Lack of Education Leads to Rising Education Costs

College costs way too much money.  This is especially true if tuition is buying you a degree in 'general studies' or the like.  Since the current job market lacks a new economic engine, it might be time to ask if a college degree is worth it anymore.  For  some, the answer should be a resounding 'NO'!  College, however, in certain circles is something we as American's 'deserve'.  (There is that word again.) Our President, in his state of the union address called out Colleges and Universities, he put them on 'notice' and proclaimed 

"Higher education can’t be a luxury. It is an economic imperative that every family in America should be able to afford."

So why are the heads of higher education laughing?  Because, the United States government through its student loan policies, created an astronomical artificially high demand for college enrollment. Through the issuance of student loans to almost anyone who can fill out the application, college becomes affordable, albeit temporarily affordable for many.   When institutions of higher education raise tuition, Sallie Mae and company hand you a loan to pay it.  After all, you 'deserve' it don't you?!?

 In a brilliantly written article by Richard Vedder, entitled "Fogive Sutdent Loans?", he points out that over 40% of students  fail to receive a bachelor's degree after 6 years. When these students don't have a job with which to pay off the loan, who is left holding the bag?  Not the Universities. They got paid by Sallie Mae.  Where did Sallie Mae get her money.  Through financing of US Debt, of course.  By selling Treasury Bonds and T-bills to China and other foreign governments, our education is  subsidized in the $Trillions.  It is a quick study to see how this smorgasbord of easy loans can lead to a slippery slope of inescapable debt.   Our President clearly understands this when he said

"We can’t just keep subsidizing skyrocketing tuition. We’ll run out of money. "

  He is right.   If students can't pay off their debt to our Government, how can our government pay off its debt to China?  Many of the enlightened members of the OWS movement believe that forgiving student loans is the answer.  When that happens, China wins. 

How do we stop this spiral?  

1. Significantly reduce the number of student loans given out by the Federal Government. (Reduces artificial demand created by federal loans)
2. Adjust the ratio of Federal loans to reflect the current job market.  If our country needs engineers, a larger portion of available loans  are eligible for engineering degrees only.  (Lowers the rate of default for those with federal loans)
3. Universities, in an effort to increase enrollment would lower tuition and offer more loans backed by themselves. (Put the university's "skin" in the game to take a greater interest in student graduation rate and job placement)

When the laws of supply and demand are allowed to work without meddlesome interference from our government, everyone wins.  Let us go out and educate the nation to what really drives the high cost of tuition and no longer shall we stand by and watch as our lack of education leads to rising education costs.

Respectfully,

Finbags