Skip to comments.Glenn Reynolds: Letís put colleges on the hook for loans that their students canít repay
Posted on 12/06/2011 7:27:48 AM PST by SeekAndFind
How do you solve the problem of young adults earning worthless degrees and a truckload of debt? Three ways. One: The Chinese way, which, while characteristically direct, is probably too authoritarian for most Americans’ tastes. Two: End federal student loans. Let kids take their chances with private lenders, who’ll need assurances up front before they lay out the cash that they’ll get a return on their investment after graduation. This idea would, I assume, die a grisly death after the first round of “all Jimmy/Sally wanted to do was go to State but he/she couldn’t get the money” stories. Three: The Reynolds way.
This is a simple case of inflation: When you artificially pump up the supply of something (whether it’s currency or diplomas), the value drops. The reason why a bachelor’s degree on its own no longer conveys intelligence and capability is that the government decided that as many people as possible should have bachelor’s degrees.
There’s something of a pattern here. The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle class people.
But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay in, the middle class.
Subsidizing the markers doesn’t produce the traits; if anything, it undermines them. One might as well try to promote basketball skills by distributing expensive sneakers…
For higher education, the solution is more value for less money. Student loans, if they are to continue, should be made dischargeable in bankruptcy after five years — but with the school that received the money on the hook for all or part of the unpaid balance.
As our Republican frontrunner once famously said, this smacks of right-wing social engineering. And I love it. Or rather, I love the basic idea: Colleges can either pare down their curricula to majors that impart actual marketable skills or continue to push crapola on their own dime. The thing is, I’m not sure it would end up producing more skilled grads than we have now. If forced to choose between revamping their course catalogues and continuing Critical Identity Theory Studies programs, I’d bet 95 percent of colleges would go the latter route and try to absorb the resulting cost of guaranteeing their grads’ loans. Culturally, they simply can’t part with super-soft humanities programs; even if they agreed that some are expendable on their educational merits, they’re not expendable politically. Which school would want to be known in liberal academic circles as the one that thought “Marxist Symbolism in the Music of Badfinger” wasn’t important enough to save?
So what’ll happen, I take it, is that they’ll backstop these loans but shrink their student bodies accordingly to limit their overall exposure — which means some kids who really would have benefited from a college education may be locked out. And after all, the fundamental problem here isn’t that colleges offer degrees in one crap major after another; it’s that students choose to take degrees in those crap majors even though they know, or should know, that it puts them at a heavy disadvantage in a tenuous economy. If you make loans dischargeable in bankruptcy and put the old alma mater on the hook for them, the personal-responsibility calculus arguably gets worse, not better: Students will be even more free to major in crap, which in turns means fewer grads with marketable skills. I guess Glenn is thinking that once you reach a critical mass, where some huge percentage of students is majoring in crap because they know their loans are backstopped, the school will have no choice financially but to eliminate some of those majors. And if student bodies do shrink, the results won’t be entirely bad: Many kids will be spared the loan burden of a B.A., willingly or not, with more cost-effective alternatives to college sure to appear in the market to meet the new demand for higher education. Exit question: Second look at the Chinese system?
“For higher education, the solution is more value for less money. Student loans, if they are to continue, should be made dischargeable in bankruptcy after five years but with the school that received the money on the hook for all or part of the unpaid balance.”
Sounds like an excellent idea to me. Or force the Ward Churchills, Noam Chomskys and other left wing professors to pay for the education of the students they brainwash out of their own salaries.
“Can’t” or “Won’t” repay?
Unfortunately there’s both.
It’s more screwed up than this.
If you were to go in to buy a truck, and the only Dealer in the state said “We want you to be a ‘well-rounded’ driver, so you also have to buy a motorcycle and a car” - naturally, you will pay full price for these extra vehicles, what would you do?
We take eager minds, set to invest years of their lives in pursuit of technology, or Medical Science - and we FORCE them to purchase an obscene number of credit hours (nearly equal to the number of hours of their chosen profession) in meaningless mish-mash of “Humanities” and “Social Sciences”. These courses cost money, and some arrogant ingnoramous says “it makes them well-rounded”. No, it does not. What makes a person ‘well-rounded’ is a personal decision to learn and read into areas outside of their primary area of interest - not extortion to take a foreign langauge, learn about pre-WWII politics or an introductory course on music appreciation.
Everything costs money - even the meaningless time-wasters that we burden students with.
The author misses an important point.
The middle class is not losing because they don’t have degrees.
The middle class is losing JOBS to outsourcing and anti-American “free trade”.
Degrees didn’t build America’s middle class.
Which would only lead to periodic university bailouts.
