President Obama’s approval ratings haven’t been north of the 50-percent mark since March of this year, according to the Real Clear Politics’ average. A solid base of support for the president since the early days of his campaign in 2008 has been voters 30 years of age and under: the youth vote. Obama T-shirts, posters, and stickers have been ubiquitous on college campuses since his first election. It’s not surprising that the president has chosen to promote policy changes close to the hearts of college students and young voters in an attempt to win back hearts and minds recently jaded by the president’s failure to adhere to sufficiently liberal policy positions on the NSA and privacy.
As Richard Vedder explained in Bloomberg today, some of the president’s proposals are good in principal, and some are very bad. Vedder outlines the negative aspects of the president’s plans:
The president’s proposal has one very bad idea: a forgiveness boon for those paying off loans right now. The proposal, limiting loan payments to 10 percent of income, potentially relieves millions of students from repaying part of their obligation. So why not major in fields the economy values least — anthropology or drama instead of engineering or math — if you don’t have to worry about earning enough to pay off your student loans over a certain period?
The idea simply raises incentives for future students to borrow more money, if they know their obligation to pay it back is capped. That, in turn, allows colleges to keep raising costs.
Obama proposes to ignore or worsen the root cause of much of the explosion in student costs: the federal financial assistance programs that encourage schools to raise costs and that haven’t achieved their goals of providing college access to low-income Americans.
President Obama chose an interesting audience to outline these proposals: SUNY Buffalo. The school, a member of the State University of New York system, is an affordable option for New York State residents who pay a fraction of what their (somewhat) nearby neighbors at Ithaca College pay. Without counting room and board, SUNY Buffalo students owe less than $8,500 a year, versus over $38,000 two and a half hours down the road at Ithaca College. For students on the hook for the majority or all of their college costs, SUNY Buffalo is clearly the logical choice. One would imagine that many of the students who chose to enroll at SUNY Buffalo made some tough, but wise, decisions while deciding on where to pursue a college education. The city of Buffalo may not be the most exciting place to spend four years, but at the end of their college career, students walk away with a valuable diploma for $120,000 less than if they had chosen to attend Ithaca.
How would a SUNY Buffalo student, who perhaps turned down an offer of admission at a more expensive school due to financial considerations, feel about this forgiveness policy? Speaking as a graduate of a state school, it’s likely that most of the audience would have felt cheated out of a more preferable college experience due to their making a financially responsible choice. If President Obama’s plan goes into effect graduates of Ithaca College and SUNY Buffalo would be paying the same amount–ten percent of their income post-graduation–regardless of the cost of their education. Such a plan would incentivize reckless spending, furthering the rise of skyrocketing college costs. Even if the plan only extends to graduates currently, one would expect that students making enrollment decisions could anticipate loan forgiveness plans of their own one day.
For an administration that has done nothing but limit the choices of students, most notably inner-city residents of Washington D.C. who benefit from the D.C. Opportunity Scholarship Program, which makes private schools affordable for students who would otherwise be trapped in failing schools, it’s a fascinating and illogical position. Until they graduate high school, the Obama administration would like students to be forced to attend a school based solely on their location, not based on their (or their parents’) needs or desires regarding their education. Upon graduation, these students could then choose from any college or university in the country, ignoring sticker prices.
This would, in turn, drive students who can meet admission standards to attend private schools with state-of-the-art dorms and gyms over more modestly priced and modestly equipped public schools. With this loan forgiveness program, President Obama, champion of public education, would eliminate the biggest incentive for students choosing public universities around the country, and with it, any sense of financial responsibility a teenager might have once possessed.
