Student loans are out of control because government support of higher education has fallen off the cliff.
Posted on 05/02/2016 8:48:35 AM PDT by reaganaut1
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The key to controlling costs and student-debt burdens is to require colleges themselves to have “skin in the game” so they have strong incentives not only to provide a good education, but also to safeguard the financial solvency of their graduates.
Colleges should be required to offer all students the first tranche of their funding. The funding could be an ISA or a student loan, but in either case, the student’s future payments on these obligations must be subordinate to all outside student-loan obligations. In other words, federal student loans must be paid before loans or ISA reimbursements are paid back to colleges. Students need not accept the college’s funding offer, but those who do would be limited by the college as to the amount of outside student loans they can borrow. As lenders, colleges would be required to abide by all appropriate consumer financial-protection regulations.
With “skin in the game,” colleges will face pressure to control unnecessary costs and limit student indebtedness. Colleges will redouble their efforts to ensure that students graduate with the skills necessary to succeed in the job market. Resources will no longer be freely available for unnecessary non-educational university spending.
To achieve these goals, the share of university-provided student funding must be large enough to give colleges the requisite incentives. The optimal college financing share is open to debate, but once the program is fully phased in, we recommend that every student be offered at least 20 percent of his funding from the institution he attends.
(Excerpt) Read more at nationalreview.com ...
Student loans are out of control because tuition and housing are out of control because professor salaries are out of control.
The Government subsidies of college education has become a cash spigot for the liberal socialists professors and staff at colleges so they can make up new courses than have more to do with “social justice” than any actually skills or classical learning so they can use the next set of rubes coming through to milk more money from the state....
Just get the government out of the student loan business and let private entities run the market.
No?
Federal law forbids discharging student debt through bankruptcy, and further, allows non-student expenses to be charged to this non-dischargeable debt.
A) Interest on this debt should be zero. There's near zero risk of the debt never being paid (much of it is federally guaranteed as well.) Anything more is extraordinary usury.
B) Anything other than tuition really should be excluded from this non-dischargeable debt. Some of the lovely things charged include: Mandatory health insurance, room & board, supplies purchases, beverages, etc.
But the only way to ‘make campuses have skin in the game’ is to END the free ride - make student debt once again subject to bankruptcy. Lenders will make actual financial decisions as to the possibility of being repaid. Why did this change? Because most lenders wouldn't give loans for someone going for their doctorate in inane social studies courses - they felt (and have been repeatedly proved correct) that they'd never see their money again.
I like it. And it may put an end to the fly by night degree mills who’s greatest interest is getting federal funds.
Excellent idea Colleges should have skin in the game.
Let their SS# be pegged to the school district and let every HS graduate's SS# be pegged to that district
Now ... if the kid makes money, a small percentage (I haven't thought it through ... FReeper help welcome) .. 1/2 of 1% .. something .... goes to the XYZ school district teacher's pension fund
If y'teach a kid to be productive, you'll be able to retire (of course it'll take time, but the alternative is ... ) relatively well and the community is no longer taxed
Actually it’s not really professors costs that are a big deal. Truth be told colleges have been shifting more education away from professors to adjuncts (non tenure track instructors) to save money. However they have been staffing up on administrators who schedule meetings to keep their fellow useless drones busy.
A goodly bit of this multiplication of administrators has to do with federal mandates and the like.
I work at a college and over my time here (in IT) I have seen the administrators multiply like roaches. Every department seems to have an assistant director, project manager, and plenty of other useless flunkies who do very little but busy work. It seems to be about fiefdoms.
Student loans are out of control because government support of higher education has fallen off the cliff.
Half of college kids should not go
The free market solution is to get the government out of the education business and the loansharking business, and let the market sort out the best way to handle it.
I’m not sure how many kids actually want to be educated.
They want a college experience, and they want to be certified as acceptable to society, but I’m not so sure they want to be educated.
So simple and I never thought of the obvious ....
Imagine a flotilla of well trained welders .... US NAVY, here we come !
There is already a mechanism for this. Make student loans dischargeable in bankruptcy court and all problems go away overnight. Restructure or liquidate loans and there will be a sea change and a massive drop in the cost of attending college. It will also limit superfluous degrees and departments.
They will return to institutions of higher learning, not spa/resorts for kids with no clue.
Don’t forget about all those gorgeous new buildings.
If colleges had to co-sign/guarantee student loans, they would be much more careful with their admission requirements.
I wonder what the employment rate of the top ten Ivy league schools is relative to the success rate of Trump U attendees?
One big reason why nobody seems to want to bring the free market into these loan decisions, is that they are afraid of being called racist if they apply a risk-appropriate interest rate or loan limit to somebody going for a (whatever)-studies major.
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