Wednesday, April 25, 2012

Forever Indebted to You

Walter Russell Mead on the Bipartisan War on the Young:

Romney appears to be following suit, matching Obama’s calls for Congress to freeze interest rate increases for student loans. And Senate Republicans agree: Minority Leader Mitch McConnell voiced support for the extension, although he took issue with Democratic plans to pay for the bill through higher taxes on businesses. For all the talk of unprecedented political polarization, we may finally have found an issue on which both sides agree.

Unfortunately, both sides get incompletes. Today’s students need more than cheap student loans. Lower tuition and better job prospects are the two things today’s students need most. A big fat federal program to lower interest on student loans will have the opposite effect: removing incentives for colleges to lower tuition while encouraging students to go into more debt to finance degree programs that are increasingly divorced from practical application in the job market.

This is perhaps the greatest irony. In their attempts to court the youth vote ahead of the election, both parties are letting down the young, sacrificing the needs of future generations for short-term political gain. But since that’s a pretty good description of the approach our political establishment brings to almost every question that comes up — why be surprised?

I see a couple of additional ironies here. The first is that while President Obama harps about how unfair it is to saddle kids with student loan debt, he's demonstrated that he has few qualms about hanging trillions of dollars of additional national debt around their necks. The second is that so many people fail to understand the connection between increased government subsidies of student loans and rising costs for college. The irony is that the more student loan support the government provides, the more the colleges can continue to raise tuition. This is the vicious cycle we’ve been stuck in for some time and those who think that government subsidized student loans somehow make college cheaper are delusional.