Bacon's Rebellion

Democracy Thrives in Sunlight

Higher Ed as Engine of Social Injustice

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by

James A. Bacon
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tuition_hikesby James A. Bacon

College tuitions have soared over the past several decades, and so have federal grants and subsidized student loans. Many observers of the higher ed scene believe that easy credit has been a driving force behind the tuition hikes: The more Uncle Sam subsidizes student participation in higher education, the greater the pricing power exerted by colleges and universities. But correlation does not necessarily equal causality. Proof that escalating college loans enables tuition hikes has been hard to come by.

Three economists working for the Federal Reserve Bank of New York think they have found the proof. In a new paper, “Credit Supply and the Rise in College Tuition,” the authors note that federal loan programs have accounted for 90% of all student loan originations since the 2009-2010 school year, and 75% to 80% in the preceding years. Drawing from three separate Department of Education data sets, they show how closely tuition increases track changes in federal lending policy.

When we control for all forms of aid, we find that each additional Pell Grant dollar to an institution leads to a roughly 55 cent increase in sticker price tuition. For subsidized loans, we find a somewhat larger passthrough effect of about 70%. We also find a loading of tuition on unsubsidized loans of 30 percent. All of these effects are highly significant.

Note: To the best of my knowledge, the Federal Reserve Board of New York is not funded by the Koch Brothers or affiliated with the Tea Party.

Bacon’s bottom line: While increased federal support has made it somewhat easier for students to finance their college educations through borrowing, the higher ed establishment captures the majority of the funds. Little of the money has gone to hire more professors, increase faculty pay or otherwise improve the quality of education. Most of it has paid for bloated administrations. Meanwhile, outstanding student-loan debt has skyrocketed to more than a trillion dollars, creating a new class of indentured servants.

This is the hardest evidence yet that one of America’s most ideologically liberal institutional complexes, higher education, is also one of the most exploitative. Colleges and universities talk a good game about social justice, but in the end, they put their institutional prerogatives first.  In the end, higher education has become a powerful engine of social injustice.

(Hat tip: Tim Wise)

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  1. LarrytheG Avatar
    LarrytheG

    re: ” Most of it has paid for bloated administrations. ”

    is this true? not surprised but do we really have numbers?

    I don’t know about the social injustice part of it myself.

    do we know that lower income are not getting loans? It seems pretty wide open to me – and the problem is – that many who are not very sophisticated in financial dealings are easy targets for those trying to sell them something they have an easy loan for.

    the premise asserted here is: ” “Credit Supply and the Rise in College Tuition,” the authors note that federal loan programs have accounted for 90% of all student loan originations since the 2009-2010 school year, and 75% to 80% in the preceding years.”

    how does that translate into harm to lower income folks?

    I think all that has been proven is that easy loans are preyed upon by not only the for-profit education companies but – yes public-supported higher Ed – they’re basically in competition with each other and public higher Ed has sunk to the same standards as for-profit – to get those kids with easy loans.

    If ever there were a case for Conservatives – true fiscal conservatives to get involved in something – this is it. We’re headed for a loan disaster… because we have no standards for getting the loans.. for student or provider and the students are almost encouraged to skip out on the loan later on.. there are no real penalties.

    Talk about throwing money at a problem – this is it!

    So once again, the “liberal” in BR has to “school” Bacon on fiscal conservatism.. he concocts this cockamamie idea bout social injustice when the real problem is the govt helicoptering money to the gullible who are preyed upon equally by for profit and public ed … and the taxpayer loses.

    OUCH!

    heckfire who is against higher ED? it’s like being against kittens.. right?

    easy fix – make students have skin in the game.. match grants – and requirements for part-time work , internships, etc.. no free money.

    1. virginiagal2 Avatar
      virginiagal2

      Most of the increase in costs are administrative – what you’re looking at is overhead. Increased amenities for students (IMHO to stay competitive in US News and World Report), greatly increased number of administrative employees versus faculty, large increase in cost of facilities.

      Problems include –

      Gifts that eat (you get a wonderful new building or institute – now you have to pay janitor, heat, maintenance – everyone wants their name on the building, no one wants to do gifts to cover the cost of maintenance staff – not sexy.)

