Posted on 11/19/2012 6:41:49 AM PST by Kaslin
America’s accumulated college-loan debt will surpass $1 trillion this year; what is our leadership doing about it? The Obama Administration took over the student loan market and expanded Pell Grants, but hasn’t accomplished anything to address the root cause of the crisis: exploding college fees and related costs. The only thing they’ve done is criticize innovators and entrepreneurs.
The Senate Committee on Health, Education, Labor, and Pensions (HELP), chaired by Senator Tom Harkin (D-Iowa), issued a new report calling into question the costs and performance of For-Profit universities. There are actually hundreds of these schools, perhaps the most well-known being University of Phoenix and Devry University. The report provides some damning statistics about For-Profits which should concern us all, since a large amount of free federal money (Pell Grants) is handed out to their students. Their cost of recruiting is much higher than private and public universities (the Establishment), and their four-year graduation rate 31 percent compared to 52 percent for Establishment schools.
When I read the report and its analysis, my only thought was “Wow! Is the committee staff really this dense?” Here are a few points:
1. Wouldn’t you expect the graduation rates to be lower at For-Profits? After all, how many of the best students in the country are going to University of Phoenix rather than Yale, Stanford, UCLA, or Texas? It’s obvious that they’re not attracting top-tier students, so it makes sense that their dropout rate would be higher.
2. The fact that more money is spent on recruitment also makes sense. Every high school in America has guidance counselors who direct students to Establishment colleges. Have you ever heard of a high school counselor telling a student that he should be going to Devry? The report leads one to believe that Establishment schools average a little over one staff person who does recruiting. Obviously, the people who compiled that statistic never had a kid go to college. That is just foolish.
3. The report also talks about the cost per student, but the numbers used don’t reflect the huge costs underwritten by states for public schools, or the cost to the federal treasury for tax deductions taken for “charitable” donations to Establishment schools. The comparison of costs is absolutely and totally slanted.
This is the fourth “study” done by this committee on For-Profit colleges in the last two years. And how many have been done on Establishment schools? Zero. One might come to the conclusion that someone has a vendetta against For-Profit schools. Since the Committee Chair is Senator Harkin, the finger must be pointed at him.
When I discussed the issue with Elizabeth Donovan, Deputy Press Secretary for HELP, she indicated that there had indeed been hearings on the Establishment schools and at my request kindly sent me copies of the witness statements. It struck me as strange that all of the testimony came from representatives of public schools, even though private schools (except Hillsdale College) receive substantial federal money.
I asked Ms. Donovan why representatives of private schools were not included, but she was unwilling to answer. I then asked whether there would be any similar studies released on Establishment schools. Again, she was unwilling to reply. But on September 13, 2012, the committee held a two-hour hearing on the soaring costs of Establishment schools. They concluded that costs are escalating because states are cutting their higher education budgets, and that schools are holding committee meetings and discussions in an effort to control costs. The reaction of the Senate committee was basically – that’s cool.
To its credit, the Republican minority, headed by Senator Enzi (R-Wyoming), issued a statement denouncing the For-Profit study. While acknowledging challenges in these particular schools, they asked the big question: why is so much effort being spent on For-Profit colleges, which represents 10% of the education industry, while Establishment schools, which represent 90%, are being ignored? It’s like focusing on your child’s performance in P.E. when they are failing math, English, and social studies. The minority enumerated the many reasons why the full report had been manipulated to make the industry look bad. And it questioned why Senator Harkin is unwilling to address the main issue – Establishment schools piling huge amounts of debt onto the public without a shred of accountability.
We deserve some real answers. Young adults are told that if they want to succeed, they must graduate from college. Today, parents are breaking themselves financially and their children are piling up ridiculous levels of debt. Increasingly, students are graduating with little hope of finding a job lucrative enough to pay off their debt, or with a degree that is useless for obtaining a position. And yet nobody asks why schools are issuing degrees in silly majors or why so many schools promote majors for which there is little demand for the graduates. More important, why are costs soaring way above the inflation rate, and why are the rapidly-increasing numbers of administrators getting paid so much? How about the falsehood of “not-for-profit” schools whose “one-class-a-week” professors earn salaries as high as $300,000 and college presidents earn $500,000 and up? There is nothing “not for profit” for these schools except their misleading titles.
Richard Cordray, Elizabeth Warren’s stand-in at the Consumer Financial Protection Bureau, broached the subject of why student loans are excluded from bankruptcy and suggested a rule change. I suspect that President Obama may in his second term run with this proposal, which means that a large portion of another $1 trillion – as well as any debt incurred in the future – will be dumped on the shoulders of American taxpayers. The Administration bemoans the debt level, but does nothing to correct the root causes. Obama’s ally in the Senate spends his time fiddling with 10% of the schools while Rome is burning.
