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August 14, 2015

Clinton's College Reform Plan Gets A Big Fat F

  Rare

As someone who has taught at the college level, I’d give Hillary Clinton’s college reform proposal, called the “New College Compact,” a big fat F. The only way her program will ever pass is by social promotion.

In an effort to buy, er, win the Millennial vote, Clinton is proposing to spend $350 billion over 10 years—$200 billion to make college (i.e., public universities) more affordable and another $150 billion to pay down the balance of those who currently owe student debt.

There are so many problems with her plan it’s hard to know where to start grading.

An F for the cost. It’s not like we aren’t spending lots of money now. According to the Pew Charitable Trust, the federal government handed out $75.6 billion in grants in 2013 alone. States kicked in $72.7 billion.

But that’s not all. The federal government spent about $110 billion in 2012 providing student loans. That’s up from a little more than $20 billion in 1994.

In addition, the federal government provides a tax credit, known as the American Opportunity Tax Credit, which allows qualified taxpayers to take up to $2,500 off their tax bill for college expenses.

The feds spent about $36 billion on that tax credit in 2012, up from about $4 billion in 1999.

That’s nearly $300 billion a year going to various higher education grants, loans and subsidies, and Clinton thinks that’s not enough.

An F for its impact. That government largess has only made college more expensive. The New York Federal Reserve Bank just released a study estimating that each federal dollar in aid and subsidies increased the tuition costs by as much as 65 cents.

We have seen exactly the same thing in the health care system. As the government pumps more money into health care—first Medicare and Medicaid and now Obamacare—the costs go up, not down, as President Obama promised.

If Clinton starts claiming, “If you like your college degree plan you can keep your college degree plan,” be very, very afraid.

An F for results. While a larger percentage of the population graduates from college today than, say, in 1970, the rate of increase slowed dramatically after the government started pouring money into the system in the 1990s.

Between 1970 and 1990 male college graduates increased by 10 percentage points, from 14.1 percent of the male 25-and-older population to 24.4 percent. Over the next 20 years, to 2010, it increased by only 6 percentage points, to 30.3 percent.

Of course, you would expect the annual increase to tapper off over time because not everyone wants to go to college nor is willing to spend the time and effort it takes—even if it were free. So how much bang for all these taxpayer bucks does Clinton expect to achieve?

An F for unintended consequences. Clinton is targeting public universities. Would making a public university education cheaper dramatically reduce private college enrollment, hurting those institutions financially? And what would happen to educational quality if thousands of people enroll only because taxpayers are paying for most of it?

Finally, an F for ignoring history. Clinton’s complaint about educational inequality raises the question of how lower- and middle-class Americans (including me) ever got through college before the federal financial tsunami starting in the 1990s?

As aspiring collegiates, we made a list of the colleges we wanted to attend. We looked at our resources and crossed off the schools that were clearly unaffordable. Then we tried to figure out whether some mixture of savings, parental help, scholarship funds, living at home for the first few years, going to community college first, or working during college could make it happen.

But you know, I don’t recall any of my class thinking we were entitled to a college education, which is Clinton’s new mantra. We saw college as an opportunity, not an entitlement. As a challenge, not a right. And most of us bore the cost ourselves because we received the benefit. You might call that “old school thinking.”


 

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