Summary of Richard Vedder

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4 February 2013 The Failure of Financial Aid Author of ‘‘Federal Student Aid and the Law of Unintended Consequences,’’ Richard Vedder is the Edwin and Ruth Kennedy Distinguished Professor of Economics at Ohio University and director of the Center for College Affordability and Productivity. He has written for the Wall Street Journal, National Review, and Investor’s Business Daily, and is the author of several books. Vedder adapted this article from a speech he delivered at a Hillsdale College event on May 2012. In this article Vedder states that financial assistance programs are putting a strain on the economy and are failing for all intended purposes. Vedder opens by stating that financial assistance programs are complex, costly, not efficient, and they do not work for what they are intended. He feels that they are dysfunctional and are one of the worst among federal programs in which there are many that he declares are bad. Vedder says that there are three common grounds that the government uses to rationalize the existence of these financial assistance programs. The first is that making sure that more young people go to college will have a positive effect for our country. According to Vedder this is an almost impossible claim to measure and the money spent on higher education through these programs exceeds the economic growth. The second rationalization is that higher education promotes equal economic opportunity.Vedder states that over the last four decades even though the number of adults with a four year degree have tripled, income equality has actually declined.Vedder says that “ In reality, higher education does not promote income equality ” Vedder (2;4). The third rationalization is that not enough students would go to college if there were no federal loan programs because private market loans to students are defective.Vedder states that there should be

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