12 October 2011

With my endorsement

College loans, discuss

So to mollify some of those protesters, this seems like a good idea. I'm fully aware that student loans were written into the bankruptcy laws because they had high default rates, and for that matter aware that they're the exception to the bankruptcy system. It still seems nuts that we force people who have no ability to pay to pay for something that is essentially a mortgage payment.

What that should mean is that they will have high interest rates or will be given out less frequently (and for fewer types of students, in need students/students studying fields more likely to pay out). This would indeed have the consequences of a) fewer people would go to college. I, like McArdle, don't find that very troubling because of the abundance of people in colleges who clearly have no idea what they are doing there. And for that matter, neither do the colleges. and b) colleges could have to stop raising tuition at astronomical rates because the government funded spigot of free money would go down in its flow. Which would mean in about 10-20 years or so college could again start being a reasonable expense for some that could be paid off during attendance (by working) or shortly there after (by taking smaller loans/working less).

Other options: adopt a percentage of income post-graduate scheme for payment. People who earn more could be paid off sooner, so they'd have some incentive to get to it, and others would have incentive to take lower paying jobs (teaching for instance, or different medical specialties for medical students) because they could now afford it instead of a fixed payment that might represent a very large amount of their income. This would also mean that the college has some incentive for either a) training people who could potentially earn higher income or b) training people such that they will most certainly have a job post-graduation. And not for training people in useless degrees. I think this admits that our over-credentialed/over-licensing society uses college largely as a degree mill for jobs rather than as self-enlightenment and self-enrichment, but we really cannot afford to continue lying to ourselves about the utility and experience of college as some sacred rite of passage at the prices we must pay.
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