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June 11th, 2012 1:07 pm
College Costs: Cause/Effect Relationship Dawns On Government, Academia
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Under the headline “New Course in College Costs,” today’s Wall Street Journal meditates on something that should be obvious:  “As Student Debt Grows, Possible Link Seen Between Federal Aid and Rising Tuition.”

A “Possible Link?”

Apparently, it’s news to academia that federal subsidies lead to higher prices:

Rising student debt levels and fresh academic research have brought greater scrutiny to the question of whether the federal government’s expanding student-aid programs are driving up college tuition.”

But don’t try telling that to the Obama Administration, famously callous toward anything that includes the concept of “profit” or “private”:

A spokesman for Education Secretary Arne Duncan said the administration believes there is a link between federal aid and tuition increases at for-profit schools, but that it sees no such tie with public and nonprofit schools. “

The real-world data contained in the report, however, contravenes the Obama Administration’s party line:

Tuition and fees at four-year public schools have risen 150% since 1990, to an average of $8,244 per student this past academic year, according to the College Board, an advocacy group made up of universities.  Over the same period, federal grants and tax benefits rose 242%, to an average of $4,292 per student, said educations consultants Kathy Payea and Sandy Baum, who conduct the College Board’s annual research on college prices.  Federal loans per student tripled.”

Unsurprisingly, George Will cogently captures the phenomenon in his latest column entitled “Subprime College Educations”:

This bubble exists for the same reasons the housing bubble did.  The government decided that too few people owned homes/went to college, so government money was poured into subsidized and sometimes subprime mortgages/student loans, with the predictable result that housing prices/college tuitions soared and many borrowers went bust.  Tuitions and fees have risen more than 440 percent in 30 years as schools happily raised prices – and lowered standards – to siphon up federal money.”

It’s just unfortunate that George Will remains too scarce on the syllabi of government and academia.

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