      Higher expectations of what you get at a college – back in the olden days when I walked uphill both ways to class, dorm rooms had no AC, shared bathrooms, and food service was edible but not posh. If you weren’t on a team, you got your exercise walking to class or playing sports or hiking. Now, you have climbing walls, a nice gym, etc. Much nicer, but – do you really want to take on decades of student debt to have a climbing wall? And as a society, is that a wise place to spend our money? I believe a lot of this is pandering to move up the USNWR rankings.

      Admin staff has increased very substantially – some is required for reporting and IT and that part is probably cost-effective, but I’m not sure paying for a dean to cover every area of interest is actually the best way to spend money. Every time you get a mandate, there is typically a hire made to oversee it. Every time you want to show commitment to an initiative, ditto.

      There are a lot of places you can cut expenses without hurting teaching. They are also supported by people with power or money or both. Not easy or it would have happened already.

  2. James A. Bacon Avatar
    James A. Bacon

    Larry says, “So once again, the “liberal” in BR has to “school” Bacon on fiscal conservatism.. he concocts this cockamamie idea bout social injustice when the real problem is the govt helicoptering money to the gullible who are preyed upon equally by for profit and public ed … and the taxpayer loses.”

    Larry, I give you credit for understanding the nature of the problem — the government helicoptering money to students, some of whom have no business attending college, never graduate, and end up saddled for the rest of their lives with loans they can never repay. You get that. Congratulations. You see the social injustice.

    Of course, the higher ed establishment is totally complicit in — and a direct beneficiary of — this arrangement. If you want to blame this racket on both higher ed and government, well, I’ll go along with that. Both are perpetrators of a massive social injustice.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Good point Jim. It is also a primary reason why so many students today receive straight As or high Bs and no one fails. It is necessary to perpetuate the fraud that students are receiving an education. Few get educated, just debt.

      This is a root cause of America’s rapid decline as a competent nation. It’s a fraud on our young people.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        As you point out, the fuel for this massive fraud on our young are the Federal Student loan programs. This should be no surprise, given the frauds long history, rising and falling and rising again, since the post WWII vets loan programs began.

  3. LarrytheG Avatar
    LarrytheG

    BOTH -ARE COMPLICIT – we agree 100%!

    we’re having the same problem with the armed forces.. they get out of the service with education benefits – and guess what happens…

    and let’s extend this one more notch…

    you give vouchers to low-income parents to choose a non-public school for their kids – and guess what?

    this has turned into a disaster by throwing money at it – and BOTH the Dems and the GOP are responsible .. You can understand the LIBs – they never met a good cause they did not want the govt spending money on – but what the heck has happened to the GOP?

    See – I give the Dems credit – they’re true to their principles.. but the GOP, we used to rely on them to keep the Dems in check.. and on some issues they do – like Solyndra but on higher Ed – good gawd o’mighty!

    1. virginiagal2 Avatar
      virginiagal2

      In general, I’m kind of neutral on charter schools. I did want to mention that, I have the strong impression that the charter school experiment in New Orleans after Katrina has actually worked out pretty well.

      Is it possible that, for school districts with large issues and entrenched poverty, the political/funding/structural problems that have not been addressed might actually be helped by doing something very different? I don’t see some of these problems ever getting fixed otherwise.

      Every time I see an article about how bad the situation is with Richmond city schools is, it’s usually followed by another idiotic initiative for a “nice to have” that hoovers up all the money that should be used for school “amenities” – you know, optional things like roofs, rat control, and structural repairs to keep the buildings from falling down.

      Seriously, the problem with some of these schools seems to be more about political unwillingness to spend the money on things that should be a priority, rather than about actual lack of city funding. If you wonder why more people don’t move to the city, schools are number one and heading up the charts.

  4. LarrytheG Avatar
    LarrytheG

    Oh – and more “schooling” here:

    ” Did the program that funded the Solyndra loan start under George W. Bush?”

    Answer – Mostly TRUE!

    http://goo.gl/3zGgz

    “Plouffe said that the loan guarantee program that awarded half a billion dollars in guarantees to Solyndra “was supported by President Bush.” The program was created on Bush’s watch by a law he signed and promoted. The program grew under the Obama administration, which ultimately awarded Solyndra’s loan guarantee under a new section of the law created by the stimulus. The Bush administration, though, promoted the loan guarantee program, and Bush himself touted it on his way out of office. There’s also evidence his administration specifically prioritized Solyndra’s project. We find Plouffe’s statement Mostly True.”

    1. James A. Bacon Avatar
      James A. Bacon

      One of the reasons why fiscal/free market conservatives had a problem with George W.

