The cost of a college education is the bane of us all, and it isn’t about to get any easier to manage. This summer, tuition at Lehigh increased about 3%. This by itself is not particularly noteworthy as tuition increases every year, however, it should be recognized that a 3% increase in tuition over the course of four years adds up to an additional $10,000 in paid tuition. This increase is mostly to check inflation but it is still an increase. As registered students, we all received a pair of letters from President Gast informing us of both this adjustment and also of an increase in the amount of financial aid being given to students who apply for it. In this economy it is perfectly reasonable for this additional support of those students who cannot pay the tuition in full. The idea, however, of increasing the tuition of those who could afford it to pay for those you can’t brings up some interesting parallels to the economics that we are seeing on a national scale in our country today.

Karl Marx, in his famous Communist Manifesto, wrote, “From each according to their ability, to each according to their needs.” This sentiment summarizes a key idea in his socialist philosophy which espoused the equality of society. We have found since these famous words were written that a society that is given everything does not function as well as one that competes for excellence. From an economic standpoint, this mentality is essentially tantamount to communism. President Obama’s new economic direction for the country seems to be directed by Marx’s works. We are told that the presidency will be able to reform major national institutions such as health care. What we aren’t told is how exactly they plan to afford this sort of restructuring. The most common approach is to simply tax the wealthier citizens more to attain the needed funds. This approach works to an extent, but can’t be sustained. We are discouraging success with the message of, ‘Go to school, work hard so that we can take half of what you earn.’ This is a reality for many people who have worked hard to pull themselves up to a wealthy socio-economic status. Data presented by the New York Times from the Congressional Budget Office demonstrates this. “The poorest fifth of the population, with average annual income of $15,400, pays only 4.5 percent of its income in federal taxes. The middle fifth, with income of $56,200, pays 13.9 percent. And the top fifth, with income of $207,200, pays 25.1 percent. At the very top of the income distribution, the CBO reports even higher tax rates. The richest 1 percent has average income of $1,259,700 and forks over 31.1 percent of its income to the federal government.” This isn’t even including state or municipal taxes. Some citizens can literally find themselves paying about 50% of what they earn to the government, more and more of which is redistributed.

The average tuition cost of attending a 4-year private school, such as Lehigh, is about $37,000. Lehigh University charges slightly more than that, about $38,000 for tuition. This means that with all other costs included attending Lehigh costs about $51,000 a year. According to the College Board, 56% of students attending 4-year universities pay less than $9,000 a year. At the same time, only about 9% of students pay upwards of $33,000 a year for education. This payment system seems arbitrary and redistributive. In 2003, 51% of freshman received average grant of $17,677 according to College Handbook by College Board. This means today’s tuition of $38,330 is excessive. When Lehigh gets to the point that students can’t afford to pay this school’s inflated prices, students will simply go to universities that offer more prudently structured tuition. To be accurate, school’s should list tuition at $20,000 but place an asterisk referencing different pricing for those making more than a $X. Why not have 5% of the wealthiest students pay even higher tuition that will cover the costs of educating more of their peers? It seems Lehigh may be heading down this path. As mentioned above, Lehigh is already slightly above average in terms of cost, and we’re not getting any better. The school is getting more money from fewer students. Financial Aid director Linda Bell described how financial aid is receiving more money from the budget, which is primarily financed through student payments.

“The annual budget for financial aid is determined based on our current population of aided students adjusted for attrition and cost of attendance changes. Our model for determining the budget on an annual basis has provided sufficient resources to enroll an entering class as well as continue assistance to those who are already enrolled…As stated previously the cost of attendance increases are built into our model to determine the aid budget. A significant increase was made to financial aid entering into the 2008-09 academic year to accommodate the new initiative of eliminating or limiting loans in need based aid packages for middle and low income families.”

This redistributive system makes Lehigh less appealing in the eyes of prospective due to increased costs. Our attempts to try to include more potential students will probably have the unwanted affect of driving away those that can actually afford our prices in full. Lehigh’s already elevated price will start to look less and less appealing when compared to similar schools with lower prices, such as Lafayette, which charged about $36,000 for tuition this year.

The Brown and White recently ran an article in its September 25^th issue that covered the health of Lehigh’s endowment, which is surprisingly good considering the recent financial problems. I believe that rather than strengthening our endowment just for an ostentatious showing of financial strength we should use that money to support Lehigh students. Rather than bulking up our resources we should be fine with using money that we have and need to use during difficult economic times. Rather than charging some students more so others can pay less, let’s cut back in other areas and use the resources we have to educate the next generation of Lehigh students fairly and equitably.

It is clear that if we just keep charging the wealthy for being wealthy there eventually won’t be enough prosperity to pay for the rest of us. We cannot expect those in the very top socio-economic percentages to pay for the rest, no matter the situation. The wealthy will move away and prosperity and talent will walk away with them. It is necessary for the administration to understand the immense burden being placed on those who not only pay for their education but those around them. Lehigh will need to cut costs. Just as our government cannot rely on the wealth of some to fund their programs for the rest, Lehigh cannot rely on the tuition of some to cover the costs for everyone.

The letter’s reference to ‘strengthening our aid programs’ essentially boils down to the simple fact that some students will pay more so others can pay less. The mentality of charging ‘those who can afford it’ is one that will deplete needed resources and cannot be relied upon for long-term economic success. It is simply interesting to note the relations between our schools financial structure and our increasingly socializing nation. The application of Obama’s economics to the tuition structure at Lehigh University will have only harmful ramifications.

Tags: Lehigh

This entry was posted on Thursday, October 8th, 2009 at 3:55 pm and is filed under Articles, Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.