Posted on 07/09/2020 6:10:09 AM PDT by grundle
Kurt Schlichter just wrote this excellent column, with a whole bunch of ways to improves colleges.
Of Schlichter’s many excellent ideas, this one is my favorite. He wrote:
Third, student loans need to come from the school and to be dischargeable in bankruptcy. A school is going to be a lot less eager to say, “Sure, go ahead and major in Norwegian Feminist Dance Theory” if they are on the hook when their ardent young scholar can’t get a gig that can pay back the sticker price.
That’s brilliant – absolutely brilliant.
I hope Schlichter’s idea gets adopted as national policy.
“Third party money screws everything up, from the housing market to education costs”
The problem is not that it involves a third party. The problem I’d that it involves a 4th party, the US government who GUARANTEES the stupid loans.
Trust me no bank would make a loan for a 4 year “education” in queer studies.
This is the subprime mortgage problem on steroid.
I proposed this here a long time ago:
http://www.freerepublic.com/focus/news/3794460/posts?page=9#9
Sorry for no html tags. Posting from my phone
I agree. Spectacular idea that provides a unique solution.
It’s a great idea, therefore it will never happen.
Something that has a better chance of happening and just as good is to remove the government guarantee on those loans.
For that to happen you need both houses of congress and the president to be conservative.
It is no longer true with the plethora of worthless degrees. So, yes, they should be hung back on the college that awarded the degrees. Attach their endowments, real estate and other hard assets if necessary to keep the taxpayer off the hook. Colleges have the opportunity to withhold transcripts or even cancel the degree for leverage on the borrower to help recover their investment.
If their "investment" creates Antifa thugs, then good luck trying to collect from them.
Yes, getting the gov't out of the lending business is the key. Either make the schools back 100% or at least part of the loans, or have banks or some other private lender. That way the lender has a stake in getting their money back & requiring the borrower get a real education leading to a profitable job.
Indeed. Even if the Federal Government continues with stafford loans, if more than 5% go into default, the balance should come out of the universities coffers. This would clear up 80% of the issues with colleges these days, including all the marxist propoganda (schools would either go bankrupt or actually produce capable young adults)
Since I posted this, Georgetown & Pomona have both announced 100% closures. I think, if the states begin to lock down again, most will.
Pomona generously canceled an anticipated 3.5% INCREASE in tuitions while slashing budgets. For now, however, they aren’t touching their endowment.
Schools would get loans based on the discounted value of the packet - discounted for time, and discounted for collection.
They need the full amount of the proceeds up front.
Thanks GOPJ.
Harvard can afford it. So can’t my Alma Mater.
It’s funny, I wonder why these institutions think they are “special.” Hospitals are laying off thousands of employees this week. Walgreens is laying of 4,000. United airlines is laying off 35,000.
Cut the ivy off the windows, folks—we are headed for some bad months.
Tax receipts are going to drop like a rock. The market is going to drop like a rock. Kids are not going on be able to afford community college.
Someone at these schools should be digging up their records from the depression—that is the model they will need to survive.
Can we assume the small private engineering University doesn't offer classes in WOKE Grievance Studies?
I think you are really onto something that everyone else missed Larry. Like I said, great analysis.
As I posted on January 24, 2020, this is a result of the universities selling a product that nobody wants.
I thought the author was setting up the reader metaphorically by first telling the story of the buggy whip, where the point was that it was a higher-quality buggy whip manufacturer that was still making a product nobody wanted. The natural transfer of concept to college would have been that universities are also putting out a product that there is no demand for (which I believe is true, but not like the total market collapse of outdated technologies).To the point that "a career that will not make a return on the investment made," I believe it's a three-fold issue.
The causes for #1 are also two-fold:
- The job market isn't paying the salaries.
- The students aren't pursuing the marketable degrees.
- The universities are cranking out graduates without regard to whether the job market is there for the graduates. In other words, they are graduating buggy whips.
The causes for #2 are two-fold:
- The jobs are being off-shored to lower-cost geographies.
- The cheaper workers are being imported via H-1B visas and are displacing our graduates.
The cause for #3 is two-fold:
- The students are choosing social-justice degrees with no anchoring in reality.
- The K-12 schools are socially promoting students who either aren't ready for college or are better suited to trade studies.
I understand the point that the graduates made a series of bad decisions, and the students are also making a series of bad decisions, but I believe that leaving the analysis there is over-simplifying (you said I was over-thinking). In decision analysis, there is the concept of "good decision, bad outcome," and "bad decision, good outcome."
- The students have been socially indoctrinated to believe the only way to succeed is with a college degree, so everyone must now go to college.
- The change to government-sponsored student loans has made it easy for universities to pad their enrollments in order to get the funding to sustain their tenures and research programs.
In the case of getting into the buggy whip business, I think we'd all agree that it was a case of bad decisions with bad outcomes. I don't think the college degree analogy is necessarily the same.
The cost of a college degree is artificially high due to government interference with free market availability of student loans. If there were a market balance between supply and demand then the price paid would equal the cost plus profit. If the universities were balancing the supply of graduates with the demand for graduates, this would mean that the graduates were being paid a salary that allowed them to pay off their loans plus their living expenses.
The fact is that the university degree market is completely unbalanced and out of whack. Young students may be making good decisions to pursue a degree, but many are too uninformed at that age to understand that the universities are glutting the market right now. The universities have built up a capital investment in professors and manufactured an inventory of graduates that can't be sold.
The university result will eventually be the same as the buggy whip manufacturer: their inventory of unsold graduates will lose their value (in terms of alumni donations, university brand reputation, etc.), and the university might eventually go out of business if they can't get new student enrollments because the word is out that their graduates are unemployable.
Is all of this the fault of the student loan scam? Is it the result of students making bad career decisions? Is it the fault of businesses that are looking for cheaper workers or exporting jobs? Is it the fault of universities hungry for students flush with loan cash that they keep taking them in regardless of the ability of the job market to absorb the graduates?
-PJ
Since the schools are the ones sponsoring some of the most useless courses, why shouldn’t they be the ones sharing in the misery if the loan can’t reasonably be paid back? With the government loans, the poor taxpayer, who in many cases can’t go to college, gets to foot the bill when the loans are defaulted upon. That is unacceptable & should NEVER have been allowed. I don’t remember who actually made this decision, but I can be more than reasonably certain that it was a Democrat & was not voted on by the people who have the most to lose.
Capitol Technology University in Maryland
No fluff. Began taking classes in his major as a freshman. His college job was in his field and he got a full time job within two weeks.
Get rid of all the universities and then what?
Brilliantly simple.
Devastatingly effective
So no more student loans. What does that get you?
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