United Liberty

Over the past several decades, it has become accepted that the cost of higher education will continue to rise every year, far outpacing inflation or any other category (save perhaps health care).  Every year, more and more colleges raise tuition to ungodly levels, fully knowing that the federal government will cover the difference.  There is little incentive for them to do otherwise.  Quite simply, college is not anything close to resembling a free market.  We have come to accept the idea that everyone should be able to go to college, including ones that are wildly overpriced, and that government - that is, taxpayers - should foot the bill.

And yet, even questioning this is akin to wanting poor kids to suffer.  During the 2012 campaign, Mitt Romney, supposedly from the party that likes free markets, was a staunch defender of Pell Grants, one of the primary government programs used to subsidize college tuition.  Romney even expressed a desire to expand the program.  For those who don’t know, the basic principle of Pell Grants is that the government gives you money towards your tuition - with no obligation to pay it back.  There are various qualifiers for this money, but it is basically a gift if you get it.  So needless to say, when I heard this during the debate, one thing was clear - you’re not allowed to question the basic idea that government has an interest, even an obligation, to pay for college for those who cannot afford it.

Written by Jason Bedrick, a visiting policy analyst with the Cato Institute’s Center for Educational Freedom. Posted with permission from Cato @ Liberty.

In 2008, then-Senator Barack Obama pledged to make college more affordable. President Obama kept his promises to increase grants and expand loan forgiveness, but the cost of attending college continues to rise. As the College Board Advocacy & Policy Center reports today, tuition at public universities rose 4.8% this year. While tuition didn’t grow as fast as in previous years, tuition continues to rise faster than inflation and growth in family income. And, as we know, student debt is exploding. Graduates of the class of 2011 carry an average of $26,600 in student loan debt, up 5% from the class of 2010.  Nationwide debt from student loans exceeded $1 trillion this year, surpassing all other forms of debt that Americans carry, including credit card debt and auto loans.

As fall approaches, hundreds of thousands of high school students are being asked that nagging question: “What college are you going to?” These students would be wise to follow the advice of Peter Thiel, a billionaire Silicon Valley investor. For most of us, college is an expensive waste of time.

Not only is entrepreneurship a nearly impossible skill to truly teach at college since true entrepreneurship boils down to risk-taking (read: outside the box thinking) and self-motivation (read: not a classroom environment) — but enormous amounts of student debt severely limit the options of graduates in the marketplace by forcing them to take jobs that cover loan costs and provide for basic living costs.

This may be the ultimate folly of college education in my eyes. How many bright, young people are stuck in the rat race of professional jobs, or worse government, who are simply unable to follow their passions, be entrepreneurial, or develop something socially useful because they took on $100,000 in student loans when they were 18 and they just are not able to take the risk due to that looming $600/mo tuition payment.

This is why the Thiel Foundation is offering $100,000 scholarships to budding entrepreneurs to drop out of college for two years and develop their ideas. At least 20 students are awarded the scholarship each year, with some impressive results.

40% of full-time students fail to get a degree in six years, and with roughly one of three college graduates in a job the Labor Department says requires less than a bachelor’s degree, it is clear that our emphasis on the need to go to college is misguided.

People are spending a large amount of time getting degrees for jobs that may never be there.