Thursday, October 18, 2012

Government Aid For Higher Education Under Obama And Romney

The costs of higher education are rising faster than inflation.  This has made higher education less affordable for many students during a period in which a college degree is becoming more important for access to jobs. Many students have taken out loans in order to pay for higher education.  The average student debt burden is now over $26,000.  This article outlines the efforts of the Obama administration to enable more students to receive a higher education.  Education experts say that he has done more than any other president to provide access to higher education.  He has eliminated banks as intermediaries between students seeking loans and the government. This has saved a lot of money for students.  Pell Grants have also more than doubled under Obama.  Some say that even these efforts are not enough to prepare students for the 21st century job market. 

Conservatives have argued that the availability of student loans has increased the pool of students seeking higher education.  They claim that this has reduced the incentive for colleges to become more efficient and to lower prices.  Shrinking demand would deal with the problem of price inflation.  Mitt Romney, as usual has conflicting versions of his policies for higher education.  He favors market solutions over more government intervention.  For example, he would return banks into the process as intermediaries.  Competition between banks for serving the student market would drive down the cost of loans for student according to Romney.  That is similar to his approach to Medicare which depends upon competition between insurance companies for government provided vouchers to lower the cost of healthcare.  He has also criticized the rising cost of Pell Grants.  On the other hand, on the campaign trail he has changed his tune and now claims that he will do nothing to reduce government support for higher education.  Voters will have to determine which Romney is the real Romney.

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