Andrew Gillen of the Center for College Affordability and Productivity registers strong dissent on Obama's new student loan policy in this essay on Minding the Campus. Just like Obama's moves to deal with the effects of the housing bubble, this new student loan forgiveness policy does not deal with the underlying problem and will just make it worse over time.
NAS president Peter Wood has written a four-part series considering the value of the for-profit higher education sector, and whether those who care about the liberal arts should also care about the fate of this besieged sector. If there is a higher education bubble, for-profits may outlive not-for-profits in the case of a burst. His series draws on a number of his personal encounters with the for-profit industry.
In this week's Pope Center Clarion Call, Troy Camplin discusses his rather unsatisfactory experience as a Ph.D. who can only obtain adjunct teaching positions. He sees his situation (staying at home with his young children because day care costs more than he'd make by teaching an array of courses) as evidence for the Austrian school's explanation that government actions can distort people's decision-making and lead them into costly mistakes -- such as taking out lots of governmentally backed student loans to get degrees that don't pay off. There are plenty of interesting revelations in this piece, including one where Camplin was told, "Now, we aren't saying that you should dumb down your course...." when that was just what the administrators wanted him to do.
Writing for Huffington Post, Anya Kamenetz compares the huge level of student loan debt to the housing bubble. I'm glad to see understanding that we have oversold college spreading, but Kamenetz misses the role of the government in the college bubble, just as leftist writers turned a blind eye to the role of the government in the housing bubble. There would have been no housing bubble if it hadn't been for federal policy pushing home-ownership as if it were a good investment for everyone and making unrealistically cheap loans available. Similarly, government officials, starting with Barack Obama, keep telling young Americans that they need to go to college (otherwise, they're letting not just themselves but the nation down, says BHO) and enabling even the most academically weak, disengaged students to get into college with financial assistance from Uncle Sam. Kamenetz makes it sound as though the bad actors are all in the for-profit sector: "Someone with experience in the for-profit college marketing business told me that the same online sales geniuses who used to work for mortgage brokers are now employed by for-profit colleges. Their business is the same: fill out the forms, get the money, consequences be damned. Will we stop them this time?" Ah, but you'll find lots of kids drowning in their student loan debts who went to public colleges and universities as well. Those schools are just as eager to lure in warm bodies to fill the dorms and school coffers, just as eager to keep them enrolled even if they are learning little, and just as eager to slap educational credentials on them and send them into a job world that many will find as hospitable as Antarctica. The trouble is not the profit motive; non-profit institutions are no less hungry for revenue than proprietary ones. The trouble is that government policy makes it easy for people to misjudge the ratio between costs and benefits, leading to a profusion of decisions that borrowers later regret. Letting students escape from their debts in bankruptcy, which Kamenetz favors, only deals with the symptoms. I say we should attack the underlying pathology.
Recently, Secretary of Education Arne Duncan said that the new policy of forgiving student loan debts for those who "follow their heart" and enter public sector employment will do wonders for the U.S. In this week's Pope Center Clarion Call, I say that it's utter nonsense. Public sector employment pays very well and gives much greater job security than those who labor in the competitive world. A very large number of college graduates want those government jobs and forgiving some of their student loan debt because they've worked at them for ten years is just a gift from the overburdened taxpayers. One more thing -- with the private sector (where wealth is produced, unlike the government) struggling these days under the many burdens and obstacles the government has put in its way, shouldn't we worry about the government luring away talented people it needs?
“The list of academically and morally corrupt practices that ensue from our inability to adhere to our own standards is rather long. One of our worst offenses is that we admit, and re-admit students absolutely unqualified and absolutely incapable of achieving a college degree. Many go into debt or cause their families to go into debt into [sic] order to attempt a college degree. This is an absolutely corrupt practice and it may be criminal. If we have done this to even one student, then we are guilty of a low form of corruption."
In today's Wall Street Journal, Secretary of Education Arne Duncan contributes a piece entitled "Banks Don't Belong in the Student Loan Business." What he opposes is federally subsidized bank loans and I'm with him on that. Subsidizing student loans is no better policy than subsidizing home loans. Where we part company is in his approval of direct government loans, which he wants to increase so that more students can "realize the dream of getting a college education." As I have frequently pointed out, a college degree is what many students want. Relatively few dream of education. Low-cost loans entice large numbers of young people who gain little if anything in the way of lasting knowledge and skills into college, where they pile of debts they'll have a hard time repaying once they get into the labor force and get a job that most high school kids could do. Besides that, nothing in the Constitution authorizes the federal government to lend money for this or any other purpose.