Federal Loans Jack Up the Cost of College

President Obama gives away the people’s money like candy, but it’s only going to make student debt burdens heavier

Why is it that going to a prestigious university is the equivalent of buying, say, a BMW 5-series sedan annually for four years?

Especially given that when you graduate, you’ll be lucky enough to afford a Honda Civic.

The federal government spends $65 billion a year allegedly to make college cheaper, but the more Washington spends, the higher tuition is. There was a time, I’m told, when you could “put yourself through college.” Imagine doing that now. You’d need a full-time job that requires a college degree in order to pay your way without going into debt.

Andrew G. Biggs writes at The Atlantic that when colleges receive federal aid, they decrease their own aid to their students. When people get handouts from the government, they don’t start spending less; they continue their old ways, courtesy of Uncle Sam. Most colleges actually raise tuition thanks to federal aid.

If Pell Grants weren’t available, do you think colleges could get away with charging $40,000 a year? No way. But, don’t worry, they tell you, federal aid will make this manageable. Sure you’ll be up to your eyeballs in debt, but let’s not focus on those depressing facts. It’s time for college!

While you are going into debt, colleges are burning through cash—both yours and the American people’s. Campuses are like country clubs, professorial salaries—given the hours they put in—can be lavish. And with politically driven courses, are students really learning the skills they need to get hired at decent wages?

President Obama is visiting college campuses, eager for the youth vote, and promising to throw yet more money at federal loan programs. But in reality he is ensuring that those throngs of adoring students will be in debt for even longer.

Read Andrew Biggs piece at The Atlantic (2 pages). Biggs is a scholar at the American Enterprise Institute—a reliable source.

College students are going to have to “adapt and innovate” (1/2 page).

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