Occupy protesters, Rick Santorum, Barack Obama and college students everywhere agree. College costs are too high and student debt unbearable. They only differ in what to do about it.

The university-generated buzz here is the same as everywhere. Public universities are being squeezed by state governments, forcing students to pick up more of the cost. But there’s more to it than that.

It’s true that state government hasn’t had much money to spread around lately, but some of the proposed solutions to the shortfall aren’t very smart. Equal per-pupil funding across the board may be more “fair”, but otherwise doesn’t make sense.

Performance-based funding at first glance appears more promising, but such well-intentioned schemes seldom work out. They become just another layer of bureaucratic control with universities themselves devising most of the hoops they must jump through.

From a longer-range perspective, our universities are hardly starved for resources. When American culture embraced the notion of college-for-all who-qualified in the middle of the last century, the funds began to flow. Just since the early 1980s, the costs of higher education have quadrupled.

As most families found themselves priced out of the higher education market, government stepped up. Total federal support of higher education in 2010 soared to $169 billion, up from $64 billion a decade earlier. States mostly continued their subsidies and private contributions remained robust. Yet tuition continued to soar also, with student loan debt doubling to $1 trillion over the same period.

What happened to this outpouring of well-intentioned largesse from Americans hoping to democratize economic opportunity or get a leg up in life? Harold R. Bowen, a former president of three colleges, explains the business model this way: “colleges raise all the money they can and spend all the money they can raise”.

So we got ambitious new building programs and we got accommodations and food service more likely to attract cash cows, er, students. Money was lavished on athletic facilities and administrative costs soared. The professoriat determined that six hours of teaching per week was the upper limit of a full load. It’s sweet being in an economic sector with soaring demand and no competitive pressures forcing new efficiencies.

But what we didn’t get was better productivity. College completion rates actually fell, especially for males. Worse, many who did graduate hadn’t learned much. They couldn’t write well, nor were they broadly educated. Students in majors like anthropology and sociology were especially likely to find little market demand for their expensively obtained credentials.

Now the college-education economic bubble is in the process of bursting. Students are starting to realize that the worth of a college education has been overvalued for many. They would be better off doing something else with their time and money.

Meanwhile the specter of millions of alumni struggling to pay off student loans with their income as a waiter or parking lot attendant has thrust the issue into the political arena. In his State of the Union address, President Obama weighed in with a proposal to — you guessed it — spend more money!

This time he wants to condition aid on a federal “scorecard” that is yet to be devised. He wants to beef up federal subsidies of college loans, already at $176 billion in 2012. He wants to give more to the states, again with strings attached. Of course, all this tweaking ignores the reality that unstinting federal dollars have played a major role in driving up college costs in the first place.

The president also wants to fund a competition to discover new ways to increase productivity. But there’s already a force fostering such innovations. It’s called the market and it promises to change the face of higher education.

Western Governors University, for example, has developed a model in which students get academic credit for performance, not seat time. Students can acquire competency through reading, tutoring or outside experience. MIT is offering a credential called MITx to students who can show mastery of subjects taught in free on-line courses.

Big changes are coming to higher education that threaten to make obsolete the gigantic one-size-fits-all institutions that dominate the scene today. Our political class needs to step aside and let it happen.

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