The 2014 '30 Under 30'

Congrats to this year's 30 -- check out the full list here!

The real #WarOnStudents

Some on the Left are saying that “right wing bloggers” only oppose President Obama’s push to keep student loan rates low because it comes from President Obama.

As usual I am unsure whether they are simply being deceptive or that they truly believe they are the only ones that have thought through their political philosophy (I’m not saying they have, I’m just saying they probably think they have).

Sorry, Eric Boehlert, we don’t oppose the president’s philosophy on student loans just because it comes from him. (Boehlert is Senior Fellow at Media Matters for America.)

Those of us who disagree actually believe in this thing called the free market, and another thing called logic. What this means is that we think – as opposed to many on the Left – that a cause has effects that ripple even beyond what any one person or group of people can predict or understand.

The Left arrogantly believes that they can order society, create a commission here or there that will have access to all the appropriate knowledge and come up with “solutions” to economic “problems.”

As Hayek said in Road to Serfdom:

“But if the actions of the state are to be predictable, they must be determined by rules fixed independently of the concrete circumstances which can be neither foreseen nor taken into account beforehand; and the particular effects of such actions will be unpredictable. If, on the other hand, the state were to direct the individual’s actions so as to achieve particular ends, its actions would have to be decided on the basis of the full circumstances of the moment and would therefore be unpredictable.”

The intention of need-based student aid was to help students from low-incomes households afford college. So they beefed up the Pell Grant program and turned the Department of Education into a full-fledged student lender.

What were the consequences? Nicholas Turner did a study while at the University of California (Who benefits from student aid? The economic incidence of tax-based federal student aid) which revealed that private universities matched student aid (specifically need-based grants) dollar for dollar with tuition increases. State schools did the same with their out of state tuition rates.

Legislators have tried dealing with large tuition rate increases with even more Pell Grant money and every year it’s the same thing, the increase in aid is trapped in tuition hikes. Has this helped students from low-income households? No, it has actually hurt them greatly.

Whether students qualify for need-based grants weighs heavily on their decision to attend college. The more aid a student qualifies the more likely they are to attend college.

But here is the rub: once these needy student gets to college they realize they cannot afford the high tuition rates that are largely caused by the increases in Pell Grant. So they take out student loans, mainly from the government.

Why? It is simply because they have the lowest interest rates. These low interests betray to the student that there is not much risk involved with taking out a student loan.

And what do we get? The ever increasing ease with which to take out student loans has led in part to a $1 trillion dollar debt balance, more than any other consumer debt (auto loans, credit card, etc.) and delinquency rates for student loan payments are now estimated at 21 percent!

What does the president want to do? Make it even easier for students to take out loans.

Here we have another instance of the federal government trying to fix a problem that was created by it in the first place (sub-prime mortgages anyone?).

In another study, (Aim High or Go Low? Pricing Strategies and Enrollment Effects When the Net Price Elasticity Varies with Need and Ability) economists Bradley Curs (University of Missouri) and Larry Singell (University of Oregon) advised that two solutions could be employed for the current tuition rate situation: a high aid/high tuition route or a low aid/low tuition route.

So I ask Eric Boehlert and the president, and even congressional Republicans: would you rather subsidize the ever increasing tuition rates in the higher education blob, wasting billions in tax payer money and strapping young people with debt they may hold for the rest of their lives? Or, would you actually like to save the government money (for once) and provide a better future for young people by helping them to avoid debt?

A real war is being waged on young people. One of ignorance (or ill intent; like I said, I’m not sure) from the Left and one of relative spinelessness coming from congressional Republicans on this matter.

Contact (tweet, call etc.) President Obama, Eric Boehlert and your congressman and ask them to stop waging this war of ignorance.

Example: Hey @BarrackObama stop the #WarOnStudents, reform the student aid program.

Or: Hey @EricBoehlert Why do you hate college students? #WarOnStudents

 

Comments

Comments

  1. Bryan says:

    I’m not quite sure what reform the author is asking for here…

    Student loans may be part of the reason for tuition increasing, it is not the sole cause. We are at a time when a college degree is more valuable than it has ever been. The difference in wages for a college grad and a high school grad are higher than they ever have been, regardless of what you majored in or where you went to school. Sure, the job market is tough right now for recent college grads, but what are we (as a nation) supposed to do when the job market is even worse for those who didn’t go to college.

    Federal subsidized student aid went large scale after World War II with the G.I. Bill, which put an entire generation through school and helped our economy as a result. Tuition didn’t spike back then either. I agree that there needs to be something done about rising tuition, but what is the author asking for here? Raising the interest rate on Stafford Loans? Ending student loans. That seems rather shortsighted and not well-thought out.

  2. geckogal55 says:

    The problem causing high tuition costs is that tuition pays for too much other stuff not directly associated with education, i.e. research, sports, exhorbitant salaries of staff & teachers, scholarships, etc. Remove those costs and take getting an education back to basics would reduce actual tuition costs significantly and make it affordable for everyone. Let private donations pays for sports, research, scholarships & higher salaries.

  3. Milan Moravec says:

    University of California Chancellor says instate tuition is not high enough. University of California Berkeley (UCB) Chancellor Robert J Birgeneau is outspoken on why elite public universities should charge more. With Birgeneau’s leadership flagship UCB is more expensive (on an all-in-cost) than private Harvard and Yale. Cal. is the most expensive public higher education in our country!

    Birgeneau likes to blame the politicians, since they stopped giving him every dollar expected. The Chancellor’s ‘charge more’ instate tuition skyrocketed fees by an average 14% per year from 2006 to 2011-12 academic year. If Birgeneau had allowed fees to rise at the same rate of inflation over the past 10 years they would still be in reach of most middle income students. Increasing funding is not Cal’s solution.

    UCB is a public universities created to maximize access to the widest number of instate students at a reasonable cost: mission of diversity and equality of opportunity. Unfortunately Birgeneau’s ‘charge more’ instate tuition diminishes the equality and inclusion principles which underlie our state and country. Birgeneau’s and Provost George Breslauer’s senior management ‘charge more’ instate tuition denies middle income Californians the transformative value of university education.

    Chancellor Birgeneau’s tenure is a sad unacceptable legacy. University of California Berkeley is now farther and farther out of reach for the sons and daughters of Californians.

    Send your opinion: UC Board of Regents marsha.kelman@ucop.edu and your Calif. State Senator and Assembly member.

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