Josh Mitchell, a reporter for the Wall Street Journal, has recently written a book entitled The College Debt Trap. In it, he addresses those questions.
In today’s Martin Center article, I discuss his book and argue that he gets some things right, others wrong.
Mitchell’s historical presentation is excellent: how American politicians panicked over Sputnik and started the avalanche of federal interventions in higher education, how LBJ thought that promoting college was a big part of solving poverty and inequality, how the Student Loan Marketing Association was created to keep federal higher-ed subsidies “off the books” and then mushroomed into a gigantic political player, how all the federal manipulations began to have unintended consequences as new schools were created to game the system and lots of students defaulted on their loans, how higher-education officials figured out that they could rake in money by steadily increasing tuition, and how politicians pushed the “college is good for everyone” idea, causing many people to make ruinous decisions involving borrowing so they could earn degrees that turned out to have far less value than expected.
Where his analysis falters is that he’s too accepting of much of the “conventional wisdom” that has been propagated about higher education, especially that the country badly needed to increase the percentage of people who went to college and that the economy grew because of the surge of graduates. He also misses two big downsides to that surge, namely the dumbing down of standards and credential inflation fueled by the huge glut of people holding college credentials.
In the end, can we escape the debt trap? Mitchell offers some sensible ideas, such as requiring that colleges bear some of the cost when students default, but doesn’t argue for the one and only change that would really end the problem that the government has created — to get the feds out of the business of financing higher education.