The Daily Signal - #501: The Unintended Consequences of Student Loans

Episode Date: July 11, 2019

Every year, colleges raise tuition prices yet again. That’s helped create the student debt crisis, and it's causing more young people to skip college altogether. But what’s the government’s role here? Is it making things worse? And if so, what’s the solution? Richard Vedder, author of "Restoring the Promise: Higher Education in America." shares his thoughts. We also cover these stories:•Labor Secretary Alex Acosta defends his handling of Jeffrey Epstein plea deal. •An appeals court rules that President Trump's hotel isn't violating the emoluments clause.•California is becoming the first state to offer Medicaid to young adult illegal immigrants.The Daily Signal podcast is available on Ricochet, iTunes, SoundCloud, Google Play, or Stitcher. All of our podcasts can be found at DailySignal.com/podcasts. If you like what you hear, please leave a review. You can also leave us a message at 202-608-6205 or write us at [e-mail]. Enjoy the show! Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Thursday, July 11. I'm Kate Trinko. And I'm Daniel Davis. Well, every year, colleges raise tuition prices yet again. That's helped create the student debt crisis, and it's causing more young people to skip college altogether. But what's the government's role here? Is it making things worse? And if so, what's the solution? I recently sat down to talk about that with Richard Vedder, author of a new book on restoring the promise of higher ed. We also delved into free speech issues and accountability for public colleges. Today, we'll play that interview. Plus, a city council in Minnesota got rid of the Pledge of Allegiance, and they got more than they bargained for.

We'll discuss. By the way, if you're enjoying this podcast, please consider leaving a review or a five-star rating on iTunes to help us grow. Now, on to our top news. In a press conference Wednesday, Labor Secretary Alex Acosta defended how we handled the Jeffrey Epstein-Empstein-July. case and the deal Epstein got made when Acosta was a U.S. attorney in Florida. By reiterating that I'm pleased that the New York prosecution is going forward. They brought these charges based on new evidence against Jeffrey Epstein, who is now a registered sex offender, and this is a very, very good thing. His acts are despicable, and New York

prosecution offers an important opportunity. to more fully bring Epstein to justice. In 2008, a major newspaper described the Epstein prosecution like this. A Florida grand jury, that is, a grand jury convened by the district attorney of Palm Beach County, had charged Epstein with a lesser offense. At that time, the Epstein legal team was elated. He would have avoided prison altogether. But then the United States Attorney's Office in Miami became involved.

Epstein got an ultimatum, plead guilty to a charge that would require jail time and registration, or face federal charges. And that was the week more than 10 years ago that Epstein went to jail. Times have changed, and coverage of this case has certainly changed since that article. facts are important and facts are being overlooked. This matter started as a state matter. It was prosecuted initially by the state of Florida and not by the U.S. Attorney's Office. Epstein, accused of sex with minors, is now facing sex trafficking charges in New York.

Meanwhile, Democrats aren't planning to let this issue go. Representatives Elijah Cummings, chairman of the House Oversight Committee, and Representative Jamie Raskin, Chairman of the Civil Liberties and Civil Rights Subcommittee, have sent a letter to Acosta requesting he appear for a hearing on July 23rd. Cummings and Raskin write, The hearing will examine your actions as United States Attorney for the Southern District of Florida in authorizing a non-prosecution agreement for Jeffrey Epstein,

as well as the finding by a federal court that you violated the Crime Victims' Rights Act by keeping this non-prosecution agreement secret from the victims of Mr. Epstein's crimes. Well, President Trump is declaring victory after a federal appeals court threw out a lawsuit that accused him of violating the Constitution by collecting earnings from his businesses in D.C. The case was brought by the Attorney General of Maryland and the District of Columbia. They argued that his continued ownership of the Trump International Hotel and related businesses meant that he was receiving payments from, foreign governments, the U.S. government, or individual states, thereby violating the Constitution's emoluments clause, which prevents the president from receiving gifts from officials without Congress's consent. After the decision was announced, the president tweeted, quote, word just out that I won a big

part of the deep state and Democrat-induced witch hunt, unanimous decision in my favor from the United States Court of Appeals for the Fourth Circuit on the ridiculous emoluments case. I don't make money, lose a fortune for the honor of serving and doing a great job as your president, including accepting zero salary. Senate Majority Leader Mitch McConnell has addressed NBC News big report that his great-great-grandfathers owned slaves. You know, I find myself once again in the same position as President Obama. We both oppose reparations, and we both are the descendants of slaveholders. nor is Obama the only liberal was slave-owning ancestors.

