Posted on 05/13/2012 7:02:27 AM PDT by Kaslin
s President Obama right about a looming student loan debt crisis?
It depends on how you define “crisis.” But there is a problem, and it is real.
What remains to be seen is whether or not the President – or anybody else, for that matter – is willing to face the real problem in higher education. Financing an education is not so much a problem, as is the stark reality that the cost of tuition consistently goes up, even when the price of other things declines.
It is a fact that over the last decade many “adjustable rate” student loans were issued, both by private lending institutions and government agencies. Just as they were intended to, the rates on those loans “adjust” upward. And on this point, the problem of student loan debt is similar to the mortgage crisis. Just as many Americans bought more home than they could afford, so also did many students “buy” more education than they could afford, or, at least, they bought their education under financial terms that eventually either have become or will become unmanageable.
But why is it that the price of college and university tuition generally only moves in one direction – upward? And why does the price of higher education rise, even when the prices of other goods and services in our economy decline? Most reports indicate that college tuition rates have continued to rise over the past four years. Yet during this same period, overall prices have mostly been flat or have dropped, even to the point where many economists have expressed fear about a looming deflationary cycle (the recent spike in global oil prices and the corresponding rise in other prices have been about the only exception to this rule).
The answer to this question is found in a very important fact. It is a consistent agenda item within institutions of higher learning to offer as many low cost, and even “free” tuition programs as possible. Whether you’re examining state run colleges and universities, or private institutions, look in to the details of school’s budgets and the agenda becomes clear. It is a point of pride if, year after year, when institutions can report that they issued more “scholarship” programs that are doled-out according to ‘financial need.”
A glaring admission of this came to light back in 2009, shortly after President Obama took office. In one of his first college commencement addresses that he would deliver as President, Mr. Obama traveled to Tempe, Arizona, home of Arizona State University. In a speech that discouraged what the President labeled the “selfishness” of business and for profit enterprise, Barack Obama admonished the students to instead deny themselves the pursuit of the “corner office” and pursue government employment, and charitable non-profit work.
These remarks from the President were not surprising, and were consistent with his disdain for private enterprise. What was a bit shocking, however, were the comments from the man to precede him at the podium, ASU President Dr. Michael Crowe.
Dr. Crowe began his speech of introduction with glowing remarks about President Obama. “No national leader before you,” Dr. Crowe said as he turned to look directly at the President, “has fully understood the role of education, knowledge and learning, in fulfilling the American ideal..”
This was a bit stunning, in and of itself. “No national leader” had understood education prior to Mr. Obama being elected? From there, however, Dr. Crowe tipped his hand on the financial agenda of ASU. “Mr. President, we join you today by committing to you and to the people of Arizona that we will continue building ASU as an egalitarian institution of advanced teaching and learning, and we commit to you also that no Arizona student will be left out of this institution and what we have to offer, because of his or her family’s income..”
There was the President of Arizona State University being quite clear about the school’s economic model. The school’s goal – at least one of the school’s goals – was to extend low-cost or now-cost tuition to as many “deserving” students as possible.
After President Obama left town, Dr. Crowe’s remarks stirred a bit of a backlash among ASU students, parents, and alumni. This was the ASU President who, in 2009, presided over no less than a 15% increase in tuition rates in less than seven years, yet there he was telling President Obama on a stage that he goal was to “give it away for free” to more lower income students.
This illustrates the not-so-little secret about the rising costs of higher education: colleges and universities are often set up to function like their own little economic re-distribution systems. And while the goal of getting lower income Americans enrolled in college is noble – education is a key to lifting people out of poverty – the cost of enrolling lower income students is often balanced on the backs of middle class students and parents. If a student isn’t “poor enough” to qualify for needs-based tuition assistance, then, too bad – the student will likely face ever-rising tuition rates.
This needs-based thinking has now begun to apply to non-citizens. In 2011, the bankrupt government of California passed a law to provide scholarships to illegal immigrant students, and just last week, in the midst of the current student loan debate, USA Today reported several colleges and universities are now contemplating illegal alien scholarships.
Will President Obama – or any other politician – dare to address this stark reality?
If Obama’s lips are moving, he is lying.
Team Obama are throwing all kinds of potential crises against the wall to see which might stick:
States banning contraception?
Gay marriage?
Student Loans?
Romney running with scissors!!!!!
Anything to detract from the real issues: state of the economy and joblessness numbers.
Has this president ever told the truth - bearing in mind that hiding information is no different than outright lying?
He is on Tulsa Time.
Of course he is not being honest. It's another diversion from the terrible economy and his making it even worse.
We've already invested $800MM in higher education. That's more than enough.
Is the president being honest? Even though he’s a big lib, I still quote a John Prine line, “A question isn’t really a question if you know the answer too”.
“Is The President Being Honest About the ‘Student Loan Crisis’?”
A more correct question might be: “Are Progressives Subverting the Student Loan Process?”
Just saying.
IMHO
The financial crisis in the college education industry has the same origin as the financial crisis in health care.
Too much government money.
Before Medicare most people did not need health insurance.
An average trip to the doctor or hospital was something affordable that most people paid for out of their pockets.
In the 1960’s a minor outpatient surgery at the doctor’s office might have cost $15 or $20. The hospital charges for a birth might have been $100 - $150.
Once the federal government started pouring billions of dollars into the system through Medicare the costs skyrocketed to the unaffordable levels we have today.
The same process has taken place in the cost of attending college.
How many Freepers know that before the federal government got heavily involved in the financing of college attendance the state colleges in California were free? And that the cost of attending many other colleges nationwide was minimal? That people could actually work their way through college, paying as they went, and graduating debt free?
History shows that anytime the federal government starts pouring money into an activity - any activity - it drives the cost up and up and up.
Ina word NO! I doubt that the Marxist in chief has ever spoken an honest word in his entire life!
Let's just say that honesty is a word not often associated with Obama. Almost as bad as his penchant for manipulating facts and distorting the truth is his endless stream of contradictions and hypocrisy.
A most excellent post! Insightful and profound.
Back when we were starting out and making very little in the way of an income visiting the family doctor never resulted in massive bills. We were also able to pay for my college ‘education’ without resorting to massive loans.
Government interference distorts price structures. One of the best examples of this was the housing boom in the early 2000’s which drove prices to absurd and unsustainable levels. Unfortunately political considerations will always trump economic rationality.
IMO, the real “Student Loan Crisis?” is how the universities can sustain/expand their armies of administrators and ever-increasing pay for their professors.
Perfect example!
Unfortunately political considerations will always trump economic rationality.
And all other rational considerations!
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