Why College Aid makes College More Expensive?

An interesting article. Let’s forget how expensive college is or is it worth the cost today. That is not the point of this post.

This is a discussion about the unintended consequences of subsidies. Politicians can’t help themselves when prices move against their voters so they always want to subsidize their voters – especially for “important” things like college education, solar energy, milk and ethanol.

Unfortunately the subsidies not only fail to work they usually make the problem worse.

In the case of subsidized college education the subsides given via college loans allow the college institutions including their faculty and administration to raise their prices (and salaries) to adjust for the subsidies. College presidents and professors end up with this largess - not college students.

Most college students only consider where the cash is coming from (or is it?) in considering their college options. Very little attention goes into how much debt will be accumulated and how expensive it will eventually be to pay off the college loans. If a 45 year old politician thinks this way what are the chances that 18 year old high school graduates will think with any more maturely?

And once subsidies are established (even when they are called temporary) they are almost impossible to eliminate. The reason is the beneficiaries of subsidies fight much harder to keep them that the average tax payer that only loses a few dollars a month to foot the bill.

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Which colleges are high school seniors most likely to choose?

A list compiled by College Magazine rates the campuses around the country where students are most likely to be sexually active. The magazine researched “the party scenes, hookup culture, sexual health resources and even streaking incidents” to create the list of “colleges where everything goes and nothing stays on.”

You don't think that this factor might influence what campus a high school senior might select? Get real. Everything but post-college job prospects seem to determine where high school seniors are choosing to attend.

The share of American workers in the science and engineering professions fell

“The share of American workers in the science and engineering professions fell slightly in the past decade, ending what had been a steady upward trend in the proportion of workers in fields associated with technological innovation and economic growth.”

Many of the science and engineering college grads today leave the US. They used to stay here (and it was very profitable for the country). Today we make it very tough for them to stay in the US because we have to make room for illegal workers with no education to sneak across the border.

“Before 2000, the share of these knowledge workers had increased in every 10-year Census since 1950, according to the Population Reference Bureau, a nonprofit demographic research group in Washington that conducted the study.“

The problem is that 1) the general media makes no distinction between a degree in Gender Studies and Chemical Engineering and 2) the US subsidize “going to college” without regard to what these kids are studying and 3) a college students can borrow bundles of money from the Federal government to pay for their college education and they charge the same interest rate whether you are studying mechanical engineering or Sociology.

You Get What You Measure

You get what you measure. This article discusses cheating by some prestigious colleges on how they are ranked. When you allow folks to measure themselves and there is big money at stake, you can count on cheating. This has happened in the evaluation of US colleges as well and teacher compensation in our elementary and high schools.

But more importantly why does a higher average SAT score for incoming freshmen rank a college more favorably? The job of the college is to impart an education not recruit the most educated. I can understand measuring test scores for graduates compared to test scores of incoming students – but that is not the case.

A few colleges are reducing their tuition

Finally a few colleges are reducing their tuition. A step in the right direction.