Not until President Biden and our nation’s parents can agree on what’s really driving up the cost of college will be impossible to solve the tuition crisis millions of American families are confronting. The President appears to believe it is the nefarious for-profit colleges that are robbing students of their education. But many parents say it is the traditional non-profits colleges and their high prices that are sending them in to debt.
Washington thinks for-profit colleges make it look bad. They do. Too many for for-profits push students to sign up for the maximum federal financial aid to apparently fatten their college profit margins. When they fail, the government must pick up the tab by forgiving the student loans. Detractors call them “Pell Factories;” churning out dropouts and the future unemployed. In reaction, Washington imposes restrictions taking away their access to the student loan program if loan defaults climb too high.
But for the overwhelming number of parents, the for-profit colleges are not an issue. Only a small percentage of students go to these colleges. What concerns most families is the ever-increasing tuition charged at non-profit schools. Tuitions that are reportedly cresting about $60,000 at schools like Georgetown or Lehigh and reaching as high as $80,000 at others. The prices at state universities have risen faster than at private colleges over the past decade.
Survey after survey finds students going to these colleges bewildered and angry at the relentless increase in tuition and the debt it requires them to take on.
Washington appears sympathetic and more than ever willing to forgive their debt as witnessed by President Biden’s recent (and now blocked) debt forgiveness order. But the order said nothing about curbing tuition, instead there is a mention of providing more Pell Grants and a promise of a strong crackdown on colleges with a high percentage of students in default. That is code for for-profit colleges.
Why does the government focus on such a small percentage of colleges? Why does it avoid calling out traditional colleges for their pricing practices? Why doesn’t the government at least challenge traditional colleges that their price increases should be a matter of financial necessity? There are likely a bunch of reasons including ideology, politics and loyalty.
Washington seems to believe that colleges are a critical public good both in underpinning our national dream of upward mobility and in contributing to our national defense. Politically, it produces students and faculty who form the backbone of the liberal Democratic Party. And for the Republicans there is always Liberty University and other evangelical colleges. And, finally, loyalty, because members of Congress are proud graduates of traditional and state colleges, in many cases the elite ones. They see it as a private good benefiting their careers.
For both Democrats and Republicans there are no votes in causing a college to close. But enough is enough. It’s time to take off the blindfolds and recognize the crisis at hand. The pricing of all colleges is too high and going higher. If we keep feeding student loans to the beast it will explode.
The government doesn’t have the luxury of only going after for profits. Rather it must focus its efforts on reducing the cost of college. That means replacing the student loan system that props up all colleges whether for profit or nonprofit.
Robert Hildreth is a former International Monetary Fund economist whose professional work involved restructuring South American debt and marketing sovereign debt loans. He founded the Hildreth Institute, dedicated to restoring the promise of higher education.