It costs more than it ought to go to university, and it’s getting more expensive every year. Tuition has nearly doubled in just ten years at state schools like the one I attended (you may have to search, but CSUF went from $2300 to $4600).
President Obama visited CU Boulder yesterday seeking support to extend the Stafford program which maintains low interest on student loans. Low interest loans allow students to delay the painful investment it takes to get a degree until it is more easily paid off when they’re finally earning money. For many, it’s the difference between reaching their potential and never getting an education.
By spreading out payments, the real cost of education is shielded from the consumer. Students take a risk that the money they invest will generate greater incomes in the future, but, as today’s stagnant world economy has shown, there is no guarantee. The government finances that risk with lower guaranteed interest rates. According to Colorado representative Scott Tipton, “It costs roughly $6 billion a year for more than 7 million students to keep the lower rate.” Students are told throughout their lives that a degree equals opportunity and statistics continue to support that, but what is the rate of return on investment and who’s making the strongest pitch?
In an arms race to outdo each other for customers students, universities must constantly add amenities and degree programs. Did you know you can get a degree in Leadership and Organizations? This masters level program ($23,184) from University of Denver will enable to the student to lead a non-profit organization. Unquestionably an admirable aspiration, but how many non-profit leaders do we need and how many of them will be that different from the for-profit leaders in other organizations (or even should be)?
What about for-profit leaders? With MBA’s costing upwards of $100,000 it’s pretty easy to wonder what students are getting for their money. MBA graduates will tell you it’s all about connections, which it may very well be, but that sure is some very expensive networking. I’ll bet just as many students will become the next Jobs and Gates (both, along with many others, lacking degrees) if they invested their $100K in a business idea and had a four year head start over their college-attending competition.
In terms of return on investment, low interest loans to future leaders of our nation is probably a pretty good deal, but as long as we’re engaging in social engineering, shouldn’t we consider a thing or two to ensure we’re getting something for our money? (And is this the slippery slope we want to start sliding on?) Somehow, we ought to be sure that universities, the ultimate beneficiaries of this subsidy, are somehow free to pursue academic excellence in whatever way they (and the market) decide is best, but are simultaneously focused on the their student’s customer’s real needs. Those needs are training, experience and education; and not just new customer acquisition with perks such as stadiums, multi-media classrooms, and an ever increasing range of customized degree programs.
If we’re struggling to keep costs down for students, then perhaps, until the economy improves, we might skip the slightly less critical degree program in Oriental herbology. OK, fine, who knows what wonders Oriental herbology has waiting for the west. How about Campbell University’s Sports Ministry degree “preparing [students] to teach sport in a Christian environment and under the eyes of God.” (Actually, I couldn’t find that degree on their website, but then I could find their Bachelors or Business Adminstration in PGA Golf Management, so you get the idea.) All this and more is paid for with student loans.
I agree with President Obama: “college isn’t just the best investment you can make in your future, it’s the best investment you can make in your country’s future.” If we’re going to keep offering subsidies to universities in the form of cheap loans to their customers, how can we make sure that, at least, the money is spent on their education?