An Idea Whose Time Has Ended?

Until the mid-60s, the federal government had almost nothing to do with higher education, with college benefits for veterans under the GI Bill being the exception. But with the passage of the Higher Education Act, the government got massively into the student aid business.

Most politicians bought into the idea that college was good for almost everyone and therefore the national interest was served by increasing “access” to higher education. They made sure that loans were easily available at low interest rates to students who wanted to go to college—without regard to the individual’s level of preparation for or interest in postsecondary education.

Federal student loans appeared to be a success for decades, as a steadily increasing percentage of high school grads went on to college, many of them paying a large part of their expenses with loan dollars. What was not so apparent was the connection between rising tuition and the availability of federal loans.

Another unintended consequence of federal student aid was falling academic standards in college, a result of the fact that the surge of college enrollments came increasingly from weak students. To keep them enrolled, many schools let the curriculum erode and grades to inflate.

Today, more students than ever are in default on their loans; many others struggle to make their payments from low earnings in jobs that call for no advanced study. Are we at the point where we should pull the plug on federal student loans?

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