  5. Peter Galuszka Avatar
    Peter Galuszka

    As might seem typical, this post and these comments push some familiar rightist views on colleges. The reasoning is:

    (1) Colleges are hotbeds of progressive thinking.
    (2) Grade inflation makes a fraud out of accountability.
    (3) Therefore, colleges are frauds.
    (4) The current system of student loans is self-perpetuating and serves the interests of suspect college administrators.

    Like you, I have plenty of complaints about how student loans are handled and how students get stuck with outrageous bills for years. They are often not allowed to renegotiate their interest rates that one might be able to do for a house mortgage. Nor are they offered many choices.

    Regarding the other points, they are unsupported by facts. They are just thrown out there as in some kind of National Review echo chamber.

    As a point of interest some colleges are simply giving worthy students a free ride if their families make less than a certain amount. Here’s an interview I did last week with the new president of the University of Richmond:

    http://www.styleweekly.com/richmond/chief-spider/Content?oid=2223533

    I suspect that the anti-intellectuals among you will trash this too in your effort to discredit higher education and the liberal arts. What’s next for you? Trying to shut down colleges?

    1. James A. Bacon Avatar
      James A. Bacon

      Progressives = enemies of the people.

      Good intentions don’t make up for bad results.

    2. virginiagal2 Avatar
      virginiagal2

      I think there actually are real problems with how universities are spending their money – a lack of budget focus, too much money spent on efforts not to offend anyone in power or who might donate money, and too much emphasis on rankings with an apparently unlimited amount of money spent trying to move up them.

      I don’t care about rankings. Good is good. USNWR saying you have a good cafeteria does not mean that you teach well. Spending more money per student does not necessarily mean you are teaching them better – how you spend the money matters.

      IMHO this is in a cycle where the incentives are bad – the incentives are to spend more, and someone else will pay for it. Doesn’t mean the people are stupid or evil – they are responding to how we’re measuring their performance. It’s on us if the measurements we’re using are stupid.

  6. LarrytheG Avatar
    LarrytheG

    all other things worthy of debate – the current setup for college loans is wrong on many levels.

    we’re giving loans to people who have little or no motivation or understanding what a personal debt really means..

    we just had a dang near depression based on giving loans to anyone so they could essentially gamble with the money – and run off if it blew up.

    and we’re doing the same thing all over again with student loans.

    we have publicly funded colleges now acting like fly-by-night for-profit education shysters…

    publicly funded colleges are ENCOURAGING folks who have little or no understanding about debt – to go deep into debt – and in many cases for a product that will not get them a good paying job in the economy – much less a job that pays them enough to pay off the loan – and maintain financial ability to buy a car or a home.. we’re creating a generation of people who are basically ignorant about debt and personal responsibility – not only for debt but for their performance in repaying that debt.

    we have all this hate and anger of credits for health care – and where is it for the education loan issue?

    I have my suspects.. education loans are perceived as for the “middle class” and health insurance credits for “parasites”.

    right?

  7. Malcolm Baldwin Avatar
    Malcolm Baldwin

    Might we also consider the rising cost of colleges’ responses to ever-rising student and parent expectations of the kinds of sports, dormitory, and other facilities they seek? When I compare my experience 50 years ago, when tuition at a private college cost 1/10th of my parents’ modest salaries, to how students today live and recreate in college, along with the revolution in communication, library and science/lab costs, surely there’s at least some additional explanation for tuition increases and the college provision for these facilities to compete for students .

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Unfortunately, those responsible in higher education apparently lack the character and seriousness of purpose to resist these trends.

      Rather, at best, they simply go along, but far too often they encourage this race to convert higher education into an adolescences’ playground, one far too often designed and built for students and faculty alike.

      While this corruption is found everywhere in higher education, it may well be most dominant among those institutions that can least afford it, namely 2nd and 3rd tier colleges.

      All of this corruption now amounts to a national and institutionalized scam of monstrous proportions. No wonder America is headed down the drain.

  8. Peter Galuszka Avatar
    Peter Galuszka

    however, if you want to look for some Honest-to-God fraud check out some of the for-profit diploma mills that make a MOOC erie of us!

  9. LarrytheG Avatar
    LarrytheG

    re: ” Unfortunately, those responsible in higher education apparently lack the character and seriousness of purpose to resist these trends.”

    except we seem to be talking about virtually all Colleges and Universities…

    Is this True – ” Virtually all leaders in Higher Education -… lack the character and seriousness of purpose… ”

    is that true?

    do parents and their kids own any of this?

