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Guidance Counselor in Chief
Obama wants you to go to college, no matter what
Barack Obama isn't impressed with your high school degree. He made that quite clear in the early days of his presidency when he told Congress: "Whatever the training may be, every American will need to get more than a high school diploma. And dropping out of high school is no longer an option. It's not just quitting on yourself, it's quitting on your country."
Virtually every president in recent memory has made a big stink about higher education, usually without making fundamental changes to the system. However, on July 14 in Warren, Michigan, Obama put $12 billion where his mouth is, promising investments in community colleges around the country. The purpose, he said, was to drive reforms that would make it easier for people to get educated in the struggling economy.
But the more fundamental proposed change came the following day, when Rep. George Miller (D-CA) introduced a bill in Congress boosting the amount in Pell Grant scholarship funds given to low-income students. In order to pay for the expanded program, as well as the community college initiative, the legislation cancels subsidies to private lenders making college loans. Instead, the federal government will become the sole, direct lender. This is a big deal.
Obama isn't the first president to throw government money at America's higher education system and hope that it sticks. President George W. Bush fiddled around with his College Cost Reduction and Access Act in September 2007. The law implemented mandatory increases in Pell Grants, cut interest rates on student loans, and established a provision that would cancel any outstanding loans after 25 years.
Bush tried it again one year later with the Higher Education Act Reauthorization. Not only did it contain a wide array of federal student aid provisions, but it also mandated that the Department of Education publish a list of universities that have the highest tuition costs in 2011. Schools on the list would then be forced to justify and explain their tuition rates; a requirement that would be tantamount to a reprimand by the federal government for daring to charge high fees.
Despite (or perhaps because of) these half-measures, tuition rates at public universities continue to rise. According to a report issued by the College Board, the cost for going to college increased at an annual rate of 4.2 percent between 1999 and 2009, with tuition increasing 6.4 percent last year alone.
But after all those virtuous-sounding laws, paying for college just isn't getting any easier. Are greedy universities charging exorbitant amounts of tuition just because they can? Not exactly. Instead, government meddling has thrown the laws of supply and demand into overdrive.
This dilemma is not unlike what we saw in the housing market during the last few years. Someone decided homeownership was a good thing for almost everyone, so the government started pushing people to buy homes, using the tax code and other incentives. The same thing is happening with college. But instead of people getting loans for houses they could never pay off, 18-year-olds are getting excessive loans for college. And just as we saw before the collapse of the housing bubble, the price of going to college in America is skyrocketing.
The reason is simple. The increase in demand (artificial though it may be) means shorter supply, which ultimately means higher prices for everyone. But whether it's in the name of affordable housing or affordable education, the government continues to throw more money into the system, hustling to increase demand. The only difference with education is that instead of bailing out banks to force them to continue making loans, the government is now making the loans itself.
Traditionally, college has been discriminatory in the best possible sense. It was used to weed out those likely to be unsuccessful in the work force. Someone who did not make it through college did not make it to the high paying jobs, period. Furthermore, letting the market control tuition prices (even if they are high) means that many people who probably wouldn't thrive at college—or would do better at a blue-collar job—won't even apply in the first place. This weeding process would eventually decrease demand and in turn, prices would go down, especially at less competitive schools.
Instead, with government help and nudging, more and more people are entering college who wouldn't have made that decision if left to their own devices. We've seen the effects this kind of micro managing has on the housing market. If things don't change now, education will be headed down the same disastrous path and universities will soon become too big to fail.
Federal involvement in education is nothing new, but President Obama is taking it to an extreme level by taking the financing of college out of the private sector entirely. With the increase in and government administration of Pell Grants, Obama is aggressively funneling young people into college; a decision that just isn't right for everyone. Apparently it's not enough to be the country's head auto exec and commander in chief: Obama is eager to try out the role of guidance counselor in chief, too.
Amanda Carey is a summer intern at Reason magazine.
|8.3.09 @ 3:06PM|#
Obama thinks your state-issued high school
diploma sucks.
The only solution, of course, is state-issued college degrees.
