Tag Archives: student loans

American University

Every few weeks, when there is a slight lull in 24-7 news crises, someone will describe how terrible the student-loan burden is for stressed-out graduates.  This is then followed by some pandering politician decrying the unfairness of higher education’s being available only to those who could qualify for loans and, therefore, with E-quality being more valuable than quality itself, college should be “free.”

This is an odd declaration for a federal representative who is overseeing budgets that are trillions of dollars out of balance.  Fortunately, we have an army of migrant workers and illegal entrants who help us harvest cash from the money trees that flower perpetually in a secret orchard between Washington D. C. and Wall Street, New York City.  No one responsible for spending the money on our behalf – we, the citizens of this great bankrupt country – can imagine denying free stuff to ostensible college entrants, regardless of ability.  How fortunate that we have full-time, well-compensated spenders working to expend as rapidly as possible.

In any case, the topic of student loans can be easily turned into a big, emotional shibboleth that, obviously, only a bankrupt, spendthrift government can solve.  First, President Obama, as part of the so-called “Affordable Care Act,” essentially placed all student loan business under the aegis of the federal government, applying the “profit” from those loans toward attempting to finance Obamacare.  Soon, of course, politicians were screaming about “profiting” from poor students who just want to improve their opportunities for higher wages through diploma ownership.  Oh, the horror.

On the other hand, many families impoverish themselves to pay for college and post-graduate programs.  They’re not cheap.  The cost of college has increased more than twice as fast as the Consumer Price Index, since 1980.  Another way to look at it is in comparison to car prices.  In 1980 a 3-series BMW was around $21,000 or so, and it was pretty nice.  Today a 325i is about twice the cost of the most comparable model from 1980.  And, it’s still pretty nice.

The thing is, the 2015 version is a far superior car to the 1980 model.  Almost no part of it has not been modified for the better; its performance is better, safety is way better, as are comfort and expected life of components.  The electronics are a phenomenon all their own.  Remarkably, compared to inflationary price pressures, today’s BMW is LESS expensive than the 1980 – and it’s far, far better.

College/University education, on the other hand, is turning out a poorer product, on average, for about THREE times the cost of 1980 tuitions.  That is, college costs have gone up half-again what other big-ticket items have.  What can possibly cause this?   There are only so many instructional hours in a semester.  Are the professors smarter?  Working longer hours?  Taking on more classes each week?  Are highly-compensated administrators covering more functions for their rapidly growing incomes?

It seems that the opposite is true in all of these question-categories.  In the 35 years that automobile manufacturers have continuously become MORE efficient at higher quality to stay competitive… to keep attracting buyer dollars, education has become LESS efficient, more philosophically (politically) biased, less likely to teach American History, less likely to study the Great Books, Greek history and philosophy, English literature… and a bunch of other culture-strengthening stuff.  There are a lot of lawyers, though.

College students, however, thanks to the fatuous generosity of federal grants and loans, are able to pay more and more and still more for those still-coveted diplomas.  Like the uber-capitalists they try to hate, colleges have raised their prices in virtually direct relation to the amount of tuition moneys available.

The growing number of high-school grads going on to college has increased steadily as tuition dollars became more available; at the same time, the net quality of entering students has gone down.  While this speaks to the reduced net quality turned out by, largely, public high schools, it speaks more loudly about the cynicism of colleges and universities: if you got the money, honey, we’ll happily take it while nearly half of you drop out the first year.  Your time, indebtedness and mental health are of no concern for us.  Can your parents, grandparents, rich uncle or well-to-do siblings co-sign for you?  Yes?  Well then come right in and we’ll call you a college student.

Even worse, larger institutions are perfectly happy to create 4-year degree programs in “soft” studies that have very little chance of generating significant incomes.  It’s not that the education isn’t real, it is the reality that it is very, very hard to sell the related skills.  For the college, however, those very significant tuition payments help to finance more costly areas of study and research… not to mention the multi-hundred-thousand dollar salaries of, say, law professors at Harvard – at least the Native American ones.

There is a simple, universally beneficial answer, and it is absolutely NOT federal-taxpayer-free college, Ms. Senator Warren.  The answer is for colleges to co-sign for every student loan!

What?  You say.  Make colleges actually responsible for student success?  What if the student spends his time partying?  Is the college responsible for that, too?

Well, what if they were?  How would the college experience change if the college actually cared whether students were studying or goofing off?  If the college could only come out ahead if the students it admitted ALSO came out ahead, who would they admit?  Would they let Freshmen enter if they had no scholastic history that indicates the ability to learn, study and succeed?  Would they then offer realistic remedial programs AT THE STUDENT’S EXPENSE (as low cost as possible) that would have to be mastered before the rest of their college time could be financed with an institution’s co-signature?

Imagine the real cost of college dropping as schools, themselves, realize that huge student loans are a shared risk.  Maybe the financial wizards who have rewarded one another while money has been free-flowing will become enough sharper as to provide genuine education for far less dough… maybe even scheduling classes so that degrees can be earned in 3 years instead of 4.  Hmmnnn.  These are ideas that make you go, “hmmmnnn.”