Even before the coronavirus crisis, universities were living large on taxpayer largesse. The entire foundation of their business model is the government-backed student loan. More than 90 percent of the dollars that trundle freshmen to their institutions each September originate with or are owned by taxpayers through the U.S. Department of Education.
If, as projections suggest, enrollment takes a nosedive this fall due to changing financial situations and fear of the virus spreading on campuses, higher ed institutions should be prepared to take their lumps like the rest of America, rather than relying once again on taxpayer-funded bailouts.
Consider elite Harvard University, for example, which refuses to use its eye-popping $41 billion endowment to ease tuition burdens on its students, but recently angered many with an article from one of its scholars advocating that homeschooling be illegal, saying it burdens democratic society, perpetuates white supremacy, and threatens children’s rights. While stiffing students, the cash-flush university even took $8 million in taxpayer bailout money, and says it won’t pay it back despite demands it do so from President Trump.
Funds will be given only to the students that received Pell Grants and other financial aid at the beginning of their enrollment.
Most of the students are completely screwed and, oh yeah, don't forget Harvard has a $40.5 billion endowment.
— Ellie Bufkin (@ellie_bufkin) April 21, 2020
Already, the taxpayer-backed student loans inflating university enrollments have proved a poor investment. America has more than 4,000 colleges and universities — more than any other nation — which is why international students, paying full freight of course, rush in to fill our additional seat capacity. But only 1,400 of those institutions even merit a place on the industry-standard U.S. News and World Report ranking, and only 50 or so regularly admit a third or fewer of their applicants.
In a world where every high school graduate comes equipped with a potential six-figure loan check, universities are incentivized to admit academically unprepared students, which is among the reasons the U.S. sports a fantastically low six-year graduation rate of just 60 percent.
Worse, federally financed production of college grads is crowding out those with high school diplomas and certificates. Researchers have noted an increase in the number of job advertisements that require college degrees, even as the necessary skills for those jobs remain similar to when they merely required high school diplomas.
“Free” government money has created a self-perpetuating cycle, as degrees — and the attendant eye-popping student debt — have become the popular threshold for jobs that those skipping college could have previously counted on. As Neal McCluskey of the Cato Institute elegantly put it, “[F]ederal ‘help’ has powered a credential treadmill that has forced everyone to run faster just to stay in place.”
In part because many college graduates find themselves qualified only for entry-level work, 40 percent of student loans were expected to be in default — and thus taxpayers’ responsibility — just three years from now. Those numbers were before a likely coronavirus-induced downturn and will almost certainly tick upward as we head toward 30 percent unemployment.
A deeper problem than their financial malfeasance, which the many conned, degree-holding debtors should consider almost fraudulent, is how universities have failed to graduate educated people, prepared for the responsibilities of citizenship. Nearly half of those who graduate college don’t know how long a senator’s term is, and one-third don’t know what the Bill of Rights is — not the individual protections contained within it, but as a group. From 1992 to 2003, the percentage of degree-holders who could read and report back the main ideas in a newspaper article dropped from 40 to 31 percent.
College graduates are more likely to support the idea that biological sex is a mutable concept, which surely justifies the public support higher education relies upon.
Instead of supporting their loan-strapped graduates, most universities have parlayed their ever-increasing federal gravy train into sprawling departments and centers for “diversity” or “inclusion,” most headed by deans or vice presidents of this or that, receiving paychecks well into the six-figure range. It’s bad enough that universities are abandoning their proud heritage and classical responsibilities in favor of morphing into woke seminaries, but to do so on the dime of struggling mechanics, small business owners, and the majority of Americans who still can’t claim a four-year degree is an outrage.
Even the billions in direct grants and trillions in student loans, bankrolled on the public’s back, seem insufficient to meet the crisis, according to the American Council on Education, which represents roughly 1,700 universities.
The lobbying group anticipates that on top of about $14 billion already inserted into the CARES Act for immediate coronavirus adjustments, the sector will require another $50 billion minimum of federal funds. Harvard University received $9 million in bailout cash despite its mammoth endowment, burdening taxpayers while it sits atop stacks of cash.
With so many needing help after the one-two punch of the virus and attendant economic woes, universities, which have already drained trillions from the public fisc without fulfilling their promises, should be at the back of the line.
Better still, higher education should be cut off from its sweetheart-subsidy deal, and left like so many Americans to the free market. If Wells Fargo or Bank of America are reluctant to loan an 18-year-old $150,000 to earn a degree in critical whiteness studies, taxpayers shouldn’t be bamboozled into doing so either.