President Barack Obama's recent decision to effectively bail out U.S. college certificate-holders by making it easier for them to avoid fully repaying their federal student loans has sparked rising anger in some quarters.
George Leef, director of research at The Pope Center for Higher Education Policy, said Obama's student loan bailout plan is unfair because it forces all Americans to rescue a privileged coterie. Potential bailout beneficiaries constitute less than 30 percent of the U.S. population, and their college certificates (including degrees) grant them entry to jobs Americans lacking college credentials may not hold even if they could otherwise do the work.
For instance, U.S. Army nurses returning from duty in Iraq are prohibited from training to become doctors or even physical therapists if they lack a college certificate. Furthermore, the certificate need not be in the person's chosen field. A degree in world communications, for instance, could qualify the Army nurse to train to become a doctor.
Inefficient, Expensive
Leef says because the American college model has become inefficient and expensive, it makes no sense to bail it out. South Korea's president has announced initiatives to move his country away from the U.S. college model, which he blames for "demographic decline" and burdening South Korea with enormous, unjustifiable expenses. He has promised to hire high school graduates in his Presidential administration.
Other nations rapidly moving away from the American model include Great Britain, whose Business Secretary is increasing spending on apprenticeship programs in accounting, law, and engineering.
"What President Obama is doing is a terrible idea," Leef said. "We are thinking about a bailout for a model that is already massively underperforming. New York University's Richard Arum and the University of Virginia's Josipa Roksa have studied the U.S. college situation in their book Academically Adrift (University of Chicago Press, 2011) and found that more than a third of college seniors graduating have zero improvement in critical thinking skills, writing, analytical reasoning."
For a Nov. 15, 2011 article in the Chronicle of Higher Education, economics professor Richard Vedder of Ohio University analyzed data related to higher education attainment by citizens in 34 nations in the Organisation for Economic Co-operation and Development (which includes the U.S.) and economic growth.
He noted nations with high levels of educational attainment "had a mean rate of annual real GDP growth of 2.87 percent, while the Low Attainment nations had an average growth rate of 3.40 percent . . .
"What I suspect is at work here is the law of diminishing returns. When few go to college, there is still a pool of bright persons who might be able to master the rigors of a truly "higher" education, as well as managerial, technical, and professional jobs where college-taught skills might be necessary or desirable. But after a goodly proportion of the population, say 15 or perhaps 20 percent, is college educated, further increases mean persons who are less bright, less disciplined are getting degrees"”which are probably somewhat academically watered down."
More Inequality
Rich Danker, director of economics at the American Principles Project in Washington, D.C., said people "are right to be frustrated, but President Obama should be aware that granting this subset of Americans an easier federal student loan burden might well exacerbate wealth inequality.
"It is interesting that the statistic that says '25 percent of Americans get 87 percent of the nation's wealth' roughly corresponds with the number of Americans who possess an American college certificate. Bailing this group out is not going to help efforts to reduce wealth inequality in the U.S. today, and, in fact, it may damage our economy by further entrenching this system and making it harder for non-college certificate holders to compete against college certificate holders," Danker said.
Alexander Tabarrok, research director for The Independent Institute and author of the new TED book, Launching the Innovation Renaissance, notes the unfairness of the federal college program and President Obama's move.
No Loans for Apprentices
"We are giving money to people who take on college loans, but what about the Americans who take on an apprenticeship to become an electrician? There aren't college loans available for them," he said. [This situation] continues to be a problem in the United States, this biasing to college and away from vocational programs. Germany and Switzerland do not do this, and have vocational training and programs."
Leef said President Obama could have been more constructive if he had proposed an effort that would have seen more Americans trained and educated in jobs and activities the country needs.
"If President Obama actually wanted to propose something that could help the horrible unemployment situation in this country . . . then he would have pushed to have ended this uniquely American college model and its regulatory and political stranglehold over numerous American professions, technical training schools, and the U.S. government," Leef said. "There is truly, absolutely no rational reason anymore for the U.S. government to be funding, let alone bailing out, this college model."
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