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Making Tuition Reform Palatable
How can we reduce the astronomical cost of college tuition?
The most direct but politically impractical solution would be to cut off all financial aid for three to five years. Universities would complain loudly, but if a Republican President and Congress persevered, ultimately the universities would be forced to cut bureaucratic and academic bloat — and hence tuition. Subsequently, we could revive aid, but only for the very poor who show academic ability. This would have much less of an inflationary impact.
If we do this, the universities will scream that American higher education will be destroyed. The student-age population (and their parents) will be affronted and outraged, making this approach politically untenable.
So, how to proceed? I would sweeten the pot to reduce the opposition.
I’d combine an aid cutoff with a five-year suspension on all taxation for those in full-time higher education. This will lessen the impact of the aid cut-off for those whose educational aspirations are interrupted. Furthermore, I’d recommend the federal government offer to pay off half of all Americans’ huge outstanding student loan debts, because government policies caused the huge rise in tuition in the first place — and also because it would increase support for the entire reform package.
Within three to five years, I expect colleges and universities would be forced to cut their tuition drastically. A summer job would again be enough to pay for a semester or a year of college.
My poli-sci professor once described politics as a way of determining the distribution of advantages and disadvantages in a society. My solution would mitigate the disadvantages to people between 17 and 23 years of age.
I don’t know what the short-term cost to the federal budget would be, so if you can work it out, I’d especially appreciate your input.
Your thoughts?
Published in Education, General
Supply and demand, baby. Require all universities taking federal money to take in about a thousand uneducated Syrian refugees. Make sure they are properly integrated into student housing including women’s dorms (if they exist). (say it with me: “Diversity is our Strength!) That should crater demand for university admittance. Added bonus: the campus feminists will have a real rape culture to complain about.
Dying business model. To grow and make the most of all our people, we need to shift to skill certifications and online courses in all forms. The college degree has lost a lot of cachet as the entry visa to the workplace.
Why fix the dead system? Let the private sector replace it with a better model.
If we let the government decide, we would all use wired phones with cell phones restricted to the use of the state only. We would have $1000 a barrel oil sourced from our enemies. We would not have MRIs and other scanning technology readily available.
The college model is dead. Get out of the way of the replacement.
We need a system where kids of modest economic means can learn and acquire certified skills and knowledge without barriers of wealth and gatekeepers. The $100,000 undergrad degree is for royalty.
@Metalheaddoc- Yale has already beat you to beginning that. Yale offered a full scholarship to the former spokesman for the Taliban:
http://www.npr.org/templates/story/story.php?storyId=5415846
http://wilsonquarterly.com/stories/whatever-happened-yales-taliban-freshman/
TKC1101-“Dying business model. To grow and make the most of all our people, we need to shift to skill certifications and online courses in all forms. The college degree has lost a lot of cachet as the entry visa to the workplace.
Why fix the dead system? Let the private sector replace it with a better model….
The college model is dead. Get out of the way of the replacement.
We need a system where kids of modest economic means can learn and acquire certified skills and knowledge without barriers of wealth and gatekeepers. The $100,000 undergrad degree is for royalty.”
Sadly, most corporations will not give people a good-paying job, especially in management, without a university degree. So while I would encourage more parents to put their kids in a school to learn a trade, most corporations have set up a de facto occupational apartheid, which creates a strong incentive to get a degree.
cut off all financial aid for 3-5 years. Universities would complain loudly, but if a Republican president and congress persevered, ultimately they’d be forced to cut bureaucratic and academic bloat and hence tuition. Subsequently, we could revive aid if we chose, but only for the very poor who had shown academic ability
I think the above would work, just as so many conservative solutions would. Our problem is that we never explain our remedies clearly enough, and we allow the left to define us without challenge. They’ll scream that we’re “against education,” which is what they always do. Differing with them about an approach to a problem always equals not caring about the problem. We must start clearly stating what we will do and why we are doing it and why it works.
High performing industries will hire proven skill. Try high tech or any cutting edge business. Try small business or any one in a competitive labor market.
As certifications proliferate, holders will have a lawsuit against the artificial barrier of a degree, but by then those corps will be headed to the scrapheap.
The best thing that could happen to education is that government gets out of it completely.
Short of that unlikelihood occuring, the next best thing would be government stop preventing schools from lowering tuition. Read that again. Yes, the govt prevents private schools from agreeing with each other to lower tuition because the Justice Dept. would consider it “price fixing”.
Guess the govt doesn’t like competition.
