Instead of Wiping Away Student Debt, Bring the Cost of College Back Down to Earth

By Arjun Singh

Friday, April 29, 2022

 

Why is a college education so expensive? It’s the key question that not enough people are asking. As the Biden administration hints at mass student-debt cancellations, conservatives and progressives have been embroiled in a debate about the fairness of the move. But the debate we should be focusing on concerns the cost of college and how to control it. The real villains here are the universities.

 

In 1992, the average tuition for an undergraduate degree at a public, four-year university in the United States was $2,349. The average tuition at a private university was $10,294. Today, the average is $11,631 for public and $43,775 for private — increases of 495 percent and 425 percent, respectively. This is nearly five times the increase in the rate of inflation in that period.

 

Clearly, this increase isn’t due to skyrocketing operating costs. What has changed is the ability of colleges and universities to leech off the taxpayer, with students as the unknown middlemen. It was also in 1992 that President George H. W. Bush signed the Higher Education Act, creating the precursor of the Federal Direct Student Loan Program, the current system. Students could take on tens of thousands of dollars in easily available credit, repayable after they left college.

 

Demand for a college education soared, while the financial impacts for students and their families were deferred. The public was persuaded that “more people going to college” was an unmitigated good. Under the veil of that notion, universities realized a grand opportunity to make money, funded by the federal taxpayer. This is on top of the enormous endowments, donations, and research grants that colleges also enjoy. Elite colleges have capitalized on parents’ eagerness to have their children admitted to the very best schools, which families view as a ticket to success in life.

 

All this, while higher education’s nonprofit status — requiring schools to invest surpluses back into the university — makes them tax exempt. It’s a crass act of profiteering. In 2018, the approximately 4,000 American colleges and universities took in a combined $1.068 trillion in revenue, tax free. That averages out to about $250 million per school.

 

Bringing down tuition, rather than wiping away student debt, ought to be our focus. Regulate colleges’ tuition fees. Regulate their room-and-board fees. Regulate their faculty salaries. Most of all, shrink the bloated administrations and regulate the salaries of administrators. Federal authority to do this, directly or otherwise, shouldn’t be hard to find. Setting conditions on colleges’ receipt of billions in taxpayer-funded subsidies and grants is a good place to start.