Several months ago Mike Konczal had a piece, The [University of North Carolina] Coup and the Second Limit of Economic Liberalism.  An excerpt:

The UNC System Board of Governors voted unanimously to cap the amount of tuition that may be used for financial aid for need-based students at no more than 15 percent. With tuition going up rapidly at public universities as the result of public disinvestment, administrators have recently begun using general tuition to supplement their ability to provide aid. This cross-subsidization has been heralded as a solution to the problem of high college costs. Sticker price is high, but the net price for poorer students will be low.

This system works as long as there is sufficient middle-class buy-in, but it’s now capped at UNC. As a board member told the local press, the burden of providing need-based aid “has become unfairly apportioned to working North Carolinians,” and this new policy helps prevent that.  Iowa implemented a similar approach back in 2013. And as Kevin Kiley has reported for IHE, similar proposals have been floated in Arizona and Virginia. This trend is likely to gain strength as states continue to disinvest.

The problem for liberals isn’t just that there’s no way for them to win this argument with middle-class wages stagnating, though that is a problem. The far bigger issue for liberals is that this is a false choice, a real class antagonism that has been created entirely by the process of state disinvestment, privatization, cost-shifting of tuitions away from general revenues to individuals, and the subsequent explosion in student debt. As long as liberals continue to play this game, they’ll be undermining their chances.

He continues (emphasis mine):

… antagonisms between the middle class and the poor in higher education are entirely a function of public disinvestment. The moment higher education is designed to put massive costs onto individual students, suddenly individuals are forced to look out only for themselves. If college tuition was largely free, paid for by all people and income sources, then there’d be no need for a working-class or middle-class student to view poorer student as a direct threat to their economic stability. And there’s no better way to prematurely destroy a broader liberal agenda by designing a system that creates these conflicts.

Konczal concludes:

Any serious populist agenda will have to have a broader agenda for wages, with full employment as the central idea. But it will also need to include social programs that are broader based and focused on cost controls…

With respect to higher education, this means investing in state university systems.  Invest in state universities – and subsize tuition for in-state residents – so that people can get a high quality, no frills* education without taking on a mountain of debt.  (By “no frills” I mean, e.g., Hampton Inn quality dorms and Boys & Girl’s Club class gyms rather than resort-class amenities.)

Yesterday Cathy O’Neil made an argument which complements Konczal’s, Let’s Make Paying for College Harder.  It’s a short post.  Here’s the whole thing:

I was disappointed with Obama’s retraction of the tax benefit for college savings, referred to as the “529 plan.”

And, although some would claim that the 529 tax shelter was used by more than rich or very well-off people, it’s still a very lopsided regressive tax, because the majority of Americans can barely scrape by on their income, never mind saving for their kids’ college funds. But that’s not exactly the point I’m trying to make, although it’s a very important point.

The larger point is this: whenever we make college more affordable by helping people pay for college, it just makes college more expensive. Tuition rises to meet our new-found ability to pay. And although I can’t prove causality for every tuition hike, the data kind of speaks for itself:

versus here’s the federal aid growth:

The result of our federal loan programs, which were started with good intentions, is that whereas before college was out of reach for lots of people, now it’s still out of reach, they go anyway, and then emerge loaded with debt. It’s not actually a huge improvement for the vast majority of the middle class, but it’s become a requirement to get a reasonable job so people are forced to go through it, kind of like a hazing ritual.

There’s another related reason why college tuition goes up, namely because we have stopped funding state schools, so their tuition is higher, and the other colleges also rise to meet them. But part of the reasoning behind that is because we have all these federal loans available, so why would we need to fund the state schools.

We need to put into place ways for tuition to go down. First, we make paying for college harder, and that includes for upper middle class folks. The reasoning is this: if you’re the only person having trouble paying for something, that’s bad. But if everyone has trouble paying for something, the price goes down.

Second, we make state schools much cheaper, or even free, by funding them.

There is no lack of demand for higher education.  If give everyone a sack full of money to pay for something when there’s no demand shortfall then you get…  inflation!  Which is basically what we see in the red box in Chart #3 above.  Not to sound glib but if you want to reign in the cost of higher education then you need to create options which cost less.

(It’s probably not the approach I’d take but, to his credit, Gov. Baker has a plan for reigning in the cost of higher education in MA.)