Today, the state Senate postponed a bill sponsored by Sixth Congressional District Democratic candidate state Sen. Morgan Carroll that set out to “make student loans more transparent”, but, instead, would have made them more costly for borrowers. See, the regulatory hoops that Carroll was proposing would have cost lenders money, which would have been passed on to borrowers.
Additionally, requiring lenders to allow prepayments would have made loans more expensive and result in fewer banks issuing loans. Again, this is bad for the consumer because they would have less choice. The market can figure this out just fine: some lenders will allow prepayments and some will not. If that is important to a borrower, let the borrower choose, don’t force everyone into the same loan terms; individuals should be free to choose what structure works best.
The real reason Carroll’s proposed bill was dumb is because it ignores the reality of why higher education is so expensive in the first place. To answer that question, we turn to the liberal’s rag of choice, The New York Times, which published an article by University of Colorado Boulder law professor Paul Campos that explained this problem last April. Here is the root of the problem:
“By contrast, a major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.”
Campos also debunks the claim that liberals (well, he calls them “college administrators”) love to make – that government spending for higher education is down. While it may be less per capita (although, still far higher than it was in the 1960s and 1970s), public investment in higher education has increased dramatically. In fact, state appropriations to higher education reached an inflation-adjusted high in 2009.
If Morgan Carroll and liberal loonies in the state legislature want to tackle the crippling student loan debt that millennials face, they should start by reducing the cost to attend college, not punish an industry that enables attendance for those who would not be able to afford it ordinarily. It’s this sort of nonsensical thinking that makes Carroll unfit to represent Colorado in the U.S. House.