Elite schools drive costs

0 Comments | USA TODAY, January, 2008 | by William G. Durden and Robert J. Massa

Harvard and Yale recently have made pronouncements regarding increased middle-class affordability and access. It is well within their rights to do as they wish, but their decisions could increase costs for the thousands of universities without huge endowments, drive up the tuition price, and reduce access for low- and middle-income students.

Exchanging student loans for grants inflates cost. The "free" grant money must come from somewhere. If one has a large endowment, it comes from taking a greater percentage as payout, leaving the tuition price unchanged. If one has a smaller endowment, or is state- and taxpayer-supported, it is likely to come from tuition increases.

Targeting more grants to upper-income students without a change in how financial aid is...