Posted on 01/24/2018 9:22:20 AM PST by Kaslin
Editor's Note: This piece was coauthored by Ed Feulner.
You can’t put a price on education, the saying goes, but if you did, it would be very high. And the cost falls on everyone.
Indeed, our economy is hampered by a two-pronged higher education problem: collectively, Americans have racked up some $1.4 trillion in outstanding student loan debt. At the same time, that debt has been amassed by those who drop out before earning a degree and by those earning degrees with limited utility in the market.
Yet, despite growing evidence that generous federal subsidies have driven tuition increases, policymakers continue to subsidize increases in college costs, instead of tackling the drivers of student debt. Easy access to federal student aid has enabled colleges to raise tuition profligately over the past several decades. When combined with generous loan forgiveness policies, which must be paid for by taxpayers, the result has been a three-fold increase in the cost of college since the mid-1980s.
Economist Richard Vedder found that, had tuition and fees at colleges and universities grown at a rate similar to the growth prior to 1978 – before there was significant federal subsidization of tuition – college costs at state universities would be closer to just $5,000 today.
The Higher Education Act (HEA), first passed in 1965, is the trough at which universities feed. The HEA authorizes multiple federal student loan programs, as well as the federal Pell Grant program and the federal work study program.
The HEA isn’t a safety net of last resort for students who cannot afford college; it is a luxurious hammock in which students can repose, accessing subsidized student loans with few if any credit checks or examination of their ability to repay. The federal government originates and services 90 percent of all student loans, crowding out the private lending market and placing taxpayers on the hook for student loan defaults and loan forgiveness policies.
This vicious lending-and-spending cycle serves no one well – save university administrators. The federal government makes loans available to anyone, universities raise tuition fully aware of the ease with which the federal government provides the loans -- and students borrow more and more to finance college.
The best way we could begin lowering college costs would be to dramatically curtail federal student loans. Although the PROSPER Act now before Congress doesn’t fully achieve this goal, it does begin reforming the HEA in a way that will lower costs for students and unburden taxpayers.
The bill would create a single loan option for borrowers, simplifying the current nine convoluted repayment options into just two: a standard 10-year repayment plan and an income-based repayment option. Perhaps most significantly, the proposal would eliminate loan forgiveness programs. Today, students can have their loans forgiven after 20 years – a figure which drops to just 10 years if a student enters government or non-profit work after college.
The Congressional Budget Office estimates that American taxpayers are set to lose $108 billion over the next decade due to loan forgiveness policies. Loan forgiveness unfairly shifts the burden of paying for college from the student to the taxpayer, more than two-thirds of whom do not hold bachelor’s degrees themselves. At the same time, such practices enable universities to raise tuition, knowing that students will have their loans forgiven in due time.
Importantly, in addition to ending generous loan forgiveness policies, PROPSPER would also eliminate the in-school interest subsidy, which costs taxpayers nearly $8 billion per year, and isn't well-targeted to low-income students.
Although there is more work to be done to really cut college costs, consolidating student loans, eliminating loan forgiveness, and eliminating in-school interest subsidies provides a long-overdue step toward resetting college pricing. Encouraging private lending to reemerge would also help.
Additional reforms to accrediting processes that include alternative education opportunities, without expanding arbitrary power to executive branch officials, are among PROSPER’s further moves in the right direction.
However well-meaning federal policy on education, it’s clearly making the problem worse. It’s time for lawmakers to show that they’ve learned this very expensive lesson -- and help make college more available and more affordable once again.
Instead of making “colleges more available and AFFORDABLE”...how about college being made more USEFUL! GET RID OF HALF the crappy tenured profs...put stuff online more.
Stop tuition assistance for everyone not in STEM majors.
Now THERE is a good idea!
You might add Medicine to the approved list, though.
1. Majoring in STEM subjects is for many students a glorious waste of time since many “American” corporations prefer to import foreign workers from communist China , India, etc — and/ or send the work there.
