Education in America desperately needs funding, and Obama, despite his words, will not solve the problem.

In a speech at Ann Arbor, Michigan, Obama proposed to increase the Perkins loan program from $1 billion to $8 billion, create a $1 billion grant competition, and a $55 million competition. Obama promised to make the pricing of school more transparent and to cap student loan payments at 10% of a student's monthly income after graduation.

In theory, these things sound good and Obama was understandably met with large rounds of applause. In reality though, they will create more problems than they will do good.

The most significant promise is the $7 billion dollars in more student loans. America is in the biggest credit bubble since the Roaring 20s, leading to this most inequality in decades, and more loans are not going to help the problem, regardless of the seemingly favorable terms.

The $1 billion dollars in grants, assuming there are 17.5 million students enrolled in post-secondary education in the US, equals $57.14 per post-secondary student. Let's take a low estimate that the average yearly tuition at an American college is $10,000 (many colleges charge much more), then Obama's grant promises to cover 0.57% of the cost of one year of American college. In this context, the $55 million competition is not even worth mentioning. Funding in the form a competition is a very obvious example of promoting the needs of a few over the needs of many.

The grant funding is a token to please ignorant voters, while avoiding making the needed ethical commitment to deal with one of America's most pressing problems.