E-Newsletter No. 41 ______ May 2017
As we discussed in last month’s newsletter, our biggest complaint about the federal government’s over-reach into the realm of local K-12 education has been the abysmal return on the massive increase in federal spending, coupled with the simultaneous decrease in measurable results. We attribute most of this decline to the federal government’s top-down regulations and its attempts to enforce a politically correct curriculum, instead of letting parents, the local community, and their schools focus on the fundamentals of education that need to be provided to elementary and high school students. To paraphrase Carly Fiorina’s presidential campaign slogan, “We need to take our local schools back from the federal government.”
Having said that…. The federal government’s detrimental effects on post-secondary education has been even worse. As we have noted elsewhere on our website, one of the worst unintended consequences of federal government spending is the price distortion it causes in the marketplace. We see this effect in healthcare, in housing, and in the cost of post-secondary education.
The crisis in outstanding student loan debt was created by the federal government, and the magnitude of this problem has increased ever since the government first expanded its role under President Bill Clinton in 1993. Since then, college costs have risen by 190 percent, far surpassing the overall rate of inflation. As the federal government took over student lending, the conditions for getting a loan were eased and were no longer linked to financial need. This has enabled all colleges (public and private) to raise tuition at will, knowing that students can get loans to cover the rising costs.
The student loan crisis has ballooned since 2003, when outstanding student loans totaled $240 billion. Total student loan debt now stands at $1.4 trillion (more than 85% guaranteed by the government), which is more than the amount of outstanding vehicle loans and credit card obligations, and is second only to mortgages. (And we all witnessed the detrimental effects of the federal government’s role in the housing industry).
The progressive movement’s solution is to make a public college education “free”. But what will that do to the competition between public versus private colleges? (OK, that was a rhetorical question). The other solution is to “forgive” outstanding loan balances (in other words, make past student loans “free”). But is that fair to those responsible individuals who have actually paid off their student loans?
A first step towards solving the student loan problem is to eliminate all federal government student loan programs, and return the issuance of student loans to the private sector. Only then will the marketplace for post-secondary education begin to hold tuition costs in check. We also need to re-think the cost versus benefit of a college education. Is a four-year college degree really the right answer for every student? There are many different trades / occupations that do not require a degree, and there are labor shortages for these positions. (We plan to address the cost/benefit analysis of welfare versus work in a later newsletter).
The skills gap in our country is substantial, which is partly due to the poor results of the K-12 education system. In a recent survey, 45% of small business owners reported that they were unable to find qualified job applicants, including construction workers, truck drivers, automotive technicians, etc. Skills-training partnerships between business leaders and local high schools, colleges and community-based organizations, along with apprenticeships and internships, would help job candidates obtain the necessary skills.
Technology changes and other evolutions within the business world will continue to create a situation where workers need to be trained and retrained throughout their careers. Post-secondary education now represents a lifetime commitment to additional ongoing training. Public-private partnerships (funded by civil society) will be critical to improving the prosperity of all American workers.
One other issue of note – – Our Editorial Board’s biggest complaint about the liberal / progressive movement’s assault on our post-secondary education system can be summed up by this quote from Vladimir Lenin – Give me four years to teach the children and the seed I have sown will never be uprooted. Many of us recall the Free Speech Movement during the mid-1960s on the campus of the University of California, Berkeley. Now, Berkeley’s administration is advocating “Free Speech Zones”, which is an “Orwellian” term used to describe an approach whereby certain public speakers are literally put out of sight in a safe zone, in order to protect the rest of the student population from potentially “politically incorrect” points of view. My, oh my, how the world has “progressed” over the past several decades.
US Debt Clock – – April 1st – $61,149 per citizen / May 1st – $61,220