South Carolina’s schools are slowly improving, but as Palmetto Public Record reported earlier this month, they still have a long way to go before they catch up to other states. But with a presidential election right around the corner, the two candidates’ education plans could have drastically different effects on what that national status quo actually looks like.
Republican nominee Mitt Romney is planning to implement sweeping changes to the $460 billion K-12 and higher education systems should he occupy the White House. To help break down the differences between the two candidates’ education plans, industry research firm IBISWorld provided some analysis:
Romney education plan
- Private lenders will experience an expansion in revenue streams as college students turn to them for loans
- With less government funding available to colleges and universities, tuition will continue to increase
- Higher tuition costs and fewer available federal grants will cause students to turn to private lenders for loans
- Private schools would receive a boost in revenue as more students from underperforming public schools use their government funds to transfer to private institutions
- Public schools are likely to experience a drop in attendance and funding, based on performance
Obama education plan
- Federal funding for higher education loans would continue on the same track as it has for the past four years, causing colleges, universities, junior colleges and related industries to grow at a moderate pace
- Growth in higher education industries will be determined by the rise in tuition
- Public schools will continue to depend on local, state and federal monies while private schools will rely on tuition for revenue generation
- The amount of public funding available to public schools will remain uncertain, placing these establishments at risk for continued underperformance
If you subsidize something less (less federal funds and grants to colleges) the price will go down. If you make college loans easy to get, tuition goes up.
For the last decade or so, it’s been easy as pie to get a student loan, and college tuition has risen at a record rate.
It’s basic supply and demand.
Clearly you don’t understand that ending the subsidies won’t necessarily bring down cost.
Prices like college tuition are extremely “sticky” and won’t immediately go down by ending federal loans more likely millions of students would dropout if you eliminated the Pell grant program. Thereby causing universities to raise tuition more to pay for their sunk costs (e.g. building maintenance, debt from new construction). This raising of tuition costs would cause even more students to dropout and the school would respond with another round of tuition hikes. The cycle would continue until universities defaulted on their debt.
Your idea in effect would create a recession in the higher education market.
You ever thought that tuition is raising not because of easy access to credit, but instead do to the fact that most people now understand they can’t find a job without some sort of secondary education.
Just look at the difference in the unemployment rate between college grads and people with just a high school diploma:
college grads: 4.5%
just high school: 8.4%
The world is far more complex than in those supply and demand models that they make you learn in Econ 101.
“Your idea in effect would create a recession in the higher education market.”
Where prices go down? That’s the point.
College tuition rates are rising, and the rate of return on a college degree is decreasing. Do you know any recent college grads who are going to pay back their loans anytime soon? Nope. It’s a wealth transfer from the middle to low income college students to the professors and the college administrators.
If you can’t tell the similarities between the college loan market now and the housing loan market ten years ago, you’re not worth arguing with because you have your eyes closed.