Solving the Student Loan Debt Problem
I have a great new idea: Let’s use the government to help give giant, unsecured loans to one of the dumbest groups in our society — teenagers.
Oh, we already have a trillion dollars of outstanding student loans? Never mind.
Now, I don’t like to use the word “crisis” unless people are actually running around the streets on fire and screaming, but this whole student loan mess is becoming a bit of a problem. Student loans top both credit card and auto loan debt, and student loan debt is all held by an increasingly worthless group: college graduates. We give $100,000 loans to teenagers — people you normally wouldn’t trust with $100 loans — and then they party for four years while majoring in art history and graduate to join an Occupy Wall Street protest to complain about all the debt they have and can’t pay back. If the goal is to create annoying, useless hippies, I’m pretty sure it can be done for much cheaper. This student loan nonsense has to end.
Oh, I know many will object to that. “Making these loans is investing in our children’s education.” But objectively, this has been an absolutely horrible investment lately. Taking the same money we’d put into a college education and instead placing it in a mutual fund would get you a much better return on your money. Plus that won’t eventually scream about the 1% and defecate on a cop car. I mean, just look at how few people can get jobs right out of college these days. Rats trained to pull levers to get food pellets have more useful skills than most of today’s college grads. And the cost of training rats doesn’t grow faster than inflation.
How did we get here? In a sane world, if a teenager walked into a bank and said, “I would like a $50,000 loan to major in modern dance,” the bank manager would call security, who would then pummel the stupid kid, and everyone would end up smarter for it. But what happens instead is that Uncle Sam walks by and says, “I like his moxy. Give him the loan; I’ll guarantee it. And I’ll make sure he can’t ever get out of his stupid choice through bankruptcy.” So they give this giant amount of money to a dumb kid, and then the colleges are waiting outside, saying, “Hey! They’re giving huge loans to moron teenagers; we need to get some of that money!” So we have colleges preying on these gullible saps, increasing costs while their diplomas plummet in value in a complete mockery of our capitalistic system.
And who is the biggest victim in all this? I’d say me. I’m a taxpayer, and I just know that, as usual, I’m going to be expected to pay for things when the government cleans them up… or, as is more likely, makes them worse. Are we going to have a bailout for people with too much student loan debt? I hope not, because as a conservative, I like for actions to have consequences. If we bail out people with student loans, we should at least randomly select some of them to fight to the death for our amusement in the Debt Games.
But I guess I’m not the only victim here. Other victims are actually the stupid kids being tricked into borrowing huge amounts of debt to get worthless diplomas. It’s hard to see them as victims when, like most people, I hate teenagers and want bad things to happen to them. And when I think about the incoherent, angry young adults in OWS, knowing that their futures have been crushed under giant piles of debt they’ll never be able to repay kind of makes me smile. Even so, this collusion between the government, banks, and colleges to take advantage of stupid people needs to stop.
Now, we have minimum ages for buying tobacco and alcohol; why don’t we have those for taking out a student loan? Debt is way more destructive than Jägermeister — to both the individual and society — so why don’t we actually make sure the people deciding to get into it are mature enough to make that decision? I mean, I’m fine with treating an eighteen year old as an adult for the purposes of putting him on trial and locking him up, but let’s be realistic here. Very few of them have any actual useful common sense at that age. So here’s my proposal: You have to be at least thirty years old to get a student loan. That way, when someone agrees to go into debt to get a college education, they might actually have some idea of what money is and what debt means. And having had to make a living without a college education, by age thirty they’ll hopefully understand what they need higher education for and get a functional degree instead of majoring in something like philosophy (and it’s kind of ironic, because if you major in philosophy, you obviously do need more training in how to think).
If a person doesn’t want to wait until age thirty to go to college, he’ll have to save up money and pay for it himself. The point is, people are going to have to learn to be useful individuals and then go to college. No longer will it be this extension of adolescence you go into right out of high school. And if being a useful individual is too much for someone, he can just go straight to being a useless hippy without the unnecessary college step. He’ll at least be a debt-free hippie. That will give him less need to complain, but hippies are pretty good at finding new things to whine about.
I’m 51 and I’ll be graduating from college tomorrow.
When I was 18, I was an idiot and completely wasted a couple of years of college with beer and chasing women. You can bet your sweet bippy that when I decided to go back to school and get my degree, I looked long and hard at how much it would cost and how it would pay off. I didn’t think that way when I was a teenager.
