Stop giving colleges more money: A new plan for cost accountability

To drive down college costs, the government needs to stop subsidizing colleges and hold them accountable for student debt.

The more that the government enables colleges with no-strings-attached funding, students will face ever-climbing tuition and fees, Paul H. Kupiec and Ryan Nabil argue for the American Enterprise Institute.

“A true fix must recognize the glaring similarities between the subprime-mortgage crisis and the student-loan crisis,” Kupiec and Nabil wrote. “Like the brokers who caused the subprime-mortgage crisis, colleges push naïve students to take on debt regardless of their ability to repay, because colleges bear no cost when graduates default. A true solution requires a new financing system where colleges retain ‘skin in the game.’”

Incentivize cost-cutting, in other words.

The Obama administration has postured on relieving the burden of high costs. They  issued a “Student Aid Bill of Rights” and announced executive actions to reduce high payments.