Colleges already have "skin in the game" of student loan repayment. Student loan default rate is widely available, such as on IPEDS (integrated postsecondary education data system -- https://nces.ed.gov/ipeds/), so students and their families can already take this into account when selecting schools. Loan burdens and default rates are also among the many factors taken into account in college rankings published by US News & World Report, Money Magazine, Forbes, etc. Unless you're talking about a for-profit degree mill like University of Phoenix, colleges and universities are already quite concerned with their students' loan repayment rates.
I took out some loans as a grad student but was able to lock in a 30 year loan at 3.25%. Not a terrible deal. But today, PLUS loans for grad students are up around 7.5% and undergrads pay about 5-6% depending on the loan. This is highway robbery when inflation has been around 2-2.5% for years! Why isn't there public outrage about interest rates on student loans? There will probably always be controversy about free college but can't we start by agitating for radically reforming a policy that all reasonable people can agree is cheating our youth? I wish the Dems pushed this issue and made the republicans explain (assuming they object) why students need to pay 3-4 times the inflation rate on their loans. Its disgraceful.
8
Through work I learned about how student loans are repaid in New Zealand and it's very much like what was proposed here for the first option. Loan payments are deducted from your paycheck and is a manageable percentage of what you earn.
1
"Our country has most of the best colleges in the world."
This is as much a fallacy as "America is #1" and yet still chanting "Make America Great Again" which would acknowledge it isn't number 1.
What are the metrics behind the statement the US has the best colleges. Is it subject knowledge? Well, given the US imports a good amount of its needed educated talent using H1 visas, obviously that isn't the case. If we use Nobel Prize Awards as a metric, the US gets trounced by Israeli and Scandinavian Universities.
Let's say we measure based on ROI, and the US again fails to perform and has been taking a nose dive over the last four decades (when it used to be affordable).
The fact is we need to understand that American education at all levels is failing to keep up with the improvements in education around the world. The adoption of high tech, critical thinking, and creative, real-world research is growing faster outside the US than inside. The US used to have a major leg up but that is almost all but gone now. The rest of the world has almost caught up and in a few places has exceeded the US and for much less money and better time use for the students.
The US education cannot rest on the myth of "Our country has most of the best colleges in the world." because the smartest students have figured out that is no longer true, it is only a matter of time and traditional bricks and mortar institutions aren't ready.
7
College Education and acquiring marketable skills is essential for career advancement for those with limited savings for college. Those whose bank of mom and dad has plenty of money in it, getting a college degree is an ornament and the experience of college life while developing life long networks and friendships. Then there are those like Bill Gates who bypass college and jump right into a career to develop an idea and become billionaires. For most college should be considered as an investment that will pay off in some tangible way more than the investment in time and money. It should be a personal choice and a free one.
Going to college should not be considered a financial albatross but a wise investment in an affordable home. Just as one would not buy large unaffordable home that will bankrupt you, don't go to a college that will suck out all you can borrow and leave you with a life long debt. The current federal loan system is quite generous but it was never thought to be sustainable because the decisions on choice were not prudent. In a country when the nation has a 20 trillion dollar debt and most people are in debt and safety nets are tearing at the seams, it is a lost cause when someone decides to go to the best college and borrow a ton and then get a job that does not even pay the interest on the loan. Smart choice should be the name of the game. Affordability is in the eyes of the beholder.
2
Ludicrous. Fact is college is supposed to be a filter: separating students who meet certain tests from those who don't. Students who have high ACT/SAT/grades will get into the top 20 schools/universities.
Those who don't (unless your parents are legacy and gave a lot of money in which case you get points for personality) will go for the next 4,000 public and private.
It's a sliding scale. Number 21 through 4,000 have decreasing chances of getting a job that will pay off the loans.
This myth that if you want to get a job, you have to go to college has been busted in Germany. Their apprenticeship program provides an alternative path to a comfortable occupation and more often than not a more secure than a university path.
Going to a liberal arts college to study 'The Great (Euro-centric) books of the world and write incisive freshman essays that always lean heavily on Spark Notes is stupid. Especially in this day and age when all the world's knowledge is just a Google search away.
There are some 4,000 colleges/universities in the US —mostly (not all) serving as employers of last resort for their own PhDs and graduates.
The average college student now takes 6 years to graduate, Thirty per cent of Tier 1 college students fail to graduate at all.
If colleges want to use Title IV, we should have claw backs if the students default.
1
Going to State University in your town or state can
reduce your student loan amount exponentially.
2
More affordable? Uh...there being good paying jobs on the other end of the schooling would be huge. Very bigly.
If I can pay for it, its affordable.
Charging students for an education like they already have high paying jobs is where the problems start.
3
Mostly, we need to be better consumers. When people go to shop for a car, they can tell whether they should be looking at a new Mercedes, or warrantied used Corolla or something from Craigslist. They are all cars and they all get you where you want to go. A lot of people would be better served by community college followed by a state school.
3
Although the horse is long out of the barn on this, a college's participation in the student loan program should be contingent on limiting tuition increases to say 1 or 2% a year. Yes, colleges would understandably object and it would, over the long term, diminish the quality of education. But there are always trade-offs involved and right now except for the very few, private colleges are not affordable.
1
My theory is that the concept goes back to slavery. America loves free labor, so when slavery was abolished and the age of industrialization dawned, corporations formed and had to find new workers to do mindless, soul-numbing stuff. Education became fashionable, more people started to get degrees beyond high school diploma, but with government not offering medical insurance or any retirement benefits people started to depend on their workplace for that. More people went to college to stay competitive in the workforce and the corporations liked that. They have a captive work force. The more debt the employee carries, the less likely s/he will be likely to leave or behave foolishly. State Universities used to be great, but not any more, even in California. Oh well, there are good schools outside of the US and if my kid lands a job in one of those countries he won't have to worry about growing old without dignity.
I am not in favor of finding newer and more clever methods of paying back a student loan. I am in favor of abolishing the need for getting a student loan.
America needs to reprioritize its needs. The two most important needs are a healthy and well educated citizenry irrespective of their income. That requires universal healthcare for all and tuition-free education for those who are academically prepared for it.
6
If the NYT and Lamar Alexander both want to solve this problem, they should ensure Alexander receives and reads all of the comments on his article. Alexander should then share with his Republican colleagues. Alexander and colleagues would thus get the education they need on possible solutions. The complexity of financial aid forms, and of paying back debt, are not the key problems, as all the comments point out. This is one of many existing problems that wealthy old white men are ill-equipped to solve.
4
Part of the answer is students from modest or middle class means should be taking advantage of the value that state public schools provide. It borders on criminal for private schools to convince 18 year olds to borrow what could end up being 200k or more. These teens have no idea that this debt could be with them for literally the rest of their life.
3
The real issue, sir, is that states don't fund higher education at levels that would lower tuition.
2
@Michael W
... and the federal government. The lack of education in our country is affecting our national security.
I went to the University of California when it was heavily funded by the state. I worked during the school year and full time in the summer. I graduated with very little debt, but I also had no real social life, discretionary time, or much "fun".
The fun came later when I found a job, and had money to go skiing, and camping, because my debts were low. At the time I went UC Berkeley used a quarter (not semester) system, so there was really no time to slack off, anyway.
The consequences of student debt are delaying marriage, buying a house, and raising kids. Then at 55 you're paying for college, again (for the kids) when you need to fund your 401k for retirement.
2
An even better idea is to make it cheaper. How could he fail to mention that???
When I went to medical school, tuition cost was $400 a quarter. For an MBA 15 years later, $400 a class. For an MPH 15 years later, $500 an hour. That is a 1000% cumulative rate in inflation while the increase in CPI during the same period was 230%.
The current college tuition costs and inflation rate are not acceptable nor sustainable.
7
The cost of college could be slashed if the demand for higher education were reduced by limiting it to actual and expected demand by employers. When but 30% of US jobs actually require, not prefer but require college level knowledge, there is no honest reason for there to be more than 30% of students on track to enter college programs. Furthermore, the distribution of majors must closely align with business needs. The remaining 70% must be entered into curricula based on projected need for non-college grads. Early and frequent aptitude testing can identify and develop talent which can then be efficiently provided the training needed for the tasks they’re destined to perform. If 12% of the workforce is engaged in retail, then 12% of students should be their classroom time gaining the skills to perform retail jobs satisfactorily. In addition, we need to acknowledge the burden that unnecessary coursework places upon the taxpayer and limit public education to the amount necessary to meet employers needs based on the track the student is assigned to. It is beyond wasteful and criminally stupid to have the claims person answering calls at Geico or the biller at a doctors office to have college credit or for auto dealer shop workers, warehouse pickers or pothole fillers to complete high school.
2
Andy Deckman’s assertion that a college education is unnecessary for most modern economy jobs is false. Higher education is almost entry level for all but dead-end jobs and allows for adaptation to the constant change that defines today. As technology and AI replace more and more human jobs, workers with nothing more than a high school diploma will be the first to lose out. Skilled craftspeople mostly excepted, but even here cheap replacement by mass-produced parts will diminish the need for repairs.
1
As a fit something adult, I recently spoke with a very motivated young man who wanted to attend college and had the SAT scores to succeed in a very rigorous program. the problem....his solidly middle class parents refused to contribute to his education, declaring it his responsibility. While I understand that it is their choice, his FAFSA form and ability to obtain grants, loans, and institutional aid was compromised and he was saddled with the full price Sadly, this was beyond the limits of government loans for undergraduates and he is now attending community college on his own dime. It is a tough call as many affluent parents might abuse the system to shelter available funds, but this young man is truly being hurt. There should be a fix.
Here's what I don't understand -- since many of these loans are guaranteed by the federal government, there is no risk to the lenders of default. Why then are the interest rates so high? If the student is primarily repaying principal, and not interest, the cost of higher education is much more affordable.
3
As a former financial aid administrator and thereafter a lawyer, all I can say is that the current loan situation is nothing short of criminal. If a private bank handled loan programs the way the Federal Government does, it would be targeted as a predatory lender. Parents and public alike should push back against the outrageous increases in college tuition rates that have exceeded inflation, but they should also refuse to re-elect state representatives that have decimated wonderful public school systems like the University of California and Lamar Alexander's own University of Tennessee, relegating them to unaffordable options for most families. A massive loan forgiveness program seems inevitable, and some of the options recommended by Senator Alexander would just continue financial aid applications into the future indefinitely - how else will we determine a loan payor's ability? That is no solution, it is only a new bureaucracy. Finally, get rid of Federal financial aid for profit-making enterprises like the University of Phoenix, especially when they have established records of abuses.
3
These solutions nibble around the edges. I have better ideas for the student debt crisis.
First, high schools should steer more kids into trade schools. 60% of kids who enter college do not get a degree, but they still have the debt. What a horrible position to be in! Many of them never should have been in college in the first place. College is supposed to be for "higher" education, and not every high school student "above average," yet, where I live, they ALL go to college. Because of the teeming multitudes who get into college only to be forced to take courses like "Remedial Algebra," the value of a degree is cheapened, and now a masters degree is the new B.S./B.A. That just gets people further in debt. Fix the pipeline and make the 4 year degree rigorous again, while returning value and dignity to the trades.
Second, tie the interest rate on federal loans to 1 point above the federal reserve rate, whatever it is at the time. The government should be paid back, but it doesn't need for-profit rates.
Third, make private loans dischargable in bankruptcy, so that lenders choose borrowers. This will have the secondary effect of lowering tuition, as easy money for unqualified candidates dries up. Prices will drop like a rock: it's simple supply-demand.
I don't think education should be free; students should have some skin in the game. But, I also think we need sweeping reform to protect reduce the number of borrowers, to protect those that do borrow, and to lower tuition.
5
There is some great legislation in the sausage works. Too bad it will be killed because every committee chair has a veto and nothing can ever go forward unless it promotes a wing agenda that hasn't got a chance of actually passing.
1
Besides simplifying FAFSA applications, Mr. Alexander misses the mark. We need to provide more subsidization for educations, which means raising taxes on the wealthy and cutting exorbitant spending on things like the military. We need to publicly fund higher education. States are strapped for cash as it is, so the federal government needs to step up.
1
The high cost of attending college and university has to be linked to overall income and wealth disparity. So long as we regard higher education as a personal asset, and so long as we assign massive relative benefits to those who have obtained higher education, it is hard to make the case that taxpayers of modest means should pay the bills.
A more rational proposal is to regard education as a social good. It should be available to those who desire and are qualified for it. Tax and wealth distribution regimes should insure that the results of education should benefit all of society and not merely those who benefited from the public largess.
We made this leap a century ago with secondary education. We can and should make it again today with respect to higher levels of education.
I just had to laugh. This is Republicans' idea of fiscal distress:
"One Tennessee college president told me it took him nine months to figure out how to help his daughter pay off all her loans, even with the money in hand."
Gosh. I hope they survived during that cold and dark time in their lives.
Republicans - party of the working man!!!
5
A fourth way to make a good closeted education more affordable: go get it in Canada.
1
I'm rather socialist in my political views. Everyone should have their basic human needs met, and society has a responsibility to support those who have difficulty supporting themselves--food, shelter, medical care, education. The difficulty is how to define what we as a society consider 'basic' needs. I'm struggling to find justification for our society to provide college education to all. If we are going to be putting more tax $$ into education, I think it should be spent on better preK-12 education. I'm all for subsidized, state colleges that would make it more affordable to achieve a higher education. Let's strive to have better educated/prepared students graduating from high school.
3
Just what percentage of jobs actually need twelve full years of school? Can’t a Walmart employee whose function is to straighten shelves do so satisfactorily with maybe an eighth or even sixth grade education? Imagine the tax dollars saved (New York is estimated to spend an average of $23,000/yr per pupil).
Amazingly, not a word from the Senator on how to make education affordable rather than a loan accessible and conveniently repayable. The issue is the cost of education. Reduce it and all these loan issues will go away.
There are lots of colleges in this country competing for students. Competition is supposed to bring the cost of education down. What's happening is just the opposite. The Market is not working. Please, figure out how to make it work or suggest another solution that might work and publish a proposal with a substance.
One way to lower the cost of colleges is to stop marginal students from enrolling and direct them to the trades. 50% of students who enroll never finish in 6 years. This is a disaster.
4
Which trades and will they exist after robotic AI?
Of those 50%, how many end up in jobs that can be done on an eighth grade education?
@Chris
My daughter goes to a charter school so rigorous USNMR voted it best high school in Minnesota. For various reasons, she doesn't want a standard lib-arts college education, she wants to be a nurse. Guess what? She still needs to go to college and she'll still need to worry about financing this trade education. Alexander's suggestion are less than useless here.
Like any good GOPer, Sen. A conveniently omits a huge factor: usurious rates of interest charged by the banksters. These loans should be an investment in our mutual future, not a profit center for financial buccaneers.
Charge 'em at the government's cost of money - and provide re-financing assistance, to boot. Current system is one of our nation's most serious shames.
4
Sen. Alexander addresses only two narrow topics, reducing the complexity of making and paying back loans, and trying to limit the monthly payback.
Fewer questions on the FAFSA may be reasonable. His proposal for limiting the monthly loan payment to a percentage of "discretionary" income, as illustrated by a hypothetical student scenario, are flawed in that they grossly understate the cost of living.
Worst, he entirely ignores the many other issues related to the cost of higher education: The dramatic increases in cost and resulting unaffordability, the fact that the majority of students are no longer teens, but working adults in their 20's and 30's juggling jobs and kids, reduced federal and state aid, the predatory and illegal behavior of those who make and administer student loans, the high interest rates charged by for-profit lenders, and the lack of adequate preparation by many would-be attendees, resulting in too many who graduate late or not at all.
As a former university president and former Secretary of Education, he clearly knows of these other issues and has chosen to ignore them; hence his flawed proposal.
How Republican. No help on cost, only more options to spread out the payments, ultimately paying lenders more. This is like Trump's recent "paid leave" proposal for parents of newborns: Rob your future Social Security to spend time with your infant.
What if the government stopped providing 100% backed student loans? How would the colleges and universities respond? Currently, they experience no consequences when they increase their tuition. Those consequences are passed onto the students and their families who struggle to pay.
Wouldn't we see tuition rates drop dramatically?
2
In America, higher education is a now a profit center, like our health care and our elections.
Just make the contrast between now and past generations, using real people examples, when state colleges were free or low cost.
Govt once used adequate taxes to help pay tuition, and this was accepted, centrist policy. Millions in past generations were the 1st in their family to get degrees, expanding and strengthening the US middle class.
These grads went into occupations for higher earnings than their parents. Then they paid more in taxes , which helped pay back the tuition funding in their state, and fund the next generation of students. A positive cycle was set up.
Later after Reagan warned that big govt was the problem not the solution, govt cut funding. The middle class has contracted and weakened.
The international GINI Index shows the US lags many countries in upward moblity of citizens. Other countries support low cost or free college tuition, even for medical school. Just like they support apprenticeship training for youth.
Explain with specific examples how that works abroad, for both taxpayers and for students and trainees.
The human based data is all there to use for comparisons.
1
I'm really thinking if I have to spend over $200k for my kid college education and not knowing they will get a degree, would it be better off to let them go work for minimum pay of $15/hrs and invest that $200k in stocks or roth IRA?
I have mixed feelings about free college educations. On the one hand, I would like to see kids from low-income families get help going to college. On the other hand, I have already paid full-cost tuition and living expenses for three college degrees and one law degree without getting a penny of help from government or anyone else and have no desire to pay for any more college educations, being as me and this good dog have plenty of other expenses.
The ideal solution for me I guess would be to place a little box on the income tax form where you could tell the government whether you wish to pay additional taxes to help pay for the program. It’s possible that I would vote yes, but only if I was in a very good mood and that is not happening much these days.
1
The Obama administration wrote regulations to protect students from the for profit college industry practices that encouraged them to take out loans for educations that didn't lead to well paying jobs. Students who attended for profits make up over 90% of those defaulting on student loans. The Trump administration reversed the regulations.
Shortening the FAFSA form is hardly going to matter. It's not the number of questions that makes it hard for low income students, to complete FAFSA, it's lack of access to needed records and having parents who can't help or are afraid of the process. I helped a young man whose mother is on AFDC and whose younger siblings receive free school lunch. That meant he only had to answer the first few questions. But getting his mother to understand that it was okay to give him her social security number and other information was the hard part. When he was finally able to submit it, it got held up because they couldn't find his mother's tax return--she didn't file one because she didn't have a job. He started community college without his aid in place, highly stressed when saw the huge bill. Eventually, he got the Pell grant, NYS TAP and loans he was entitled to. But, if he didn't happen to be friends with my upper middle class daughter and her well educated parents- who promised him that they were so sure he would get aid that they would pay for the semester if he didn't, he would have dropped out before the bill was due.
2
Considering Republican attacks on education funding at federal, state and local levels for decades, these words are tripe. Also, the current presidential administration is led by a man who infamously stated he loves "stupid people".
Mr. Alexander: Please see Farhad Manjoo's column in today's NY Times. You'll find some very helpful ideas there.
Want to help student borrowers and their parents, lower the loan interest rates!
I want to commend Senator Alexander for correctly identifying a problem. Now he should talk to constituents and identify some solutions. His proposals would do nothing to help those struggling to pay back student debt.
My heartfelt thanks to Mr. Alexander for this clear-eyed piece on student debt. Now above 1.5 trillion (480 million in 2008). And a special thanks to Mr. Alexander and his colleagues in the Senate and corporate boardrooms for 40 years of cuts in education spending--a significant factor in the rise of the cost of education. Thanks for cutting taxes to the bone, thanks for showing us the evils of government. Thanks for your vilification of "liberal college professors". You are a true champion of education.
1
Student debt ($1.5 trillion) has surpassed credit card debt. This is not a sustainable situation. The predatory colleges (Trump U??) are on the move as are the predatory loaners. Our current government is an enabler. When students begin to be considered national assets rather than sheep to be fleeced, the situation might change.
