The Staggering Regulatory Cost of Student Loans
The total amount of outstanding student loans in the U.S. is more than $1 trillion.
About $850 billion of that cost is directly due to government regulation, which eliminates
competition from lower-cost training programs and schools.
If government student loans did not exist, degree-granting schools would be forced
to reduce their expenses and their prices according to market forces, as other businesses
are required to do. If the 50 states ended their regulation of higher (i.e., post-secondary)
education, including vocational training programs, private enterprise would create
vocational training programs and schools offering instruction resulting in marketable
skills at much lower costs, possibly about $2,000 per year for a student. Compare
that to current average annual college expense of about $17,000 for public colleges
and more than $30,000 for private colleges and universities.
As another analysis, the cost of unregulated local vocational training is only 5%
of the cost of one year of college, and about 1-1/4% of the cost of a four-year college
(campus) education.
Carl Person owned and managed a post-secondary vocational school, The Paralegal Institute,
for 18 years, and is able to make these statements based on experience.
Three steps can prevent trillions of dollars from being wasted:
(1) Eliminate the U.S. Department of Education.
(2) Eliminate federal student loan programs.
(3) Pre-empt all state regulation of post-secondary vocational training programs
and schools under the interstate commerce clause and/or the First Amendment. The
potential proprietary school owners have a First Amendment right to commercial freedom
of speech; and potential students have a First Amendment right of free speech to
receive instruction to create marketable vocational skills without the interference
of state or federal regulation.
As president, Person would direct the Justice Department to commence an action to
establish such First Amendment rights of students and the owners of post-secondary
vocational training programs and schools.
The saving of trillions in costs to students and their families is miniscule in comparison
to the losses our economy is suffering by depriving U.S. citizens and residents of
a competitive marketplace for post-secondary education.
The nation’s unemployment problem is directly related to state and federal regulation
of post-secondary education. Such regulation has left the country with college programs
that grant degrees in fields that offer little potential for employment. The same
regulation prevents low-cost vocational training programs and schools from offering
training needed to create valuable employees for the nation’s 26,000,000 small business
owners. Currently, small business can’t use new graduates because the graduates lack
the skills needed by the businesses. The same grads also don’t possess skills needed
for jobs in government or in large corporations, but both of those have resources
available to offer training.
The regulation of education has predictably caused the United States to lose some
of its economic potential. In fact, current government officials and major-party
presidential candidates are so stuck in the regulatory mindset that they are at a
loss as to how jobs can and should be created. The mainstream media shares the same
mindset, so Americans can’t expect any of these issues to be raised during debates.
Apparently, neither the candidates’ nor journalists’ own educations have allowed
them to reach the above conclusions.
