Student loans are the symptom-Why college costs are no different than health care costs, both rise at more than twice the cost of living

30 Mar


Do you get your money’s worth from all the health care you receive, do you get your money’s worth from a college education?  The answer is who knows, and to a large extent both depend on the involvement of the individual.  Likewise, both are considered essential by many people and both are purchased without a second thought as to the costs. 

Since 1980 college costs have risen at twice the rate of the cost of living .  I don’t recall an outcry over these costs except perhaps over the kitchen table (or granite breakfast bar) as parents try to figure out how to finance these costs.  Why do college costs go up so fast, I suspect there are many reasons which include to some extent government involvement insulating people from the cost, a great deal of inefficiency at colleges, dare I say million dollar administration salaries (na, that’s not fair) and an inability for parents who want the best for their children to be objective.  Here is more from someone more knowledgeable than I.

The Obama administration is approaching the college cost issue the same way it did health care by attacking the symptom and not the problem.  Under the just passed changes in the student loan program within the reconciliation act repayment of student loans is capped at no more than 10% of annual income.   This logic further insulates the student from costs and gives her less reason to object to cost increases.  Why don’t we question the cost of a college education, the rate of increase and the salaries of college administrators and professors, many of whom essentially have part time jobs?

This attitude of trying to help people by giving them more from the hard work of other people is pervasive in the current administration.  The goal of helping people afford college is a good one as is expanding health insurance, but the way to do both is not to subsidize flawed systems where costs continue to outstrip inflation, but to bring the costs in line.  If this is done, the need to subsidize will be reduced and the goal of making both college and health care affordable can more realistically be achieved.

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A. Thayer Wells

One Response to “Student loans are the symptom-Why college costs are no different than health care costs, both rise at more than twice the cost of living”

  1. A. Thayer Wells March 1, 2011 at 8:28 PM #

    Interesting blog post!

    The investment in college and the loans that are typically required to attend outweigh the costs for many due to the Great Recession that we, as a nation, are slowing moving out of. This notion is one that I write about on my new blog: I invite you to visit and hopefully you will share your ideas.

    All the best,


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