I have an even better idea: Let’s use the government to help give giant, unsecured loans to one of the dumbest groups in our society — Wall Street CEOs.
Congratulations Robert on your accomplishment. In your case learning for the sake of learning is a good thing. At 51, though, your expiration date in the job market has, for the most part, passed. If you don’t know this you will soon find out.
Not all of us are stupid lefty punks who work for wages. Who wants to do anything that involves getting past the pursed-lipped bitchy woman in HR, well unless she’s sorta cute and will let you jump her bones; lots of them will. What you stupid lefty punks have to get accustomed to is the fact that we old guys are going to be the “boss of you” for quite some time.
that sounds like a well spent 2 years to me.
I think student loans should be the same as all other lending, I.e. based on the likelihood of repayment. To qualify for a student loan there should be a point system. You get a large number of points for being in a program whether it is university, college or trade school that leads to a job. You also get points for your grade point average while in college. Therefore if you are taking a general humanities program and partying , you would not be given loans and so possibly these student would drop out and come back when they are more mature. You would have to have exceptions for people from disadvantaged homes who are working hard but are in the process of catching up academically.
Robert now that you have graduated allow me to show you some real education. Register with my site and I will open a retail store for you. The course is free and the only money this course will cost you is if you elect to put real products in your store for sale. I can teach you more in 90 days than you have learned in 4 years of college. You see I build you ownership in my company. Join us and let me show you the money. Free Enterprise.
Funny stuff, in a tragic sort of way (or is it the other way around?).
“Other victims are actually the stupid kids being tricked into borrowing huge amounts of debt to get worthless diplomas.”
And here’s the second part of this joke: Tricking the ‘stupid kids’ into voting for the clowns (see Obama and “Dems”) who have created this education bubble and are encouraging — and making it easy for — their victims to go into debt, and then enter a job market that has no jobs.
“Will you walk into my parlour?,” said the spider to the fly . . .
Astounding.
Couldn’t agree more. In fact, this is what I tell teenagers who are complaining about cost. It’s directly attributable to the leftists who control the universities. Wouldn’t it make sense that the faculty and administrators, our “best and brightest” would seek ways to lower the cost of education? The students are just there to be milked and they need to be aware of that.
Have a look at this……
….”University cuts college cost by 10% for next year | Sewanee Today …
news.sewanee.edu/academics/2011/02/16/tuition-reduction
Feb 16, 2011 – Sewanee: The University of the South … The 10 percent price reduction applies to tuition, fees, room, and board for the 2011-12 academic year; …
Alumnus, B.A. Econ.,1954………..a different World then….
If a marriage license is a “civil right” then why isn’t a law license? Or a medical license? Or a hair-dressing license? If society has no business setting standards for one license then it’s discriminatory to set standards for any license.
College Degrees are Human Rights! By depriving me of that degree you’re depriving me of the livelihood that I deserve! Close the diploma mills and give me my license!
Logic. What a concept! Good stuff, ChrisS.
Here Here!
ChrisS, you’re unraveling the bureaucracy.. shame on you!
Simply get gov’t out of the student loan business altogether and leave it up to the banks with NO gov’t guarantees.
Make prospective students prove their degrees are a worthwhile investment to a loan officer. Less debt for young people, less bloat on college campii, and students graduating with educations that actually make them USEFUL to society at large.
A novel concept, I know, but I’m pretty sure it would work.
Actually, the problem is the schools. If the colleges had to cosign their students’ loans, there would not be any degrees in LGBT Studies. The fact is that intelligent, highly trained, experienced adults are allowed to market completely useless majors to innocent children, and bear no responsibility for the results. Why we prosecute heroin dealers but not Political Science professors is a mystery to me.
Seriously, why shouldn’t the college guarantee its results? Let them cosign, and if the graduate can’t repay the loan, well, whose fault is that? Who was in a better position to assess the likelihood of repayment at the time the transaction closed? Let them bear the risk, if they think it is small. And if it turns out the crap they are peddling is worthless, well, why should they get paid to peddle it?
Political Science is one of the less problematic departments. You see a lot of ROTC cadets/midshipmen taking PoliSci. It’s the Humanities departments that are the real ripoffs.
That it is atrocious to burden the immature and gullible great sums of loan for a “college education” is a theme I and others have been attempting to sandblast into the face of the establishment and popular indifference for ten years or more.
