Democratic candidates are tripping over themselves to provide subsidies for college tuition. Hillary Clinton’s idea is to wipe out student debt by sending states huge block grants for education.  The funds for the grants would be paid for by eliminating or limiting tax deductions for the wealthy.

According to the Wall Street Journal’s Laura Meckler:

“The Clinton plan would have the federal government send large grants to states, which would then ensure students can pay tuition without taking out loans. There are strings attached: States would be required to increase their allocations to higher education, and schools would face new constraints on spending. Families would have to contribute what they can afford, according to a financial analysis, and students would be required to work 10 hours per week.”

Hillary’s campaign figures the cost of her plan to be about 350 billion over ten years.  In other words, about $35 billion every year, plus inflation, forever.

The other Democratic candidates have similar plans, essentially tax the rich to provide less expensive or even free tuition to state colleges. In other words, taxpayer subsidies would go to state universities in exchange for lower tuition. There are two basic problems with this basic formula.  First, we have a $17 trillion debt, most of it due to existing entitlements.  Adding an additional education entitlement does not make much sense, even if taxes pay for it.  The real problem though, is that subsidizing anything tends to have an inflationary effect. The more people can afford to pay, the more universities will charge, as evidenced by the inflationary spiral that already exists in the area of higher education.

Economics 101:  The cost of anything depends on what the market will bear.  Whether though student loans or block grants, the price ceiling is never reached and prices continue to climb.  Remember in recent years when the price of gas just kept going up and up, until people started driving less?  Once that price was reached where consumption dropped, the price would level off.  Now, imagine if someone agreed to loan you money at a low-interest rate, or better yet gave it to you to help pay for your gas.  You probably would see no reason then to reduce your gas consumption, you wouldn’t take vacations closer to home or take the train to work. You’d continue to buy the same amount of gas, regardless of price as long as your friend was giving or loaning you the money.  With this artificially assured continued volume, the oil companies would have no reason to ever stop raising gas prices.  So it is with college tuition. colleges will continue to increase tuition as long as admissions remain steady and the subsidies continue to roll in.

It won’t matter where the universities get the money, whether its funneled through the parents and students via student loans or though the state, the results will be the same.  Colleges won’t stop raising prices as long as admission rates remain level. Colleges are well aware of the economics, hell, they taught the guy who wrote the textbook, as a result college degrees have been oversold.   You need college to become a doctor, a lawyer, any number of things, but you don’t necessarily need college to become a master machinist or mechanic.  Many other occupations only really require a two-year Associates degree and some specialized training.  Colleges, for some inexplicable reason though, are more than happy to give your son or daughter a degree in philosophy.  Whatever sells.

It’s funny how the Democrat’s will decry ‘corporate welfare’ when it comes to big business, and well they should, but then they openly advocate for ‘Academia Welfare’.  It’s time to stop all subsidies, however cleverly disguised and let the free market dictate the price of a college education.  Yes, give grants to the poorest of the poor, but stop the upward cost spiral caused by overriding economic forces. Only this will bring back the cost of higher education in line with inflation.  Stop lining the pockets of universities with taxpayer money.  Yes, it sounds harsh, but in the end economics will win out.