Obama Just Found a Way to Make College Even More Expensive

The President's new College Scorecard will jack up federal taxpayer subsidies without improving accountability or reducing the soaring costs of tuition.

StudentCollegeDegrees360 / Foter / Creative CommonsUniversity presidents are crying a river over the Obama plan to create a federal scorecard to rate colleges. But their tears might be the only good thing to come out of this plan.

Otherwise, it's simply a welfare scheme for students masquerading as college accountability that won't do diddly to make college more affordable in the long run.

It is true that rating colleges ought to be as simple as "rating a blender" as Jamienne Studley, deputy undersecretary of education, told horrified college presidents this week. But it isn't, because unlike blenders, colleges obstruct efforts to test their performance.

Uncle Sam hands out $150 billion in financial aid to universities every year—about twice as much as all the states combined. Yet, notes State University of New York-Albany's Ben Wildavsky, colleges resist independent, national, standardized testing that would allow lawmakers to judge what exactly this aid is accomplishing—and give parents the information to determine the educational bang they are getting for their buck.

Take the Collegiate Learning Assessment exam, for example. It is hardly perfect, but it tests the reading, writing and critical thinking skills of a sample of incoming and graduating students to measure the "value added" of their university. But only 200 of the country's 1,700 or so colleges participate in it and hardly any make the results public. This is not surprising, maintains Wildavsky, given that the limited data available shows that colleges produce "dismayingly low levels of learning."

What's more, some years ago colleges actually managed to get a law passed barring the federal collection of individualized data that would, for example, allow student transcripts to be linked up with earnings data to see which majors from which colleges generate what returns to help students pick more lucrative colleges and majors.

So if Uncle Sam wants to do something, it ought to be to require universities to administer a CLA-like exam and also allow data gathering as a condition for federal aid. Instead, the Obama administration's proposed scorecard will simply duplicate the half-a-dozen or more private rankings that rate colleges by input rather than outcomes.

The main difference is that unlike them, it'll explicitly rate colleges by their "accessibility and affordability" and, if Congress agrees, tie federal aid to the score they get. Colleges that admit more Pell grant students will get a higher ranking and therefore more aid. This sounds great, but in reality it means that existing federal aid will beget more federal aid.

It gets worse. One of the most under-reported aspects of administration's scorecard is its loan forgiveness provision. Currently, "new borrowers" who obtained their first federal student loan after 2007 are eligible to signup for something called the "Pay As You Earn" program. This program caps their loan repayment at 10 percent of their income for 20 years after which the remainder is written off. (For professions such as nursing it takes only 10 years to get the write off.) In other words, students take loans according to their needs, and repay them according to their ability and hit taxpayers for the rest. The president wants to expand this socialist prescription to all students who receive federal loans.

Setting aside the fiscal insanity of expanding an entitlement at a time when the country is already groaning under debts and deficits, what incentive would students have to be careful shoppers if they know that Uncle Sam will eventually write off all their debts?

One reason college costs have grown 27 percent beyond inflation over the last five years is that parents are picking up an ever smaller share of their kids' college costs and the government (and other) grants ever more, according to a report last year by Sallie Mae, a government-sponsored enterprise that manages student debt. Loan forgiveness will shift this equation even more toward the government, giving students even less reason to seek—and colleges less reason to become—more cost-effective institutions.

Ultimately, if the administration wants to make college affordable, it'll have to stop reading the Communist Manifesto and curb inflation. And in order to curb inflation, it'll have to give parents information—and incentives—to be better shoppers.

The Obama scorecard does the exact opposite. That's the real reason to cry over it.

A version of this column originally appeared in the Washington Examiner.

 

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  • sarcasmic||

    Let's see here. You teach Austrian Economics?

    F!

  • Jordan||

    No Office of Diversity? F!

    My alma mater (Texas A&M) has one, complete with a Vice President of Diversity. I've told them if they can afford that, they don't need my donations.

    No kangaroo courts for rubber stamping sexual assault charges? F

  • OneOut||

    Howdy Jordon

  • JD3||

    Exactly.

