Column: Student loan subsidies raise tuition

Ben Wetmore In My Opinion

The MAROON

Ben Wetmore In My Opinion

Ben Wetmore In My Opinion

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On the front page of The Maroon’s Feb. 3 issue, the article “Life and Debt” visually argues, as does the article itself, that unless Congress acts now, the artificially low interest rates for borrowing money for tuition will go from 3.4 percent to 6.8 percent in July. Loyola’s Financial Aid director apparently said, “We’d like y’all to make some noise,” and so I shall: she’s a shill for a federal subsidy that enables university waste and inefficiency.

Let’s admit what’s really going on: every few years the system uses fear to motivate us, and our cherished programs are at “risk” from the political elites who want us to participate in their rigged game. Sometimes it’s the “liberal democrats” about to burn flags, or it’s the “staunch conservatives” about to steal away your birth control pills. This is just the latest of such scare tactics. It’s professionally managing fears that student loan interest rates are going to double, “unless Congress acts now!” Fearing voter and activist apathy, the political class is pushing us into more kabuki theater. President Obama could give away free college by ending one of his many wars, but he won’t.

College is expensive because colleges have no incentive to cut costs since student loan subsidies makes tuition hikes easy to absorb. Instead of asking why prices are rising, the college industry wants us to get outraged that our loans aren’t subsidized enough. For the cost of four years at Loyola, you could buy a pretty nice house. That’s the debt load we’re incurring, and for what? On Loyola’s most recent 1099 form filed with the IRS, available at http://guidestar.org, there are 15 Loyola staff members earning more than $150,000. Considering that those salaries come from student sharecroppers working a decade to finance that annual salary, it’s obscene that such people have so much when so many have so little.

Before the campus libertarians get feisty, let’s remember that the business of Loyola is a private concern, a non-profit founded by the Society of Jesus for the goal of educating those in need. Yet runaway tuition creates a crushing debt burden counterproductive to those goals. At Loyola, in higher education, the source of revenue is primarily a student’s debt for the decade after they graduate. The source of these high salaries is student debt, and as such, at such high levels, they are immoral.

Cutting salaries probably wouldn’t save much on the whole. But they’re a reflection that the institution doesn’t care about trimming. Even record unemployment, especially for recent college grads, can’t force Loyola to trim spending and tuition. The college is part of a larger cartel which sustains annual tuition higher than many people’s annual salaries, regardless of the economy.

Anyone guided by principles of social justice should think globally and act locally. Our actions shouldn’t be directed at Congress and Father-Leader Obama to bail us out; it should be to make the economics of higher education work. It’s easy to externalize our problems. Just as President George W. Bush can go to war in Iraq to avoid solving domestic problems, we can similarly attack Congress for not further subsidizing our education loans and give Loyola a free ride to keep ratcheting up tuition. But if we care about what Ignatius Loyola would do, what Jesus would do and what we ought to do, we shouldn’t continue subsidizing administrative largesse for starters. It’s time to trim budgets, cut tuition, cut the budget and make Loyola affordable.

In 1920, Loyola’s yearly tuition was $100. Room and board was $35 a month. Adjusted for inflation, those rates today would be $1,079 for tuition and $378 a month for housing. The university’s budget and spending reflects its materialism, greed and excess. Higher interest rates reveal the real costs of the budgets we tolerate, these costs are masked through subsidies. Ignatius wouldn’t beg for a handout, but Loyola apparently will.

Benjamin Wetmore is a Loyola law student. He can be reached at

[email protected]

In My Opinion is a weekly colum

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