This solution is premised on the notion that college tuition is reasonable and the method of debt repayment is the problem, assuming either a student and his family can shoulder the burden of debt repayment or the student can qualify for financial aid. Expensive tuition is the problem and the consequences are crippling indebtedness and possible bitterness towards those who qualify for debt-free education, creating further social divisiveness.
I question the belief that getting a college education is a transaction--if you benefit financially from attending college, then you should pay tens of thousands of dollars. What happened to the view that everyone benefits from an educated populace? People live longer, healthier lives. Crime is reduced. Educated citizens are more likely to participate in the democracy. Everyone's quality of life improves.
This article is about as tone-deaf as it gets. Parents and students around the country are clamoring for high tuition charges to be reigned-in, eliminating student loan debt, and they are in favor of more public subsidies to make college education more affordable (e.g. in the form of state and federal grants). Yet, this senator endorses a policy that essentially ignores the growing public momentum and consensus on this topic. Sadly, this Senator's op-ed epitomozes the current state of American politics.
Senator Alexander's points are well taken, but relate to the complexities of subsidized borrowing and repayment. If colleges could charge students and parents a given amount without federal aid, why should they charge students less with federal aid? The subsidy drives up tuition, as does the enjoy college now, pay later, syndrome. That leads to luxury dorms and other amenities, and a vast increase in academic administrators. Full time faculty, alas, are replaced with cheap adjuncts, with families typically not noticing the difference. In short, if you treat even non-profit colleges as if they were business corporations, you won't go far wrong.
Is free or low cost college for all really just an unacknowledged parking lot for late teens who aren't ready for or who don't want to enter the workforce? Parents don't have to say, "Johnny just lays about the house all day, we don't know what will become of him". They can say, "Johnny's in college now", it sounds so much better.
Au contraire: keep tuitions high to reduce the student population that can afford college. Too many unqualified and uninterested young people attend institutions of higher learning, good and bad. If you whittle them down, only the truly committed will want to attend, and will find the means to do so.
Another great idea would be to cap senior administrator’s salaries! Wish there was more transparency and reporting around this embarrassing injustice.
I am extremely angry about this column. What about those of us who understand the system and will have our loans forgiven soon? Will we be able to use the old system that we understand. Mr. Alexander makes it sound as if the current system is hard to master. It is not. Under Obama's government, the system got fairer.
These are just different ways to continue to transfer graduates' money to the corporate banks and federal government. A more direct solution would be for GOP leaders at the federal and state level to stop vilifying higher education, recognize and promote that it is an investment that pays for itself manifold, and fund state universities adequately so more students can attend without any -- or far fewer -- loans.
That said, any student loan reform needs to be retroactive -- we're removing talented graduates from participating meaningfully in our current economy for decades.
1
The loan system is only the secondary problem.
The primary problem is cost. So much of what is done in colleges bears no relationship to education. The rise on cost of a college education has far exceeded the general inflation rate for decades.
2
We need free college educations, but we also need free internet service, free bicycles, free pot, free subway rides, free tattoos and free haircuts. We mustn’t forget the tattoos and the haircuts. They are critical to the whole plan.
1
@A. Stanton Is that you, Mr. Burns?
Only the 1% can afford to pay for what they consume. The rest of us have been living on credit since the 1970’s when stable employment, salaries and benefits began stagnating. Without credit the country would collapse. Being in debt has the advantage of keeping the populace timid and docile. Fear of debt encourages students to choose money making majors rather than liberal arts as evidenced by the number of colleges eliminating history for example. The rich at their retreats bemoan the plight of the less well off and simply do not know what could possibly be done. There are solutions like they could pay their taxes but don’t hold your breath. The rest of us are encouraged to castigate each other for not working hard enough, having too many children, making all kinds of wrong decisions, and putting pressure on fellow debtors. The system works perfectly well for those who control it. Don’t expect changes any time soon.
2
If you're a Canadian citizen studying in Canada, you can expect to pay an average of CA$6,838 per year for an undergraduate degree, and CA$7,086 per year for a graduate degree.
My advice if you want affordable college, move to Canada. Thank God Mr. Alexander isn't in charge of figuring out their system.
1
Would have been way better to do a case study in an income of more like $25,000 vs $60k.
What Alexander fails to mention in his final paragraphs is that the federal government may be generous but state governments are not. While over 70% of students attend state schools, the costs have increased because of the decline in per student funding from many states. This leads to higher tuition and higher student debt.
4
Student loans come with high interest rates, may not be renegotiated if rates fall, and may not be discharged through bankruptcy.
None of these conditions apply to real estate developers. Is it because they're more equal? Funny that there are different rules for student. Why is this? The only possible explanation is that it happened accidentally.
3
A big part of this problem would be resolved if the canon of "US News World Report" ratings of colleges disappeared. We are fixated on the "Top 100" schools - often neglecting the "Top 100" price tag that accompany them. Did you know there are thousands of institutions of higher education that don't cost 50,000$ to attend? What if I told you some of them - even most - could provide a world class education - at a reasonable cost?
Senator Alexander never mentions why the cost of college is so high. It's a result of a greedy system, just like the high cost of prescription drugs in this country, there is no way private colleges can justify the prices they are charging.
How about we restore funding at the state level that has been slashed. When I was a student at U of Washington, state support was roughly 80 percent the cost of attending. Now, that has all but been flipped. Similarly, how about Pell Grants that cover the cost of the education and housing. Let's make the public benefit of higher education something that the public pays for. Stop privatizing the costs when the public is the primary beneficiary.
1
This Op ed is a right answer to a false problem. The problem is not the broken system of repayment. Yes you can fix a broken system that does not address the root cause. But you will still have the main problem.
The real problem is why do we have to pay for college education?
2
The solution to crushing college debt is ludicrous. Making it easier to fill out forms for financial aid doesn't make college cheaper. Please don't insult the intelligence of NYT readers. Linking a student's repayment schedule to post graduation employment doesn't help with graduate school; it anchors students to their future employers so that the student is dependent on the employer - just like the current model of employer provided health insurance. It will be even more difficult for someone to start a business.
If the congress was truly interested in helping a generation of young people congress would assure free college tuition for every student who could perform. Furthermore, no college should be eligible to participate in government sponsored reimbursement if the college spends its own money building football stadiums and hiring coaches who are paid several million dollars every year.
3
An education is considered an investment into the future. How about treating it, literally, as an investment?
1. Allow students to pay back loans using pre-tax dollars, the same way that people can contribute to an IRA.
2. Automatically adjust student loan interest rates downward whenever the prime rate goes down, i.e. and automatic refinance.
5
The costs are completely out of control. Just 30 years ago, I attended UC Berkeley as a graduate student on an academic fellowship ($12,000 for a year) from which I paid $741 per semester for tuition and $1200 per semester for room and board in a co-op. I increased my personal savings over $7000 the first year, which I used to pay tuition and room and board the second year. I graduated with a nice chunk of cash to move to where I was working. This is simply implausible today. But it shouldn't be.
That all sounds very good. But.... someone won't like it! All complications help 1 special interest or another, and are therefore challenging to unravel.
One ignored point is that financial aid is determined by need. I HATE that! There is more need for private vs pubic, and therefore students going to private colleges/ universities get more aid. Therefore taxpayers dollars flow to the privates, and that is not right. Especially when there is, sometimes, no added value for the higher cost.
Another simple solution is affordable public universities. Push the quality HIGH. And forget about aid to privates.
2
If you are not smart enough to fill out a questioner you not smart enough to attend collage. Period.
3
@Marika But what about college?
2
....college.
If you choose your major wisely, attending college will pay off and you will reap rewards.
If you choose foolishly, and don't have the up front money for tuition, you'll have wasted your money and indentured yourself for life. A few years ago NYT had an article about a woman who double majored in women's studies and near eastern religions. Surprise! She couldn't find a job...and was blaming everyone but herself.
2
The white high school graduate male entertainers Glen Beck, Sean Hannity and Rush Limbaugh never had to worry about college loan debts.
And the moral of their story is to choose to be born a white male in America. Just like Jared Kushner and Donald Trump Sr. and Jr.and Eric Trump.
MAGA!
4
Simplify loan applications.
Simplify paybacks
Provide placement success rates
A rather pedestrian analysis don't you think?
We are living in revolutionary times and we get this kind of drivel. NYTimes, your readers deserve better!
4
Make it relevant.
1
1. Throw out republicans.
2. Throw out republicans
3. Throw out republicans.
There, problem solved.
4
I don't understand the lack of acknowledgment that public universities have received significantly less assistance per pupil for some time from state governments. Can someone give me hard data on this point? He gives a comparison of a student loan to a car loan----but the car loan can be part of a bankruptcy proceeding but the student loan cannot. Does that make sense? What are the significant changes from 30-40 years ago that now make college cost so astronomical?
1
Here's at thought. Stop calling this sham "Financial Aid". Call it what its - "Crushing Debt".
2
Fourth Option, and it's a four-part one: (1) Force colleges to stop the ridiculous style dormitory/suite cold-war to woo rich families and are subsidized through non-tuition fees AND (2) eliminate 3/4 (or hopefully more) of administration positions on campuses AND (3) stop paying professors more than their industrial counterparts, especially in the psuedo-sciences and liberal arts AND (4) eliminate Title 9 sports scholarship requirements, or better yet, eliminate sports altogether.
1
The problem is too much easy money.
If student loans were dischargeable in bankruptcy then lenders would be more careful about the educational products that could be financed with loans.
Cut down loans -- cut down demand.
Cut down demand -- cut down price.
We saw easy money inflate the housing market. The same thing has happened with higher education.
1
Thank you Mr. Alexander for investigating solutions! I am the first woman in my family to go to college. Today, I have a PhD and a great job. I also have nearly $80K in federal student loan debt. I received many grants/scholarships but 13 years of higher education adds up (with interest) over time. It took me years (literally) to figure out how to successfully participate in the Public Service Loan Forgiveness program (noncompliance is easy to step into by no real fault of your own) but my payments are being made, on time, and I hope to complete the program in the next five years. I hope Betsey DeVos doesn't eliminate it.
6
These solutions are veritable drops in the bucket, as some commenters have indicated. It's fairly discouraging to see the GOP, which would vote for any increase in the military budget or push through an insane tax cut for the wealthy, ever solving a major problem like this one. Same with housing, or infrastructure. Let alone health care, while most of us suffer under the most horrid, unfair system in the 1st world. They criticize Obamacare, but have not once offered a viable alternative.
The so called economic boom is a grifter's dream - half of it was financed by more deficit spending. More bad effects will crop up as a result of the tax cut for the elite. We've all seen this movie before, with Reagan and W. When the pin cushion comes calling for the "everything" bubble, what will remain.
Talking about education remedies when the proposals are floated by a party with a dependence on low education level voters in moocher states makes no sense.
4
In 1981, when I started at the University of Maryland, a year's in-state tuition and fees were about $900, not counting housing. Now they're $10,595. The Reagan era's love of budget cutting and corporate tax cuts shifted the burden of the greater good (education) onto the individual. Simplifying forms will do nothing to change this fact. Automatically deducting loan payments simply mechanizes debt, it doesn't lower it. Punishing colleges whose students can't repay loans doesn't "put skin in the game," it just shut poorer students out of the game altogether. It's about time you start thinking of the shared social benefits of an educated public rather than individual profit and loss, Lamar.
4
I am encouraged by this piece Senator, but I am always confounded by what is included the numbers and I think we are all maybe missing the bigger picture. Are you including in Joe's example his income tax which would be just over 10k. If not, then poor Joe would only have 8,735 for rent, food, comms. and transportation for the year. That is just over 700 bucks a month, of which nearly half would go to repayment of student loan debt. Kind of a bleak lifestyle for a young smart college graduate, don't you think?
I have a simple idea, why not allow student loans to be paid back with pre-tax dollars? That would save Joe 1,000 over the year in income tax which would cover just under 25% of his student loan burden for the year. A slam dunk, or should a say, an alley-oop from Uncle Sam!
I think the big picture problem is U.S. wages are not commensurate with the cost of living in the U.S.- that is a real issue, and stagnant wages have not been addressed by our government for too long.
4
@Neil thank for making the senators math more accurate !
1
Some of the commentators here have picked up on an interesting theme. An extremist like Trump has gutted any sense of GOP credibility with its ideology of greed.
I sense that the tide is about to turn and that the reality show President will soon be going to.........
2
If you want see why colleges are so expensive, you need to examine the budgets of these institutions. Buried into them are the expenses, such as salaries, benefits, pensions, operating costs, etc. Not clearly defined are the expenses paid to service long term debt. Too many of our institutions of higher learning have fallen into the bond debt trap. Essentially, the schools or systems, issued bonds to pay for development of infrastructure, such as new student housing (think club med), new classrooms, new gyms, new faculty offices, etc. However, the debt paid on these bonds can often exceed the actual cost of the construction by a factor of 3-6x. If the college or university system cannot get the proper funding from the state, they raise student fees and tuition to guarantee the payment on these bonds.
Factor in other issues, such as a burgeoning administrative staffing and costs, these leads to the ultra-inflationary rises in student costs.
2
My wife dropped out of high school, went to community college nearly for free where she obtained her GED and AA; she transferred to a top-flight woman's college in Massachusetts, where she received her BA. She scorched the LSAT and was given a full scholarship to law school. Total cost? 30k, more or less.
I plan on getting my two sons BA degrees from our state flagship university for about 140K. How? Starting at a local community college and transferring to the University upon obtaining their AA. I have saved half of that in cash and will pay the rest out of pocket over about 6 years. I started saving around the time of their births.
I don't particularly care what they study. I want them to be free of debt, that was my only goal . I will also help them with graduate school to the extent I can.
You can do the same thing. Unless you are upper class and have incomes over say 500-600k per year it's very hard to play the private college game. Save what you can, save early, and plan plan plan. There are many paths on the road to success.
3
No mention of government funds going to for-profit programs? Those students most in need of help are also those most likely to be ripped off by for-profits. They send recruiters onto military bases and lie to young people about to be completing their enlistments. It’s just a big grab for those GI benefits and they get away with it and how many of those young people complete any program that leads to a job? Graduation rates at for-profits are around 4% but 100% of enrollees are left with big debt. Why do we tolerate that?
4
Senator Alexander omits the most important thing we can do to make college more affordable: increase public investment in education. Over the last few decades, the states have massively divested from public education (at all levels). Many state universities now receive less than 10% of their funding from the states whose names they bear. Then they get upset when tuition rises!
Public reinvestment in education at both the state and the federal level can help to solve this problem.
6
My daughter has five college diplomas. She has two bachelors degrees, two masters degrees and is finishing her doctorate. She earned all of these degrees with very high honors. She owes nothing for her degrees – years in college. My wife and I paid for her first semester and her room and board for the following three semesters. Oh, did I say she's a decorated combat veteran and served eight years in the military. The military has paid her tuition and has given her a living allowance for her advanced degrees. Oh, did I say she earned a Masters degree while serving in combat in Iraq. The military has paid over $150,000 in tuition. She briefed the secretary of defense and worked at a high level at the NSA. She is now out of the military and will work at a local VA hospital most likely. She has served all her adult life, and she looks forward to civilian life. Yes, the issue of the cost of college education is significant. I won't even begin to tell you about my son.
4
This isn't rocket science. If the weight of student debt worries you, and at over a trillion dollars, it should, then one must look at other models. And here there are many shining examples available.
But doing so would involve considering the models of more "socialized" societies that as of the last State of the Union, I am be told by our President are evil and bad.
Unfortunately, far too many Americans have bought into the perception that we are best, that we have the best, and that we must protect our institutions as they are best way to achieve goals.
But that is a false notion. It crosses all lines of American life and only the foolish and incredibly wealthy have the luxury of living that lie.
3
Interesting suggestions - but zero attention paid to the underlying, and more salient issue, which is, why has the cost of a college education increased at such an astronomical rate? CNBC reported in 2107 that the cost of a college education at a four-year, public school increased 213% since 1988. US News and World Report in 2018 reported an increase of 243% for in-state tuition and fees at public universities over the last 20 years. All while the real purchasing power of wages has barely budged. THIS is the part of the equation that really needs fixing!
8
Much of the rise in cost for state institutions comes of course from the drastic reduction in funding from the legislatures. But the more general problem at all levels of education is that technological attempts to improve instructional productivity have fallen woefully short, the online "degree programs" notwithstanding. I wish I knew the solution to this problem.
1
I want to know why loan rates are so high when the prevailing corporate rate is so low. Also, why can't we finally get rid of for-profit colleges that prey on our students? This is a good start, let's get it done.
4
I've put two kids thru college; one in-state, one out of state. Luckily, my wife and I didn't have to resort to loans to get them thru but we did dig deeper than we planned to make it happen. It's definitely added a few years to both of our employment plans.
My biggest issue with college is how much it costs to attend. Tuitions are too high to begin with, but add on all the fees associated with enrollment and the necessary room & board expenses for a single year and for the same amount you could afford yourself a fairly luxurious car.
The cable industry is going thru the same thing but it is addressing the issue. Unbundling cable packages to reduce costs to its customers is something universities need to consider also.
4
In the current political climate, it's great to see a senator who wants to begin to fix the broken student loan system. Maybe next, we can make college more affordable.
2
We need to know how come college was so much cheaper 50 years ago. We need to know how much other countries spend to make their college educations much cheaper for students. We need to know who lobbies for our current system, and who makes money under it.
The country's future prosperity depends on a large number of smart people who will invent and keep up with new technologies and generally do complicated things well. So sending people to college is an investment in the country's future, and the country should pay for it.
These smart people will make more money (at least, most of them). So since they benefit, they should pay for it. The fruits of their education should belong to them, and they should pay for what got them these fruits.
Under the rubric of personal responsibility and individual success, we have adopted the individualist way of thinking about paying for college. Pragmatically, this approach has several results. It deprives the consumer economy of some of what recent students would spend on buying houses and starting families, making it difficult or impossible for some of them to do these things for a while. By loading them up with debt, it encourages them to think about their lives and education in money terms; those who dont and seek knowledge and self-exploration will tend to be punished by genteel poverty. It thus reinforces certain values and a certain approach to the meaning of life.
Other values are better.
@sdavidc9
Unlike the federal government, states have to balance their budgets. Illegal immigrants pay little in state taxes, but cost states a large amount to educate, to provide with social services and medical care, to police their communities, and so on. States do not have the money left over to fund state colleges to the same extent that they used to which is one reason why tuition has risen.
2
Immigrants, illegal and otherwise, do pay a reasonable share of taxes. Sales taxes, fuel taxes, excise taxes in utilities and property taxes (directly as owners, indirectly as renters). It has been shown that most “illegals” end up paying income taxes and social security taxes even though they have no recourse to refunds or benefits unless they start the legalization process. Unfounded mandates passed down by the federal government are more likely the cause of state financial distress, not to mention self-inflicted wounds (Kansas is the poster child) through ill advised tax reduction schemes and wasteful spending.
2
@David DiRoma
I recall Hillary Clinton's campaign saying that about 50% of illegal immigrants pay payroll taxes, such as social security taxes. This assessment was based on the PEW Research Center's estimate that there are about 11 million illegal immigrants here. Yale's School of Management has since said that there could be over 29 million immigrants living here illegally. Therefore, the percentage of them who pay payroll taxes might be considerably lower than Clinton's campaign thought.
It has not been necessary to pay federal income taxes to apply for the Earned Income Tax Credit or the Child Care Tax Credit. Many illegal immigrants who have paid payroll taxes have received cash from the IRS under these credits. The Inspector General of the Treasury Department found that the IRS had paid $4.2 billion to illegal immigrants under the Child Tax Credit in the year 2010. The IRS said it could not determine who was here legally, and has continued to make the payments.
Perhaps it is this money that some illegal immigrants have been using to pay state taxes.
In Seattle, the low-income get reduced fares on public transport so they don't contribute much in fuel taxes. Illegal immigrants often cram into low income housing so they pay little in utilities or property taxes.
