Pushing College
by Fred E. Foldvary, Senior Editor, 16 August 2010
The U.S. federal government has two big pushes. It pushes people to buy houses, and it pushes Americans to go to college. For some reason, the government wants as many youths as possible in college. Could it be a way of reducing unemployment?The high unemployment during the Great Depression ended with the start of World War II, when millions of men were drafted into the army. The U.S. now has a volunteer army, so instead of pushing the unemployed into the armed forces, the government is pushing them to go to college. That way they will not be seeking work, and will no longer be counted as unemployed.
President Obama has made college education a top priority of his administration. He wants to put college education within reach of all Americans with grants, tax credits, and loans. One could ask, why is the choice of attending college the business of the federal government?
One possible answer is that an educated labor force is more productive. But there are many valuable skills other than what is taught in college. We need auto mechanics, plumbers, carpenters, and toolmakers. We need barbers, cooks, and repair guys. Why not push those skills too?
The administration’s budget proposal includes an increase in college Pell Grants for low-income students. It would go further and make the Pell Grants a mandatory program that would not just continue forever but expand indefinitely. The funds for Pell Grants would increase annually by inflation plus one percent. Besides the grants, the federal government would directly loan money to college students.
The president’s proposal calls for grants of $5550 per student for the current year. If a college was charging less than that in tuition, its incentive now is to raise the tuition to $5550, since that is what a student can get. Governmental and private grants, scholarships, and fellowships generate tuition inflation. One can now easily apply for a college grant in web sites such as click here.
Of course some students from middle-income families do not receive grants, and the student works part-time or even full-time while attending classes. More grants would enable them to study full-time. But they would not need to work so many hours if they could fully keep their wage, and more students would be hired if taxes did not double the cost of labor. By stifling the labor market, government creates unemployment, which they then try to fix by pushing college.
It is not just young folks that are being pushed into college. The president wants mothers to go to college. There is a “Obama moms return to school program.” Maybe mom is unemployed, and going to college will get her a job. But why not make mom an electrician?
Another reason why the government is pushing college is that a university education is laden with prestige. Indeed, as one who teaches economics in a university, I agree that graduation from a college or university is a big accomplishment. But why should that not be an individual and private decision? There are many other useful accomplishments that could be achieved.
If every American is provided with the means to attend college, many will not succeed. The more that government pushes young people or mothers into college, the more that those who are not so ambitious or not so capable, will drop out. Resources will have been wasted. Also, many who are not really prepared for college will choose “easier” majors that do not provide them with marketable skills. Even if they choose difficult courses such as ancient Greek, that will not put dinner on the table.
Some less developed countries provide free college education and then get lot of graduates who will not do manual labor. They have no productive skills, so the government expands the bureaucracy in order to hire them as administrative assistants. These officials feel a need to be useful, so they see their job as denying permission to entrepreneurs seeking permits to engage in business. Perhaps then a bribe will bring results.
Oh, wait a minute. The federal government is now the leading growth industry in the USA. Americans are no longer producing much steel, but they are producing more government. So there will be a need for more college-educated bureaucrats. Am I being too cynical?
-- Fred Foldvary
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Copyright 2010 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
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