Folding Towels

Sometimes the most direct route is the least effective one. For instance, when wrestling with writer’s block, staring at a blank screen only makes things worse. Instead, stepping away and doing something entirely unrelated for a while can allow the pieces to fall into place. I’ve had many a breakthrough while folding towels or taking the trash to the curb.

Something similar is true with social issues. Sometimes the direct route is blocked, but solutions are easier from an angle.

For instance, take the valid social concern about student loan burdens. Responding directly -- say, by capping what students can borrow -- isn’t likely to end well. Either we’d have a collapse of supply of education, thereby shutting many people out entirely, or we’d have an explosion of private loans on even more exploitative terms. Or both. Tuition caps might look tempting in the short term, but when the only option available to providers is cost-cutting, the long-term effects on quality are predictable.

That’s probably why I was so struck by this story. Geographic areas with few or no public higher education options tend to have much more robust for-profit higher ed. We know that, on average, for-profit undergraduate education incurs more than its proportional share of student debt and defaults. (Graduate education does, too, but that’s a separate post.) Public options are more affordable. For-profits fill in the gaps where the publics are either absent or scarce.

In other words, the way to get college costs under control is not to defund colleges. It’s to flood the zone on the public side, thereby putting competitive pressure on more expensive alternatives.

That doesn’t match the widespread intuition that the way to prosperity is to “starve the beast.” People who want to improve their lives will choose from among the options before them. If the best option isn’t available, they’ll take the next best. I don’t think it’s a coincidence that the major for-profit providers mostly emerged in regions where public higher ed was relatively sparse.

I’d apply that lesson beyond basic geography. It isn’t just a matter of having a campus nearby, or of having a well-publicized public online option. It’s also a matter of perceived quality. To the extent that we inflict austerity upon public institutions, we make them less appealing, and we open up more market space for for-profit alternatives. Austerity doesn’t actually save money. It costs money. It costs money by depriving people of a more affordable option, driving them by default to less affordable ones.

Telling that story requires a shift of perspective. The idea of forcing public institutions to shift more of the cost burden to students, and then punishing them for doing it, isn’t going to reduce the student loan problem. For proof of that, just look at the last 10 years. If we want to attack the student loan problem, the way to do it is to improve the institutions that cost less in the first place. That may require the political equivalent of stepping away to fold towels for a while, but it’s the right way to go. We’ve tried austerity, and seen it fail, for too long. We have the political equivalent of writer’s block. We just need to look at the problem from a different angle.