#1 Teachable Moment:
Many of the student protesters were angry because they have to pay anything toward their education as there is a provision in the North Carolina constitution calling for free higher education "as far as practicable".
- Attention naive college students! NOTHING IS FREE! North Carolina tax payers PAY for your FREE higher education, which is already heavily subsidized by the state.
- If market forces were able to play out in the arena of higher education, I guarantee you that tuition rates would not have risen well over 40% since 2000.
- The result is more borrowing by students. Student loan debt has increased by 511% since 1999. Do you really think a four-year degree is worth $80,000 - $120,000? $60,000? $50,000? At what point does it seem like a good investment of time, effort and money. You could buy into hundreds of franchise businesses for that kind of investment. You could travel the world (in luxury) for that kind of money. You could start your own non-profit or for-profit business for that kind of money.
The problem is the intervention of the federal government into the education sector by way of Pell grants, student loans and subsidies. There is no incentive on the part of the institutions to manage their expenses when their customer (the federal government) continues to pump more and more money into the system. The result is the average student who receives a four-year degree leaves college after five years with tens of thousands of dollars of student loan debt. Payments begin six months after graduation.
The only lesson learned by our college educated students is how to incur debt in massive amounts.
Even Vice President Joe Biden, no stranger to big government, admits that government intervention via subsidies and loans contributed to the incessant increases in college tuition rates by preventing free market mechanisms to go to work.
Government subsidies have impacted upon rising tuition costs. It’s a conundrum here. But if we went the rate your view of the free market route what we would have done is we would have not of done that. We would not have increased Pell grants, for example. And there would be 9 million fewer students in college today.
And there would be hundreds of thousands and millions of students who would not be in college who don’t get Pell grants because there was no ability for them to borrow money through Perkins loans and/or have the tax deduction.”
He went on to admit that, in a pure free market, college tuition would have to be lower because there would be fewer people going to school.
First of all, what is wrong with fewer people going to four year colleges? Why can't more people go to a trade school, community college or go out and get a job?
Secondly, in typical liberal economic logic, Biden assume fewer people would attend because the government is NOT involved. My observation has been that everything the government touches turns to crap (see two previous blog posts 100% Failure Rate - Part I and Part II). I would argue that, if the institutions became more responsive to their customers - THE STUDENTS, instead of their current customer - THE FEDERAL GOVERNMENT, prices would decrease making college more accessible, less expensive and, therefore, MORE (not less) students would attend.
#3 Teachable Moment
UNC Board of Governor's chairwoman Hannah Gage said, "we must show the taxpayers of North Carolina, and the legislature, that every penny that's invested the University of North Carolina is wisely spent". To do that she recommends: 1) Achieving operational and academic efficiencies, 2) Using technology more effectively and 3) Devising a strategy for financial aid.
NO MENTION OF DEALING WITH THE FAT PENSIONS OF THE PROFESSORS AND STATE WORKERS. NO MENTION OF GETTING RID OF UNPRODUCTIVE TENURED PROFESSORS SUCKING ON THE PUBLIC TEAT FOR DECADES. Like all good bureaucrats, Ms. Gage wants to devise financial aid strategies so students can continue to pay exorbitant prices for an inferior product.
Class dismissed!
