I was watching Fox News today (mostly because I couldn’t find the remote) and they had a panel on discussing how an average undergraduate degree now costs over $100,000 and the primary reason for the cost being pushed up was more Federal education money was made available and schools were going after that.
Pell grants and Federal loans are actually being limited per student to limit the government’s liability. The high default rate of the Boomer generation forced that issue. The Federal government was not responsible for pushing up tuition costs this last time around. You were.
Parents were taking out cheap loans against their homes to pay for education and that was the money schools were going after. Federal loans and grants were peanuts compared to what private lenders were willing to loan. The colleges gambled that parents would pay for their kids education and continue the culture of “nothing is too good for my child.”
And they were not disappointed.
The kids relying on Federal grants and loans are not going to a four-year college in this economy; they are going to community college and trade schools. Or trying to join the military. Or doing nothing.
College won’t reduce their tuition costs. They can’t. Cheap money from home equity loans has dried up. I don’t know what the long-term effects are going to be on education, but I can guess that if we continue this trend, education will once again only be for the folks who can afford to pay.
In a world economy, not educating your citizens dooms you to a path of decline. Probably not a good thing.