It is an amazing thing how politicians believe that all you have to do is throw money at a problem and it will go away. Or perhaps I give the scoundrels too much credit as their ultimate goal is to buy votes from an unsuspecting, naïve electorate. Whatever the case, Barack Obama is at it again, this time proposing to spend more money to stave off the negative effects of high college tuition on America’s higher education students.
Late last week, the President unveiled a plan to give relief to Americans affected by high college costs while at the same time providing incentives to colleges and universities to contain tuition costs. Key provisions of the plan include boosting federal spending on Perkin’s loans from $1 billion to $8 billion, keeping interest rates low for current student loan recipients, and doubling over the next five years the number of work-study jobs available to college students. Further, the President’s plan would force institutions of higher learning to contain tuition costs or risk losing federal funding.
Now, this isn’t the first time since becoming president that Obama has upped the ante when it comes to spending on higher education. In fact, he has more than doubled Pell Grant funding and spent billions more on college subsidies in his so-called “stimulus” act and Patient Protection and Affordable Care Act.
Given the fact that college tuitions continue to rise, you’d think that Mr. Obama would have learned that more money thrown at higher education doesn’t help college students. The direct opposite happens. Yes, college students take the money and go to school, but the end result is that many of them have debts they will never be able to get out from under. In fact, student loan debt now exceeds credit card debt in America. Additionally, since many high paying jobs have gone overseas, college graduates are finding it harder and harder to acquire positions that will give them any chance to pay down their debts. Only about half of the jobs obtained by recent college graduates even require a college degree.
But more importantly, it is precisely because the government is spending billions every year to subsidize higher education that costs have gone through the roof. Since 1980, congressional funding of college Pell grants has increased by 475 percent, after adjusting for inflation. At the same time, the cost of tuition has skyrocketed by over 430 percent. Economist Richard Vedder has pointed out that the same dynamic that causes health care costs to soar is also at work in higher education - third-party payments. When someone else is footing the bill consumers are more willing to purchase the good or service provided. The inhibition of cost is removed, demand increases, and tuition like medicine and medical care gets more costly.
What has been created by Washington’s policies is a financial bubble in higher education. Like various bubbles in the stock market, dot.com industry, and housing before it, the federal government has pumped tons of cash into higher education, bidding up the price of the service. We are at a point where the benefits of a college degree do not offset the high costs thereof. At some point, when enough Americans realize it and stop being lured into the government’s financial trap, the demand for higher education will drop and with it the cost. Of course, Uncle Sam will continue pumping even more money into the system to feverishly re-inflate the bubble. That has been the track record of our government in the current financial bubble, there is no reason to believe it won’t do the same thing in higher education.
To solve the problem of high college costs, government must end its subsidization of the industry. In the absence of the market determining interest rates, government should be raising rates for students not lowering them. Government sponsored grants should be abolished altogether. These two acts would decrease the demand for higher education causing its artificially high price to tumble back to reality. Since there are few jobs requiring a college degree right now anyway, this seems like a good time to burst the bubble.
With thirty years of proof that government subsidization of higher education causes high tuition rates you’d think the last thing President Obama would propose is more spending on college education. Or perhaps his ultimate goal is to buy votes from an unsuspecting, naïve electorate?
Article first published as Is Obama Attempting to Buy Votes from College Students?on Blogcritics.
Late last week, the President unveiled a plan to give relief to Americans affected by high college costs while at the same time providing incentives to colleges and universities to contain tuition costs. Key provisions of the plan include boosting federal spending on Perkin’s loans from $1 billion to $8 billion, keeping interest rates low for current student loan recipients, and doubling over the next five years the number of work-study jobs available to college students. Further, the President’s plan would force institutions of higher learning to contain tuition costs or risk losing federal funding.
Now, this isn’t the first time since becoming president that Obama has upped the ante when it comes to spending on higher education. In fact, he has more than doubled Pell Grant funding and spent billions more on college subsidies in his so-called “stimulus” act and Patient Protection and Affordable Care Act.
Given the fact that college tuitions continue to rise, you’d think that Mr. Obama would have learned that more money thrown at higher education doesn’t help college students. The direct opposite happens. Yes, college students take the money and go to school, but the end result is that many of them have debts they will never be able to get out from under. In fact, student loan debt now exceeds credit card debt in America. Additionally, since many high paying jobs have gone overseas, college graduates are finding it harder and harder to acquire positions that will give them any chance to pay down their debts. Only about half of the jobs obtained by recent college graduates even require a college degree.
But more importantly, it is precisely because the government is spending billions every year to subsidize higher education that costs have gone through the roof. Since 1980, congressional funding of college Pell grants has increased by 475 percent, after adjusting for inflation. At the same time, the cost of tuition has skyrocketed by over 430 percent. Economist Richard Vedder has pointed out that the same dynamic that causes health care costs to soar is also at work in higher education - third-party payments. When someone else is footing the bill consumers are more willing to purchase the good or service provided. The inhibition of cost is removed, demand increases, and tuition like medicine and medical care gets more costly.
