Terry Paulson

If you want to know what is wrong with the cost of education in America, look to some of the politicians you elected. We've been sold that cheap student loans are the answer to making education affordable. Nothing can be further from the truth.

Tom Coburn, the Oklahoma Senator, could summarize this column in one sentence: "If you want to make something expensive, have government get involved in making it affordable."

When you disregard basic economics, we learn the hard way. With limited supply, the greater the demand for a given product or service the higher the price. By making funds for education easier to get, the demand for education has increased along with its cost. Since 1985, the cumulative inflation rate (CPI-U) has increased what we pay for products and services by an average of 115%. But in that same period, the cost of a college education has increased 498%. In short, government aid is hurting, not helping. The tuition and student debt increases are leaving students with tremendous outstanding debt and depleting the savings of families who thought they had set aside enough for their children's education.

How did this happen? The Federal Stafford Loan Act opened the floodgates to government-backed student loans without parent income restrictions in 1992. The colleges welcomed the news with open arms. The sudden injection of millions of additional aid dollars exploded tuition increases and filled college endowment coffers .

The colleges have gone on spending spree claiming that tuition increases were justified due to higher fuel, labor and overhead costs. There were the buildings that needed to be renovated or replaced, faculty chairs that needed to be created, and research facilities and computer labs that needed to be updated. Welcome to hyperinflation under the guise of making education affordable!

Just as many were attracted to the low rates with adjustable-rate mortgages, many students over the last decade have been enticed into "adjustable rate" student loans issued by private lending institutions and government agencies. Unfortunately, those "adjustable rates" tend to go in only one direction--UP. In July, without bipartisan congressional action, the adjustable rate on student loans will rise to 6.8 percent, impacting 7.4 million students. Many students are finding out that they signed up for more education than they can afford. Like so many in our culture, it's "enjoy the benefits now and pay later!"

Terry Paulson

Terry Paulson, PhD is a psychologist, award-winning professional speaker, author of The Optimism Advantage: 50 Simple Truths to Transform Your Attitudes and Actions into Results, and long-time columnist for the Ventura County Star.

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