Government Subsidies Help Raise Cost of College Tuition

Ross Smith


How come petty goods like plasma televisions, cell phones and laptops increase in quality and fall in price each year, while a college degree becomes less valuable and more costly every semester? Why is a college graduate more likely to have an IPod, X-box and computer rather than health insurance? Isn’t it ironic that politicians never talk about making the next line of Gucci bags more affordable, yet they continuously get less expensive, while on the other hand, elected officials often promise to make college more affordable, yet tuition keeps rising. The reason for all of this is that our government handicaps the free market and prevents its powerful forces from being unleashed.

The fundamental explanation for why college degrees continue to fall in value while tuition costs rise each year is pure and simple…GOVERNMENT! The vast majority of college students receive government financial aid, enabling them to pay for college. On the surface, having the government help students pay for college sounds great; however, nothing could be further from the truth. If the government did not provide financial aid, most students could not afford college. Accordingly, classrooms all over the country would become nearly empty. In response, colleges would have to lower tuition fees, making it more affordable for potential students.

Unfortunately, this concept was completely ignored last semester, as McDaniel College’s president, Dr. Coley, sent out a campus-wide e-mail urging students to vote against the state ending “its program of monetary support for private colleges, mainly to help them pay for financial aid.” While this program would indeed help McDaniel College and its benefactors in the short run, the point is that government subsidies in education contribute to rising tuition costs. Despite the fact that I voted “YES,” as many times as I could, this e-mail was offensive because Dr. Coley assumed “the correct vote would be ‘NO,’” ignoring the benefits of voting “YES.” In an environment in which students should think for themselves, it is unfortunate that Dr. Coley never suggested to students that they should investigate the matter for themselves. It certainly would have been more appropriate for Dr. Coley to present the matter by saying, “in my opinion, the correct answer is ‘No’”.

Nevertheless, failed policies continue to be implemented in Washington. During the State of the Union speech, President Obama announced a plan that will allow college graduates to pay just 10 percent of their income on student loans, and after 20 years, default. Furthermore, if that college graduate chooses a career in “public service,” that 20 year period will be cut in half. This will undoubtedly put more college graduates in debt and continue to push up tuition fees. More students will need student loans, and the process will continue as before, ever since the federal government started subsidizing education.

Milton Friedman, a Nobel Laureate economist, once said “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” No other organization can drive quality down while increasing prices. Just imagine if you put the government in charge of selling movies. This year they’d be selling Blue Ray disks for twenty dollars; the next year they would VHS’s for thirty dollars.

A real solution to rising tuition costs is for the government to step back and allow the free market to work. Accordingly, college would become less expensive and more valuable, one of the great benefits of market forces.

If you are upset with both parties and seek a party that promotes peace, freedom and prosperity and want to learn more about Libertarianism, contact Ross Smith at