In an editorial which seems to be in response to higher education criticism posted on this blog, Grand Forks Herald opinion editor dismisses the idea that government should get out of the higher education business even while admitting that the government’s involvement has created a bubble in tuition and fees:
So, with student-loan debts skyrocketing, why doesn’t the government just get out of the business of subsidizing college students?
After all, by funneling grants and loans to students — more loans than grants these days, but that’s another editorial — the government drives up college costs.
Like traffic expanding to fill a new freeway, colleges grow their budgets to absorb the new dollars. So, cut off the easy money, watch the number of college students fall, then sit back and enjoy the spectacle of colleges cutting costs as well.
Great idea. Right?
Wrong — and wrong not just in any old way, but in a bipartisan supermajority way.
Dennis goes on to point out that Republicans and Democrats alike – both Mitt Romney and Barack Obama – want to continue government-subsidized student loans, grants, etc. Which might be a good point, except that once upon a time there was a “bipartisan supermajority” in favor of promoting home ownership through government-backed, government-subsidized financing.
The political obsession with homeownership began in the 1990’s, and we saw how that story ended in 2008 and 2009. It was the collapse of the subprime housing market, and it was ugly. The housing bubble popped, and home ownership declined:
We’re currently promoting higher education in the same way – through government-backed, government-subsidized loans – and it’s creating the same sort of bubble. Here’s annual growth in tuition, compared to housing, medical care and overall inflation:
The student loan market isn’t as big as the mortgage market, but American student loan debt is larger than American credit card debt. And we’ve been inflating this bubble for much longer than the housing bubble.
This sort of growth is hurting our students. Just the other day I talked to a friend, in his early 30’s and in the middle class, who told me that he and his wife have $100,000 in student loan debt. They expect to be paying it off for the rest of their lives.
Dennis would have us believe that this is just a price we must pay for higher education opportunity. I disagree. We can have that opportunity without making our students into debt slaves, and the solution is to get government out of higher education.