-three percent of money that we give back to students.  Then tell me with a straight face about the need to cut off our oxygen.  Look me in the eye and say it.  I’ll be looking right at you.