Higher-Education Finance and Accountability

Abstract

The finances of colleges and universities are increasingly under the scrutiny of policymakers, researchers, and families. Much of the attention focused on money has been in reaction to skyrocketing tuition costs. From 1980–81 to 2008–09, the average list price of a public, four-year institution rose twice as fast as inflation.¹ Questions about whether the escalation of college costs has been justified have translated into calls for greater accountability in postsecondary finance. The focus on college prices reached a fever pitch with a 2003 proposal by Rep. Howard P. (Buck) McKeon to penalize colleges that raise their prices too high by denying them eligibility to participate in federal student-aid programs. While the measure was hotly debated, the ensuing debate highlighted the view that colleges are doing little to keep costs in check.²