Should Colleges Be On The Hook For Student Loans? Ctd

A reader writes:

I agree with Glenn Reynolds on a number of points: college has become too expensive; this expense is burdensome when it no longer guarantees employment; college enrollment is too high; and the alternatives (like trade school) are undervalued and underfunded. But making colleges and universities bear some or all of the risk for the students' borrowing is not going to fix any of these problems. Reynold's plan would only result in the following:

– Admissions preference for the already-wealthy. Even if schools maintain a need-blind admissions process, reduced loan opportunities will still weed out poorer students

– Students who need loans will likely turn to private lenders, who offer loans with less forgiving terms. These loans place greater financial burden on students (and their parents) and simply displace the responsibility from schools back to individuals. 

– Schools don't become more "efficient" when budgets tighten. Instead, they will slash the auxiliary programs that can help students succeed in college and beyond (academic advising, mental health services, career services) and focus on that which brings in endowments and investments (sports, new buildings, etc.)

And colleges and universities aren't supposed to be job-placement agencies anyway. They're supposed to provide an education, an education which is still in demand by employers. That fewer graduates are getting those jobs isn't evidence that the education is devalued; it's evidence that there are fewer jobs and more candidates. 

If Reynolds thinks that students are graduating from university without possessing the traits he (and employers) value – self-discipline, delayed gratification, etc. – then he can push for higher accreditation standards and tie federal loan availability to those standards. If he simply thinks student loan debt is too high, we could restrict federal loans only to a certain dollar amount per year, or make them available only to schools whose tuition is below a certain amount.

None of these solutions is perfect, but they are less likely to turn universities into elite-only institutions. Though perhaps this is exactly what Reynolds wants.

Another reader takes the other side:

I love Glenn Reynold’s take on student debt.  That was my position this past Thanksgiving when I had to defend my support of OWS to my family members who opposed any sort of debt amnesty. I compared college education to motor vehicle Lemon Laws.  Say I purchased a four wheel drive pickup from Ford that promised 30 MPG and no maintenance for the first 50,000 miles and that oil changes were needed every 10,000 miles.  Now, let us say that the truck actually gets 20 MPG, needs maintenance almost immediately and actually requires oil changes every 2,000 miles.   I could sue Ford for breach of contract, fraud and on and on.

This brought up the questions, what exactly does a college education promise and who makes the promise.  I take the position that both society at large and colleges themselves have spend the last 30 or so years convincing the American public that unless you go to college, you are virtually worthless.  Become a plumber? Waiter? Fix cars for a living?  Having been born in 1982, I grew up in a society that looked down on those positions (never mind the fact that a master plumber, good mechanic or waiter at a high end restaurant can make a better living than some doctors or lawyers).  The momentum of society has always been towards higher education.  My generation, the Millennial Generation, has been indoctrinated to believe that if we don’t go to college we’ll all end up janitors and that that is a horrid fate.

And the colleges are quite happy to be complicit in the false notion that college is for everyone, that it's just about finding the right college.  They’ll take your money and let you get a degree in sociology (or as I call it, an excursion into the obvious). But once you get your degree, you are just a statistic, and another $200,000 towards some school’s endowment. 

Sadly, many schools have been caught fudging or out-and-out lying about their employment statistics, both in terms of percentage employed as well as starting and medial salaries.  If they were selling any other product it would be fraud.  But because education is amorphous and because tomorrow is promised to no one, we let them sell snake oil.  They promised education as a cure all to society’s ills, but instead it is stagnating the economy’s growth because so many young adults are saddled with so much debt.

The colleges should absolutely be the ones to pay back loans when students default through no fault of their own.  If they are willing to print a degree that says this person is competent and qualified to be a productive member of the college educated work force, they stand behind that promise.  Instead we apologize for them and say, the school did all they could … it must be the student’s fault.