By Professor Doom
It’s so funny to
hear the leaders of higher ed bleat about how hard they’re working to keep
tuition down. It’s even funnier to watch them get a 6 digit signing bonus, and,
for the Poo Bahs, a 7 digit parachute when they leave, and constant raises and
luxurious benefits while they work.
Then the leaders
shrug as they increase faculty workloads and cut pay: no money in the system,
you see, too bad, but we’re working hard to keep tuition down. Maybe next year,
after the automatic administrative pay raises (“Those are policy, we can’t
change those…”), there’ll be something left over.
One of the many
strange reasons justifying their insane pay and bonuses is that they work so
hard. Even though in every other industry, the economy of scale that comes with
growth usually makes it easier to keep prices down, our leaders in higher ed
have perpetually failed to do what any mediocre manager in private enterprise
can do.
How badly have
our leaders failed?
Tuition is tracked carefully, so administrators play a bit a shell game to keep tuition down, by raising all sorts of other
costs and adding fees to the tuition bill. All this money is paid for by the
student loan scam. No matter how you shuffle the fees around, the total fees
still end up being paid by student loan debt. You can ignore whatever they say
tuition is, and just focus on student debt to get an idea how well our leaders
are working to keep education cheap.
Bottom line, if student debts are
increasing for 18 years in a row, it’s because the cost of higher ed has been
increasing for 18 years in a row…our leaders in higher ed have failed, and
failed spectacularly. The rational thing to do would be to flush these losers
away and/or end the failed student loan scam.
We probably should have done something
about this years ago (hey, I would have, if given the power), but we just let
the loans stack up, as though “debts don’t matter” (seems to work for the
Federal government, I admit…though I do suspect it will work perfectly right up
to the point where it doesn’t work at all).
Anyway, the article cites an important
clue that things are amiss:
As of the
end of 2016, 11.2 percent of student loans were more than three months delinquent.
Like most
everything else in higher ed, the above fact is misleading once you look more
closely. There are a host of options for students to put off making payments,
without going into delinquency. The most common example is a student taking just one cheap night course every
year—you don’t have to make payments on the loan when you’re in school, you
see, so by dragging things out you can avoid being declared delinquent. It’s
almost impossible to believe but more than
40% of student borrowers aren’t making payments. That’s
quite a bit more than 11.2%, and way worse than any other legitimate loan
repayment. Seriously, compare the
40% defaults of student loans to the roughly 2.5% defaults of credit card or
other loans.
Rather than do the
obvious and shut down a system that’s obviously failing spectacularly, the
article I quoted from above appeals to Trump for help. Trump actually has a
plan, but it’s just another shell game, shuffling things around while not
addressing the real problem:
Trump’s
proposal allows for borrowers to pay 12.5 percent of annual income to earn loan
forgiveness after 15 years; REPAYE has borrowers pay 10 percent of their income
over 20 to 25 years before qualifying for forgiveness. A CNBC analysis found that, under Trump’s plan, borrowers would pay
down their student loan debt far faster than under REPAYE, even though they’ll
end up paying more each month to do so. Under Trump’s loan repayment plan,
you’re paying more to escape the crushing cycle of debt repayment faster than
normally.
I’m not a
forgiving person by nature, but I feel the vast majority of student loans
should be written off, rather than just write and re-write repayment schemes.
The bottom line, most of these loans were fraudulently given, most of the money
went to the failed plunderers who rule higher ed.
Don’t create a
new repayment scheme, while pouring more easy student loan money on the table to
create a new generation of high school graduates to be taken advantage of by
the vicious
crocodiles who run our schools…fix
the problem:
Shut down the
student loan scam, cancel the degrees of the students who paid so much for them
(and, any student who thinks the degree is worth the money will get the option
to keep the loan and the degree), and then claw back the money from the
schools/administrators who took it.
Even if the last part of my plan isn’t
feasible, it still makes far more sense than just ripping off more kids. The mainstream
media generally presents any Trump plan in the worst possible way, but it turns
out he’s actually considering (finally!) trying to fix the student loan scam:
But in changing the current
parameters of loan forgiveness, Trump has also favored reforming the student
loan business in the first place — reforms that may cause long-term problems.
In a May interview with Inside Higher Ed, Trump campaign co-chair and
policy director Sam Clovis floated the idea of getting the Department of
Education out of the student loan market and allowing private banks to issue
loans, a system the Obama administration abandoned in 2010…
Absolutely, get the Federal government
(and taxpayer) out of the student loan scam business…if private lenders want to
assume the risk, they can do so, that’s at least a start to reducing all the
hot money pouring into higher education. Naturally, this can only work if the
Feds can stop giving so many protections to the lending banks, and instead
protect the kids who will otherwise still be victimized by this system.
Oh wait, the article mentions “long term
problems.” What might those be?
But…this is what we have now. It’s no
secret that the biggest ripoffs and scams are for-profit and community
colleges, and likewise it’s no secret that these vicious predators target the
low-income and minority markets. The system is already hurting the most vulnerable,
and we need to stop that.
Ultimately, the simple fact is student
loans have been rising for 18 consecutive years, and that means 18 consecutive
years of failure. All the tweaking of the system we can possibly do won’t alter
that established track record of failure, a track record that in a sane world
would lead to only one conclusion:
Shut the student loan scheme down
completely.
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