That’s the title of an excellent piece by Jason Delisle of the New America Foundation in the December 31 Wall Street Journal.
Delisle works for a leftish organization, but federal higher education policies have gotten so harmful that they’re drawing criticism from all sides now. Delisle aims in particular at Obama policies that are meant to make student loan repayments easier for the students, but which are certain to stick taxpayers with billions of dollars in losses.
I have often commented on the similarities between the housing bubble and higher education policy. Making it easy to repay student loans is like the policies designed to keep people in the houses they improvidently borrowed to buy. When politicians decide to be “kind and generous” toward students or homeowners, they just get in the way of sensible cost/benefit calculations.
There’s one big difference, though — the houses that were built to meet the inflated demand were at least well constructed and of eventual benefit to someone. Many of the students dragooned into college these days get an education in name only and a credential that is rapidly falling in its allure.
The student loan policies are objectively foolish, but in politics what is foolish can still “work.” Delisle observes, “This all makes sense when you realize that the student loan program has been developed to achieve two political goals: Loans should be available to any student, at any school, pursuing any credential; and student debt is bad and burdensome, so it should be easy for borrowers to repay.” We will suffer huge but hidden costs (this is merely another tributary of the great federal river of red ink) just so politicians can crow about how they’re concerned about students in debt.