There are many private universities that would like to lower tuition which would increase college applicants thereby increasing the quality of the school. But then, if this doesn’t happen across the board, there is another problem with the school that lowers tuition: it would be eventually be considered a less than quality school in the marketplace… Quality is perception.
Honestly I think the college degree is super overrated today. I think America needs to focus on vocational work. All those folks who complain about Apple going to China for manufacturing need to realize that Apple cannot find enough American workers to make their products.
@David Sussman- “There are many private universities that would like to lower tuition which would increase college applicants thereby increasing the quality of the school. But then, if this doesn’t happen across the board, there is another problem with the school that lowers tuition: it would be eventually be considered a less than quality school in the marketplace… Quality is perception.”
You don’t think that by removing subsidies, they’d almost all be forced to lower their prices/tuition, much as Paul Volker’s raising interest rates very high from 1979 to roughly 1984 stopped general inflation by cutting demand?
“Honestly I think the college degree is super overrated today.”
Yeah, especially the liberal arts, which as Dennis Prager constantly points out, have become seminaries for indoctrination in leftist dogma.
I am hoping the $10,000 college degree catches on. I think Texas and Florida are now offering or will soon offer an online degree at that price. It will change lives.
I also like a lot of the extension schools connected to the major universities. They draw from a large area for their professors. Harvard has a fantastic program. The student pays about $1,500 for a course, takes three of them, and then applies to the extension school for a formal acceptance and financial aid. The idea behind the school is that the student has to show up for class only once a week–it was predicated on the idea that many students had other priorities and that they should be able to attend college just the same. They make it as easy as possible for the students. I really love the attitude. And everyone I know who has gone there has really enjoyed the classes and the access to all of Harvard’s many facilities such as the libraries and museums. It’s a fantastic program.
I like the co-op plans at Northeastern and the Rochester Institute of Technology. When the students graduate, they have a job and very low, if any, debt.
And I like the University Without Walls program at UMass. It works hard to award credit to people for experiences they have had that have enriched their intellectual life. So it becomes a matter of just a few classes to get a degree.
Let’s lament it during the campaign, blame university administrators, and liberal spending progressives, then when we have power, end federal support to all education, not try to tweak it, cleverly reshape it. It can’t be done. That’s the problem. Education in the fastest changing economic and information environment in history must be allowed to adjust, without the false narrative that central control is possible, to whatever individuals and employers want and need.
The three industries that are most heavily regulated and subsidized by the government are education, health and housing. Housing has already caused one crash. Education is probably next.
The federal government does not belong in education. Period. The only tuition aid the feds ought to offer is to soldiers and veterans as a benefit, not as a support to the education establishment. As to everyone else, if ya ain’t smart enough to figure out how to pay for college, maybe ya don’t belong there.
We need to decide what it is we are purchasing as a people, and whether or not we want it. Create a big table of interest rates and max loans based upon:
I would prefer the social utility priorities be set by congress and not by the administration.
When we offer low interest loans we are making a choice as a people to purchase certain kinds and amounts of skills in partnership with schools and individuals. This is ultimately a choice we can make but we should exercise discretion.
The proposal would fail. Markets adjust to distortions like a three year moratorium, and would pick up where they left off with nary a hiccup.
The solution requires two parts:
1: Regulations on all kinds of things make colleges crazy, and require enormous numbers of compliance people and the like. Kill them all. No regulations. Caveat emptor.
2: Cap need-based Federal Financial Aid at the cost of the cheapest for-profit college in the state. If students need/want more, then they can borrow from the school or any third party borrower who thinks it is a worthwhile deal.
I would NOT want any plan that started with giving out more money. How about a simple graduated plan for decreasing federal financial aid each year and asking universities to collaborate by gradually scaling back their bureaucracy to bring down costs?
Remove federal subsidies for most student loans, and allow student loans to be discharged through bankruptcy. The latter part is the most important.
This would naturally reduce tuition costs, since banks would have to actually carry risk for these loans and would charge more interest. Currently student loans are risk free, since they cannot be discharged. If student loans were actually difficult to qualify for, and banks had to think about the risks, it would force the entire market to be educated about the risks and rewards of student loans.
Currently the bank’s desire is to just issue as much paper as possible because they have big brother to collect on the loans.
We CREATED the bureaucracy, with all the regulations dealing with feelings, snowflakes, discrimination, compliance, etc. The government needs to cut the strings to allow universities to fire all those pushers of pencils.
Being under the impression that there was basically no private market anymore, I turned to Google.
