Government Tries To Make College More Affordable, Makes It Less Affordable
July 22, 2011
I’ve called before for a “Separation of School and State” on the grounds that the education itself is different—and not as good, for the recipient or for the rest of us—to the extent that it is paid for by the government.
This week in National Review Online, Michael Barone discusses another reason: Government’s attempts to help are actually making college more expensive.
It’s counterintuitive, but it makes sense if you think about it: We’ve more or less decided, as a society, that everyone should be able to go to college. (Leave aside the question of whether everyone should go to college in the first place—that’s a topic for another day.) We’ve decided that that means the government should make up the difference between how much college costs and how much a prospective student (or his family) can afford to pay—in other words, no matter how much college costs, the government will make sure it gets paid for.
But think about what that means: If four years of college cost $20,000, and I can afford to pay a total of $10,000, the government will chip in $10,000. If college costs $120,000, the government will make up the remaining $110,000. To the extent that the government is agreeing to pick up the tab, no matter how much it costs—to that extent, colleges can charge as much as they want.
Of course the government doesn’t do this primarily through outright grants of money; it does this primarily through loans. And of course not quite everyone gets help from the government. But that doesn’t change the basic principle at work: It’s a matter of degree. Things aren’t as bad as they could possibly be; they could be worse if everyone were receiving government help to pay for college, and they could be worse if the government were doing grants instead of loans. (If things were as bad as they could possibly be, the cost of college should theoretically approach infinity.) Of course, doing loans instead of grants has the added disadvantage that it saddles a large (and poor) subset of the population with crushing debt.
So, as many have observed, the cost of college rises much faster than inflation; that makes college unaffordable to more people, which then increases the original justification for the government’s involvement, in what may be a vicious cycle. Or, as the Demotivators put it:
Hat tip to the Reformed Pastor.