Reform how? Lower the amount of required education and training? Make professors teach for free? It's easy to just throw out there "I wish medical education was cheaper".
Or we could reform how medical education, training, and licensing works instead of forcing those people into ever larger piles of debt for no reason whatsoever. Just an idea.
Of course it's a ridiculous concept. Allowing 18 year olds to go several hundred thousands of dollars into non-dischargeable debt is a pretty obviously silly idea. If we need more people to become doctors there are many ways to do that other than by this mechanism, so of course it wouldn't prevent people from doing that.
I personally think that high amount, undischargeable, unsecured loans to 18 year olds is generally a bad policy idea. Your mileage may vary.
We could always go back to the old system - private loans for education. A bank will lend you tons of money to become an engineer or a doctor because they know you'll pay that money back. They'll be slightly less interested in giving you money to get your degree in Feminist Studies.Well it depends on the situation. I do not think 18 year olds should be granted enormous loans to get arts and humanities degrees at private colleges. But if they are going to medical school, I don't see why not.
Then again, if you're in a certain variety of fields, equipment like scanning electron microscopes, linear accelerators, etc., - that equipment doesn't come cheap. I think it can be argued the other way as well - those history majors - they pay for heating in a room and for some history buff to stand in front of them and lecture them for a few hours. There's no equipment. Their tuitions are subsidizing the tuitions of the engineers, physicists, etc.
Reform how? Lower the amount of required education and training? Make professors teach for free? It's easy to just throw out there "I wish medical education was cheaper".
Yes, my plan is to have Dr. Nick do all surgeries.
I'd rather make medical education free and open to a wider pool of people who would otherwise not consider it due to cost. A significant amount of otherwise capable people won't consider it because they don't want the debt burden. Simply make a deal that says their education and training will be paid for in exchange for a certain number of years on contract as a primary physician.
The country has an emerging crisis in the number of available doctors to care for a growing and aging population. Shortages of adequate, timely medical will cost the country a lot more than educating more doctors/nurses.
We could always go back to the old system - private loans for education. A bank will lend you tons of money to become an engineer or a doctor because they know you'll pay that money back. They'll be slightly less interested in giving you money to get your degree in Feminist Studies.
Of course it's a ridiculous concept. Allowing 18 year olds to go several hundred thousands of dollars into non-dischargeable debt is a pretty obviously silly idea. If we need more people to become doctors there are many ways to do that other than by this mechanism, so of course it wouldn't prevent people from doing that.
I personally think that high amount, undischargeable, unsecured loans to 18 year olds is generally a bad policy idea. Your mileage may vary.
The poor typically get tons of financial aid as their EFC is zero...any debt they incur will be much less than those from "middle class" families.This will be the end of collage education for the poor. Those loans are what make a degree possible for many people, and the only reason they get them is that they can't be discharged in bankruptcy.
Then, how to we pay for these loans?
If getting an education is good for the economy, then why do we need the government to subsidize anything?
Colleges have recruiters that go around the country looking for HS talent to play sports for their school. The reason is because sports pay big money. Its worth it for the school to pay someone and invest in not only the recruiter but the student as well. Why would that not also work for a degree? If the expected income the grad would get is higher than the cost of the degree, then colleges would be more than glad to spend money investing right?
The arms race many colleges are engaged in with building ever more extravagant student amenities, athletic facilities, and other major capital projects of questionable need in the face of declining public funding has to stop.
There are lots of things that are good for the economy that we need the government to subsidize due to various incentive/capability structures. For example, K-12 education. If you limited basic education to only those who could pay for it like in the old days I think most people would agree our country would be worse off. Sure there could be some alternative financing somehow, but that seems like it would be predatory lending city.
You can recruit top sports players because there aren't that many of them. While it might be practical to send out recruiters to grab up people for your ten person basketball team it doesn't sound practical to send out recruiters to fill your 8,000 person freshman class, especially when you account for different interdepartmental priorities, etc. Coordinating it would be a logistical nightmare, at a minimum.
A single Division I football team can have a max of 85 scholarships. That is for 1 sport.
http://www.scholarshipstats.com/ncaalimits.html
Its a billion dollar industry, so schools are willing to spend a lot of money on it.
Exactly. For a division 1 football team, which means the pinnacle of the most profitable sport for any college, they have 85 spots to fill, which means approximately 22 scholarships to fill per year at the most prestigious schools, and football gets by FAR the most scholarships.
