Like everything else the government touches, higher education has become a debt-fueled racket. This rackets benefits the universities and colleges while plunging students into debt servitude after they graduate (if they graduate). From Derek Foster at mises.org:
The student debt crisis isn’t a natural market phenomenon; it’s the predictable result of decades of government interference. Since 1980, average tuition and fees have increased by 1,200 percent, while consumer price inflation has risen only 236 percent over the same period. This massive increase has left students and families struggling to keep up, often forcing them to take on substantial debt just to attend college. Today, over 42.7 million Americans owe a combined $1.69 trillion in federal student loan debt. A combination of federal policies, including subsidized loans, government grants, bloated university budgets, and a complete lack of accountability, has fueled the relentless rise in tuition costs. As a result, higher education—once seen as a path to opportunity—has become a debt trap for millions.
Why 1980?
In 1978, Congress passed the Middle Income Student Assistance Act, making federally-subsidized loans available to nearly all students, not just those with low incomes. It took two years to fully roll out loans to the newly-eligible student population. Once 1980 began, tuition rates started their steady climb. Making student loans available to more people seems like a benign policy on its face, but it sent tuition prices soaring for decades.
Universities serve one of the poorest age/education demographics in the United States: young adults without a college degree. Since their target market was short on cash, universities had to be sensitive to tuition prices; otherwise, students couldn’t afford to attend. Before 1980, students had to work during college to pay as they went or work after high school to save as much as possible before enrolling. Once subsidized loans became available, students could borrow the full cost of college with the expectation of higher post-graduation earnings and easy debt repayment. Never mind the taxpayer picking up part of the interest expense. College administrators quickly realized that since students didn’t have to pay up front in cash anymore, price sensitivity was no longer a limiting factor. Universities could raise prices and pursue pet projects like social change, costly sports programs, bloated staffing, and luxurious amenities.
And the administrator bloat probably started about the same time although it was ten years plus before Heather has two mommies and participation trophy equality of results for all.
Won’t equality of outcomes for all make an “elite” education worthless?
Clowny and Potemkin.