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 ...
get the Federal Gov’t out of this completely.
This is exactly like the housing bubble. Fake printed Federal Reserve money at ZERO interest rates, with the sluice-gates of Federal Regulation and back-stops wide open in a politically-favored industry, are blowing a huge debt bubble.
Political reality is that some bailout is inevitable. A partial bailout in return for getting the government out of the loan business completely would be a bargain.
Logical Six Point solution to the student loan crisis:
Yes, the taxpayer takes a 30% hit up front to liquidate this crisis, but that is far better than continuing to grow this monster.
I taught at a Big Ten school and it's not the profs salaries that are out of control, it's the addition of administrative, non-teaching people, most of whom are high salaried. Some part of that administrative burden falls out of federal regulations (e.g., monitoring student privacy, grant documentation, etc.), and part just because of empire building. That is, your prestige on campus is a function of the number of people who work for you.
Before you make blanket statements like the one above, check out the rate of change in teaching salaries, both total and average, and compare it to admin salaries.
The government loans are the problem.
Discontinue them and all the costs will go down. And the kids will work for education and degrees which are not junk degrees.
Any school that has a high number of loan-defaulting students should lose its accreditation
Hmmm, given that graph, state appropriations appear to be dropping. I’d bet that in constant dollars they are rising, just not as fast as total costs.
The solution is simply to end student loan program, excepting for military vets.
Colleges will crater and become reasonably-priced again.
[and to continue your thought] ... because borrowing for student loans is out of control, because there is no self control.
The fastest and easiest way to bring spending under control is to 1) stop all government funding of education, and 2) stop all government funding of research.
Your solution is more thoughtful than mine. I would simply government fund the whole student body one time. The money would go to the college. The student would pay back the college. If the student fails to pay back, the college would eventually go broke and out of business for crappy degrees.
“Student loans are out of control because tuition and housing are out of control because professor salaries are out of control.”
It’s liberal arts studies that are out of control. Every time a university adds another worthless liberal arts program, you have to staff it, build facilities to maintain it and deal with all the other costs associated with it.
Then they try to fix this by getting rid of good programs to support the bad. Eventually the college that once had a great reputation winds up as a welfare program. Look at Missouri for example.
I completely disagree. Colleges and universities are simply "putting their product out there." It's not up to them ensure its students choose wisely; it's not up to universities to ensure its students choose majors and fields of study that will guarantee any sort of outcome upon graduation.
If students would choose their majors and their classes more wisely, everything else would fall into place. If colleges and universities stopped bowing to political pressures, they wouldn't feel the need to conduct social engineering on their campuses. They wouldn't drape tenure on professors who've become nothing more than professional agitators, leading campus sit-ins and protests and marches against the administration, insisting upon certain wages and certain racial compositions in their janitorial and clerical staffs--something students should have no concern over.
If we as parents (and taxpayers) started to enforce the notion that college is an investment in the young adult's future, and that in any investment, a positive return is expected. And if we explained that no 4+ year degree is worth going in debt for $150 thousand dollars or more, if all you could expect to make is $30 thousand dollars per year annual salary. It's not greedy CEOs holding you down; it's that degrees in Medieval Literature, Women's, Black or Transgender Studies don't have much of a market.
Do any other loans work this way? Housing loans? Car loans? Small business loans?
Why would we insist that colleges take on the debt that its students incur?
Actually the proliferation of administrators and administrative salaries are out of control. Professor’s salaries are too high too, but they make up for that by hiring adjuncts from unemployed Ph.D. graduates and pay them peanuts.
Think of it as a way to make them warranty their work.
Discontinue them and all the costs will go down. And the kids will work for education and degrees which are not junk degrees.
I agree. Just as you get bloat and waste with Big Government, you get bloat and waste with Big Government education.
With less government money, colleges would be forced to streamline and focus on the "money-making" programs, as there'd be less excess to fund the trivial degree departments.
This actually happened recently at Purdue University. Guess who was complaining about women and minorities being hardest hit because their "pet" departments would have to cut?
Something like this needs to happen.
Colleges are raking in mountains of cash, and dumping people with no skills out into the workforce. This would force some accountability on their part to their students and to society.
It's an education. Perhaps a degree. If the college is already accredited--assuming it is--whatever degree bestowed upon that student is only a tool, not a guarantee. It's still up to that student to make something out of that tool, to leverage it in some way.
And yet many colleges have entrance standards. Perhaps if colleges only admitted people who (from pre-admission testing) had a reasonable chance of making it in their majors upon graduation, and DROPPED majors which had too many people not being able to make a living upon graduation, things would turn out better.
Colleges are in a better position than students to know the necessary information to be able to make decisions like this.
Then perhaps we should make "percentage of graduates who are able to make a living in their degree major" a metric used in accreditation. Or at least have the government PUBLISH, broken down by college and major, the percentage of graduates who are behind on making their student loan payments. Then pull accreditation of any college program which has defaults rise above a given threshold.
The big problem is that colleges are admitting people who are not qualified for college, and letting them graduate from programs that do not demand rigor (and thus are easy to graduate from), rather than either not admitting them in the first place, or flunking them out in freshman year (before they've invested excess time and money in something that won't work out).
Of course, your solution is far preferable to the no accountability money spigot that flows from taxpayer to colleges now. It would at least add an accountability factor. My six point solution just tries to be a bit more comprehensive by divorcing the money spigot from the taxpayer’s wallets, after an initial big hit to make it politically salable.
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