It is worse than a summary can give, but superficially there appears to be no problem — never underestimate the persistence of a widely held social asperation. The ones who are most hurt — the once innocent young, now burdened with a nigh unpayable lifetime debt — are nearly always embarrassed to speak of if. Parents and peers still lustily brag about which great college they or their children are going to, or just graduated from. Four years onward, after the wonderful stadium-filling graduation ceremonies where establishment high-priests and stars sprake solemnly at the podium before the first lines of adulthood formed up like some betassled herd in a cattle shoot they shut up. The reality has overwhelmed them, yet even when a younger peer comes abragging college-wise they have not the social sense to rebuke that fool.
The reality is at college they learned very little, but four years, and twenty years, later they are paying a hefty chunk every month — 300, 400, 500. As much as the rent in the tiny bedroom house-share, such miserable elbow-knock being the only digs they mayst afford. They put off marriage — who can afford marriage, and put off making children. College taught them that well — how NOT to be parents.
try $1000 per month
Actually, mine is $1600 per month (law school). Just saying.
(and while the government is absolutely partially responsible for this by guaranteeing these huge sums of money and enticing colleges to raise their costs to get a piece of the pie, the colleges themselves deserve some blame, too. I took our my loans in reliance on the data provided by my law school. Since I applied to law school and took out these loans, it has come to light that law schools outright lie in their job and salary figures. I saw it firsthand when I graduated with no job and they gave me a “job” doing research for one of the law journals so they could mark me down as “employed.” I worked 5 hours and made less than $50, but hey, I helped give them an alleged 99% employment rate. What a joke. When people ask me, I tell them not to bother with law school; I wouldn’t do it again if I had the choice, and if I didn’t have to come up with $1600 in payments a month, I would switch careers altogether)
My daughter is in the same boat. The Law School she attended gave glowing reports of the great jobs and salaries that their graduates found by attending their highly rated Law School. Turns out the only ones who got good jobs with high salaries were students whose Daddies were Partners in large law firms. What a rip-off! She is saddled with a student loan debt that is larger than her mortgage payment! She had NO student loan debt when she graduated from College, but the overpriced law school was very willing to help her find loans to finance her tuition. The only job she could find after graduating was doing research as a temp…no benefits and horrible pay.
Do not encourage anyone to go to Law School-it is a waste of time and money!
All we need to do is see to it that the “useless” majors include coursework requirements which can actually be used to make money in the real world.
For example:
Modern Dance – Exotic Dance
Art History – Tattoo Artistry
Womens Studies – Escort Service Studies
Graphic Design – Pizza Design
Philosophy – Sandwich Theory
Hey now… Graphic Design is a legitimate major. It’s what I like to call “the only art degree that will ever actually make you money.”
-Self-employed graphic designer making enough to pay the bills
The solution is easy.
Stop federal subsidies and make student debt dischargeable through bankruptcy like any other unsecured debt (which is exactly what it is).
What I could never understand was if inflation goes up about 3% or 4% a year, why does the cost of getting a college degree go up about 20% each year? And these are the same colleges that teach “Business Administration,” no less.
Could it be that the colleges see all of this “free money” that’s being given to the students by the government and are trying to gouge the students for as much as they can? Naaaa, that would be to mean, right? But what it really represents is the true far-left circle of life, my friends.
The colleges keep raising the tuitions so that the government can give out huge loans, thereby allowing the colleges to hire a lot more left-wing teachers who support the Democrats, you know, the ones that keep wanting to give out huge student loans. The money goes from the government, to the schools, who give it right back to both the Democrats (in the form of either union dues or donations from left-wing teachers) and to the government (in the form of the silly kids who are dumb enough to pay the money back to the government at high interest rates). It’s a perfect scam, and one that both parents and kids buy into every year. Because everybody in the media and in the government scream that you need a college degree to succeed in life. Tell that to the kid who majored in theater arts and is now working at Starbucks making minimum wage.
All knowledge that is taught in college is from books that have already been written. So if you studied the same books and did a thorough job of it, you’d know as much as a college graduate. It would be easy enough to replace diplomas with certification tests run by a private agency who has a reputation to protect as regarding the thoroughness of their tests. Proving therefore that a certified person who had passed these tests did actually known what was required for them to know. The only advantage a college might have is where people have to do lab work, although virtual reality might be able to replace that. Also, why should college courses cost more than similar courses taught in high school? The source of the knowledge in both cases is exactly the same!
