Obama's College Aid

IBD Editorials

 

Obama's College Aid Plan Deserves An 'F'

 Posted 06:36 PM ET

Academia: President Obama says his new aid proposal will make college more affordable. It's actually an attempt to leverage a government-caused problem to root Washington even more deeply into higher education.

Like most Obama proposals, this one has a surface appeal. "It is time to stop subsidizing schools that are not producing good results, and reward schools that deliver for American students and our future," the president told an audience of college students in Buffalo, N.Y.
Well, who could oppose that? But, like most Obama proposals, things get ugly once you scratch that surface.

First, Obama's claim that college is wildly unaffordable is simply not true. Yes, the colleges' posted prices have shot up. At private colleges, they climbed 27% in real terms over the past decade, according to the College Board. They're up 66% at public four-year schools.
But the tuition families actually pay has barely increased. Net tuition at four-year private nonprofit schools, for example, has been virtually flat for a decade, after inflation. At public four-year colleges, net tuition has climbed 35% since 2004, but it's still only $2,910, on average.
Neither is it entirely accurate that students face an avalanche of debt. College Board data show that the average debt incurred by those getting a bachelor's degree climbed only 22% in real terms since 1999, to $13,600.

What has exploded over the years is the amount of federal aid — grants, subsidized loans, special tax breaks — thrown at college students. That's climbed 143% in real terms over the past decade.

Spending on special tax breaks alone has tripled. Per student, overall financial aid has climbed 62% in real terms since 2001.

The problem is that all this federal largesse is simply fueling tuition inflation, while largely insulating students from the cost hikes. Now Obama wants to use this government-manufactured cost crisis to let the government burrow still deeper into higher education.
He wants to create a new federal rating system for colleges. But why? Students have reams of such comparative data available from private groups. And there's every reason to be suspicious of a system that ranks schools based on a politician's idea of value.

Tying college aid to these politically derived ratings will only make colleges more beholden to federal dictates about "quality."
Earlier this week, Obama told students that "a higher education is the single best investment you can make in your future." Students should ask why, if college is such a great investment, is the government involved at all?