2. Direct them to the nearest mop store.
I worked my way through eight years of college without going into debt.
I made sure that I had practical degrees and marketable skills.
I also paid for four years of college for my wife. Though she was from a wealthy family--and I was from the opposite--I paid for her college after we were married because her parents were screwed-up royally, opposed the marriage (frankly, I didn't blame them), and I knew we'd never hear the end of it if they gave her the money. We slept on box springs on concrete blocks and cooked on a hotplate.
I set up a scholarship program to provide practical degrees and marketable skills to indigent people. I have no idea how many people I sent to college, but there were many!
I PAID FOR IT ALL AND NEVER WENT INTO DEBT! Worked nights--holidays--weekends.
I was a millionare at age 40. A multimillionaire at 42. And retired to live on my investments at 52!
If I can do it, anyone can.
Herman Cain did something similar. If anything, what he accomplished was tougher! He prevailed over poverty, racism, cancer, and the corporate world--and told the world how EVERYONE can do the same!
Democrat Politicians and their henchpersons in their Propaganda Machine (the MSM) have done their best to destroy him! They had to! He is the antithesis of everything they are, believe, and stand for. Cain is ascendance. They are decadence. They are the Forces of Decadence!
I know the Secret of Happiness! And the secret of ascendance. Submit to the forces of decadence at your peril.
Believe in The American Dream: liberty, justice, and prosperity for all of the people of the world.
But know well that the Forces of Decadence--The Left, the Democrat Party, Democrat Politicians, and the Democrat Propaganda Machine--will destroy it if they can.
Spot on. This is why colleges are afraid of technical certification programs.
Your also right. The USA is short 10-20 million jobs.
More degrees won’t fix this.
Their students are not allowed to take out government loans. The College has their own sources of funds and approved pools of lenders who understand that Hillsdale graduates actually learn something useful, become productive members of society and are at a very low risk for default.
Other conservative colleges (the relative handful of them) are taking a look at what Hillsdale is doing successfully and seeking to emulate them.
I know a few people who are really in trouble with student loans (and don’t even realize it yet).
A common theme of mine: Loans should only pay for tuition, not rent, the cable bill, a new I-Phone, etc....because at that point, they become elaborate credit cards.
Response - everybody deserves an education, and that includes a place to live.
My reply - work through school, take semesters off to earn money.
Response - a look in the eye like I just kicked Tiny Tim’s crutch out from underneath him.
For a large portion of our society, pursuit of higher education is viewed as a human right, which in their opinion should be free. This whole loan charade is bothersome to them - alot of paperwork to get what the government should outright give them.
I’d like to eliminate the entire program...but that’s not gonna happen. But how about some reasonable controls - tuition only, collateral, co-signers.
I know, I know, too capitalistic and too practical and too much reality for academia. We wouldn't want to sully the schools with the introduction of reality.
American college students are the new sharecroppers in our country. The university professors enslave the students with loans to pay the bloated salaries of the professors.
>Id like to eliminate the entire program...but thats not gonna happen. But how about some reasonable controls - tuition only, collateral, co-signers.<
To actually fix the system, it would be helpful to look at the financial aid offered to one segment of the student population at the expense of those whose parents make too much money, according to the liberal powers that be, to qualify for any discount whatsoever.
As long as you punish some students because their parents have too much (at least according to the faceless powers-that-be), in order to be “fair” to others, the system will continue to burden many young people with huge debts unimaginable just a few decades ago.
American college students are the new sharecroppers in our country. The university professors enslave the students with loans to pay the bloated salaries of the professors.
I've also been advocating this. Deferred cash flow: the college makes the loan, perhaps using the government to service the loan. Instead of getting their tuition money at the start of the semester, they finance their yearly operations from loan payments collected. If a student declares bankruptcy, the loan cash flow stops.
A large part of the mess comes from the EEOC, the various Civil Rights Acts, and the "Griggs v. Duke Power" supreme court case, which prohibited the use of written tests if they had a "disparate impact" (lower pass rate for blacks).
What is really needed is for Congress to change the Civil Rights acts so that employement placements tests are once again allowed AND that disparate impact is DISALLOWED as a basis for declaring discrimination. An employer could then administer a placement test for job openings (or use test scores from an independent testing company). A high school dropout who scores higher than a college grad gets a higher preference than the college grad.
Suddenly, if the sheepskin becomes irrelevant to the job market, fewer people will bother with the degree, and instead take whatever courses (if any) that they think are useful and helpful.
really easy, after three years student loans are dischargable in bankruptcy and the university then becomes the primary responsible party. (like a cosignor)
This will kill off worthless studies degrees.
there are more first year seats than first year law school applicants.
law schools are high profit because it has low costs. computers, a library, classrooms, professors and presto instant profit.
some of these schools need to close.