    I’m with Malcom on this.

    but this starts is K-12… where both parents and kids expect – not just a core academic education – but soup to nuts including sports –

    Most of Europe and Asia focuses on core academics AND performance with respect to core academics…

    Here – Virginia funds core academics with the SOQs – but look at most local schools budgets – that willingly choose to spend millions and millions of additional dollars of local money – NOT on core academics… but soup-to-nuts and when these kids go to College that’s what they are focused on – not core academics.. not even the things needed for a job in this 21st economy – AND they’re willing to go into debt up to their eyeballs – for decades.

    you can’t blame that on College leaders.. they might be complicit – but they’r more responding to the demand and going along with what people want – than imposing it.

    If someone wants to go to college to get a degree and go into debt up to their eyeballs – what would any self-respecting college administrator – willing choose to lose enrollment to other colleges willing to play along?

    I don’t think we can pin this on college administrators.. it’s coming from society.

    1. TooManyTaxes Avatar
      TooManyTaxes

      At least in Fairfax County, there are no public school sports until high school. Sports are sponsored throughout the county by private organizations. School gyms and fields are rented to the youth leagues.

  10. Peter Galuszka Avatar
    Peter Galuszka

    Reed, how do you know college administrators lack “”seriousness if purpose?” It’s like saying all lawyers and bankers are shysters. What nonsense. Hope you start to thinkbefore you write.

  11. salz Avatar
    salz

    I admit to being pathetic at math and admit to thinking that higher education has too many administrators piling too many work hours on too few teaching professors who are giving too many inflated grades.

    As a former academic, I agree with Clark Ker that “the academic is the most liberal with other people’s lives and most conservative with his own of any profession.”*

    But…

    …this sentence makes no sense to me: “When we control for all forms of aid, we find that each additional Pell Grant dollar to an institution leads to a roughly 55 cent increase in sticker price tuition.”

    As I read this if a college has 1,000 freshmen getting $20,000 annually — which seems like a reasonable numbers for a medium to large university, doesn’t it? — in Pell Grants, tuition that year would increase over $10 million for every student who isn’t on a Pell Grant.

    Again, I’m pathetic at math, but…

  12. LarrytheG Avatar
    LarrytheG

    hmmmm… 1000 x 20,000 = 20,000,000 …

    I equate the current college loan program to the way sub-prime loans were working and it’s primarily because the folks that get the loans have very little if any skin in it. They are more or less free to walk away if things don’t work out.

    There is no incentive to pick a degree path that leads to an occupation in demand. There is no incentive to excel at academics.. to be a better competitor for jobs. There is little incentive to work part time or get relevat job experience to help financially as well as be more “job ready”.

    And again – it’s not STEM per se. It’s the level of judgement and reasoning that STEM requires to be successful.. that same criteria is needed in most jobs nowdays because virtually all of them are infused with technology, science and math concepts.

    When you look at things like AP enrollment and pass rates for things like math and science – places like Fairfax excel – but most of the rest of Virginia is shockingly minimal. It’s not unusual to see a 10% participating rate in AP core academics and a 40% pass rate.

    You cannot be involved at a professional level with designing drones to monitor power lines or to design a database for electronic medical records or developing a self-driving vehicle.. with a weak or non-existent core academic education yet too many kids with heavy duty loans are seeking your basic generic degree more suitable for Starbucks than Boeing..

    I don’t blame college administrators for this mindset. They basically are competing with other colleges for .. enrollment… and the losers end up like Sweet Brier.

  13. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Often, within minutes on this blog, one can discover one words twisted out of shape into the delusions of other people’s compulsive need to stereotype so as to “feel good” via their own knee jerk reactions.

    Hence my need to repeat my own earlier assertions:

    “Unfortunately, those responsible in higher education apparently lack the character and seriousness of purpose to resist these trends.

    Rather, at best, they simply go along, but far too often they encourage this race to convert higher education into an adolescences’ playground, one far too often designed and built for students and faculty alike.

    While this corruption is found everywhere in higher education, it may well be most dominant among those institutions that can least afford it, namely 2nd and 3rd tier colleges.

    All of this corruption now amounts to a national and institutionalized scam of monstrous proportions. No wonder America is headed down the drain.”

