Tuesday, June 11, 2019

Forgiving Student Loans Is Useless Without Punishing The Thieving Schools

By Professor Doom

     Another election is on the horizon, and already politicians are getting votes in the usual way: promising “free stuff.” Normally, I’m against the notion of getting something for “free” from the government, but I have an exception for student loan forgiveness, for many of the victims of our higher education system.

      Lest the gentle reader think he detects the smell of…hypocrisy, I point out that many student loans were for nothing, as the so-called education and degrees were bogus. So, the government isn’t giving something (student loan forgiveness) for something (degrees and education), it’s giving nothing (fake money created from nothing) for nothing (a worthless degree).

      Determining who exactly would be eligible for such forgiveness is straightforward: any student willing to forfeit his degree and all college credit, working at least 2 years in a job where the degree/education is of no market value, should be eligible. That’s just a stray thought, and I admit it has room for exploitation, and it’s unlikely to be used because there’s too much money to be made off kids suckered by this system. The student loan forgiveness idea has a bigger problem, however:

      The scammy schools (this includes, for-profit, non-profit, and state schools) are off the hook for ripping off students, and making a fortune off them even as the taxpayer was forced to provide that fortune via student loans.

      We can forgive the loans, but as long as we allow these types of schools to get away with it, we’ll just have this problem again in a few years. In fact, the problem will be bigger—if students know that mass forgiveness is likely to happen, they’ll be willing to take out even bigger loans! So, the promise of student loan forgiveness by some political candidates is just typical government: creating bigger problems while trying to solve other problems government created (it’s similar to how amnesty for illegal aliens, given in the past, has worked out for today…).

      This is why when I mentioned student loan forgiveness, I also mention fixing accreditation—every school taking student loan money is accredited, and accreditation rules can shut down those schools in a heartbeat any time they want…just need to enforce the rules. I’d love to claw back the money from the thieving schools (more accurately, the “leaders” of such schools), but I know that’s politically and logistically difficult. Shutting them down is comparatively easier.
      A recent article in the Washington Examiner actually manages to express ideas I expressed years ago, though they know nothing of accreditation (forgivable, almost nobody knows anything about it), and never gets around to suggesting even roughly how to punish the schools:

     It’s certainly a good title, let’s see what they have to say:

Warren wants to eliminate some or all student debt for those with incomes as high as $250,000. Those making less than $100,000 annually stand to benefit most, with forgiveness of up to $50,000 of student debt. She wants to finance this (of course) with a wealth tax on fortunes greater than $50 million.

      Warren’s ploy is a good one: we have around 50,000,000 voters with student loan debt, and average debt is around $30,000 (both numbers are rising fast). So, offering the equivalent of free money could capture 50,000,000 votes, not bad at all. I’d hope those 50,000,000 are educated enough to know a critical theorem about the existence of free lunches, but I know about how very little most of them learned while racking up those debts.

Until market discipline is imposed on free-spending and tuition-hiking college administrators, no amount of loan forgiveness will ever be enough to give students a fair deal for their money.

      The above is certainly correct. You know how we’ll get market discipline? End the student loan scam. The paper doesn’t have the balls to say that. Oh well.

This is also why Obama's administration controversially, but to our mind admirably, cracked down on the many for-profit colleges that had sprung up to take advantage of the over-generous government subsidies that were coming ultimately at students' expense.

      The paper nearly snaps its back putting praise on Obama but…no. Student loan debt went up over half a trillion dollars under Obama’s reign, well more than doubled. I sure don’t recall any “crack down” beyond one big school. I’m not saying Obama is responsible for our student loan mess (he honestly isn’t), but I’m hard pressed to give him credit for slowing it down when all measures saw acceleration.

The decline and fall of the traditional model of the university is probably just around the corner, and everyone should be cheering it on. Instead of propping up institutions whose relevance is already waning, government should support state-level efforts to make higher education more affordable through online learning and other means of modernization of reputable educational institutions.

--emphasis added
      I’m not convinced the paper is right about this. Gatherings of scholars, the traditional model of a university, have occurred in every civilization, over the course of thousands of years. Now, our system of student loans has warped this, and it’s clear the paper believes “traditional model” is the same as “today’s model.” This is patently false. The days of today’s model of the university (most places), as a central indoctrination center to push ideology and extract student loan money, are probably numbered, but the traditional model of gatherings of scholars is unlikely to end (in fact, proto-universities, of scholars gathering away from “traditional” schools, are starting to form anew, these gatherings often supplemented by internet connection, of course).

     “Online learning” just isn’t going to help, neither lowering prices nor addressing the real problem of worthless degrees, as I’ve discussed in detail many times before.

By expanding their educational programs to a broader base,…

     I’ve deleted the rest of the quote because of the sheer idiocy of it. We already have huge online schools, they already have a massive base…and they’re failing hard, burying students in student loan debt for worthless degrees. It’s a real shame the paper doesn’t know easily accreditation could fix this problem, and an even bigger shame is the article doesn’t allow comments so readers such as myself could help them out.

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