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A commonly-held leftist meme is that conservatives hate education. The technical word for this is “nonsense”: conservatives value education just as highly as liberals, and it bears repeating that the majority of college graduates vote Republican. Conservatives do, however, have strong criticisms of academia, which is a related but distinct matter from higher-education itself.
Of late, a new criticism has grown regarding the rise of the government-educational complex, specifically regarding the positive feedback* loop between tuition prices and easy student credit. The more money the government offers at below-market rates, the more colleges raise the fees, prompting even more generous loans, and setting up another cycle of the same. When you further consider that the availability of the loans is completely divorced from consideration of the degrees’ potential value and that their value is almost uniquely protected from normal market pressures, you realize that we’re not dealing with a market failure, so much as a conscious and successful effort to prohibit the existence of one.
As usual, Megan McArdle puts it best. Writing about students trapped under mountains of debt for nearly useless degrees, she says:
[Acknowledging the students’ culpability in their predicament is] not to say these students shouldn’t get relief. They should. Happily, we already have a system for dealing with people who are burdened with excess debt: the bankruptcy system. The government should change the law to make it easier to bankrupt student loans.
But at the same time, this case points to an issue that I’ve highlighted before: the need for better underwriting in student loans. Simply allowing students to borrow large amounts of money and then bankrupt it is a recipe for big government losses. We should allow people to bankrupt student loans, but the corollary to that is that we need to be more careful about the loans we make in the first place.
Right now the system indiscriminately lends to any marginally well-equipped institution that can claim to be teaching anyone any skill, even if that skill isn’t going to increase a student’s ability to repay their loan. It’s no wonder that institutions are setting up lots of useless programs to collect those tuition checks; the real wonder is that there aren’t more stories like these.
So yes, we need to offer debtors like these some relief. But we also need to stop making loans for programs that have poor graduation records, high default rates and little evidence of economic benefit to degree holders. I’m not just talking about for-profit colleges here, but also about the wide array of programs at accredited four-year schools that allow students to amass substantial debt without giving them anything of value in return.
Formal education– be it motivated by remuneration or a simple desire to learn — is a great thing, but not all great things are public goods. The sooner we start treating education like a normal thing we have to be sensible and rational about, the less damage there will be from the impending education-industry crunch, and the more people will be able to find educations they can afford and value.
* The original version of this post erroneously described this as “positive feedback.” Many thanks to anonymous for the correction.