Want to make education more affordable? Get the government out of It!


Outstanding student loan debt whizzed past the $1 trillion (that’s twelve zeroes) mark a little over a year ago, surpassing the entire amount of outstanding credit card and auto loan debt.

Student loan debt has grown by about 300% over the last eight years as 37 million Americans hold this debt. With these kinds of unprecedented numbers, it’s to be expected that the Obama Administration would want to step in and “fix” this. Last month they released the “A Better Bargain” plan, aimed at fixing the mounting crisis.

But the plan, unfortunately, merely offered more big government solutions. The solution to this problem is not more government, as the Administration would like to think; the solution is to get government out of education entirely. Hear me out!

Obama’s plan to make college more affordable is three-fold:

  1. tie aid to the performance of colleges and students
  2. tie aid to innovation and technology use
  3. cap student loan payments.

Now, where have we all heard this type of plan before? Oh, right — in George W. Bush’s No Child Left Behind. While NCLB might have been well-intended, it certainly proved to be a dismal failure. (Don’t just take my word for it; ask any teacher.) As the economist Milton Friedman once said, “One of the greatest mistakes is to judge policies and programs by their intentions rather than their results.”

The President also recognizes the failures of No Child Left Behind, but attributes most of its shortfalls to not having enough funding. That might be a fair argument if the data backed it, but unfortunately for that particular narrative, it doesn’t. Let’s take for instance that in 2011, the United States spent $809.6 billion (#1 in spending) on education and Finland spent a “measly” $10 billion (#12). By the logic that the academic success of students is largely determinant on how much federal money is thrown at them, surely US students would be excelling far beyond Finnish students.

Not so fast! The literacy rate for the US was lower than that of Finland for students aged fifteen and up; Finland was ranked number 1 in literacy and the US ranked number 3. Math and science test scores were even more disappointing. Out of 600 possible points for math, Finland once again came in 1st with an average test score of 548, while the US came in 10th  with an average score of 474. In science test scores, Finland (once again) came in 1st (563 points) whereas US moved up one spot to 9th place (489 points).

Cool story, bro, but what does this have to do with Obama’s plan to make college more affordable? Well…

  • The plan is nearly identical to the failure that is No Child Left Behind.
  • Obama thinks the reason No Child Left Behind failed is because it did not have enough funding.
  • But education spending in the US for 2013 is $934.9 billion (an increase of $125.3 billion in just two years) — the highest in the world by several hundred billion dollars.
  • Education quality in the US is far worse than that of other countries that spend a small fraction of what we do on education; that’s not to mention that education quality in the US continues to decline.
  • When (not if) this plan fails, it will undoubtedly be blamed by proponents on not having enough funding (?!) and not the fact that the program is (unintentionally) destructive by its very nature.
  • Lather, rinse, repeat.

So, what do we do? We have a problem and it needs to be fixed — but not by some bureaucratic agency in Washington, D.C., because as we can clearly see, they just make it worse.

Let’s get all of this straight: The government got involved in college education with the intentions of increasing affordability, retention rates, and quality. The results have been the opposite. College tuition has increased by 945% since 1980 (and that is adjusted for inflation). Consider that before the government got involved in subsidizing tuition, students could work part-time while attending school and easily pay all of their expenses and fees for college. Over 50% of students who take out federal student loans never even finish their degree. Quality of education has also decreased (as evidenced above).

On top of all of that, 42% of American loan borrowers aged 30 to 50 are still paying off their student loans. Moreover, when students do actually graduate, they’re catapulted into a nearly non-existent job market, largely due to other “big government” policies and programs. We are literally paying to make ourselves worse off.

With  the  government  indirectly  driving  up  the  price  of  tuition  through  its  sheer involvement, it then seems “necessary” then to call for more government help by offering loans to help pay for something we can no longer pay directly for with a part-time (or full-time) job. Furthermore, as you know, with loans come interest and interest is merely the price of the loan. The riskier the loan is, the higher the price for the loan, thus the higher the interest rate. Shelling out tens of thousands of dollars to millions of 18-year-olds with no credit and miniscule hope of getting a decent job (much less one in their field) is pretty risky; wouldn’t you agree? In other words, we wouldn’t have this huge debt crisis and campaigns such as “Don’t Double My Rate” would very likely not even “need” to exist…

Yet the Administration’s college tuition plan seeks to also manipulate the interest rates by holding them artificially low by capping payments. Where have we heard of this before? Oh, right — the housing bubble and the root cause of its predictable burst, another example of a well-intended government program with dire results. There is only one logical solution to making college more affordable: getting the government out of education and letting the market work.

We need to abandon this “top-down” approach to education and let the market function like it did before. The market is made up of me, you, and millions of individuals and no transactions are made unless it benefits both voluntary parties.

In a free market, whether it is in terms of education, housing, healthcare, or any other industry, competition is able to flourish, resulting both in decreased prices and increased quality — something of which the federal government has been proven time and again to do the complete opposite.

So, which of these actually sounds like “A Better Bargain”?

Content published on the Young Americans for Liberty blog is only representative of the opinions and research of the individual authors. It does not necessarily reflect the views, goals, or membership of YAL. 

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