Warty|8.3.09 @ 3:08PM|#
What we need is an old surly man for President. Someone who will tell us to drop out of our damn-fool theatrical lighting program and get a real job down at the mill or wiring houses or something. And get him another gin and tonic, goddammit.
Tomcat1066|8.3.09 @ 3:14PM|#
I just had a horrible idea. Federal
universities.
Don't utter that shit out loud!
[whispers]They may hear you!!!![/whispers]
|8.3.09 @ 3:16PM|#
Come on, it'd be so much easier to indoctrinate us with federal universities. Just imagine the Economics classes!
|8.3.09 @ 3:21PM|#
You are a terrible, terrible person, ProL. That you could even come up with that idea indicates your total and complete villainy.
Rich|8.3.09 @ 3:21PM|#
"And dropping out of high school is no longer an option. It's
not just quitting on yourself, it's quitting on your
country."
Ooh, may I try parsing Obamaese, with a little help from
Webster?
"quit: released from obligation, charge, or penalty ; especially :
free"
Guess not.
T|8.3.09 @ 3:24PM|#
Well hell, my high school diploma did suck. But I'm honest enough to admit that was my fault. What the hell would forcing me into college have done for anybody?
Xeones|8.3.09 @ 3:27PM|#
Hey, i met my greatest and closest drinking buddies in
college.
That's all i got out of it, though.
|8.3.09 @ 3:28PM|#
I just had a horrible idea. Federal universities.
We already have them at Colorado Springs, Annapolis, and West
Point.
|8.3.09 @ 3:32PM|#
Episiarch,
I blame (1) my profession and (2) my fellowship at the Clinton
White House. Otherwise, I'm lawful good.
Tupla,
I thought about those, but they're a special case. I meant
universities without the direct connection to the military. They
could also use the federal university system to force kids (in lieu
of paying back loans or paying for school in the first place) into
mandatory community service, which they've been trying to do for a
while with limited success. A federal university system would make
that lots easier.
I'm going to major in Bureaucracy, with a minor in
Keynesianism!
|8.3.09 @ 3:33PM|#
The government got involved more in the housing market. Now it
has collapsed. As the government gets more involved in the
healthcare sector, prices have gone up. The government has been
taking care of more people's college and prices go up. So what do
we do to drive prices down. More government involvement,
naturally.
"What we need is an old surly man for President."
Well, Warty, I know who that man is. That man is Clint Eastwood
(who is also a Libertarian and all around badass).
|8.3.09 @ 3:37PM|#
I'm going to major in Bureaucracy, with a minor in
Keynesianism!
"I have a degree in homeopathic medicine."
"You've got a degree in baloney!"
|8.3.09 @ 3:38PM|#
There will be no drinking or drug use at federal universities.
In the federal university system, the kids will all live in
strictly controlled dorms. In place of student RAs will be
well-trained political officers.
Episiarch,
After the federal universities are established, no one will be
allowed to run for or be appointed to federal office without a
federal degree.
Jordan|8.3.09 @ 3:38PM|#
Can we make a bachelor's degree as worthless as a high school diploma? Yes we can!
|8.3.09 @ 3:44PM|#
"Obama thinks your high school diploma sucks"
Thanks to Brown v. Board of Education 1954.
|8.3.09 @ 3:45PM|#
"will we find ourselves in an education bubble?"
So, when the education bubble bursts like the housing bubble did,
will the degree I invested in actually be worth anything? Is there
any way I can sell it now and just rent for a while?
On a serious note, the more I see imbalances such as these growing,
the more I'm becoming convinced that the US dollar is inevitably
going to experience a substantial devaluation.
The only way that students will be able to repay their loans on
degrees that aren't really worth anything, will be with money that
isn't really worth anything either.
The same goes for indebted households, corporations, and
governments, who have all accumulated significant liabilities
without corresponding assets of equal or greater value.
|8.3.09 @ 3:45PM|#
"Reason intern Amanda Carey wonders, will we find ourselves in
an education bubble?"
Already there, Ms Carey. Already there.
|8.3.09 @ 3:47PM|#
"Absolutely, and I bet it begins busting in the next few
years."
