May 3 2012

How To Make College Cost Much, Much More

Carrie L. Lukas

President Obama is pushing to extend student loan subsidies, and Republicans (including candidate Romney) have been flat-footed in responding properly to this last push toward government dependency.  The right response would be to explain how subsidies facilitate colleges raising rates and may be encouraging on over-consumption of useless college courses. 

Karina vanden Heuvel wades into this debate in the Washington Post to double down on the current approach and make college "free".  She writes: 

…even with the lower rates, more and more students can’t afford the college education or advanced training that everyone except for Rick Santorum believes they need.

College costs have soared at a rate faster than health-care costs. Since 1980, the cost of living has nearly doubled; health-care costs have quadrupled, and college tuitions and fees have exploded eight times over.

This has had two major effects. As the National Commission on Adult Literacy reports, “The US is the only country among 30 OECD free-market countries where the current generation is less well educated than the previous one.”

Yet Heuvel should note that these trends have occurred while government has rapidly increased subsidies for colleges.  Heuvel hypothesizes that making public colleges “free” would force private colleges to cut prices.  The opposite is far more likely to be true.  Public colleges would do what they’ve been doing in reaction to previous subsidies:  Jack up the price to capture the subsidy, especially when the entire bill is being passed on to taxpayers.

America does have an education and student debt problem.  But part of that is that we’ve been encouraging young Americans to pursue a “college degree” rather than an education.  College degrees only matter if they actually represent useable knowledge attained.  Wasting time in grievance-study programs isn’t of value to employers so is unlikely to be a good reason to take on government debt.  That's why recent college grads are so frustrated:  They did what they were told, took out big loans to go party for four years and sleep through some generalist classes, and now can't find gainful employment with their skill set.

Pouring more government money—and money that we don’t have of course, because contrary to Heuvel’s headline, college wouldn’t be “free” the tab would just be passed on to taxpayers—isn't going to create a better educated populace or more efficient higher education system, which is what we actually need.

 

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