See HERE for my earlier post on this topic.
College tuition continues to outpace inflation. Check out this quote from the article:
"We're probably going to have to take some options off the table (for the other children) unless things change," said Kopec, who works in book publishing. "It's not easy." She hopes President-elect Barack Obama will implement campaign promises such as offering college grants in exchange for community service. Low-income students in particular could also get help from Obama's proposed economic stimulus package, which may include measures to improve college affordability, such as increasing the amount of Pell grants."
These options do NOT make college more affordable. In fact, they do the opposite.
Some time ago, the government wanted to make it possible for more people to attend college. To achieve this goal, the government implemented a number of policies, including Pell grants, and federally backed loans. By increasing the amount of money available to spend on college tuition, these types of policies increased the availability of money within a subset of the market (i.e. college tuition). This increase resulted in artificially increased prices. No one who understands basic economics should have been surprised at the result: rapidly increasing costs associated with secondary education.
Don't believe me? Think about this next paragraph:
Some time ago, the government wanted to make it possible for more people to own homes. To achieve this goal, the government implemented a number of policies, including tax credits, legislation such as the Community Reinvestment Act, and artificially low interest rates. By increasing the amount of money available to spend on housing, these types of policies increased the availability of money within a subset of the market (i.e. housing). This increase resulted in artificially increased prices. No one who understands basic economics should have been surprised at the result: rapidly increasing home prices.
Those paragraphs are nearly identical because the situations are nearly identical.
Home ownership is a good thing. So is a college education. Therefore, when the government promises to help people own a home or get a college education (or get health care) it sounds like a great idea. Anyone who complains about the costs associated with socialist/redistributivist ideas like these seems selfish and small-minded. However, this type of policy always leads to increased costs, with tragic results. For example, we could be dealing with the fallout from the current financial crisis for decades.
As another example, my dad could pay his way through college, simply by working and saving his money. Now, that's simply impossible. The current system eliminated the possibility of paying your way through college, and replaced it with nearly unavoidable student-loan debt obligations, which often exceed $100,000.
If given the choice between delaying college one year to earn the money to pay for it outright, or working for 10 years after the fact to pay off your student-loans, which would you choose?
Also, the increased supply of people with college degrees decreases the value of a college education. If everyone has a college degree, you need a post-graduate degree to set yourself apart. And while arguments extolling the virtues of an educated society seem compelling, it's no secret that the requirements of a college degree have become far less rigorous than they once were. College has been dumbed down to meet the decreasing abilities of its increasingly average clientele, at the same time that its cost has risen.
Students (and their parents) are paying far more for far less, thanks to well-intentioned, but misguided government meddling.