  14. jwgilley Avatar
    jwgilley

    Yes costs have exploded and student debt has gone crazy. Student debt is more than one trillion dollars. That number comes from federal backed student loans and the actual number is about $1.4 trillion. And it does not include credit card debt, debt taken by parents so their children can attend expensive colleges and universities.
    The culprits include state legislatures who saw an answer to cutting spending on higher education. So they cut appropriations but compensated by reducing oversight of colleges and universities. This left the decisions on cost to presidents and boards. In the past ten years presidential salaries have jumped some 20% per year. Investment in non-academic facilities has exploded as rec centers, stadia, coffee shops etc. have been construction to the tune of some $500 billion in debt which students will have to pay.
    And spending on athletics has exploded much of the cost being passed on to students less than a dozen universities actually make a profit on athletics. And some small state colleges have jumped to the pot. A small state college we all know of added football and then the athletic fee jumped from $400 per year to $3400 per year. Their paid attendance was less than 200 per game.
    And the other culprits other than legislatures and president have been board members who are mostly wealthy coming out of the ole dot com boom of a decade ago. So spending was not conservative at all to them. Much of the off the books spending came through public private partnerships not unlike the State’s” Road to No Where” that McDonnell wasted a couple hundred million dollars on. At some time someone will have to pay the piper at our colleges and universities.
    And faculty have been silenced by not excessive salaries but lower working hours. Now the average full professors at public universities teach six hours per week. And retired presidents go back to being professors at $400k per year or $100k per course.
    To compensate for the lowered teaching loads and expanded enrollments part time faculties are hired – adjuncts and grad students. Now the part timers teach over 50% of all college classes nation-wide. I know one young person with a doctorate in English from a well-known Virginia university who for six years has existed by being an adjunct at three different colleges and universities. She gets about $24000 a year from the three institutions but has no health insurance or retirement.
    And Americans have bought into debt and not just the national debt. There was a recent article about the former Governor of Maryland who borrowed some $390,000 to help his kids go to more prestigious institutions. And I know of a person who borrowed all of his home equity so his son could go to U. Penn rather than Penn State.
    So Americans are desperate to go in debt and it has been led by elected officials at the state and national level. But some day someone will have to “pay the Piper.”

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Jwgilley –

      That you jwgilley, Virginiagal2, Malcolm Balwin, and salz – now we are getting somewhere with folks who know what they are talking about.

      jwgilley’s comment is the tip of an iceberg of knowledge and experience. Each sentence of his comments could spark an entire article.

      Hence one minor elaboration on his comments is the fact that today’s professors fear giving their student(s) a low or even mediocre grade. Why? The students now attack the Professors by way of their right to lower his or her assessment of the professor. This today professors greatly fear. Why? Simply by reason of the fact that the Monkey’s Run today’s Zoo we call Higher Education.

    2. LarrytheG Avatar
      LarrytheG

      The guys running the schools are just responding to demand from folks who have access to easy money. Not saying they are pure as the driven snow – but they’re positioning themselves to receive the goodies.. no surprise…

      This follows pretty much what is going on when servicemen leave the armed services with their GI education benefits and the for-profit folks are ready, willing and able to accommodate their voucher-ready wants.

      you put this money in their hands and no shock that a crowd forms to figure out how to get some of it.

      Let’s assume for a moment that it’s all on the College folks – that they’re the evil ones and the folks with loans/vouchher are just innocent rubes.

      how would you fix it?

      bonus question – would your “fix” involve those nasty top-down government regulations?

      If the govt is helicoptering money to either kids or colleges – the colleges will surely figure out how to receive it in the most effective way possible!

      😉

      Jim says not every kid is suitable for college. That may be true – but most every kid can be trained to do a job suited to his talents and no one is better at that than the US Military.. who gives you an entrance test – determines where your talents are (and are not) – and offers you training and at the end of your service – a stipend to add civilian scale knowledge.

      If we are so bound and determined to give every kid 30, 40, 50K of debt – to go to college – why not expand that to more K-12 VocEd and Community college – and forgive the debt if they get an occupational certificate.. etc?

      Just giving money away – to virtually anyone who wants it is going to certainly attract folks who want it.