What they pay in taxes does not come close to covering what they cost.
1
Are all the kids applying to college really college material?
Can kids go to, or start off at, less expensive schools?
3
The law of supply and demand works the same on the incomes of college graduates as it does on any other commodity. Go ahead, make it free and see how that works on stagnated incomes Andy under-employment.
1
Might I suggest a fourth option for the honorable Senator? Instead of 12 figures in grants and loans, restructure public higher education to make it 12 figures going to free universal public higher education, be it college, university or trade school. Perhaps add a debt cancellation for current holders of federal student loans.
These solutions would still allow students to go to private colleges and universities, still allow people to get a high quality degree, and prevent people from going into debt to achieve it.
If public education should be free for kindergartners through high school, why not make it free for people pursuing further education? If you disagree with the premise, can you explain why it is honorable and just for the youngest among us to get a basic education that will allow very basic work yet dishonorable and unjust for the slightly older to get a higher degree that would allow for more profitable work?
3
We don't need more ways to make college affordable.
No student can afford college, the idea that it is a product available for purchase is fundamentally false.
We as a society need for the small part of the population who by chance is born exceptionally intelligent (and scattered throughout the demographics which divide us) are all given an excellent education so that we have the best possible leadership and highest possible level of innovation to take us forward.
By framing a college education as some sort of enhancer, a luxury product we should help the striving middle class purchase on credit, the right has so falsified the situation that they are simply no longer a good faith player in the debate. Look and Jared and Ivanka. look at George W. Bush and Trump — this is the leadership and advisors get from defining education as a luxury product for purchase, in a word — SHIPWRECKED!
We need a whole new paradigm. College should be a gift we give the next generation because they will be of enormous value to us upon receiving it. You reap what you sow - it's that simple. Every talented child which falls through the cracks in some new payment scheme will be just us shooting ourselves in the foot on slow delay, burning down our future.
2
With respect to the senator, many other countries are better at delivering quality education for significantly less that the US. The difference is their systems are not "for profit". Remove that motivation and emphasise "investment" in the country's future and you will see a rebalance.
When i attended college in Europe, it was 1,000 ponds per year or $3000 US dollars. Now it is 4,000 Euro per year, and we are closer to $72K per year. That insanity is not matched by real wage growth or comaprable opportunities. It is as unsustainable as living in Miami will be in 30 years. An example of where greed outweighs the common good.
3
@Kevin
The vast majority of colleges and universities, public or private, in this country are "not for profit". There are some, but the quality of education they provide is far lower.
European higher education is cheaper because it is heavily subsidized by government in France it is effectively free. US state universities used to not cost and arm and a leg. The problem is states have reneged on their commitment to affordable higher education for their citizens. If they were to renew that commitment, competition for the best students would force private universities to find ways to reduce their tuition as well.
@Kevin
I got a wonderful education at Brooklyn College in the '60s. The cost was a $35 registration fee per semester. I still had to work part-time to contribute to the household because my mother was a widow with an eighth-grade education who worked as a saleswoman. Had it not been for free tuition I never would have been able to get a higher education. I really feel so sorry for young people today who do not have this opportunity. We have devolved. Shame on us.
2
How about relief for the elderly, still paying off their loans? A friend of mine is age 68, still working, and has reduced his 7% loans by $50,000.
He still has $85,000 to go.
And, btw, he sold his house to finance his healthcare degree, before he took out the loans, so now he's renter. Drives a 20+ year old car. Should be saving for retirement, but instead . . .
2
This is an absurd proposal that does not do anything to reduce the cost of a college education. It lets the Department of Education, universities, and Congress off the hook for bloating the cost of college by offering loans far beyond the means of the average graduate. It's a basic principle of economics that a subsidy drives the price up. As soon as colleges know that students can get a $25k loan easily, they're incentivized to increase their tuition further because there's less of a barrier to entry. Congress, in turn, sets interest rates for these loans that allow the DOE to profit off students rather than treat it as an investment in the long-term economy (because better educated workers will be more productive). This adjusted repayment proposal does nothing to address the underlying issue. We've been sold a myth that college is the ticket to get ahead, but at a price tag and with interest rates so extreme, the return on investment for our country is reduced. All because the DOE needs more streams of revenue. How ironic.
5
I would add that universities and medical schools are actually
using overhead obtained from federal grants as a way to subsidize their favorite projects. Supposedly overhead by the university to pays for the all the extra costs of doing research not covered by grants ( electricity, building maintenance etc).
And while that may be true, some schools including in New York, are now tying tenure decisions and even university subsidized apartments to how many NIH grants a professor gets. Indeed, even tenured professors who don' t get the
required quote of grants, are being evicted from their apartments! It is sad that universities no longer place any value on academics.
1
I attended the University of Minnesota for one year as a freshman in 1968-69. Tuition for the year was $375, or 300 times the minimum wage.
At that time, the state provided most of the university’s budget. Also, most colleges had far fewer administrators than they do now, including the private college I transferred to.
The university now costs 1700 times the minimum wage, has more administrators, and more classes taught by adjuncts or graduate students. Furthermore, the state now pays only 30% of the university’s budget, and the Republicans want to cut it more.
Meanwhile, the private college I attended is 20 times as expensive as it was in my day.
7
I went to college in the 1960's, when ordinary people cared about education, were willing to be taxed to afford it and states picked up a substantial portion of the cost. I paid $96 per quarter in tuition at the University of Minnesota and got an excellent education. Later, I obtained an MBA from the University of Chicago, attending classes in night school, and my employer picked up the cost.
It is unconscionable that people teaching an extracurricular activity (football and basketball coaches) and college administrators are making seven figure salaries while students are paying thousands to attend college. Cap compensation to no more than the governor of a state is paid. Tax people and finance a bulk of higher education costs through both state and federal tax revenues. We owe this to the future of our children and our country to have an educated citizenry.
8
@James Ward thank you for brining this up!! We need more reporting about this heinous reality
The interest rate on my federal student loans was 8.6%, because when I graduated in 2008 the job market wasn’t super hot for new grads. So I went back to grad school during the recession. FedEd told me I would be unable to refinance my loans any lower without prolonging my repayment and the best they could do was 7% that ridiculous. Last year in March 2018 I refinance with credit union to get 2.55% but I had already accrued $65k in interest at that point. The system is broken, completely broken. I borrowed $83,780 and have paid back $70,729.20. I still owes $111,302. I don’t think changing question would have helped me. I think being told, just like my mortgage, how much I would need to pay to actually pay it off in 10,20,30 years would cost me monthly would have helped. We need lower interest rates on loans and lower tuition.
1
I think I missed something. The Greatest Generation put their Baby Boomer kids through college but the Boomers spent it all on themselves and didn’t help their kids. By the way the college administrators making the big bucks are also Boomers.
1
The American model and modality to make money, profit and then some, surpasses normality in so many areas and aspects of Society and as a threat to so much life and liberty it is becoming frightening and is obviously unsustainable.
For the Nations citizens and in many respects, the citizens of other nations globally, the desire and need to make money and then make more and as much as possible (and those who peddle profit the most ensure and make sure more and more profit IS possible, with little or no regard to the huge and real cost and consequences such behaviour ,thinking and actions are having.
From payday lenders to healthcare costs & coverage and bail bonds and private prisons, personal data sold, education, debt, finance and security and all the way up to international arms sales...America is riddled with so many ways , means and opportunities to control, exploit, bankrupt and impoverish so much and many for the benefit of the profiting, powerful few who can buy influence , laws and impunity as the majority of the nation that make it a viable Nation and call their own is sucked for all its worth as they lose more and more of their portion and piece of the shattering American Dream.
For what?
To who?
To what end?
(Not a happy one , that's for sure.)
1
@Loomy
Please marry me so I can move to Australia! America is dying.
When our daughter was attending college (she graduated this past May) we filled out the Financial Aid Forms for the first year, it took me HOURS, realizing she basically qualified for next to nothing, then said to hell with this. The information requested was so convoluted and unnecessary. We were fortunate to be able to finance her education by a home equality loan.
There are better ways to finance s higher education, but the GOVERNMENT and the agencies who control the funds do not want to loose their control.
Ask parents how to setup a system and we can show you in an hour and everyone wins in the end!
2
This is such a spot on analysis. As a parent navigating the hell that is the FAFSA application 3 times x 4 kids, yes, it should be simpler. Paying back the loans is a bit like gambling-what really is the difference between the payback methods and why try to confuse us? And finally, with regard to the method of deducting the payment, if it indeed is a smaller more reasonable amount then yes, paycheck deduction does make sense. There is so much more to this though-please investigate the "student loan forgiveness by the NHSC and its penalty of 7x the forgiven amount if you cannot find the required but nonexistent NHSC approved job-I received $30k and now owe $166k!." Another method to trick and destroy those that rely on loans.
1
I'm 68. I graduated from college in 1973. I had a State scholarship that back in those days were handed out very liberally (I was a middle class kid with a 3.2 gpa) and that covered my quarterly tuition of $110 (I think) at a UC. My grandmother gave me $200/month and my parents the same. I didn't live at home. Yet I graduated with a mere $500 in student debt---and I borrowed that more out of convenience than necessity. I realize those numbers would have to be inflation adjusted, but how did we get to this point where kids have to take on tens of thousands of dollars of debt just to get a BA/BS? Sounds to me like Senator Alexander is treating the symptoms rather than the disease.
4
In the late 1970's and early 1980's I put myself through school. My elderly mother who owned her home, widowed, working a low paying job then on Social Security could not help.
I worked as a bag boy, union job, at a chain grocery store. That put me through my first couple of years at a local JC. Then off to the University of California.
Because she owned her home, purchased in the 1950's, I did not qualify for a thing even though she had a hard time paying her bills. I know a doctors son who was a surgeon who qualified for me that I because his dad had lots of things to pay for like multiple houses. The student aid system was and is still a joke.
When I was at school the budget was about 8000 a year. In 2019 that is about 20,000 a year or so the BLS tells me. The cost per year at UC is now about 33,000 a year.
Why the over 33% increase over inflation? That is the question to be asking.
I did get student loans that had good repayment terms. I paid them off in 10 years. The real issue is that the costs have gotten so out of control that I could never work my way through school to day. Of course some of that is due to the fact that my union grocery bagger job is not a minimum wage crap job in comparison. I was paid about double the minimum wage at the time.
It is more than just a form or the loan program Senator's; it is about costs, jobs at the bottom that IA is killing, and fairness in the financial programs for students.
2
I have to say I've taken close to 60 classes online from EDX & Coursera and others from some of the best schools in the world. FREE. No degree, but what do you expect for FREE.
Look for yourself. The world has already changed. Let's keep up.
The model of the big land grant university eating up billions from state coffers to educate our citizenry is 19th century in form and medieval in practice.
Sweep it into the dust bin of history along with the entire football culture of shallow drugged dreams of sexual hook ups and permissive grade inflation.
Free college degrees can be funded simply by paying a fair wage to college professors who work from home in a virtual classroom aimed at open enrollment. Imagine a world where 100,000 people pay $2.97 for a 3 credit college class. Pay the prof $65,000 just to teach one class one semester. Pay tech support $6500 and graduate students $3500 x 30 to grade papers. The sponsor school still makes money on their name alone.
Whew Boy. Disrupt the market for something worthwhile for a change. Ha!
1
I returned to college in my 40s and 50s. I sat next to 20-yr olds running up $60, 80, 100+K in debt. The problem:
Parents are living in the 1950s--giving their kids a plan for that decade--instead of preparing them for the 2050s. Subjects students are majoring in--education, retail, law, finance, accounting, engineering, etc.--careers their parents see as valuable--will soon be eliminated due to technology and A.I. advances.
These realities argue in favor of the most liberal, wide-ranging education plan. Students must be able to flex into several careers as change and tech creates them, must become generalists not specialists, and must accept that college and learning will be a 40-60yr. life long adventure.
Because of that, an expensive education is discounted. Why pay $200K for a degree that becomes useless by the time you're forty when you must return and earn another?
Born in 2000 you will live to see the year 2110 (people are living into their 90s today and they were born in the 1920s)! The plan of the 1950s--to graduate high school at 17, go four years to college, finish at 21, never to return again--is over. That is not what the next 80 years will require.
Instead: graduate high school. Find full-or part-time work as best you can. Go to college on a pay-as-you-go basis, taking those credits you can afford out of pocket until you earn a degree. Allow 10-13 yrs. Borrow nothing. Get a masters degree by age 30 with no debt. You'll still have a 60 yr work life ahead.
4
I have an idea. No student loan money for for-profit schools. These are diploma mills that exist solely to hoover up student loan money in exchange for garbage degrees. I'd rather attend the most underfunded community college in rural America than have a "diploma" from one of these places.
2
Wow. Just, wow. The naivete is astounding. Joe earns $60k a year but only $19k+ constitutes "necessities"? Like, what exactly? If the old saw applies that rent should be no more than one third of one's income (which in my experience it rarely is nowadays), that would be a "necessary" expense of $20k alone. How much does Joe get to spend on food and transportation? Are clothes necessary, or is he expected to borrow a sewing machine and make due until the loan gets repaid? Mr. Alexander, a better solution involves looking at the root of the problem: underfunded public universities. You and your party are responsible for this problem: for almost forty years you have steadily eroded taxpayer funding for schools, and this is where we are now. How about you get a real education and spend a couple of weeks, maybe months, living with people actually struggling to pay back the loans? Maybe then you could write a credible essay about solutions, which is anything but this airheaded fluff piece.
3
Here’s another thought, how about we stop tuition/fee increases mid-semester? There is nothing worse for a student who thought the thousands they paid for the semester was a done deal only to find out they have to pay another $500 half way through the semester because of some arbitrary method to circumvent financial aid payments from Pell/TAP. It makes no sense that I pay for a product only to be told later that I have to pay more because they raised the price. A prime example of this is City College in CUNY. we need the NYT to investigate this!
Bah. Education used to be about betterment not business and survival. Poor taste.
Ah Lamar Alexander who will do absolutely nothing to help people either attend or pay for college. Lamar votes with his party approximately 100% of the time and the GOP does not want people to become educated.
2
Unfortunately, if I read the Senator's op-Ed correctly, he offers no solution whatsoever...only merely addressing the red tape. Come on Senator Alexander (!!!), the American University bureaucracies gotta be shaken up...cost-plus school inflation is ridiculous, primarily because the local U hires too many useless 'administrators' & pays them too much, and plus they build, these days, too many plush dorms. Most importantly, the entire university system recognizes that whatever tuition they charge, federal loans will back them up and incoming students get squeezed. Please wake up and do something constructive --- shake 'em up!!!.. PJS
Do you have plans to help those who have graduate school debt?
The USA is steadily dismantling publicly financed higher education. Crushing student debt is only round one. The coup de grace is the starvation by state budgets of university budgets, which sets off loss of accreditation and thereby puts the institutions in a death spiral.
Precisely this is happenning in the unincorporated territory of Puerto Rico, long the guinea pig for medical and social experimentation. As an intended consequence of austerity imposed by the Fiscal Control Board, the Middle States Commission of Higher Education has forced the 11-campus University of Puerto Rico to submit a "teach-out" plan, which is euphemism for shut-down.
https://media.noticel.com/o2com-noti-media-us-east-1/document_dev/2019/01/30/uprrp-show-cause-report-jan-25-2019_1548869654198_31523687_ver1.0.pdf
Billionaire and millionaire bondholders, and their corrupt allies in federal and state governments, uncork the champagne!
2
If Donald Trump can declare bankruptcy many times over, why can't college graduates do so with their college loans?
2
@Steve
While that seems unfair, you blithely ignore the consequences of this. That would change the risk profile of these loans, shooting interest rates through the roof, which in effect makes goo borrowers subsidize the bad, or lead to an adverse selection problem. If you regulate the interest rates, the supply of loans simply goes away, so nobody gets them.
Happy now?
When I was in college about 15% of students in every freshman class could not function at a college level. Read and respond to Plato? Dream on. So they spent the first $35,000 year of college learning how to place a predicate. Stupid. We fail our kids K-12 with huge class sizes, garbage facilities, underpaid teachers, insipid book-based curriculums and low expectations. Then we eviscerate them and their families with abusive college costs that don't align with the projected value of the jobs they will have access to. Pump adrenaline and $$$ into K-12 with extra resources to impoverished communities, put the high school kids who have no interest in school (me!) into paying trades that align with their aptitudes with the option to easily re-enroll in free education until 18 or low-cost community college forever, teach kids to value PROSPERITY & WORK ETHIC over "prestige", make it mandatory for every college to publicly post 10-year data on how their graduates are faring and increase public spending on college tuition with an emphasis on trades that we need to function as a society. Let's just cover tuition for the top 500 medical school applicants every year while decreasing medical school costs generally and doctor compensation. As a professional artist about 70% of my skills were learned in other jobs and by teaching myself and I'd stomach more taxes if I knew my kids were getting a great education and the nightmare of college tuition wasn't looming on my horizon.
1
The insane inflation in Higher Education pricing is related to the same mass psychosis and loss of meaning that’s driving inflated healthcare prices.
We’ve killed God, and have been reduced to equating “success” with a list of material and status signifiers. So we become obsessed with ensuring a good coming of age event for our children that really just equates to them landing a good job. And so rampant price inflation, government subsidies, and financial buttressing is put in place to ensure everyone has a chance to make huge financial sacrifices to attend a college.
Think about it. Most of you probably have 529s for the kids, and like me you probably cranked those up within their first year of life. Do we have savings instruments for their first home, for a year of travel around the world, for their first car or a hobby fund, or $200 a month for books and trips to the Symphony and museum memberships? Nope. And are we forking hundreds of thousands over so they’ll get a deeper understanding of history, philosophy and the sciences at college? Nope. It’s all about their job prospects, about their ability to accumulate status and stuff.
And then on the backend of life, as we face death, we start throwing obscene amounts of money at squeezing 6 more months out. Why? Because deep down our lives lack meaning, and we’re not ready to face death.
Nietzsche was right. We killed God, and we’re all going crazy as a result, and spending our time and money on the wrong things.
2
This country deserves so much better than Secretary of Education Betsy DeVos.
She pays no attention to funding anything but parochial schools with taxpayer money.
That is her goal. Seriously, she does nothing for public college tuition, public grade schools, public high schools, public preschools - anything in between.
In addition she has NO education college credentials.....
Sad Pick, Donald. But who would be surprised?
It's, um, interesting that the word 'interest" appears nowhere in this article. Also, before giving too much credence to what my state's "esteemed" senior senator says, readers should bear in mind that this is the same guy who rammed Betsy DeVos's nomination through committee.
Start by making Liberal Arts Colleges free.
That should clear up the debts of untold aspiring artists who cannot find a job with their Liberal Arts MBA.
That alone would help a lot.
But they are huge profit machines, so I doubt they will ever offer their worthless curriculum for free.
You mention “unnecessary complexity,”’ the “chilling maze” and “$6 billion in mistakes,” as ongoing selected components of America’s current appalling situation, post-HS educational system. Unnecessary-human- policy- created financial debts. I presume that there are/can be additional, actual/potential, “causative,” “correlated,” as well as we do not (yet) adequately know/ understand WHY-factors operating. How did the USA create and manage the GI Bill and its educational gifting? How did the USA create and manage the Marshall Plan, helping to reconstruct a destroyed Europe post WWII? Were there no “Fail better” lessons to be learned from them, THEN, which are generalizable to NOW? You suggest a “new accountability system” re repayment. What is/has been the personal accountability of ALL members of Congress on this issue? Of all parties, of whatever divisions and nuances? What are/have been the political barriers to making needed, sustainable equitable changes?
1
Typical R response to a crisis facing Americans. how about this:
Free College/Trade school.