Knowing is knowing, so you’d be right. Of course the cultural experience of leftist misandry Part 2 would be missing. Our poor youth wouldn’t be able to function with reinforcement of their place in society as told through television, the movies and sealed with the university system. George Clooney’s tummy would hurt I’m afraid.
Loans! All for the bargain price of cutting families from aid who finally made enough to pay for college…just not enough to qualify for aid. Colleges raise their rates since loans are “available” (thanks for meddling US Government). As a result of such a backward-ass benefit, hardest-working families pay more for college than those who can’t afford it. How the hell did that happen?
Stay tuned folks. It’s about total stupidity, not partial. There’s no place for loopholes.
The ability to pay back & over age 30 rules of thumb are sensible. Will we vote sensibly?
…..see my —-
“University cuts college cost by 10% for next year | Sewanee Today …
news.sewanee.edu/academics/2011/02/16/tuition-reduction
Feb 16, 2011 – Sewanee: The University of the South … The 10 percent price reduction applies to tuition, fees, room, and board for the 2011-12 academic year; …”
….posted above somewhere.
College degrees are practically the Edsels of the new century. How many people with college degrees cannot find a job in their field in 2012? Last time I looked it was about 80%. For the first time these ‘graduates’ are refusing to take jobs they consider ‘beneath them’, because their parents will enable them to remain children. Very sad for America.
Interesting article Mr. Fleming, and, I think, fair. Still, while I agree that tax payers should not have to foot the bill, I am in agreement with bvw. These student loans have been pursued in as predatory a manner as any other type of loan since indentured servitude was allowed.
I remember being 19, 20 years old and having, quite literally, every single adult influence in my life stressing the importance of college to me. “Forget the cost!” They seemed to say, it will all be worth it in the end.
I got a serviceable degree in English Literature. Yeah, sure, it’s not a network engineering degree, but I can and do make a living with it. Except that now I have this crushing debt hanging over everything I do. I have no savings, I cannot buy a home, I’ve never owned a new car, I don’t go out or have, “expendable income,” heck some weeks I struggle to feed my family.
Honestly, I do feel taken adavntage of. I feel that I was promised by people I trusted (and don’t we want the youth to listen to adults?) that taking out these loans would be a good investment. Except that it was a terrible investment, and there is no way I can ever get away from this mistake.
If I were a corporate robber baron, a’la Trump, and made a poor investment that hurt many, many hundreds of people, then I could seek relief in the bankruptcy courts. But as a student who trusted in my advisors and made a poor decision that hurt only myself and my lender (who also made a poor decision), then I cannot. This seems inherently unfair.
By the way, I think that we should have a system like Isreal, in which every American male (females optional) spends a couple of years in the military, and in exchange gets a G.I. bill sort of deal. That would go a long way towards fixing this issue.
You could hardly do better than listen to your elders. Real tough break man. Never give up. Vote your best. All the best – Alan
In Israel everyone serves in the army. Females included.
We give $100,000 loans to teenagers — people you normally wouldn’t trust with $100 loans — and then they party for four years while majoring in art history and graduate to join an Occupy Wall Street protest to complain about all the debt they have and can’t pay back.
But but (this is the “philosophical but”) those college students will come to need their enabler, their paternalistic Godfather, Barack Hussein Obama, mmmm, mmmm, mmmm and his dirty coterie bent on fostering their complete dependence.
Which is the name of the game for all of Barack & friends’ initiatives, concealed as those initiatives may be in holier-than-thou BS.
Taking the same money we’d put into a college education and instead placing it in a mutual fund would get you a much better return on your money.
Which is, reportedly, what colleges are now doing (“investing”) with the egregious sums they’re currently charging for the product they offer, eddukashun.
I did a 10-year financial analysis of my alma mater (University of Vermont – UVM) while earning my MBA at my then-employer (Champlain College). UVM had laid off a number of employees a few years ago, reduced benefits (not sure if they moved to a defined contribution plan to get out of the defined benefit/pension plan which is a financial sinkhole for any large organization), and trimmed some operating expenses. The reason? The school had an annual net revenue shortfall that was almost entirely supported by investment income. This is the school with the highest in-state tuition in the *country*, and they still couldn’t cut the mustard. So, due to the college’s ridiculous financing planning, once investment revenues were down (which tends to happen now and again) they were left coloring in their net operating income in ink other than black – hence, cut operating expenses in the form of people, their highest cost driver.
