Posted on 10/24/2023 3:33:50 AM PDT by karpov
While our country’s approach to all student lending needs a radical overhaul, there is one category of lending that sticks out as especially broken: graduate-student loans. Since the turn of the century, undergraduate lending has increased marginally from $37 billion a year to $43 billion. In contrast, graduate lending more than doubled, from $18 billion to $39 billion a year. Graduate lending has increased so rapidly that it will soon dominate the lending portfolio. The Congressional Budget Office (CBO) projects that, over the next 10 years, undergraduate lending will total $421 billion, while graduate lending will total $522 billion.
Why are graduate loans so bad?
High lending volume is not necessarily a problem. If all that lending were facilitating wise and productive investments in human capital, it could even be a cause to celebrate. Unfortunately, that is not the case. Analyses by Preston Cooper, Jason Delisle and Jason Cohn, and myself have demonstrated that a disturbingly high share of graduate programs are dangers to their students and taxpayers (a “program” is a college, major, and credential combination, such as a bachelor’s degree in nursing from Texas A&M). For example, one potential accountability system, which would punish college programs whose graduates are unable to repay their student loans, would sanction or sunset the majority of professional and doctoral degree programs, as seen in the reproduced figure below.
The poor performance of graduate programs makes the large and rapidly growing volume of graduate lending a problem.
But students aren’t the only ones harmed by these failing programs. Taxpayers lose out, too, because when loans are not repaid, the taxpayers have to fill the gap. Indeed, the CBO estimates that taxpayers will lose 16 to 28 cents of every dollar lent to graduate students over the next 10 years
(Excerpt) Read more at jamesgmartin.center ...
Maybe schools should be more like an investment system. A college goes out and finds students with potential. The college provides an education with no upfront cost — undergrad, grad, certificate: whatever the college feels is a good investment, based on that student’s ability. After graduation, the student finds gainful employment and has to pay back the school for the investment.
If the school chooses the wrong student, or provides a pointless education, then students will be unable to pay back the school. Therefore, schools will make smart choices about the value of the education they provide.
Sounds like capitalist exploitation to me. Fortunately we offshored a lot of those kinds of jobs to avoid this king of thing.
Schools are made up of people including a heavy dose of overpaid self-dealing administrators. Those incentives might influcence business owner if there is one. They don't affect an officer who can load up on all the lard he can get and then cut and run from the ruination he caused.
Well it would be nice if schools were an actual business that only got paid AFTER their product performed well out in the marketplace. But the current situation is nothing like that.
See Figure 5 on page 10. Law schools appear to be the worst offender.
Professional “students”.
“Well it would be nice if schools were an actual business that only got paid AFTER their product performed well out in the marketplace. But the current situation is nothing like that.”
BINGO ! You nailed it. There is no capitalistic pressure on BE (Big Ed) to control prices. They demand their money up front and they care not one whit where you get the money. After you graduate, your loan and workplace performance are no longer their problem.
Grad school is free for the sciences, the only people that pay for grad school typically are doctors, lawyers, and people getting an MBA.
Yep, my daughter with ChemE undergrad, got a full ride plus $30k year stipend for her PhD studies in Biomedical E studying brain cancer at U of Minn.
Yep, my daughter with ChemE undergrad, got a full ride plus $30k year stipend for her PhD studies in Biomedical E studying brain cancer at U of Minn.
There are STEM master’s programs typically conducted in the evening that you pay for (often employer pays!) up front. 10-12 classes with minimum B grades and you get a MS.
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