Will colleges use student loan handouts as 'free pass' to increase tuition?
UC Berkeley law professor John Yoo and The Heritage Foundation president Kevin Roberts analyze the implications of President Biden's student loan handouts on 'Fox News @ Night.'
Since taking office, President Biden has adopted a policy of ineptly mopping the floor while forgetting to turn off the faucet that created the mess. Biden's foolish attempt to address college costs through a student loan bailout will only exacerbate the issues that created the growth in student debt.
For decades, state and federal governments have provided trillions of dollars to students to pay for school believing college access was the key to economic success. But rather than improving access and affordability, taxpayers have subsidized a spending race in pursuit of prestige that has made college less affordable and less accessible.
President Biden announces his student debt package at the White House on Aug. 24, 2022. (Bonnie Cash/UPI/Bloomberg via Getty Images)
Schools have gotten a free pass to inflate their prices, hiding behind debunked claims of declining state support. While schools talk up their contribution to affordability by touting generous "institutional aid," far too often it’s more like a coupon for the financially secure who are unwilling to enroll without it than a scholarship for needy students. The result is a squeezing of middle-class families’ pocketbooks and increasing debt to pay for degrees that simply don’t pay off.
This is unsustainable.
STUDENTS, TAXPAYERS DESERVE BETTER THAN BIDEN'S REVERSE ROBIN HOOD PLAN
The nation’s borrowing crisis cannot be solved by ad hoc student loan debt jubilees on the eve of Election Day. Just last month, House Republicans presented the president a bold blueprint to fix the student loan crisis his party created. In response, the Biden administration charged each taxpayer $2,500 – including those who never set foot on a college campus – for a plan that will put outstanding student loan debt right back where it is today in a few short years.
Rep. Virginia Foxx speaks at a news conference at the Capitol, March 25, 2021. (Tom Williams/CQ Roll Call)
It is critical to reverse the vicious cycle of increasing prices and declining quality of education. Once again, House Republicans are stepping up to the plate and providing a proposal to do just that.
First and foremost, colleges must have skin in the game when it comes to federal student loans. Institutions can no longer get a free pass when borrowers are stuck with mounting debt and a degree that does not meet its promised returns. If a school’s programs are successful, we should reward them, but for those riskier programs, colleges must help cover the loss for students. The burden can no longer fall squarely on taxpayers.
Institutions will have to look inward and ask whether the money spent on a new administrative office could be used to improve the quality of teaching, lower the cost of overvalued programs, or rethink their business model all together.
Second, we must fix higher education’s convoluted pricing system. For decades, experts have warned that the tuition bubble would ultimately burst, and it appears their projections are coming to fruition. All it took was the enrollment bubble to pop first. Students across the country were surprised to learn Zoom University cost just as much as their state flagship, begging the question, what are they paying for?
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Education is an investment, yet it is priced like an airplane ticket where two identical students can get charged wildly different prices for the same experience. Colleges call these differences in pricing "merit aid," yet often it’s a calculated bid to ensure schools meet their bottom line while clouding student’s financial decisions. This opaque pricing model also deters highly qualified students from modest means from ever applying because they believe they cannot afford it.
Students have the right to know the price they will pay and the real-world earnings they can expect so they can easily compare the value of different degrees. After all, it may be the biggest investment they ever make.
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Lastly, we should reward institutions that are committed to lowering costs and increasing student’s return on investment. A program that goes above and beyond on its promise to move students up the economic ladder should be compensated accordingly. By rethinking the Pell Grant, we can help students enroll and complete high-quality, affordable programs and can encourage more institutions to offer them.
It’s time to stop treating student loan debt and college costs as a political token. Biden’s recent actions have done nothing to address exploding college costs. Republicans are offering real solutions to reform our postsecondary system. This is what is needed to build a better future for students and the nation.