Day By Day

Friday, January 27, 2012

College education and the Feds

News from Michigan:

President Barack Obama Friday told an enthusiastic crowd of students at the University of Michigan that extra taxes on millionaires should help subsidize their futures.

Without mentioning Gov. Mitt Romney by name, Obama used his campaign-style event to urge higher taxes on the nation’s most prosperous to reduce student loan-payments, increase student grants, fund universities and pay for high-tech research.

Excellent commentary from Sundancecracker:
This argument has frustrated me for years. The reason colleges are able to raise tuition costs is specifically because the federal government underwrite student loans and guarantees payment. There is no supply/demand equation in the pricing process. The colleges can charge whatever rates they want. The student goes to the federal government and gets loans for the cost. The loans are determined by the cost of the education. If the free market was allowed to work, colleges would immediately have to lower tuition costs in order to attract students. Alas, POTUS would never be honest about that. It is the subsidization of tuition that raises the rates. 

Who says this isn't all about class warfare?

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