Here is one quick dataset to indicate what is really wrong with our system:
School name (state) Endowment 2017
Harvard (MA) $37,096,474,000
Yale (CT) $27,216,639,000
Stanford(CA) $24,784,943,000
Princeton(NJ) $23,353,200,000
M I T $14,832,483,000
Pennsylvania $12,213,207,000
Texas A&M $10,808,501,077
Michigan $10,777,563,000
Columbia(NY) $9,996,596,000
Notre Dame(IN) $9,684,936,000
Factor in how much prime real estate these and other universities own and you can understand that these business exist to build their brand, perpetuate themselves and not to educate students.
The problem is that the loan companies and for profit colleges are trying to extract as much profit from the loans that they legally can. Pres Trump put a woman in charge of this whose family fortune was partially made on the backs of these students, so of course things are getting worse.
1
First we had indentured parent-less children. Check it out. They were on the Mayflower.
Then we had permanently indentured Black slaves.
Well we freed the slaves, but now we are back to indentured children, some until death because they chose not to enter a high pay sector.
Such as school teachers in North Carolina.
What a wonderful country!
www.InquiryAbraham.com
As a 'good' Republican, an old political head who knows how to do stuff, Lamar sat as his party spent years of political capital convincing us education is for greedy, efete elitists who hate America.
The party that re-elects and re-re-elects politicians who suggest people studying humanities ought to be shot.
Never just talk, these boys put their money where their mouths is. They took education money for real, godly uses like coal mines, pipelines, charter schools, Evangelical political clubs working to destroy the nation.
Lamar oversaw Federal defunding education. He held the torch and pitchfork as anybody with a degree was accused of eating babies, having sex with teenagers (not in a good way, like Trump and Moore).
Lamar asserts education, like healthcare, is best run like a steel mill or used car lot.
If Mr. Alexander wants us to succeed he'll bring education's payday loan collectors to heel.
He'll jump on the reduced cost/free college bandwagon, pushing a few Fascist pals in front of him.
He has foreclosed the future of the nation. He wrecked individual lives, put institutions and careers at risk.
For all the immigration hoo-hah, Lamar forced us into dependence on immigrant scholars and researchers as he drives ours away with Trump's infantile refusal to study the planet, guns, drugs, immigration
Time to get over obsessing about money, think about how to recreate an educated and disciplined citizenry. Trouble is, that's what Republicans fear most.
2
Wait, is Lamar Alexander now a socialist?
But whatever the babble of this article, don't reduce the cost of a college education. That's the idiotic root of the problem.
College (room and board) cost me $1500 per year. Factoring in inflation, that's $13,000 in 2018 dollars.
Senator, I can remember the first time I heard Boehner mumble under his breath that "There will be means testing for Social Security"....
Only problem, Senator – folks pay in with one set of rules, and then the rules change, the funding’s plundered by all sorts of good-sounding vote-getting stuff, or both...
Most recent upshot, the cry by your GOP colleagues for “block grants” back to states to expand Medicaid, but how they see fit...
Forgive the candor, Senator – but our governance has become some of the most institutionally duplicitous and corrupt anywhere in the world...
Hard to see any US industry where the larding on of rent-seeking fees and make-work regulations that impede progress and create false shortage aren’t poisoning the work ethic, pride of craft, and – most important – global competitiveness of our work force...
Capital doesn’t care – it’s fungible...
Whether it thinks a cyberwallet filled with $50M in cryptocoin has more or less value than a $50M Picasso made from about $50 worth of materials – only depends on how much more or less it thinks they’ll be worth an hour or a month or two years from now...
So, cut to the chase...
You all want a tipping point of ~$30-40K per person...
Including gifting them the entire amount if they’re not feeling industrious, any time soon...
Once they move much above that level, you want most of the excess back...
Already several points on the income curve where the real marginal rate is 70% – since way before AOC...
To Disillusioned who writes : I attended a well regarded state law school... now $ 12,000 per semester
In CA and many other US States you do NOT have to go to law school to become a lawyer. All you need is to pass the Bar Exam.
Nor do you have to study CS to get a high paying IT job. Pass the Microsoft Certification and you shall have one
The US education would be better and more flexible were there more such separations between instructions and accreditation
Senator Lamar does not go nearly far enough in his suggestions for enabling college affordability and reducing student debt.
Many Western democracies offer free education at all levels. Some even offer free education to citizens of the European Union or even other international—non-tax paying—students. Imagine that.
The Nordic nations, which are the most socially advanced, have high per capita GDPs. They have a lot of disposable revenue in relation to the population. Sweden, with a population of approximately ten million, is by far the largest Nordic country. The others have significantly smaller populations. The exception in the European Union is Germany, which boasts a population of approximately eighty million, yet still offers free undergraduate education.
So, the key to socially enlightened policies is to have small, relatively heterogeneous populations that produce a lot of goods and services.
The United States is simply too large. The only way that Senator Lamar’s suggestions and other enlightened policies—such as universal healthcare—can be achieved is if there is a socialist coup, in which case productivity and revenue will likely decline.
As an aside, the full-year tuition at the University of Toronto in 1978 was $575 Canadian. The tuition in 2018 is $6,780 (domestic), $49,800 (international).
Canada, it seems, has gone the way of its avaricious southern neighbor and other nations competing for cash-rich internationals.
As a parent of a junior in high school, please hurry up and fix this horribly broken system!
26
Another option is parents who re-finance their home in order to have the money to pay for their child's college-- and that may be a 30 year commitment, gulp. And dang nabbit, make the student loan interest rate 1-2%; it is criminal to run student loans as a for-profit business. FAFSA is a joke, especially if you are middle class and in a high cost of living area. Interestingly FHA home loans take into account higher cost of living areas, why doesn't FAFSA? When parents help their child by paying for college-- it is a tremendous burden on the parents. We thought that paying for college was our child's "inheritance." But those college bills -- changed our social life and added tremendous stress as parents.
Oh Washington, how little those in the “ Land of Oz” understand. First , the average cited for Graduate School Of $28,000 per student is based upon what educational institutions? Many State Universities are approaching an average of $ 18, 000 dollars per year for an Undergraduate. When we discuss tuition, room and board costs are not included. Those costs are equal to or are higher than actual tuition. According to studies, 58% of students go to institutions 100 miles from their hometown. An average cost of one year of graduate school is $24,800 per year. These degrees are rarely take one year to complete. Secondly, the federal government backs student loans but they are provided by many of the large corporate banks. The fine print in these loans are complex and for students whose parents are both working, parents own a home ..ie: many middle class families...students are borrowing most of the cost. Then our recent graduates enter the working world, and pay rentand need to purchase food. 35% percent of the jobs in the US, require graduate degrees. For students of Parents that have jobs that pay minimum wages or slightly better, the financial implications are even more difficult. They do not have college savings plans. The defaulting on student loans is not simply borrowers walking away from debt ( as or President has) but because the reality of those monthly payments . What we need is for a cap on how much we allow students to incur and direct grants to lessen the cost.
I earned my BA in Anthropology going to a State university on the GI bill. I earned a Master of Library Science using the Hazelwood program (which enabled veterans to get tuition assistance for graduate programs). You'll notice that both of these degree fields are chronically listed in the bottom 10 of paying professions. Colleges and universities have become a money making enterprise and are no longer educating citizens. Community Colleges cost as much as State Universities and all are shameless in how their administrations press students into the loan pit. Over the course of my bachelors, the cost of tuition (matched by fees) was $3 a semester hour. That more than tripled by the time I graduated. In that time, the school morphed from a nice commuter school to one with Greek organizations, dormitories, bloated overpaid administrations and organized sports teams (and their needed infrastructures). There's where your money is going. Mr. Alexander has no intention of addressing the underlying causes of the obscene causes of the inflation, he's just proposing another market solution that continues to profit those who will continue to destroy higher education.
2
Some universities set a tuition that allows them to stuff monies in their endowment fund. This practice should STOP. Given all the restrictions on loans that the borrower can't go bankrupt and the interest rate can't be re-set lower there is NO EXCUSE for such a high rate. Moreover, if education benefits all of us since there are externalities why not reflect that by 'socializing' some of the cost in a truly low rate of interest?
This not rocket science. It is common sense.
Education debt has become the modern equivalent of the company store in the coal mining regions. Once in debt, you can rarely escape. What burns me is the banks essentially have the blessing of the Fed to conduct business in this fashion. Really, is that liberal arts degree really work $200K of endless debt? Not a chance.
1
Lamar Alexander's solution is to make the forms easier for getting loans rather than encouraging society to support higher education just as they do in all other developed countries. Here in NH we receive the lowest support of higher ed in the country. We are dead last. If people care about these kids then they must support more for education and perhaps less for some other stuff (you pick).
Mr. Alexander, I have another way to suggest how these loans can be paid back quickly. The idea is to give three years of committed work in a Native American community either teaching, helping to build infrastructure, or bringing modern methods to old tasks like farming. In this way everyone wins. Where does the money come from? Lets say Google, Apple, Microsoft, Berkshire Hathaway, or any number of billionaire companies who could easily afford to give back to the communities. It's criminal the Native American Communities have been left behind for so long it's time we as Americans live up to our founding principals. Invest in our greatest natural resource, our people!
1
Two thoughts from a college professor: one, there's an unreal number of very highly paid middle and upper management administrators who seem to spend all their time compiling reports that end up on a shelf. Two, there's far too many students who really shouldn't be in college. We HAVE to have a system of high schools that train students with worthwhile skills for jobs that don't require a degree. Not cosmetology or interior design, but useful, decent-paying skills such as coding or electrical work. Many graduates aren't making any more money than that even with a degree.
2
What we call "getting an education" is actually work like the work people do and get paid for. Imagine not only working four to six years and more without pay but having to pay for the privilege of working while working a second job on the side to meet your basic living expenses. Yes, some personal value accrues to the student who graduates, more or less, depending on what degree they get and what the market says it is worth, but the same can be said for the paid worker who spent those four to six years building skills, experience and references in an occupations. Who is the college student working for without pay? The business owners of America who will hire them to do the work they need done to make their products and services and profits. They're also working for the buyers of those products and services. And they're working to maintain America's economic strength, political and social stability and national security, which is based on our economic strength. So higher education is not just a privilege, it is a necessity for our country. All who have the brains and determination to do the hard and valuable work of learning are as essential to our country as those who serve in military uniforms, if not more so. We would have no country worth defending without them. It's time we invested more in them, one way or another.
1
Whatever happened to the concept of parents saving for their kids college education? My parents made sure to save enough money for my siblings and my college education, and I made sure to save enough for my kids college educations. Yes it required some sacrifices, but isn't that what parents are supposed to do for their kids?
1
There has been some discussion of taxes and increased administrative costs driving up the price of education. Both of these certainly contribute to the issue, but that's not the only thing driving increased costs. Frankly, many students and parents have unrealistic expectations about what a "college experience" should look like. This results in tons of money spent on things like athletics facilities, social development programs, nicer residence halls and dining facilities, etc. It's not that these things aren't great benefits - it's that they do not add to a student's actual education but DO add to the cost of school for everyone, including those who would never use the facilities due to cost if given the choice. Yet, if a college doesn't have these things, they're unlikely to be competitive in the higher ed "marketplace," and are in danger of closing. Frankly, this may not be a terrible thing - not only do we have some of the "best" schools in the world, we have A LOT of schools - but the understandable fear of school closure due to declining enrollment is a huge driving factor in this equation.
Why not attack the big issues head on?
First, the interest rates on student loans should be much lower. If the government guarantees the loan, it should be at very low interest rate (less than 3%). Remember, the student loan program benefits banks at least as much as it benefits students.
Second, college tuition, room and board should be fully tax deductible. I can't think of anything that our society should encourage more than education.
Instead of changing the number of questions on forms and tweaking how to repay huge debt at absurd interest rates, let's actually lower the costs.
4
I could rewrite this entire op-Ed in 14 words:
Make in-state college tuition free for every student who wants to go to college.
102
@M +1000
3
@M
You have to figure out a way to fund it though, the excelsior program in New York is bankrupting our public universities. My friend is a graduate student there and she said due to their severe budget cuts there are some departments that not only have no tenured faculty, but no adjuncts who have PhD's either. Creative writing classes are being taught by pharmacy grad students. $20 something k is very easy to pay off, I paid mine off while making a tiny graduate stipend. Much better to have that very manageable amount of debt in order to get a great education than waste your time in classes without professors.
6
Just a point about the example of Joe, the engineer who chose the paycheck repayment program: Joe's GROSS pay is $60K. His net will be considerably less. Projecting $41K in discretionary income is a fantasy. It could be closer to half of that, increasing his payoff time to 18 years. Remember Senator Alexander, Joe has to pay federal, state, (possibly) municipal taxes, FICA, Medicare, unemployment taxes, temporary disability, and others, depending on one's location. It concerns me that you overlooked--or were unaware of--Joe's tax load!
3
Republicans seem to think the only purpose of education is to create employees. Engineers make a living wage and can pay back student loans over years. The country also needs historians to remind us of past mistakes, artists and philosophers to remind us of what's important in life, and teachers. Should we give up on those professions because they don't pay enough to repay student loans?
Can Lamar Alexander live on $18,735 for "necessities?" I remember when Tony Snow of Fox News left the Bush administration because he couldn't live on his $168,000 salary.
2
One of the issues is that many jobs require advanced degrees and those programs seldom have any scholarships or financial aid other than loans. A student can graduate from such a program with crushing debts of $100,000 or more. And the interest rate on those loans are higher than what a 30 year mortgage commands right now.
1
Some interesting assumptions in the one example. You make $60K (gross, I presume) and only have $17K or so in necessities? How can that be realistic? Aren't taxes and payroll deductions "necessities"? How can taxes, rent and food only come to $17K unless you are living in a box on the street? Are power, telephone, etc "necessities". What about property taxes if you own? State income taxes? Feeding your children or buying them clothing? It is hard to believe the example envisions any of these being "necessities". If we are to define "necessities" so narrowly as this example contemplates, are we really offering any relief at all? Or is Alexander really saying, "if you have student debt we expect you to be very, very poor" until it is paid?
4
I wonder how many students saddled with debt are from families who are financially able to help but choose not to aid in the burden. My parents helped me to graduate without debt. I and my wife did the same for our two daughters. We felt it was our responsibility.
1
These ideas would not make college more affordable. They are just ways to pay back the high tuition we already have. I modestly propose 3 ways that will really make college more affordable:
1. Stop making students pay for faculty research. The number one cost for colleges is still for teaching staff. In many universities professors teach only 3 or 4 courses a year. The rest of the time is spent in research, funded largely by tuition. If students paid only for the time teachers actually spent teaching, this cost could be reduced by more than 50%. The government could require that colleges receiving federal aid, only charge students the portion of faculty salary spent teaching. Research funding would have to come from other sources or, God forbid, Teachers would have to focus on teaching.
2. Reduce college to 3 years. Most of the rest of the world have 3 year degree programs, with no decrease in the quality of graduates. This would force American students to choose majors early, but at a 25% savings in tuition.
3. Eliminate college athletic programs. These are mostly big money losers for schools, especially smaller schools where the annual cost per student can exceed $10,000. They have little value for those not participating in them, and arguable value for those that do.
These proposals would decrease tuition by more than 50%, benefit students by forcing faculty to focus more on teaching, and eliminate the distraction of watching or participating in college sports.
2
In my experience most money spent on research comes from external sources already, for example NSF grants and such. I'd be interested in seeing the figures on how much research is supported by tuition dollars. I'm guessing it's a minority, but maybe it depends on the field.
There is a lot of administrative overhead in higher education, and it has been getting worse. Ratios of administrators and staff to students have been steadily climbing over my 35 years in higher education. A quick way to reduce the cost of education would be to return the number of administrators to, say, the 1990 level.
@Peter
In the sciences, research money often comes from grants, which is fine. However, the majority of professors are not in science.
Professors in departments like English, history, and Music get their salaries from the college, and rarely from grants. They are still required to publish or perish.
BTW, I entirely agree with the idea of reducing administrators.
Because we can all live on $18K in areas where engineers start at $60K.
Reasonable rent in the SF area is above $1,500 monthly. That is $18K right there. This leaves $700 to eat, buy clothing and so on. Or are those things discretionary>
2
part of the reason is the artificial demand for degrees. At least half the jobs in the US that require a college degree are done excellently in rest of word by people without degrees (through training that starts in high school and apprenticeships/work experience that is free or pays). The combination of that and the availability of loans that make no financial sense (lending people $100k so they can get a degree for which there is little or no demand struggle to get a job after graduation that pays $10/hr.) is why a typical size US state has more universities than entire countries that have 10x the population.
1
End the fractional reserve system while we are at it. Then we can all afford to go to college.
The main force driving increased tuition cost is the expansion of college administration. There are hundreds of mid-level associate deans who do not teach any students and do not do any research.
2
Cap the interest rates on student loans and stop giving student loan creditors a preferred status in bankruptcy. Treat student loan creditors like any other creditors in bankruptcy.
Also, universities and colleges are responsible in some part for the student loan mess--there are fancy dorms, fancy recreational facilities, and an abundance of staff and bureaucracy alike on campuses where everyone attends too many meetings.
1
Maybe Mr. Alexander should also take a look at the current policies regarding federal student aid dispersed (churned) through the private-for profit education industry associated with Education Secretary Betsy Devos.
2
The goal of Senator Alexander is to make college more affordable to students. He offers three suggestions: 1) make application for financial aid simpler, 2) make loan repayment easier, and 3) bring college's "skin in the game" with respect to student borrowing. All three are about borrowing, none are really about affordability.
I suggest a more fundamental rethinking. When I attended the University of California in the 1950s there was NO tuition. There was an "incidental fee" of about $50/semester (roughly $500 in current dollars). One could literally work one's way through to a degree and come out mostly debt free. With this example in mind, the rethinking I suggest is not about increasingly imaginative ways of dealing with student debt in higher education, but how to reduce the necessity for that debt. Accordingly, a couple of hopefully guiding questions: Why is it we cannot do in the 21st century what we did rather well back in the middle of the last century? Why are we concentrating on debt repayment rather than on finding ways to actually make college more affordable?
1
China and Europe are eating America's lunch, while America is eating their young. Crushing federal and personal debt, years of servitude to the financial overlords.
113
Fiddling around with how college is financed is fine, but the real solution is thus:
Force down the cost of tuition across the industry (yes, it's an industry) by making state universities cheap and terrific.
85
@Sam Politicians never, never look to lower costs, they always state "we need to find a way to pay for this" I have been barking about this for over a decade. College should not be free, but it should not be 1/2 as expensive as it is today unless you decide to go to a private college. When the govt. started guaranteeing loans, look what happened.. it is a free for all when they govt. guarantees or gives money, the prices run straight through the roof. We should give each state money for higher education and training, and let the locals decide what is best (with guidelines). The federal govt. cannot manage this issue.. it is too large, but they need to stop subsidizing the overhead at these colleges and universities. The free market would crush these schools for their ill advised decisions if the govt was not involved.
My school built a new science building 30 years ago when i graduated. They have since doubled the size fo the campus and built another science building, all without adding more students to the campus. complete incompetence, and selfishness towards the students and their families.. the tuition is now 72000$.
solution
Tell schools if they want fed money or backing, they need to add to their student base, thereby lowering costs.
they need to add classes
they need to go 365 days a year full blast, add another semester, make the teachers work the whole year (holy smokes what a gig the professors have that are tenured).
add majors we need in society.
5
@matt. FYI, those science buildings contain faculty who do research that brings federal research grant dollars into the university. The overhead charged on those grants subsidizes tuition. I know this because, as a tenured professor, I am one of the people bringing in this grant money. And I have to do the work associated with these grants - over the summer. This is not a "summers off" gig.
67
@B not at our school, small liberal arts school with astronomy, chemistry and biology degrees basically
The first thing Congress can do is to change the usurious interest rates it charges on student loans, which are as high as 7 and 8 percent. Until then, Alexander's phony handwringing is hypocrisy and evasion. Why is the gov profiting on the backs of families?
119
@RichPFromDC: Yes, when I was in graduate school, there were loans that charged only 2% interest.
2
@RichPFromDC
Thank you. Exactly.
