These reports prove aid doesn’t fuel tuition inflation… except they don’t – Neal McCluskey

In News on June 5, 2012 at 10:40 pm

Today we are once again treated to a declaration that there is simply no way the crazy Bennett Hypothesis — the theory that student aid helps fuel college price inflation — is true. This time, the end-all-debate pronouncement comes from David L. Warren, president of the National Association of Independent Colleges and Universities, who cites three apparently definitive reports as proving aid is not “driving up” costs.

Aside from the problem that the argument is really that aid fuels price increases rather than driving them — the aid is the gasoline, the colleges the car drivers — what do the studies offered by Warren really tell us?

First is the 2001 federal report everyone who wants to declare the Bennett Hypothesis dead loves to cite: “Study of College Costs and Prices, 1988-89 to 1997-98,” from the National Center for Educational Statistics. As Warren accurately cites, the report does say:

Regarding the relation between financial aid and tuition, the regression models found no associations between most of the aid packaging variables (federal grants, state grants, and loans) and changes in tuition in either the public or private not-for-profit sectors.

But, then, it also says this:

[T]here are considerable data limitations in these models: for example, the availability of only one year of financial aid data and a lack of comparably recent financial data (especially for private not-for-profit institutions). IPSFA data on loans include all sources of student loans; federal subsidizedand unsubsidized, institutional, and private loans cannot be disaggregated. In addition, the IPSFA aid variables focus on the packaging of various forms of student aid in terms of the percentage of students receiving aid and the average amount received, and therefore cannot be used to explore the possibility of a revenue interaction at the institutional level between federal aid and institutional aid. Due in large part to the accounting standards used by the institutions themselves, information on financial aid collected through the IPEDS system for the available years is incomplete, especially regarding student loan volume, which cannot be isolated from tuition revenue in the IPEDS Finance survey data. Finally, financial data such as instruction expenditures cannot be isolated to undergraduate students, making any comparison with undergraduate tuition inexact.

Essentially, the report contains a regression based on a change in student aid for just one year and can’t adjust for a whole bunch of important things. In other words, it tells us little and in no way closes the door on Bennett.

Next, Dr. Warren cites a February 1998 commission report in which the commission purports not to have found any evidence that student grants effect college prices, and no “conclusive” evidence that loans enable rising prices. Then again, the Commission did no meaningful empirical analysis of the question, and as dissenting member Francis McMurray Norris objected, “issues such as tenure, cost and value of research, duplication of facilities, teaching loads, and relationship of student loan programs and rising costs have not been addressed.” [Italics added]

Grounds for putting the Bennett Hypothesis in a pine box? Hardly.

Finally, Dr. Warren cites a 2011 GAO report that looked only at the effect of an increase in the federal student loan limit for first- and second-year students, and only tracked three years of prices and enrollment. It concluded that enrollment and prices rose at rates generally consistent with recent “prior years.” Of course, looking at the effect of such a narrow change in overall aid over such a short time period without controlling for myriad variables that impact prices tells us basically bupkis.

The fact is that several empirical studies do show student aid enabling schools to raise their prices, and I have listed many of them. It is also the case, as most studies point out, that it is very difficult to definitively isolate the effects of aid when so many factors — from school type to student characteristics – are in play. That’s when basic logic also has to come in: People in colleges are like everyone else, and will be happy to take more money if it’s available. Aid makes it available.

One thing that cannot be supported is insisting, as Mr. Warren does, that we know for certain there is no connection between student aid and rising prices. That is something that truly has been disproven.

via Cato.


Why the GOP can’t afford to ignore Ron Paul and his many fans – Brian Doherty

In News on June 5, 2012 at 8:50 pm

Ron Paul has stopped actively campaigning in forthcoming primary contests, and after Texas everyone agrees that Romney has the nomination effectively locked up. But Ron Paul’s people are still striving to rack up as many delegates as he can at state Republican Party conventions before the Tampa.

He’s continued to do it too—even after his May announcement that many in media spun as “Paul drops out,” the Texas Congressman cleanly won control of his second state delegation at Minnesota’s state convention.

This past weekend in a chaotic and divided state GOP convention in Louisiana, in which two Paul activists were injured by police, it appears likely that he controls the delegation in that state too. (Since the convention literally split in two, the national party will have to eventually decide between two competing delegations, but the Paulite convention had the majority.)

Paul also previously won Maine, and has strong hope of coming out of the state convention later this month in Iowa controlling their delegation as well.

