John Stossel: President Obama said in his State of the Union Address that he is putting colleges on notice to lower costs. A few days later, he spoke to students at the University of Michigan, with a promise of more federal aid. Politicians claim they can make college affordable. No They Can’t!
In the last 30 years, inflation is up 160%, but tuition costs are up 750%.
It’s because colleges have no incentive to cut prices when students can get money from government. Federal aid, adjusted for inflation, increased from 32 billion in 1987, to 169 billion in 2010.
Government tells us, “Here’s the gap between what you can afford and what the college is charging, we will now make up that gap. And then the college just inches up the tuition a little bit higher,” says Naomi Riley author of The Faculty Lounges: and Other Reasons Why You Won’t Get the College Education You Paid For.
Colleges don’t use all or even most of that money in the classroom. We were stunned at the gyms and dining halls that serve lobster and sushi. Check out the University of Missouri, which is proud of its spa, rock climbing wall and “Tiger Grotto” – an elaborate pool complex.
Government creates perverse incentives. Colleges compete on prestige and luxury amenities, not their price tag. Administrators don’t worry about high tuition costs because their customers have government subsidies.
And so what if they graduate with a mountain of debt and their job prospect are sh*t. They government will take of them too. And if ObamaCare survives they can be on their parents Health Insurance until they are 26.
And they’ve been raised by the liberal socialists to believe they are entitled to be look after just because.
So who cares, the Government will take care of you. You may remember that The Obama Administration took over the student loans because they were going bankrupt.
2010: President Obama will sign a bill today that ends a 45-year-old program under which banks and other private-sector lenders such as Sallie Mae receive a federal subsidy for making government-guaranteed college loans.
Instead, the U.S. Department of Education – which already makes roughly a third of these loans through its direct-lending program – will make 100 percent of them starting July 1.
Students who previously had to choose a private-sector lender for their guaranteed loans will now have only one choice: the government. (SFGATE)
But the newly passed legislation does nothing to address the rapidly rising cost of education–and adds to our national debt. (Forbes)
A “single payer” system, you might say. 🙂
And costs are up 5 times inflation because colleges only incentive is to spend more to make college look like an French Riviera resort.
Costs? Who gives a crap about costs. The Government is paying for it.
Then they graduate and reality hits them in the face.
Students who graduated from college in 2010 with student loans owed an average of $25,250, up 5 percent from the previous year, according to a report scheduled for release Thursday.
The average debt — once again the highest on record — came as the class of 2010 faced an unemployment rate for new college graduates of 9.1 percent, the highest in recent years, according to the report by the Project on Student Debt, which pointed out that unemployment rates for those without college degrees were still higher.
The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to a study released on Wednesday by the John J. Heldrich Center for Workforce Development at Rutgers University. That is a decline of 10 percent, even before taking inflation into account.
35 percent of unemployed college graduates have been without a job for a year or longer. And, the long-term unemployment rate for those 25 and older is almost the same across the board—regardless of educational level.
Sidenote: remember, most report unemployment statistics don’t count people who have given up completely looking for a job.
CNN Last week: But the competition is steep, with employers reporting that they have received nearly 33 applications for every job posting, up from 21 applications per posting last year.
Enter Occupiers. “Entitled” little skulls of unemployed (and many cases unemployable narcissistic and anarchist) socialist mush who have had reality hit them in the face and they just want to whine about it.
New York Times: The high cost of college and the growing debt burden of student loans have become increasingly potent political issues in recent years, high on the agenda of Occupy Wall Street and related protests across the country.
And then there’s the next line of graduate-in-waiting: Teenagers
The high teen unemployment rate, which came in at 23.8% for February (2012). Their unemployment rate remains above 20% for the 40th month in a row, the first time this has happened since the government started keeping records in 1948.
And since Obama was elected the first by getting naive 20-somethings to believe in his Messianic self he has to throw bones to his peeps, especially as their support has cooled over the years because a lot of them are not college students anymore but unemployed and underemployed debtors.
So he’ll need a new crop of naive morons to vote for him.
“Student debt goes up and it doesn’t ever go down,” said Mark Kantrowitz, the publisher of Finaid.org and Fastweb.com, two Web sites that offer advice on paying for college. “We’re clearly heading in the direction of decreased college affordability. Among lower-income students, the canaries in the cage that squawk first, we’re already seeing a decline in enrollment in four-year colleges and an increase in lower-cost two-year institutions,” he said.
Mr. Kantrowitz estimated that for the class of 2011, average debt was $27,200 — or, if parent loans were included, $34,000.
This is the fifth consecutive year in which the public universities that serve most students raised their tuition at a faster rate than the far more expensive private universities. (NYT)
So that’s why Obama has proposed….<<Drum Roll>> SPENDING EVEN MORE on student loan programs!!!
Now, I know that’s a shocker! 🙂
So when in Debt SPEND EVEN MORE!
When the system is bleeding red ink and it’s failing SPEND EVEN MORE!
When your house is burning down throw more Napalm on the Fire that will help!!
Liberal Economics at it’s finest.
But don’t worry, It’s all the Republicans! and “the rich”‘s Fault! 🙂