Clinton Takes Taxpayers to School
http://www.wsj.com/articles/clinton-takes-taxpayers-to-school-1439250407
To adapt BuzzFeed, 10 ways Hillary tried to buy young voters.
Hillary Clinton has something for everyone in President Obama’s political coalition, and this week her target is millennial voters. On Monday the inevitable Democratic presidential nominee, er, candidate rolled out a $350 billion proposal that she says will make college more affordable. The irony is that she plans to ramp up the federal subsidies that have for decades driven up the cost of a higher education.
Her campaign is selling the New College Compact as ground-breaking, but you’ll recognize the path: debt-free public education for all as a taxpayer entitlement. The plan would ladle federal money on states whose public universities guarantee loan-free education and community college. Mrs. Clinton would also expand a program that allows borrowers to cap repayments based on what they earn, among other ideas. She’ll pay for this frat party the only way Democrats know: taxing the wealthy.
The government has since the 1960s dumped truckloads of money on colleges and students, the result of which has been higher tuition: Schools pocket the subsidies and pass on the costs. A July report from the New York Federal Reserve found that every additional dollar in aid and subsidized loans led colleges to raise tuition as much as 65 cents.
The Clinton camp says her wealth transfer will end differently because the money will be restricted to “instruction and learning” as well as improving graduation rates. But cash is fungible, and we doubt tuition increases will be forbidden. This is a faculty pay raise disguised as loan forgiveness. Professors eager to teach that seminar on the Hermeneutics of Beyoncé, this is your moment.
Winning the stiff competition for worst provision is Mrs. Clinton’s promise to continue the Obama Administration’s scorched-earth campaign against for-profit colleges. She vows to strengthen the Education Department’s “gainful employment” rule, which requires only for-profit schools to live up to certain debt and income standards. Meantime, she’d plow cash into two-year community colleges, where the three-year graduation rate is regularly below 30%. For-profits are especially important for minorities and students who have to work.
Mrs. Clinton’s outrage is political: She’s hoping to end grousing on the left over the $16 million that her husband Bill received for his role as honorary chancellor of the for-profit Laureate Education. He resigned in April after about five years. Laureate should ask for a refund.
All of this will be very expensive—about $35 billion a year by even her campaign’s estimate, or roughly as much as the Pell Grant program. To pay for it, Mrs. Clinton says she’ll close “tax loopholes and expenditures on the most fortunate.” This idea is getting a workout since it seems to be the way she’s paying for every other new spending proposal too.
Despite all this, Mrs. Clinton’s plan is winning plaudits as “bipartisan” because it pretends to be serious about holding higher ed accountable. Colleges would supposedly be forced to be more transparent about graduation rates, likely earnings and more. Institutions churning out graduates who can’t pay back loans would be penalized.
We’d cheer, but this is fantasy. The college-industrial complex won’t stand for it: Case in point is President Obama’s plan to rate colleges, which was quietly folded this year after protests from the Obama voters who run colleges and universities.
Mrs. Clinton’s sales pitch laments that the federal government hasn’t done enough to address “the underlying problem of rising costs” in higher ed. Here we agree, and her ploy to win over millennials is one more wasted opportunity.
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