The Washington Free Beacon reports Senator Kamala Harris, Democrat of California, has an ancestor Hamilton Brown who owns slaves. The Free Beacon found the ancestor in an article by Harris' dad and determined that that ancestor owned slaves by looking through Jamaican archived records. Harris has not commented on the issue. Well, Congresswoman Alexandria Ocasio-Cortez isn't just against ICE and Border Patrol. In a recent interview on New Yorker radio, asked if she would get rid of the Department of Homeland Security, she said, quote, I think so. I think we need to undo a lot of the egregious, a lot of the egregious mistakes that the Bush administration did, end quote.

She also added, I feel like we are at a very, it's a very qualified and supported position, at least in terms of evidence, and in terms of being able to make the argument, that we never should have created DHS in the early 2000s, end quote. Well, the Department of Homeland Security was created after 9-11 to consolidate several federal agencies that had failed to work efficiently together in the lead up to 9-11. Kim Derek, the UK ambassador to the U.S., whose blunt and not-flattering assessments of the Trump administration were leaked to British media, is stepping down,

saying, quote, the current situation is making it impossible for me to carry out my role as I would like. End quote. After the leak, President Trump tweeted that, I do not know the ambassador, but he is not liked or well thought of within the U.S. We will no longer deal with him. Well, British members of Parliament have taken steps that could potentially impose same-sex marriage and abortion on Northern Ireland, a constituent country of the United Kingdom. Northern Ireland currently defines marriage as the union between a man and a woman,

and abortion there is illegal. Those two issues have been left to local governance in Northern Ireland, but the government there collapsed in early 2017, creating a power vacuum that's remained unfilled for over two years. Members of British Parliament said that as long as the deadlock there persists, they have an obligation to step in. British lawmakers voted overwhelmingly to push both same-sex marriage and abortion on Northern Ireland come October if a local government there isn't assembled. California is now offering Medicaid to illegal immigrants between the ages of 19 to 25 if they make a low enough salary or no money to qualify. According to CNN, California is the first state to offer older young adults who are illegal immigrants this kind of health care benefit. And how will the Golden State pay for this?

Well, California brought the individual mandate back, and now California adults must have health insurance or pay a fee. That fee will go to funding health insurance for young adult illegal immigrants. Well, the left has fought tooth and nail to keep the citizenship question off the 2020 census, but it turns out the U.S. public wants it. In fact, a new poll from the Harvard University Center for American Political Studies and Harris found that 55% of Hispanic voters approve of asking residents on the census whether they are citizens. 67% of all registered voters approve of that question, and that includes 88% of Republicans and 52% of Democrats. The Supreme Court recently ruled that the Trump administration could not add that question based on its proposed legal rationale of enforcing the Voting Rights Act.

Next up, we'll feature Daniel's interview with Richard Vedder about college costs and free speech on college campuses. If you're tired of high taxes, fewer health care choices, and bigger and bigger and people, bigger government, it's time to partner with the most impactful conservative organization in America. We're the Heritage Foundation, and we're committed to solving the issues America faces. Together, we'll fight back against the rising tide of homegrown socialism, and we'll fight four conservative solutions that are making families more free and more prosperous. But we can't do it without you. Please join us at heritage.org. Well, I'm joined now by Richard Vedder. He senior fellow at the Independent Institute and author of the book Restoring the Promise, Higher Education in America.

Mr. Vedder, thank you for joining us. Delighted to be with you, Daniel. So, you know, lots of younger folks, I guess in my generation and younger, are saddled with student debt. I don't want to ask you about that. We often think of student federal aid as a good thing, something that helps us afford college. But you write in your book that government aid actually contributes to, the problem. Can you explain that for us? Sure. When they started the student loan programs around 1970 and they grew very large

in the late 70s, an extension of the Student Loan Act that provided this money, when this happened, colleges said, aha, kids are going to be able to afford college more than be before so we can be more aggressive in raising our fees so colleges starting in the late 70s started to raise their fees they used to go up a little bit more than the inflation rate maybe 1% a year more than the inflation rate now they started going up far faster 3% or more faster in the inflation rate and if you compound that over 40 years which is the amount of time that has passed since then We're now paying, kids are now paying about double the tuition fees they would have paid if that had not happened. So the tuition fees in America have been pushed up by the student loan programs, I think. Bill Bennett, who was a secretary of education, wrote an op-ed in the New York Times of all places in 1987, where he made that point. And a lot of people poohed it and said, ah, that's not true. but the research from the New York Fed and the National Bureau of Economic Research

has validated what Bill Bennett said. Wow. So would you say government intervention really is the key driver, the main driver of tuition these days? I mean, we see it tuition every year going up. It has been. Now, in fairness that in light of recent developments, tuition fees are starting to rise less rapidly,

and schools are desperate because enrollment, have been falling. Fee's went up so much that college became prohibitively expensive for some people, particularly low-income people, saw these massive sticker prices, and they just didn't apply, in some cases, to college. So the irony of it is, is we put in student loans to help mostly low-income people, supposedly. And the reality is the low-income people have been scared away from college more than the affluent or middle income or upper income people. So I call this the law of unintended consequences. Things turned out to be just the opposite of what the government intended.

