Obama to Target Schools for Rising Tuition Costs

Posted: Jan 27, 2012 8:34 AM

The federal government has been subsidizing and passing out student loans at an ever-increasing pace for years, making is possible for more people to obtain student loans more easily, and President Obama has often proselytized about the supposed need for every American to go to college. But when demand increases like that, the colleges and universities need some kind of mechanism to limit their application pool to a reasonable level -- so the price goes up. These are basic economics of which the federal government is apparently woefully ignorant. The Obama administration has made grants and loans more available, made loans easier to pay back, provided tuition tax breaks, and kept interest rates artificially low; and now they're trying to place the blame for rising education costs on the universities. It belies logic:

President Barack Obama will announce Friday a plan to shift some federal dollars away from colleges and universities that don't control tuition costs and new competitions in higher education to encourage efficiency as part of an effort to contain soaring college costs.

Obama will spell out his plans at the University of Michigan in Ann Arbor. The speech will cap a three-day post-State of the Union trip by the president to promote different components of his economic agenda in politically important states.

On Tuesday night during his State of the Union address, Obama put colleges and universities on notice to control tuition costs or face losing federal dollars. That's had the higher education community nervous that he could set a new precedent in the federal government's role in controlling the rising costs of college.

The money Obama is targeting is what's known as "campus based" aid given to colleges to distribute in areas such as Perkins loans or in work study programs. Of the $142 billion in federal grants and loans distributed in the last school year, about $3 billion went to these programs. His plan calls for increasing that type of aid to $10 billion annually.

Education is not free -- it's not a human right that just exists in a vacuum. We as a nation really need to move past the idea that everybody needs to go to college, and get rid of the stigma that you're somehow a loser if you don't. We're creating an education-bubble, and it's bound to pop eventually.

Update -- Behold, a press release from the White House (I recommend skimming the entire thing): "Fact Sheet: President Obama's Blueprint for Keeping College Affordable and Within Reach for All Americans." I rest my case:

“Of course, it’s not enough for us to increase student aid… States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down.” — President Barack Obama, State of the Union, January 24, 2012

In his State of the Union address, President Obama laid out a blueprint for an economy that’s built to last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values. As an important part of keeping the American promise alive, the President called for a comprehensive approach to tackling rising college costs. In today’s global economy, a college education is no longer just a privilege for some, but rather a prerequisite for all. To reach a national goal of leading the world with the highest share of college graduates by 2020, we must make college more affordable.

President Obama has emphasized the responsibility shared by the federal government, states, colleges, and universities to promote access and affordability in higher education, by reining in college costs, providing value for American families, and preparing students with a solid education to succeed in their careers. Over the past three years, the Obama Administration has taken historic steps to help students afford college, including reforming our student aid system to become more efficient and reliable and by expanding grant aid and college tax credits.

This year, President Obama is calling on Congress to advance new reforms that will promote shared responsibility to address the college affordability challenge. If these proposals are passed, this will be the first time in history that the federal government has tied federal campus aid to responsible campus tuition policies. ...

Update II -- Here's Secretary of Education Arne Duncan before President Obama's speech at the University of Michigan this morning, with more perennial wisdom on how to achieve the exact opposite of your ostensible intentions:

I would also like to point out, that the Obama administration is trying to push every American go to college, while also trying to bring more manufacturing jobs back to the United States. That is all.