Obama’s policies are designed to dole out money to college students, not promote better outcomes, which would make them poor policy even if there were no budget crisis. For instance, the plan makes no effort to incentivize academic effort or excellence: “A” students and “D” students are equally eligible for Pell Grants, federal student loans, and the American Opportunity tax credit. Further, the abundance of subsidies and student loans available may be encouraging students who aren’t prepared for college to attend anyway. Only 57 percent of students who started college in 2002 had graduated six years later, according to the National Center of Education Statistics. Students who drop out face the prospect of paying back student loans without a degree that brings them a better salary.
Romney’s approach is different. He supports the Ryan plan, which would put the Pell Grant program on a sustainable path, something Obama has not done, by curtailing eligibility. And he has talked frankly about the idea — first put forward in the 1980s by then–education secretary William Bennett — that government subsidies may be driving up college tuition rates, which have grown by 559 percent since 1985.
“If you look at inflation in America, there are two places where the rate of inflation has been massively higher than the overall rate: higher education and health care,” Romney told the Reno Gazette-Journal editorial board in February. “When the government subsidizes to a great degree a particular effort, people take advantage of the money coming in from the government and just keep on raising the tuition. And so if the federal government tomorrow were to say we will give $50,000 a year to every student in higher education my guess is that the tuition would go up $50,000.”
Instead, Romney prefers to apply market forces to tuition rates, noting that for-profit colleges like the University of Phoenix could help provide competition. “Students are going to say, you know what, it’s not worth tens of thousands to go to this college when I could go to that college for half the price and get a very good education,” Romney remarked.
This approach has not won Romney too many fans on the left. In March, when Romney encouraged a high-school student to “go to [a college] that has a little lower price where you can get a good education . . . and don’t expect the government to forgive the debt that you take on,” New York Times editorial writer David Firestone characterized his response as “pretty brutal.” The Nation’s Ben Adler also derided Romney’s college policies, writing that “Romney, the fantastically wealthy son of an auto executive, has evinced a ‘let them eat cake’ attitude towards college affordability.” In other words, just as in the health-care debate, liberals are eager to label those who oppose additional government subsidies as heartless or cruel.
Ultimately, this debate isn’t about college affordability. It’s about whether students and their parents or taxpayers should be primarily responsible for paying for college. And it’s about whether higher education will respond to market forces or become, like health care, increasingly subsidized, with its costs rising at a faster and faster rate. But since this places a bigger and bigger financial burden on the government, students and parents who choose the “free stuff” approach today will spend their future working for Uncle Sam, not themselves.