      1. jwgilley Avatar
        jwgilley

        Obviously the person who borrows the money is at least partially responsible for the bloated spending by colleges. But not all and we once believed that institutions of our culture looked out for the least of us not taking advantage of the weakest of us.
        According to this theory the trillions of dollars of bad home loans that the government financed in the housing bubble was entirely the responsibility of the borrowers and not of the banks that made bad loans. Or of the government which backed those false loans made by banks.
        And certainly do not blame congress or here in Virginia the General Assembly.
        Apparently, we Americans like civilizations before, love to have a Pied Piper lead us off the cliff like the Romans. Gladiators were adored as Rome fell off the cliff. When will we put a statue of Dennis Rodman on the National Mall?

        1. TooManyTaxes Avatar
          TooManyTaxes

          My daughter graduated last year from North Carolina State sans debt due to money her mother and I saved over the years. After her junior year, she thought she wanted to stay in school and get a double major. We told her there would be no more money. She thought she’d borrow for another year and then thought better of it. Wisdom came early to my daughter, who is now working for a large financial services company in Research Triangle Park.

          A person who uses all their home equity to send a child to U. Penn deserves to have no home equity.

  15. Jonathan Wight Avatar
    Jonathan Wight

    I can corroborate this from my years in Brazil, where higher education was not only subsidized, it was free. All you had to do was get in. But only rich kids had access to excellent high schools. As a consequence, society provided a free ride for rich kids to add to their human capital in college, paid for by the taxes on the poor. And virtually all of these kids were white, adding to Brazil’s racial injustice.

    Two chapters in my book, Ethics in Economics, deal with economic injustice and economic opportunity.

    For more on the economics of why tuition prices shot up, see:
    http://www.economicsandethics.org/2015/07/milking-students-and-taxpayers.html

    1. James A. Bacon Avatar
      James A. Bacon

      I highly recommend Jon’s book, by the way. Very thought provoking and challenging to some of my philosophical views — but in a good way that inspires me to think harder about why I believe what I believe.

  16. jwgilley Avatar
    jwgilley

    I spent some time in Brazil and the education is different based on culture. In the German towns the education day for say high school was 7 hours while in Portuguese towns it was 3-4 hours a day. Brazil has several distinct cultures – Portuguese, German, Italian and others.
    But in England the bachelor’s degree is three years as in Germany and Australia a law degree at Bond University in is two years and here we stretch things out because we want more money from the students not because a law degree must take three years. The basic difference in time spent getting a degree is that in England etc. the student goes around the clock and does not take time off in the summer. But it is far more cost effective.
    And in America we have given up on vocational schools and look for everyone to go to college not prepare for jobs in fields such as manufacturing.
    America’s best hope is in our community colleges which are in a movement to become tuition free. In Tennessee they have mad e community colleges free and other states are following. That is an important movement for higher education and for economic development.
    Basic global economics will change all of our higher education system private and public in time

    1. TooManyTaxes Avatar
      TooManyTaxes

      While it occurred many years ago, my third year of law school is an absolute waste of time and money.

      I have concerns over making community college free. Today they are rather efficient because most students pay the freight. Make them free with tax dollars and we will expand the financial problem. Using other people’s money is an open invitation to steal.

      1. LarrytheG Avatar
        LarrytheG

        TMT are you okay with loans for 4yr but not 2yr?

      2. LarrytheG Avatar
        LarrytheG

        TMT – how about this. The money is a loan. The loan is forgive – becomes free if:

        1. – you graduate with a degree or vocational certificate

        and

        2. – you become employed within 6 months.

        like a performance agreement…

        and for that matter – why not the 4yr degree the same way?

        1. TooManyTaxes Avatar
          TooManyTaxes

          No, Larry, I’m not OK with it because the evidence shows where institutions (public or private) get access to taxpayer money, their costs tend to grow much faster than inflation. Right now, knowing that most people pay directly for community college tuition keeps spending and tuition down. NOVA, for example, is an excellent school with affordable tuition. Many people in Northern Virginia have gotten a start or a restart there.

          I’d rather see expanded tax credits for tuition paid. Maybe even credits that carry forward for say three years.

  17. LarrytheG Avatar
    LarrytheG

    on the housing crisis – it appears it was companies found guilty – not the govt:

    http://www.alternet.org/economy/bank-fines-and-crime

    The SEC has a list of firms whose activity “led to or arose from” the financial crisis on its website. It tells you what they have been charged with, what fines have been sought and what has been paid. The list is pretty long. Here’s just a small sample of the

    161 entities and individuals charged for a grand total of $2.73 billion collected so far in settlements:

    Goldman Sachs: Charged with conning investors on a financial product tied to subprime mortgages as the U.S. housing market started tanking. Goldman agreed to pay a record penalty in $550 million settlement and reform its business practices. A jury found former Goldman Sachs vice-president Fabrice Tourre liable for fraud.

