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Eventually this will all adjust as markets clear... There will be a student loan credit bubble that bursts. The government will bail out the banks/note holders and college students will end being able file for bankruptcy or forgiveness.
The last issue will be education institutions will no longer be able to charge crazy tuition fees and will either have to right their cost structure or they will go bankrupt. College students will not be able to secure large loans going forward and will either have to get a credit card APR like fee 22%+ or they will have to pay cash for class.
First of all, who is to say there is little demand for a liberal arts degree. This is a myth. If everyone went to school and earned a STEM degree, the world would not function. There is a place for a liberal arts degree and studies have shown again and again that people with liberal arts degrees earn more at the height of their career, on average, than people with STEM degrees.
If you're going to invoke studies to support your point then reference one of those studies.
It seems that federal student loans are wrecking havoc on America’s young adults. Schools can pretty much charge whatever they want now, so long as they know Uncle Same will front them the money.
Is it time for congress step in and greatly limit access to federal student loans, which would presumably decrease tuition rates when no one can afford to go to expensive public and private universities? Of course students could still go to private lenders but no doubt federal student loans are the gist of the problem.
A sizeable part of that % increase was that a lot of states withdrew subsidies. As such, projecting the same increase into the future would likely grossly overstate the increase.
There is a lot more scrutiny and education about taking on student loans these days.
A lot of schools are also instituting lower cost options like more robust JUCO feeder programs.
I don't follow the logic that the schools can just "charge less" if student loans dried up. They'd likely have to make major cuts to programs, staff pay etc. I mean seriously, go look at a school budget that is publically available for whatever State University is near you. Where are these cuts going to be made when their revenue drops?
P.S. Some schools help their budget situation by letting in out of state or foreign students with lower scores and then charging them a lot more. University of Iowa rakes in huge China $$$ this way as one example.
First of all, who is to say there is little demand for a liberal arts degree. This is a myth. If everyone went to school and earned a STEM degree, the world would not function. There is a place for a liberal arts degree and studies have shown again and again that people with liberal arts degrees earn more at the height of their career, on average, than people with STEM degrees.
The government subsidizes student loans by offering lower rates. When you subsidize something, you get more of it. I used to know people who took out college loans to live on, buy designer goods, you name it.
Employers want people capable of critical thought who have a strong work ethic. A BA from an Ivy or other top university requires the capability for critical thought and you can't get through the program without working hard. A BA from a 3rd tier state school paid for with borrowed money? Not so much.
We have easily 40% of the age 18-26 population going to college. The majority of those attend very unselective schools with college-lite work loads because the students couldn't possibly handle a real academic work load. For the most part, this kind of system doesn't benefit anybody except the educational cartel feeding on the student loans. Why would I want to hire a grad from a 3rd tier school? I know they have pretty much zero critical thought capabilities. I know they didn't have rigorous courses. I might be able to sift the wheat from the chaff and find a few smart ones who were there because it's all they could afford but most top employers won't bother. I think the US needs to adopt more of the German model. The top people go to college. Most everyone else gets a really strong high school education followed by lifetime skills-based education. In Germany, the no-so-bright High School 'C' student doesn't go to college. In the US, they likely bumble around for 2+ years in a Community College doing remedial High School and another 2+ years in a state school where they end up with a degree that's not worth much of anything while piling up big student debt.
The other point I'd make is that, inflation-adjusted, college profs are paid the same now as in 1975 when college was far cheaper and they generally teach the same number of students. The problem in 2018 is all the non-academic overhead. If you eject most people from the university system who don't actually teach college students, college becomes affordable again.
The government subsidizes student loans by offering lower rates. When you subsidize something, you get more of it. I used to know people who took out college loans to live on, buy designer goods, you name it.
That’s another large issue. The loan proceeds should never go directly to the borrower with the ability to do anything they want with it
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Quote:
Originally Posted by jghorton
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Perhaps it is instead time for the public to weigh the cost of a college education with the value provided and ask, "Does it really make sense to indebt one's self $60K+ for a basic liberal arts degree - for which there is little demand?" To me, this is more of a 'parenting' problem than a federal student loan problem.
^^^
I'm in this camp.
Look over the same period and report and determine how many students 'parents' paid 100% for EDU rather than the STUDENT paying for higher EDU? (as generations before had paid their own way)
Make the students 100% responsible for paying AND outcome, and:
1) Schooling will get completed much quicker
2) They will hold profs and U's to higher std
3) They will graduate with purpose and direction
4) They will get to WORK / productivity
5) Employers and community and students will be better served.
By PAYING themselves... students will lead the 'revolution' to get market rate education tuition (as in pay for results). Check out the FREE / low cost Universities all over the world. The USA is not leading that list!
There are many ways to accomplish this. (besides parents 'enabling' the students and the U's to take advantage of the AVAILABLE and EZ green $$$ flowing from parents) Who for some mysterious reason feel obligated to perpetuate the 'Entitlement Generation'.
A sizeable part of that % increase was that a lot of states withdrew subsidies. As such, projecting the same increase into the future would likely grossly overstate the increase.
There is a lot more scrutiny and education about taking on student loans these days.
A lot of schools are also instituting lower cost options like more robust JUCO feeder programs.
I don't follow the logic that the schools can just "charge less" if student loans dried up. They'd likely have to make major cuts to programs, staff pay etc. I mean seriously, go look at a school budget that is publically available for whatever State University is near you. Where are these cuts going to be made when their revenue drops?
P.S. Some schools help their budget situation by letting in out of state or foreign students with lower scores and then charging them a lot more. University of Iowa rakes in huge China $$$ this way as one example.
And students from Illinois ... it is a pipeline to Iowa City.
I think a big part of the Fed not allowing bankruptcies for student loans is that there isn't much collateral for the loaned money. Its not like there's a car, house, building, assets, that they get back. It would be assumed that they can't get back the "knowledge" that's gained through the loan.
Now if this were the matrix and you paid an amount to download all the info to your brain - THEN it might be allowed.
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