Posted on 09/14/2012 9:28:07 AM PDT by SeekAndFind
The education industry doesn’t really like it. Because all these loans come with a huge overhead for them. The financial aid department is often the largest department in a college, and they have to do the most recurring training. They don’t spike the price because of all the loan money coming in, the spike the price because their costs have gone up because they have to add more people with more training to an already huge department.
Ha ha!
What rightfully should be returned to the lenders—whether taxpayers or private—would be kept by loads of middle-class families who sent their kids on four or more years of Disneyland on someone else’s dime.
I bet you there’s nobody out there who couldn’t keep current on their stupid loans by working another 20 hours a week, and the vast majority of them could do it with just 5 more hours a week.
That’s what they should do to pay it off and if they do, maybe they actually will have learned something from their borrowed educations after all!
What a load of crap.
The education industry is under no obligation to accept anyone that can't pay.
If the overhead was such a burden, they'd simply refuse to participate -- but they don't refuse. They don't refuse because they make plenty of money from borrowers.
The education industry has turned into General Motors. They don't make money selling educations. They make money by facilitating the financing of educations.
It’s not a load of crap at all. It’s a fact. And yes actually if they want to be accredited they are under obligation to accept financial aid payments, it’s part of being “equal opportunity” which is a requirement for all the federal accreditations.
Financial aid is the only department at a college that sees over 75% of students (generally they see almost all students). Federal regulations change every single year causing retraining to have to happen every single year.
You got it half right, they don’t make money selling education. But the rest you got wrong, they make money on big time sports, or research grants, or not at all. Financial aid is a trap for them, it’s a money bleed.
They got one, just not the one they thought they were getting.
They had better get busy and make their fortune quickly, while they still know everything and their parents are still stupid, 'cause when their parents get smart, they won't even have a place to live.
That assumes jobs are available.
The current regulatory/tax/tort environment makes it risky to employ young, inexperienced workers. It often just isn't worth it.
Student loans have been masking this problem for years. The employment rate for 18-24 year olds is just 54%. Nearly 40% of that age group are in college. WIthout loans, the unemployment rate would make a nice jump -- and the government doesn't want that. It might make them look bad.
Nice try.
It took me about 5 minutes of searching on the internet to discover that financial aid processing for a typical state system (Florida Universities) consumes a mere $50.5 million out of a $2.76 billion budget.
So what are you arguing—that we should continue to dish out humongous student loans to marginal students like crazy AND not make them pay them off?
If you’re a college grad, which is when you’ve got to start paying back your loans, you sure ought to be able to get a job at something. Many of those hanging at home are just waiting for their dream jobs, or choosing to take unpaid internships on the hope of advancing into a dream job. They really are about the last demographic taxpayers should be subsidizing.
Don’t go to college unless you can afford it outright. Instead take low level jobs or unpaid internships where you would ultimately like to work (and stay home with mom and ad til you can afford your own place).
How long have you been around American colleges and universities? They’ve spiked the price like crazy because that’s what the market will bear since we’ve flooded them with cheap, subsidized loans and grants.
Meanwhile, they put a good chunk of that money into creating a deluxe, spa-like campus and lifestyle for the students they require less and less and less of, academically, all the time. Because the students, with their parents, are making the purchase decision but often not having to bother with the price tag.
Further, the colleges collude to make sure they don’t end up bidding against each other for the students they want.
It’s a corrupt and wasteful system that should be smashed back down to earth.
Nope.
I would treat student loan debt like any other debt.
The only thing I might add is default insurance. A student might be asked to pay a premium each year while in school to cover the possibility of a default later on.
With default insurance, groups that tend to exploit bankruptcy law (like lawyers), or groups in financially marginal degree programs would be asked to pay a larger premium to cover the increased possibility of default.
Of course lenders might also charge higher rates to such groups so perhaps default insurance isn't necessary.
They’d only take out bigger loans to pay what would be inadequate default insurance to cover such easily weaseled-out-of loans.
