A recent decade-long case study in paying for higher education raises an interesting question: should we be more concerned about others paying for the exorbitant cost of higher education students currently face, or should we focus more on decreasing the cost of a college degree?
Basically, should we be more concerned with addressing the problem of high college costs from the front end or the back end?
An article in Politico described a decade-long, $50 million experiment in Kalamazoo, Michigan, known as the “Promise.” In 2005, anonymous wealthy donors tried to help solve the city’s problem of failing schools, poverty, and population decline by vowing to pay for college for all students attending Kalamazoo schools from kindergarten and then a Michigan public college. Those entering before 9th grade would also be eligible for some of the Promise’s funds.
This is a noble aim. Education — or training in a skill — is a golden ticket on the path to upward mobility. When Americans are better educated and trained, individuals and the American economy are better off.
However, there must be a better way to get there on a national scale. The “solution” of the Promise highlighted some problems in the larger scope of higher education, and it shows that these problems persist regardless of where funding for higher education originates.
When you throw money at things, those things become more expensive, explains Robert Tracinski in an article titled “The Paradox of Subsidies.” The Paradox is as follows: “Why do you subsidize something? To make it cheaper. What is the actual effect? To make it more expensive.”
If something costs too much, you don’t buy it. That act of saying ‘no’ to an expensive price is how consumers keep prices down. But when college isn’t affordable, for instance, government throws more money at it in the form of federal financial assistance programs. That means the bill will get paid, no matter the cost, so consumers don’t say “no” and colleges don’t lower costs. That is why federal assistance programs have skyrocketed alongside the growing cost of higher education.
Worse yet, “private colleges [are gaming] the federal financial aid system.” For every new $1 in government financial aid, colleges decrease the amount of tuition breaks their institutions would otherwise offer to students by 40 cents!
This has created a vicious cycle: government subsidizes higher education, so colleges raise prices and decrease aid, so government subsidizes it more – and so on. This is the worst way to go about making college “more affordable” for students.
Even in this case, if wealthy benefactors financed everyone’s education instead of the government, the underlying problem of the cost of education would still not be solved. This type of system rewards those who reap the funds of higher education, even if the price is artificially high. It does nothing to reduce a critical, long-term aim nationwide — to reduce the price tag of higher education up front.
One of the ways to help students afford college is to stop throwing money at the problem and start a real discussion about when one needs college.
That can start with government ending its practice of writing America’s universities blank checks. Unfortunately, U.S. Secretary of Education Arne Duncan doesn’t seem to understand this. Rather, his only “solution” has been to throw more money at the problem.
Another solution is that Americans need to stop writing universities blank checks, too. Students are often too willing to go into massive debt to pay for higher education.
But it’s not students’ fault – we are raised learning that higher education, particularly a four-year degree, is the most important thing for our futures, that the price is always worth it, and that it is the only way to be successful. These mantras are far from accurate. An article in the Economist, for instance, explains that in some cases, you will be as much as $150,000 worse off by going to college than if you had worked instead.
Wisconsin Governor Scott Walker recently said that you don’t need a college degree to run for higher office. “I got to be governor without it,” he said, “So I don’t think it’s any base requirement out there.” Rather, he believes his constituents judge him on his performance.
Considering 41% of graduates from America’s top colleges couldn’t find jobs in their field and half said they would choose a different major or school, Walker’s experience should make us think – do we really need college? Will it help us achieve our individual goals? Or would our time be better spent somewhere other than college, such as an internship or mastering a trade?
Before making the decision to enroll in college, students should think it through. Making a flippant decision to go to college can leave students worse off than if they had chosen another path. As more people seriously weigh their options, colleges will be forced to do more to attract students – like lowering costs and increasing quality.
Unfortunately, students aren’t receiving such value today. And the solution is not more kind-hearted, wealthy donors. Rather, students must start saying “no” to expensive colleges that don’t give them good returns on investment, and the federal government needs to stop writing blank checks to colleges.
This is the free market at work and it helps everyone.
