Student loans ruin a lot of lives every year. Not only that, but they also cause colleges to waste money on ridiculous things and jack up salaries far above where they should be, because they know they will always have money.
This causes a vicious circle where tuition has to keep rising for everyone. There is speculation that student loans are going to be the next big bubble. I think we need to end student loans now, before tuition rates and graduate debt get even more out of hand. It used to be that you could work a minimum wage job and be able to pay tuition all out of pocket. Let’s bring those days back!
Exactly whose salary at universities are jacked up? The handful of administrators? The college president whose job it is to secure millions in donations? I know I make third of what I’d make if I went into industry.
Universities are extremely expensive to run. We don’t break even until we have at least 15 in a class, and for lab classes it’s almost double that. So all the lab classes we run at 20 and lectures we run at 8-10 lose money for us. That’s just a small part of what goes into the budget. Can you show me a budget analysis of where this savings is supposed to come from and how cheap are you willing to go so that even finacially strapped people can afford it without loans?
I agree that loans aren’t the answer. There should be more straight grants from the federal government rather than loans and more loan payback programs (like if you work in certain jobs or in certain parts of the country after you graduate).
Ah, yes, let’s eliminate the means by which hundreds of thousands of students go to college every year. That’s a winning ticket!
I’d rather put in place tuition-cost-ceilings - i.e., some law stating that tuition cannot exceed $300/credit hour or something like that. My only concern is that this might cause colleges and universities to scale back their expensive programs such as medicine or engineering.
Maybe if his salary wasn’t so high, he wouldn’t need to secure as many donations. Plenty of charities have people working as volunteers to secure donations.
Exactly. Even if it was due to high salaries, all you’ll do it allow only the wealthy to go as they’ll be able to afford it. Screw the middle and working class and watch our economy and country tank.
Really? You want to entrust the leadership of universities to volunteers? I want someone with experience and expertise in academics, business, philanthropy, educational theory and building community-educational partnerships and they must work for free!
[bolding mine] When were those days exactly? I went to college (University of California) 1980-84, on a combination of grants, scholarships, student loans and working part-time. No way a minimum wage job would have paid for my tuition, let along living expenses, books and such.
We should abolish ALL loans. They all follow the pattern outlined by the OP. Civilization would be much better if every transaction was a cash transaction.
Back in the 70s tuition relative to minimum wage was such you could pay for most state tuition by working 8-10 hours a week. Tuition has grown much faster than inflation and much, much faster than minimum wage. Also, in early 80s the interest rates sky rocketed, making loans way more expensive, which adds to the problem.
Tuition is high and it’s a problem but the solution is not eliminating loans.
Here’s an article addressing the minimum wage and tuition issue: The Myth of Working Your Way Through College - The Atlantic
I think it’s fair to say that increased liquidity in the student loan market has an inflationary impact on tuition and other tangential costs. Whether that’s a net positive I’m not sure. My take is that it’s a spectrum - and that currently we are on the bad side of the spectrum.
[The fee increases](http:// http://ww2.kqed.org/news/2012/07/18/csu-and-uc-tuition-hikes-over-time) in CA are pretty absurd. No idea how much loan availibility impacted this but it couldn’t have helped.
The number of administrators at a typical university has gone way up in recent decades. They’re multiplying like rabbits, and I’m not sure what the majority of them are supposed to be doing. They are a part of the explanation for rising tuition, not the whole explanation. Culling the herd would help drive prices down a little bit.
Further money could be saved by eliminating useless departments. (Women’s Studies, Sociology, …)
The bottom line is that universities have wandered away from their purpose. Everyone is starting to wonder whether it’s really worthwhile to give all that money to them when it’s not clear how much we’re getting in return. More and more students are looking at alternatives to the standard four-year on-campus experience. I expect that trend to continue.
You think they’re useless. Others don’t. Why does your opinion count as the “right” one?
Ah, yes, studying society is useless. Of course.
How do you mean absurd? You understand, i assume, that the cost of providing university education has to come from somewhere, right? All those people with graduate degrees from prestigious universities who teach in the public universities don’t just work for free, you know, so the money to pay them has to be found from one source or another.
It could be that loans are contributing to rising tuition, but in order to make that assessment you have to look at other sources of university funding and see what has happened to them. If other sources are drying up, and students are being asked to foot an ever-increasing percentage of the cost of providing their education, then where are they going to find that money, if not loans?
And, in a nutshell, that’s precisely what’s happened.