I can’t find a percentage of federal loans to private loans other than this, which says “The entire private student loan market is estimated to be $99.7 billion or 7.6 percent of the $1.31 trillion student loan market. The six participants represent approximately 66.7 percent of the entire private student loan market.” It lists the six participants as Sallie Mae, Wells Fargo, Citizens, PNC, Discover and Navient. The search turned up multiple articles from Forbes, USA Today, credit unions, and other sources warning borrowers away from private lenders as the loan terms are much more strenuous than those of the Federal program.
Although surprising that there is still some private lending, I agree with the OP in that it is the heavy influence of government which is to blame. The Feds cut out the lenders when they reformed the laws in 2010 – so instead of subsidizing banks to lend too much, the government just does it themselves. Not much of a solution.
Naivient is a government servicer.
Private loans are often subsidized or backed or protected or regulated. I doubt a lender can discriminate on the basis of anything rational: like the likelihood of successfully repaying.
Team America,
Just need to get the Federal government out of student lending. We certainly don’t need taxpayers to forgive student loans.
This will also help to eliminate the leverage the Federal Dept. of Education has over universities to allow the universities to push back against compliance mandates.
Yet in the articles it is that (muted) differentiation in pricing and terms that makes private lenders so despicable.
All you can do is shake your head.
Three to Five is not enough!
The best suggestion I have come across is to make the colleges responsible for any loan defaults. They would then have to admit only kids with a reasonable chance of success at making money and teach them things that would ensure that they were able to thrive in the marketplace.
Two step process (if you’ll accept a friendly amendment):
While I would prefer a clean sweep of the feds from education, the above approach might help and is more politically feasible. The outrageously immoral conduct of colleges and universities from the lowliest to the mightiest should make great fodder for congressional hearings.
Forgiveness, no. Dischargeability in bankruptcy like all other debts, absolutely. We are now creating a class of people that are incurring debts they can never pay off and never escape. Très bad.
Perhaps. The educations given by most colleges are neither useful nor particularly enlightening. Students graduate without “marketable skills” or a knowledge of their history and culture.
The college degree, as it exists now, may be overvalued, but learning is not — and can never be — overrated. Most conservatives agree, but I don’t believe they’re explicit enough in their messaging. “Avoid college; acquire a skill,” can easily be misinterpreted as, “Avoid book-learning; it’s irrelevant,” especially by a population which knows nothing about the classical conception of work and leisure.
It’s an interesting paradox: the more our society praises college education, the less it praises learning.
I think it would work to make student loan eligibility conditional. Only schools who reduce administrative/non-teaching staff to 1980 levels will be eligible. Problem solved.
@iWe- “The proposal would fail. Markets adjust to distortions like a three year moratorium, and would pick up where they left off with nary a hiccup.”
Sorry, I wasn’t clear. I mean to propose a permanent cutoff of financial aid, at least to the middle and upper classes, while perhaps offering some aid to poor kids who show academic ability and promise. I assumed it would take 3-5 years for the aid cutoff to have a major impact on tuition rates, much as Paul Volker’s raising interest rates in 1979 took 3-5 years to (painfully) wring inflation out of the economy. I do like your suggestions, especially the second one.
@I Walton- “Let’s lament it during the campaign, blame university administrators, and liberal spending progressives, then when we have power, end federal support to all education, not try to tweak it, cleverly reshape it.”
Yes, for once Republicans must be clever about preparing the political ground for reforms. If only Reince Priebus would send out requests for contributions to be used for such purposes.
@Jordan Wiegand- “Remove federal subsidies for most student loans, and allow student loans to be discharged through bankruptcy. The latter part is the most important.
This would naturally reduce tuition costs, since banks would have to actually carry risk for these loans and would charge more interest. Currently student loans are risk free, since they cannot be discharged. If student loans were actually difficult to qualify for, and banks had to think about the risks, it would force the entire market to be educated about the risks and rewards of student loans.
Currently the bank’s desire is to just issue as much paper as possible because they have big brother to collect on the loans.”
Basically I agree, but I wonder what would be the difference in economic impacts, in the short run, of allowing students to discharge loans in bankruptcy vs having the federal gov’t pay off half of outstanding student loan debt?”
Ha!
@MarciN- “I am hoping the $10,000 college degree catches on. I think Texas and Florida are now offering or will soon offer an online degree at that price. It will change lives.
And I like the University Without Walls program at UMass. It works hard to award credit to people for experiences they have had that have enriched their intellectual life. So it becomes a matter of just a few classes to get a degree.”
Thanks for making us all aware of this. My sister may want to make use of this.