The Ol’ College Lies

Most college kids have no choice but to subsist on Ramen noodles, and every year skimping on aid keeps tons of fully-qualified students out of higher education, right? Wrong, but you’d certainly believe such things if you listened to the nations’ student interest groups, or most of our politicians.

“We must address the crisis in college affordability that affects every low- and middle-income family and threatens our economic progress,” said Senator Edward M. Kennedy (D-MA) after the House recently passed a bill that would cut in half interest rates on subsidized federal student loans. “I applaud the efforts of my colleagues in the House and look forward to taking up this critical issue in the Senate very soon.”

The problem with continuing to propagate these ideas, as I and others have argued many times, is that if anything, making student aid cheaper and more plentiful actually drives college “sticker prices” higher by pulling up demand and allowing colleges to increase prices with impunity. We’ve also argued that politicians encouraging practically everyone to go to college – and providing them with big subsidies to do so – is hugely wasteful, pushing many kids into higher education who aren’t prepared for it, and squandering huge bundles of student and taxpayer money in the process.

A few articles in today’s newspapers illustrate well the yawning gap between the rhetoric and reality of higher education.

First, there is a collection of pieces in USA Today which reveal that as much as students complain about crushing college costs and massive debt, recent grads are both generally happy with their college experiences, and substantially to blame for their own debt burdens.

In a survey of 100 recent graduates, USA Today found that 68 percent of respondents thought that their college experiences were worth the price, and 44 percent thought the value of their education exceeded the costs. Even more interesting were the newspaper’s findings about debt and spending:

More than a third said some debt was unavoidable, but 60% said they should have “absolutely” monitored spending more closely.

Books, lab supplies — “those are just excuses we all make to justify our high debt load,” says pilot Brian Lee, 27, of Hacienda Heights, Calif., who owes more than $70,000 in loans and $20,000 on credit cards. In truth, he says, much unnecessary spending goes to “luxuries like eating out and fancy gadgets.”

Now, you should take these findings with a grain of salt, because a newspaper survey of only 100 recent graduates probably isn’t representative of graduates in general. (I couldn’t find a description of USA Today’s methodology to prove this one way or the other). However, the sob-stories about kids working as hard as they can but still coming up short on college funds that start most news pieces about college costs also aren’t representative, and almost always leave out relevant details about kids’ spending choices.

Sometimes, reporters even ignore evidence of wasteful spending that is right in front of their eyes. (Hit the link, watch the video, and then check out this article.) At the very least, the USA Today pieces provide some desperately needed balance.

The second story of interest today, from the Tennessean, shows that not only do many students waste their money while in college, but lots of kids receive aid who will never get their sheepskins:

Only 1 of every 4 students who received the first batch of lottery-funded HOPE scholarships will graduate in 2007-08 with their awards intact….

A report prepared by the Tennessee Higher Education Commission for state lawmakers also showed that, between 2005 and 2006, 47 percent of students at four-year schools lost their HOPE scholarships and 65 percent at two-year schools failed to keep their awards….

At this point, all involved in the program seem to agree on one thing: High school students in the state need to arrive at college better prepared.

It is one thing to get the money to go to college. It is another thing entirely, apparently, to be able to make good use of it.

None of this, of course, says that there aren’t some kids with great aptitude for higher education who genuinely can’t afford it. There are. But considering student aid’s inflationary effect on tuition, many students’ wasteful spending habits, and all the kids getting aid on whom it is squandered, and it seems pretty clear that we all – the truly poor included – would be better off if government just got out of the aid business completely and returned the money to taxpayers.