Last week the Advisory Committee on Student Financial Assistance presented “The Rising Price of Inequality,” a report claiming that unless there is an increase in need-based state and federal aid, the number of low-income students earning degrees will decrease over the next decade. 

The underlying problem is not insufficient government aid, but the rising tuition of America’s colleges.  Colleges are price discriminating institutions, listing a high “sticker price,” but charging different amounts based on the family income of individual students.  When the government grants student aid, it enables colleges to increase the amount of money they capture in tuition.  Student aid becomes college aid, and college “sticker prices” rise. Unless the government stops granting aid to students, this will continue to happen, and we will continue to hear calls for more federal and state student aid.  Instead of feeding into it, the government should end the vicious cycle.