    I just graduated from Northwood University (private business school) in Michigan. I really enjoyed my time there.
    They love Austrian economics.
    To quote their core values statement:
    "We believe in the advantages of an entrepreneurial, free-enterprise society. Individual freedom and individual responsibility.
    Functioning from a foundation of ethics and integrity.
    Promoting and leveraging the global, diverse and multi-cultural nature of enterprise."
    Woo hoo!

  • VG Zaytsev||

    Obviously some dangerous cabal of teathuglicans.

  • JD3||

    If by teathuglicans you mean freedom-loving, constitution-respecting entrepreneurs with the skills and character to drive personal, organizational and societal success...then sign me up!
    Again.

  • sarcasmic||

    Those wealth apologists will never get a passing grade.

  • On The Road To Mandalay||

    With regard to "Austrian economics", was that during the Austro-Hungarian Empire, between World War I and II, Nazi Austria (which was really Germany), or after the Soviet Zone moved out. Just curious.

  • Will Nonya||

    Are you being intentionally obtuse or just too lazy to use Google today?

  • RussianPrimeMinister||

    They're misspelling "Australian" economics.

    In that system, people fight bears and kangaroos for their money, which is in the form of deadly deadly poisonous spiders.

    Also snakes. They have lots of snakes.

  • wareagle||

    something Obama says having the totally opposite result in action. This is my shocked face -

  • Ted S.||

    It's all about control. The more control Big Government has over the purse strings, the more control they have over everything else.

  • JD3||

    That's why we need to educate the younger generations about WHERE they choose to go to school.
    Private, freedom-loving, big-government-detesting universities are the way to go...the other schools are for the birds.
    Big, spying, controlling, fear-mongering, bald eagles...'Merica!

  • RussianPrimeMinister||

    Is there any possible way to get accreditation for college level homeschooling?

    That would be one hell of a business. and I'll bet it would make a mint.

  • Virginian||

    Where the fuck are the Morning Links?

  • sarcasmic||

    The 9:00AM Morning Links?

  • Virginian||

    They used to come at 8:30!

  • TwB||

    When does the bubble burst and leave millions of people holding onto a load of debt that they can't possibly hope to pay? It has to happen at some point, right? And when it does, the economy will be in for a rude shove downward.

    On a side note, does anyone live in the DC area? If so, I recommend watching the ABC morning show on weekdays from 5-7, simply for Autria Godfrey. Watching her read the news while I jog on the treadmill isn't a bad way to start the day.

  • JWatts||

    "When does the bubble burst and leave millions of people holding onto a load of debt that they can't possibly hope to pay?"

    That's a day the Democratic party is gleefully awaiting. It's the day millions of Socialists are born.

    After all, it can't be their fault, they were promised an easy life as long as they got a degree. And no one "important" said that it couldn't be a 4 year degree in hacky sack and cost $150K in student loans.

  • Frozen Costume||

    “I can't afford college”

  • iEagleHammer||

    At least I'm paying off my loans... sheesh. We are raising another generation of free-loaders in this country, but it's okay, because social justice. /facepalm

  • TwB||

    It's really sad. I often wonder what will happen in the next 10 years as people in their 20's get into their middle and upper 30's. What will their careers look like? Will they all be living with roommates because they can't afford to buy a home/condo/whatever because they couldn't save up any money due to student loan debt? It's tough to think about.

  • iEagleHammer||

    Definitely, and then you have to wonder about this class warfare bender we are on. Will they blame peers like me, because I actually worked hard and can afford a house? Who gets the blame when their lives don't pan out? Obviously, it can't be their own fault....

  • TwB||

    The biggest hurdle to overcome for many folks a couple of years younger than me is: personal responsibility. Take ownership of your own life, accept the choices that you have made, and work your ass off on finding a job. It's not easy out there, I get that, but still, effort does go a long way.

  • trshmnster the terrible||

    Will they blame peers like me, because I actually worked hard and can afford a house?

