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Washington Examiner


Obama Wants More Cash Wasted on Federal Aid For College Students

February 18, 2010

By Charlotte Allen

In President Barack Obama’s State of the Union address Jan. 27, he called for expanding the Pell Grant Program that currently serves about 7 million low-income college students, both by substantially raising the size of the grants — from the current annual maximum of $5,500 to $6,900 by 2019 — and by turning it into a Social Security-style entitlement.

Obama’s rationale was that “no one should go broke because they choose to go to college.” That’s a worthy sentiment, but it raises an important question: What exactly will a massive additional transfer of federal funds to college students accomplish?

Pell already costs the government $18 billion a year, and another $92 billion goes to support federal student loan programs. Yet, there’s evidence that, while the cash infusions from the government have certainly boosted college enrollments, they also have contributed to skyrocketing tuitions (a 500 percent increase since 1980, far outpacing inflation) and dismal graduation rates.

Only 54 percent of students enrolled at four-year colleges manage to collect a diploma within six years.

In his address to Congress, the president also proposed a series of loan-forgiveness arrangements for college graduates that would shift even more of the higher-education burden onto taxpayers.

In order to help pay for some of this, he has been pushing Congress to eliminate private financial institutions from the federal loan system, saving a projected $87 billion, and to require all student loans to come directly from the government. The House passed such a measure in September, but it has stalled in the Senate thanks to lobbying by banks and some college administrators, who argue that the projected savings are mostly illusory and that private entities can process and oversee student lending more efficiently than federal bureaucrats.

That may be true, but it bypasses the larger problems generated by easy higher-education cash: tuition inflation and a population explosion of students.

For colleges on the bottom half of the admissions-selectivity ladder, the graduation rate is only 45 percent. At community colleges, fewer than one-third of students earn degrees of any kind after spending up to eight years in classrooms.

In the journal Democracy, Kevin Carey, policy director for the think tank Education Sector, said it’s in those low-performing schools that the majority of Pell Grant recipients are enrolled. Although he’s a progressive who supports federal aid to education, Carey called Pell a “failure.”

But the Obama administration wants to make the federal student-assistance system bigger and more wasteful than ever. Wouldn’t it be better to rethink the whole idea of handing out free or partly free money to students? That’s better for the taxpayers, and better for the students themselves.

Original Source:



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