Posted on 11/18/2016 10:34:25 AM PST by Kaslin
For those of you who are unaware, America is facing a student loan disaster. The facts are frightening. Student debt is now in excess of $1.2 trillion. Yes, TRILLION. To put that in perspective, student debt is more than the total of all of America’s credit card debt.
Now comes the really bad news.
Twenty-five percent of those with student debt are in delinquency or default…that is, right now American taxpayers are on the hook for $300 billion, or approximately $1000 for every man, woman and child in this country.
Yes, you, your spouse and your 4-year-old child who has yet to start pre-school are each saddled with $1000 in student debt.
But wait, it’s much worse. The New York Fed reports that of those who are paying their student loans, fully 71% are only paying interest… potentially leaving the taxpayers on the hook for the other $600 billion in principal. That means your 4-year-old child already owes $3000 in student debt even before starting pre-school. If this doesn’t frighten you, it should.
Well, I have the solution. Read on.
Liberal politicians have complained that “for-profit” educational institutions that are not delivering the education and jobs they have promised should be required to pay back the tuition and fees to the students they have failed. This is one time I agree with them.
But why doesn’t this apply to EVERY educational institution?
Is there any difference between “Joe’s Auto Body Repair Institute” or “Mary’s Hairstyling College” failing to adequately train its students so they can get a job…versus Harvard University failing to adequately train its students so they can get a job…versus a public university failing its students?
When any of these institutions take a student’s money, they are entering into an implied contract to educate that student to be better positioned to survive in the “real world” and be able to repay what it costs to get that education.
So, my solution…
Every educational institution, whether it be Joe’s or Mary’s or Harvard or Ohio State, is ultimately on the hook to repay a portion of the student loan, if the student is unable to.
One could easily argue the college should be on the hook for the entire loan. But let’s be fair and reasonable. The college should certainly be responsible for half of that loan, while the student should take personal responsibility for the other half. The student needs skin in the game too- to force them to get out of their parents’ basement and fight for a job. No one gets a “free ride.”
There is nothing better than a market-based solution to get positive results. These universities are not forced to take a student’s money, but if they choose to do so, this solution will rightly make them responsible and motivate them to adequately educate/train their students and assist them in getting jobs upon graduation.
Remember much of this money comes from loans provided by the federal government. Why should colleges get to take this “easy money” from the government, then let students stiff the taxpayers? Taxpayers are the ones whose tax money made the loan possible in the first place. They should be protected from losses by the colleges accepting these loans.
This solution would mean forcing colleges of all kinds to tailor their curriculum to “real world needs and demands.” At colleges from Colorado State to Harvard this would undoubtedly mean being truly helpful to their entering students by, for example, directing more of them to science and computer majors, than art history or “ethnic studies” majors.
This would not only benefit the students, but benefit America and the economy as a whole, as they would be training and educating students with skills that would actually help America grow and thrive. It would mean each college would have to create a truly robust job placement department, focused on real world needs and demands.
Think how totally depressing it must be for a bright, motivated young person to spend four or more years pursuing a degree that their ivory-towered instructors and so-called “guidance counselors” encouraged them to pursue, only to graduate with $100,000 or more in debt and find there are no jobs for what they have studied.
Is it any wonder one out of twelve college students have not only considered, but actually made a suicide plan?
Eliminating this terrible outcome for so many young people is perhaps just as important a reason to enact the market-based solution I’ve proposed, as saving America’s taxpayers from this exploding student loan disaster.
It’s time our higher educational institutions, controlled by corrupt progressive elites, are forced to focus on results, what is best for their students, and what is good for America, rather than simply continuing to feather their own cushy lifetime jobs and lifestyle- all provided by easy-to-get government loans that students aren’t paying back.
Oh and this would have one more real-world result: Professors who teach one or two courses a week and publish one book a year that no one reads (except their adoring mother) would no longer make $200,000 a year (let alone the $400,000 Senator Elizabeth Warren made at Harvard Law School). Colleges would have to do the same thing every small business owner does- live within their means, cut non-performing employees, lower salaries and reduce pensions.
Result?
*Tuitions would go down dramatically.
*Parents of students would have more money for retirement, instead of working until they die to pay off their kid’s student loan.
*Taxpayers would be off the hook for billions.
*Colleges would join the real world and make sure their customers (i.e. students) get their money's worth. Maybe the Harvards of the world would have to dip into their $15 billion endowment funds to pay back taxpayers, on behalf of their customers (students).
Everyone wins.
This is the simple, commonsense way we solve the impending student loan disaster. Brought to you by a successful small businessman, not a government bureaucrat.
My daughter comes from a six-figure home and we have taken out almost $50k worth of loans so far. She is a junior. I deeply resent the fact that she doesn’t qualify for scholarships (we make too much money). Wish they would determine “need” based on savings and chance for academic success and not race (though she is bi-racial) or earnings.
Or, real quick, and something that might even be accomplished by Executive Order: Any institution which has more than a certain percentage of delinquent student loans, becomes ineligible for student loans.
Or even better: majors and departments within an institution: if more than a certain percentage of graduates from that major are in default, then no student majoring in that subject gets a loan. So the engineering students can continue to get loans, but the “xxx-studies” majors who can’t get any better job than at Starbucks, forget it.
Anyone writing about students loans should point out that Obamacare legislation took money from student loans to pay for health care. Students
Seems like most people forgot this as soon as it happened but it’s a very important point. Students especially need to be told this since most don’t even remember passage of the ACA. Ds cannot claim outrage at student loans without being outraged at themselves and their prioritization of a bad health insurance plan over student loans.
