Here they come again. The well-intentioned feds are extending a helping hand with last month’s release of the “College Completion Tool Kit,” a document listing seven strategies for state governments to increase their college graduation rates. It is another step for the Obama administration to achieve its goal as stated in this year’s State of the Union speech: By 2020, the U.S. will have the highest proportion of college graduates.

College graduation rates and the national economy

However, the goal reflects a prevailing, misguided assumption that a scarcity of college graduates threatens U.S. economic prosperity. According to the “College Completion Tool Kit,” an unacceptable 42 percent of adults ages 25 to 34 in the U.S. have a college degree.

South Korea, meanwhile, has the highest percentage of adults ages 25 to 34 with a college degree at 58 percent. Yet how much this rate translates into South Korean economic prosperity is difficult to ascertain. Nor is South Korea’s economy dramatically outperforming the United States economy.

In general, there is much more to a country’s economic prosperity than its proportion of college graduates, such as ensuring a public policy climate for free market enterprise to thrive. Merely tying college graduation rates to the national economy can be an attention-grabbing sound bite.

College graduation rates and individual economic prosperity

Likewise, indicating that college graduates have, on average, higher wages, can garner political support for government investment in higher education, but correlation is not causation. Possessing a piece of paper, called a bachelor’s degree, does not guarantee a high-living wage.

In a previous Chimes article, I mentioned a Center for College Affordability and Productivity study, which found that 35 percent of college graduates are underemployed with jobs that do not require a four-year degree. It also found that although the number of college graduates has grown between 1992 and 2008, about 60 percent of this increased population of graduates hold lower-skilled jobs that do not require a college education.

On the other hand, creativity and a strong work ethic are two of many ingredients necessary for personal economic progress that are not necessarily learned in a college classroom.

Current effects of government aid for higher education

Meanwhile, current federal aid for higher education adversely gives incentive for people to attend college when, in fact, they are not ready for college or may be better off pursuing a different path towards their career. As mentioned in a New York Times article, “Although three-quarters of today’s young adults pursue some form of post-secondary education, fewer than half earn a certificate or degree within six years of enrolling.”

Worse, as expenses are funded less by students and more by third-party taxpayers, colleges compete to attract more students and the taxpayer subsidies that come with them. Colleges consequently spend more on non-education-related goodies, such as athletic programs, lavish amenities, or big-shot professors who are more interested and adept at research than teaching.

Colleges then raise tuition to cover the new spending rather than reining in spending. Only recently have more students begun to feel the financial pinch because drying government aid can no longer insulate them from increasing expenses.

The dangers of more government aid for higher education

The more egregious component of the “College Completion Tool Kit” is the increase in federal intervention. States will be eligible to apply for federal grants to help them work towards raising college graduation rates.

But new federal grants are essentially more third party subsidies that have been contributed to rising tuition. Besides, more federal aid may not be a prudent idea, given the weaker-than-believed effect of college graduation rates on economic well-being and the present need for the U.S. to get its fiscal house in order.

Moreover, the “College Completion Tool Kit” is potentially another burdensome federal encroachment upon colleges and state governments because a precondition to win funds is complying with federal demands. Resisting the opportunity for more money may be difficult for cash-strapped states, even if it means more regulatory burdens.

Regardless of how much the feds want to help, their wholesale policies usually unintentionally exacerbate the original problem or create new ones. Their tool kits, unbeknownst to them, often include a monkey wrench that clogs and clutters things. It is time to stop looking so much to Uncle Sam and help each other out ourselves.