Worse, this kind of lunacy is routinely blessed by non-liable agents known as “Board Trustees”, who cannot be damaged personally by the decisions they make in foisting unsustainable and frankly reckless financial plans on unsuspecting students, faculty, and staff. The larger problem in higher ed is that the overriding opinion in higher ed is that everything or anything done by higher ed institutions is de facto good for the student, community, and perhaps any passing starship that enters Earth’s gravity well.
There is other massive, government-supported industry out there that contains so many blinder-bedecked group of car clown drivers that have done more to waste money, damage unrefined talent, and congratulate themselves while doing so than that industry known as Higher Ed. I’d rather hire Mr. Ed than anyone who’s fresh off the college boat, because they, in large part, have no idea what they are doing – thanks to their benefactors at a Campus Near U.
If you’ve been on a college campus in the last 20 years, you know exactly what the high tuition is going for.
nice workout facilities, beautiful dorm rooms, equipped with fridges and private bathrooms, gorgeous study halls, etc etc.
Talk with some instructors – the colleges aren’t hiring too many professors to replace the ones that are retiring, it’s cheaper that way.
AND the biggie – which we hear all the time – most colleges get something like 10 applications for each spot they have.
Why shouldn’t they raise their prices?
I disagree with the idea that everyone should go to college. The only jobs that really require a degree are professionals and managers. We are never going to need more than about 5 – 10% of the population to be doctors, lawyers, scientists, engineers, accountants, managers, and teachers. Technicians for the next tier of jobs can be trained at community college in two years for under $10K and the kid can live at home for two more years after high school while attending as there is a community college near almost everyone.
Otherwise, why should it take more than a high school education for the jobs in the lower parts of the pyramid?
The main reason college grads cannot get jobs is there are too many of them. It is the market sending us a message.
The reality is, everyone cannot have a top job. There are way more middle and bottom jobs, and there is no way around that. How much education does it take to do 75% of the jobs that really exist? The top 10% should go to college. The next 10 – 20% should go to trade school and learn to be some sort of technician. The rest should be trained in high school to be plain old workers and plan on getting a low prestige/pay job at age 18 and working their way up.
It is cruel and delusional to tell kids who are not capable of doing honors level work in high school that they can attend college, get a degree in something useless in the real world of business, and automatically get a ticket to the upper middle class.
Good point, Old Guy. What are the results of increasing the number of an item if there are too many of that item already? It lessens demand and makes the item less valuable. Does it make any rational sense to keep throwing more money into a system that offers graduates with significant loan debt an economy that has no use of those credentials?
You have vastly under estimated the cost of community college.
I checked the web site of the Community College that is one mile from where I live. Credits cost @ $125 each, a 15 credit semester is $1900 plus books & materials, which means the cost of two years comes in at about $10,000.
They offer training in a large number of fields that lead to real jobs with good paychecks. Police/fire/EMT, construction, cosmetology, cooking, practical nurse, dental assistant, IT, and so forth.
My kid is attending a Big 10 U in Engineering and that is less than what one semester costs for her.
One problem with the idea that “everyone” should go to college is that we have a greater need for “skilled trades people”. Who is going to fix your car? Do plumbing work? Electrical work? What about carpenters? Who will install things? The man who is “handy” will never be without work because there is always something that needs to be “fixed”. Granted with a lot of Chinese made stuff, it’s more a case of “cheaper to throw it away and buy another” than to have it repaired. But we still have a lot of things that need repair. Our infrastructure is getting pretty bad. You need heavy equipment operators, welders, all sorts of skilled people to repair our roads, bridges, buildings. The problem is that there is a growing shortage of these people. Those doing this work are getting older and are going to be retiring soon. Where are their replacements going to come from? Something to think about here…
You can’t outsource painting the house, fixing the electrical, or doing the plumbing. Just sayin’
Rest of the developed world uses advanced tests in high school to decide who should go to college and who shouldn’t. If you do qualify, the government pretty much picks up the cost of your college education. However first you have to “qualify”. And you are also required to get your education in something that will be “useful”. Here in the USA we don’t do that. Nor do we actually “qualify” people to see if further education will be valuable. If you can find the money, you’ll be able to find a college somewhere that is willing to take your money. The college doesn’t care if you graduate or not. Or whether or not what courses you take will actually be worthwhile once you graduate. Our “beyond high school” educational system is not based upon providing “value”, but separating “suckers” from as much money as possible. Colleges also admit people who realistically shouldn’t have been given a high school diploma. They can however profit by giving these people basic high school level courses that these kids could have gotten on the taxpayer’s dime back in high school. The entire American higher education system is designed not to educate people (you can do this for free using public libraries), but extract as much money as possible from those who don’t know any better. Along with those who could have gone through community college taking criminal justice courses and later become a police officer or prison guard. Both of which pay better and offer benefits, something you don’t get working some minimum wage job that any high school drop out could probably do as well! Part of the problem is that the high schools have pretty much dropped “manual training” from their offerings. No one wants to tell kids they’d be better off going to trade school than thinking of going to college. So we now have a big “surplus” of college educated people who can’t find jobs or who are taking jobs that used to be done by high school graduates back before we got “crazy”…
Where do you live? Virtually every job requires a college degree. Not only that, but virtually every career requires licensing, which mandates a certain degree and type of education. Examples are endless…accountant, hairdresser, massage therapist, lawyer, cop, teacher, even secretary (a job I held as a college graduate for many years). For those who talk about the GI bill, you’re dreaming. The military tries to do anything they can to discourage them from taking advantage of the GI bill and I have several friends who were very much jerked around by that system. They want soldiers to take online classes, which will be looked at as worthless by the majority of employers.