Do you think there's any hope of reversing that with federal policy? Well, it's going to be tough because our vested interests are always going to fight change. If we did things right, we would start reversing that. And we could whittle away at it. We could limit student loans the number of years you could borrow. We could limit it to only undergraduate education and not expensive graduate education. We could cut out something called plus loans, which are loans often made to parents of students. And we could also make the loans more on a commercial basis.

That is, you don't get the money unless there's some reasonable prospect that you're going to graduate. you've got to have a minimal academic standards. There are a lot of things we could do to improve the system, but we need to start doing those things. I want to ask you also about the issue of free speech on campus, which is increasingly an issue that even the president has addressed. You know, back in the 60s, the sort of young, new left on campus were championing free speech. And we can speculate as to why.

I mean, it certainly helped their voice. but now that they have a monopoly on the university, it seems that they're more in favor of shutting it down. Just historically, I mean, I'm curious about when this started. When did free speech really start getting shut down on campus? Is this a recent phenomenon? Well, you know, you could argue that free speech has been closed down on campuses since the 15th, 16th century.

you know, Galileo wasn't allowed to say what he wanted to say. Right. And faced consequences. But when the Enlightenment came in the 18th century, the idea is that free speech is liberating. It improves the mind, it improves the economy, and so forth. And we had the classical liberal revolution that is what made us what we are today as a nation and as a planet really, a wealthy, prosperous place. All that started way back then.

And then we were getting rid of barriers to free speech. The idea is enhancing free speech. In the last, we had in the 1950s some restriction on free speech, but in what was called the McCarthy era, where Senator McCarthy, who was, most people would say He was a conservative Republican, but I don't look at him quite that way. He was fiercely anti-communist, and we had loyalty oaths that some professors had to sign in order to have jobs as teaching and so on. So we've had episodes in American history where government has interfered with a process of education to impose certain restrictions.

That's coming back again. It's not so much the government. But in some sense, the government is enforcing it, I think, because diversity of ideas is not part of the agenda of the welfare state. And indeed, the agenda of the welfare state seems almost to be the opposite. We all have to think alike because there is a progressive way of thinking. And that problem has grown, I think, gradually since the 80s and the 90s. but it has certainly reached a crescendo level in the last decade or so. But again, if the federal government weren't in the higher ed business at all,

which essentially they weren't before 1960 or 65, I don't think we would be having these problems. Or at least we wouldn't have them at the level of severity that we do. Because colleges would be competing for students without subsidies from the government, there are consequences when you turn people off. And a lot of these protests have turned people off. Look at Evergreen State in the state of Washington where they went wild with protests,

and at one time we're even telling certain white students that they couldn't go to campus, you know, because... And what's happened there, dramatic decline in enrollments and so forth. and I think the American people, by and large, have a different set of values with respect to these things than is prevailing in the collegiate communities. Schools like Yale get away with murder in this regard. For one thing, they have huge endowments, so no matter what they do, they're sort of insulated from the market.

and we need to let market forces work more. And the biggest single thing that would help that is for the government to get out of the higher education business. Yeah, we saw a few years ago at the Missouri state, the Missouri controversy, you know, with the professor getting fired because she was involved in the physical confrontation. I mean, they saw a drop-off of students.

Dramatic at Missouri. several thousand they've had to let go a number of faculty members and whatnot and the irony of it is a secondary effect is appropriations on the part of the state government for the university have fallen significantly because the legislators were fed up with this rightfully so i might add in this case uh and so protesting is costly to universities. But they feel they have to allow it because they're being intimidated by a small group of students, sometimes not so small, sometimes medium size group of students on some of

these campuses. And it's time that we sort of stand up to this and one way to do it is to threaten the removal of federal funds. President Trump intimated as much in his recent executive order.