I can't wait to bail out Harvard!
|8.3.09 @ 3:47PM|#
I just had a horrible idea. Federal universities.
We've already got a couple of those. Surprisingly enough, they're
highly competitive.
-jcr
Abby|8.3.09 @ 3:48PM|#
"Traditionally, college has been discriminatory in the best
possible sense. It was used to weed out those likely to be
unsuccessful in the work force. Someone who did not make it through
college did not make it to the high paying jobs, period.
Furthermore, letting the market control tuition prices (even if
they are high) means that many people who probably wouldn't thrive
at college-or would do better at a blue-collar job-won't even apply
in the first place. This weeding process would eventually decrease
demand and in turn, prices would go down, especially at less
competitive schools."
That's not really true - I mean, that's just not a good history of
higher ed in this country or very good economics. 1) College
degrees are more necessary now for high-paying jobs -- so "Someone
who did not make it through college did not make it to the high
paying jobs, period" isn't particularly accurate. 2) Colleges only
stopped discriminating against most of the population (women, Jews,
etc.) fairly recently in the scheme of things, so the major ways
they were "discriminatory" were not, in fact, in the best way. 3)
The arguments you are making about supply and demand assume certain
slopes of those curves, and you say that demand is driving prices
as less selective colleges. But you don't back any of that up by
giving price numbers specifically for less-selective colleges, and
it's not clear to me that they're where the growth in price is
happening. 4) You don't distinguish at all between sticker price
and actual price paid - how much of increasing prices is a matter
of better price discrimination via higher prices and more aid? 5)
You don't do much of a job talking about how there isn't one market
for college education, there are several different markets with
different inputs and outputs - and different degrees of price
growth with different reasons behind them.
|8.3.09 @ 3:52PM|#
Nah, I figure some Obamamite who thinks he's a libertarian will read this, propose it, then freak America out of its malaise.
Xeones|8.3.09 @ 3:55PM|#
"Boil the BAs! Boil the BAs!"
"No, you fools! You don't boil BAs... You bake 'em!"
|8.3.09 @ 3:58PM|#
In general the article is on the mark. But Ms Carey is wrong
here:
Someone who did not make it through college did not make it to the high paying jobs, period.
High skilled blue collar workers can earn higher wages than all but
those graduates with professional degrees. Listen to a college
professor bitch about what he had to pay a plumber* sometimes.
:)
See also machinists, electricians etc, not to mention those lucky
enough to get into the UAW at a big three plant in the glory years.
Auto workers were pulling down earnings in the high five figures in
today's money, some of them with very little education.
Admittedly the high paid unionized unskilled industrial jobs are
disappearing, but a skilled worker can still do well either as a
wage-slave or self-employed.
*Even considering that that bill includes materals and overheads
etc that plumber is still clearing a pretty good load of brass.
|8.3.09 @ 4:02PM|#
Xeones,
You catch on quickly.
Of course, these days, as we casually spend trillions, the
government could probably get away with spending the $5 trillion
it'd probably cost.
Maybe they could start by just buying universities that already
exist? Or seizing them through eminent domain?
kinnath|8.3.09 @ 4:12PM|#
You can make good money with the right skills or the right education, but neither "skills" or "education" in a general sense is a guarentee of high income. However, you can pretty much be assured that unskilled, uneducated workers will be at the bottom of the heap.
kinnath|8.3.09 @ 4:14PM|#
Maybe they could start by just buying universities that
already exist? Or seizing them through eminent domain?
Can we start with some historically black university in the deep
south. The SCOTUS ruling on that one would be wonderfully
amusing.
|8.3.09 @ 4:35PM|#
The guy who had the biggest house on the block owned a septic truck. He was not Harvard educated.
Space Fiend|8.3.09 @ 4:43PM|#
To call out a specific college: Kansas University, ~40 minutes
from where I grew up, is little more then a holding pen for morons
with rich parents, to be awarded their degree and half of daddy's
business after a 4 year wait. [Note: this excludes the schools of
engineering and medicine, which are still very good]. I would take
an applicant with 4 years work experience out of high school over
any type of liberal arts degree from KU in a second, and most
employers feel the same way.
