The Student Loan Crisis: Here We Go Again
In one of my posts on the sub-prime crisis I mentioned, as an aside, that government subsidies for student loans had driven up the cost of college in a manner similar to the way subsidized mortgage lending drove up housing costs. The current November issue of The Freeman contains this article by George C. Leef on how government intervention into student loans helped build another politically-privileged class getting rich while harming the supposed beneficiaries of their program.
I want to especially call attention to the section on Credential Inflation. In my post on Poverty and Government, I cited licensing laws as one of the most harmful to the poor. In field after field, the costs of entry have been jacked up by compulsory licenses having little to do with the quality of the service, and one element of that, cited in the Leef article, is the requirement for a college degree.
There is nothing to prevent a profession from establishing a certification or credentialing program, giving certain professionals a seal of approval that may convince potential customers or clients of their higher quality. It is the monopoly protection of laws that turns these programs into tools for exclusion rather than quality. A free market would undoubtedly have certification by professions and market-provided third party evaluation services such as those that Consumer Reports and Good Housekeeping and Underwriter Laboratories and Kosher standards provide today.
Where the government intervenes to make a service affordable, they inevitably do the opposite. Housing, education, and medicine are among the essentials of life that have gotten enormously more expensive, while food and clothing and transportation, which have much less (I would never say no) intervention have gotten less expensive, in terms of how much time the average person must work to pay for them. The size of the pig trough keeps getting larger once resorting to aggression by government is accepted as a principle of funding.