Obama’s War on Innovative Education

Last week, President Barack Obama was telling students that he wanted to change federal student aid to reward schools that were providing a “cost effective” education.  Sounds great, right?

At the same time the North Central Association of Colleges and Schools, the accrediting body for over 1,000 colleges in 19 states, was pulling the plug on Ivy Bridge College, a partnership between Tiffin University and the for-profit Altius Education.  Ivy Bridge College’s mission was to provide a cost-effective two year program that successfully funneled students into completing their four year degrees.

The Obama administration argues that the federal government must focus on rewarding schools which are cost effective.  In theory, this is a sound idea.  Unfortunately, neither Obama nor people of his ideological persuasion are able to grasp a few basic truths:

  1. The liberal policy of throwing money (in the form of grants and federally subsidized loans) is a primary culprit in price inflation of a college education far outpacing the price inflation of the economy in general.
  2. “For-Profit” is not synonymous with “bad”, “evil”, or “poor quality”.
  3. A government cannot centrally plan an economy, or a large portion of it, with same efficiency and quality as a free market.
    Like the mortgage crisis, the “crisis” of inflation in higher education is a product of government action.  Monetary inflation is the effect of too much money chasing a limited supply of goods.  Easy money (in the form of poor quality, government subsidized mortgages) chasing a limited amount of real estate precipitated the real estate “bubble”.  Inflation in higher education is the effect of too much money (in the form of grants and subsidized loans) chasing a limited number of seats in our colleges and universities.

Obama and his ideological acolytes first tried to tell us that it was “for profit” education that was the culprit (just has the evil banks were the culprits in the mortgage crisis).  Then we were told that private sector participation in providing student loans was costing taxpayers and students.  While the Obama administration has nearly destroyed for-profit higher education and has ended private sector student lending, the costs of a four year college education continue to rise far faster than the cost of living.

Has all of this extra funding gone to providing a higher quality of education?  No.  Today’s colleges and universities are investing in such educational necessities as rock climbing walls, fancy dining facilities and a Starbucks in almost every building.  This flood of money yields an increased competition for customers students.  A better library, smaller classes, or a better teaching just can’t compete against saunas and caffeine.

Innovation in higher education, just like the innovation brought by school choice in primary and secondary education can’t be permitted.  Free market solutions simply cannot be allowed.  We can continue to expect declining public schools and college graduates drowning in debt … and liberal politicians continuing to claim that the solution is throwing your tax dollars at the problem.

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