Obama’s Student Loan Proposal Won’t Lower College Costs

University professors should work more hours to help lower higher education costs and the student loan burden.

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America's colleges and universities have been holding another love-in for President Barack Obama and his liberal policies this spring. According to a survey by the Young Americans for Freedom, some 71 percent of the graduation speakers at America's top 100 universities this year are liberal. Of the top 35 universities, only one could bring itself to invite a speaker who was identifiably conservative.

Sixteen of the luminaries tossing platitudes from their respective podiums will be Obama officials or his appointees. In fact, in three years, officials from this administration will have spoken 29 times at graduation ceremonies—more than double the number during the Bush administration's entire eight years in office.

This is no surprise, of course. The liberal groupthink of America's institutions of higher learning has been a fact of life for generations now. One wonders, however, if some of those students who voted for "hope and change" four years ago are having second thoughts as they face a job market in which one out of two of them will be either unemployed or underemployed—either unable to find a job or working at a job far below their education level.

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If all those commencement speeches were ringing a bit hollow as they contemplated life as a college-educated barista, I feel their pain.

I received a similar rude awakening when I graduated from college back in the 1970s, when the economic prospects for young people were arguably even more dismal than they are today.

A decade of economic mismanagement left us in the end with "stagflation," a newly coined word to describe the until-then unknown combination of economic stagnation and runaway inflation. Things were in such a bad state that financial advisers were telling people to invest in "collectables," such as blown-glass ashtrays and antiques, because these were more likely to retain value in an inflationary environment than blue chip stocks in America's leading corporations. Meanwhile, taxes were so high—especially capital gains taxes at 70 percent—that venture capital had all but dried up and the United States was losing its nascent high-tech industries abroad, as entrepreneurs and innovators were forced to sell their patents to the Japanese.

I was recently talking with a successful developer from Virginia. He had started out as a young man in the 1970s, and was close to giving up, convinced that he was a failure in life. Nothing he did seemed to work out. Every day was a constant struggle to stave off bankruptcy.

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Then, he said, "everything changed." Almost overnight, he told me, "I went from being the guy who couldn't get a loan to being a business genius." I asked what had changed. "1980," he said, "and the election of Ronald Reagan. From then on, it was like I had the wind at my back."

Sixty-eight percent of the youth vote in 2008 went to Barack Obama. According to a recent Gallup poll, 64 percent still favor Obama, but the thrill is clearly gone, and one wonders how may will simply stay home (or stay in their parents' home, where so many college grads have ended up) rather than drag themselves to the polls and vote for another four years of 50 percent underemployment.

Clearly, Obama himself is worried. According to Young Americans for Freedom, Obama has spoken at college campuses one out of every 12 days of his administration, and the Daily Caller notes that administration officials made college appearances 130 times in the last year.

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Just like Jimmy Carter at the end of the '70s, Barack Obama is telling us that the terrible state of the economy is not his fault. He inherited a bad situation and conditions beyond his control make his job uniquely difficult. (Carter famously blamed the American people themselves for the problem in his notorious "malaise" speech).

In true liberal fashion, Obama is making the case for his re-election by promising tax-financed goodies—in the case of young voters, an extension on the federal subsidies to lower student loan interest payments. Here's the thing, however: Even with lower payments, the loan still has to be paid back, and for many this will mean a life-time burden that they may never get out from under. It's not uncommon these days for retirees to find their Social Security checks garnisheed by the government for student loan obligations they incurred decades earlier.

Increasingly, people are waking up to what a raw deal the student loan business is. Its primary effect has been to allow America's colleges and universities to bloat their staffs and pay professors full-time wages for less than half-time work while pushing the cost off on students and parents who can ill afford it.

[See a collection of political cartoons on the 2012 campaign.]

Between 1980 and 2010, the cost for American higher education rose more than 240 percent faster than inflation, but hardly a single institution has made a serious effort at lowering costs on the students whose futures they otherwise make such a point of caring about. Neither is the source of the problem a mystery. In a recent Washington Post op-ed, David Levy, the former chancellor of the lefty New School in New York broke ranks with his profession and party to state the obvious truth that college professors are simply way overpaid for the time they put into teaching.

A typical executive, he points out, works a 40-hour week for 50 weeks and clocks a minimum of 2,000 hours a year. The typical faculty member, in contrast, teaches 12 to 15 hours per week for only 30 weeks a year. That's 450 hours a year, maximum. Even if they were to devote an equal amount of time in preparation and grading of papers—which Levy says is highly unusual, despite the claims of the professoriate—their workload is still barely 45 percent that of academic professionals. Yet their compensation these days is entirely comparable.

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Here's a simple fix. Rather than lure students into massive loans to pay for the leisurely life of our tenured faculty, burdening both students and taxpayers in the process, why don't we just ask our professors to work a full schedule like every one else? That could easily cut tuition costs in half and eliminate the need for most student loans right there.

But no matter how many college tours he conducts to shore up the youth vote, Obama will never let on to this simple truth. Tuition costs skyrocketing above inflation, like the economy that is now teetering on a double-dip recession and the declining job prospects of his young and once eager voters—none of these things are the result of his misguided policies. They're all, to hear Obama tell it, someone else's fault.

That's what they kept telling me in the 1970s, too, until I finally got sick of hearing it. So did enough other people, apparently, because in 1980 we elected Ronald Reagan. And then everything changed.

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