by Tina Grazier
The cost to educate our children has grown at a rapid clip since the Federal government founded the Department of Education a little over three decades ago. Jimmy Carter signed that legislation that would bring another cabinet post to future administrations. Rising tuitions at colleges around the country are causing students and their parents a lot of worry as they consider alternative ways to make higher education possible. Some are beginning to question whether the education students received is worth the price that must be paid. Others are fuming as they realize student loan debt has created an education bubble that might soon burst or that will never be repaid. This is a burden taxayers will shoulder whether or not they benefited from “forgiven” loans. Still others have noticed that increasing tuitions are actually driven by subsidies and grants that are so generously granted by our federal government.
The Heritage Foundation has information about the high cost of higher education:
Since 1982, the cost of attending college has increased 439 percent, more than four times the rate of inflation. Increases in college costs exceed increases in health care costs, which have risen more than 250 percent over the same time period.[2]
Federal funding is contributing to this exorbitant increase in college costs. Economist Richard Vedder argues that “some of these financial aid programs have contributed mightily to the explosion in tuition and fees in modern times.”[3] Moreover, Vedder notes:
When someone else is paying the bills, people want to buy more of the good or service in question at prevailing prices than when the customer pays the bills. This means a higher demand for higher education, and other things being equal, higher tuition costs. … Each one dollar in grant aid leads to tuition fees somewhere around 35 cents higher than would otherwise be the case. Just as third-party payments in medicine have led to escalating health care costs, so increased student financial payments have contributed to soaring tuition costs.[4]
Overlooking the relationship between increased federal subsidies and rising college costs, proponents of increased Pell funding want to continue down this path. The Obama Administration and certain Members of Congress say an increase in Pell funding is necessary to ensure more students have access to college. Senator Tom Harkin (D-IA) recently stated, “This decrease [in Pell funding] would hit at a time when many Americans are returning to school in an effort to make themselves more competitive for jobs in these tough economic times.”
First the administration creates conditions that ensure sustained “tough economic times”, then it steps up to the microphone to tell us more spending is necessary because of “tough economic times”. It’s a neat political trick but, more and more, Americans aren’t entertained or fooled by cheap tricks or expensive giveaways as solutions to the problems we face.
Most of us can imagine (or relate to) how easy it is to spend someone else’s money. But at the federal level when the spending of other people’s (taxpayers) money means that college becomes too expensive for those paying the tab (taxpayers for their own kids) there is something extremely wrong. Suddenly generous subsidies to others are taking too big a bite out of ordinary Americans’ family budgets. Something needs to be done to make college affordable to average middle class Americans so that debt isn’t the biggest present at graduation.
The President keeps talking about making sure everyone gets a fair shot at the American Dream. The President is out talking up his polices to college students across the country. I guess he sees himself as the pied piper of higher education. Unfortunately he is (blindly? conveniently? stupidly?) ignoring the causes of rising tuitions, the numbers of students that higher tuitions now exclude, and the rapidly rising debt his education policy is creating for those who will one day graduate and become taxpayers. We were already in a deep education hole; the President’s big plan is to send in a backhoe to dig the hole even deeper.
Isn’t it time to for Americans to stand together and demand a better product at an affordable price from our institutions of higher learning? The first step may be removing federal government involvement. It is certainly worth considering since college tuitions have risen 439 percent…four times the rate of inflation…since the DOE was born.
In typical American fashion one solution is emerging to combat high prices and can be found online:
Similar to how media began “supplementing” printed newspapers in the 90s with free online editions — which transformed business models and made the news largely “free” on the web for consumers — free online courses might (perhaps unintentionally) ultimately force tuition closer to zero.
Getting government out of the way and the introduction of online learning will re-introduce healthy competition into the higher education game. Competition, more and better choices for students, and lower costs for parents….hmmm, sounds like good old American free market principles at work. Where there’s a will, you can be certain, enterprising Americans will find a way!