Problem isn’t student debt, it’s college costs

In a move that must be setting progressives’ teeth on edge, President Joe Biden said Thursday he’s considering ways to reduce student loan debt, but forgiving $50,000 in loans per borrower isn’t one of them.

“I am considering dealing with some debt reduction. I am not considering $50,000 debt reduction,” Biden said. “But I’m in the process of taking a hard look at whether or not there are going — there will be additional debt forgiveness, and I’ll have an answer on that in the next couple of weeks.”

Leading Democrats have called for $50,000 to be wiped from student borrowers’ slate, while Biden has kicked around the $10,000 per borrower figure.

But the debate about how much debt to cancel misses a key question: Just why is a college education so expensive?

If we’re going to get to the “root causes” of anything, it should be this.

According to Forbes, published college tuition costs have increased more than any other good or service besides hospital care over the last two decades. Tuition inflation has risen at a faster rate than the cost of medical services, child care and housing. Underlying costs at American colleges are the highest of any large country in the developed world.

Economist Beth Akers of the Manhattan Institute tackled the question of soaring college tuition, and found administrative bloat, overbuilding of campus amenities, a model dependent on high-wage labor, and the easy availability of subsidized student loans were to blame.

But how can the market allow for this?

Akers took a look at four reasons: Students overestimate the return to a degree; colleges are not transparent about their true prices; too few institutions operate in each regional market; and there are significant barriers to entry for new educational providers.

Thanks to student loans, colleges don’t have to worry about where potential students will get the money to attend, and therefore, they can continue larding the administrative ranks and adding posh amenities, such as a dorm with a rooftop pool (University of Texas), an on-campus steakhouse (High Point University) and water features (the lazy river at Louisiana State University).

Not every campus can vie with a luxury resort, but even the less-than-elite institutions know to make state-of-the-art gyms and upgraded dining part of the college experience.

The fact that so many take on massive loans to attend their dream schools without asking serious questions about the bills coming due after four years demonstrates the need for financial literacy classes in high school.

It may be a grim task, but crunching the numbers on tuition vs. earning potential of a degree, what the employment outlook is in the field one is majoring in, and whether an education of equal caliber can be had at a less prestigious but more affordable university is vital for a student’s financial future.

The alternative is taking any job one can get, being crushed by loan debt and realizing that homeownership and starting a family are years down the road — if possible at all.

The answer isn’t to have the government step in and relieve students of their responsibility to repay their loans. The longterm solution must lie with the students — and parents — themselves.

Fiscal savvy and asking the right questions may not lead to a dip in the rooftop pool between classes, but it will yield a more prosperous and selfsufficient future.