Saturday, January 10, 2015

President Obama's bizarre free community college proposal

Barack ObamaThis bizarre proposal (it can hardly be called a "plan" given that there's no way to pay for it, no studies proving that it would work, and little support from the Congress) is the latest in a series of whimsical, fairyland ideas that occasionally float out of President Obama's brain and into the nation's political discourse.

Whereas, it would make good economic sense to promote policies that reduce college tuition and thus enable more students to purse higher education.  Obviously, the first step would be to tighten up student loan standards and stop handing out the loans like candy at Halloween.

I would propose ending the practice of lending tuition to first year students.  Let them save up and pay for the first couple of semesters themselves, to see if they really want to be in school.  It would also encourage the colleges and universities to cut expenses and charge more realistic tuition rates.  As it is, tuition is funny money, nothing but an abstraction.

The Obama college plan is like Obamacare, cheapen it and make access free for everyone. Never mind that the quality will be lower and that the skills required for the new technology and higher wages won't be acquired. Obama will then try to cheapen the goods produced by making them of a lower quality. It's all called socialism.

From the WSJ:
President Barack Obama on Thursday proposed offering free community college nationwide, in effect extending government-funded education from kindergarten through a two-year degree.

“I’d like to see the first two years of community college free for everyone who is willing to work for it,” Mr. Obama said in a video posted Thursday on Facebook. “It’s something we can accomplish and it’s something that will train our workforce so that we can compete with anybody in the world.”

The plan, which would offset some of the $20 billion in annual tuition received by community colleges, will require legislation in a Republican-controlled Congress that already is at odds with the president over other spending issues. The concept is expected to formally be released in Mr. Obama’s 2016 budget proposal, due out in February.

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I'm a big fan of community colleges. One of the things I liked about the one I attended was its low-cost.  I wonder what will happen to those costs if market pressures to keep them low are removed?

One need look no further than what's happened to tuition costs at four-year institutions once the federal government started backstopping "easy credit" student loans. Costs explode wherever the government steps in to "help" and make things "fair."

Sure, there won't be a formal tuition bill, but the money's gotta come from somewhere, so it'll be either in the form of a larger national debt or higher taxes.

Obama is living in the 1930s, when Marxism was in vogue. His idea is completely off-base. Today there are hundreds of so-called "massive open online courses", or MOOCs, available to anyone with an internet connection (or access to a library).

Stanford and MIT among others offer hundreds of online courses. Khan Academy has a huge, Youtube-based inventory of courses. There are hundreds of college lectures on Youtube as well. There are hundreds of thousands of out-of-copyright books freely available to download, and of course there's always the public library.

The resources are all there, for a person with the motivation to learn. If someone needs the credential of an A.B., they are better off working full-time and taking night courses over 2-4 years, and they will come out ahead financially, not to mention that they will have greater self-respect and will have demonstrated tremendous self-discipline to future employers.

It's time to tighten up the student loan requirements and stop handing them out like candy at Halloween. Students and their parents will scream and moan, but in the long-term it will force the universities to lower tuition rates to something more affordable in the real world.

There's nothing wrong with people working and saving up the money to pay for university.  "But in Germany, it's free!" bleats the liberal.  Well, true, but they also pay about 50% income and payroll taxes, plus a huge VAT, so in the end it's not free at all.

If universities charged a reasonable rate and stopped raising it 8% or 10% year after year, in an era when inflation is 0% or 1%, then there would be less need to borrow money in the first place.  We have a vicious cycle and it's time to break it.

It's not the college education. It's the person.

If we stripped all collegiate education and training from every single American, the same people would still make more money than those currently making less purportedly because they don't have a college degree.

It has nothing to do with higher education.

It has always been an individual's willingness to work hard, postpone consumption, and determine what must be understood to do a good job at work. These people pay attention, concentrate and spend long hours focused on how best to accomplish the task assigned them.

As a consequence, these people - half of all Americans - go home exhausted each night. The other half don't pay taxes. Because they haven't put out enough effort to earn enough to pay them.

Effort leads to greater earning power. Many of these same people are willing to sacrifice to go to college.

Giving away free college education won't make more of these people.

People seem to ignore the "chicken and egg" issue with education and employment.  I agree with the concept of good jobs available for people who have initiative and qualifications.  One way to show initiative is to make a personal effort and commitment working for a useful education.

The problem is that the effort and commitment is the main ingredient for a good employee, not a degree in something meaningless.

Once people get "something for nothing" they expect that to continue through life as though it is their right as a human being.  Getting paid without adding value, getting a job just because you are alive, and all the other goodies the government wants to hand out is not a right.

From a political standpoint it is a clever idea.  In effect buy votes by giving something for nothing and also don't let the voter know until after the election that what they got was meaningless.

It is high time that the institutions charging exorbitant tuition have some skin in the game. They need to be part of both the initial loan approval process and the indemnification if the loan moves into default. There is no mystery to the fact that, with the exception of taxpayers, those who might be held financially responsible for non-payment of loans will exercise a lot more care in selecting who they will "co-sign" with in the first place when there is a very real chance that it is going to cost money from their pocket.

The realities of the forever escalating costs these institutions foist onto naive students and well-meaning parents is in dire need of some manner of check and balance. How ironic that many of these bastions of liberalism refuse to acknowledge the bankruptcy of their ways as long as they get "theirs" from the backs of those they enslave.

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