Fox’s Your World pretended to discuss a bill proposed by Sen. Elizabeth Warren allowing students to refinance their student loans a few days ago. But the show chose as its only guest a Fox Business Network host who used his time on the show to argue that government-provided student loans should just be abolished.
Host Neil Cavuto made it clear he knew his guest’s view in advance. Cavuto said right in his introduction, “Kmele Foster says if the government really wants to help, it needs to get out of the student loan business altogether.”
(W)hen the government is subsidizing education, it has the predictable consequence of actually raising the incentive for the schools themselves to raise tuitions. The government is giving a direct transfer effectively to these various universities, and it’s not like they’re teaching new calculus.
You don’t get a better sort of biology when you pay another $10,000 a year for your education. You get the same stuff and the schools tend to build things like new rec centers or get a new foosball table for the dorms. All of that is nice. I don’t think you ought to have a spartan, barren experience where you go to academic boot camp when you go to university -
Cavuto, presumably joking, interrupted: “See, I think you do. I think you should.”
Foster replied, presumably seriously: “Maybe so. And if you get that, then you ought to pay a discount for it and if you want all that extra stuff, then you ought to pay for it out of your pocket.”
“It’s a very valid point,” Cavuto said. But, he wondered, “What happens if we cut back on the amount of lending? Do you really trust the institutions to cut back on their tuitions?”
“If they want to stay in business,” Foster said. “If these schools want to stay in business, if people can’t afford them, they won’t go, and (schools) will actually have to lower their prices, and perhaps focus on academics as opposed to some of these other frivolous programs.”
Cavuto asked, “What about feeding the notion that everyone has to go to college?” Which was really a way of suggesting that we shouldn’t worry if not everyone has the ability to go to college.
Foster was obviously of like mind. He said, “I think there are people pushing back against that now as well.”
Cavuto added, “Over a course of a lifetime, the college grad is going to earn $800,000 more as a result.” But instead of using that as an argument for why people should get a college education, Cavuto used that as an argument for making it harder to do so. He said, “So that strikes me, whatever bumps along the way initially, we shouldn’t have to subsidize them to pay it back.”
Foster agreed again. “Sure, if they make the right choices.”
But what neither mentioned was why student loans are a good deal for all. As Richard Kogan, of the non-partisan Center on Budget and Policy Priorities, explains, the loans turn a profit for the government at the same time that they charge lower interest rates than banks. Kogan notes, “More than 10 million undergraduates per year borrow from the government precisely because it helps them pay for college and comes with favorable repayment options and consumer protections not offered by private lenders.”
Instead, Cavuto gave extra cred to Foster by saying, “Good stuff,” as the interview closed.