Dumb is a good way to describe America's approach to paying for a college education. A college diploma is treated like any other commodity, priced at whatever the market will bear. And the market, historically, bears a lot.
In October, the College Board's annual report on college costs showed the average tuition and fees at a four-year public university had increased 6.4 percent from the previous year, while private schools' costs were up 5.6 percent.
Those disturbing numbers exceeded inflation and past average annual increases. In fact, a separate report last week by the National Center for Public Policy and Education said tuition and fees increased 439 percent from 1982 to 2007, while median family income rose only 147 percent.
Families may complain about the cost of college, but they're willing to pay up because they know the value of a college degree. In a recent Gallup poll for the Sallie Mae company, 96 percent of students and 94 percent of parents agreed that college is a worthwhile investment.
Additionally, 87 percent of students and 74 percent of parents said they would "stretch myself financially to obtain the best opportunity for the future." Ah, that's music to the ears of Sallie Mae, whose very livelihood is built on the dreams of people who need college loans to make their desires come true.
But Sallie Mae isn't alone. There are myriad companies in the so-called financial-aid industry collecting billions in interest payments from students or their parents.
The lament now is that the worldwide financial crisis has withered the credit pool for college loans. But no one is talking about changing a system that requires onerous amounts of debt to obtain a degree.
The whole nation benefits as much as any individual student by having a well-educated population capable of providing the brainpower and workforce needed to remain competitive in the world.
Yet, when a student seeks a college education, the government is more likely to serve him a loan than a grant. And since federal grants are income-based, many in the middle class have little recourse except to sign a loan application.
But the poor are hurt most. The National Center report said the net cost of a college education - tuition, fees, room and board minus financial aid - is 55 percent of the median income for a poor family and 28 percent of the median income for middle-income families.
For either group, that's a lot of cash, enough to discourage many young people from considering college. The loan companies say that's not their fault, that they are merely providing a service. They blame the colleges and universities, which keep raising tuition beyond inflation.
Some well-heeled private schools with big endowments responded to that charge last year by lowering tuitions. But state schools expecting budget cuts in this economy will likely impose tuition hikes next year. And students and their parents will scramble for loans to keep up.