Using Carrots and Sticks to Improve American Colleges

Abstract

An unintended consequence of making access to college an entitlement readily available to all high school graduates is that serious study in high school has become optional—even for those intending to apply for college admission. Without an incentive to study diligently, many students are disengaged in high school and, as a result, underprepared for college. Some freshmen arrive at college thinking that having fun is the main reason they are at college and that the pursuit of knowledge should be available for when they have nothing better to do. Before World War II academically excellent students from families unable to finance college for them could apply for competitive scholarships. Scholarships mutated into “financial aid” when the GI Bill of Rights financed college for discharged veterans of World War II. Pell grants should continue to be available to youngsters who want to go to college even if they are mediocre students—provided they can persuade a college to admit them. Mediocre students are being given a chance to become “late bloomers.” Loans, however, are expected to be repaid, and mediocre high school students with bad credit ratings are likely to default on their loans, causing serious financial problems for themselves and financial complications for the American economy. Targeting loans to students with good prospects for repaying them is more prudent financially and makes more sense educationally.