Monday, December 22, 2008

The Government, College Affordability, and You

As students, the cost of college education is perhaps the biggest political issue that hits closest to home for a large array of young people and their families. In the newspaper that I'm involved with on my campus, we received a letter to the editor about how the youth were not motivated for McCain like they were for Obama, partly because of how Obama/Biden made "college affordability" a larger part of their platform.

On Obama's "College Affordability Fact Sheet," he cites such issues as "60 percent of all college students leave college with debt," "the average graduate leaves college with over $19,000 in debt," and that "between 2001 and 2010, 2 million academically qualified students will not go to college because they can't afford it."

In fact, in a lecture, I heard one college professor ask, "In a nation as wealthy as the U.S., why isn't college education free?"

Yes, why indeed? Thomas Sowell, one of my favorite economists and an educator himself, has some thoughts on the matter.

"Why does college cost so much?

There are two basic reasons. The first is that people will pay what the colleges charge. The second is that there is little incentive for colleges to reduce the tuition they charge.

Those who want the government to provide subsidies to help meet the high cost of college seem not to consider whether government subsidies might have contributed to the high cost of college in the first place."

"The president of a small college once told me that, if he charged tuition that was affordable, even an institution the size of his would lose millions of dollars of government money every year.

In a normal market situation, each competing enterprise has an incentive to lower prices if that would attract business away from competitors and increase its profits.

Unfortunately, the academic world is not a normal market situation."

"The University of Colorado law school had its accreditation by the American Bar Association put in jeopardy simply because they did not spend enough money on books for their law library -- even though their students passed the bar exam on the first try at a higher rate than the law students at Harvard and Yale."

So it seems that the college market is getting the worst of both worlds--regulation and cartelization on the supply end, and enabling the high prices through mass subsidization of its demand. In the meantime, politicians vaingloriously point to how they've used taxpayer money to continue this system.

Since Obama has promised to examine the federal budget and eliminate wasteful spending by ending "programs that have outlived their usefulness, or exist solely because of the power of a politician, lobbyist or interest group." Let's hope that our approach to funding education is one of them.

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