Sunday, October 14, 2007

Hillary on Higher Ed

By Richard Vedder

Senator Clinton unveiled her higher education plan last week. Overall, it is not a very good plan, but it is far better than I expected it to be. It is reasonably detailed and has a few very good features.

The good news is that it proposes to eliminate the guaranteed student loan program, an incredibly good idea. It also proposes to require colleges to report earnings and employment data on graduates --another great idea.

This is offset, however, by proposing an increase in total federal higher education spending by a massive expansion of tax credits, which is an open invitation for colleges to raise tuition fees. The huge expansion in grants is also conceivably dubious, but if done using vouchers it is an idea with some potential. Incentive grants to improve graduation rates could be good, depending how they are administered. A huge expansion of AmeriCorps, which provides funds for college tuition in exchange for a year of community service, has little to do with higher education, and where is the evidence that program has been effective? Nothing in the plan deals with the root causes of higher education’s inefficiency. Still, for Senator Clinton, it isn't too bad --and at least she is giving us some specifics on what she would do --more than most other candidates are doing.

3 comments:

Analyticsdude said...

"It also proposes to require colleges to report earnings and employment data on graduates --another great idea."

This would be useful, but seems practically impossible since it relies on the ex-students to report this.
A very useful result of this would be to show where people who major in X end up. I suspect universities over-allocate resources to some of their programs.

ktbruns said...

The proposal to eliminate the guaranteed student loan program to generate savings is baffling.

The recently enacted $22 billion cut in lender payments makes the guaranteed student loan program comparable in cost to the Federal Direct Loan program, if not cheaper, according to the President’s FY 2008 Budget. Even if direct loans retain a cost advantage, it will be ever so slight.

In other words, the savings from eliminating the guaranteed loan program wouldn’t amount to a hill of beans—certainly not enough to make a dent in the proposal’s $8 billion in new annual spending.

It may even cost taxpayers money to shift all federal student loans to the direct loan program.

In return for meager if any savings, the proposal would eliminate an effective program that 8 in 10 schools prefer and that millions of families rely on. Take away the choice of lenders that millions of families now enjoy and force them to borrow directly from the government.

Senator Clinton should reconsider this part of the proposal and recognize the value to borrowers of choice. Families are as entitled to choice in federal student loans as they are in health care and other areas. Indeed consumer choice is central to the Clinton health reform proposal, as it is to Senator Edwards's and Senator Obama's health reform proposals.

Choice puts borrowers, not bureaucrats, in the driver's seat.

Analyticsdude said...

"Families are as entitled to choice in federal student loans as they are in health care and other areas."

They are ENTITLED to choice? Why?