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Student Loan Crisis Solved -- Next Problem?
Forbes ^ | 12/14/2012 | Raj Sabhlok,

Posted on 12/30/2012 4:00:10 PM PST by SeekAndFind

Economists fear we’re racing towards another trillion dollar bubble of student loan debt. But there is a simple way to stop the madness now, before we blow any more taxpayer dollars — or our kids pay an even bigger price.

SNIP SNIP

A simple solution

Admittedly student loans are riskier than most since there is no tangible asset to collateralize (although there certainly is a non-tangible asset — the student’s education). However, all educations are not created equal and should be “appraised” by lenders as part of a student loan determination.

College fees and student loan debt have a perverse symbiotic relationship. Rising costs in education beget rising student loan debt. It is puzzling why an art degree costs as much as a computer science degree when the job prospects of each are so vastly unequal.

Lenders, in this case the government, should make a fact-based determination of a student’s likelihood to graduate, to get a job and their expected income. Prospective students applying for loans can be evaluated for “credit worthiness” based on a score much like a FICO score. A student loan score would be based on a formula comprising their grade point average, major, and academic institution. Each of these variables is directly related to a student’s ability to get a job upon graduation and repay their loans. For example, a STEM (science, technology, engineering and mathematics) major at MIT would yield a higher score and loan compared to a religious studies major at a lesser ranked school.

While the solution I have outlined doesn’t offer relief to those deeply in debt today, it will stop more hot air going into the student loan balloon.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Education; Society
KEYWORDS: college; studentloan; tuitionbubble

1 posted on 12/30/2012 4:00:19 PM PST by SeekAndFind
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To: SeekAndFind
Rising costs in education beget rising student loan debt.

This genius has it essentially backwards.It is the availability of student loans that begat rising education costs. Take out government backed student loans, eliminate them completely and tuition costs drop like a boulder in water. It is all about supply and demand. Dry up the money, demand drops drastically. To increase the demand, you do what? Lower the prices to get rid of the glut of supply.

2 posted on 12/30/2012 4:08:00 PM PST by Founding Father (The Pedophile moHAMmudd (PBUH---Pigblood be upon him))
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To: SeekAndFind

Never gonna happen with Dems in charge.

“Big education” is probably as important in contributions to Dems as “big labor”.

Those contributions come from overpaid profs and admins who profit from high tuition and fees made possible by massive student borrowing.


3 posted on 12/30/2012 4:08:15 PM PST by nascarnation (Baraq's economic policy: trickle up poverty)
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To: SeekAndFind

“Lenders, in this case the government, should make a fact-based determination of a student’s likelihood to graduate, to get a job and their expected income.”

Well da, that’s what they do in every other type of lending (at least when the government isn’t involved). “You want money to start a business, fine, show me the plan and how it pays us back.”

It is very simple, but the liberals will scream to high hell if we ever tried to add accountability to this lending. About the only thing good is that the loans can’t be discharged in bankruptcy and I get more entertainment value listing to Art History majors bitch about not being able to pay back their $65,000 debt.


4 posted on 12/30/2012 4:20:58 PM PST by BobL (Agenda 21...Agenda 21...Agenda 21...Agenda 21...Agenda 21... (whatever the hell that is))
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To: SeekAndFind
So people are supposed to do cost-benefit analysis on their education expenditures?

Isn't that racist?

5 posted on 12/30/2012 4:23:12 PM PST by E. Pluribus Unum ("Democracy is indispensable to socialism. The goal of socialism is communism." --Vladimir Lenin)
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To: SeekAndFind
should make a fact-based determination of a student’s likelihood to graduate

Amy liberal would tell you that any such action would be racist. Besides, the Dems are fixing the situation. Students who get their degrees now (in Penguin homosexual studies, etc.) simply transition to SSDI for life (for ADD or some such liberal condition).

6 posted on 12/30/2012 4:24:05 PM PST by Cementjungle
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To: E. Pluribus Unum

Everything else is[according to some], so why shouldn’t that be?


7 posted on 12/30/2012 4:26:50 PM PST by sport
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To: E. Pluribus Unum

Basic mathematics is racist.


8 posted on 12/30/2012 4:36:29 PM PST by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: SeekAndFind

Financing education amounts to financing “human capital” - it’s a small business loan.

No loans for: Feminist Poetry, The Dog in Cinema, Labor Studies...


9 posted on 12/30/2012 5:12:11 PM PST by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
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To: Founding Father

eliminate them completely and tuition costs drop like a boulder in water.

