I recently came across an article in The Economist social class and how social class is a strong determining factor in the level of education achieved by children. It discusses non-marital birth-rates at varying levels of education along with differing levels of parental involvement based on social class. Ultimately, the article concludes that children raised in the highest quarter of income level who received low 8th grade test scores were just as likely to graduate from college as those with high test scores in the lowest quarter.
In terms of managerial economics, it's not difficult to connect the populations' level of education to the amount that the government has to pay in social welfare programs. With that in mind, also note that currently student loans are not subsidized and students are ineligible for food stamps without working 20 hours a week making the decision to return to school more difficult for those with low income. While there are grants available, they are limited. My question is this: is the government losing money in the long run by making its education department profitable to the extent that it is?