According to your chart if a school decided to max out its scholarships in every sport and decided to actively recruit for every scholarship, which they don't do, they would be looking to award 58 scholarships per year. (don't double count football for FBS and FCS)
It's easy to recruit for 58 people. It's a lot harder to recruit for 12,000.
I say student loans should be non-dischargeable, that way they are still obtainable and people going into high-paying professions can still be successful. You say something vague about "education should be cheaper". That's all well and good but it's not a solution, it's a wish.
Well it depends on the situation. I do not think 18 year olds should be granted enormous loans to get arts and humanities degrees at private colleges. But if they are going to medical school, I don't see why not.
It's not just underwater basket weaving degrees that are being priced out of the market.
My alma-mater, a Midwest top 10 engineering University, charged $18K for out of state back in the 90's. Now $43K+. That's insane. It shouldn't cost me $500K-$600K to send my 3 kids to school.
When they call looking for donations I absolutely won't give a cent. It feels to much like giving money to a relative with a gambling problem.
If families on two engineering salaries are going to struggle to cover their kids college tuition, there's no way the average family can.
Somewhere between the new construction, luxury student accommodations, fancying dinning, and the excessive increase of 6 figure administrators, colleges are going to have to find a way to reign in the spending that requires such onerous debt.
The price is going up because kids are using other people to pay for their education. The huge expenses you now see are only coming around in the last 20 years or so. The system will collapse under its own weight eventually and when that pops, it will be painful. Many people are taking on debt that their degree wont pay for.
I disagree. The elite university market seems to be unsustainable, but the market where the most students go seems to be just fine. As I mentioned before their per student spending has remained flat or even declined.
Additionally the median student debt is about $30k for those who have loans, meaning actual median debt is considerably lower than that. (I have no student debt, for example. Yay!) If you look at the cost of a degree vs. the increase in lifetime earnings they are still an excellent deal, which implies costs could rise considerably further and still make economic sense.
Except the lending institution, i.e. the federal government, will never say no. The universities get all the free money they want, government officials get their kickbacks, and taxpayers are saddled with the debt. This will lead to even higher tuition costs and even higher interest rates for those who can pay them, and a free ride 8 year all-expenses paid party for the rest. If this ever goes through, making student loans easily discharged, it will be a disaster.
It can't go both ways at the same time. Its a fundamental misunderstanding about the effects of loans. Less loans will mean less money flooding into the college system. Since they temporarily create more money until paid off. Tuition would actually drop because less people could get financing to go.Student loan debt has officially passed _ALL_ credit card debt. This is a HUGE issue, and a completely insane move to EVER suggest allowing student loan debt to be discharge-able. The following will occur.
1) Think college is costly now? Think again. Tuition costs will be 10x the current price now to account for all of the people that will be manipulating the system to get rid of their $50k Art History / Psychology degrees.
2) Want to get extra student loans because you can't get any through the federal government? Too bad, you think banks are going to take that kind of risk? BWAHAHA
3) Think interest rates are high now? BOO HOO! They will need to skyrocket them to account for people discharging.
Obama buying votes, news at 6pm. Never gonna happen (on retroactive basis) because:
1) 2016
2) Congress
3) Strategic default as students have no assets
With my grad school loans at 6.8% I've already subsidized a score of humanities majors with absolutely no discernible skills. What we need is underwriting based on ability-to-repay, rather giving out money (bankruptcy) like it's candy.
Votes for what? Hillary isn't saying this.
1) All it takes is somebody to make it a national issue, Obama has started that, to build momentum.
2) Congress changes
3) Doesn't matter.
It is going to happen, one way or another, and it won't be armageddon. If anything it'll force fiscal discipline on students, parents, and most importantly, schools.
They will underwrite on ability when they are forced to, not a second before. Until then they'll underwrite to the government and parent co-signers who can't afford to go BK.
It can't go both ways at the same time. Its a fundamental misunderstanding about the effects of loans. Less loans will mean less money flooding into the college system. Since they temporarily create more money until paid off. Tuition would actually drop because less people could get financing to go.
You think colleges can AFFORD to drop tuition and naturally have 20% less revenue? HAHAHA you're funny and you CLEARLY don't understand how business works.
What, are they going to tell all the high paid professors: "Okay, you guise, you all need to take a 20% paycut ok???"
Yeah, sure, nice idea. I can tell your glass is half full, but it's rather cute to imagine.