Except maybe for Hollywood and Goldman Sachs, there has been no firmer source of support for Barack Obama’s presidency than academia. University faculties have been among his greatest sources of donations, while professors have happily charged his critics with racism on every imaginable ground.
So, naturally, Obama’s throwing them under the bus.
In his State of the Union speech, the president put colleges and universities “on notice” regarding skyrocketing tuitions. Later, speaking at the University of Michigan, he explained that he plans to punish schools whose tuition climbs too high by cutting federal aid.
Now schools will be judged by how much they cost, how fast costs rise and (apparently) how well their students are employed after graduation. It’s basically an extension of the administration’s assault against for-profit colleges — cheered on by the leaders of the traditional college and university sector — now extended to the traditional college and university sector. Gosh, who could have seen that coming?
Campus administrators were quick to warn of unfair scapegoating and the dangers of unintended consequences (things they tend to pooh-pooh when the targets are, well, everybody else). University of Washington president Michael Young called Obama’s plan “nonsense on stilts.”
Well, it’s not nonsense. Tuition has been skyrocketing for a couple of decades now, growing at several times the rate of inflation and showing no sign of slowing down even in hard economic times.
US student-loan debt now exceeds credit-card debt. And parents can’t subsidize their kids’ tuition with cheap home-equity loans, as they could a few years ago, making the pain harder to ignore.
So the problem of college costs is a real one, and a potential vote-getter. And while faculties and administrators have been loyal Obama supporters, they’re vastly outnumbered by students and their parents. The president’s just going where the votes are.
But his solution seems to be aimed more at getting those votes than at doing much about the problem. There are many reasons for college tuition’s rise, and most wouldn’t be changed by such a blunt instrument.
Probably the biggest problem is administrative bloat. In the Cal State system, for example, faculty numbers grew only 3.5 percent from 1975 to 2008. In the same period, the number of administrators rose by 221 percent, to the point where administrators now outnumber full-time faculty.
Other systems have seen similar changes. And a study last year by the Goldwater Institute found that administrative bloat was the major reason for higher college costs. (To be fair, Sen. Lamar Alexander points out that much of that bloat is created by the need to comply with federal regulations).
Another problem is the presence of federal subsidies themselves. Typically, when an industry is subsidized, prices go up to consume the subsidies. As Washington has vastly increased the size and availability of student loans and grants in recent decades, colleges and universities have raised tuition to take advantage.
A final problem: Although college is sold as an “investment in the future,” college programs aren’t rated (as investments should be) based on their returns. A degree in electrical engineering, for example, is likely to produce higher returns than one in peace studies or critical race theory, yet they cost the same.
If colleges had to provide accurate data about the earnings of graduates in different majors to students upon registration, many would make different choices. (And if interest on student loans varied with risk of default, the way it does with most loans, the engineering student would be paying much less than the “peace” major.)
Obama’s approach doesn’t do much to address any of these problems. And political observers say it’s not likely to get through Congress anyway, suggesting that it’s mostly election-year posturing.
Still, the president has opened the door to further national discussion, and perhaps made a useful policy possible.
Economist Herb Stein famously said that something that can’t go on forever, won’t. College tuitions can’t continue rising faster than inflation and family incomes forever. So they won’t.
Give Obama credit for raising the issue, even if he hasn’t come close to solving it.
Glenn Harlan Reynolds, a law professor at the University of Tennessee, hosts InstaVision on PJTV.com.