What has been created by Washington’s policies is a financial bubble in higher education. Like various bubbles in the stock market, dot.com industry, and housing before it, the federal government has pumped tons of cash into higher education, bidding up the price of the service. We are at a point where the benefits of a college degree do not offset the high costs thereof. At some point, when enough Americans realize it and stop being lured into the government’s financial trap, the demand for higher education will drop and with it the cost. Of course, Uncle Sam will continue pumping even more money into the system to feverishly re-inflate the bubble. That has been the track record of our government in the current financial bubble, there is no reason to believe it won’t do the same thing in higher education.
To solve the problem of high college costs, government must end its subsidization of the industry. In the absence of the market determining interest rates, government should be raising rates for students not lowering them. Government sponsored grants should be abolished altogether. These two acts would decrease the demand for higher education causing its artificially high price to tumble back to reality. Since there are few jobs requiring a college degree right now anyway, this seems like a good time to burst the bubble.
With thirty years of proof that government subsidization of higher education causes high tuition rates you’d think the last thing President Obama would propose is more spending on college education. Or perhaps his ultimate goal is to buy votes from an unsuspecting, naïve electorate?
Article first published as Is Obama Attempting to Buy Votes from College Students?on Blogcritics.
TIP:
Enter the amount, and click "Tip" to submit!
Michael Andrews
Frank Apisa
Johnny Fever
GerryGreene
TriviaCompanion
Larry3000
Salon.com
Comments
Higher education should be available for all who can meet stringent entrance criteria and for no one else. Too many college teachers have to spend a major portion of the first two years of a student being enrolled teaching them things they should have learned how to do in grade 6 - like read or spell or know the multiplication table. That is a costly thing to remedy at a university!
It has become almost axiomatic that those who, like Steve Jobs, build mighty financial empires, do not have university degrees. I doubt that 90% of jobs where one is "required" actually need that level of education. All those employers really want is people who can read the instructions and follow them reasonably well. A proper high school education should be able to teach that, for pete's sake!
It's time we stopped forcing teachers to "pass" incompetent teachers for fear of losing their jobs. It's also time to take special needs kids out of regular schools. They are lovely, loveable kids to be sure, but they eat up the class time of teachers AND competent students. We need schools that are specially geared to teaching special kids so the kids a regular schools have a chance to learn their course work properly.
.
.
When a government makes it too easy to afford a college education, it cheapens its value to the student. Too many in California, where both Rider and high State subsidies for college tuition exist, enroll in a public university or community college and drop out quickly when things get tough or pursue less challenging, relatively useless, degrees.
There's something about the things you have to work hard to acquire . . . you respect them . . . you maintain them . . you improve them.
I'm not certain that "working hard" to get an education is what makes us appreciate it. In my own case, it was the opportunity to learn that which I wanted to know more about that was the root of my appreciation. But then, I didn't go to university with the intention of making myself a more marketable wage-slave. I went, at age 30, because it was what I wanted to do.
I am saddened that getting a degree has become a criteria for obtaining employment. This demeans and devalues eduction. True education is not job training, it is exploration of ideas and possibilities. It is training the mind to think logically and well. It is discovering the potential that lies within oneself. It is learning how to learn.
.
One of Kenn’s points seem to be that Obama’s offer to subsidize more tuition for tertiary education leads to an artificial demand. Hence, costs increase and greater student loan debt accrues. On a more cynical note, Kenn also believes that Obama may be buying votes as well – a common practice among many politicians who believe taxpayer money can be distributed to the unfortunate in a manner that secures their political careers.
My point correlates with Kenn’s to the extent that we agree that increased tuition subsidization encourages more to embark on a college career. It’s just that I believe many are not prepared for educational challenges beyond the high school level, so enticing them to college’s cheapens the curriculum offered, explored, or acquired.
For example, when students who don’t learn well enter the level of education beyond high school, the institutions enrolling such students seek to accommodate them. They offer remedial courses. They offer certificates that are easier to achieve. They cater to a group who may not have the desire to learn at the tertiary level, but who are enrolled simply because the government made it easy, or inexpensive, for them to do so.
For most of the 20th Century, there was a “ticket punching” aspect to a university education. A Bachelor’s degree was an indication its recipient could learn at higher levels. No employer realistically believed that a college graduate learned what he or she needed to know about its business. They presumed that college provided the basic knowledge and that student achievement was an indicator of how well the graduate would learn during OJT (“On-The-Job-Training”).
The fact that you were 30 when you went to a university may say much about what motivated you to get an education at this level. The fact that I had to work during the course of acquiring my Bachelor’s degree may say something about my motivation. The fact that the government paid for my tuition to acquire a Master's degree under the provisions of the GI Bill, but that I still had to work to support my family and pay bills, may also say something about my motivation.
I suspect that if either of us had simply gone to college because it was free and because we had nothing better to do with our time, then what we learned, how we learned, and why we learned would have been very different for us both.