Obama, like most politicians, is telling people what they want to hear: That everyone is entitled to a college education for no reason other than that one wants and needs one.
He also implies that “greediness” is “pricing out” a young person from having the college education to which he or she is supposedly entitled.
Interesting. If it were the price of gas or medicine, Obama (and his ilk) would be railing against the greed and selfishness of the profit-seeking oil company “exploiters” who “charge too much.” Yet he doesn’t say this about colleges. Instead, he speaks of college tuition as if it’s some kind of floating abstraction removed from reality. It’s as if college tuition is rising … for no particular reason. It’s just something that happens, kind of like a natural weather event, and there’s nothing we can do about it other than make sure government takes away most or all of the pain.
Obama and others with his attitude completely ignore the relevance of the economic fact most responsible for the cost of anything: The law of supply and demand.
If college tuition is escalating in cost every year, it must be for one fundamental reason: There’s too much demand for too little supply.
The government sees itself as responsible for altering this trend. But the government cannot do it. The best thing the government could do is get out of the higher education marketplace altogether. It should stop intervening in the marketplace by rigging/manipulating the rules for obtaining loans (through federally regulated and managed student loan programs) and providing grants that have the effect of artificially inflating demand – that is, making demand for college higher than it otherwise would have been, thereby raising the cost of tuition.
Instead, Obama proposes even more tinkering and manipulating in the student loan/tuition marketplace, thereby making college more expensive each and every year.
If you really want college costs to go down, then you don’t forbid parents and graduates from paying back their loan at the pace they otherwise would have done. If you really want college costs to go down, then you create more supply to meet the demand – and you get rid of the demand artificially created by the government. Only the private marketplace can create more supply.
The best thing the government could do is what Obama would never allow: Reduce or eliminate the role of government financing in education.
In a free marketplace, most students would not pay the outrageously high prices that even state-funded schools are now charging for tuition. As a result, demand for college would start to go down. People would actually find other ways to learn, such as post secondary vocational education, on-the-job training, etc. Using your mind and brain doesn’t have to be as expensive as colleges and universities have led us to believe they have to be.
This would force even the best and most expensive colleges to lower their tuition rates. Eventually, as rates became low enough, private colleges (which all colleges should be) would – on the premise of profit and self-interest – create new educational services to meet the rising demand.
Of course, in order for a free market in higher education to develop, we’d have to get past the idea that, “Education is a right, and the government must make sure everyone has one.”
Even if we don’t establish a free market for education, sooner or later college tuition will price college education out of existence for most people. There’s only so much most people will pay (or can pay) for college, and the continuing tuition inflation rates are not sustainable.
Government will keep intervening by paying for more and more of it (or perhaps forgiving loan debts at some point), but that will only inflate the costs even more. Implicitly, Obama, through his proposal to slow down the repayment rate required for student loans, is acknowledging that the government is running out of options, too. There’s only so much the government can spend or borrow, and the borrowing is now in the multiple trillions of dollars. This cannot be a healthy thing for the economy or the future, certainly not the future of the college-aged student currently being educated to thrive and survive in that future.
For a completely different perspective than the one people want to hear, consider this interesting news story from Yahoo.com [“Father of 8 Won’t Save Money for College,” 10-29-14]:
For a lot of parents, watching their child get his college diploma represents a lifelong dream. For David Fagan, a marketing executive in Orange County, not so much.
Fagan has eight children, the oldest of which is a senior in high school, but the author of the upcoming book “Guerilla Parenting” says if any of his kids want to go to college, they’re going to have to pay for it themselves. “There was a point in time when college was the main goal, it was the American dream,” Fagan tells Yahoo Parenting. “The reason was that it led to being financially secure and self-reliant. But things have gone so far out of skew that we’ve stopped chasing self-reliance and instead chase college for college’s sake. Kids go to school and hope they’ll figure out their future, and we end up with a whole generation of kids laying on parents’ couches with degrees that are unusable, and $100,000 of student loans.”
This is the most honest and accurate assessment of college that I have ever read.
The premise of today’s compulsion-for-college is indeed “college for college’s sake.” By showing that they’re willing to pay any cost for college, students and parents are conveying to these colleges that, “I must have you, no matter what. There is no other option.” In itself that might not be such a problem. But the fact that people expect their politicians to carry the freight (via the student loan pseudo-marketplace as well as grants) only serves to drive the cost of tuition up even more. None of this would have happened without the original idea that, “We must have college for college’s sake.
I call this an “idea,” but it’s not necessarily something conscious. It’s more of a subconscious, irrationally experienced emotion. Unfortunately, a lot of parents are worried that if their child does not have a college degree from a particular school, it will make him or her (as a parent) look bad, and this would be a catastrophe. This is the psychological mechanism by which so many millions of parents end up chasing college and forgetting about (or altogether ignoring) the whole principle of self-interest and self-responsibility that supposedly made college desirable in the first place.
Be sure to “friend” Dr. Hurd on Facebook. Search under “Michael Hurd” (Rehoboth Beach DE). Get up-to-the-minute postings, recommended articles and links, and engage in back-and-forth discussion with Dr. Hurd on topics of interest. Also follow Dr. Hurd on Twitter at @MichaelJHurd1