Senator Alexander is actually looking to destroy the current system that helps public employees who have chosen to teach. The system he mentions does not account for people like myself who understand the nuances of the current system and have no issue with it. Similar to the ACA arguments from Republicans, and many Democrats, which centered on the idea that many people, including myself, have no issue with their healthcare, the same can be said for student loans. Student loans are an issue when they are used to attend for-profit colleges. Senator Alexander should attack those horrible entities.
Did I read this column correctly? A Republican (Sen. Alexander) and Democrat (Sen. Murray) working together to tackle a serious problem, and at the same time increase efficiencies, saving everyone time and money? Shocker! Congress doing its job.
Give me a break! The very idea that students pay for their education is pure plutocracy. Any actual patriot would barf at the idea that improving the quality of the national work force must be paid for by the workers. It is our national interest that every qualified student willing to study hard should be incented to go as far as they can - for the good of their country. The American system does the opposite. Are we nuts or just victims of a massive social mistake?
1
My tuition in my university days at the U of Tenn was $225 for three quarters (in my first year, 1956-57, only $156.). Today it is 56 times that. Minimum wage was $075/hr; today $7.50. Faculty salaries are also about a factor of ten, so are a modest new car, and a gallon of gas. I lived at home for a couple of years, then got married and paid $45/month for a furnished apartment walking distance from campus. Today’s condition makes me think that we in the upper quintile want to accelerate the income and wealth inequality that has been raging: “keep those swine [white trash] in the sty.” If you like meritocracy (actually, I’m dubious about that model, too), the nation is missing out on lots of potential talent.
A major factor in the University business model is the need to make the campus (beautification) along with all student facilities (modernized) competitive in the quest for upper middle class students. Entertainment, often in the form of sports, of the kids is expensive, but has to be paid (tuition). The lower two quintiles cannot pay the bills for their kids, while for those in the upper two quintiles, parents will shell out the money, no matter how high the tuition because of their wealth and the pressure from their entitled children. Kids from lower strata often are not ‘ready’ for the top public schools, so they are relegated to the branches or the community colleges. There are no checks and balances.
What about the financisal albatrosses around the necks of all the taxpayers who would never be able to attend, nor their children, the elite universities that they subsidize. The public cost (per credit hour) for the elite, highly selective universities (both public and private) that 90% of our politicians and journalists attend is an order of magnitude higher than the public support of more common universities and community colleges (not to mention technical and trade schools). It's obscene. Making grants more available to pay expensive universties would greatly please these institutions who, purposefully, do not support the wider community who actually pay for it. This is another pseudo-progressive proposal. Likewise, without our subsidies for their endowements elite universities would be forced to operate in a more financially and ethically responsible manner. Which shouldn't be a bad thing for teaching institutions.
Add to it Sallie Mae’s excessive monthly fees, high rates, and principal growth from accrued interest during the “you don’t have to pay until you graduate” period. Meanwhile its eecutives have multimillion dollar compensation packages.
3
College football teams across America PRETEND they are losing money. Show some transparency on the whole chain, from football ticket, swag, alumni contribution, TV rights, and I would bet you see some changes. How do college football coaches make multi million dollar contracts, while TA's make gig work, making almost nothing, while doing all the work? A person attending Berkely in 1945 paid $20 per semester.
The GOP has declared war on education.
The purpose of student debt is to indenture you to the system.
Privatize=profit. Get rid of private student loans....And DON’T privatize the VA.
1
"but the current level of generosity toward students is unprecedented."
What a disingenuous turn of the phrase. These loans are largely predatory, enticing the economically naive into unrealistic sums with high interest with the false promises that "you will be making so much money, you can easily pay it off." Really, with 4%, 5% and even large suns with 7% interest!!!!
So the actual chickens now coming home to roost are graduates so impoverished they cannot even think of starting a family or owning a home, parents draining their retirement savings to help bail them out, leaving a growing consensus that college isn't worth it any more.
The government has no incentive to help because the enticement of college tuition is the back door draft for our military.
What have we done to our youth and at what a cost?
2
Pardon my cynicism, Senator, but while it's good you've apparently (apparently - talk is cheap) seen the light on the road to Damascus on this topic, where have you been? Your party, along with complicit or asleep Democrats, has long allowed college education and funding to fall into the grip of "deregulation"-aided and "privatized" grifters, fraudsters and incompetents, aided greatly by politicians allowing, indeed in effect mandating, usurious interest rates and onerous payment schedules and penalties.
It's akin to another fraud on the public, Congress's requiring list price for Medicare drug prescriptions.
It's been a classic American rentier scheme, fed by a government-facilitated cash stream channeled to powerful and often corrupt financial interests. That's the Republican Way, right? Personified currently by Betsy DeVos, the education-scam industry's best friend, but she's by no means alone or singular.
"Gee, when I grow up I want to be a fatcat sharpie backed and subsidized by a government-regulated income stream. Free money! And I know my friends in office will protect it, and me. How do I know? I gave them campaign money, didn't I?!"
I hope against real hope you actually follow through on your touted efforts to clean this up. I'm not holding my breath for any politician, and especially Republicans, to really do the right thing. That's a bit much to expect in a Congress long for sale.
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How come no one talks about Professor Salaries?
This seems like the biggest expense the schools face.
Many Professors, especially in Elite Liberal minded schools that protest Conservative Voices are quick to complain about inequities and the evils of Capitalism, yet I dont recall any of them agreeing to pay cuts to help lower the cost of college.
In other words. Put your money where your mouth is.
1
I can certainly endorse the idea that repayment needs to be simplified. Last year, I paid off my daughter's $40,000 student loan balance. I tried to do so with a credit card, thinking that while I would get no tax advantage for doing so, I might at least accrue some credit card points and maybe a free trip to go to see her. No dice: the Department of Education prohibits use of credit cards in all cases. I understand that DoE wants to prevent students from jumping from the frying pan of student loans to the fire of credit-card debt, but this blanket policy is paternalistic stupidity.
Second, Mr. Alexander's example of repayment is conveniently sunny: a young borrower with a $60,000 salary and $18,000 in living expenses. These aren't the people crushed under student loan debt. Try the student who comes out and gets a job making $40,000 in Washington, DC. After taxes, huge rents, inflated transportation costs, healthcare costs, etc. such borrowers are living paycheck to paycheck, with little or no disposable income left. Those are the people crushed under the weight of debt, and Mr. Alexander's formula will mean repayment with their Social Security checks in retirement.
3
Debt is a very effective method of control.
Get real Lamar. You get what you paid for.
College costs a lot because we want a country club; upmarket dorms, great food, entertainment, security to rival Fort Knox, funding for every fringe club, therapy for everything, and expensive involvement in sports (yeah, I know body is important as mind, but join a private gym).
Nonsense majors are cobbled together with highly paid people who have stopped performing (on account of tenure), and poorly paid, largely unworthy part timers with no skin in the game. You should see the applications for tenure and promotion!
Costs? For every single faculty member, there are two administrators who make and enforce rules that make sense to no one.
In a free society, people should have the freedom to pursue nonsense majors because they want to and want the benefits of a spa in academe. Bacchanalians are different from Spartans; don't expect the former if you want to pay like the latter.
We also have nonsense laws. A person cannot work in a salon without a degree on cosmetology. Why? Was there an epidemic? Death and destruction as a result of misapplied mascara, or wrongful termination of a fringe. You (elected officials) made these dumb rules, making it impossible for people to pursue their passions.
For that matter, what are you going to fix next. People have bought houses and cars they cannot afford, charged up their credit cards with meals and vacations.
1
To reduce the cost of college would be easy: walk down most any college or university administrative building hall and you will pass many offices with name of deans whose jobs you can't figure out. They are producing mots of DATA, REPORTS, and other largely useless stuff which never helps a student learn much of anything and further reduces the funds which could have been used to hire faculty or others who directly interact with students to learn. So start by eliminating 25% of the state and federal least useful reports and firing the deans and assistants who oversee those. Let me give an example: in the 114 Calif. community colleges, they all have to report on STUDENT LEARNING OUTCOMES as a proof of "quality improvement." This is a big waste and often requires two or more faculty to oversee a useless piece of software called Curricunet, for which the college pays through the nose. So there are over one hundred faculty state-wide playing with this software when they could be helping students. This is just the tip of the iceberg.
Get rid of a lot of bureaucrats and reduce the cost of tuition and student debt. Help students!
2
This proposal amounts to taxing higher education, a basic, fundamental right for those who show aptitude and commitment to achievement, and with that achievement, give back in measurable ways to society.
It is despicable and heartless that this government continues to impoverish graduates and force them into the backwaters of hopelessness because of grinding, overwhelming student debt. What a sad, relentless unforgiving existence. Why not transfer the billions of tax-payer dollars from the richest 1% or from the senseless tax-paid wars, to bail out our graduates and make education affordable? Education, as Plato taught, is manifestly not a market value; it is a human value...as is health. But both have been hijacked by the ugly, ruthless excesses of market capitalism, and rendered the quality of life for all but the richest in the United States equal to the quality of life in developing countries: nasty, poor, brutish and short.
This proposal is also a form of wage garnishment. Why not be honest, and call it for what it really is?
Finally, isn't it curious that this proposal contradicts a nearly sacrosanct Republican principle that "less government intervention and regulation is better government." C'mon, Alexander! Get real.
1
Universities extract a ludicrous rent from what seems to be a completely inelastic market to allow people access to jobs that are now closed off from those without this hallowed credential. i
I just can’t understand why the richest nation the world has ever known can’t provide public community college education or trade school for all who want it.
2
Is it just me or is anyone else sick of these "guestimations" by certain people on the right of how life "should" work for people of whom these "guestimators" have no real life experience in understanding? This is the epitome of our current political system in the US.
1
Nothing new here except some lipstick on the swine.
His concern is not misplaced but his solutions are inadequate, as are republican approaches to health care. They are a party imprisoned by antiquated libertarian/conservative handcuffs.
Of course, there really ARE some thoughtful people on the other side of the aisle.
But today's news re "payday loans" underscores how very little difference there is between kleptocracy in the U.S. and kleptocracy in Russia. IN BOTH CASES, "who you know" matters a lot more than "what you do." That is, it's not enough that 400% interest should be deemed excessive - wasn't there was a "consumer protection" arm of government, and shouldn't that mission be right up there with life & liberty?!
The reason for the above tangent is simple.... Not only does the President have zero when it comes to morality - his "charity" is every bit as sleazy as Harvey Weinstein.
Republican Senators and House members take money from people who probably belong behind bars. Certainly, if our laws ever aligned with our values, there are many financial services businesses that could not survive. (Of course, I believe that they should not! Their existence today speaks to their ability to buy access.)
Of course, Democrats like Joe Biden and Chuck Schumer have similar "campaign funding" profiles to typical-to-bad Republicans, so the problem is even MORE intractable.
The Times also has a good op-ed today about how maybe the G.O.P. really NEEDS to come up with a policy re health care. When all a party stands for is "2nd amendment rights," "pro-life balderdash" and tax cuts for the people who need them least, methinks that this op-ed is the last we'll hear on the subject until/unless there's a Dem. Pres.
So, $1.5 trillion in student loan debt. And if that $1.5 trillion had been invested in education? Oh wait, that's socialism.
An elite education is not a right, nor should it be . Go to a state school or , gasp a community college . Better yet skip the whole exercise and become a tradesmen.
Two of the biggest lies being foisted upon people in America today is the importance of travel and a college degree.
Join a trade union you have a retirement plan, and good health insurance. Your work life won't resemble a sitcom, but should it? get your hands dirty , make a good living, don't get outsourced overseas.
Are you disqualified from talking about this in good faith, $enator? If you voted for “bankruptcy reform” in 2005 (along with Hillary Clinton, Joe Biden and John Kerry), then you are.
The privatization of student loans, a craven giveaway to banking interests, and the prohibition against discharging student loan debt in bankruptcy, except in cases of permanent disability is inexcusable. It is the pure essence of privatizing profits and socializing costs, since the government indemnifies banks against losses through student default.
“Administrators have a specific question: ‘Can you do something about the jungle of red tape that wastes money on overhead that could instead be spent on students?’”
One reason why college costs have skyrocketed is the insane proliferation of MBA educated administrators. That they wring their hands over red tape that they themselves helped to create is appalling. It is part and parcel of the takeover of education by MBAs that colleges have gone into building frenzies and become real estate magnates. NYU now has dorms in far flung areas far from its campus in Greenwich Village.
And public universities have had cost of attendance skyrocket because both state and federal support has all but evaporated.
1
This article is all about the repayment of loans. Loans that are way too high to begin with. How about exploring how to keep loans to a more reasonable level?
1
How about getting rid of all the mostly useless, non-academic positions, like "Vice President of Equality", or "Provost of Inclusion"- which have to be paid for in the tuition fees?
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This is simply a symptom of American's subservience. The people of the country have been trained to be serfs and accept whatever outrage the wealthy can foist upon them. Passive and cowed, the people feel they are not worthy of being treated with respect and dignity. They elected Trump, Mitch McConnell, Paul Ryan and numerous other leaders who hate everyone except their wealthy donors. I assume many are masochists who love the pain of being treated like dirt. Many others are permanent children as they were raised to remain child-like for as long as possible and effectively were taught to remain children permanently.
We have democratically elected leaders yet we have leaders who only serve the wealthy. Meanwhile the few politicians who seek to level the playing field are vilified in the media (including the NYTs) over their "socialist" stances or silly things like a DNA test. People who are adults would not be fooled by this propaganda. You can blame the system, but it is the system that the people have voted for time and time again.
1
No interest on student loan debt for anybody! We need tax payers and should not punish those working hard to pay their fare share. That Trump and the Republicans have no problem calling people socialist who call for free college, but won't even help their own constituents a tiny bit and continue to allow the financial exploitation of students and families for Investors gains. How dumb and short sighted is our system? We will have to bring in more immigrants to work our best paying jobs because our citizens can't afford the debt.
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Lamar primarily puts the burden to the students/society to just pay up. What about the 900% increase in costs the last 30 years. Where are the NYT charts on professor/administrator salaries?
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The United States government ought to acquire all of the student debt and pay the loan sharks 1% of that amount. Do we need a southern boarder wall? We have lived without it since our existence. We could chop our military in half as part of the payment. We need and must have the most educated young people for our survival. Take 2 or 3% from the billionaires until this debt is paid. I know you will hate this but get rid of the minor league football and basketball teams which is what college teams have become.
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@Mishomis
"The United States government ought to acquire all of the student debt and pay the loan sharks 1% of that amount."
The US government is one of those sharks charging 5% interest on their subsidized loans.
Senator Alexander,
I believe after witnessing your career close-up from the first day you put on a red and black checkered shirt, that you care about education. The comments I've read here about your proposals need to be taken to heart. The NYT Picks are clear-eyed and logical. They come from people who are living the reality that you are only talking about. The complications with forms, etc. is just not getting to the heart of the problem. Your career is nearing its end. Please take a harder look and use your reputation as the education expert to promote significant change. Be not afraid to shake up your thinking in order to help your constituents.
@Angie Republicans don't care about their constituents. Whatever gave you that idea?
Let's put public universities out of the business of minor league sports!
I wonder how much Senator Alexander has to pay for his college education?
Another thing that bears discussion: The enormous endowments that many private universities have accumulated, running into the billions of dollars for some elite schools. For what purpose?
It was posited not long ago by the chancellor of Princeton University that their enormous endowment - $23 billion dollars! - could cover the cost of tuition for all students for several decades and still have money left over.
Well, how about putting your money where your mouth is, and offer free tuition to all students? Ditto Stanford, Harvard, Yale, MIT, Notre Dame, Yale, Michigan (a state school), Texas A&M (another state school), Columbia, and Penn? All have endowments of $9 billion and more.
https://www.usnews.com/education/best-colleges/the-short-list-college/articles/10-universities-with-the-biggest-endowments
"to chase down a bachelor’s degree by any means necessary."
If anyone really bought and/or followed this advice then they should be eligible for the silliest person in the universe pageant.
I always assume that most millennials can use google.
Gee, whiz. Why is tuition so high in the US? Oh, yeah. I forgot.
America's higher education "system," laden with non-academic "administrators" who make ten times more than the professoriat, is now a proven rent extraction system. It's a business, brought to us, condoned and approved by the same rentier class of Americans (and their bought politicians from both parties) that oversees our health care/rent extraction "system," laden as it is with non-physician health insurance executives that need to be paid salaries of millions a year.
Whether we're looking at higher education, so called health care, the student loan racket, the military industrial complex or any other industry that Americans are perforce dependent upon, this is parasite capitalism plain and simply. If you feel as though the "powers that be" in America's economic system have you over a barrel, you're absolutely right. And, just to clear up any confusion you may be having, that sensation you're feeling right now is what ALL people feel when they find themselves over the barrel.
God Bless America. Liberty. Freedom. Never give a sucker an even break.
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Cut the salaries of the administrators, who earn from 500k upward, and do away with tenure - a vestige of the Middle Ages.
Many tenured profs become driftwood after a decade or so, with a ridiculous teaching load of perhaps 3 classes a year and insignificant research, especially in the social science and liberal arts.
The bulk of teaching is being done by Teaching Assistants or Adjunct faculty. And yet, the salaries of the tenured faculty keep going up. Stop this nonsense!
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I'd rather live in a country with tuition free colleges than tax free billionaires. Stop tweaking and admit it's time to dance.
Venezuela? Socialism? Fear mongering always terrifies the cowardly. More likely, a little bit of Canada, maybe a whiff of the European Union. But in the end, it will be America, the United States Our country is big enough and tough enough to survive the end of finance capitalism, just like it survived the end of slavery. And became a much better place for it.
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The hypocrisy runs knee deep in articles like this. The Republican Party has been cutting taxes at the local, state, and federal level for almost a half a century. As a result tuition has skyrocketed. Adjunct professors cannot earn a living.
You never saw articles like this when the Republicans had all three branches of government, not to mention a stranglehold on both houses at the state level. This guy is just as bad as Trump when it comes to being straight with people.
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Dear Senator Lamar:
While everyone can agree that the student loan system is burdensome and corrupt, let me draw your attention to your own rather dubious history on this subject. In 2014, you railed against a student loan reform package proposed by Senator Warren and supported by President Obama. I'm having a hard time keeping a straight face as you rail against students who borrow too much, which is laughable. How much "skin in the game" do people have to have when they can't buy a house or plan their families because they're shackled to a loan system that you yourself have enabled and supported?
Come now. I know you haven't been to college since the Taft administration, but things have changed. A deep reading of this "proposal" carries with it the smell of loan industry lobbyists who probably wrote this for you. The big question is: What's in it for them?
Also, you may want to share this industry-written piece with Secretary Devos. She seems intent on pushing policies which are the *exact opposite* of what you're proposing.
Honestly, you should have worked with Senator Warren five long years ago. What a waste of time.
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In the whole article not one mention about one of the primary causes of skyrocketing student debt; ballooning administrative empires and salaries.
It used to be that administration was a support entity. It is now the driver to oblivion. It now protects itself over all else - even above the viability of the institution it is there to support: Universities frequently cut courses and faculty to make up losses in enrollment, yet not one administrator is ever lost.
Another word, perhaps: Corruption.
1
I started college in 1980, the first year that student loans were a thing. My older sister got scholarships. It took me 24 years (!) to pay off my loans, to the detriment of buying a house and starting a family.
Sen. Alexander, the best way to make college affordable is obvious - make it free, or nearly so, the same as most other civilized democracies who recognize that education individuals makes society better.
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Make it simple. Education for modern America needs K--14
education (plus free PreK for all who want/need it). Then add
a far more robust program of scholarship and support for public and private 4yr institutions with a "nudge" toward pushing them to
accept and support graduates of 2yr. institutions who want/need it.
Start the funding with a "wealth" tax on the excessive endowments of "elite" institutions which they can offset by contributions to the funding of such scholarship and support.
Not sure why college is so expensive today--the cost of teaching physics, calculus, Cromwell, Shakespeare, and Marcuse could not have increased that much in the last 50 years--at least for undergraduates.