Now, I am no fan of expensive education till you drop system imposed on Americans, but the fact is, it was imposed. No teenager said “Please, I would really like to pay more for my education than any individual in any other country in the world and attend for longer than anyone with a brain would attend.” When I was going to college we were told that well-rounded liberal arts graduates were what was desired by businesses and professional schools such as law and medicine. And so they were. But the business world is nothing if not trendy and their tastes changed. Now they require applicants to be highly specialized with additional exotic skills which will probably never be used – such as an ad for a programmer I recently read which asked for a person who was familiar with supply chain management, Arabic and Farsi. Well, actually – that was probably written with a specific individual in mind in order to avoid hiring Americans, but I digress. Don’t blame kids for listening to the liars they look up to. Blame the liars.
Bad article, bad thinking. True, we have a broken lending system, but the root problem is a break down in integrity, both kids and adults. And basic trust betrayed. Examples: Years ago, a client told me that he had a great time during college, ran up bills, then one month after graduation, purposefully bankrupted, walked away from his debts. He worked in nuclear power. I hawked his account.
Two years ago, a young economics graduate was given the following offer: work for us, without pay, for a year, then we will decide whether to hire you.
Half of the graduates of 2011, last year’s class, have not yet found employment. Many work as laborers or receptionists, far removed from their major.
Four years ago, the leading candidate for President was John Edwards. Today he, a billionaire attorney, is in court with a defense that he is an admitted liar and contemptible scoundrel, but not a criminal. The moneys involved would fund battalions of college educations. But many voters “compartmentalize” the ethics of their guy.
If the US had used tough love on GM, and the TOO BIG TO FAIL banks, the money saved would wipe out college loans, but bankrupt the fat cats living high in the Hamptons.
The solution, for young graduates, financial types, academics ignorant of reality, and many shark like attorneys, is a good set of blisters from swinging a pick, for endless hours. Some should be in prison.
“bad article, bad thinking.”
clearly, sir, you do not understand the satirist that is frank j.
A hundred thousand dollars? Sheee-it! When I was 20, I took a student loan to a attend a college and take … theater arts. The government and bank loaned my $380.00. I actually made a living as an actor for the next four years, however. Still, $100,000.00? I’m feeling ripped off.
You are not addressing the additional victims, those students going for Science, Engineering, Accounting degrees that are seeing the cost of their education artififically inflated.
We have at least two generations of young people, whom are productive members of society, got valued degrees at far too steep a cost.
when we are done tinkering with the systems, perhaps we can focus on the actual condition – tuition rising year after year, often by double-digits, “just because.” Think about that. No other product can sustain such annual increases in its prices. We saw what happened when housing prices kept climbing; the same happens with virtually any product or service. Yet, colleges and universities – which, by and large, are creatures of the state – get away with annual price hikes and we the stupid people focus instead on loans. It’s like responding to cancer by focusing on how comfortable the patients’ pillows are.
The OWS gang’s favorite chant of “how am I going to pay off this massive college loan” is a question that they should have asked BEFORE taking the loan. Honestly, some kids are too stupid to even go to college. As the saying goes, you can’t fall out of the gutter.
