Last night President Obama delivered his first State of the Union address. He spoke for 71 minutes and devoted about a minute and a half to higher education. Here’s what he had to say:
Still, in this economy, a high school diploma no longer guarantees a good job. That's why I urge the Senate to follow the House and pass a bill that will revitalize our community colleges, which are a career pathway to the children of so many working families. (Applause.)
To make college more affordable, this bill will finally end the unwarranted taxpayer subsidies that go to banks for student loans. (Applause.) Instead, let's take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. (Applause.)
And let's tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years -- and forgiven after 10 years if they choose a career in public service, because in the United States of America, no one should go broke because they chose to go to college. (Applause.)
And by the way, it's time for colleges and universities to get serious about cutting their own costs -- (applause) -- because they, too, have a responsibility to help solve this problem.
The bill regarding community colleges is the American Graduation Initiative, a $12 billion project about which NAS wrote in “A Safer Way to Squander.” We agree with President Obama that community colleges need revitalization and that they should be valued more highly than they have been. As we have noted, if the government is going to dole out funds for higher education, community colleges are the best places to invest. At a two-year school, students can learn practical knowledge for less money, and they usually don’t encounter the same kinds of politicization in their courses that they would at a four-year institution. Since they don’t live on campus, they are free from ideological reeducation programs in residence life like that at the University of Delaware. Also because they don’t live on campus, students are much less likely to engage in as much binge drinking, casual sex, and other “I’m-finally-free-from-my-parents” behavior that is characteristic at residential colleges. Great Books programs thrive at some community colleges, and there is a prevailing instinct to provide something useful in a short amount of time.
The initiative corresponds with President Obama’s goal for the United States to have the highest proportion of college graduates in the world by the year 2020. We at NAS see folly in this goal for two main reasons. First, the balloon of enrollment in higher education necessary to reach it would mean an inevitable decrease in academic rigor to accommodate the influx of students who are unprepared for college-level work. Second, the university today has more interest in “transforming” students into social activists than in educating them. It sees its mission as erasing biases, getting students “engaged as change agents,” and instilling in graduates a deep sense of social and environmental responsibility. Often these ideals translate to radical ideologies. Students miss out on a real education when they are inculcated in a steady diet of eco-socialism, racial preferences, and hostility to white or religious people. Doubling the size of higher education, as the President’s goal requires, would thus double the influence of politicization on the next generation.
He is right in observing that a high school diploma no longer guarantees a good job. That diploma has been devalued as high schools shuttle students through to graduation whether or not they have mastered basic subjects. The plan to dramatically increase enrollment in higher education would put the college degree in the same position of insignificance.
President Obama also proposes loan forgiveness—with an incentive to become a government employee—as a sort of year of jubilee. The rationale is, “because in the United States of America, no one should go broke because they chose to go to college.” The President received a standing ovation as he spoke these words. Is it that good an idea?
We see pros and cons. A “career in public service” can be a good thing, but that doesn’t necessarily mean we should create new tax-payer financed incentives for public service jobs. Arguably we already have too many people on the public payroll rather than working to create new wealth and more opportunities for others. Moreover, the President’s term “career in public service,” sounds ominously vague. Does he mean just government jobs? Or is he thinking that a stint as a community organizer with, say, ACORN, would suffice to wipe the graduate’s student debt slate clean? If “public service” means work in the non-profit sector, who will decide which public service merits debt forgiveness? Is President Obama ready to forgive the debts of graduates who go to work for the National Rifle Association, the National Right to Life Committee, or the Minutemen?
A large purpose of college education is to help students understand the way the larger world works and to help them pursue a vocation. Usually graduates earn higher incomes than they would without a college degree, and they can use their earnings to counterbalance the cost of their education. In that sense, we don’t need extra incentives for public service. Moreover, many individuals find lifetime fulfillment through jobs they were trained for in apprenticeships or trade schools, as opposed to college. The President’s proposed incentives subtly punish those who succeed without going to college by effectively paying the college-educated more for the same work.
As for the President’s final statement on higher education, we concur; it’s time for colleges and universities to learn to cut costs. But we doubt the President’s grasp of basic economics. If you subsidize something, the costs seldom go down. The President proposes to put a whole lot more money within the reach of colleges and universities. They are almost certain to find a way to reach out and take it. That means costs will go up and the momentary sense of relief by the public (“Oh! The government is going to help pay for my college education!”) will be replaced by a sinking feeling (“Why did my tuition go up again?”).
Peter Wood wrote about this in “Deferred Maintenance.” He writes that “Colleges and universities, once models of frugality, have become extraordinarily profligate institutions” and that “Largely this has to do with the financial model that has grown up around state and federal aid and the federally-guaranteed student loan program” since the 1960s. With federally-backed loans, student enrollment has soared and so have tuition prices. Wood wrote, “The American middle class became convinced that a college degree was an indispensable ‘investment’ in a child’s future success in the workplace, and further convinced that the pricier colleges and universities would be worth the extra cost.”
So if President Obama ends “unwarranted taxpayer subsidies that go to banks for student loans” as he says, would that end the system that started the overspending in the first place?