Education as Entitlement, Part 2

By Professor Doom

     Last time around I mentioned riots at an institution that had the “audacity” to not consider undocumented immigrants as in state students, charging them the tuition that out-of-state students would need to pay. These undocumenteds want to get rid of the administrator that’s trying to put some common sense into the system.

      This is to their credit, since the taxpayers being cheated like this don’t even know the name of the administrator that came up with the bright idea to consider immigrants as “local” for purposes of tuition in the first place. I again point out how minimal the integrity (or is it mental capacity?) of many administrators must be, to even consider that someone from a different country entirely should be as “from the same state” as the institution.

     The reason the immigrants are upset, is because it’s a great entitlement program. The students get the loan money for tuition, get extra loan money for living expenses…then, when the loan money runs out, they can just go back to their home country, with little chance of ever repaying the debt.

     And these students are rioting at the thought of not being able to take more this way.

     It’s a slight variation on the Pell Grant scheme, which can be used repeatedly—thanks the administrator’s bright idea not to keep track of who’s received the grants--to rake in as much money as a low-wage job (without all the work).

     The articles I’ve referenced for these schemes just gloss over administration’s role in promoting the schemes, however. Go and read the Pell Grant scheme to get an overview…the biggest thieves are not the “students”, I promise you.

     I feel the need to point out this entitlement program isn’t restricted to immigrants and Pell Grant recipients, there are loads of students in higher education that are, wittingly or not, scamming the system. 

     When you qualify for a student loan, you don’t just get money for your tuition. You can borrow more than the tuition expense, far more, and use that extra money for “living expenses.”

     Somehow, it never occurred to anyone that giving teenagers extra money to spend on “whatever” could go horribly wrong.

     Some undergrads use excess financial aid money to purchase cars and finance expensive trips.

The tipping point was when he approached the school's student loan office to get help with his $3,000 tuition payment, he says. He walked away with $16,000 for that quarter, starting a cycle that would continue for the rest of his undergraduate career.

     While the above article highlights a fairly extreme case of how abusive the student loan scheme can be, the idea that anyone, merely by taking classes, can “qualify” for an extra $10,000 or more a year for loans for “living expenses” is extreme. I had to put down a significant down payment, and show considerable documentation to get a loan for my house…and any yahoo can sign up for college and rack up $50,000 in loans in excess of the cost of tuition.

     Seriously, how did nobody see something wrong here?

      Not everyone gets so much, of course, but realize that the bulk of students that could use money for tuition for wildly useless courses like Lady Gaga and the Sociology of Fame, could also use money for critical things, like food and rent.

“The University of Oregon estimates the total cost for undergraduates living off campus at nearly $24,000 for the 2013-2014 school year. Less than $10,000 of that goes to tuition, leaving students with refund checks of roughly $14,000 each year.”

     Am I the only one that thinks it’s odd to call the loan kickback a “refund check”? Of course, that “refund” only applies if the tuition is low enough that there can be some money left over to go to the student. For-profit institutions typically raise their tuition as high as it can go, to maximize their revenue.

But government-backed student loans max out at $12,500 per school year, and tuition at for-profits can go much higher; at  ITT Tech it runs up to $25,000… A former ITT financial-aid counselor named Jennifer (she asked us not to use her last name) recalls that prospects were "browbeaten and hassled into signing forms on their first visit to the school because it was all slam, bam, thank you ma'am."

     

     I see commercials for ITT Tech all the time, and they’re fairly notorious for how much they abuse students that get trapped in their school. I grant that ITT Tech makes no claim for to be higher education. They do claim to be job trainers, however. Unfortunately, ITT Tech degrees seems to be of minimal use to graduates when it’s time to get a job.

     "Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry. I was wrong,.. The for-profit education industry has proven equal to the task."

--the speaker is Steve Eisman, famous for betting against the subprime mortgage industry. I shudder to think what he’d have to say of the state education systems, if he looked at them.

     While smart investors are guessing the for-profit industry is doomed, the fact still remains that student loans, for many, have turned into a form of welfare. Over 70% of college seniors have student loan debt, and that’s not factoring in the Pell Grants that go to everyone…it’s not a stretch to think that many college students are eventually using loans to cover their day to day expenses, little different than welfare checks.

      People talk of the riots that will occur when/if support programs like food stamps are ever cut off. I concede there will be some big riots in that case, with well over 40,000,000 people on food stamps.

Student Loans Entice Borrowers More for Cash Than a Degree

--even the Wall Street Journal is catching on to what’s really happening. Keep in mind, administration knows exactly what’s going on, but facilitates the fraud because they get their cut, while the fake students get their debt. Why does a caste that facilitates fraud get a free ride like this?

     There were over 20,000,000 college students last year, and yes, there will be riots when the student loan support programs are cut off. At least it will be a good warm-up for the larger riots when the bigger programs finally end.

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