My new sidekick Josh Distel sent me an infuriating but illuminating tweet from the U.S. Department of Education that has forced me to write 700 words or so about a tweet under 100 words long–call that the writer multiplier effect. Our government, so beautifully characterized by Abraham Lincoln as being “of the people, by the people, and for the people,” may, to borrow from Ibsen, be now the “enemy of the people.”
The tweet starts out with the assertion: “Higher education is the best investment you can make in your future. Here’s how we’re making it more affordable.” It goes on to list several things, to which I will soon return. But let me challenge the basic statement and suggest that, for at least 40 percent of the population, and probably far more, it is a bald faced lie. While there are a number of studies suggesting that the average rate of return on a college education is pretty high (perhaps 10 percent), those statistics are averages based mainly on historical data–from a decade or more ago. What is relevant to today’s potential students is what attending college will do to their personal financial situation. At the margin, will additional college training, and especially degrees, lead to enhanced economic well-being large enough to justify the costs, including the income foregone while attending school, the interest costs on incurred debt, etc.?
A large number of recent studies question the Education Department’s propaganda. The New York Fed has said 46 percent of recent college graduates are underemployed–mostly doing jobs where a majority of job holders are high school graduates. The bulk of these persons earn little more than high school graduates traditionally have (to be sure, some high school grads have been pushed into unemployment by the excess of college diploma holders). Arum and Roksa in their new book Aspiring Adults Adrift observe roughly one-fourth of college graduates are living with their parents two years after graduation, and about 60 percent are still dependent on them for some financial assistance. That, of course, is in addition to the fact that 40 percent or so of those attending college full-time fail to earn a bachelor’s degree in six years.
Bottom line: college attendance is a risky investment. For some, there is the big payoff. But attending college is becoming too much like buying lottery tickets or playing slot machines. What galls me is that high paid Department of Education apparatchiks know this, but they are leading many into a life of financial misery in order to maintain their own comfortable lifestyle–it is not only incorrect advice, but it borders on being immoral. Uncle Sam is not our benevolent protector, but truly the Enemy of the People.
To compound the verbal felony, the tweet goes on “Here’s How President Obama Has Helped Make College More Affordable.” It then lists several things: increased Pell Grants, new tax credits, reformed student loan programs, and “steps to combat rising college costs.” Before even addressing the factual inaccuracies, it is galling to claim President Obama has done anything. If increased Pell Grants have made college more affordable (I think they have not), those grants were approved by Congress and paid for by the taxpayer, not by President Obama. Using taxpayer funds to glorify the president individually is disgusting. New tax credits were approved by a bipartisan majority of Congress, and to suggest this was all Obama’s doing is, again, another bald faced lie (granted he supported the credits and signed the final bill).
Then, again, the factual inaccuracies. Almost all observers of student federal financial aid think tax credits are a highly inefficient way to provide student aid. The “reformed student loan programs” are a scandal–loan “forbearances” are soaring, huge financial liabilities are being created, taxpayers are in for a huge unhidden tax, and incentives are expanding for new graduates to simply ignore their loan obligations–and for new borrowers to borrow ever greater sums of money.
There are even more things to say, but my blood pressure is getting too high. Suffice it to say, I wouldn’t buy a used car from the DOE bureaucrats who are peddling this pile of lies and disinformation.
Richard Vedder directs the Center for College Affordability and Productivity, teaches at Ohio University, and is an Adjunct Scholar at the American Enterprise Institute.