So let me understand:
If someone pays cash-as-you-go for a degree, and it turns out worthless, “sucks to be you”.
If someone pays put-it-on-my-tab for a degree, and it turns out worthless, the student can just eject the debt at a time s/he can afford to cycle thru bankruptcy (hey, Dad will foot housing & healthcare ‘til 26), and the school has to pay the creditor for the ACCREDITED services rendered in full? WT*?
Look, there is no guarantee that a given degree will have a workable return on investment. In fact, the whole classic POINT of a “liberal arts” degree is to acquire advanced skill and knowledge in something which does NOT have any expectations resembling marketability; makes the student a “better, well-rounded person” yes, but a far cry from a profitable trade.
At a key point, my father asked me the pointed question “do you want to make software, or do you want to make money?” Not a snide slam on programming, but a reality check that if you want to “make money” then do something for that purpose as anything else is not guaranteed to do so. Likewise getting a degree: if you want to make money, learn how; if you want to write about the obscure ailments of newts, don’t expect a lot of funding. Acquiring an unprofitable degree is laudable in and of itself, but don’t expect anyone to pay for it if you can’t pay the bill for what you signed up for.
Upshot: NO, the school should NOT be obligated to pay any of what a student didn’t, so long as the service of education has been rendered as accreditation deems correct.
NO THEY DON'T.
The professors are paid to teach a subject. The students sign up to learn the subject. If the student wants it bad enough, s/he can go into debt to pay for the education before having the money for it, at which point paying up is the student's problem; if the student makes life choices which are financially idiotic, that's not the professor's problem. If the professor teaches something which a large number of students are willing to pay high prices to acquire, the high salary is warranted; this is NOT "slavery".
If I want a high quality education in music appreciation, I'll write a large check (or a long loan) for the opportunity to have the best minds on the subject fill my mush-containing skull with everything they believe is needed for said education without the long process of discovering said material the hard way - and I will NOT expect a robust salary as a consequence.
Supply and demand. If students are willing en masse to sign up for huge loans of dubious repayment potential, that's their problem - NOT the professors', whose only involvement is to teach the given subject well.
If you're paying list price or more for college, you're doing it wrong. She & I together paid under $100K for 5 degrees - cash.
RE: do you want to make software, or do you want to make money?
Tell your dad that I’ve been making software for 20 years from old languages like PASCAL and FORTRAN under older operating systems like OpenVMS to C# and ASP.NET under newer operating systems like Windows 7 today and I don’t find making software and making money to be mutually exclusive... (especially if you do software for the financial industry)
RE: If I want a high quality education in music appreciation, I’ll write a large check (or a long loan) for the opportunity to have the best minds on the subject fill my mush-containing skull with everything they believe is needed for said education
Or you can go to your library and simply borrow a course taught by a great professor on a CD or VIDEO... FOR FREE.
I have this course in my library on Long Island ( and many other courses as well ). Why do I have to PAY to learn this when It is FREE and I can learn from the comfort of my screen or car?
How to Listen to and Understand Great Music,
Taught By Professor Robert Greenberg, Ph.D., University of California, Berkeley
Professor Greenberg teaches the powerful influence of social context on musical creation. Bestselling author James Collins, writing in Inc. magazine, explains: “The Greenberg series combines a history of Western civilization with a history of great music from ancient Greece to the 20th century. Greenberg’s 48 lectures come alive with passion and knowledge. The course illustrates the interplay between societal change and innovation and offers a unique perspective on the acceleration of change wrought by the 20th century.”
If you have the motivation and internalized direction to do so, and are satisfied with the results, fine.
If you wish to seek out personalized attention by certified experts at an accredited institution devoted to imparting such knowledge in an efficient manner with subsequent personalized certification, that's gonna cost you. And it's not "slavery".
I'm quite the advocate of self-motivated learning. At any opportunity I'll suggest the free ivy-league education offered at http://ocw.mit.edu for the self-motivated (personal attention & certification costs extra).
But good luck to most people going from zero to certified within a few years for most subjects short of paying some serious money for it. A lot of subjects really do need a non-trivial amount of hands-on assistance for efficient learning. I've worked with/for some who didn't get formal training, and while they were pretty good there were some large gaps in their abilities which any accredited education source would have covered.
Supply and demand. There's a demand for big-price educations, so a supply has grown to match it.
Doctor Gall...became a specialist, specializing in diseases of the rich. - Tom Lehrer