Give anyone who can register a pulse a student loan and guess what? All that money will find its way into the system and will inflate the cost of “education.” It’s simple. It seems obvious. And yet so many people fail to understand that the reason college is unaffordable is because of all the efforts to “make college affordable.”
That problem is obvious: During the past few decades the price of a college education has grown more than four times faster than the consumer price index. According to a recent piece in The Wall Street Journal, a typical family in 1970 had to spend 16 percent of its annual income for a private college’s four-year tuition. Today that same family would have to pay 36 percent of its income for the same product. In the past five years alone, tuition has risen 10 percent at private colleges—and 17 percent at public ones.
The public-policy prescription for this trend has been to throw more money at the problem, in the form of student aid. This is lunacy. It does nothing but encourage colleges and universities to charge even more, secure in the knowledge that student aid will rise to keep up.