[patio11]

In a case of "Be careful what you wish for", this would likely result in colleges abandoning the pretense that all their majors are equally valuable and charging engineers more. They already act to capture any increase in public or private subsidy [+]; this just makes it easy to justify for people who would find it socially awkward to say "Degrees in CS better prepare you for the labor force than degrees in communications; we should charge accordingly."

"The government is practically forcing our hand; what can we do. Those philistines, there is just no reasoning with them. Ever since Reagan all they do is cut, cut, cut -- why does no one appreciate the value of an education anymore?"

[+] I have been occasionally called paranoid regarding this claim, so I will clarify that this is directly observable. Get a price quote which contains any portion of grant aid. Then inform the university that you've received a $2k scholarship. The university will increase the price retroactively, by "applying" the scholarship 50% to your loan and 50% to your grant aid.

This was straight-up policy at my alma mater. Luckily, my regular-old mater embarrassed the heck out of me by arguing the point with them for each of my external scholarships, causing a net decrease in the cost of attendance of about $10k versus the university's post-subsidy-recapture amended quote.

[pdog]

So what? This form of "price discrimination" already exists at universities, e.g., with certain graduate, MBA, and continuing education programs that function largely as profit centers. There's no reason for different schools like engineering or liberal arts to charge the same rate.

Students aren't forced to pay tuition. It's a voluntary exchange if they feel they're getting their money's worth.