Hey, what a racket! Go to college on the government dime, then go to work, sucking at the government teet for 10 years, and the college loan also goes away.
What self-respecting leftist could resist such a deal?
How about teaching them NOT TO BORROW A DIME for college.
A. Work hard in high school, get AP credits, score high on ACT/SAT
grants and free rides roll in.
B. Work full time school part time, pay as you go. Down the road have experience, education, and no debt.
C. ROTC, somewhat same as B
D. If not student type, Learn a trade, start a business hire A,B,C.
While inflation has made things go up over 300% in the last 3 decades, the cost of college has gone up over 1000%
Throwing government money in always does that. How does an absolute moron earn $300,000 for teaching one course? (Elizabeth Warren)
The cost of college education would decrease dramatically if you got rid of BS courses and focused on tangible skills and lessons.
Colleges are pricing themselves out of the market. There will be a time when kids (and parents) really wake up and stop funding this monster.
I am currently paying for a 2 year ONLINE degree and owe $17k. Biggest regret of my life. I’d have the same job I currently have without this stupid piece of paper.
I worked in a college business office decades ago. At that time, the college was directly involved with collections of loans, and new loans were not given to our students, if the default rate on existing loans was too high.
Perhaps this has changed. If colleges can just raise tuition, depend on loan money to pay for it, and never have to be concerned with whether loans get repaid, then there’s no accountability anywhere is there?
Higher education is a huge Democrat fraud.
Q: Did the tax on endowments stay in the tax bill, anyone know?
If we can’t rid if subsidies, how about taxing endowments above a certain level per student...?
Great idea!
Great suggestions.
I would consider borrowing for education *IF* I did the calculation and could demonstrate that the expected disposable income earned in the first few years after graduation would pay for my loan. That means that there would need to be a near 100% chance of graduating and near 100% chance of getting a job paying enough.
Most of these snowflakes never stop for one second to think about whether they will be employable with the “degrees” they get. Most never stop to think for one second about how massive the debt is that they are taking on and how long it might take with any job (not just the burger-flipping job they are qualified for) to pay for.
In the end, I attended the Naval Academy and went into the service and learned a marketable trade. I did my 21 years and, at 64 years old, am very happy with the choices that I made.
If I had been born rich, I would have loved to be an archaeologist (either land or marine) or an astronomer, but I wasn't so I didn't. I can't imagine why somebody would think that you could make a living (and pay back student loans) with a major in feminist logic or black/women's studies or any of the other manifestations of snowflake college degrees.
Allow students to discharge their student loans in bankruptcy. Make them take the hit to their credit standing that goes with it....
...but then make the school they attended responsible for paying the defaulted loan. Principal AND interest.
Accountability is how you end these phony baloney degree mills that were once institutions of higher learning. Once people’s own money gets on the line, they will shape up.
>Stop tuition assistance for everyone not in STEM majors.
Your fingers kept typing. The sentence should have ended at the word ‘everyone’.
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How about teaching them NOT TO BORROW A DIME for college.
A. Work hard in high school, get AP credits, score high on ACT/SAT
grants and free rides roll in.
B. Work full time school part time, pay as you go. Down the road have experience, education, and no debt.
C. ROTC, somewhat same as B
D. If not student type, Learn a trade, start a business hire A,B,C.
>
Well, you need a Step 0: Return govt to its right/lawful size.
Damn hard to do ANY of that when govt is picking the pockets (1st in line regardless of harm).
When the local/State/Fedzilla leeches suck upwards of 90% of ones’ livelihood, it gets a *bit* difficult to even EXIST.
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Throwing government money in always does that.
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If it were GOVT monies, we all couldn’t care less about the ‘problem(s)’, no?
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How does an absolute moron earn $300,000 for teaching one course? (Elizabeth Warren)
>
One could ask how the same was voted into office to craft/pass legislation (most unconstitutionally, but they don’t teach about that anymore anyway)...it all still boils down to what We the People have allowed to happen.
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