In today’s Pope Center Clarion Call, I write about the effects of more than 45 years of federal student aid programs: higher costs and lower learning.
Just as was the case with respect to federal intervention in the housing market — the idea behind which was to make home ownership more affordable and widespread — federal intervention in the higher education market has backfired. In housing, the virtues of the old system, which required people to save if they wanted to buy a house, were destroyed by the pressure to lend to almost anyone. Housing prices soared, but we wasted lots of resources on housing and many people who bought homes now regret it. Similarly in higher education, the old system cultivated beneficial behavior: Parents saved money for it, and students knew that they wouldn’t get in unless they did very good work in high school. As federal funding turned higher education more and more into something approaching an entitlement for all, costs rose but many students discovered that good work was not needed either to get into or to stay in college.