Student Debt — Cost vs. Value

Expense and subsequent debt are skyrocketing, while the value of the investment diminishes.

Robin Smith · Aug. 26, 2019

What a mess! We’ve got Democrat candidates for president promising some government-funded program (remember, government has NO money other than the money it takes from its working citizens) will pay for all the college debt owed to colleges and universities while tuition prices rise and the practice of activism replaces academics in too many of the campuses conferring degrees to the newly entitled, pretentious crowd they’ve crafted.

Once upon a time, the value assigned to higher education — specifically at four-year colleges and universities — was on an ascending trajectory. Not so any longer. Between the rising costs of obtaining degrees, many of which come with very dim prospects for employment, and the proven indoctrination that is epidemic on the campuses of many institutions of higher learner, the reputation and worth of a college degree has taken a hit of late. So says the Pew Research Center’s latest survey.

Released last week, the report showed that only half of those surveyed viewed colleges and universities as having a positive impact on our country, down 10 points from seven years ago. Meanwhile, almost 40% deemed higher education as having a negative impact, an increase of 12 percentage points over that same window of time.

In both the Pew and a separate Gallup study, costs and indoctrination are cited as the driving factors devaluing institutions, yet, the value of a functional degree remains high. A full 91% surveyed in a 2018 Pew publication identified that a college degree is important or essential in the success of the younger generation. But America has at least one generation of college-educated individuals, carrying degrees like gender or interdisciplinary studies with little pay or functional value or they’ve been instructed that being malcontented Millennials is acceptable and, oh, by the way, we’re going to pay off your school debt.

The forgiveness of school debt is one of the key drivers of the Democrats’ platform. A great deal of focus is on their primary corral of candidates and, while “free stuff” is grossly irresponsible, it’s also appealing to their demographics.

The magnitude of that promise is astonishing. According to, as of June 2019, there’s $1.52 trillion in unpaid student debt. Loans have been taken under the premise that these men and women would exit the college classroom prepared for employment, create wealth, and repay the institutions of lending for services provided.

Elizabeth Warren wants elimination of this debt through some redistribution scheme of taking from those who have money to pay for the debt of others who have less. Essentially, she’s saying let’s just print some more money and borrow another trillion or so from China — or whatever her conjured up logic is to deal with the debt held by 45 million student borrowers.

Please remember that the famed minority-wanna-be-Warren enjoyed favored status as a “Native American” while on faculty of Harvard, which charges between $47,000 to almost $68,000 annually for tuition, and is the driving force behind easing the access to loaned money and now wants all who hold the debt to walk away from their responsibilities. Both she and Bernie Sanders are unashamedly luring our next generation into the lie of socialism and government dependency.

As government subsidies increase for the purpose of defraying the burden on students and parents attempting to pay for college, it makes a market distortion. Prices charged by colleges and universities are not forced to reflect consumer ability to pay or demand for a range pricing. With subsidies, institutions of higher learning can also be institutions with ever-increasing costs that reflect a subsidized market.

The 2018-2019 average tuition for college is $21,370. That’s an 145% in tuition costs compared to 1971 prices while wages have increased only 28% over that same window of time. Bottom line, the easier it’s been to borrow money and obtain educational funding subsidies, the higher costs have risen on campus.

Just like it sounded good to give easy access to loans for mortgages in the mid-2000s but the ability for individuals to repay that debt was removed, and now in the student-loan arrangement, creating a crisis, not from any free market force but because of a manufactured scenario that was logically unmanageable.

As Warren predicts a crisis of student debt, she helped create it — just as the mortgage market failures were created by a government interference that, while rooted in good intentions, constructed a situation that had a predictably poor outcome.

We’re learning that education has a value, but its costs are inflated by government interference. Wise up.

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