"When someone tells me he's a Christian businessman," my former law partner once observed, "I put my hand over my wallet."
I feel much the same way whenever I read some policy wonk's sweeping plan to solve the student-loan crisis. After we've listened to all the bells and whistles, we always discover that the grand scheme is just another pitch to pump more federal money to the academic racketeers and hucksters that run the nation's universities.
And this brings me to an article by Kevin Carey titled "How to Save Higher Education," published recently in Washington Monthly. Carey proposes "a new higher education ecosystem that works for everyone, not just the chosen few."
So what would the new ecosystem look like? Carey wants to give "a direct annual subsidy of $10,000 per full-time-equivalent student" to any college (public or private) that agrees to adopt a "uniform pricing system." Students from families with household incomes below $75,000 would pay nothing. Tuition would increase on a sliding scale, with families earning more than $250,000 paying the full tuition price of $10,000 a year.
According to Carey, his scheme would send more federal money to colleges than they are receiving now. Students from middle-class families would pay only a modest tuition price, and they wouldn't have to take out student loans. Sounds great!
So what's the catch? Well, for starters, Carey's plan is damned expensive. Carey didn't estimate the cost of his proposal but acknowledge that it would amount to tens of billions of dollars annually.
How will we pay for it? Carey said the cost will be "partly offset" by "eliminating the tax deductibility of any donations to colleges with an endowment greater than $200,000 per student." But who believes a modest tax hike for wealthy donors will bring in enough revenue to eliminate the student-loan program and reduce tuition prices? I certainly don't.
Interestingly, Carey assures us that his plan will have no effect whatsoever on "the system of elite colleges and universities that currently serve to acculturate and accelerate the children of the ruling class."
Even though these elite colleges, in Carey's words, "sell status to the highest bidder through a thinly veiled system of bribes and legacy admissions preferences," we shouldn't ask them to change the way they do business. Why? Because, according to Carey, institutions like Harvard, Yale, and Stanford "truly are some of the greatest centers of research and scholarship on the planet."
In my view, Carey's plan to "save higher education" boils down to nothing more than a proposal to send more money to our corpulent and corrupt colleges and universities. He is content to allow the various accrediting agencies to "serve as watchdogs to prevent unscrupulous schools from lowering standards to sell easy credits." But the accrediting bodies have done a terrible job regulating the higher education industry. Does anyone think they will suddenly change and become watchdogs over a sector that is out of control?
In my mind, the biggest flaw in Carey's college-funding scheme is its failure to address the fact that 43 million Americans owe $1.7 trillion in student loans, and about half of those debtors will never repay their loans. And Carey says nothing about the notoriously corrupt for-profit college industry, which should be stamped out in its entirety.
But college leaders will surely love Carey's proposal. After all, it will send them more federal money, and it will allow the nation's elite colleges to continue charging obscene prices to tutor their students in the arts of arrogance, self-righteousness, and condescension while failing to teach them how to get a job.
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