Wednesday, March 31, 2010

Making College Affordable

How do you make college affordable? Put the government in the business of providing loans and grants? What does that do?

Increasing the demand for college education by providing sweetheart loans and grants by the government simply raises the demand for a college education without in any way increasing the supply. What does that do? It raises prices.

The predictable response to Obama's recent closing of the private market for student loans in favor of more big government largesse will be a dramatic increase in tuition and fees in the college community. Why not? There is a significant increase in demand and funding. Take advantage of it. Raise your tuition and fees. Colleges administrators are smiling.

The problem that the modern college has is: how can I waste all of this money? An increasing share of college expenditures goes to non-educational pursuits -- mostly political pursuits. Centers for special groups proliferate. These centers have almost no educational purpose. Most merely seek to divide one student from another for the purpose of justifying its own existence. Pay administrators more. The modern college president has a total income that would make a bank CEO blush, not to mention free housing, free everything, as well as not much of a workload. The modern college president is mostly a party host for rich donors and has little or nothing to do with administrating the modern college. What is there to do? Professors have tenure and can't be required to do anything that they don't want to do, so what's there to do for the modern college president?

So, each college will now have to dig down deep and find new ways to waste the additional money that Obama is throwing their way. As for the middle class, they will sink deeper and deeper into a quagmire of debt to finance the booming tuitions and fees that colleges will impose. Thank you, Mr. President. Another idea from the coffee houses of Harvard that will impose a huge new cost increase on the American middle class.