George Leef is right—Lamar Alexander should never have claimed that college graduates earn $1 million more in a lifetime than non-graduates, as he did in his July 6 Wall Street Journal article. That claim was demolished long ago, and, as George pointed out, it is based on past facts and doesn’t take into account the marginal student.
But there were other arrogant and economically ignorant statements in Alexander’s essay. It was not worthy of a senator, certainly not worthy of a conservative. The column as a whole seemed designed to promote more federal money.
- First, regarding loans, Alexander ignored the fact that 40 percent of all college students fail to graduate in six years. So the “$27,000” average debt for college graduates does not include their debt, and without degrees they are even less able to repay. (Yes, there is some advantage to a degree.)
- His “tuition and fees” figure of $31,000 for private non-profits excludes living expenses; he should have cited the College Board’s figure of $42,419 per year, which is a more accurate picture of what parents are facing. The “about $50,000” he genially ascribes to Georgetown should have been $67,420.
- He lauds Georgetown for giving away $100 million a year to make college affordable. But scholarships are rarely based on merit these days; they are discounts carefully calculated by the colleges and geared to family income. Colleges can squeeze a lot out of families, because the 108-question FAFSA form tells them what they need to know.
- “College degrees appreciate,” says Alexander. What does he mean by that? He cites the $1 million ROI that George rightly criticized. Economically speaking, as more and more college graduates enter the market, degrees are likely to decline in value, not increase. And after graduation, experience is what boosts one’s value in the marketplace.
What bothers me the most, though, is Alexander’s complacency. For example, he wants more Pell grants, not fewer, blithely ignoring the problems that range from “Pell-running” to the mission creep that has led to nearly 60 percent of all students getting Pells now. He apparently approves of the 10 per cent payback plan (you can pay 10 percent of your loan per year and be forgiven after 20 years), which spurs dependency and moral hazard.
A Republican ought to be figuring out ways to reduce the cost of college, reduce the burden on taxpayers, and keep Americans from being dependent on the government. Alexander is doing the opposite, apparently eager to continue filling the coffers of colleges and universities at other Americans’ (including students’) expense.