Barack Obama does not like reality. He likes to imagine that he is a god-like figure who transcends the laws of the universe and can magically roll back the oceans and heal the wounds of our scarred planet. And once again, Obama’s hubris has been fired up, and this time it has to do with college education funding. An article on CNN this week indicates that Obama’s plan to make college both more accessible and cheaper will face political challenges. Additionally, Obama’s plan faces another roadblock: it’s out of tune with the economic reality of supply and demand.
Obama famously wants more people to enroll in college. He also wants costs to be kept down. He also doesn’t want new colleges, such as for-profit colleges, popping up. He also wants students to be able to use federally funded student loans. Essentially, Barack Obama wants to increase demand for a product and keep the supply constant, yet hopes to find ways for the price to go down. If American voters buy this nonsense, they should be going to college in greater numbers and taking economics classes.
One of the more complex proposals by Obama is based on the idea of granting federal government funding only to those schools that keep costs down. Most education funding goes to students in the form of loans, meaning that students would be barred from using Stafford Loans and Pell Grants to pay for certain colleges. To effectively implement such a system to reward schools for keeping costs down, spending decisions would be taken out of the hands of students and placed in the hands of government administrators. We’ve all seen how well that’s worked in healthcare.
The problem with college is that the government has reduced and obfuscated the costs to the consumer with below-market interest rates on loans. College isn’t for everybody. Some people are best served at a four year liberal arts institution. Others at a more technical school. Furthermore, for others the best job training program might be a job. So long as the gains of increased education are captured by higher wages, people will make investments in education which will give them the highest return given their strengths and weaknesses. Instead, we have identified education as a desirable commodity and thrown ever increasing amounts of money at it.
Obama speaks wistfully about technology and innovation driving down the cost of college, as if computers will magically scale the costs of a college education and make it more affordable and accessible for all.
That Obama attempts to advance mutually contradictory goals is revelatory of the flaws of liberal ideology. Sometimes when you love something, you have to set it free. If Barack Obama is truly concerned about college accessibility, he will unleash the reigns of government from it. Only then will institutions be forced to innovate and compete to offer the highest quality education at the lowest possible price.