Then again, is anyone really surprised?
“Student loans should be discharged in bankruptcy like any other debt, and colleges should be on the hook for at least part of the loans. Do this, and overnight colleges will stop accepting unqualified students, and stop offering majors for which there are no job openings.”
Bingo! Best answer on this thread.
I changed my major, made the dean's list, and never looked back.
Why is it the Senate’s issue? People choose to take on these loans for worthless degrees. Consequences of choice should not be protected by the Senate.
My downfall was Discrete Mathematics. Had to use both forgiveness classes on it and still never managed a C. Had the same non-English speaking professor all three times, and to this day, I blame him. He could never understand my questions and I could never understand his answers.
Hey, now we found something we can do with the NYT’s proposed wealth tax! It’s raining money!
The title is not correct. The debt is individual debt, incurred by individuals, who owe a great deal of money. In most cases, rather than being frugal and making wise decisions about their education, they chose to spend money they did not have, thus endangering their future and their children's future.
Just like those who chose to borrow money for homes, they could not possibly afford, many of these individuals pursued dead end degrees, that could not lead to jobs.
As a result of a Democratically controlled House and Senate(2008-2010) crashing the economy, and Obama following his inclination to redistribute that which we do not have,the world has crashed around their heads.
Once the House reverted to a Republican majority, the Democratically controlled Senate (under the leadership of Harry Reid)refused to bring any House Budget to a vote in the Senate. Any time a Obama budget was taken to the Senate for a vote, the result was a resounding vote of no by the senate, the last being 98-0 against. As a result we have not had a budget for how many years? We have only had spending, and borrowing.
Pollsters constantly polled people about their feeling about "Congress", not their feeling about the House or the Senate. The truth is the American people love the House, but despise the inaction of the Senate, as reflected in the results of the vote in November.
If electoral ballots were distributed by House districts, rather than winner of a statewide vote taking all delegate, we would have a Republican president this time.
It the old story of choices. Some choose to live lives of moderation, saving, investing, and working toward the future for themselves and their children. Others choose to borrow, spend,and live an extravagant lifestyle. They then look around and find that because of their choices, they have nothing, owe a lot, and then demand that others have cheated, and they deserve more. They deserve their "fair share".
I really think the Occupy Wall Street crowd is looking at how Obama bailed out GM and spread the money around to his supporters, and want their share, since they were instrumental in getting him elected the first time.
I would not really have a problem with refinancing college loans at current rates, but only for those individuals, who pursued degrees in health sciences, engineering, business,mathematics,and even English(if that person took a masters in Education in order to teach). These people chose to invest in the future.
Fairness does not mean that those who worked their way through school, or paid back their student loans, should pay for the individuals who refuse to honor their debts.
That used to be the case. The 1978 Bankruptcy Code allowed student loans to be discharged just like any credit card debt three years after the first payment was due. Since then, every few years, starting in the mid ‘80s Congress has amended the code to make it more dificult to discharge student loans. In ‘99 they virtually eliminated the discharge of all governemt guarenteed student loans, and in 2005, all private student loans.
The days of the brick-and-mortar college monopoly is coming to an end. Sooner or later they will be forced to embrace technology and offer alternatives to “going away to college”. This will be unfortunate for the hundreds of thousands who depend on students and parents to fund their salaries and retirements.
Any parent who encourages their kid to take out a student loan in this environment is irresponsible.
Tommie the Commie is going to HELP put the country even further in debt.
“3rd party payer” systems are all a big fustercluck.
Any of them and all of them.
So?
Do we need yet ANOTHER 'help' from Gov't?
People are buying what the colleges are selling; so just leave them alone!
Yup!
Frankly, I’m all for higher and higher education costs. Then the idiot students will finally learn that they only been taught to be liberal commies and were dumb enough to pay for it for the rest of their lives. They beauty of the progressive commy way they will not have the knowledge to ever be employed except as toys for the govt. Just like all the eastern countries, dumb and poor.
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in fairness, they do work outside the classroom -- preparing for the lecture, research etc.
I think that's incorrect. If there is a major with low job offerings, it should still be offered, but I don't see why it should cost so much as say an engineering degree, and people should be told about this at the beginning
Also, i believe that engineering students etc (and I'm a mechanical engineer) having english lit or some other "arts" course as a minor is a good idea to get a balance...
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