    Yes! How do I know? Because they call me lucky and blessed and fortunate. (It's all true, but none of it is the differential between me and them) What they don't realize is that I work hard on two fronts. I work hard to make a solid career for myself and I work hard to cut costs wherever possible. It irritates me when people look at the life I built myself and my family and call me blessed and lucky, all while they drive their new car, rent a luxury apartment, eat out 5 out of 7 nights a week, and go on 3 vacations a year. Guess what, you're blessed and lucky too, and you're running your finances into the ground.

  • Pulseguy||

    Two of my sons are doing well. One, really, really well. He owns a couple of condos, plus owns a number of commercial properties. He is my youngest. My second eldest is doing well, too. Good job, girlfriend, promising career, makes close to $100 gs a year, on salaray, etc. My third son, my eldest, is not doing well. He has had a lot of trouble getting things going and is back at home with his Mom...my ex.

    The first two I mentioned, didn't go to University. My eldest, who is not doing well, went to University and has a teachers degree.

  • Bill||

    Many colleges and universities are accredited and I believe there are federal rules pushing this already. (won't be eligible for this and that unless you are accredited, the same way they do with many federal monies to push states and businesses to do things their way). The accrediting agencies require different forms of assessment. For example, my university is accredited by SACS which handles southern schools. My dept. is chemistry and we track our outgoing graduates performance on a standardized test called the Field Majors test. This is fine but would only help us if our performance went down with time. It does little though to assess what happens to the ones that don't graduate. So the current system is far from perfect but I doubt Obama's new plan will have any positive effects.

    The newspapers are already onto the fact that many with college degrees don't have jobs and that students need to get degrees in areas they can find jobs so this is correcting itself to some degree due to the continuing recession. I'm reminded of the fact that the feds required the financial institutions to be rated and for reasons which I've forgotten, it quickly became a scam where the ratings agencies (I guess because they were getting paid by the people they were rating) would give them good ratings when they did not deserve it.

  • JD3||

    ObaMAO believes it's A-okay for big-government to control students.
    Yeah, that sounds great.
    What's the historical, global track-record for that type of educational sovereignty?

  • GW||

    Meanwhile, good paying "blue collar" jobs can't be filled because we've taught an entire generation of entitled little shits that those jobs are beneath them. So they get college degrees, which are now about as common as high school diplomas, and can't find jobs. Never mind that most of these degrees are simply generic....only a handful have some real demand and meaningful value. These graduates are shocked that going to school and partying for 4 years on the taxpayer's dime, majoring in beer in minoring in getting laid, doesn't equate to a six figure income and a corner office as soon as they get out of school.

  • toolkien||

    As a controller for a mid-grade durable manufacturer, the "blue collar" crowd that are getting tech degrees are getting somewhat the same signals. We get entry level, just out of school, people who are expecting $18+ per hour starting (Mid-West cost of living) which simply isn't realistic for the effort required (e.g. straight welders, no underwater-upside down type stuff). But the tech-school instructors are filling their heads with unreasonable expectations. Whether it's a 4-6 year university or a 2 year tech school, they have to justify their tuition. They delude students into unrealistic expectations to keep the tuition money flowing in. The saddest part is, the students are inept. We'd almost be further ahead apprenticing rather than looking for degrees. We had a person apply who was a tech school instructor and they failed our weld test.

    In case people haven't noticed - this country is falling apart.

  • Pulseguy||

    Just talked to a landscaper who is crew boss for a City landscape crew. He says the kids with horticulture degrees just out of university are the worst workers. He says they think their degrees exempt them from having to pick up a shovel. He has to point out to them a shovel is sort of part and parcel of gardening. They are shocked.

  • straffinrun||

    Prog: We use taxpayer money to subsidize Uni because the price of Uni is too high.

    Ever wonder why they use "because" when they should use "so"?

  • american socialist||

    A number of studies-- and the most in depth of them-- have found no link between the amount of financial aid and tuition increases. Furthermore, they have found a link between increased state spending on schools and lower tuition increases. Want to see the studies? I see that you guys have stated that there are increases in tuition and the number of students receiving financial aid. I wonder why that is.

    A hammer and fucking sickle over obama's visage? As I have said before, you guys are a cult who get 1% of the vote and should not be taken seriously or elected to any office higher than my garbage man.

