The contrary point to the above argument, is the disjunction of college tuition cost and its behavior compared to other sector of economy. College costs continue to rise during a recession and a bear market, while still rising during a bull market. According to William Bowen, president of the Andrew W. Mellon Foundation, the fact that tuition has raised faster than inflation during the past thirty years can be attributed to the educational process (Bowen 34). The educational process, does not permit academia to share in the productivity gains that caused earnings growth in the rest of the society (Bowen 34). Academic institutions attempt to be their best in every aspect to attract more business. They aggressively seek funding sources from sectors …show more content…
Many of these loans are subsidized and their interests are paid by tax payers while the students are still in school. Many students get qualified for these loans regardless of their major and its income potential. Students have to take the loan because the don’t have enough money to cover the costs. Findings from a recent research on the subject of “Accounting for the Rise in Collage Tuition,” suggest that a large fraction of the increase in tuition can be explained by increase in subsidies (Gordon and Heldon). The results of the research are echoing the three decade old Bennett hypothesis. In a 1987 opinion piece in The New York Times Bill Bennett, the education secretory of president Reagan, wrote that “…increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase”. Bennett pointed put that subsidies for education were implemented in 1978 and as early as 1980 collage tuitions began to rise year after year, federal student aid polices help collage price inflation (). In a recent media appearance, on HIS radio show Bennett explained,