HIGHER EDUCATION BUBBLE UPDATE: The Regulatory Goose Chase Degrading America.

American colleges are diverting more and more money away from serving students and instead using their funds to develop a massive D.C. lobbying force. . . .

Federal mandates impose huge costs on colleges, just as they do on other industries, and federal subsidies (student loan programs as well as direct funding for colleges) are a crucial source of colleges’ incomes. It’s small wonder then that as the federal government becomes increasingly vital to their financial health, colleges devote an growing portion of their resources toward influencing federal officials. The result, of course, is the kind of regulatory capture we see in so many federal programs, where industries organize to ensure that the regulators serve their interests rather than the needs of the public.
And, of course, regulatory capture exists side-by-side with expensive regulatory compliance, which colleges can’t avoid. Despite the lobbying by higher ed institutions, there are many ways that federal involvement in higher education forces colleges to divert attention from what ought to be their core mission and apply it instead to regulatory compliance. According to one study, colleges spend $27 billion dollars annually complying with a whole range of regulations, including those issued by thought-policing Title IX bureaucracies and all the other well-paid bureaucrats (whose numbers continue to grow).

And all of that in turn makes the colleges even more dependent on federal subsidies than ever, so they hire more lobbyists to get more power over legislation and implementation. In industry after industry, this kind of wild goose chase consumes more and more of America’s energy, attention, and money every year—leeching the vitality out of our system, degrading the performance of key institutions, and making government less effective even as it keeps getting bigger.

How long it will continue and how much more damage it will do is anybody’s guess. But ultimately U.S. policy is going to have to undertake a serious change of direction, or the country will slowly strangle itself.

The higher ed sector is hugely dysfunctional, and heading for a reset. Be warned.