  • JWatts||

    "A number of studies-- and the most in depth of them-- have found no link between the amount of financial aid and tuition increases."

    No there's probably not a direct link. Why should there be? However, the Universities are charging what the market will bear. And students with financial aid can afford higher tuition.

    So, basic supply and demand assumes there will be an indirect link between the two. You understand basic supply and demand, right?

  • straffinrun||

    The new law of demand and demand. Evidently someone slept through the housing bubble.

  • trshmnster the terrible||

    A number of studies-- and the most in depth of them-- have found no link between the amount of financial aid and tuition increases.

    Citation abso-fucking-lutely needed.

    When you make a bullshit remark that would literally turn the entirety of economics on its head, you at least need a handful of peer-reviewed studies to back your bullshit up.

  • american socialist||

    No problem... Here is the link. The paper here isn't itself peer-reviewed, but has the links inside. Section 3 has the most relevant section.

    Www.acenet.edu/news-room/Docum.....ograph.pdf

  • Eggs Benedict Cumberbund||

    STFU. You have no credibility here. Stiffed the bank on a contract you willingly signed. You suck.

  • Heroic Mulatto||

    Section 3 is the most relevant section? Not Section 4 which contradicts your argument?

    As described in the introduction, the best way to characterize the
    studies that have attempted to measure the veracity of the Bennett
    Hypothesis is that the findings are ambiguous. Some studies find a
    relationship between Pell grants and tuition increases; others do not.
    Some find a relationship in some college sectors but not others, and
    other studies find exactly the opposite result.

    Don't piss in my drink and tell me it's a lemon twist, boy.

  • american socialist||

    Did I write "all" or "a number of". You may want to contact the Reason ombudsman and tell them about their conflation of certainty with ambiguity, because they seem to think the link is a slam dunk. Good luck! Let me know how it goes with people employed with Koch Industries.

  • Butler||

    As far as I can tell, this paper compares student aid to "gross tuition." Whatever that means. What it should really be comparing is student aid to total educational costs per student. Given that the cost of a college education has blown away inflation since the creation of the dept of ed, we can easily find a direct correlation between increasing federal financial aid and increasing costs. Correlation is not causation, but when you start looking at the rate of inflation for goods/services largely subsidized by taxpayer money (i.e. education, healthcare, housing, etc.) and see that these things consistently tend to outpace inflation, whereas prices in sectors of the economy that are not heavily subsidized by FedGov do not typcially outpace inflation -- well, it's easy to start developing some pretty credible theories about causation. Given that the libertarian theories are also consistent with long-established laws of economics and Obamanomics isn't . . .

  • Taggart||

    Here's the thing about tuition - some people pay sticker price, and some people do not. Tuition has gone up dramatically for SOME, and has gone down or stayed the same for OTHERS.

    Who has it gone up for? The people who have fiscally responsible parents who live consistently below their means and save money in order to accumulate wealth to assist their children with their college educations. These people - the responsible ones - pay the most.

    Then, of course, in order to the tuition paid by the student (and/or his or her parents) there is the actual per student cost - SOMEONE is paying whatever part of the sticker price the student is not paying - a private foundation or the taxpayer.

  • Heroic Mulatto||

    Want to see the studies?

    Yes, I do. Posting the doi addresses would be most helpful, thanks.

  • Eggs Benedict Cumberbund||

    No comprehension of supply and demand?

  • On The Road To Mandalay||

    The propaganda poster with Obama and a hammer and sickle background is amusing. Another article blasting Obama's administration, which of course is the job of those who dislike that administration. However, as usual (and in this case, student loans) there is NO suggested solution. In real life, a problem is supposed to have a resolution. In the world of propaganda, the "resolution" is the propaganda itself. Amazing!

  • Eggs Benedict Cumberbund||

    The solution, dumbass, is not to do the stupid shit the admin is doing. Encourage loans for useless degrees, then means test payments for 20 years, and finally forgive the rest of the loan.

    That is fucking preposterous. The best remedy is to ruin the credit of the idiots who took out 100k worth of loans for an art history degree. The pain will discourage similarly stupid behavior in the future. Perverse incentives do not create a sound economy.

