College: A government-subsidized ripoff

IT’S August. Many young people head off to college. This year, fortunately, fewer will go. I say “fortunately” because college is now an overpriced scam. Normal incentives to be frugal and make smart judgments about who should go to college were thrown out when the government took over granting student loans. Why?

Because our government basically vomits money at everyone who applies.

If private lenders gave out the loans, they would look at whether they were likely to be paid back. They would ask questions such as: “What will you study?

You really think majoring in dance will lead to a job that will pay you enough to allow you to pay us back?”

Government rarely asks these questions. Bureaucrats throw money at students. Many don’t benefit. Many shouldn’t even be going to college. Today, nearly half of the students given loans don’t graduate even after six years. Many feel like failures.

College is good for people who want to be college professors or who major in fields such as engineering and computer science that might lead to good jobs.

But that’s not most people. Government loans encourage everyone to go to college, even if they’re not very interested in academics.

Government’s handouts also invite colleges to keep raising tuition. Over the past 50 years, college costs rose at four times the rate of inflation. Four times!

Years ago, I reported how colleges were suddenly wasting money on luxuries such as fancy gyms and even day spas. Recently, The Wall Street Journal reported that it’s gotten worse: The University of Oklahoma bought a monastery in Italy for study-abroad students. The University of Kentucky built a theater where students play video games.

When I went to Princeton, tuition was $2,000. Now its $60,000. Colleges have little incentive to cut costs or innovate. Princeton still “teaches” by having professors lecture. Super boring. I slept through many.

Today, student loan borrowers owe tens of thousands of dollars. Last year, the president announced he would cancel up to $20,000 of that debt per person. Indebted students loved that. The Student Debt Crisis Center called that “a major win for many.” But it would be a major loss for many more. Canceling debt is unfair to the people who work hard and pay off their debts.

Fortunately, President

Joe Biden’s plan was struck down by the Supreme Court, which said only Congress has the right to cancel student debt.

Now Biden’s trying again. The administration announced it will forgive debt for anyone who has been making payments for more than 20 years. That’s better, but still bad. Maybe courts will stop this handout, too.

College students take on loans and spend decades in debt because they believe they must get a degree to be hired. But that’s no longer true. IBM, Accenture, Dell, Bank of America, Google and other big companies, recognizing the uselessness of many undergraduate degrees, recently dropped college-degree requirements.

Good jobs in the trades, such as welding and plumbing, don’t require a college degree. Trade school programs often take less than two years and cost much less than college.

To have a good life or get a good job, you don’t need fancy dining halls, video game auditoriums or a college degree. College has become a government-subsidized rip-off. It’s good that fewer people go.

Every Tuesday at Johnstossel.com, Stossel posts a new video about the battle between government and freedom.