Just as newspapers are seeing their circulation drop as readers discover that it is possible to get unbiased news conveniently for free on the Internet, so too students are beginning to realize that technology is making it possible to get an excellent unbiased education online without spending tens of thousands of dollars in the process.  The great problem in education today is that educators and government bureaucrats are in a massive state of denial about this.  


As government employees, educators and bureaucrats wield large amounts of authority and power.  They tell students and their families where students can go to school, for how long, under what conditions, etc.  They grade students, and set academic standards, etc.  They certify who is qualified to teach, etc.  They are in a privileged position of authority for lobbying for their special interests in Congress and in the state legislatures.  In short, educators and bureaucrats use their positions of power and authority for their own benefit and convenience and job security.  It is impossible to deny that this conflicts seriously with respect to their obligations to students.


Remarkably, while this conflict of interest is in plain view, educators and bureaucrats typically bristle at the suggestion that they are so low minded as to put their own interests ahead of those of students.  Nevertheless, they do.  If a student and his family go out to eat, and if they are not satisfied with a restaurant’s menu and its prices, then they are free to walk across the street to another restaurant.  In today’s high schools and colleges, students and parents may not like the menu.  They may not like the service.  They may think that the cost of the meal is exorbitant.  None of this matters.  In a government run restaurant system, restaurants exist to provide lifetime jobs for government employees who use the power of government to protect their jobs.


The recent college student loan scandals are the result of denying that a conflict of interest exists between students and educational institutions.  These scandals actually represent two separate conflicts of interest.  The current focus of investigation is on the relatively minor conflict of interest that exists between students and corporate interests.  As the student loan scandals reveal, conflicts of interest with corporations create problems for students when college financial aid offices are influenced into favoring banks and student loan lenders at the expense of students.  Colleges and universities face other similar conflicts of interests in their relationships with food service and beverage companies, cellular phone providers (***see footnote), education associations, auditing and accounting firms, etc.


KEY POINT:  While conflicts of interest with corporations and associations are serious, they are not the major conflict of interest problem for students.  The truly important ---- and widely ignored ---- conflict of interest in the current student loan scandals involves the fact that it is in the financial interest of college financial aid offices to maximize the amounts of student loans themselves.  To do this, colleges and universities raise the cost of an education to the maximum.  Then they soak students with student loan debt to pay for inflated college expenses.  Then in the following year they repeat the cycle all over again.  Consequently, the student loan scandal problem is not really so much about a difference of half of a percentage point on interest rates for a $20,000 or a $30,000 student loan.  It is primarily about the $20,000 or the $30,000 student loan itself, which directly benefits colleges and universities and which is where all problems with student loans begin.


This is the elephant in the middle of the room that everyone ignores.  The reason is clear.  Many educators and bureaucrats pretend to be concerned about conflicts of interest in education, but their efforts to correct conflicts of interest are shallow and deliberately misguided.  A genuine concern for the best interests of students would lead to a much better, more economical, less expensive, financially disciplined approach to educating students.  It would also mean that educational programs would be forced to compete for students.  


Competition is what leads to excellence, including excellence in education.  Openness to competition indicates that an enterprise is free from any conflict of interest, and that it is confidently pursuing the best interests of consumers.  This is why free markets are so efficient at providing what consumers want.  Now, for the first time ever, new technologies make it possible for free, privately funded, Internet educational programs to compete effectively with public schools and colleges and universities on the basis of quality, convenience and cost.  With Internet educational programs free Internet access to the finest teachers and professors is widely available in an attractive, convenient, transparent, economical, and readily accessed format.  


FOOTNOTE


Cellular phone services for high school and college students illustrate the remarkable blindness that exists to conflicts of interest in today’s educational systems.  A portion of the revenues from a cell phone service can easily be used to fund an excellent, free Internet high school and college degree program.  A cellular phone service like this would be enormously popular with millions of high school and college students and their families.  Individuals who are working in today's educational systems do not even begin to consider possibilities like this because it conflicts with their own self interest.