More than 150,000 college students were left without financial help this spring when Illinois ran out of money for MAP Grants…
…Illinois’ Monetary Assistance Program, or MAP, which provides financial aid grants to low-income students. The program ran out of money in March last spring, leaving about 150,000 students – half of all who applied – without help.
That number could grow – this year’s state budget cuts money for the grants by 14%.
Illinois has one of the worst if not the worst budget deficit in the nation, and it’s starting to reveal itself in cuts to public services. Liberals like to signal that they care more about the poor than conservatives, but it doesn’t matter how much the government cares about the poor if the government runs out of money.
In fact, there’s a good chance that the government’s intervention has made the situation worse. In Tuesday night’s third-party presidential debate, Libertarian Party candidate Gary Johnson argued that “the primary reason… college tuition is so high” is due to “government guaranteed student loans” that make “colleges and universities…immune from pricing.” After Green Party’s Jill Stein and the Justice Party’s Rocky Anderson called for “free education,” Gary Johnson retorted, “Free comes with a cost. Free very simply is spending more money than what you take in.”
Now even simply loaning money with no risk of loss creates a distortion in the market, but Illinois’s MAP program is actually a grant, which as far as I understand, like the Federal Pell Grant, means it’s a gift that students don’t have to pay back. This is an even more direct subsidy that helps drive up the cost of higher education faster than inflation (though I’m not sure how the students are “left without financial help” if there are still federal subsidies available – but I’m no expert on this).
A compassionate liberal might argue that we need to provide these grants to low-income students because otherwise they would not be able to afford college, and it’s not fair that only the wealthy should receive the benefits of a college education. You might even argue that it’s a positive investment to help break the cycle of poverty.
I think this sort of argument calls for the Caplan Rule. A few weeks ago, Bryan Caplan blogged about the frequent “what if” questions regarding the potential imperfections of a world with less government intervention. Caplan argued that libertarians should respond with analogous “what if” questions about the actual imperfections of the real world of government intervention.
In this case, the interventionist is asking, “What if the government doesn’t help poor students go to college, and only the rich can afford it?” According to the Caplan Rule, a proper response might be, “What if the government helps poor students go to college, but this drives up the price so much that eventually government can no longer afford to help poor students go to college, and now those students are worse off than they would have been because they’re not getting help from the government and college costs even more than it would have if the government had not been involved in the first place?”
If that’s true, it doesn’t necessarily follow that all government attempts to help the poor are ineffective, or that there aren’t interesting arguments for certain kinds of assistance. But it does mean that low-income college grants, as a method of helping the poor, may actually be detrimental in the long run. You don’t have to argue that the poor don’t need college subsidies because, say, online education is free; this invites the response that a degree is still a valuable albeit possibly irrational signal (does that mean it’s a market failure?), and “what if” a poor person can’t get a job because he doesn’t have that degree? Well, even if the poor do “need” help, “what if” the government’s help ends up hurting?
I suppose some folks might respond that Illinois should simply raise taxes to continue funding this crucial program, but they already tried that. Apparently it’s not working. You might even argue that this program isn’t very costly, especially compared to [X program of less importance], but that’s just part of the unfortunate reality that the government’s interventions are decided by people who are often influenced by other people who lobby for their programs better than you do. This also works against the government’s effectiveness.
Sometimes when a person doesn’t want the government to help the poor, you might assume it’s because he doesn’t care about the poor. But he may very care much about the poor. Maybe he just thinks the government isn’t a very good helper.