Student Loans: Another Entitlement

Why should a kid who went to work straight out of high school, who learned a trade and worked his way up there, pay for another kid’s college degree?

One of the arguments for socialized higher education is that society benefits from kids putting their academic learning to work. However, this is true only insofar as the college graduate can actually get a job based on his college-learned skills. If he can’t, it means that his degree does not let him add enough value to the economy to make it worth the while getting the degree in the first place.

If, on the other hand, the college degree leads to a job with a career, then the student will add enough value to pay for his tuition based on his own income.

At this point, countless college graduates around the country will protest loudly. They are staggering under the burden of student loans, struggling to make ends meet even on a decent salary. However, that does not mean someone else should be responsible for paying for their degree: if you choose to go to a college that charges $70,000 per year instead of a much-cheaper school, then you have made the calculation that the extra tuition you will be paying will give you a much better career start after graduation.

In short: your calculation says that with a $35,000/year degree, you will (all other things equal) make half as much as you would if you graduate from the more expensive school. If the earnings potential does not reflect the difference in cost of the degree, then you have made a poor choice of school to go to.

Your parents should have taught you better.

Recently, it seems as though parents and prospective college students have started making better choices. With annual tuitions increasingly outpacing the earnings of even older college grads trying to save up for their kids’ education, it has become more accepted to shop around and find less-astronomical alternatives to the supposedly top schools. The coronavirus craze has added its fair share to stimulate market-based choices; why would anyone pay more than a quarter of a million dollars to go to a first-tier school when all the education takes place online anyway? How big of a difference is that – really – from getting a degree from the University of Phoenix or your local state college?

As someone who has been a college professor in three different countries, I can only encourage parents and high-school kids to stay away from the most expensive schools. Even under normal circumstances, with campus life at normal pulse and all the traditional college atmosphere in place, it is absolutely not worth it to pay the equivalent of three Mercedes S450s for a college degree, that you can get for a fraction of the price at Ashland University in Ohio. Sure, there is some cachet to the degree, and there are minor academic differences that could translate into better earnings potential, but they are nowhere close to motivating the often-exorbitant differences in tuition.

It is also important to remember that big research schools, like all the Ivy Leagues or the Big Ten in the Midwest, not to mention the ones in the Democratic People’s Republic of California, almost invariably assign grad students to teach undergraduates. This is especially true for the bigger classes that most students take in order to learn the basics in what they will later major in. If you end up with a grad student teaching you Macroeconomics 101, I can guarantee that you will not learn nearly as much as you would if your class was taught by a Ph.D. with an active, relevant research agenda.

In other words, by paying more for a big, fancy school you run the risk of getting a lower-level academic education than you would at a smaller, cheaper school where all the professors have doctorates.

There is also a tendency among bigger schools to hire people as adjuncts. This means, simply, that they don’t have to make a salary commitment and they certainly don’t have to dole out benefits for them. (These are schools where most faculty normally vote for Congressional candidates who rail against the unfairness that we don’t have single-payer health care in America.) Adjuncts are usually less anchored in their subject matter, or have other priorities that draw their intellectual attention away from what they are teaching. There are exceptions, but in my experience the adjuncts usually do not rise to the same academic standards as full-time faculty.

In short, the choice of college is complicated, especially when taking the cost of it all into account. It doesn’t get better, though, from the fact that our college campuses have become rampant socialist breeding grounds. Faculty with political leanings, who see it as their mission to preach socialism to the students (and yes – that’s exactly how they see it), hire younger faculty with the same political leanings. For each generation of new hirings the political preferences slowly gnaw away at academic proficiency; the more important the political preference becomes, the less important are academic standards.

As the political pressure on students is dialed up, the academic challenge is dialed down. You get more politics and less learning for your hard-earned tuition dollars; the more tuition dollars you spend, the more politics you get for them.

With all this in mind, it is – again – absurd to ask a 19-year-old welder who did not go to college, to pay the tuitions for Jennie and Johnnie to get a degree in oh-my-god-i-hate-donald-trump studies. Nor is it fair to ask the plumber who learned a trade and built a successful business to fund the tuitions of someone who got a business degree and became an accountant. The accountant, just like the plumbing entrepreneur, is adding value to the economy, enough so that he can pay for his own student loans.

This common-sense reasoning, however, is falling on deaf ears among many Americans. So pervasive is this political hard-of-hearing disability that we the taxpayers are now on hook for well over a trillion dollars worth of student loans. Reports the Wall Street Journal (p. A1, print ed., Nov. 23):

The U.S. government stands to lose more than $400 billion from the federal student loan program, an internal analysis shows, approaching the size of losses incurred by banks during the subprime-mortgage crisis. The Education Department, with the help of two private consultants, looked at $1.37 trillion in student loans held by the government at the start of the year. Their conclusion: Borrowers will pay back $935 billion in principal and interest. That would leave taxpayers on the hook for $435 billion, according to documents reviewed by The Wall Street Journal.

On top of that, the Journal reports, government is the co-signer for $150 billion in private student loans.

In short, our beloved federal government is now sitting here with a pile of unfunded liabilities that our beloved Congress did not see fit to take into account when they got us – the taxpayers – involved in the student loan business.

This was, of course, not by accident. It was entirely intentional. This is the way the socialist American welfare state expands: not by big, revolutionary sweeps, but by mission creep. There have been two exceptions:

  • The Social Security Act of 1934, which created a socially conservative welfare state; and
  • The War on Poverty, which created a lot of new programs and redefined the purpose of the federal government in the image of the socialist Swedish welfare state.

Other than that, the expansion of our system for economic redistribution has been a gentle canter through time. In this tradition, we can safely expect tax-backed student loans to turn into refundable student loans – also known as loan forgiveness – which will then turn into student grants, which will then turn into student entitlements.

All in due course of time. And we can all sit back and watch as another generation sink their common-core shaped minds into grievance studies, the Millennial generation’s up-the-ante to art history, the most useless college degree of the last century.