Economic issues typically don’t resonate with us college students, as many of us are insulated against the burden of taxes, unemployment, outsourcing of jobs and even gas prices. But one issue that unequivocally affects college students is the ever-increasing cost of tuition. The best explanation I have heard for the phenomenon was delivered in a few, simple words: No government intervention in education means no inflated tuition.
Before World War II, most Americans didn’t attend college. For individuals who did, it was inexpensive relative to today’s figures. In many cases, the student worked for a few years before or during school to save up enough to pay for college and graduated without debt.
This rarely happens today due to the existence of an exorbitant number of government-guaranteed loans and grants available to students. The problem with such a system is the development of an educational-industrial complex in which individuals become slaves to debt who are forced to pay off loans long after graduation. The benefactors of the scheme aren’t the students but rather the banks, universities and politicians.
Tuition data for the University’s Law School show the effect of government intervention. Adjusted for 2009 values, yearly tuition at the Law School in 1950 was $1,884 for state residents and $4,037 for out-of-state students. In 1950, the inflation-adjusted, median personal income was $18,103, meaning that students would have earned enough to pay off a year of tuition in less than three months.
Fast forward 60 years: tuition for the Law School is currently $41,310 and $44,310 for in-state and out-of-state students, respectively. The median personal income is approximately $25,000. Today, the average American would have to work more than 18 months to afford a year of tuition.
What caused the difference? Before World War II, there were no government loans or grants. When these things did not exist, college was inexpensive and affordable. Government intervention in education has caused costs to skyrocket.
Besides driving up the cost of education, the government is driving down its value. Since fewer individuals went to college before World War II, people didn’t stay in school very long before they joined the work force. Today, however, with guaranteed loans, droves of Americans obtain college degrees. Thus, the value of the degree has diminished. This is basic supply and demand. To stand out, a student must obtain a graduate degree or Ph.D. These students spend more years in college, accumulate more debt and delay their entrances into the work force, where they can actually make money.
Today, anyone who wants to go to college has access to a loan co-signed by the government. Students then bid and compete against one another for spots at universities with government money. There is no restraint on the demand, which causes an increase in prices. Universities love this, as it enables them to increase admission costs knowing that the government will guarantee the debt. If anything, college tuitions should be decreasing. We are currently in a recession and demand for highly skilled workers has diminished. Unemployment is high, and incomes and the economy are shrinking — yet college prices continue to rise.
Could colleges afford to charge $30,000 a year if government loans did not exist to support this artificially created demand? The answer should be obvious. These programs mean that colleges have no incentive to bring down costs.
Let’s examine a hypothetical scenario. If the government announced that it would eliminate educational aid programs for the next fiscal year, there would be a drastic decline in enrollment. Most people wouldn’t be able to afford outrageous tuition prices. Would this mean that colleges would continue to operate with empty classrooms or shut their doors and go out of business? Of course not — colleges would adapt by slashing outlays to lower operation costs, which would subsequently make attendance more affordable for students.
Instead of having people go to college for a devalued degree and graduate with 25 years of future debt, students can work for a few years after high school and gain valuable real-world experiences before choosing to obtain degrees for significantly lower costs. The benefits of reconsidering misguided federal aid programs, which have jacked up the price of a college education while devaluing it in the process, are crystal clear.
Alex Biles is an LSA junior.