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.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    Absolutely, and I bet it begins busting in the next few years.

  • ||

    Obama thinks your state-issued high school diploma sucks.

    The only solution, of course, is state-issued college degrees.

  • ||

    I just had a horrible idea. Federal universities.

  • Warty||

    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.

  • Warty||

    Federal universities.

    Shut the fuck up, Pro L.

  • ||

    Go, Feds!

  • Tomcat1066||

    I just had a horrible idea. Federal universities.

    Don't utter that shit out loud!

    [whispers]They may hear you!!!![/whispers]

  • ||

    Come on, it'd be so much easier to indoctrinate us with federal universities. Just imagine the Economics classes!

  • ||

    You are a terrible, terrible person, ProL. That you could even come up with that idea indicates your total and complete villainy.

  • Rich||

    "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||

    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||

    Hey, i met my greatest and closest drinking buddies in college.

    That's all i got out of it, though.

  • ||

    I just had a horrible idea. Federal universities.

    We already have them at Colorado Springs, Annapolis, and West Point.

  • ||


    I blame (1) my profession and (2) my fellowship at the Clinton White House. Otherwise, I'm lawful good.


    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!

  • ||

    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).

  • Rich||

    Xeones, we're talking *Federal* universities, not *feral*. ;-)

  • ||

    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!"

  • ||

    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.


    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||

    Can we make a bachelor's degree as worthless as a high school diploma? Yes we can!

  • ||

    You'll also be able to major in Spin.

  • ||

    "Obama thinks your high school diploma sucks"

    Thanks to Brown v. Board of Education 1954.

  • ||

    "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.

  • ||

    "Reason intern Amanda Carey wonders, will we find ourselves in an education bubble?"

    Already there, Ms Carey. Already there.

  • WWJGD||

    With a minor in Cognitive Dissonance?

  • ||

    "Absolutely, and I bet it begins busting in the next few years."

    I can't wait to bail out Harvard!

  • ||

    I just had a horrible idea. Federal universities.

    We've already got a couple of those. Surprisingly enough, they're highly competitive.


  • Abby||

    "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.

  • ||

    You're enjoying this, aren't you, ProL. You sick bastard.

  • ||

    I'm talking about a federal university system, not the military academies.

  • ||

    Nah, I figure some Obamamite who thinks he's a libertarian will read this, propose it, then freak America out of its malaise.

  • Xeones||

    "Boil the BAs! Boil the BAs!"

    "No, you fools! You don't boil BAs... You bake 'em!"

  • ||

    Say, how much would a federal university system cost, anyway?

  • ||

    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.

  • Xeones||

    It would be free to whoever wants to go, Pro L!

  • ||


    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||

    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||

    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.

  • ||

    Say, how much would a federal university system cost, anyway?

    How much you got?

  • ||

    The guy who had the biggest house on the block owned a septic truck. He was not Harvard educated.

  • ||

    If everyone goes to college, it'll just become High School. Or has it already?

  • Space Fiend||

    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.

  • Spoonman||

    I just had a horrible idea. Federal universities.

    Fuck you. Fuck. You.

  • alan||

    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!'

  • A T||

    We demand that the new chick posts some pictures of herself!

  • alan||

    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!'

  • ||

    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.

  • ||

    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.

  • ||


    No, that's F.U.

  • The Mythical Canadian Libertar||

    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||

    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.

  • ||

    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||

    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 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?

  • ||

    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||

    I just had a horrible idea. Federal universities.

    It would introduce competition into the system, increase choice and reduce costs.

    Oh wait...

  • hmm||

    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.

  • ||

    Mortgage-backed security?

    Anyway, don't worry. The federal university will graduate everyone with a 4.0 average, instantly making America smarter!

  • hmm||

    Yes mortgage backed security.

    It's scary how outright stupid some of the people are that schools are pumping out.

  • ||

    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.

  • ||

    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||

    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||

    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||

    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.

  • ||

    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||

    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||

    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||

    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.

  • ||

    Barack Obama is an old Beagley SOB, if you ask me.

  • Jeremy||

    Wow, and they called COMMUNITY college the 13th grade...

  • abercrombie milano||

    .in order to really get the Books of the Bible, you have to cultivate such a mindset, it's literally a labyrinth, that's no joke

  • nike shox||

    is good

  • دردشه عراقية||



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