American higher education is unaffordable, oversold, and underserviced. The current system will not self-regulate or self-correct.
Many who purchase the programs that institutions offer at significant cost fail to receive fair value for their investments. Federal sponsorship of student grants and loans has increased access, but at a far higher price for a lower-quality product.
Schools have raised tuitions and fees at fantastic rates, and many charge more for tuition, room, and board than most American families’ annual incomes. Even public colleges and universities have increased fees at rates far greater than inflation.
Students have accumulated $1.75 trillion in federal and private student loan debt to seek degrees that have little or no commercial value. Policy requires that loan applications from candidates seeking degrees in performing arts or art history be considered the same as applicants for engineering, medicine, physics, and chemistry.
The loan principal is paid to the schools – even if their services are substandard.
Only the institutions lack financial risk. Accordingly, most have increased class sizes and lowered admissions standards. Schools charge tuition for remedial courses, and even the Ivies inflate grades to keep kids enrolled. Most institutions offer non-challenging majors to attract and retain students, while gutting or eliminating the demanding core courses once required of liberal arts undergraduates.
Changes are necessary. Futures are at stake.
Lowering standards to admit and keep poor, marginal and unserious students only cheats diligent students who belong in college, casts doubt on the value of all degrees, and drives up college costs, while passing too many mediocre, meaningless degree holders into the workforce.
Of course, no one forced undergraduates to major in gender or leisure studies, nor were they blackmailed into electing useless courses or forced to take on more debt than their degrees will ever be worth.
But, recent college graduates carrying student loan debt and older graduates similarly indebted have paid or will be paying student loans into their forties. Because most companies have stopped defined benefit pension plans, and many have cut back contributions to employee 401-Ks, the requirement to repay student loans will make it virtually impossible for many college graduates to plan adequately for their retirements.
And, if Social Security is not preserved, its benefits may not be available to anyone under fifty. Many degree-holders are working at jobs unrelated to their degrees, while paying payroll taxes for a benefit they may never receive.
Solutions require changing the mindsets of students, parents, politicians, and the education establishment. We must demand accountability from those who benefit from current policy by placing the risk on the institutions that recruit, accept, “educate,” and indebt students, including dropouts, are responsible for the high costs and poor quality of education, yet fail to produce job-ready, loan-satisfying graduates.
Taxpayers, especially those who have already satisfied student loans, cannot be held responsible for bailing out degreed, under-educated debtors. Kids – though often naïve, lazy, misplaced, and gullible – and parents are (often willing) victims, but they have taken on contractual responsibilities to repay student loans.
Currently, the Bankruptcy Reform Act of 2007 prohibits discharging student loan debt in bankruptcy. Therein lies an opportunity.
It will take some new metrics, but institutional behavior could be changed if we were to strictly tie debt-service payments to income, place a time limit on servicing student loan debt, and change the law to allow student loan debt to be dischargeable in bankruptcy. That latter change, alone, would rationalize the risk of issuing loans, especially if the relationship between colleges and students were also made contractual, defining in advance each party’s risk, and making the institution of higher learning responsible for all or part of the debt in the event of default or the expiration of an underemployed debtor’s obligation.
Then, applicants would think more carefully about matriculating and selecting majors, and schools more judicious about whom they accept and the courses of study they offer. Such an arrangement would likely mean fewer majors, and grading would be tougher. As a byproduct, there could be a renewed interest in the sciences and engineering.
That way, we could recreate a smaller academy providing higher-quality education, populated by far fewer – or no – irrelevant, cultural/political ideology-driven administrators, and more genuine teachers of subjects that provide real value to properly-educated, taxpaying graduates, to society, and to the nation.