According to the Associated Press, on September 27, President Bush signed into law the “College Cost Reduction and Access Act” which in effect pumps another $20 billion into higher education Pell grants raising the maximum grant to $5,400 from $4,310 by 2012. It also cuts the interest rate on federally backed student loans in half to 3.4%.

Unfortunately, this legislation will only achieve the opposite of intentions…higher cost and less access as already proven by (at least) 29 years of government adulteration.

I could find solid information on post-secondary tuition, grants and loans only back to 1977. At that time, tuition at all post-secondary institutions averaged $924, while Federal grants and loans totaled $267 (per student). If we fast forward to 2006, we find that inflation adjusted (base year 1977) tuition and fees should be somewhere around $3,077, yet the actual amount is more than double that at $7,601! This dramatic increase in post-secondary tuition can unequivocally be attributed taxpayer funded grants and easy credit backed by the taxpayer (or our “lenders” since we’re $9 trillion in debt) since 1977.

According to College Board, Bachelors degree recipients in 2004 graduated with a median debt of $19,300 and it has certainly increased since then. Some economists predict the cost of attending state colleges will soar to $120,000 by 2015. The infusion of cash, be it easy credit, grants or subsidies (in this case, tax breaks) will inflate prices. Have we not observed this in health care? Have we not observed this in housing?

Post-secondary education costs have outpaced inflation by a margin of about 2:1, about the same as health care. We need not wonder why; both have been terribly adulterated with government programs.

Chuck is self-employed in agri-business in Virginia. He can be contacted at

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