College Subsidies Hurt the Poor

Published April 6, 2013

Much college aid goes to people with little regard to their income. Pell Grants might be pretty targeted—though they’re getting less so—but “unsubsidized” federal loans backed by taxpayers are available irrespective of need. Tax-based aid skews high-income.

The American Opportunity Tax Credit, for instance, can be claimed by couples making up to $180,000. This pushes up college prices. If “college is astonishingly expensive” is repeated often enough, who do you think will more often be deterred from college, the rich or the poor?

The poor and minorities are disproportionately burdened by debt. Although everyone spends too much time and treasure on higher education, the poor and minorities are probably the most snookered by “college for all.” They tend to be the least prepared to do college-level work or pay inflated bills, and consequently most likely to pursue degrees without completing them. For example, only 39.5 percent of African-Americans completed their degrees.

So is it really fair to proclaim those who want to phase out inflationary aid don’t care about the poor and minorities?

Neal McCluskey ([email protected]) is associate director of the Cato Institute’s Center for Educational Freedom. Reprinted and edited with permission from


Image by U.S. Army Corps of Engineers.