Affording the dream.(on the right)

NEW YORK, MAY 4

THERE is one very undreamy constituent of the American dream, and that

is the high cost of college education. The marketplace rule is that competition reduces prices. Well, the marketplace rule is hogwash when it comes to higher education. The explanations for this are multifarious. 1) More Americans, especially in the two decades after the war, decided to attend college, making for great rises in demand. 2) Choice colleges are hotly competed for, giving them a relative immunity to market pressures. 3) Ever since the Fifties, teachers have been demanding a living wage. 4) College perquisites increased; academic offerings for students with exotic interests are understandable, but some college administrators think themselves delinquent if they do not offer a course in jujitsu.

The free marketeer is tempted to address the problem with the kind of fatalistic glibness that makes us so offensive to so many fellow citizens. He will say: So what? There is the demand--a lot of students desiring a lot of things. And there is the supply--4,140 colleges and universities nationwide. Obviously these schools would not survive if the money needed to operate them were not provided. So what we have arrived at is an amalgam of contributors to the students' needs.

Primary, of course, are parents. Those who have it will put up cash. Those who do not will take out another mortgage on their house. Next in line are the students themselves. Many begin their contributions by undertaking school service: waiting on tables, mowing lawns, tutoring students with special problems. Alumni join in by subsidizing scholarships.

Then there are the institutions that make loans. Loans, at the most basic level, are made to the individual by the bank, with some reference to collateral. All that the student can offer is future payments--when he has graduated and begins to accumulate a little surplus.

But quickly there came interventions in the lender-borrower pairing. Colleges themselves, desiring to increase enrollment, made loans, some of them at sharply reduced interest.