Must be admin expansion, their salaries-perks-benefits, and the cruise-ship enhancements over the years for faculty and student body.
So what has all that student-debt really paid for, college-university largess?
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Missed an obvious one: get the interest rate on student loans down to a level much nearer the rate the federal government pays to borrow. Federal loans, subsidized loans, federally guaranteed loans and rates.
1
I didn’t hear anything about promoting people go to a technical to learn a skill or trade, where it’s typically less, may not have to get a loan and if you do it’s thousands less than a state college. Normally learning a skill or trade, you can get good paying job when your done. Community colleges you can transfer to 4 year school and finish in 2 years with still less to pay back.
1
Even at Private University’s those of us who needed the Pell Grant could go do a Work Study job during the school year for spending money. Then we could work 2-3 jobs waiting tables and make 3-6k to pay the tuition. Guys could have painting companies, landscaping companies during the summer and do the same.
My tuition at a Private University in DC was 3200 yr in 78 room and board was $3200. When I graduated in 82 it was 6400 and 3200 respectively. my social security earnings statements show I made 3-6k those years from summer gigs.
My daughter worked three jobs during 5 years of nursing school. She could only make $11,000 -14000 yet tuition Room and board is $60 k.
It was realistic for my generation to make the tuition with summer jobs. This generation can’t.
My youngest is doing Dual Enrollment at a technical college and will have 22 credits. She will stay there any other year and get an associates then transfer to another 4 year college.
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I believe Senator Alexander's three suggestions for furthering college affordability make a great deal of sense. In that spirit, I would like to suggest a fourth. Many of the colleges and universities with the highest tuition costs also have the largest endowments, as well as the largest number of wealthy alumni. If said institutions were to ask each wealthy alum to step forward and sponsor one low-income student (i.e., pay that student's total college costs--tuition, room and board, fees, books, travel) for four years, that might obviate the need for so many discouraging forms and ongoing loan payments. Just sayin'.
As a German-language teacher, I see first-hand the way that country is recruiting top American STEM students to its colleges and universities. The fact that tuition there is practically free, makes it worth students' while to learn the language and prepare for entrance exams. Other countries are investing in higher education. America is falling behind. Alexander's proposals to simplify student loan applications and repayments are modest--too modest in the face of an overall global competition for the talents and minds of our "best and brightest."
1
A simple start would be to lower or eliminate interest on student loans. My med school loans average a rate over 6%, and during the period during which I took them on, mortgage rates were under 4%, AND the interest was not subsidized while I was a full time student and unable to work or make loan payments (and undergraduate loans are). Why on earth is the government profiting off the backs of students like this? A rate just high enough to cover administrative loan costs seems much more logical and kind, and would be a step in the right direction towards helping students pay off their debts.
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This is textbook GOP: The universe begins and ends with the U-S-A! The civilized world beyond our borders has already figured out how to achieve excellence and affordability in higher education: through a properly funded public university system. Ours is being starved for lack of public funding (= higher student fees) and buried by a free-for-all private/for-profit university system (= exorbitant student fees). Mr. Alexander's band-aids for a flawed model will hardly help.
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Hard to argue with simplifying forms and making it easier to choose a repayment option, but as far as public policy is concerned this "plan" is laughable. And who is that unfamiliar (to Republicans) stranger who appears near the end in the form of "my third proposal?" Is it...? Could it possibly be...? A proposed regulation on predatory lending???
[While total student debt is high, the average loan for a four-year college graduate is about the same as the average car loan.]
This is an important point. The horror stories with which we are inundated are about people who made very poor choices when borrowing money.
Unlike mortgages where people who over-extended their ability to repay a loan lose their home or car and the bank is able to recoup its costs, there is nothing to reclaim from a loan for education and some other entity is on the hook for the money if it isn't the borrower. I don't want it to be me, the taxpayer.
We don't forgive loans to people who borrow for homes which are larger than they can afford and we should not forgive loans to people who chose to attend an expensive private college rather than a state or local public institution.
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How about we publicly fund public education? (Oh, is that too radical?) Less to borrow equals less to pay back--the way it was for decades before schools started competing over flashy rec centers, and instead focused on programs, faculty, and research centers to market themselves. (Ok, football teams have always been used in this gambit.) Go to the states that have gutted their higher ed funding over the past decades (I'm guessing Tennessee is in that group) and lower the costs by making citizens and their reps realize that public education is a public good that pays dividends for all of society.
I'll ask the question: Why do we need to the student loan system at all? If you're proposing to automatically deduct student loan payments from employee paychecks, why don't you just skip a step and tax income to finance higher education? Higher educated individuals will naturally bear the brunt of the burden because college graduates will earn higher incomes. You don't need to invent a complex secondary financial industry to accomplish what we're already doing. Collecting taxes.
That's what an automatic deduction is: A tax on students. Specifically, a tax on recent graduates and college dropouts. The people arguably least suited to bear the burden of financing higher education. An equitable college finance program would tax already successful college graduates. Namely, high earning adults already established in their professional careers. Even more so, the inherited wealth and investment income generated by these professional careers.
Alexander's proposal, aside from being horribly inefficient, is like asking the infant to pay for their pre-K education. Just take out a loan you can't liquidate even bankruptcy. What sense does that make?
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I wouldn't call offering $90 billion dollars in loans at an inflated interest rate, "generous".
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First of all, everyone should not go to college. Artificially high demand has led to runaway costs and abuse in many areas, from six figure professors with minimal class schedules to Division 1 “professional” athletics with seven figure coaches. I pity the poor parents and their equally clueless children who bankrupt themselves in pursuit of college degrees that mean nothing and guarantee less. We don’t need need any more landscapers with degrees in Global Studies or waitresses schooled in Criminal Justice. What we need is results oriented education. If you come out of high school not knowing what you want to study to become, go somewhere where you can find out: work, the military or public service. Don’t buy a degree if you don’t know what the return on your investment will be.
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@Larry:
As statistics show, the average wages of those with only a high school diploma have been stagnant for about three decades while the average incomes of college graduates have gone up.
There is something hidden in those statistics:
Since almost all of the children of the top 1% go to college, they skew the averages. Included in the averages of incomes for all college graduates are the incomes of these top earners and their children.
They are the ones whose incomes have gone up while the incomes of 99% of college graduates have been stagnating along with those of the high school grads.
What is needed to present a clearer picture of what is happening in the US with regard to income disparity are statistics which show the median incomes of college graduates, not just the mean averages.
As the Scarecrow said in The Wiz: You can't win, you can't break even and you can't get out of the game.
1
Banning colleges with very low placement rates from student loan programs is an excellent idea. Too many for profit institutions take advantage of students by saddling them with debts but giving them no useful education.
2
One fallacy of Senator Alexander’s argument is that a graduate with engineering degree is an entry level employee. An entry level employee does not make the median income for that job category, so that graduate’s level of discretionary income is much smaller than the Senator depicts.
3
To me, the problem is that the college doesn’t bear any of the risk of the student’s post-college career success. Or, put another way, if tuition fees were not paid up front but were a share of the student’s earnings after college, you’d see a different student body for sure.
But widespread tuition as a share of earnings is a long shot.
So my idea: The US should not guarantee any student loans, and for sure student loans should be dischargeable upon bankruptcy. Instead of guaranteeing student loans, the US should loan money to the colleges to put out to the students as aid, and tell the colleges that the college will owe the money back to the government whether or not the student pays the college back. That’d surely lower the number of students with majors that have no hope of a decent-earning career. That’d also lower the number of failed college students who should have been in vocational or career training instead.
2
My state has a 529 plan that I have been putting modest amounts into since my kids were born. State schools and the fact they can work a little during the school year (like they do in high school) and full-time in the summer means that all of us will emerge debt free.
I applaud efforts to expand educational opportunities, and also worry about the fast-rising cost of college. However, it's easily unattainable if you're realistic and organized about it.
3
Why does the Senator need to begin with "Our country has most of the best colleges in the world."? This Trumpian proclamation invokes a chant of "U-S-A-U-S-A". It's certainly not true unless the rest of the world is subject to an inferior level of higher education. I don't think so.
2
@Harpo, this was my first thought as well. Americans, especially their politicians are great at "marketing" all of our institutions as the best. Unfortunately, they use is as a rationale for turning everything into a mega-profit-making-racket. Just look at the military, health care, the justice system, etc.
1
@Harpo
That's a true statement, though. Knee-jerk cynicism serves nobody.
many students can afford the best colleges without incurring crushing debt. The question is should poor students be able to afford them without crushing debt? There have always been scholarships for the smartest of these so the real question comes down to whether not so brilliant poor students be able to afford elite colleges? The answer is probably not, they should try cheaper alternatives like state colleges, some of which are excellent.
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I think it's important to consider, as some have already said, that there is a lack of consumer education involved in investing in higher education. While I can only speak from my personal experience, I can't help but feel that my situation is similar to that of many others who have taken on debt in order to pay for their education.
Neither of my parents or any of their siblings went to college. Both grew up very poor and only learned what financial skills were needed to survive from day to day. There was no financial planning or investing in the future because they needed to feed six children every day until those children could afford to feed themselves.
So when it came time for any of us kids to go to college, my parents had no knowledge of what stood in front of us. My oldest sister had to drop out because they couldn't afford to pay for all four years. From there on, my siblings were on their own to figure out how to pay, and as the last in line with barely any savings I assumed that taking out loans and getting scholarships were my only options in order to get the education I thought was "good enough" to invest in.
Had I truly understood my options and the pay-off for investing in a "better" school, I would have decided on a much less expensive school where I could afford to pay more up front.
High school students AND their parents need more education before making these huge financial decisions.
2
@Catherine
I think there are too many students that still expect to land their dream job and/or have their loans magically disappear upon graduation from college (or law school, or any other post-secondary school).
My son is currently applying to a number of both state and private universities, and understands that the ultimate financial package offered by each school will have to be part of his final decision. He has been offered early admission with merit scholarships at a number of schools so far, so he (hopefully) will have the opportunity to graduate without amassing huge amounts of debt. Plus we are still filling out multiple additional scholarship forms to try and obtain a few extra thousand a year, and looking at work-study and other options at each school.
One of his cousins graduated about 5 years ago from a school he is considering, with a degree that she has yet to try to put to use. She worked part-time teaching snowboarding for a year or so, traveled around the country in a van following her boyfriend (who has a real, full-time job) from place to place for a few more, went to India to study yoga for three months, and has yet to work full-time. Now she complains about the tens of thousands in student debt she still has to pay off (and I doubt her parents will be able to help). I fully support taking a gap year or being a ski bum, but do it before running up soul-crushing debt. It's harder to do these days, but many people I know have managed.
The reason students have so much debt is that Republicans since Reagan have given away so much in taxes to rich people.
California state schools used to be free until Reagan cut taxes and imposed tuition rates. Both tax breaks and tuition have expanded beyond our capacity to accommodate them.
Tweaking forms is not a serious proposal. And anyone making $60K in the Bay Area can't afford $350/month for school loan repayment. An average apartment in SF costs $3600/month.
The fix is not to make it easier to take on debt, but to reduce the cost of education. We will recover our investment when graduates pay their taxes.
4
@Occupy Government luckily California is governed by Democrats so they can raise taxes to offer free tuition if they like. New York started offering tuition free education for their state schools to lower and middle class residents. California should do the same.
How about restoring the funding that has been cut from state higher education, and investing in public colleges again?
3
@nell at least you’re in New York which offers free tuition for state universities. Other states should follow your lead.
socialism! never! why should we make a COLLECTIVE (Commie) investment in somebody else's kids? who cares about the future of strangers when there are boat slips and greens fees to be paid today? love, the Republican Party
Maybe there should be consideration to allow student aid borrowers to declare bankruptcy. Similar to every other loan backed by a financial institution or government subsidized, the individual should be allowed to file for bankruptcy. I understand allowing the bankruptcy option will probably raise interest rates, but it would also provide a viable option.
In addition, I do not think we can look at this financial crisis as being the sole concern of the student. Universities must also consider ways to reduce the cost of attendance. One example is to allow students to opt-in on non academic fees. Students should be forced to pay for intercollegiate athletic fees, student government fees, recreation and intramural fees, security fees and similar. Let the student opt-in and pick and choose. And, students should not be taxed for new building construction that they will never use during their time
1
Lamar Alexander only addresses the existing problem but with weak "real world" solutions. It is very clear where his party stands on this overall. The State of the Union address given last Tuesday made it perfectly clear assisted social programs, past and present, are the Democrats further push towards "socialism". This includes higher education. Apparently all the federal social programs the Red states rely so heavily upon are not counted.
And, remember: education to Trump is a capitalist exploit given his criminal background regarding his now defunct Trump University.
Real progress on this issue of affordable education will be made when the Republicans come to the table and freely admit that they rely on public assistance as much if not more than most and we can start negotiating programs by first not calling them the Democrats push towards the nation becoming "socialist".
For now, this socialistic branding towards meaningful programs is the same old diversionary tactics employed by Repubs and Trump, including Lamar Alexander, to keep their voting base disillusioned.
2
Regretfully, Senator Alexander doesn't touch the main problem -- dwindling public financial support for our universities, shifting the cost to students.
I taught at a state-supported university in Kentucky from 1971 until 2013. When I began, the annual budget for our university was about 60% from state funds. Now it is under 20%. In contrast, I calculated in 2015 that our student tuition and fees, even controlling for inflation, had grown by 500%.
Is it any wonder that so many students are crushed by student debt? Or that the percentage of high school graduates who choose to attend college is falling?
If America wants an educated citizenry, we need far greater public investment in higher education.
7
I agree 100% that we need to change incentives for colleges to reduce costs and improve job placements and repayment rates.
Not sure about the suggested payment plans. Sure, it would be nice for someone with a steady paycheck to have their payments automatically deducted. But what about someone with variable income, multiple part-time gigs, or income from tips??
And suppose Joe has a bachelor's and master's from an Ivy league school. How long will it take him to repay $200,000+ on the 10% of discretionary income plan? And if he lives in an expensive city like NYC, will he pay less per month because his necessities (rent) cost so much? Would incentivize young people to live in high-cost cities, but joke's on them because they will be in repayment for decades.
Like healthcare, college tuition has risen much faster than wage growth since the mid 70's and therein is the problem compared to 1946-1976 period.
Just increasing either government funding for universities or providing increased government loans to families without some limits on the ability of colleges raise tuition does little to solve the cost problem and may even exacerbate it.
Most striking to me is the amount of amenities ( luxurious dorms and rec centers) with attendant costs compared to same options for students of the 50's, 60's and early 70's.
Together with these amenities comes the personnel cost of added staff not involved in teaching or research.
I believe for some students a partial solution may be found in on line learning in certain fields from accomplished institutions.
1
You are missing a big component of all this. What about the debt that parents take on to cover college expenses? While my kids are assuming a lot of debt in govt. loans to pay for their college, I am assuming much, much more, in private asset-based loans, that I will be paying for the rest of my life ($150k so far, and they aren't done!). That is an albatross that will have a major effect on my retirement well being.
3
These may be fine ideas, Mr. Alexander, but they don't address the fundamental problem of tuition being too high.
I attended the University of California at Berkeley, one of the top schools in the world, 40 years ago. I could earn much of my tuition simply by working over the summer - scholarships and my parents covered the rest.
This was because California once upon a time heavily subsidized higher education. Since then California and most other states have drastically cut higher education funding, laying the burden on students and their parents and reneging on the promise of low cost college for their citizens.
In our modern world, a bachelors degree is as essential for success as a high school diploma was 50 years ago. States must understand this and once again step up and fund higher education out of tax revenues.
7
Here's a simple solution: Stop cutting public funding for higher education.
Tweaking the rules and processes for accessing and paying student loans is nothing more than a band-aid on a gushing head wound.
7
Part of the issue is colleges have to cut costs. They have to disengage from the arms race to get higher rankings and also stop spending money on lavish facilities. Perhaps cut back on high marketing budgets. Colleges have to tighten their own belts.
2
Mr. Alexander you are a republican hack, the problem of the student loan debt crisis has nothing to do with the forms. The problem is that funding for college was privatized. That 1.5 trillion dollars that is owed by students for their education is owed to private lenders who have pushed uneducated kids into signing away their their future.
I know about this first hand, I currently owe $275,000 dollars, and if I were to spend the next thirty years of my life repaying that loan, I would pay a total of $650,000. Less than $100,000 was actually paid out to me and the colleges I attended, the rest of the balance was tacked on in consolidation fees and compounded interest.
The current system has created a $650,000 incentive for me to never pay a cent of this debt back...
5
@Charles Anderson
obviously, you pursued the wrong education at the wrong colleges.
While I have much sympathy for young adults suffering from student debt, they should also take a certain amount of responsibility for taking it on in the first place. Did the prospective student ask: How will this degree help my job prospects? Am I entering a field that is saturated? Will this field actually support repaying my debt? Can I receive similar education at a less expensive institution? Do I even need to get a college degree to perform the work I want to do? Have I exhausted all avenues of financial aid before borrowing money? What do my high school counselor, my parents, or a trusted adult have to contribute in advice? These are very important questions that need to be answered long before filling out student loan applications.
1
From the title of this op-ed I thought Lamar Alexander may have some ideas to make college more affordable. Instead, I found that he is offering how to make paying off student loans affordable, and how to make the loan applications easier to fill out. This appears like the advice from a school counselor or a financial adviser. I expected substantial policy proposal from someone who has headed a University as President before becoming Senator.
It is well known that rising cost of tuition is the problem. This is a problem because of under-funding of colleges by the states. The under-funding is due to tax cuts at state and federal levels. The colleges pass on the costs to students. This cost has been increasing at a higher rate than average inflation rate.
Only private colleges are doing well because their endowments are ballooning due to investments and rich alumni donations. But most students go to state colleges, not private ones. They need to be able to afford college on their own and not through debt. This piece reminds me of what Wilbur Ross, the commerce secretary, is reported to have said during government shutdown. Why don't the federal workers take out loans to meet expenses during the shutdown? It is sad that the secretary of education has not even a single idea to improve higher education funding.
7
Mr. Alexander,
Your suggestions all serve to protect the lenders. How about protecting Americans seeking higher ed? Quit running higher education on a business model and return to an education model. Quit paying administrators obscene compensation while 70-80% of faculty are paid minimum wage. Quit creating more and more unnecessary administrative positions that create and track numbers simply because technology makes it possible to do so. Quit turning college bookstores over to Barnes and Noble and running them like a 7-Eleven. And while you're at it, quit turning universities into resorts and return them to the business of educating.
9
Make college cheaper instead of trying to figure out how to pay for an overpriced product.
6
@Doug Feinburg
online education is the future, not paying a king's ransom for a "college experience".
As a college professor here, I would say that the red herring is that everybody needs to go to college. Because that's the unspoken assumption of this article and others.
My observations as an instructor and adviser are that many college-age children (especially boys) are simply not ready to be in college. I see multiple students who have no clue what to major in, even as juniors. We give them opportunities to explore multidisciplinary courses, and do intensive advising and mentoring.
Now, aimless students have probably always existed, but historically, college attendance was nowhere near current levels; people delayed entry for a year or two, or took up service opportunities first, or maybe worked or explored the trades.
Now, it's the "everyone goes to college" model, and if your child doesn't, than it seems as if you failed as a parent somehow. Student retention rates are bad and getting worse, even with campus-wide initiatives shepherding them along. Yet, most students that do make it and graduate go on to jobs with much lower pay than those in the skilled trades... or they simply get back on the graduate school bandwagon. How many white collar professionals do we need, exactly, in America? How many scholars?
College is wonderful place. But not for all. And not even for most, at 18. Why did we expect this to be true when it's such a recent development? What's wrong with college at 25, or 30, or never?
6
Maybe not everyone "needs" to go to college, but 40 years ago everyone "could" go to college. The tuition at U. C. Berkeley was zero.
With increasing automation and robotics, college is becoming more, not less essential.
