Student Loans are the Problem

Peter Sacks’s recent piece attacks a straw man. He argues against advocates for eliminating all federal aid to colleges, a powerless faction if there ever was one. In so doing he sidesteps the very real failings of our higher-ed policy. 
Sacks claims that capitalistic systems requires educated citizens. Far from controversial. However, he contends that since college educates a wide swath of Americans, all federal support for higher-ed “amounts to a direct government subsidy to capitalistic enterprises.” This is a logical leap. Surely, some colleges–and, for that matter, some majors–invigorate “capitalistic enterprises,” but far from all do. Sacks’ argument relies on the same faulty assumption that undergirds our loan programs, namely, that every student, academic program, and college, deserves equal taxpayer support. The tremendous unemployment among recent college graduates, growing loan repayment delinquencies, and the large percentage of college students holding jobs that do not require a college degree suggests otherwise. 
More troubling is his assessment of higher-ed’s problems. He argues that tuition costs have grown so large that many students cannot afford to complete their degrees. Though this point is inarguable, his solution — reducing aid for middle-class students to double the maximum Pell Grant award for poorer students– evinces an incomplete understanding of the problem. Higher education is expensive in part because colleges face zero pressure to reduce their costs. Maintaining the current level of subsidization for colleges will do nothing to solve this problem. 
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One thought on “Student Loans are the Problem”

  1. All kinds of economic systems require some level of education, but it does not follow at all that such education must come from the government. In colonial America, productivity, investment and the standard of living rose rapidly even though there were no government schools and only a tiny number of people went to college– mostly to become members of the clergy.
    If anything, government provision of higher education today is a hindrance to what remains of capitalism because it squanders resources that would be better used in the private sector, miseducates many students such that after they graduate, businesses need to spend money to teach them how to do simple tasks, and inculcates in many a foolish animosity towards profit-making enterprise.

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