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Politics, Economics and Learning: Understanding Education Policy in a Changing World

Among the many areas of policy that have become major sources of polarized political discourse in recent years, few have been as prominent as higher education. Once largely a matter for states and the private sector to deal with, college and university tuition costs have become a central point of discussion at the federal level in the United States. Critics of the current state of subsidized higher education appear on both sides of this political debate. On one side are fiscal conservatives who prefer a free market approach to higher education, while the other side tends to favor increased subsidies or tuition-free college policy. Here is an overview of what everyone should know about politics and economics in modern education policy.

History of the Current American System

Much of the modern subsidy infrastructure of the United States was established by the Higher Education Act of 1965, a part of the Great Society reforms under President Lyndon Johnson. This act created the current system for the extension of federally guaranteed loans at low interest rates to college students. It also increased the amount of money earmarked for federal education grants, creating the early groundwork of what have become known as Pell Grants.

Despite this increase in funding, college tuitions continued to rise and present economic difficulties for low-income students. By the 1980s, a school of thought that federal subsidization of higher education had actually fueled these increases by eliminating downward market pressure on the borrowing power of students had emerged. This line of thinking would eventually become known as the Bennett Hypothesis, named for Ronald Reagan’s Secretary of Education, William Bennett.

Since Mr. Bennett’s time, further increases have been made to federal education subsidies, with costs continuing to rise. Whether or not this confirms the Bennett Hypothesis, however, is still a question of great debate among economists. What is certain is that the increases have been both continuous and rapid. According to the Bureau of Labor Statistics, the average cost of college tuition increased by 63 percent between January of 2006 and July 2016 alone. As a result of these soaring prices and the massive amount of debt taken on by American students to pay for them, educational funding policy has appeared as a central facet of modern political discourse.

Pathways to Change: Legislation and Democratization

At present, vast changes are taking place in the world of post-secondary education. Inside the political sphere, more and more jurisdictions have implemented enhanced financial support for students. Early in 2017, New York became the first American state to offer tuition-free public college to its residents, and a similar program has been implemented at the local level in San Francisco. On a national scale, the debate over tuition funding and free higher education received extensive coverage during the 2016 presidential election.

The private sector, too, has succeeded in finding ways to improve the ability of students to learn regardless of their income level. Online study resources, such as the well-known crowdsourced learning platform Course Hero, have helped to enhance learning and success rates for college students around the globe by improving access to information. Taking this concept to the next level, many universities now create MOOCs, or massive open online courses. These courses, hosted through online platforms, allow students to learn from top academic professionals for free. Though they do not carry the weight of a college degree, credentials from MOOC courses are gradually gaining acceptance among human resources professionals, particularly in the entry-level tech sector.

With both public and private entities exerting pressure on the traditional educational model, there is little doubt that significant changes are on the horizon. One of the developments that has already occurred is a greater shift toward online college offerings from for-profit private universities. A 2016 report found that, in just three years between 2013 and 2016, the number of private colleges offering online courses had increased by eight percent.

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  1. sarcrilege

    Non-dischargeable and easily obtainable student loans made lifetime debt slaves out of young people.

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  2. macpatton

    Thanks for the background as I was a beneficiary of that system. By the time my wife and I graduated in ’83 we were $8k in debt. It would have been much more but for the Pell grants and low junior college costs. Junior college was $3 a credit and the university was $12 a credit. Even so it took awhile to pay off three loans. In my opinion there needs to be a way for motivated people, that are living hand to mouth, to get and education without accumulating large debt.

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