And what about those who do "need" to go to college but cannot afford to do so?
I have some questions for the Senator.
Why are we forcing students to take out loans for the total cost of education at all?
Why is government-funded higher education a business when government-funded primary education is not?
If a student makes a higher salary leaving college, and pays more in taxes, is not paying a loan back to the government double taxation?
Why is the government allowing state-run colleges to employ part-time professors (adjuncts) at a quarter of the rate of full-time professors (usually at poverty wages), use these adjuncts to teach the majority of classes, and yet continue allowing colleges to increase tuition?
5
These are the first rational thoughts from a Republican that I have seen in a long time. I might not agree with all of these but at least there is thought and reasoning behind them.
1
When I went to a private Catholic university in the early 1970s, I could expect to get a job after graduation with an annual salary at least equal to the entire cost of my tuition over four years. We're talking about $10,000 - $12,000 for a bachelor's degree, and at some schools, that total cost might also have included room and board.
Today, we have freshly-minted university graduates taking starter jobs that pay $15 - $20 a hour or $30K - $40K per year, but with $30K - $40K in student loans to pay off on top. Even $60K a year ($30/hr) doesn't go very far in many geographic areas to cover housing and living expenses and then you have student loan payments on top of that.
The result is young adults remaining single longer or couples postponing having children (and not many at that) into their late 30s and early 40s as they are stretched financially. It's a double whammy.
In the meantime, my electrician comes into to replace an attic fan or upgrade electrical wiring for a new appliance and charges me $80/hour. He might have some college education, but more than likely he joined the trade out of high school with perhaps some vo-tech training and certification along the way.
Not everyone needs to or should go to college and university. Those schools repeat the mantra about college graduates earning more than high school graduates, but that's not entirely true - many contractors I know do very well without a bachelor's degree.
2
All a good start, but most of what Senator Alexander is focusing on is the back end of student debt - after students have already accumulated debt. What about making the front-end, college selection more transparent for students and parents. Here are simple steps to give the consumer (families) better information up front to make a more informed college decision and avoid excessive debt for students AND PARENTS:
1) Require college net price calculators to be accurate, not just estimates based on old data
2) Require colleges be transparent about how they offer aid, whether it's based on need or merit. Right now for many schools this is a black box to applicants. If the college is giving out money based on merit, show what ALL the requirements are.
3) Share statistics on employment of recent graduates and loan repayment rates
4) Update the federal methodology used for FAFSA, not just the tables used for allowances (which keep decreasing significantly). Change the calculations. The current results have nothing to do with reality of what a family can afford to pay.
5) Start quoting parent debt for sending students to college. The numbers quoted usually don't include parent plus loans.
Fixing problems with existing student loans is important, but help families up front in the college selection process and maybe we can avoid a lot of the student debt problems in the future.
1
States don't subsidize college like they used to. There are a lot more students than there used to be. State tax dollars are needed for Medicaid, K-12 schools, and infrastructure; state taxpayers are not willing to pay more. Graduates receive the lion's share of the benefits of people getting degrees, not society at large; graduates should pay for that degree.
Sen. Alexander's proposal for paying off college from future earnings is entirely sensible. I would go further. Colleges should only be paid what the collection from the graduate delivers. If a graduate doesn't earn much with his/her degree, and particularly if the student didn't graduate and thus isn't earning much, the college should feel that pain by not receiving as big a payout from that student. Degree mills that make big promises and deliver little in terms of useful qualifications would suffer most if their graduates are not earning much post-college.
Finally, art-history majors cost less to educate than engineers, but may make less post graduation. Colleges should be able to choose the percentage of future disposable income they will receive, and it should depend on the degree program of choice. Different colleges and programs should compete to offer the best deal (lowest percentage).
2
Imagine the real economic stimulous for everyone - rich and poor - if the $1.5 trillion tax cut for nothing went to pay off the $1.5 trillion in student debt instead! You wouldn't have highly educated students desperately taking minimum wage jobs to pay off a lifelong debt. Those hiring know they can lowball salaries to those most in debt and thus most desperate.
Irony is that a college education does not benefit students and graduates as much as it benefits the banks and those that hire them for their learned skills and expertise for a sublivable wage.
Red tape? Overhead? Archaic? That's nothing less than profit! As in healthcare, the private sector will never give up the profits generated by the inefficiencies they have intentionally introduced to maximize their wealth amassing efforts.
The wealthiest increase their wealth - and wealth gap - by increasing the debt and desperation of everyone else. Yet those same wealthy insult us by claiming to be geniuses for having amassed such astronomical wealth all by themselves.
Sen. Alexander, how about having the income tax deducted from these indebted graduates' pay check, go to pay off the loan instead of subsidizing the government of and for the rich? Higher income means higher income tax that pays off the loan faster. After the loan is paid they will be productive citizens of society paying taxes to the fed - unlike the kleptocratic class who have left the rest of us without any skin left to give in this cruel rigged "game"
3
To propose that something be more "affordable" usually implies bringing down the cost in some way. That's not what I see here. This looks like more loans for more people, paid back more quickly. How does that help?
4
I was one of a lot of kids who were told “you’re going to be going to college”. No negotiation; this will be happening. I don’t want to whine since a lot of kids don’t have that ladder of opportunity available to them at all. I just wish someone else had gotten to go in my place.
I earned close to $20k in scholarship money, worked up to four concurrent part time jobs by junior year, and graduated with $25k in debt. I’d still be paying the loans off ten years later if a distant relative’s passing didn’t throw me a small golden parachute. I worked two jobs at 65 hrs/wk upon graduating, and the loan payments ate up all of my disposable income. I wish I had done the punk thing, flipped off my parents, and not thrown my life away because, I don’t know, we were worried about what the other parents would think? If you’re going to basically accomplish nothing anyway, might as well have some fun.
At our school, there was an internship/service/research requirement. I worked two summers for free as an intern, but they wouldn’t let that satisfy the graduating requirement after the fact, so I did a third. I published baseball research and was “strongly encouraged” to have faculty sign on who were literally confused by the work I was doing. A year after graduating, I had no career leads and rarely saw a person on a typical day.
The world’s largest library is online and mostly free. Not all fields work like this, but I’d have advanced further in mine by researching/writing from home.
@Ryan Swanzey, the same mindset held in our family. "You're going to college!" When I wondered out loud about just getting a technical education in electronics, my father was appalled. "You're going to be a TV repairman? When I wondered what it would be like to work at a local radio station, my stepmother wailed, "You're just going to be a disk jockey?"
I think that "going to college or else" mindset was very common among parents who grew up during the Depression and knew that the key to upward mobility was w white-collar job. It certainly was for them, but the cost was nowhere near what it is today - and with no guarantees that you'll get that lucrative job right out of college.
1
A long time ago, America made a decision that we would pay for the education that a person needed to be a participating member of the economy. At the time, that was high school. Everybody gets a high school education on the government's dime.
The world has changed since them. Now you need college or an apprenticeship, but we pay for neither. Education has been in effect privatized, and generations of Americans are going into hock for something that they need to have.
Not so long ago, you could get a college education for a lot less, especially in the state college systems. It wasn't Ivy League, but it got you into the job market with some essential training. Now even that is expensive.
It's time to reverse this process, even if some rice bowls get broken in the process.
2
My recommendation would be to shut down all athletic departments. Money spent by alumni associations on sports and training facilities for athletes could be better spent by reducing tuition and building state of the art labs.
4
Dear Lamar,
Your ideas leave out the biggest problem -- the interest rate on these loans. They are far above the 10 year Treasury Note rate. Why is it that you support lowering tax rates but not rates on the loans needed to support the education you say should be available to all Americans who want to pursue it?
4
In the Senator's example, taxes are apparently discretionary. Who knew? And how does he get to the $18,735 needed for necessities? If you consider that the average rent for a one bedroom apartment in a major city is at least $1,100/month, that alone comes to $13,200, leaving $5,535 for food, gas, insurance, utilities, etc. Is that even possible?
2
When I attended a Big Ten university in the ‘70s, students could pay their school tuition by working a summer job. Taking out loans were unheard of.
The author doesn’t address the root cause: school has become unaffordable. Why? The numerous articles on this subject have not satisfactorily explained it. We must focus not on how to make loans more efficient but how to make college more affordable.
4
Thank you Sen. Alexander for your thoughtful contribution. I came of age during the time when university (and vocational) students were seen as the future of our nation. Does anyone nowadays recall the National Defense Education Act, signed by President Eisenhower? Now, students are seen by many institutions and lending agencies as just another commodity and donors to many huge, administratively bloated universities. Some of these institutions are land-grant universities who until a few years ago were largely responsible for an educated middle class in the USA. I served on the faculty of one such, Big State University, for more than 20 years and was appalled at just how greedy and money-hungry the institution had become over the course of my tenure there.
It is now no wonder that many of our smarter students are leaving the USA for studies abroad, Germany for example, where excellent educations are available at little cost. I am also amazed at the internet offerings by many reputable institutions of in some cases, more than 100 undergraduate and graduate program offerings. Seems to me that we need to do a comprehensive study of our system of higher education, including vocational-technical. I still think of our young folks as holding the future of our nation in their hands and brains.
1
How about we drop college athletics. with its obscenely high salaries to coaches? Surely that would cut college costs substantially.
4
As a parent of three, the last of which is in their final year of college, my only goal regarding college was to get them through it, financially speaking. All told, they made the most out of their educational opportunity. Two are employed and one is pursuing their masters while working full-time. The last one is still a work in progress and may seek to go onto grad school. We have made it clear to him as we did his sister, that he would need to figure that part out.
Our children didn't earn scholarships or weren't up for grants. Instead both they and their parents had to take out loans to cover both tuition and housing/food/books/etc. Each one is paying off (or will be) the typical $28K-$30K for the tuition portion of their state university bill. Luckily one of them is in a position in education that might very well permit her to absolve her loans over time. But that's just the kids.
We, their parents, also have student loans that are in fact massive. Our share is about $80K per kid per four-years. We live paycheck to paycheck but made too much to permit our kids to be awarded grants. So we went into great debt for the sake of our children.
I still hold out hope that we will be able to bear the burden of our side of the loans as much as I hope that our children can keep up with their debt obligations.
But boy would we love some level of relief. Unfortunately, Mr. Alexander's plan does nothing to address anything.
5
@It's Not Just Our Kids
You are the problem. Your kids are the privileged caste that continue to contribute to the inequality woes of our social fabric. You should have cut the purse strings as soon as they entered public school kindergarten and redirected your financial contributions to supporting your community.
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I think the best way it address the underlying costs of providing classrooms and lectures.
Because the economics don't really make sense when you take $50,000 tuition and divide it by 32 weeks of classes, comprising 15 hours of lectures per week.
That's almost $100/hour for a student per class lecture. Sometime with 15 people in a small class ($1500 total cost), but often with 100 students in the lecture hall ($10,000 total cost). And these are lectures that are substantially identical to those being given at colleges across the nation.
Well, some majors require labs and computers. OK fine, so then do English, business, accounting, law or economics majors (who just needs some books) get a 75% discount on tuition?
I really hope someone figures out how to disrupt this industry.
1
Start with the costs Senator! College costs and health care costs have both increased several times the rate of inflation over the last thirty years.
Colleges need to stop raising prices so fast the students can no longer afford an education.
2
Senator Alexander has some good ideas but he's way off base in his assumption that the average student debt is $28K. That may be true for some students going to state colleges and living at home and receiving some form of scholarships. I personally know of many students that are leaving college with bachelor degree owing well of $50K in student loans and if they go on to graduate school their debt can be easily over $100K.
The cost of secondary education is a real problem for today's students as the debt is a hindrance in qualifying to buying a home or even a car in some cases and it's not just the students. Many parents have Parent Plus loans that exceed $100K just for undergraduate degrees with interest rates exceeding 7%. This is a trend that will eventually stifle this country's ability to be competitive on a global scale.
The $40 billion or so that Trump wants to spend on the wall would be much better spent if at least a portion of that money went to help students and parents with the extremely high costs of secondary education.
2
As a parent I was saddened when my own child decided the costs of attending Yale would be too much, too for them, and too much for middle class parents, and so our child did not apply for the 2019 term. The other school choices our child made are fine but they are not Yale. I felt the heartache along, with my own child, when we realized an Ivy league education was beyond our middle class income. I'm not saying my child was admitted, I'm saying they didn't even bother to apply because of what was projected to be, based on calculations of the projected costs, indefensible future debt. It felt like a Caste system.
2
The tuition amout is in black and white. The students know they're going to have a huge loan to pay back every month after graduating.
They fall in love with the columns, the ivy and all the trappings of an idealized version of college life.
They can't sign up for those loans fast enough. They get accepted. They get the degree and then cry that they can't afford the payments. The college can't repossess the education. That bell can't be un-rung.
I finished high school very close to the top of my class. I got accepted to Smith, Mt Holyoke, Amherst and Tufts. My parents were public school teachers and they just didn't have the funds to send me to these institutions. I went to U-Mass, Amherst and became a social worker. I paid off my loans and later went back to school to get 2 master's degrees on my way to becoming an LICSW, no loans.
I save my money and what's left, I don't spend foolishly. I own my own home and a small cottage close to the beach. I paid for my 2 year old Toyota with savings, no loans.
The cries of poverty from college grads don't move me. They knew the cost but signed on the dotted line willingly. They remind me of people who bought homes wildly out of their league and complain about their foreclosures.
Am I expected to bail out them as well?
6
@DontBeEvil
Lucky you. Now relax! Just because you figured it out doesn't mean everybody can. Stop it with "If I didn't have that, why should you?" mentality.
@DontBeEvil . . . Perhaps if you got a better education, you would realize that your own experience is merely anecdotal, is not generalizable, and is in no way the basis for public policy.
If there were ever a good reason to socialize anything in the United States, it would be secondary education. We should never view knowledge as a for profit entity. Higher education should be considered a matter of national interest and ongoing security. Tuition rates should be set according to a national baseline, salaries established by Congress and job placement assistance a part of the senior year curriculum. A student would still be required to pay for their education based along guidelines such as working 35 hours a week at $12 an hour for three months of the year. This nonsense of graduating and being $140 thousand in debt is absurd.
3
I just got back from a trip to South Asia where college is free for all who have the grades to benefit from it. Why are we wasting time on all these complicated repayment formulas. Let's just come up with a single sliding scale that says if your family income is less than X, you don't pay anything, and then moves up the income ladder with reduced payment by income that makes it affordable for all.
BTW, many of the folks in Nepal and India who are getting degrees in computer science and other technical fields at no cost in their home country then come here. We bemoan the foreign influx in these high paying fields, but don't make it easy for our own citizens to qualify for those jobs.
This is madness.
5
maybe put a cap on educator's salaries and compensation to keep educational costs under control. this seems to be part of the socialist's solution when they confiscate successful industries like innovative healthcare and energy production before outlawing market competition.
1
This is completely false. The average college professor makes much less than you think due to the entire culture of temp workers- the adjuncts. Colleges will typically have a handful of full-time faculty, but the majority will be part-timers trying to get the coveted tenure-track job so they can finally START their career. Instead, colleges need to dial down payments to administrators who have redundant or useless jobs, yet have $60-$100k jobs. Colleges have become far more bloated in the past few decades with costs being high for little reason. It also doesn’t help that bonuses are paid to top administrators, yet the professors don’t get anything.
1
I greatly respect Sen. Alexander and has known his commitment to education for years. However, this article misses the basic point: our college system in fundamentally wrong and unnecessary (except for the college faculties and administrators running this multi-trillion empire). The students should learn in high school what is usually covered only in the first two years of college. This is the practice in most European countries, where I got my education many years ago. The last two years of high school, the lyceum, prepares one for the university and offers choice of humanistic, biological, mathematical and other majors. Those not interested in university education can go instead to high schools that combine general and professional curriculum and produce highly trained professionals ready for the job market. Needles to say, all that education is free and includes stipend for living expenses.
I have known students from Nordic countries who spent a year in USA as exchange students. They told me that they loved initially our high schools which were very easy, but after they returned home they realized how little they learned and they had to take remedial courses to catch up with their peers.
4
The solution is obvious and relatively easy: state legislatures should mandate that state universities offer the first two years of college on-line for a nominal fee. There are no technical hurdles, and there is no difference between viewing a computer presentation in a class room or at home. This would also result in massive taxpayer savings as well as environmental benefits.
2
@RC. So the taxpayer is supposed to to bear the burden? Howe’s that fair?
How about a fourth one: colleges should stop spending money like drunken sailors on all sorts of things that students don't really need to get a good education. Colleges are looking more and more like fancypants country clubs. The food should be ok but not great. The gyms should be ok but not great. The research should be self-funded on a different balance sheet. All professors should have to teach multiple courses all the time. Sure, it helps to consider how students and families will pay/repay the exorbitant fees that colleges charge, but it would also really help to have colleges reduce those fees through less liberal spending on lazy river pools, new dorms, etc.
6
College presidents in New England rake in anywhere from $1mill to $1.6 mill annually. Add in all of the other administrators, and you can see that these completely unnecessary costs are a significant part of the problem. And this is at the supposedly "non-profit" schools. (Why do we even HAVE for-profit schools? Why is that even allowed? Are we ALL about money, all of the time, in this country? If so, God help us.)
4
@Grolb
The hockey coach at UMASS makes 485K. UCONN lost $40.5 million on athletics last year. When you have an Athletic Director making 600K a year and they are looking to move onto to a higher paying job, they are never going to say "Gee maybe we should not be spending so much on sports."
2
Don't forget the millions in athletic coaches' salaries -- those far outstrip administrative salaries.
2
Why does college cost so much? I think schools should be required to report breakdowns on how they spend the money they receive. I remember teaching 2 classes of 30 as a Grad student. I earned about $3000 for teaching the courses (by the way, I wasn't qualified to be teaching it). Each student was probably paying about $500 for the course's credit hour. So the college received about $30,000, and 10% of that revenue went to me. So what did the other $27,000 go to? Each students share of my salary was all of $50. So what did that extra $450 cover?
Student money is not being spent prudently by these colleges. I think if you asked the average student, "would you rather not need loans and attend classes in an outdated ugly suburban office park, or need loans and attend the same class at a place that looks like a country club, what would you pick?" - they'd go with the first option.
4
@MC
Excellent points all. I have often wondered how colleges operate financially. You said you taught two classes of 30 each, but what if you taught two classes of 40 each, you would still receive the same pay, right? And the college would get even more money. It’s not like making widgets where there is a cost for raw materials, production and labor, which you can calculate. Need more raw material? Buy more. But the raw material in college is the student, and whether it’s 15, 30 or 40 in your class, you’re teaching the same course, the same way, and the same hour(s), except that if you’re teaching 40 students, you’re grading more papers, but for the same pay. Your workload is greater, but the college makes more money the more students you teach, unless you are paid on a per-student basis, which I doubt.
1
@MC
someone needs to pay for the retired professors and former staff.
Senator Alexander lays out some very good options. I especially like the accountability system for college programs. We need to have a serious conversation about which majors are worth funding and which ones are not. Why should taxpayers foot the bill for someone who is paying $50k per year at a private college to study art history? The cold hart facts show that someone graduating with a humanities degree will never make enough money to justify that college tuition expense.
Americans also need to be held responsible for their decisions. If someone decides to go to a private college versus a state school, they should be held liable for all debt they take on. Parents should be responsible for guiding their children to the most financially sound option. Where is the concept of personal responsibility?
1
@PK if only it were so easy. Public college in NJ costs $28,420 per year. Even if I send my son there he will be in debt up to his eyeballs. He's a very smart kid, very high IQ, but I'm afraid I will be encouraging him to attend community college for 2 years.
Why is it that our economy is predicated on Americans living beyond our means? This is alarming when considering the struggle of the middle class. Wages have declined due to cheap overseas and domestic undocumented labor. Our once respected careers in the trades has been relegated to the underground economy.