However, because of the "go to college" cultural message
[definitely helped by the government] you get all kinds of idiots
who would be lucky to end up working at McDonalds [NTTAWWT] sitting
in colleges. Most state schools have a "general studies" diploma
now - I mean, we've stopped pretending these degrees are anything
more then a trap you spend $100K on in return for a piece of
worthless paper.
Students without the real intellectual skills to benefit from a
college environment would be much better served working and gaining
experience.
alan|8.3.09 @ 5:03PM|#
Pro Libertate | August 3, 2009, 3:58pm | #
Say, how much would a federal university system cost,
anyway?
All of it.
As in, you are hitting your second fifth of whiskey, and playing
poker. You see a pattern in your hand, you cannot quite make it out
what it is, but maybe two more cards will do the trick, so you
declare, 'all in, baby!'
alan|8.3.09 @ 5:07PM|#
Sean | August 3, 2009, 4:43pm | #
If everyone goes to college, it'll just become High School. Or has
it already?
Why don't we just skip high school altogether, and send the
shorties packing to college? Then we turn around and laugh at the
teacher's unions, 'no more jobs for you. We won!'
|8.3.09 @ 5:11PM|#
To clarify 3:44pm:
The fruit of Brown was bussing, which broke up neighborhoods. When
I was a kid, everyone (nearly) on your block, the kids at the park
or whatever all went to the same school. Most of the kids walked to
scholl or rode their bikes There was a sense of community. People
got to better know the people in their communites.
Bussing changed that. In most big cities, it's not uncommon for a
block with 12 kids on it to have those kids attending 12 different
schools. It had an isolating effect. It splinters the block.
Today, my city has an overwhelming majority, non-white student
population and yet they still bus. Absolute idiocy.
|8.3.09 @ 5:14PM|#
BTW an electric lineman can easily earn six figures. No college
required and as I have indicated here in the past, there is an
industry-wide, growing shortage of lineman.
A lineman can earn more in one year than what a kid pays to get a
four-year degree in General Studies.
The Mythical Canadian Libertar|8.3.09 @ 5:32PM|#
As someone whose trip to Planet Libertarian was largely propelled by viewing the absurdities of higher education from the inside, I've officially reached the point where it can't even make me angry anymore, and I just have to laugh.
kilroy|8.3.09 @ 5:42PM|#
Last week there was an article about a couple of firemen with $200K+/yr pensions. I got a degree and 20+ years experience and I won't be seeing anything like that.
|8.3.09 @ 6:25PM|#
Education and success are, and always have been, about effort and initiative and not some rubber-stamp degree. Sure you can catch a bad break but that can happen to anyone. But the odds are that if you sleepwalk your way to a degree you'll end up with less than someone who works to educate and improve themselves through their own efforts.
Space Fiend|8.3.09 @ 6:41PM|#
Regarding D of E loans:
I got a letter in the mail a few weeks ago informing me that the
Department of Education had "bought" (a loose use of the term to be
sure) my loan from Citi. For some reason unknown to me, even though
they already had all my information (they sent me snail mail at my
home address, and emailed me at my university email) I was forced
to go to a website (of a private contractor, not part of doe.gov)
and re-enter all my information, including email address and
physical address. My SSN was pre-typed (in asterisks) into the
form, or I would've refused to fill it out.
So can someone tell me, what is the point of this? Instead of banks
with large, functioning loan departments that skim off a small
percentage of a student loan in return for the use of their
infrastructure, now I have to deal with dozens of government
sub-contractors? Don't even try to tell me that's going to save
money.
Lord, if they screw up my information, or lose a payment, I don't
even want to imagine what kind of hell that's going to be. And now
the government is going to be the collections agent on the only
loan that follows you through bankruptcy? How sick is that?
|8.3.09 @ 6:44PM|#
Although to be fair though, there are a number of state
sponsered schools that are continually ranked at the top like the
UC system etc.
The key factor there being that they have to a competive field for
college kids unlike the majority of the public school system.
Also, I think if we are going to be providing public money for
college, it should be for majors that actually produce something.