Still, Paul’s campaign admits they know Romney will win the Republican Party’s presidential nomination. This has led many to wonder exactly what Paul’s trying to accomplish at the August GOP convention in Tampa. Prominent speaking slot? Platform influence? Sway over the vice presidential slot?

But what the GOP establishment needs to wonder is: what do his supporters want, and why?

Paul himself will likely not be a political player past 2013, when he leaves the House seat he’s held since 1997. But his supporters skew so young, they’ll be shaping the Party’s future far longer than Romney’s fans will.

Paul can attract over 7,000 students to come hear him speak, a level of enthusiasm no other GOP figure can muster. He’s now got 110,000 signed-up members for his “Youth for Ron Paul” group.

Why are they so passionate about this unlikely political champion? And why is their energy so hard to contain even by Paul’s own campaign, who talk of their desire for more “decorum” on the part of their often rowdy and contentious supporters?

Most politicians sell comfort—that American is the greatest, rich and mighty and right, and what small problems we have can be solved by electing our guy and getting rid of the other guy. Ron Paul wins passionate devotion selling a vision of great discomfort.

He tells us American foreign policy is misguided and understandably earns us enemies. He sees America not on the rise, but in decline because of Federal Reserve-primed booms and busts and a crushing debt burden.

He decries the American government for not protecting our liberties but rather unjustly oppressing its citizens over everything from medical marijuana to raw milk.

Unfortunately for Paul’s fans, the radical solutions the Paul worldview demands—an end to overseas military adventurism, ending government’s ability to manipulate paper currency, severe cuts in spending on all the myriad income-shifting promises Washington makes — don’t register as “practical solutions” to those who helped create the crises those policies have led us to. And that’s both the Democrats and Paul’s own Republican Party.

Even though Paul’s budget plan, with its three-year glide path to a balanced budget with no tax hikes, was found by U.S. Budget Watch, a non-partisan research group, to be the only budget plan offered by GOP candidates this year that would not balloon the national debt, the Republican Party is scared of him. Even though his supporters continue to win control of delegations (Maine, Minnesota, and Louisiana) or state party structures (in Iowa and Nevada), the Party doesn’t want to embrace him.

Because if Ron Paul is right about the dangers of government overextension both at home and abroad, it means the GOP has to actually be serious about this limited government, living-within-our-means stuff that is supposed to be the very marrow of conservatism.

If they have to swallow some sour apples about returning the U.S. military to its original goal of just actually defending the U.S. and make the government respect citizens’ civil liberties, that should be a small price to pay to attract the loyalty, votes and money of a rising generation of activists.

Paul’s people have given money and rallied in amounts and numbers far exceeding such other GOP hopefuls as Newt Gingrich and Rick Santorum. Paul’s fans gave nearly as much money to his campaign as those other two candidates combined.

The Goldwater movement in 1960 was seen as too young, too radical and too outside the mainstream by the GOP establishment of its day.

The religious right during the 1988 Pat Robertson campaign was seen as an overly loud and pushy minority.

But just as those minorities grew and dominated the GOP, the libertarian-leaning energy of the Ron Paul movement is primed to shape the future of the Republican Party. With their unique seriousness about reining in a government drowning in debt, neither the Republican Party nor the country can afford to ignore the concerns of Paul’s devotees.

via Fox News.

Ending the war on George Washington’s favorite crop – Nick Gillespie & Joshua Swain

In News on June 4, 2012 at 1:54 pm

“The main goal [of Hemp History Week] is to try to bring back hemp farming in the United States again,” explains Eric Streenstra, President of the nonprofit advocacy group Vote Hemp.

Once hailed as a “New Billion Dollar Crop” by Poplar Mechanics, hemp farming was effectively shut down in the United States over confusion with its genetic cousin, marijuana. Though hemp carries no psychoactive properties, the 1937 Marihuana Tax Act defined hemp as a narcotic and that wording was subsequently adopted into the Controlled Substances Act of 1970. Current laws allow the importation of industrial hemp from outside the U.S., leading to an ever expanding list of hemp related products, but denies would be hemp-farmers the ability to grow industrial hemp on American soil.

Steenstra sat down with Reason.tv’s Nick Gillespie to discuss the legislative fight to lift the ban on cultivation, hemp’s long history in America, and why hemp lube is just one of the many benefits associated with the plant.

A. Barton Hinkle on hemp.

via Reason.