    Citigroup: The SEC charged the company and two executives with misleading investors about exposure to subprime mortgage assets. Citigroup paid a $75 million penalty to settle charges, and the executives also paid penalties.

    Bank of America: Charged with misleading investors about billions of dollars in bonuses being paid to Merrill Lynch executives at the time of its acquisition of the firm, and failing to disclose ginormous losses that Merrill sustained. BofA paid $150 million to settle charges.

    I would presume that these companies would have provided proof the govt made them do it .. if they could have.

  18. LarrytheG Avatar
    LarrytheG

    with student loans – it used to be the private sector with the govt guaranteeing them…

    now .. it’s the Govt itself:

    The office of Federal Student Aid provides grants, loans, and work-study funds for college or career school.

    We offer more than $150 billion each year to help millions of students pay for higher education.

    https://studentaid.ed.gov/sa/about

    think about 150 billion – that’s major money.

    that’s on the order of 3 billion for Va alone.

    that’s MORE than the MedicAid Expansion…

    that’s 17,000 for every student enrolled in Va. for one year.

    that’s about 70K for each enrolled student in Va for 4 years.

    I must be doing something wrong on the math.. at least I hope I am.

    Imagine you are in charge of enrollment at any college in Va and you know each one will bring in 17K in money.

    I don’t think at the College leadership level they are thinking about anything much other than how much money comes from how many students.

    you get the kids hooked up with financing and keep on trucking…

    I don’t think any of them are thinking they’ve done anything of a negative nature.. their job is to get as many kids enrolled as they can accommodate physically and fiscally.

  19. jwgilley Avatar
    jwgilley

    The good news is that President Obama plans to announce a student debt forgiving program like HARP for home owners. Anyone who does not earn a livable wage will have a chance get their loans forgiven. Not good for college graduates with a good job ..that is if they have debt.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      “Not good for college graduates with a good job ..that is if they have debt.”

      That’s a shrewd observation. How our government has contrived yet another government program that actively encourages citizens to sit at home watching TV rather than be punished by the government if they get a “good job.”

      1. jwgilley Avatar
        jwgilley

        Where do they get hundreds of billions of dollars for yet another write off program. The Fed Bank is printing money for all sorts of things. Some day someone will have to pay the Piper. But for a 24 year old with $75,000 in student loans and a part time job it is a good thing. For the nation that is the question.

        1. LarrytheG Avatar
          LarrytheG

          Personally – I think we’re screwed up twice.

          we should not be giving loans in the first place for generic college without regard to grades or target degree.

          but it’s worse than that – because as we do in high school – we target resources to the 4-yr college bound and short shrift to non-college or two-year college with occupational certificates.

          New program? Nope . take existing monies and devote some balance to community colleges and really occupational certificates from private providers like computer security and truck driving.

          make the loans – competitive grants… for people who have good grade, are pursuing a legitimate in-demand field and graduate and get a job in their field of study.

          no employed certified employee – no money.

          why are we forgiving loans for 4-year college grads in the first place?

          I still cannot believe the level of debt people are willing to sustain.

  20. LarrytheG Avatar
    LarrytheG

    Oregon has now become the second state to provide free community college.

    http://goo.gl/a1jFLa

    Unlike the “free money for whatever you want to do ” Federal Govt program – “free” Community College can and should easily be structured:

    1. – only applies to specific courses and curriculum for skills that are in demand. vocation certificates, engineering, medical , science

    2. – only is offered to students who maintain a 2.5 GPS in core academic courses in K-12.

    3. – only pays for the courses passed

    4. – means test applicants to focus on lower-income but allow paying applicants in the program also.

    5. – course and work credit for staffing Medical clinics to serve low income citizens.

    6. – tax credits to employers to provide jobs/internships to students

    We need to create job-ready grads… not folks who graduate to sign up for entitlements.

    Kids need a path to a productive adult life – where they are financially able to care for themselves, their families and pay taxes.

    that should be our goal…

    the current loan program – it does not take an Einstein to see it’s a disaster that will end badly and not just for the participants – for the country… we’re creating the environment for colleges to essentially finance their operations from easy-loan students.

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