How smart is going to college?

As the market declined during the financial crises of 2008 and people began foreclosing on their houses, the prices of nearly all goods and services came down. Gas prices went down, housing went down and consumer goods went down. This is a basic rule of economics: when demand falls dramatically, the price of the good or service must drop or else no one will buy it.

Since nearly all families were experiencing a loss of wealth of at least 9 percent, according to an article by the NY Times, almost all markets declined as well. The one exception was higher education, and it’s because of financial aid.

While everything else plummeted in price, the cost of college continued to increase. Over the past 30 years, tuition has increased 12-fold, according to an article on Bloomberg.com. While the country was still in a recession, WSU felt the need to add an $80 million extension to Martin Stadium, remodel the business center and add a brand new residence hall.

Let’s look at a different industry as a contrast: consumer electronics. Prices for laptops with great performance are affordable for nearly all college students. These prices are a result of different brands competing with each other to make better and more affordable laptops. This is because the government does not subsidize the purchases of laptops.

If the government stepped in and said “we want every college student to have a high performance laptop” by giving a tax credit, the prices of laptops would skyrocket and the competitive environment that existed beforehand would be destroyed.

If a tax credit was issued, these tech firms would then have so many customers flocking to them with their subsidized purchases that they would no longer have to worry about competing with the other guy. Thus, they could increase their prices, and the quality of the products would decrease with no consequence for the manufactures.

This sounds shockingly familiar to the housing bubble. Back in the 1990’s, there was a push to enable everyone to own their own home. What followed was one of the largest bubbles in housing this country has seen.

The wonderful electronics industry that we are blessed with today is the result of free markets. The same can’t be said for the education industry.

As early as the sixth grade, society taught my peers and me that the only way to achieve future economic success was by obtaining a college degree.

This is simply not true.

Skilled trades such as electricians and plumbers can make a phenomenal living with a median wage of $49,320 to $80,000, according to USNews.com. These figures can be much higher if someone opens a business and finds success.

In addition to collegiate brainwashing, the amount of financial aid being thrown around has increased dramatically in recent years. The number of students receiving aid during the 2011-2012 school year increased by 66 percent compared to just four years earlier, according to an article by USAToday.com.

With the increased financial aid and college promotion, college attendance rates have increased by 37 percent from 2000 to 2010, according to the Institute of Education Sciences.

While all this student aid may seem like a good thing, the aid might have the drastic unintended consequence of the skyrocketing the cost of college. If everyone can get some form of student aid, then colleges can charge more money because students are willing and able to pay just a little bit more. There is almost zero incentive for colleges to save money.

A higher cost means that students are forced to take out more loans and seek more aid, which only fuels the flames of increasingly expensive tuition and fees. We need to return to the times when students could work a part time job throughout the year or a full time job during the summer and have enough money to pay for the costs of college.

My dad told me that he bartended at a couple bars and was able to buy a Ford Mustang and pay the entire cost of college. Today that kind of financial success story would be pipedream.

If the government is truly concerned about the rising costs of college, then it needs to leave the education industry and stay out.

-Mitch Strang is a senior finance major from Bellevue. He can be contacted at 335-2290 or by [email protected]. The opinions expressed in this Column are not necessarily those of the staff of The Daily Evergreen or those of Student Publications.