Amidst the debating and pontificating about nationalized health care, cap and trade, and a whole host of issues plaguing the U.S. right now, President Obama is making waves in reforming another major sector of the U.S. economy: education.
On September 17, the House passed legislation to overhaul the college loan system. The bill, introduced by Rep. George Miller (D-CA) and supported by Obama, ends government subsidies to banks and other private lending companies for college loans. The Democrats who pushed for the bill’s passage, say it will free up $80 billion; half of which, will go toward increasing the amount of money in the Pell Grant program.
Other provisions of the bill include roughly $10 billion toward improvements for community colleges and a myriad of other spending initiatives for preschool, elementary, and high schools. Sounds like noble enough goals, right?
Actually, as noble and honorable as this bill sounds, calling it such would be a great misnomer. Throwing money at a problem has been the go-to-solution for presidents in recent years, but there is little to show for it.
President George W. Bush had his College Cost Reduction and Access Act that increased Pell Grants and cut student loan interest rates. Before that, President Clinton had his own initiatives, calling for a $1,500 tax credit for students who committed to going to community college for two years and maintaining a “B” average.
The fact is Washington has been trying to spend its way out of mediocrity in education for years. Yet the results don’t add up. The Department of Education estimates that the U.S. spent $667 billion on K-12 schools during the 2008-09 academic year alone. That’s up from $553 billion the previous year. And that number is only getting higher, especially with the $100 billion from the stimulus bill that was allotted for education.
Yet despite this massive amount of funding, reading scores on nationalized tests in elementary schools have stayed relatively the same since 1970. Furthermore, the New York Times recently reported that only about half of teenagers that enroll in college end up with a bachelor’s degree. Among advanced countries, only Italy has a worse graduation rate.
However, that same New York Times article went on to praise President Obama’s education bill, saying that taking the practice of student loan lending out of private companies and transferring it to the government is a good thing. Why? Because it would ensure that more people have access to higher education, since the government wouldn’t be so stringent with their rules and requirements in order to qualify for a loan.
The graduation rate in America may be dismal, but the way to increase it is not by throwing more money at young adults, enticing them to enter college. Increasing demand for any product only increases prices for everyone. That lesson is taught in any basic economics course. But maybe Obama was sick that day.
Probably the most disturbing aspect of this bill is that its sole purpose is to increase access to college by making it more affordable, by increasing student loans. Yet this approach was tried once before with the housing industry, when the government decided that it was a basic, American right to own a house.
We saw what happened next. For a while, the housing industry boomed and thrived, but then that bubble burst, resulting in banks closing and thousands, if not millions of people swimming in debt.
When it comes to education, the result will be the same. Increasing access to college will not raise graduation rates. If anything, it will just increase drop-out rates. And when everything is said and done, there won’t be more people with college degrees; just more young people saddled with enormous amounts of debt. As if the burden of paying for social security and a possible universal health care system weren’t enough.
President Obama and the other proponents of this new bill need to realize that education is not a right. It is not the job of the federal government to ensure that everyone make it through college. Nor should any individual be forced to finance another’s college education through taxes. Whether it’s elementary, high school, or preschool, flooding the education system with money is not a panacea for low graduation rates and poor test scores. The sooner those concepts are grasped, the better. Or else we may be on the road to a collapse of the education bubble.
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Amanda Carey is the Editor of The Tiger Town Observer at Clemson University. She has previously worked for Robert Novak and has been published in Reason Magazine and The American Spectator.
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