The Tragic Political Economy of Higher Ed

Lynchburg College President Garren. Photo credit: Wall Street Journal

Lynchburg College President Kenneth Garren. Photo credit: Wall Street Journal

by James A. Bacon

Lynchburg College President Kenneth Garren was sipping wine at a reception last year when he bumped into Senator Mark Warner. He button-holed the senator and urged him to oppose an Obama administration plan to create a ratings system for U.S. colleges and universities. Two months later, under pressure from Garren and other Virginia college presidents, Warner declared his opposition to the plan, reports the Wall Street Journal today.

The higher education system has emerged as one of the most effective lobbying forces in Washington, spending more than $73 million yearly on lobbying and employing more than 1,000 lobbyists — more than any other industry in the nation save drug manufacturing and technology, the WSJ says.

Moreover, with a presence in every state and every congressional district, higher ed can mobilize enormous grassroots support. Rep. Robert Goodlatte, R-Roanoke, told the Journal that he received a letter opposing the Obama plan from every school in Virginia, and he met with several college presidents on the matter.

Federal loans and grants to college students now runs at $134 billion a year, making higher ed one of the biggest recipients of federal assistance of any industry in the country. With student debt surging way past the $1 trillion mark and student defaults climbing into the billions, the Obama administration, like administrations before it, has pushed for more transparency and accountability in higher ed by publishing data to allow students and parents to make more intelligent consumer decisions.

The higher ed lobby defeated Obama’s plan to rate colleges, although the administration did end up publishing significant data without the ratings. Colleges have opposed such transparency and accountability measures on the grounds of protecting student privacy or the impossibility of making fair comparisons between colleges serving different market niches. Government should not be in charge of weighing the factors that go into determining colleges’ performance, the industry says.

The colleges’ arguments have some merit, but they overlook the obvious: He who pays the piper calls the tune. When Uncle Sam supports the industry through $134 billion yearly in tuition assistance (not to mention billions in research grants), Uncle Sam will want a say in how that money is spent.

While much of the rest of the country has stagnated economically over the past 15 years, higher ed has been a growth sector entirely due to federal largess. But costs have ballooned, tuitions have soared and a generation of students is hobbling its future with debt. Higher ed doesn’t want to give up the money or to be held accountable to its students, and the federal government can’t afford to dole out billions without a measure of accountability, so conflict is inevitable.

As the federal leviathan seeks to impose its will, the industry mobilizes to defend itself, and yet another sector is sucked into the rent-seeking maw of Washington politics. Higher ed, a bastion of economic privilege, is fighting to maintain that privilege. The sector is morphing into another special interest like all the others

There are currently no comments highlighted.

2 responses to “The Tragic Political Economy of Higher Ed

  1. “Yet another sector is sucked into the rent-seeking maw of Washington politics” — Nice imagery. Now, what to do about it? Every parent understands, our children have to have what they sell.

  2. what? what happened to consumer-centered supply/demand markets where people shop for quality and services and the institutions compete for their business – you know – like with Payday Loans and Health care?

    How come most of the OECD countries provide free or near free College education for anyone who wants it at a fraction of what it costs here?

    somehow – we seem to figure out the worst, most costly and inefective ways to do these things…

    then we do the blame game

    and offer no real alternatives – just condemnation…

Leave a Reply