Pursuing Serious Student Loan Reform: Legislation must focus on lowering tuition costs and ensuring that students are pursuing degrees that are likely to offer financial security

The first 100 days of the Biden administration have been marked by extraordinarily costly pieces of legislation, led by the passage of a $1.9 trillion COVID stimulus bill, with another $2 trillion infrastructure proposal currently under congressional consideration. Thus, you can be forgiven if, amidst this spending bash, you happened to overlook another radical proposition from the administration: student loan forgiveness, which, if enacted, would cost an estimated $1 to 1.7 trillion.

Student debt statistics are indeed sobering: the average college graduate owes roughly $30,000, and student debt has doubled within the past ten years. Although these numbers are deeply troubling, there are innumerable reasons why student debt cancellation is terrible policy.

The most basic argument is to note that students and their families willingly and knowingly agreed to the terms of their loans, and therefore are fully responsible for paying off their own debts. Of course, the trillion dollar price-tag of debt relief is a major cause for concern that will impact the long term health of the economy. Moreover, because the wealthiest in our society tend to have the highest amounts of student debt, student debt cancellation would simply exacerbate economic inequality, and would do little for those in our nation who are most in need. Finally, and perhaps most importantly, debt cancellation will only incentivize future generations of students to take on more debt, rather than alleviating the underlying factors that have contributed to the current student loan crisis. The cost of higher education has risen dramatically over the past 30 years, with tuition costs increasing eight times faster than wage growth. Over the past decade, public colleges, which are supposed to provide a low-cost option for students, have increased tuition by 55%.

Many students decide to attend college but are not academically prepared for the rigors of college coursework. An estimated 30% of students will decide to change their major, which increases both the time and cost of earning a degree.

Attending college simply for the sake of attending college has created an influx of workers with skills that are not essential to economic needs, which has resulted in “degree inflation.” In other words, employers now demand college degrees for positions that historically have not required higher education.

Meanwhile, there is a glaring need for domestic workers with STEM (science, technology, engineering, and mathematics) backgrounds. Demand is similarly soaring for skilled labor, while other industries are also suffering from labor shortages.

This problem could be solved almost overnight by telling colleges to adopt the Hillsdale College or the Bank of North Dakota model.

Hillsdale forbids government loans and refers their students to their own group of lenders. The lenders offer great rates because Hillsdale students tend to grow up to be productive members of society. Their default rate is near zero.

The Bank of North Dakota distributes loans for colleges within their borders. Loan amounts are strictly limited to students making clear progress toward graduation and a degree. If you want to major in something exotic and unmarketable, you have the dual challenge of finding a college in North Dakota that offers the degree and finding enough loan money from the bank to finance it. There is a reason that useless people with useless degrees don't stay in North Dakota very long. Again, their default rate is near zero.

We don’t need tuition reform, we need to eliminate all government intervention and subsidies. Then the market will level out to very close to optimum market value.

The useless degrees are only being offered so that people who do not have the academic chops can still get a college degree without actually learning anything valuable. It’s a symptom of the typical liberal logic that the piece of paper = academic achievement.

Think of the Wizard of Oz. . .liberals love their fantasies and honestly believe that if they believe them hard enough, they will become truth.

But then, eventually reality kicks in. . .but will it be soon enough?

RE: ...gender perversion, embracing racism, advocacy, etc.

You hit the nail on the head. There is one solution for it, but it requires courage on the part of policy makers.

Policymakers should therefore reform our financial aid system to incentivize students to pursue degrees based upon labor market demands.

In other words, tie financial aid awards to the economic importance of the degree being pursued. Decrease financial aid for degree plans where there is a labor surplus.

By obtaining degrees in areas with high job demand, students would be more likely to repay loans, and the nation as a whole would benefit by addressing labor shortages with domestic workers.

Also, focus on TRADE SKILLS. One does not need 4 years and high tuition costs to obtain this.

>>This is, in many cases, false.<<

How so? When I was 18 and took student loans out (which I repaid as promised) I knew exactly what I was promising and signing.

I do admit that students today are MUCH less mature than students in our day but still they should be able to understand a simple promise to pay.

It’s interesting because the “Master Promissory Note” students sign these days for federal student loans list NO amount borrowed—it’s a “blank check”—the MPN is just a 10 year flow of endless generous $$ for any and all schools attended for 10 years, plus never-ending “refunds” (to the student) for room and board!, or whatever else they want to use the $$ for!

End the Dept of Education
All they do is distribute Federal Money, create rules, and run a huge debt-enslavement machine to keep leftist university administrations alive and operating.
Its just another central government and social-engineering power-grab.

The political bargain could be this: End the DoE in exchange for writing off defaulted student loan debt. Those loans inflated the cost of education, making it impossible for some people to repay debt for useless degrees, or unfinished degrees. No more money for elitist academics, and leftist administrators.

How so? Someone takes out a loan they’re supposed to pay it back.

If someone, as a parent, co-signs a load for their kid, who wants to get a degree in Post Neanderthal Feminist Poetry and can’t figure out that it’s going to cost over $100k and be worthless, then that’s on them.

Commence wage garnishment now.

Funny that in every other industry, we can hear of budget cuts, but when it comes to secondary education, the only folks that stand to lose anything are the maintenance folks and the sports programs. No radical left wing professor ever loses their precious tenured positions no matter how worthless the class they teach 2d a week is.

And then the taxpayer or parents are forced to fork over more money for the tuition increases.

Look no further than FedGov to find the source of the problem.

Colleges take FedGov money.
FedGov attaches strings to that money.
Over time the number of FedGov strings attached to each dollar increases exponentially.
Entire bureaucracies are created at colleges to please the FedGov bureaucrats.

Combine the FedGov mission creep with the proliferation of degrees that are useless in the real world and there you go. Young people with useless degrees and student debt their useless degrees can’t help them pay for.

Add in the fact that between 30-80% of college students change their majors at least once in four years and there goes more debt.

Colleges have a great racket going.
Damned if I want my money going to pay for their ignorance and stupidity.

Can anyone tell me why a social worker, who probably starts out in the $30-40k range, need to spend over $100k to get a Masters to qualify for a job?

Especially, when all they do is hand people forms for more benefits.

The folks coming into to those offices know the system inside and out. Better than the social workers because all they want is more bennies and know all the scams.

Turnover is disgustingly high. My cousin did it. She’s kind of a millennial lib. Thought she was going to help folks. Not so much.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.