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No more student loans is an acceptable option IMO.
And close down most of the colleges in the US? The institutions cannot live without the revenue they get from those loans. Any significant action needs to be phased in over a long period...say 20 years.
And close down most of the colleges in the US? The institutions cannot live without the revenue they get from those loans. Any significant action needs to be phased in over a long period...say 20 years.
Let them close. While I am a fan of higher education, not until we get past the Special Snowflakes syndrome where the 20 something leeches dispute their moral and legal obligation to repay, can we subsidize this education.
We should add the default list into everify or similar pre employment check systems, with the deadbeats automatically assessed an extra % of each paycheck taken out with Federal Income taxes. At year end, since IRS does not issue refunds to these deadbeats, that would expedite their repayment process.
Public college always subsidized. That's why they're called PUBLIC and not private universities. Although now, since most states contribute about 1/3rd to 1/2 of public higher ed revenue, they should be called public-private partnerships.
Student loans have been a lagging factor that fill in the gaps of state funding. Also, universities increasingly rely on "creative" sources of revenue such as Chinese students paying very high out of state tuition, and the revenue from campus housing.
Also, the student loan problem is in no doubt related to the explosion of for-profit "colleges" aka scams. Over 40 years, the number of public institutions has remained stable. The for-profits are the ones that have benefitted from student loans.
Quote:
While the number of people going to college has increased, the number of traditional colleges has been relatively constant (see Figure 2). In the past two decades, the total number of non-profit degree-granting institutions has remained steady at about 3,300, almost equally divided into public and private schools. Therefore, increased enrollment at non-profit institutions came almost exclusively from increased enrollment per school. By contrast, the number of for-profit institutions has almost doubled since the mid-1990s. In 1997, there were about 600 proprietary schools in the United States, but by 2010 there were nearly 1,200.
That linked report from 2012 pretty much sums up the economics of the university sector and how loans contribute to it. It puts to rest this notion that student loans are the driver, rather than a reaction to, college costs. In full context of the university economy, loans are significant but you could cut all of them and most insitutions would survive. Maybe 20% of them would close - mostly the for-profits. You'd see a contraction in the entire sector but it would survive but be focused on sustainability. A lot of faculty and staff would be let go - that would significantly harm a lot of local economies.
You'd also hurt community colleges since they mostly enroll first-generation and low-income students, but they can ask for local bond issues or property tax increases so those communities that cared about their college would keep theirs.
What cutting student loans would do would mean that college would only admit students they were sure would graduate in a timely fashion. The situation would go back to what it was prior WWII (the GI expansion) when a fairly small percentage (5-12%) of the population went to college. There is a direct linear relationship between university selectivity and the amount of aid given per student at those institutions. The more selective the school, the fewer low-income students they have.
Basically, you'll destroy poor people's chances for moving up because in one fell swoop you've destroyed their educational oppotunities - most notably the community colleges. Congratulations on winning the hunger game.
It wouldn't save us as a whole that much money because the practical effect would be to put intense pressure on high schools to provide the tertiary training people now need for the workforce. You'd probably see the diminished universities partner with high schools and create "long high school" curricula of 5 or 6 years, etc... that would cost money.
Last edited by redguard57; 06-05-2016 at 02:10 PM..
Let them close. While I am a fan of higher education, not until we get past the Special Snowflakes syndrome where the 20 something leeches dispute their moral and legal obligation to repay, can we subsidize this education.
Really? And generate a recession? Couple of million people unemployed? Drop GPD a few percent?
And a devastating long term impact leading to the hiring of properly educated foreigners either here or in their home country?
Really? And generate a recession? Couple of million people unemployed? Drop GPD a few percent?
And a devastating long term impact leading to the hiring of properly educated foreigners either here or in their home country?
LOL. Would not rapidly occur. These institutions would use endowment funds to subsidize a decade or two, with the weakest closing early on, and gradually more close, until supply meets demand.
In addition, parents would use those 529s, home equity, etc, and college kids would start to work p/t at 16 and save, save, save.
LOL. Would not rapidly occur. These institutions would use endowment funds to subsidize a decade or two, with the weakest closing early on, and gradually more close, until supply meets demand.
In addition, parents would use those 529s, home equity, etc, and college kids would start to work p/t at 16 and save, save, save.
The universities with rich endowments are simultaneously the ones least dependent on federal & state subsidy or student loans.
Essentially you'd make it to where only the rich could go to college.
The average indebtedness of the 2013 and 2014 college graduates was around $28,000.
Be careful of medians. They can mislead particularly if you have a large representation at the low end.
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