The costs of tuition are going up largely because the amount of money that the state kicks in to fund the public universities has declined as a percentage of the total university running costs here in California. The reason that a state university education used to be so cheap was that the taxpayers of the state forked over a considerable percentage of the money required to pay for that education.
As this study notes, General Fund subsidies for the UC and CSU systems fell by about 50 percent per full-time equivalent student from 2007 to 2013. Overall appropriations dropped by about one-third, but the per-student contribution of the state declined even more because student enrollment continued to increase even as funding decreased.
As the report points out, when the state reduces its contribution, the money has to come from somewhere, generally reduced expenses and/or rising tuition. The UC and the CSU have had to follow both options, cutting back expenses using a variety of measures (including forced unpaid furloughs and using more adjunct faculty) while also jacking up tuition. And if you look at the graphs on the linked page, you’ll see that it’s certainly not skyrocketing faculty salaries that are contributing to the shortfall. Faculty salaries at the UC have remained flat over the same time period, and real, inflation-adjusted faculty salaries at the CSU have actually declined.
While this trend of declining per-student state support for the university system has been particularly sharp over the past seven or eight years, it actually represents an exacerbation of a longer-term trend whereby students have been asked to foot more and more of the bill. Part of this is due to the continued expansion of the system, allowing more and more students to enroll, but it also arises from a decreasing willingness by California taxpayers to foot the bill.
I’d actually be interested to know how many tens of thousands of Californians there are who got their own university educations massively subsidized by taxpayers during the period from the 1960s through the 1990s, and who, now that they are taxpayers themselves, don’t want to pay it forward so the next generation can get an affordable education.
Maybe we can identify those people and retroactively charge them the inflation-adjusted market rate for their college education, plus interest at the same rate as students loans. That would help fund the current shortfall. I can only dream. 
Outstanding U.S. student loans now total $1 trillion. Who holds all this paper?
It would be interesting to see breakdowns of U.S. college revenue and expenses today, and what they were 40 years ago. … Or it would seem interesting to me, but perhaps not others; despite much Googling I’ve never come across such a thing.
Fron BusinessInsider.com I see U.S. college (mean?) cost in 2010 as almost $14,000 compared with less than $600 for France. Germany’s top-ranked University of Heidelberg and Technical University of Munich apparently charge no tuition at all even to foreign students!
(Obviously the solutions in 3rd-world countries like France or Germany, with their Marxist policies like childcare and progressive taxation, are unacceptable in The Home of the Brave.)
OP’s remedy is unclear. If professors already earn only one-third of industrial pay, does he hope they undergo further pay-cuts and moonlight at McDonald’s so they can afford to teach?
I agree with the OP, the student loan program as it is takes advantage of our children* in a horrible way that should be illegal. Having them sign away things they do not yet understand as they don’t have the needed life experience to understand because of the way our society is structured.
- I say children, even though most are 18+ because many still have a child’s view of money at this stage in their lives for the reasons stated above.
Worse is that these children just feeding their future into the system does tend to cause the prices to rise to take advantage of this surplus.
Hey, the old “they can vote, drive, and get married, but whoa nelly, have then sign a contract with clearly laid out terms? Let’s not get crazy here!” argument.
There are a lot of 18 year olds that don’t have good money sense that shouldn’t be getting loans. The same can be said for 25 year olds, 40 year olds, and 80 year olds.
Just because some student have gotten loans irresponsibly does not mean we should forbid loans to the thousands of students for whom it is the gateway to education.
The transition is not how you make it appear.
Voting, early on they are really a product and a extension of their parents vote (this does not mean they will vote the same, but it is the product of parenting). After this and life experiences they may tend to form their own opinion based on adult life.
Driving, again a learning experience is usually involved such as a learners permit and specific instruction given and the passing of a test.
Married, for those very young this again goes much into extension of parental upbringing.
You have to draw a line somewhere to indicate some concept of adult financial experience. Age seems to be a easy reasonable line.
I do agree that for those who need or desire a gateway to a college education a gateway should be provided, I just disagree on the gateway of student loans and would like to see a different one provided as the gateway.
If you want to get rid of the current solution but don’t have a proposal to replace it, you’re just saying you want to make it impossible for large numbers of people to go to college.
The total amount of college loans is going up because more and more people are going to college and states are funding colleges less and less. $80k of student loan debt is not a problem if your first job out of college pays $90k/year. It’s only a problem if you can’t get a job or if the only job you can get pays $25k/year.