Hard sciences etc. I would rather support a budding engenieer, over
another damm poetry major.
Paul|8.3.09 @ 7:58PM|#
I just had a horrible idea. Federal universities.
It would introduce competition into the system, increase choice and
reduce costs.
Oh wait...
hmm|8.3.09 @ 8:27PM|#
The grade inflation is what kills me. The absolute need to force a class of 20-100 into a normal distribution within academia is insane. This has always been an issue, but with an increase students and people who probably wouldn't otherwise qualify the over all effect on grades has been to drive the value of an A right into the shitter. Hell I've seen 3.6ish accounting students with no clue what a MBS is and finance students who struggle with manipulating the dividend discount model. Simple basic shit.
|8.3.09 @ 8:33PM|#
Mortgage-backed security?
Anyway, don't worry. The federal university will graduate everyone
with a 4.0 average, instantly making America smarter!
hmm|8.3.09 @ 8:42PM|#
Yes mortgage backed security.
It's scary how outright stupid some of the people are that schools
are pumping out.
|8.3.09 @ 8:52PM|#
hmm, I was in an electronics class one day. College level, 3rd
semester. A lady asked the instructor, "now how many segments are
in this seven segment display?"
She is now an Avionics tech. Working on the U.S. army base on AH64
Apache longbow attack helicopters.
|8.3.09 @ 11:04PM|#
Let's not forget the convenient fact that nearly every
university in America practices affirmative action. Icing on the
cake?
When I was in college just a few years ago, I quickly lost count of
the number of times I'd be sitting in class, trying not to
laugh/cry whenever in contact with those who shouldn't have even
been there in the first place.
qwerty|8.4.09 @ 12:12AM|#
The grade inflation is what kills me.
Unfortunately, this is a consequence of the fact that too many
people are going to college today. Now that people have decided
that everyone--every single one of us!--is entitled to a college
degree, the only way to make sure that happens is by dumbing down
the courses so that everyone can pass. University presidents used
to talk about rigor and learning. Now they talk about "retention"
and "student success".
The real answer is to repeal Griggs vs. Duke Power and let
companies give IQ tests again. That way people don't have to waste
4 years getting a BA to prove they're smart.
mthec|8.4.09 @ 2:10AM|#
Ha, nice Futurama reference Episiarch.
"Hey! Unless this is a nude love-in... get the hell off my
property!"
"You can't own property, man."
"I can. But that's because I'm not a penniless hippie."
Sosnowski|8.4.09 @ 4:01AM|#
If you really want to go to college, and don't have any disqualifiying medical conditions, I know a way to get the federal government to pay for it right now.
|8.4.09 @ 7:52AM|#
It's not just the lack of rigor, it's the uselessness of the subject matter to start with. It's not like all these people going to college under the Obama plan are going to study computer design, accounting or medicine. We and our grandchildren will be on the hook for Fred Flintstone learning all about 17th century lesbian sado-masochistic literature in southern Scotland. This is the perfect government boondoggle - billions with absolutely no chance of increasing productivity or gdp!
mike|8.4.09 @ 10:23AM|#
This "everyone can go to college" nonsense only makes sense if
by "college" you mean "community college."
Taking out a giant loan to get a liberal arts degree (originally
meant only to enrich the minds of wealthy children, not to prepare
you for a job) makes no sense whatsoever.
mdav007|8.4.09 @ 12:13PM|#
If you want to stimulate the economy I would suggest paying off all the government loans for those that are actually paying their loans back. This would put more money into hard working peoples pockets instead of giving it away to stupied people who should never be allowed into college. It a little thing called rewards vs. consequences.
William Furr|8.4.09 @ 3:21PM|#
Whatever happened to trade schools and community colleges?
Hell, my CS degree is practically trade school material for all the
economic good it does me. An associate's in programming is
functionally equivalent to a bachelor's in CS.
The Master's I'm going for next is the equivalent of advanced trade
school, in some sense, though I'm also planning to enjoy the hell
out of myself as long as I'm not in a 9-to-5 office job and
immersed in theory and research instead of production.
Leave a Comment
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