- The Washington Times - Friday, March 13, 2009


I write in response to “Pell Grant hike may ease student burden,” (Metro, Sunday). The methods being used to prop up the student-loan industry mirror many of the recent government bailouts, following an economic model that emphasizes pumping government tax dollars into an industry in an effort to revitalize stagnant markets, leading in some cases to industry nationalization. Government subsidies may provide an illusion of fiscal health and political cover for politicians, but they do little to solve the systemic problems in America’s higher-education system.

One of the primary causes of the rapid increase in the cost of higher education is the growing addiction to debt spending in colleges nationwide. Increasing the flow of student loans without first addressing the spending problem will only make the problem worse, and another bailout will be just around the corner.

The government’s more active role in student-lending agreements places a great deal of new financial risk on the federal coffers, allocating billions of taxpayer dollars to prop up a market that is highly unstable. Certain interest groups have tried to portray these bailouts as necessary steps to preserve higher education, but they are in fact more harmful than helpful, distorting the private market and inflating the already high cost of higher education.


Legislative specialist

The Heartland Institute


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