Institute calls for end to financial aid

To keep college tuition costs from rising, the Cato Institute suggests eliminating federal financial aid.\nA recent report by the Cato Institute proposes a 12-year phasing out of federal assistance causing tuition costs to decrease and encouraging private sectors to get involved with tuition assistance, the report said. \nBill Ehrich, associate director of financial aid at IU, said he believes the Cato Institute has forgotten why federal financial aid was enacted.\n"We provide financial aid so more people can go to college," Ehrich said. "If we never had financial aid for the past 40 years we wouldn't be as ahead in our economy and other aspects of our society. Not as many people would be able to attend college without financial aid." \nAccording to the report, released Jan. 25, "At least some portion of the increase in federal financial aid that has occurred over the years has ended up in the form of higher tuition."\nEhrich said tuition increases should come as no surprise because there are always changes in college life, such as technology growth, that require funding. \nCutting out federal financial aid for students would be harmful to students such as junior John Frederich. He said he receives about $6,000 a year through the government. \n"If federal assistance were eliminated, I would have to get an extra almost $3,000 a semester from my private loans," Frederich said. "Their rates aren't that high but are still higher then my government loans."\nFrederich said he doesn't believe that tuition costs would decrease if federal financial aid was cut, but rather increase at a slower rate through the years.\nThe price of attending a four-year public university increased by 10 percent from 2004 to 2005, according to the College Board's annual tuition survey. During the 2004-2005 academic school year, the average in-state tuition and fees at a four-year college was $5,132. However, based on last year's level of student aid, the average grant was $3,300, making net tuition $1,800. \nAccording to the IU Office of Admissions Web site, the estimated cost of tuition and fees for the 2004-2005 academic school year for in-state students is $6,776 and $18,589 for out-of-state students. \nThe board of trustees makes decisions about tuition at IU every spring, said Larry MacIntyre, IU media relations director.\n"Enrollment, state money (and) needs of the University are all considered when trying to set the tuition rate that will cover everything," MacIntyre said. "They also look at the needs of students and their families."\nEven students who can afford to attend college believe in maintaining federal aid for students who need the help.\nSophomore Phil Smith added aid should be need-based, but students should meet academic requirements once in college.\n"I think anyone who wants to go to college should be allowed to regardless of who pays for it, whether it be parents, federal financial aid or private sectors," Smith said. "However, if you do get finances through the government, there should be guidelines or a certain GPA level to encourage students to work hard."\nThe Bush administration's 2005 budget would provide $73.1 billion in overall federal financial aid to students through the Department of Education, according to the report, "Making College More Expensive: The Unintended Consequences of Federal Tuition Aid." This is an increase from $4.4 billion for financial aid in 2004.\nEhrich said he believes reports such as the Cato Institute's are discouraging and if financial aid were eliminated or phased out, society would be separated between those who could afford college and those who could not.\n"I do find the report distressing," Ehrich said. "I wonder what they are thinking. No country has ever attempted to educate this many people and it's a wonderful thing. The phasing out of federal financial aid would move this backward."\n-- Contact Staff Writer Maggie Bozich at mbozich@indiana.edu.