When Obama took the student loans away from those evil banks, I can tell you the Federal Parent’s Plus loans didn’t drop in rates. They stayed the same.A 3rd party company now handles the loan. So what was accomplished? Nothing, except the Federal government has a lot more risk. This was a campaign ploy on Obama;s part to demonize the banks and win the younger vote. He didn’t win mine, the parent. Now he’ll be clamoring for student loan bailout for the students. Another ploy. It used to be back in the early 70s, college would cost the equivalent of the first years starting salary in a job. I went to a private college, cost less than 10k, and my first job was 10k. Now college costs at the highest level, 240k for 4 years.I don’t know too many making 240k in their first job. What went wrong? Liberals would say the salaries didn’t go up fast enough. However it is more that the cost of college skyrocketed because of the easy money student loans made available. So we have single dorms, including naked dorms( no extra charge), elaborate gyms and exercise rooms, and expensive professors. And since it doesn’t make any difference what you major in, any course and degree can be had. Make your own major. Except maybe what is useful. Haven;t seen too many degrees in auto repair, plumbing, electrician, or carpentry. They would be too useful. The answer is before you select your major, look at the jobs available. And if you really want to go into an area with few jobs, don’t complain when you can’t get one or you can’t pay your loans.
Employers are forced to use college degrees to screen candidates. This is why you have college degrees for jobs that 50+ years ago wouldn’t have required one.
Google “Griggs vs. Duke Power”. After that decision, IQ and aptitude tests were basically banned. The supreme court ruled you cannot have a test that has a ‘disparate impact’ on any particular group. Basically, the court ruled that you must have an equality of outcome.. not just equality in opportunity.
In the past, an employer could test some kid out of high school. If he had a 120+ IQ and scored really high on a mechanical aptitude test, they might consider him for an engineer in training position. It was not uncommon in the past to have engineers working in factories and mines that NEVER had formal education in college. They learned on the job. Before any employer is going to invest the time and money to train / apprentice someone, they have to be able to screen the candidates.
After Griggs, college degrees became the screen. Now diplomas aren’t worth much either, outside of the hard sciences / engineering fields.
To make the college debt issues go away, Congress will need to address Griggs. This however, means stepping into a racial grievance minefield as blacks in particular tend to do worse than other racial groups when it comes to testing and screening.
This is not “investing in the future of the children”. This is the universities finding away to siphon off some of the future earnings their graduates are expected to earn. To risky to take a direct interest, they got the federal government to give them a cash settlement while the revenue stream was taken by the banks. Well, the future earnings estimates turned out to be way off so the federal government who was already on the hook for potential defaults on the revenue stream decided to take the revenue streams on as well.
A $100,000 for a theater arts degree, well maybe if the person makes Hollywood’s A list. Oh, but most of those didn’t get a theater arts degree.
Let’s face this for what it is, the universities trying to get their piece of the future earnings of graduates up front and without risk that the earnings won’t materialize. Best of all, when the “students” default, those who didn’t get the advantage of a college degree get to pay for the loss via higher taxes while those who did and were successful get to keep the other portion of their earnings. A loss, no gain for the non-college workers.
I’d be satisfied if only people in the hard sciences and other practical applications were eligible for student loans, and any phonies who pretend to major in accounting or engineering to get a loan: Sorry, when you flunk out, it’s due in full on the spot. But then I guess colleges would come up with things like “Physix Lite” majors to keep the government money coming, the greedy bastids.
Personally, I was an English major with a partial scholarship and I worked my butt off and got out with no debt. With the cost of college now, though, I don’t even think it’s possible. You might as well spend your money on beer.
On that note: Debt may be way more destructive than Jägermeister, but when you add tequila, I dunno….
DOLLAR VS GOLD STANDARD
http://www.youtube.com/watch?v=beQME8aV2e0&feature=player_embedded#!
THIS SEEMS RELEVANT!!!
The point is not age, but some level of maturity–some folks have that at 18-22, many don’t.
Frank–I wrote a piece on PJM last week about using extant government loan repayment and college-funding programs–most notably the military–to address the debt issue. Wouldn’t it have made sense to at least have referenced my article?
The real problem of college is the cost of inflated tuition. If people really want to help kids afford school, they’d stop giving them easy money that jacks up the cost.