Yeah, that's, he did. Sorry, we'll have to edit this. Last question, I just want to ask you. We've had some members of Congress talking about how college, they've kind of been turned off by the way the universities have gone and are saying that, you know, college isn't for everyone. It's not as good as it's, you know, cooked up to be. We need to consider trade schools, look at that.

those and I think a lot of conservatives are interested in that because it would break up the monopoly that among other things is indoctrinating a new generation of people. So with that, with the college costs and everything that goes into a four-year university, do you think it's still worth it for young people to attend the four-year college? There are some people that benefit from a four-year college and will continue. There are things that colleges do that some people will benefit from. And part of it is vocational. You know, they'll develop credentials that make them look good to law schools and look good to employers and so forth. And so there are some students, some people for whom this is true. But there's a large group of students for whom this is not true, or who

drop out or fail. 40% of the kids drop out. Another 40% graduating and they end up doing jobs like being a barista or working in a Walmart or Home Depot or something like that. And

so the risk of going is rising. The risk of going to college. So is it less risky to be trained to be a welder or a plumber? Yes. I mean, even there you can fail. But if you fail, the consequences are not as great.

You don't have four years of schooling, you have less money involved. You make a lot more money welding. And you make more money welding. So I generally wish government generally get out of the education business. But if you're going to be in the education business, I think it would be smart to turn some of our resources away from the traditional universities towards these kind of programs, a vocational education. which, by the way, 50, 75 years ago, we did have a more vibrant vocational education program in America,

and we got away from that because we told everyone, college is for all. You have to go to college. That was a very bad advice, and we're reaping the consequences of it now. Well, the book is called Restoring the Promise, Higher Education in America. Richard Vedder, really appreciate your time. Thanks. Do conversations about the Supreme Court leave you scratching your head?

If you want to understand what's happening at the court, subscribe to Scotus 101, a Heritage Foundation podcast, breaking down the cases, personalities, and gossip at the Supreme Court. That plugs to a less than 15 seconds. That's not too much. Yeah, Fox and Friends, that's the audio from quite the City Council meeting.

Minnesota Town St. Louis Park's City Council unanimously voted in June to stop saying the Pledge of Allegiance during meetings, according to Fox News, although they left open saying the pledge at other times. Council member Tim Brosson said at the time, we concluded that in order to create a more welcoming environment to a diverse community, we're going to forego saying the Pledge of Allegiance before every meeting. Another council member, Anne Mavity, told the Minnesota NBC affiliate, it. Not everyone who does business with the city or has a conversation is a citizen. They certainly don't need to come into city council chambers and pledge their allegiance to our country in order

to tell us what their input is about a sidewalk in front of their home. End quote. But, as you heard, not everyone in St. Louis Park is happy. Reportedly, around a hundred folks showed up earlier this week during a city council meeting, unhappy over the decision to abandon the pledge. So Daniel, what do you think? So I can, I'm basically against this, but I can see where they're coming from. Like if you're dealing with local people who are not Americans and who don't intend to become Americans, maybe they're living here for a few years. Like, yeah, they shouldn't have to say the Pledge of Allegiance,

but it's just not a big deal. Like, why can't you still have the Pledge of Allegiance and maybe they just not say it? I don't really get that. But I think it does speak to the larger issue. on the left, that is, they don't really want assimilation. They want to create pathways to citizenship, but they don't really define what citizenship is and why it matters and what it is to be an American.

You know, in that clip that we just quoted, they talked about there being a diverse community. Well, America is diverse. Like, America itself is an extremely diverse country. So I guess I don't understand why pledging allegiance to America is a problem if America itself is extremely diverse. Yeah, and actually I got to disagree with you on this one. I think that I don't really understand where they're coming from the sense of I'm not aware that it was ever mandatory to recite the pledge yourself. And I mean, I think I would assume you can't be a city council member unless you're a citizen.

But I also think, you know, if I was ever to live abroad for a few years, I would. I would have no problem with, you know, Spain or England or whatever, you know, reciting their anthems or their whatever their equivalents to the pledge are. And I think that to me, this more smacks of sort of that thing in the left you hear about, oh, I'm a citizen of the world. And it's like if you're a citizen of the world, in some ways, you're a citizen of nothing. Like, you have to have allegiances matter. And as I recall, I can remember a book I was reading about Denmark recently, but, you know, they were saying like there's a lot of civic pride there. I think it's a healthy thing in a nation. That doesn't mean that you, you know, whitewash the past or anything.

