President Obama’s signing of the education bill is triply disastrous. First, he violated basic tenets of representative democracy by tying otherwise politically unattainable education changes to the health-care bill.
Second, the bill’s student loan provisions will not save the $68 billion promised, and will move the country closer to a European-style socialism that has brought that continent stagnation. Going to a Soviet/U.S. Postal Service model of student-loan services goes against the sound maxim that competition is always better than monopoly. Moreover, the bill’s repayment terms will lead to increasing student-loan defaults, adding to the crushing fiscal burden on a government whose IOUs are now trusted less than those of some private corporations.
Third, the bill proceeds from a false premise. President Obama asserted Saturday that “by the end of this decade, we will once again have the highest proportion of college graduates in the world.” Putting aside the nasty reality of a 45 percent six year college drop-out rate, the Labor Department forecasts that, over the next decade, there will be fewer new jobs requiring college degrees than there will be new college graduates. This bill aggravates a costly and inefficient system, likely will raise tuition charges, and lead to more over-educated and over-indebted young Americans.
– Richard Vedder is a professor of economics at Ohio University and an adjunct scholar at the American Enterprise Institute.