What makes you think so?
You got that right.
stop loaning money for junk degrees.
and make the school eat the loss for any graduate that can’t find a job.
Interesting. How about Trump University? Why should Trump be sued because some lazy a$$hole couldn’t apply what he or she was taught even though thousands did succeed? If he has to pay then most certainly ALL colleges and universities must be liable.
Sorry, just kidding. We're still paying off our daughter's student loan debt, we'll be done in a couple of years, just in time for my son to start college.
At the rate he's going, he'll be at a community college his first two years. I told him there's no way I'm paying $20+ grand a year without proving to me he can do the work, and do it well.
He also knows the opportunity is there, as we now have the assets to fully fund at least 3 years of college. It's up to him.
Wage garnishment should solve the problem.
Oh, but they are, you know. College admissions have not been under exclusive control of the institutions themselves since the government barged in and began using admissions as a means of social engineering.
The very first step in providing a market solution to the thing is to enable it in the first place, and that means the government butting out. What has happened, as has happened in the housing market as well, is that government intervention has distorted any market solution in the interest of "fairness". Colleges are no more able to decline entry to those for which an education is unlikely to produce a trustworthy repayment than housing lenders are, and for the same reason.
Along with the government butting out will be the excision of an entire layer of college administrators whose job is nothing but interfacing with the government, without whom one cannot run an institution in the current environment. Such private institutions as Hillsdale have had to fight desperately for their own sovereignty in the face of determined governmental incursion, that fight also consuming resources that cost money that might better be spent in education. This doesn't have to be.
However, getting the government's hooks out of the institutions is likely to resemble pulling molars with a pair of pliers. It can be done, but it's painful.
Oh, you have nailed it for me! My wife and I worked, saved, lived frugally so WE could pay, monthly payments, for our boys to attend college. They had no debt upon graduation and neither did we!
Now, anybody, talking about forgiving college debt or passing that debt onto the American Taxpayer, ME, sends me into a rage.
I’ve got a better idea than Mr. Root: Either the ones who took the money repay the debt or they go to jail!
Any idea that does not have, as an end-state, the full payment of the debt or prison and then payment is totally unacceptable to me!
I’m tired of always be proved the sucker for believing that it is my responsibility to act responsibly! If I incur a debt, I pay it! I expect the same of everyone else
Maybe students should be able to deduct payments made against loan principle.
When I am told my full fare payment of college tuition is actually high so some of it can be given to other low income students, why am I not given credit for a charitable deduction? That is truly what it is.
Imagine what this would do to the number of minority students in college if they had to take real majors.
I couldn’t agree more with both of your steps. The result will be more stringent screening (elevated somewhere above “can you fog a mirror and digitally sign documents?”) and will raise interest rates (to reflect the added risk to the lenders). Both would be EXCELLENT outcomes.
The problem is neither is likely to happen. Universities would crumble without the scam cash flow they have used to build huge buildings, endowments, programs, payrolls, and on and on...
I’m not sure how this gets solved without bilking us all (which really won’t solve the problem - see Bank Bailouts exhibit for an example), or crashing the system.
While I see your point, in all fairness the whole government K-12 school system worked very hard to make sure they did take out those loans.
If you include social pressure from every authority figure they've ever been told to obey and massive social engineering in your definition of force, then to a large extent the failed government K-12 system did indeed pretty much force them to take out those loans by assuring them they were worthless until they were a college grad.
The whole government propaganda and indoctrination machine that passes for k-12 education in this country needs to be ripped apart and put back under control of parents, that should go hand in glove with making the "higher education" system responsible for its own failures.
JMHo
Not a problem for me. I paid mine off, so can they.
The security for a home loan mortgage is the house. The security for the GSL is ... the student.
This is a black cloud over their heads that will follow them until they pay it off.
So suck it up buttercups: pay. Otherwise, you’re paying Sallie Mae trolls to dun you for years.
Let em suffer. No bailouts. They need to take their licks and grow up. Otherwise you get more of what you're getting right now.
A better solution is coming if we manage it right. The internet is quickly becoming the classroom of the future. Instead of thousands of students being taught something by thousands of teachers, it’s going to boil down to all of the students being taught by the very cream of the crop teachers over an internet connection. It will be education at your own pace right there over your I-Phone. This IS the future. The cost of an excellent college education will go down tremendously. Only a few universities will be needed to deliver the future college degree and the amount of buildings and land they will need is next to nothing compared to today. Pay these debts from selling off all of these buildings and land and provide a small pension to all of the educators whose jobs will disappear.
Get the Feds outta the student loan bid was. Make the administrators and professors personally responsible for half.
1) cease to guarantee these loans from this point forward.
2) treat student loans like any other, requiring security for example or tying them to actual ability to repay with circumstances as they are now, not as assumed to be in the ever optimistic future.
IOW: essentially tell the kids to GET JOBS first so they can pay for education themselves.
3) cease federal funding of higher education, or at least any education besides remedial (to correct for what should have been accomplished through high school).
4) cease all federal funding of student loan programs and the arts (which would certainly be used to back door spending on useless education).
5) cease federal funding of any public education that does not focus on things like English literacy, math, the physical sciences, chemistry, or vocational training.
6) enact, under the authority of the 14th Amendment’s “privileges or immunities clause” a federal civil right to school choice for primary education.
7) enact, under the authority of the 14th as above, a federal civil right for right to work inclusive of the teaching profession
8) clarify within the above legislation that the Constitution grants no federal power to require non-State actors to be responsible for federal civil rights.
... are some things I would certainly support.
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