My husband is a college professor and each semester he has students who have obviously signed up for his classes just to get student loan money and sometimes campus housing to boot. One was a welfare mom, who failed the course twice. These students (all ages, mind you) will show up maybe 2-3 times during the semester and disappear–and fail. He’s even had students admit to him that they are in college because they can’t get a job and don’t have other options in terms of living expenses. He has pushed several students to graduate, even though they wanted to stick around. You can’t pin-point these students early on and do anything about it–you kind of figure it out towards the end of the semester, and then they disappear.
The problem isn’t just inflated tuition (and by the way, the professors at hubbie’s school certainly don’t see any of that money–their salaries are quite low). There is also the problem of irresponsible people who scam the system and live on borrowed money. Kind of like the people who bought houses they couldn’t afford and then just walked away.
I too have seen, spoken with individuals who have done what your husband sees. A shame.
However I beg to differ regarding, ‘..salaries are quite low’ comment.
Professor’s, Teacher’s curriculum is a piece of cake, following a couple semesters and or year(s) to fine tune their lesson plans whereas they teach the same/ nearly same curriculum semester after semester.
The breaks, planning periods are nice. Most work environments don’t have a couple hours per day to ‘plan’ one’s next stratagem.
The campuses/ schools union’s have the city/ county by the short hairs and can dictate, protest, walk-away and get their way most instances. The money you speak of is the husband’s/ professor’s pensions. Which are ridiculously adequate imo. 90-100% of one’s final pay and adjusted for inflation.. if the entire country incorporated this unionista strategy.. we’d be tens of trillions more in debt than our present obscenely high debt.
I do like some schools, campuses providing a choice of the professor/ teacher being union or not. Though it’s rare.
paul_
I appreciate your perspective, but $32K is a very low salary, even with the decent retirement contribution added by the university. He doesn’t have tenure (few young faculty are getting it these days, as universities are going the route of year-to-year contracts). If he were tenure-track, his salary would be $45K. He can recycle some lectures, but there is pressure to constantly change media in the classroom, mentor students, etc. It really is a 40-hr work week. Because his salary is so low, he teaches courses at a different institution for the money. He teaches all through the summers. Breaks are spent doing research–there is pressure to publish articles and present at conferences, which affects pay, etc.
I can’t believe that idiot Elizabeth Warren was making $300K as a professor at Harvard Law School. Then there are the school teachers in Wisconsin complaining about their situation, when many make well over 60K/year. This really gives a bad name to educators, many of whom make very modest salaries. I don’t know of a single educator who makes over $60K–and the ones making that much are close to retirement.
They don’t complain, however, because they like their work. (I just complain for them). But I think there are a lot of misconceptions about professors–their political orientations, their workload, their pay, etc. But perhaps my husband is an exception to the general rule.
Thanks for your very helpful balancing of facts and perspective. Good luck to you both!
Student Loan? Government guaranteed? Isn’t there a GI bill that pays for college? Put in your 5 years, fight, sacrifice, get an inkling the cost freedom, and then you can get your college money.
Sometimes you even get the money as a soldier. Just watch for the subterfuge Like alternating 3 shift jobs (Security Police), or being stationed at Laughlin, Texas where the base votes on what class will get taught next. Kind of hard to string together a 4 year degree in those conditions.
The constant 1 year deployments will wreak havoc on plans, too. Training to go and re-integration after returning Stateside can take up 1.5 years. Will = way, but the primary focus is money – the subject of this article – before getting the boot from military service with Gov’s always first attempt to rob broken soldier of her/his bennies.
Great article Frank.
A super funny, and very true, look at the craziness that is going on with student loans. In my blog, I try to convince parents to seriously consider outlawing the use of student loans in their family. Strapping someone with this kind of hard core, if anything goes wrong along the way you’re dead, kind of debt makes no sense.
More than half the people that take on student loans are harmed financially as a result. Crazy!!
Yes a good article. No one should go to college unless a) they can afford it (i.e. they are better people because they can afford it) or b) they are willing to perform military service. Otherwise, too bad. Anything else is an infringement on our freedom and liberty. Education is over-rated anyhow. We need to be able to compete with China on equal terms, not with a bunch of egg heads.
When I was in grad school, i borrowed some money. I was in state and back then tuition was incredibly reasonable. STILL they would have lent me $25,000 for the school year. I ended up borrowing $3000 (and a little from my mom). It is complete insanity as to how much they will lend people over and above tuition. They think tuition and living expenses were $25k? When my rent wasn’t even $200 per month? really? Who knows what it is these days, with much higher tuition bills.