Caps on College Loan Interest Shift Pressure Away from the Problem

Ted Nesi has reprinted a portion of a Politico story on the politics of college loans, involving Rhode Island’s own Sen. Jack Reed:

So Courtney said Democrats are aiming to move a bill through the Senate to force the House’s hand. Among the options is Sen. Jack Reed’s (D-R.I.) measure to set interest rates on Stafford loans at the current 3.4 percent. …

[College] debt has ballooned past $1 trillion, the Consumer Financial Protection Bureau announced last month. More than 37 million graduates and dropouts owe money.

Meanwhile, the Washington Examiner has a column by widely respected political pundit Michael Barone observing that, while collecting ever-growing pots of money, American universities and colleges have been shifting expenses from science to political activism and diversity:

… The University of California system has been raising tuitions and cutting departments. But, reports John Leo in the invaluable Minding the Campus blog, its San Diego campus found the money to create a new post of “vice chancellor for equity, diversity and inclusion.”

That’s in addition to what the Manhattan Institute’s Heather Mac Donald calls its “already massive diversity apparatus.” It takes Mac Donald 103 words just to list the titles of UCSD’s diversitycrats. …

… The University of North Carolina at Wilmington saved some money by lumping together two science departments and raised spending on its five diversity-multicultural offices. …

“In recent years, study after study has found that a college education no longer does what it once did and should do,” the [California Association of Scholars] report concludes. “Students are being asked to pay considerably more and get considerably less.”

In Rhode Island, we’ve recently seen appointed officials granting lower, in-state tuition to illegal immigrants, which (contrary to assertions) will cost money. The year before, the news included unionization raises for part-time faculty and this very relevant letter from University of Rhode Island student Joseph Higgins:

Putting the school’s money into building a new building for the GLBT members doesn’t seem like the right choice when there are so many other things that should be built instead of this building. It’s nothing against GLBT students or their lifestyle; it’s just that they already have the Rainbow Diversity House on Fraternity Circle and Adams Hall’s first floor south wing for the GLBT center. Yes, this campus has a Women’s Center, a Multi-Cultural Center and, most recently, the Hillel Building for the Jewish faith, but to spend money on a completely new building just isn’t where our school’s money should be going. Tuition rates could be raised even higher than they already are with the new Pharmacy Building in the works, a new Chemistry Building being planned, another dorm building replacing the demolished Terrance Apartments, landscaping being done in-between Ranger Hall and Green Hall and a new fitness center that will take the spot of the Roger Williams Center.

The letter, at least, suggests that URI is building out its hard sciences as well as its mushy cultural self-definition. Still, at a time when the university is lamenting the portion of its funding from state taxpayers and striving to induce high-cost senior professors to retire early, increasing spending in equal measure on both priorities may not be a stable solution.

Placing all of the pieces on the table, capping the interest on college loans may slow the increasing financial pressure on students and their families. Stable or increasing revenue from taxpayers may relieve some of the pressure on administrators to increase tuition. But it all would reduce pressure on the system to do some deep thinking about the appropriate mission of higher education and to rework its priorities so that students spend reasonable amounts of money to acquire knowledge that will actually provide a return on their investment.