Reading, writing and ROI
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Last year, in a piece on a generation of Americans hobbled by student debt, the former president of Ohio State University told the NYT that in the past he “didn’t think a lot about costs”. President Obama wants to change that. In a speech in Buffalo today, the president introduced a plan to keep college costs down; Dylan Mathews breaks down the details.
A key part of the plan is to use the federal government’s $150 billion role in America’s student debt burden as a cudgel: colleges that hold down costs will get more student aid; students at colleges that don’t will get less. Josh Barro thinks this is a smart approach. Simply “boosting taxpayer subsidies for college”, he writes, “isn’t an affordability strategy that will work forever”. Tyler Cowen is skeptical, because research has shown “educational subsidies mostly are converted into higher rates of tuition and thus captured by the school”.
The president’s plan also aims to insure students get what they pay for by publishing scorecards evaluating institutions — metrics like average tuition and debt, graduation rates, and post-graduation earnings will be taken into account. As Ezra Klein puts it, measuring value in education is hard: “Defining the right quality metrics is difficult, and making sure you’re not penalizing institutions that accept disadvantaged kids is crucial. And that’s before you even get into the politics.”
Matt Yglesias points out that defining value is especially tricky when both cost and services provided increase: “The idea of inflation is that the price gets higher without improvement in quality”. Colleges have, he notes, been steadily adding ancillary benefits for decades.
Even as the amount of student debt Americans owe crosses the $1 trillion mark, David Leonhardt finds that the “cost of attending college has indeed increased more quickly than inflation in recent years, but it has not risen as fast as many people imagine”. The true figure: the cost of attending college has risen 4% annually for the last 20 years, or 1.6% more than the rate of inflation. — Ben Walsh
On to today’s links: