From an article in the WSJ, Tuition Costs and Pell Grants Rise in Tandem:
College tuition and fees climbed once again this year, but the burden was tempered for some students and their families by a big jump in federal aid, according to a new report by the nonprofit College Board.
The average price of tuition and fees for in-state students at public four-year institutions is $7,605 this school year, a 7.9% increase over last year. At private nonprofit colleges and universities, the average price is $27,293, a 4.5% rise. Two-year state colleges saw a 6% rise to $2,713.
But the federal government gave out $28.2 billion in Pell grants to students in the 2009-10 school year, almost $10 billion more than the previous year. Pell grant numbers for the current school year are not yet available, but are expected to rise.
Federal grants, including Pell and veteran’s benefits, accounted for 44% of the $94 billion in total grant money awarded to students in the 2009-10 school year, compared with 34% the previous year, according to the data. Ten years ago, federal grants represented 29% of the total.
So the government increases grants and colleges raise tuition which spurs the government to increase grant money which allows colleges to raise tuition again. Politicians get to brag about helping families with tuition. Colleges get to raise tuition with all that implies (higher salaries, etc.). The only losers would seem to be the folks who actually have to pay for the education.