Tag: Higher Education Act

Education Guns Fire Blanks in War on Poverty

A lot of federal weapons were created to fight President Lyndon Johnson’s ”War on Poverty,” and some of the biggest were in education. The Elementary and Secondary Education Act, the Higher Education Act, and Head Start are all parts of Johnson’s overall effort to end poverty and create a “Great Society.” They also share two other things in common: pretty damning evidence that they are failures, and Cato videos laying out the bad news.

The first video – which calls for the end of the U.S. Department of Education, but in so doing highlights ESEA and HEA programs – presents the big evidence of K-12 and higher ed failure: massive spending, stagnant test scores, and turbo-charged college tuition inflation. Of course, a lot of variables affect these things, but there is simply no compelling evidence of federal success. 

The second video is of Cato’s recent forum, “Preschool Education: What the Research Says.” While there is a great deal of debate about the effectiveness of preschool generally, there seems to be consensus that Head Start has few, if any, meaningful, lasting, positive effects. Yet not only do we stick with it, President Obama is pushing to expand federal preschool intervention, to the tune of $75 billion over ten years.

What keeps these misfiring, War on Poverty blunderbusses in service? Not their effectiveness, because, well, there is precious little evidence of any. Most likely, it is that it’s very compelling to “help” the young and poor with big programs, while it is cost prohibitive for the average American, with a full-time job and other interests, to research whether these programs actually help. Finally, for most politicians – where the public-sentiment rubber meets the public-policy road – the costs of appearing not to care are much too great to act on the powerful evidence that voters rarely see.

Hopefully, voters will see these videos.

6.8 Day Is Here!

Washington hasn’t passed a new law to avert it, so today’s the day that all of higher education has, it seems, been dreading: The day that interest rates on subsidized federal student loans double, going from 3.4 percent to 6.8 percent.

Hooray?

In the long term, it might actually be good if these rates – which will only affect some federal borrowers – go up. (Congress could still lower them retroactively.) Why? Because federal aid has fueled decades of rampant price inflation, giving basically anyone whom a college would accept – and many colleges will accept anyone – the money necessary to pay sky-high prices. Perhaps the rates rising will dissuade some people from going to college who should be doing something else, or some people going to college who should be there from choosing a more expensive school that offers no better academics but lots of superfluous frills.

That said, the uptick in rates is likely to have little major effect on what people are willing to pay. And to some extent that is as it should be. The average college graduate will earn enough additional money as a result of having a degree that the additional debt is worth taking on. However, roughly half of people who enter college won’t complete their studies, and half of those will earn below the average for whatever piece of paper – some sort of certification or degree – they complete.

Perhaps the most discouraging aspect of all this isn’t the financial impact of the doubling, but that Congress couldn’t get a deal done. If you are going to have federal student loans, it makes sense to peg them to interest rates such as those of the 10-year Treasury Bond rather than having Congress fix a number for several years. At least then they will fluctuate with the overall time value of money. Indeed, that concept was sufficiently agreeable that President Obama proposed such an idea, and the Republican-controlled House passed roughly similar legislation. But, in a surprise move, President Obama threatened to veto the legislation without, it seems, any effort to negotiate with House leaders first, and Democratic Senate leaders called mainly for freezing rates at 3.4 percent until they could reauthorize the Higher Education Act. There was even a bipartisan effort in the Senate to push through a bill similar to the House measure and the president’s, but it went nowhere. 

Why the breakdown? It’s hard to know exactly, but easy to see a suspect: politicians, especially Senate Democrats and to a lesser extent the president, didn’t want to do anything that didn’t appear to give students the cheapest loans possible. That’s bad news for any future compromise, but much more importantly, a clear and troubling sign of why, barring loud public outcry, we won’t get the long-term solution we need: phasing out federal student aid to force students and colleges to demand and furnish efficient, effective higher education.

Don’t Bother, HEA Ostriches

If this is how reauthorization of the Higher Education Act is going to go, Congress shouldn’t even bother. If, as the tone seemed to be set in House and Senate hearings yesterday, Congress won’t seriously consider even the possibility that federal student aid helps to fuel tuition inflation – much less make policy based on the massive logic and evidence backing that concern – then they might as well just quit on the HEA. And if they will accept the swiss cheese explanation that cuts in state funding drive inflation – despite its inability to explain inflation in private institutions, and public schools raising tuition about two dollars for every dollar in lost funding – then they simply aren’t serious about dealing with the crippling unintended consequences of federal “help.”

In the face of ballooning student debt and long-skyrocketing college prices, we don’t need Congressional ostriches jamming their heads in the sand anymore, pretending that their generosity with other people’s money is the solution, not the problem. Either deal with reality, or don’t bother with the HEA.

Cross-posted at seethruedu.com