***

Eliminate usury on ANY debt, and the same thing happens.


10 posted on 12/30/2012 5:15:44 PM PST by ROTB (Live holy, forgive all & pray in Jesus' name. Trust He is willing & able & eager to ANSWER BIG!)
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To: 4Liberty

RE: No loans for: Feminist Poetry, The Dog in Cinema, Labor Studies...

PROBLEM: A significant number of college freshmen don’t even know what they plan to major in.


11 posted on 12/30/2012 5:16:40 PM PST by SeekAndFind
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To: Lurker

In my upper division undergrad math classes there were only one or two blacks and in my grad classes I saw exactly one black student and he did not stay too long. These were at public universities. That shows how deeply racist math is.

One of my classes was allegedly a course in algebraic topology, but we just sat around and figured out how to oppress minorities and keep them from what is rightfully theirs.


12 posted on 12/30/2012 5:19:50 PM PST by 17th Miss Regt
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To: SeekAndFind

As the article stated..it doesn’t offer a solutions to of the past.

I don’t think all kids are are college material. If kids really want to go to college..maybe they should earn that right. If a kid’s grade average is high enough in high school, there are AP classes that translate to college credits. They can always go to a community college for a couple of years to get the basics at a lesser cost and then move move to the college of their choice to get a legitimate degree.

And if they don’t have scholarships...maybe they should work so they don’t come out of school so deep in debt it would scare a normal person.


13 posted on 12/30/2012 5:22:15 PM PST by berdie
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To: 17th Miss Regt

“One of my classes was allegedly a course in algebraic topology, but we just sat around and figured out how to oppress minorities and keep them from what is rightfully theirs.”

Well done.


14 posted on 12/30/2012 5:24:25 PM PST by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: ROTB
Eliminate usury on ANY debt, and the same thing happens.

I'm not speaking of interest rates and in the case of student loans the rates are nowhere near usurious. No, I'm speaking of eliminating the government (i.e. taxpayer or US bond/bill purchaser)providing the loan principle.

15 posted on 12/30/2012 5:31:51 PM PST by Founding Father (The Pedophile moHAMmudd (PBUH---Pigblood be upon him))
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To: SeekAndFind

The writer forgot that there is no risk for student loans. They cannot be discharged in bankruptcy. Like herpes they are forever!


16 posted on 12/30/2012 5:43:39 PM PST by muawiyah
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To: SeekAndFind

I think a significant number of the students are betting on the government coming through with some type of loan forgiveness. Most partied for 5 or 6 years to get a 4 year degree and fully expected to be given a high paying job, a large suburban house, and a nice jet setter lifestyle just because they deserved it. Many of those living in their parents basements are becoming bitter and resentful, not at themselves, but at their parents and society. Like the Food Stamp President, it is always someone elses fault. The classic, but not uncommon OWS student sign puts the entire generation into perspective: “I have BA Degree in Hispanic Gay, Lesbian and Transgender Studies with $90,000 in student loan debt and I can’t find a job”. DUH, DUH ... One would think for $90,000 (which is only the student debt, probably not the total cost) one could obtain a scrap of paper representing something educationally more substantial than just hanging around Hispanic queers, freaks and perverts for 5 or 6 years.


17 posted on 12/30/2012 6:01:46 PM PST by RetiredTexasVet (Save the nation, have your family's progressives spayed or neutered.)
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To: RetiredTexasVet

Young American-American people are encouraged to abandon their parent’s morals, ethics, values and culture in entertainment, public schools and Universities. Every day is opposite day in America.

If they obey that humanist commandment and abandon what their parents and grandparents taught to them, they are up the creek with no paddle. Just the way the Marxists want them.


18 posted on 12/30/2012 6:18:20 PM PST by SaraJohnson
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To: SeekAndFind
"However," not "all educations are not created equal..."

Learn to write-a de English, big shot.


19 posted on 12/30/2012 7:27:21 PM PST by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: SeekAndFind

This solution has NO chance of ever being tried. White men would benefit disproportionately. Journalism majors and communications majors and political science majors wouldn’t be able to get a loan, let alone women’s studies and black studies.


20 posted on 12/30/2012 8:13:38 PM PST by Nota particle
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To: SeekAndFind

Europeans do what this guy is suggesting. Children in Europe are evaluated all through their educations and ONLY THE BEST get their higher education paid for. Here in the U.S., we try to put every student who desires it into university, whether they have the talent and drive or not.


21 posted on 12/30/2012 8:42:50 PM PST by Amberdawn
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