Phi Beta Cons

What John Oliver Forgot to Tell You about Student Debt

I’m not sure how many Phi Beta Cons readers are regular viewers of John Oliver’s new late-night show, Last Week Tonight. But even if you aren’t, his recent bit about student loans is worth a watch:

https://youtube.com/watch?v=P8pjd1QEA0c%3Flist%3DPLmKbqjSZR8TZa7wyVoVq2XMHxxWREyiFc

Most of Oliver’s viewers are likely living the nightmare that is the student debt crisis, and in between riffs about Lyndon Johnson’s potty-mouth, Oliver made some salient points. But there are a few important things he forgot to mention:

1. Government loans drive up the cost of college. Oliver began his monologue with a short history of how federal student loan programs got started (that’s how LBJ’s uncouth speech came up), but he never mentioned former education secretary Bill Bennett’s famous hypothesis: “Increases in financial aid … have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase.” Given the solid evidence we’ve now accumulated showing that Bennett was right, explaining student debt without explaining one of its root causes is like explaining lung cancer without mentioning the risks of smoking.

2. Schools don’t need more government money. Oliver goes on to explain that rising tuition is a consequence of states that have “slashed funding for higher education.” It was unfortunate to watch Oliver repeat one of the classic canards put forth by colleges and universities that refuse to take responsibility for soaring tuition. Their argument would be more believable if schools faced tough economic times with a bit more frugality. But when leading public universities pay their presidents exorbitant salaries, increase administrative bloat, and leave classrooms unused, it’s much harder to take this line of reasoning seriously. Consider the size of some public university endowments on top of that (one percent of the University of Washington’s endowment could have paid its 2012-13 tuition for nearly 13,000 students), and you’ll realize that more taxpayer money isn’t what higher ed needs. When an alcoholic blows his paycheck on liquor, he isn’t hungry because no one gave him enough food—he has a bigger problem.

If schools need guidance about how to cut back in tough times without sacrificing academic quality, they need look no further than Florida and Maryland, where successful board initiatives led to increased efficiencies that held tuition down. 

3. Nonprofit colleges engage in the same kinds of mischief as for-profits. The bulk of Oliver’s monologue is devoted to tearing apart for-profit universities as drivers of student debt. Many of his criticisms are well-taken, and some of the stories he tells are so absurd you don’t know whether to laugh or cry. But for-profits don’t deserve all the blame. The unscrupulous practices Oliver skewers often characterize nonprofit schools as well. For-profit schools spend large sums of money on marketing? So did the not-for-profit University of New Hampshire, which spent $65,000 redesigning its logo! And UNH isn’t an outlier, but part of a broader trend. Nonprofit schools also mislead students and lobby like hell to protect their interests. For-profits may make an easy target, but there’s plenty of blame to go around.

4. Every one of the derelict schools he mentions is fully accredited. All right, Oliver gets a pass for not bringing this up. The man has a late-night show and the words “accreditation reform” would probably put half his audience to sleep. But it’s important to mention nonetheless. The for-profit schools Oliver blasts for their shoddy educational quality and low graduation rates are all accredited by federally-approved accrediting agencies. And there are plenty of nonprofits with dismal graduation rates and poor educational quality that also receive and maintain accreditation with little trouble. The federal government’s quality control system for higher education is hopelessly broken, and accreditation reform needs to feature prominently in any discussion of how to solve the student debt crisis.

Okay. You’ve got the whole story about student debt now. Feel free to sit back, relax, and enjoy your late-night television.

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