There was a time when people had to work and save and scrimp in order to go to college. Those who were really serious about studying did whatever it took to make their dreams come true. They took a year off after high school and worked, they worked summers, they worked during school, they took fewer classes per semester, they ate Ramen noodles, whatever was necessary because it was something they truly valued. They valued it more than the work and sacrifice required to obtain it or else they wouldn’t have done it. Because it was so difficult to obtain a college degree, only the most dedicated succeeded, the supply of college educated workers was commensurate with the subjective costs and benefits of each student obtaining a degree. The supply of graduates was such that they were valued across different industries like the sciences, engineering, health care and education, and they commanded a respectable wage.
Unfortunately, there are always people in any society that don’t think it’s fair that others have something they don’t. They want what others have without having to earn it, without having to pay for it and they know that the best way to get what they want is to use political force, so the issue of college tuition was politicized. When the politicians felt the movement had a sufficiently large enough following – meaning voters — they got involved. Politicians understand that when you give voters what they want, they will vote for you in the next election and politicians have access to all the resources necessary to politicize any issue when there is a critical mass of voters involved.
In typical political fashion, the solution was to just throw money at the issue, subsidize college tuition for students because history has shown that voters like free money and they vote for the politicians giving it to them. So after a healthy gestation period, they gave birth to the bastard son of ‘Medical Insurance’ and they named the unholy child ‘The Guaranteed Student Loan Program’. The program was meant for banks to indiscriminately loan students money for college tuition and expenses. Normally, qualification and interest rates for a bank loan are based on risk, current debt/equity ratio and how likely the borrower is to faithfully repay the loan with interest. Guaranteed Student Loans, however, didn’t take any of those things into consideration, the only thing that mattered was supposed ‘financial need’. The poorer you and your family were, the more money you could borrow with no obligations until six months after you graduated.
There’s a well known principle in politics that whenever the government subsidizes something, you always get more of it. In the case of college tuition, that was exactly the plan; to indiscriminately get more kids going to college that otherwise wouldn’t have without any regard as to why they otherwise wouldn’t have. There’s also a well known economic principle that when the costs of obtaining money are zero, you benefit from whatever you decide to spend the money on regardless what it is. That’s why lottery winners blow millions and welfare recipients buy booze, cigarettes, lottery tickets and drugs. Although student loans aren’t free, they are expected to be paid back, 18-year-olds aren’t expected to begin paying them back for at least four years or longer if they go to graduate school. The time horizon is so far out in their minds that it’s practically the same as being free money to them. You can even drop out of classes after you receive your student loan money and just keep the money and remain eligible to receive more the next semester. So, why not go to college even if you have no interest in anything specific and hadn’t really ever thought about it? One thing we all know happens at college: PARTIES! Student loan money for all practical purposes is fungible after your tuition is taken out so party on Garth.
In the sixties and seventies, college enrollment exploded thanks to guaranteed student loans and universities scrambled to keep up logistically with the demand. Revenues were up so they built new housing facilities and new classrooms. But they still had money to spend so they built student recreational centers, invested heavily in football teams and built common areas with shops, bowling alleys and eateries. They went from institutions of higher learning trying to attract the best and the brightest to theme parks trying to attract the most student loan money. And how do you attract young people to your ‘school’ so they can give you their student loan money? Offer them things that they value rather than the things the university values and used to pride itself on like education, distinction and professional capabilities. Sell your educational and professional integrity and give them whatever they want for money. The educational equivalent of the world’s oldest profession.
Truth is, they had to prostitute their institutions because if even one university did it, they all had to do it to remain competitive or risk going out of business altogether. The Guaranteed Student Loan program is a real poison destroying everything it touches. Students started deciding which school to go to based on how good the football team was, what facilities the rec center had, what kind of meal plans there were and their reputation for partying. There’s even an online index for tracking the top ‘party schools’. Students didn’t care what they studied, that’s not why they were really there, so universities offered courses of study that were low cost for them and logistically easy to support. It no longer mattered if the student’s university experience prepared him for any particular field of work or not, just as long as they could keep him enrolled as long as possible. Want a bachelors in sociology or history, they will gladly offer it to you. A masters in women’s studies, a Ph.D. in Russian Poetry, no problem, step right up. Some universities even allow the students to ‘design’ their own ‘educational program’. The customer is always right.
This also meant a decline in academic integrity. Universities were less likely to expel a student for academic improprieties and risk losing his student loan money. The number of degree programs ballooned right along with student enrollment to the point that formerly valued graduates were now wading through a flooded market. And as the supply of anything increases, the value of each one decreases. College graduates have seen their opportunities and salaries decline, they have staggering student loan debt and many aren’t able to find work in their field.