How much do universities spend per student annually on average in the US?

Why has the Gates Foundation been funding studies that advocate scaling back federal student loan programs and making college more expensive for students and their families to finance?

• See details here: http://www.buzzfeed.com/mollyhensleyclancy/how-a-private-foundation-with-deep-ties-to-the-student-loan#27uova8 http://chronicle.com/article/The-Gates-Effect/140323/ These include studies by the think tanks, the New America Foundation and the Brookings Institute. http://newamerica.net/sites/newamerica.net/files/policydocs/NAF_Income_Based_Repayment.pdf http://newamerica.net/sites/newamerica.net/files/policydocs/NAF_Rebalancing%20Resources%20FINAL.pdf http://www.brookings.edu/research/papers/2013/10/03-reimagined-system-of-student-aid-akers Several of the studies have been jointly funded by Gates Foundation and Lumina Foundation, according to disclosures in the studies and press reports.  The Lumina Foundation was created by the Private Student lender Sallie Mae, and the first two head of Lumina were former senior executives at Sallie Mae. Many studies have investigated whether federal student loans contribute to increases in higher education costs, and all of the peer-reviewed studies by economists have found that they do not (or that there is no evidence suggesting that they do).  Take a look at this recent report by the Government Accountability Office, which found no evidence that increases in student loans lead to tuition increases: http://www.gao.gov/assets/670/660991.pdfhttp://www.gao.gov/assets/670/660991.pdf Or the summary of the empirical literature in this article on federal student loans: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1941070 Almost all the studies find no effect of loan limits or loan pricing on tuition, and that's over 30 years of economists trying to find some connection.  The one study that found a connection was looking at for-profit trade schools, which have very different incentives and behavior than private non-profit colleges and universities (the for-profits spend much more on sales and marketing and much less on instruction). . There's some mixed evidence that Pell Grants may increase tuition a little bit, but it's something like 10 cents on the dollar--the overwhelming majority of the effect of the Pell Grant is to reduce the costs for students and their families.  The fastest increase in tuition by far has been at public universities where state support has declined.  The data is unambiguous--reducing public support increases costs to students and their families. And the portion of aid that universities do absorb ends up paying for a higher quality education. The more universities spend, the better student outcomes in terms of completion and earnings. See, e.g., Stacy Berg Dale & Alan B. Krueger, Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables , 117 Q. J. Econ. 1491, 1524 (2002) ((“We do find that students who attend colleges with higher average tuition costs tend to earn higher income years later, after adjusting for student characteristics. . . . [T]uition matters because higher cost schools devote more resources to student instruction.”). Completion rates for lower cost options--online education, schools that use more adjunct professors, under-funded public universities--are all lower than completion rates for private non-profit universities. And within every category of higher education, completion rates have gone up as tuition has increased, even though the student body has become more diverse and less academically elite (schools are digging deeper into the barrel as educational attainment increases). At the same time, the boost to earnings from education has actually gotten bigger over the last 30 years. College and Universities have become more expensive because they've become higher quality. The Gates Foundation people claim to care about completion, and they came to be data-driven. They should know better than to believe unsubstantiated claims coming out of private student lenders, think tanks and politicians. I think they do know better.  So why are they pushing policy prescriptions that will hurt students and their families and are at odds with all of the social science?

• Answer:

  Your first link, about the Lumina Foundation, only mentions the Gates Foundation in passing by comparing sizes - there is no indication that they are involved with each other at all.  There are two New America paper.  One talks about a government program to reduce the maximum repayment rate on student loans to 15% of their incomes to make higher education more affordable.  The article goes on to suggest that the limit for lower income people should be lowered to 10%.  This will not make college more expensive to finance - the opposite.  The second paper suggests some revisions to the current system including things to encourage schools to accept more lower income students. Neither makes specific reference to the Gates Foundation (in the executive summaries at least) and the Foundation itself has the goals of: "New America is dedicated to the renewal of American politics, prosperity, and purpose in the digital age through big ideas, technological innovation, next generation politics, and creative engagement with broad audiences." The last paper refers to the fact that the Gates Foundation funded a large number of studies at the same time to provide a variety of ideas to improve the student loan system.  "This project generated a vast number of recommendations for policy makers to consider.  Despite the diversity of the viewpoints represented, a number of points of consensus emerged among the reports.  While implementation strategies often differed, objectives were aligned, largely around the need for:  simplification; better information for students and families; a system of institutional accountability; and new ways to serve the needs of non-traditional students." This looks like it will help - not hurt students.  There are a variety of ideas but that seems to be the point of the exercise.  They wanted to give the government a series of options to improve a system that no longer is working all that well.  I think that your premise that they are "advocate scaling back federal student loan programs and making college more expensive to finance?" is cheery picking the items you like the least while ignoring that consensus of the studies that were financed.