From student debt “cancellation” (i.e. taxpayer-funded bailout) to outright socializing higher education, Democrats increasingly support more government intervention in response to the out-of-control cost of college. But we just got even more evidence that government meddling is what produced this problem in the first place.
A new study examined the expansion of federal loans for graduate education that occurred in 2006, which basically removed the limits and let many students borrow up to the full cost of attending. It compares the trajectory of different students who were and weren’t affected by this change to analyze the impact it had. The results are shocking.
The massive expansion of subsidies did not accomplish any of the goals its proponents promised. It had “no effect” on graduate enrollment, meaning it did not enable more students to attend graduate school (suggesting that the previous caps weren’t prohibitive for many people). It also had “no effect” on the “racial and gender composition” of the graduate student body, despite promises that expanded subsidies would enable more minorities to attend grad school. Further, it had “no effects” on either student graduation rates or their future earnings.
That’s right: The benefits were literally nonexistent. Meanwhile, the costs were quite significant.