I’d be with you if you said we should start writing loans that don’t have any extraordinary debt protection AND we should get the federal government out of student loans completely. But what’s already out there’s gotta be paid for. It’s a population that’s fully capable of paying for it if they’ll only work to.
My daughter has worked 30 hours a week, the entire time she has been in college. She has payed all of her own expenses, still lives at home and will graduate at the end of this semester debt free.
And other parts of the budget?
22 years. Long enough to see the FA staff at the college my wife works at triple.
Colleges big against each other for students all the time. Most of the time the only way a student ever actually pays for himself is when they join the alumni association.
It is a corrupt and wasteful system. But it’s NOT the corrupt and wasteful system you’re saying it is. It really all centers around the government. They push students to a financial aid system the colleges have to accept, the acceptance of which pushes up the costs for the college, which isn’t made up by government financing, so they pass the costs to the students, which drives more students to financial aid. The financial aid system does need to be broken apart, just understand who made the system as stupid as it is.
I vehemently disagree with you that the cost of administering financial aid exceeds the increase in money that the colleges are able to rake in overall. College costs have been rising at multiples of the inflation rate for years because and only because government subsidies make it possible for their customers to agree to payments they otherwise couldn’t afford.
I agree with you that government is at the root of it, but higher ed has been making out like bandits from the system and spending lots of money wastefully to lure customers who are not cost conscious because they now have third-party payers, lenders and subsidizers.
And you’re right, the Ivies at least used to coordinate their aid offers, but the Dept of Justice made them stop. Early admission policies are a funky way to keep students from shopping in the marketplace, however.
Well you can disagree, but all the colleges I know the finances on lose money on students until state and federal funding shows up, and with recent cuts in state funding they still lose money on students. Financial aid certainly isn’t the only cost driver, but it’s good to keep in mind that most if not all that increased money they’re “raking in” leaves. Running a college is expensive, tons of government regulation on everything you do, most of your employees are unionized, anytime you want to build or expand something everybody assumes you have deep pockets and your prices sky rocket. It’s an bad way to try to make money. Unless you’re a diploma mill, then a whole bunch of your problems evaporate.
How dumb things happen at smart universities. The public’s UC Berkeley harvests family savings, Alumni donations, supporter’s money and taxes. Cal. ranked #1 public university total academic cost (resident) as a result of the Provost’s, Chancellor’s ‘charge residents higher tuition’. UCB tuition is rising faster than other universities.
Cal ranked # 2 in faculty earning potential. Spending on salaries increased 29% in last six years. Believe it: Harvard College less costly.
University of California negates the promise of equality of opportunity: access, affordability. Self-absorbed Provost Breslauer Chancellor Birgeneau are outspoken on ‘charging residents much higher’ tuition.
Birgeneau ($450,000) Breslauer ($306,000) like to blame the politicians, since they stopped giving them their entitled funding. The ‘charge instate students higher tuition’ skyrocketed fees by an average 14% per year from 2006 to 2011 academic years. If they had allowed fees to rise at the same rate of inflation over past 10 years they would still be in reach of middle income students. Breslauer Birgeneau increase disparities in higher education, defeat the promise of equality of opportunity, and create a less-educated work force.
Additional state tax funding must sunset. The sluggish economy, 10% unemployment devastates family savings. Simply asking for more taxes (Prop 30, 38) to spend on self-absorbed Cal. leadership, inefficient higher education practices, over-the-top salaries, bonuses, is not the answer.
UCB is to maximize access to the widest number of residence at a reasonable cost. Birgeneau Breslauer’s ‘charge Californians higher tuition’ denies middle income families the transformative value of Cal.
The California dream: keep it alive and well. Fire hapless Provost George W Breslauer. Clueless Chancellor Birgeneau resigned. Cal. leadership must accept responsibility for failing Californians.
Opinions? UC Board of Regents marsha.kelman@ucop.edu Calif. State Senators, Assembly members.
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