O Weighs in on Unaffordable College Tuitions - (More Govt.!)

Obama State University

The President blames colleges for the result of government subsidies.

President Obama recently concluded a five-year campus speaking tour in which he explained to students how his financing programs were making college more affordable. Then on Thursday he kicked off a new campus speaking tour to tell students that college is unaffordable, and that the financing program he has championed faces increasing defaults.

"We've got a crisis in terms of college affordability and student debt," said Mr. Obama, without a trace of irony at the State University of New York at Buffalo. The same man who three years ago forced through a plan to add $1 trillion in student loans to the federal balance sheet over a decade said on Thursday, "Our economy can't afford the trillion dollars in outstanding student loan debt, much of which may not get repaid because students don't have the capacity to pay it."
 Naturally, the President blamed somebody else and demanded more authority over higher education.

Mr. Obama specifically blamed colleges and universities for charging too much. "Not enough colleges have been working to figure out
 how do we control costs, how do we cut back on costs," he said. His solution is for the federal government to rate colleges on their effectiveness and efficiency, and then to allocate federal subsidies to the schools that Washington believes are providing the best education at the lowest cost.

Particularly jarring for Mr. Obama's fans in the faculty lounge, he talked about them on Thursday in the same disrespectful manner that he normally reserves for entrepreneurs. "And I've got to tell you ahead of time, these reforms won't be popular with everybody, especially those who are making out just fine under the current system. But my main concern is not with those institutions; my main concern is the students those institutions are there to serve," said the President.

Conservative readers may be tempted to chuckle here. And we concede that this latest Obama regulatory onslaught couldn't happen to a nicer bunch than the university elite who did so much to elect him. But while shifting control of universities from lefty professors to the U.S. Department of Education may seem like a transition between six and a half-dozen, it is not.

As maddening as it can be to see how liberal academics spend the wealth created by hard-working citizens, Americans should think long and hard before allowing the federal government to dominate a system of higher education that is still by all accounts the envy of the world. If the feds are deciding what a quality education is in order to dole out billions in annual aid—in an era when most students can't afford to matriculate without some form of aid—Washington will certainly dominate. Tying aid to whatever the bureaucrats decide is the right tuition is a back-door form of price controls. Even more disturbing is the idea that a federal political authority will decide which curricula at which institutions represent a good educational value.
 
Lest taxpayers think that Mr. Obama is simply going to protect their investment in education by demanding more accountability from schools, he made it clear on Thursday that he is not driven by a desire to protect the public fisc. He also called for an expansion of his "Pay as You Earn" program, which caps student-loan payments at 10% of a borrower's discretionary income, and then forgives the balance in 10 years if the borrower pursues a Beltway-approved job in government or a nonprofit.

Mr. Obama is trodding a well-worn political path. Politicians subsidize the purchase of a good or service, prices inevitably rise in response to this pumped-up demand, and then the pols blame the provider of the good or service for responding to the incentives the politicians created. Think housing finance and medical care. Now President Obama is attacking colleges for rationally raising tuitions and padding their payrolls in response to a subsidy machine that began in 1965.

That's when the feds launched a program to make college "affordable" by offering a taxpayer guarantee on student loans. Federal grants and loans have been expanding ever since and it's no coincidence that tuition prices have been rising faster than inflation for decades.

This week the White House noted that since the academic year ending in 1983 tuition and fees at four-year public colleges have risen by 257%, while typical family incomes have advanced 16%.

The better answer is to stop the increases in grants and subsidized loans that Mr. Obama has so greatly accelerated. Let educators, students and their parents decide which courses and campus amenities provide the most educational value. As fervently as many professors abhor the idea of free people operating in a free market, they may decide it's better than federal politicians running their universities.