Having watched college fees skyrocket over the years while the rolls of overpaid administrators gets ever more padded, Dan is exactly right. Student loans, a subset of subsidies to colleges, are really a racket by which the university charges more and more, the taxpayer (the source of the loan) pays now, the college gets the money, and the student spends decades paying the bill.
And one of my points, based on this very sobering chart from one of my Cato colleagues, is that America’s educational performance took a turn in the wrong direction when the federal government became more involved starting about 40-50 years ago.
Well, the same unhappy story exists in the higher-education sector. Simply stated, there’s been an explosion of spending, much of it from Washington, yet the rate of return appears to be negative.
Let’s take a closer look at this issue.
Writing for the New York Times, Professor Paul Campos of the University of Colorado begins his column by giving the conventional-wisdom explanation of why it costs so much to go to college.
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