college student debt money

The Crisis of Higher Education in the U.S.

The state of higher education in the United States is deplorable; it is extremely costly, but the investment has become decreasingly worthwhile.  Students bear the burden of extraordinarily expensive education, which results in massive debt, and they are left with – especially now – mediocre results, to flounder in a job market that leaves much to be desired.

Even the left can see this problem, though their prescriptions for change are indubitably different.  Indeed, “two-thirds of students who earn undergraduate degrees end up shouldering more than $25,000 in debt, and 1 in 10 owe more than $54,000, a 2012 Center for American Progress report found.”  Furthermore, minorities are even more likely to need a loan of this kind “as need-based federal aid for low-income students has become insufficient to cover rising tuitions.”

Of course, the federal government is largely to blame for a couple of reasons.

First, as the Heritage Foundation’s Lindsey Burke and Stuart M. Butler explain, the accreditation process, “a feature of the traditional education system,” remains an obstacle to innovations that would decrease the costs of receiving an advanced degree.  Second, there is a provision buried deep in Obamacare that “effectively nationalized the student loan industry by ending government subsidies to private lenders and putting the federal government in charge of originating and servicing federally backed student loans.”

The financial problem is twofold, affecting both students and taxpayers.  If you’re a college graduate who had to take out loans, you know what we’re referring to: your debt.  It’s probably hovering over your head, and if you’re the average college student, there are five digits after the dollar sign and before the decimal point.  Indeed, the average debt of college graduates today is $23,000.

If you’re a taxpayer, the effect is less direct, but the truth is that you’re fitting the bill for a flawed higher education system.  The total student loan debt in the United States now exceeds $1 trillion.  Burke explains:

Part of the problem is a system where virtually anyone is eligible for a student loan, regardless of credit history or repayment potential. But unlike other loans, taxpayers are on the hook when students default or incur other losses.

Moreover, the cost of attending college has increased 439 percent since 1982.  Yet, somehow, President Obama and his administration have insisted on ever increasing subsidies for higher education.  To be clear, these subsidies have not decreased the cost of education.

Rather than continuing to sink more money into the flawed education system, Heritage has proposed real solutions.  Burke suggests:

Shifting from debt-based to savings-based college financing, limiting access to federal student loans to four years of undergraduate work, and—with the proliferation of online learning—allowing the free market to work to reduce college costs are all policies that would provide needed relief to both students and taxpayers.

The federal government has proved to be incredibly ill-equipped to improve the state of higher education despite taking an ever growing amount of taxpayer money.  For decades, the Department of Education — an “inefficient federal agency” through which taxpayer resources are filtered to no avail — has been like a gangrenous infection in our academic institutions.

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