  • On The Road To Mandalay||

    Eggs Benedict

    Since I am a "dumbass", I hope you don't mind if I refer to you as a son of a bitch, asshole, piece of shit?

    Your reply to my comment is interesting. I assume you are a libertarian. And yet, you are saying that people who get degrees in art history (etc.) are choosing the wrong degree.

    The translation is that student loans should probably be approved by YOU, who will decide what degrees are valuable and so on.

    You have a nice day Asshole. Go fuck yourself if you have the time away from your busy schedule of figuring out what a "sound economy" is.

    Fuck you!

  • Pulseguy||

    People who get art history degrees didn't get the wrong degree. They did get a degree which almost for certain guarantees them a job anywhere in the world, driving taxi. Their degree is, more or less, useless. That, by the way, isn't a libertarian comment. It is just common sense.

  • On The Road To Mandalay||

    So what fucking degrees are people supposed to get that will fit your fucking vision of what the world is supposed to be?

    How many people get art history degrees anyway? Not many. However, art history might be a bit more sane than getting more fucking computer degrees, so you can tell people how to be better fucking zombies.

  • NotAnotherSkippy||

    But art history degrees teach people how to think? That's rather rich. I know one of those art history majors. After daddy didn't ruin her dreams of getting her master's at Sotheby's, she's now earning the princely sum of $40k pa in the low-cost state of CA. That's after the ~$150k pissed away on a little private school for undergrad so the precious snowflake wouldn't drown in a more affordable state school and the ~$70k for her fuckaround 18mo in London.

    More "computer degrees" please. And make all of the underwater basketweavers pay back their loans. Let the markets work.

  • Taggart||

    They are supposed to get whatever degrees they want, provided they can pay for those degrees with their own money.

  • Eggs Benedict Cumberbund||

    I'm saying perverse incentive don't work...well they do work to fuck things up.

  • On The Road To Mandalay||

    Thanks for the update asshole.

  • Duke||

    The more money that's chasing a fixed supply of services causes...prices to go down!

    I love leftenomics!

  • Bryan C||

    "barring the federal collection of individualized data that would, for example, allow student transcripts to be linked up with earnings data"

    Wait a minute. That's a good thing. I understand the argument and the stated reasons, but the federal government has no reason to have access to any individual student's transcripts. And individualized earnings data is needed only for income taxes, and absolutely nothing else.

    If the federal government's loan program turns into a bottomless pit without intimate access to everyone's educational records then the federal government should get the hell out of the loan business.

  • AS||

    Government rating is dangerous; they will eventually change it to incorporate all types of socialist ideals. But the public will take it seriously, considering it some type of 'official' ranking. However, the author's solution of a CLA-type test is also dangerous. I recall reading results that engineering students fared worse on it than humanities. However, engineers earn higher salaries than humanities majors. If a test does not reflect how society values the contribution of the student, then it is not a useful measure of the effectiveness of education.

  • Taggart||

    While the Obama administration's proposed ratings system is a complete waste, I'm not fond of the article's counter-proposal - the extension of standardized, national testing into colleges. What a mess that's been on the secondary and grammar school level, and hardly a libertarian concept.

  • JagerIV||

    I go to a small, liberal arts college. One of the things I greatly value is the freedom that the students and staff have in what they can choose to teach.

    Mandating some sort of test for college, where the goal is to teach vastly divergent things, is folly, merely asking to take the disease that plagues our high schools and below into the college as well.

    Just get rid of the Department of education. If a state wants to create something like this for their colleges, power to them, its in their right. Just don't force this on everyone in the country, so that any failures are hidden within the averages.

  • EricaF||

    To improve the lives of the most vulnerable students, as Obama promised, should be done much more than releasing a new guidance. Our government shouldn`t forget about the real steps in this direction but not only additional instructions. All children want to feel safe and comfortable at home and at school, moreover they should have access to modern technologies and resources (like this one My Essay Service which helps in writing essays. And, of course, it is necessary for children to know where to ask for help and defense when they feel bad.

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