But to me, this just feels like, yes, it's only one city and I don't know their percent of immigrants or whatever. But it just feels like another really unnecessarily hostile attitude toward patriotism. Yeah, I'm kind of surprised they voted unanimously. And I think city councils have got to understand that this is going to really tick off locals more than it is going to appease any minority. group. Like, you're just whacking a hornet's nest when you do this. But so, I mean, yeah, I'm against, I don't think we disagree. I don't think, wait, how did you think we disagree? Well, you said you understood. You were, you sounded a little more sympathetic than I think I am. Because like, you know, if, if they were requiring that everyone say the pledge of allegiance, you know, and I can see,

like, I can see it being awkward, like, oh, there's a group of, there's a family from somewhere else. Like, are you going to make them say the pledge or make everyone say the pledge? But, but, but again, it's just not a big deal. Why can't there be the pledge and not everyone has to say it? Right. And I think sometimes we worry too much about awkwardness. And I would almost relate it to, you know, like the time I went to your Baptist church. Like you were like, hey, they might say some things that offend you.

And I was like, cool. I give you the trigger morning. Yeah. And they didn't say anything that offended you. No. You don't have to come back another Sunday. They might. But I mean, I think there's something like I wouldn't have expected or wanted.

your church to compromise to make me feel comfortable. Like I was the one who chose to enter that space. Sorry, now I've made it really personal for you. But I mean, I think there is like, like you lose something. You really lose something when you stop doing things. Like you stop saying the pledge and you stop. And it's, I think especially tough because you think about what Alexis de Tocqueville, you know, said about America and how the localities, the associations,

all of that was so important. Like a city council, it's very small, but it also. So that is where most people experience government. That is where they deal with the government. That is what they have to do. I mean, most conservatives would like to see that area of government become more or not less powerful. And I think it's very revealing. So how would you respond to those who would say, well, you don't have to be a U.S. citizen to be a full-fledged member of this community.

And you're still partaking in the community in a real way. like you are almost a citizen of the community, but not of the country. I would say you can't be a full-fledged member of the community without being a citizen. And so far as, like, of course, most importantly, you can't vote. I mean, that's a huge part of being. And I would not ever propose extending voting to non-citizens. I think that, you know, I have a sister who lives in Spain, and I don't know what she's going to do long-term. But, like, there is.

Sometimes it's kind of weird for her. But that's a choice she made. I don't think, frankly, one of the reasons I would never want to be an ex-examination. Pat long term is I don't like that sort of in between. I mean, I guess you have lived in other countries, so you might be able to speak to this more than I have. But, yeah, I don't think you're a full member of the community. And I think that when you come to the United States, just as if I came to another country,

you should expect some degree of awkwardness if you don't become a citizen. I don't think that calls for cruel to you, like demanding an individual do the Pledge of allegiance before you fix their sidewalk. but there's no suggestion anything like that was occurring. Yeah, and I mean, I generally agree. I just don't think being a citizen of the country is quite the same as being a member of the local community. But, I mean, when you think about what America is,

I mean, this is not like signing up for the Chinese, you know, you're going to be a Chinese citizen and member of the Communist Party. Like, when you think of what America is, it's this, you know, multicolored quilt, you know, this melting pot of a country. that's inspirational and that itself should never be, that that itself is never exclusive. Right. And I think also, you know, I mean, obviously this is a nation of immigrants. You know, I've seen my own ancestors' records at Ellis Island.

Oh, wow. I'm grateful that this country is open to immigrants. But I think that, you know, with that came a genuine love for America. And I think if you have such distaste for America that hearing the pledge bothers you, like, frankly, you shouldn't be here. Well, and I think most immigrants here, even the illegal immigrants who want to become legal and citizens, like, they are perfectly happy to praise America for what it is and to become American. Like, I think it's just the political elites that have the streak of anti-Americanism. I could see that being true. I mean, like that, you know, news story you did today where over half of Hispanics don't mind citizenship being asked on the census.

Yeah. You know, I mean, years ago. It's not a big deal. Right. I mean, years and years ago, there was a poll asking Native Americans if they thought the Washington Redskins name was offensive and the vast majority did not. I don't know if that's changed in probably two decades since that poll was taken. But, yeah, sometimes I definitely think the left assume something without maybe consulting

the actual community. And I agree that you may well be right. And immigrants might be largely in favor of the Pledge of Allegiance. I certainly hope that they are excited about their new country. Yeah. Well, we'll leave it there for today. Thanks for listening to The Daily Signal podcast brought to you from the Robert H. Bruce Radio Studio at the Heritage Foundation. Please be sure to subscribe on iTunes, Google Play, or SoundCloud, and please leave us a review or rating on iTunes to give us any feedback.

We'll see you again tomorrow. You've been listening to The Daily Signal podcast, executive produced by Kate Trinko and Daniel Davis, sound design by Lauren Evans and Thelia Rampersad. For more information, visitdailySignal.com.