It is no wonder that many to fall prey to rip off government backed school loans. The colleges are not complaining as long as the money comes in. The students, tax payers and parents are getting taken to the cleaners.
The career politicians are offering to help us out of problems they created in the first place. Government has no business in backing student loans, or promoting the financial industry interests.
College wouldn't have to be a financial albatross if Republicans would stop voting for huge tax cuts for the wealthy and instead invest in education in the US. Forgot building a wall we don't need and help students obtain an education.
6
@Jacquie
An article is finally written in the NYT not about Trump and the commenters have to go and ruin it. Not even closely related. Brutal.
I think there's one huge point not addressed in Mr. Alexander's discussion of how to lessen student loan debt and that's the obscene interests rates charged on student loans.
I have two kids, one a doctor and one a Physical Therapist, who are both paying off student loans. They have been paying on these loans over the last few years and their loan interest rates range anywhere from 6.5% to 8%. Now realize during these last few years interest rates for things like homes, car loans, etc have been dramatically lower than these rates, most being anywhere from 0% - 3.5%.
So why do we penalize these students for trying to better themselves by charging them such exorbitant interest rates? It makes no sense at all. These people represent the future of our educated society and yet we penalize them for trying harder. It's shameful to see this happen and the sad thing is it's one of the easiest things that could be fixed about the system - just don't let lenders gouge students on these loans and cap the rates.
8
Wow. Swing and a miss. The problem with college is not repaying the debt. It is the fact that we as a people, through our state and federal governments have stopped seeing education as a public good and now see it merely as a private good. Accordingly, government support of education is way down. We need to view college not merely as a way to pump out new workers, but as a way to create and empower the population as a whole, people who can understand and grapple with our real world problems.
And speaking of which, your single engineering student with $28,000 in loans and a $60,000 starting salary is a terrible example. He will have no problem, even under the current system. What about a young couple, one a teacher with a masters and $60,000 in student loan debt, the other a police officer with a degree in sociology and $40,000 in student loan debt? The teacher starts out at $38,000, the police officer at $43,000 and unlike the engineer, they are not going to seeing a tripling or more of that salary. We have hamstrung their ability to buy a house, have children, or get ahead in life.
We are systematically transferring the nation's wealth from the middle class to the rich, and student loans and failure to give public support to universities is one way it is happening. You can - must -- do better, Senator.
11
The real problem is that when a student takes out loans, the school gets paid regardless of whether and if the student will ever repay the loans. Schools have no incentives to keep costs down; in fact the opposite. Make school funding tied to graduation rates, job placement rates, and student default rates.
3
Some decent ideas to correct a horrific situation for both our country and all the people in it. My child just graduated from an Ivy League school with a debt of over $80,000. Add to that another $40,000 that we acquired for the education. And of course there are the out of pocket payments to the school, which were more than all the loans. And this is WITH help from the school. And the price keeps climbing about 10% per year. I don't think I need to explain how this issue impacts every aspect of our society.
"My third proposal is a new accountability system for college programs based upon whether students are actually repaying their loans. If too many students aren’t repaying, then that program could lose its ability to enroll students with federal financial aid."
YES !!!!!
I would put the college on the hook for repayment in the event of a student default so that taxpayers are not.
1
The problem I see with this approach is that often there are new and unforeseen factors that can affect graduates’ employment prospects. For example, I entered law school in the mid-1980’s at a time when pretty much any graduate could reasonably anticipate getting a job. In fact, my university, like many others, overcharged law students in order to lessen the cost for other students whose anticipated careers were less lucrative (such as social work and nursing). The economy took a dramatic change, though, and many of my classmates, through no fault of their own, found themselves either unemployed or vastly under-compensated given their levels of debt. Penalizing the school for economic conditions over which it had no control and could not reasonably anticipate, is unfair.
The truth is that there’s no “fair” way to allocate access to education: there should be enough to go around for everyone. Once we accept the concept that some qualified students can be denied access due to economic factors, there’s no “fair” way to pick and choose which students lose each successive round of musical chairs.
1
@Kathleen L.
The college is in the best position to retrain/reeducate a graduate to meet the changing demands of the market. They are also in the best position to forecast the demand, as well as the supply, more so than any bank or student loan provider.
The best approach is to start saving for college once a child is born. When the student is ready to apply for college, add up your college funds and apply only to colleges you can pay for without taking out a loan. It may mean community college or part-time attendance, but by keeping at it, semester by semester, the student will get a degree. Without taking on debt.
4
@Robert
Great idea for the top 20%, but can most people fund college funds as well as saving for retirement (no pensions) and also paying for essentials? I think not.
Staying within your means when picking a school is always a good idea, maybe including some debt, but not $50K or $100K of usurous loans. Using low interest collateralized loans that do discharge in bankruptcy would also work. Paying as you go, with careful monitoring of expenses can keep costs down, from textbooks, to housing, to commuting etc.
But really, most people need subsidized state universities and their feeder tiers of community colleges and local 4 year public colleges .. which we have woefully cut funding to .. And then promising students need financial aid at those same universities since $20K is still out of reach for average Americans.
Another reader commented about the similarity with healthcare and said the common denominator is too many administrators. I'd go a level deeper: the commonality with the crushing costs for education, healthcare, child care, elderly care, etc. are that a generation has allowed the religion of "the market" to run into every corner of society and try to squeeze profits out of families in areas where our society, as one of the wealthiest on the planet, should be helping families, not exploiting them. We should want better educated, healthier citizens. Instead, we're making it harder. Capitalism should be seen as a tool that can do great good when well regulated. When it's not, greed takes over.
5
This proposal is a starting point insufficient on its face.
Senator Alexander proposes two repayment options, but does not indicate whether and how a borrower could switch between these options when the borrower's life circumstances change. In some cases expedited forgiveness may be appropriate and necessary.
The proposal, as outlined, does not speak to interest rates. Student loan debt is a special case and should have an interest rate equivalent to the Federal Reserve overnight rate. Investment in human capital is just as necessary as subsidizing banks.
The proposal does nothing to curtail abuses in the collection process. Borrowers need due process rights and the ability to require the student loan creditor to provide a comprehensive accounting for original disbursements, interest charges, payments, and other add-ons for collection efforts.
The proposal does not address the criteria for responsible lending and the criteria for the amount of "tuition" financed by student loans. The amount of administration costs in tuition is not addressed.
This is just a Republican carpe diem proposal. The handwriting is on the wall. Voters want the student loan program to be overhauled. The Republican response is to seize the moment and pass a bill that fails to include student loan reforms that are desperately needed by borrowers and does little or nothing to reform the practices that have created the present student loan crisis.
2
Senator Alexander is correct that our methods of paying for college and university studies needs to be fixed. Not only does the current system leave students with onerous student debt, further separates the socioeconomic classes in the country. A 2018 Sallie May study found that parents, using their savings or borrowing, were the largest group of people paying for student education costs. This automatically excludes may working class people. Increasing the income limits for federal aid would help this. Interest rates on student loans are often above market rates. I love the idea that universities would pay part of the coast of a defaulted loan repayment, because too many schools, especially for-profit ones, take advantage of the federal guarantee on student loans and enroll students who have no chance of paying them back. The cost of college has also skyrocketed, and the increases have not been uniform. The consumer price index increased 51% over that last 20 years. College tuition at state public four-year schools increased 79% in the same time period, but increased 168% at so-called "National Universities," both public and private, that do lots of research as well as teaching, such as Harvard, or UCLA. Two year schools only increased 54%, similar to the consumer price index. What has gotten truly out of reach, except to the wealthy, is elite university education, which further stratifies our society, giving the affluent an additional boost over those with less wealth.
1
@Cousy Yes, for-profit colleges might be even more insidious but I think all universities have adopted a "for-profit" model. They continually build the newest buildings, biggest stadiums, and have lawn-work that makes the local golf course embarrassed by its landscaping work. All the while tuition prices go up and up. Some universities can do this...the top ones. But most can't and the students are paying for it for many years.
1
Many politicians miss an important point: college costs rise because of fees. The most egregious fee is the athletics fee; at many universities, students rack up thousands of dollars in debt for a "service" that they do not participate in or enjoy. It would be wonderful if legislators examined the pile of fees that colleges require, especially the athletics fee. Freezing these hikes or reducing/eliminating certain fees would reduce the loan burden substantially. Where is that initiative?
1
The source of my generation's student debt misery isn't red tape – it's the debt itself. College is too expensive. Full stop. Where does the senator's proposal address that? (It doesn't.) Why the lack of interest in rectifying the real injustice at the heart of things here? (He has no interest in rectifying injustices.)
All of the "solutions" presented here are just perpetuating the system that's negatively affected me and countless others in my generation. If Germany and France offer free tuition, we can too.
This does not address the insane cost of a public education at a state university. The University of Connecticut and the University of Massachusetts the flagship state universities payroll is public record. In both these states the top 100 paid state employees are all university employees. I can accept paying a top ranked physician $1 million in salary but these guys also get defined benefit pensions. Does your doctor get a defined benefit pension? Vice Presidents of Diversity and Inclusion making 200K at state colleges with 6,000 students. Underneath these VP's are a staff of 6 people that all make 120K. It's the cost of the education.
1
Republican Senator Alexander claims that "it's never easy to pay for college." Actually, in most other advanced nations in the world it is. German universities charge nothing to attend. So, too, Ireland and other European countries. Tuition and fees in Japan and South Korea are a fraction what they are in the United States, while Korea's Seoul National University, its Harvard, is government-owned and operated, and doesn't charge tuition.
Democrats have proposed free college tuition, funding it by a higher marginal rate on the wealthiest Americans. Sadly, Senator Alexander refuses to even consider anything that would impinge on the wealth of the wealthiest.
Free college tuition for all. Now.
3
What limited, head in the sand, status quo, thinking. Imagine being young today, ready to face life, already limited in outlook, formed, filed and packaged, and held back by the burden of student debt. This was not the case for me fifty years ago. It should not be the case for today's new graduates. Our current system is horrid, horrible, and stultifying--A Damocles sword of debt hanging over the young of America, and their families. We need to make education free, at least through grades 13-16 ( the new necessary high school) and we need to pay for this by raising taxes to 1950's levels, getting rid of any special categories of income that benefit from a lower tax rate (For example, the capital gains tax) while also cutting Defense spending by at least 25%. Tax all income as ordinary income, and cut defense spending. We are no safer as a result of the Bush, Obama, Trump, wars of the last decades. However; because of them, we the people, are more controlled and greater sheep, and poorer. An alternative source of funding might be a payroll tax designed to create an education trust. A tax without an upper income limit, applying to all forms of income and paid for primarily by the employer- 1/3rd worker, 2/3rds employer based.
1
The compounding of interest rates on college loans amount to criminal usury. One child of mine borrowed $30,000 to attend a state school and now owes $100,000. Having graduated in 2009, in the midst of the recession, he worked in the service industry for lack of a “career track” option. He negotiated deferments and paid the minimum, and now he feels he will never catch up. Grad school? Law school? Beyond reach. Another child and her spouse, both with MFAs from CMU jointly owe close to $400,000 because their majors compelled them to borrow living expenses. Even with good jobs in their professions, they will never be out from under.
How many college-educated Americans in their 30s and 40s are NOT BUYING houses, appliances, furniture, and the other big-ticket items that should be generating jobs for others? Not becoming homeowners shuts them out of the middle class and the opportunities to grow any wealth for retirement. And as things stand, they will be forfeiting Social Security because of federal loan debt they will still be carrying in their old age! Allowing exorbitant interest rates on college loans is short-sighted at the very least, and damaging to individuals, families, and the nation in the long run. Congress should act.
2
I agree with Ron that costs should also be looked at. The inflation rate of tuition far exceeds the underlying inflation rate for the economy. Is it driven by increased bureaucracy? The seduction of loans?
I took out student loans for a master's degree program in the nineties. I became ill and had to drop out of the program halfway through, and ultimately ended up on SS disability for several years, during which time I was unable to make payments on the loan and it was put in "forbearance", meaning I didn't make payments but the interest continued to accrue. As I recovered and finally got off of disability and returned to full time work, I started making payments again and have been making them continuously since. The amount owed on this debt now is still more than the original amount of the loan, even though I have been paying on it continuously for nearly ten years. The debt will outlive me, in all likelihood.
Perhaps there should be a plan for tuition free 4-year public college/university instead of saddling the low and middle class with unneeded debit?? This "plan" will do nothing. There needs to be a focus on why tuition costs have inflated so much over the past few decades, not on ways to get the borrows to pay their loans faster. Very typical Conservative thinking that everyone just has money on hand to pay for college. Also, very wishful thinking that everyone/most/10% of people with a BS in engineering is getting $60k a year haha.
1
Few typos in my rage typing.. sorry.
*unneeded debt...
*not on ways to get the borrowers...
excellent comments on the high interest rate charged on student loans--the Federal Govt borrows money at about 2.6% today (10 year treasury bill) so why can't it just charge students about 3% interest on loans?
I agree with senator Alexander's idea to force colleges to have accountability for high rates of their student loan default. Fewer than 50% of college students graduate from 4-year colleges so roughly 50% of students leave with no degree and student debt. Why? I blame the colleges for a lot of this--help your enrolled students graduate and/or do not admit students who can't pass the courses. Punish the colleges financially and they will change.
Community colleges and for profit colleges are far worse then traditional 4-year colleges and universities--fewer than 20% of community college students leave with any kind of degree or certificate. Punish these for profits and community colleges with financial penalties and they will change.
Some sensible goals and a refreshing adult bipartisan presentation. However we must attack the cost side as well. Today's 'business model' for education is outdated and too reliant on real-time, face:face methodologies. Let's find ways to accelerate the adoption of effective technologies across the educational spectrum.
Orrr...we could create a system that lets students attend college without a car loan's worth of debt in the first place.
This no way addresses college affordability. It simply makes paying back a loan easier. Massive personal debt is still required in order to pay for college. Alexander even likens it to a home mortgage. The people at the top in this country have more money than god and the vast majority of the populace has to take out what amounts to a miniature mortgage in order to pay for school. This is not normal.
Progressive taxation on the ultra-rich is the only way out of this quagmire. Alexander won't propose that, as he undoubtedly will lose a lot of campaign contributions and assorted other perks from big finance who make enormous profits on debt. So he comes up with this scheme instead, which actually makes it easier to take on debt. And he has the audacity to mention affordability, while in no way addressing it. And a lot of the commenters are actually thanking him for this! Don't you see? It's all subterfuge. We're not supposed to question the debt itself or the system that produces it. In their eyes the debt they impose on us, and get rich off of, is the like the air we breathe. Inevitable. But it's not. Please stop falling for these shenanigans. Use your heads. Read about the system. And support candidates who propose progressive taxation on the uber-wealthy. It is the only way out of this.
1
How does Jeff Bezos owe me a college education (or health care or anything else)?
1
You could reduce property taxes so parents could save for their children's education. This could be accomplished by bringing education pensions more in line with private sector pensions.
1
As a fellow Tennessean, and with all due respect, I think you have missed the point. It is the cost sir.
The flagship public university in TN has become so expensive that it at odds with the school's mission—to "enrich and elevate the citizens of the state of Tennessee." How many Tennesseans can afford over $100k for an undergraduate degree at a public, state university? Where did I get that number—from my bank account. My son graduated from UT last year.
Sure, tuition is not $100k, but when you add the plethora of fees, like a fee for living off campus (please), it all adds up. Did he receive a solid education—I believe he did. Should it cost 6 figures, no sir.
Stop looking at ways to ease paying the existing cost and attack the cost itself. Why is there such a massive administrative overhead, why is UT in a Carnegie chase instead of teaching Tennesseans, and how did a college become the most expensive YMCA?
11
Thank you, Senator Alexander, I hope your proposals come to fruition. These ideas don't address the entirety of our problems with affordable college for our young people, but they address a substantial chunk of them. Good luck.
1
"Roughly 40 million borrowers owe $1.5 trillion in student loan debt."
So the average debt is about $37,500.
The average college grad makes about $1M more than the average high school graduate over a lifetime.
Sounds like a good investment.
When I was in high school (1963-1967) we took classes required by UCLA for admission. All students who met the requirements were admitted. Tuition was almost $200 a semester. This was right before Ronald Reagan and the Republican Party opened an all out war on public funded tax supported higher education. The rich have been paying less and getting richer ever since. Life doesn't have to be this hard for so many people. The Democrats who have just arrived in Congress are offering real solutions. Republican Lamar Alexander throws out a few crumbs hoping that no one will remember the time when upward mobility was only limited by a person's willingness to work hard and follow the rules, and the highest tax brackets were much more than the modest 70% Ocasio-Cortez is proposing. Sanders' estate tax proposal would also be very helpful. So would Elizabeth Warren's more complex but effective recommendations. Income inequity is the big problem behind all the other problems that Republicans are doing everything possible to not do anything meaningful about.
207
@mary bardmess -- I'm your generation and went to a UC, and your memory is good, but it wasn't "Tuition" -- it was "fees."
I had to check it, because I couldn't remember it either, but you can read it here:
http://www.dailycal.org/2014/12/22/history-uc-tuition-since-1868/
They gotcha with the fees, and this history doesn't include all the little fees they tacked on. I specifically remember a $30 student union fee, and several other obnoxious smaller fees.
Also, was UCLA on the semester system? UCSD was on the quarter system -- that was a gotcha due to registration fees.
My last year at UCSD was 1972, and I remember that by the time I'd paid all the school fees that year it was just a bit less than $600.
Sound cheap? $600 in 1972 is the equal of $3,598.89 today.
A whole lot of the "everything was so cheap back then" completely forgets inflation.
6
@Lee Harrison I'm sure there were fees that could add up against the rosy picture many have of the cost of education. Still, 3598 is something someone can easily make in a summer. In the 60's and 70's someone could pay for their education with a part time job. I graduated from law school 4 years ago and work as a public defender. The interest I pay on my student loans is higher than for my mortgage. Even paying nearly $500 a month on student loans I have not made the slightest dent in my debt. The interest is so high that the entirety of my monthly payments goes to interest. There are so many like me who went to school for an education with a desire to give back to our communities but are now saddled with what feels like an endless debt. For those of you who would point to Public Service Loan Forgiveness, there is no guarantee that the program will continue to exist and 99% of applicants have been denied. We need to stop forcing young people to choose between an education and the very real possibility of being in endless debt.
18
@mary bardmess Your are right about the role Ronald Reagan played in laying waste to government support of higher education in California when he was governor of that state. His infamous rationale: "I don't think the public should be required to support intellectual curiosity." In Reagan's view, NASA scientists would not have merited public support. They were just practicing intellectual curiosity.
16
Yes - college should not be a financial albatross.
Looking at it bottom up: In 2016-2017, the US spent an average of about $13K/year on each K12 student. At the top NY State spent about $22K per K12 student last year.
Elite private K12 education can cost a lot more.
Well done college education imparts and develops more sophisticated knowledge, with more complex labs, higher priced professionals in a number of fields, and more complex infrastructure. Being on the cutting edge in a global economy is not cheap.
Given the above K12 numbers, how much should college cost?
I think the fundamental issue, is how should we as a society pay these costs ?
1
The senator would do well to meet with more actual students and grads than upper middle class parents with cash on hand and the inclination to pay their adult children's loans (good for them and all, but that is really not the student debt crisis in action). Fewer options for repayment and a single plan predicated on recent grads working one job (ha!) that pays above the actual median (ha!) is not bringing solutions to the table.
Private Universities are losing the middle class. If you are in that spot of earning a comfortable living after a few decades of work (> $80k year but less than < $150k), affording a private university is pretty much out of reach for families with multiple children.
To put it in plane terms. The tuition for my alma mater (top 20 school) in 1987 was $24k in today's dollars. The actual advertised cost for tuition on their website is $48k. (Room & board is another $15k a year). When you start looking around, you realize all the private universities at this level charge the same cost. This is payment to a school that has an endowment in the multi-billions.
Until they stop allowing loan agents to treat 18-24 year olds as potential marks and offering unsecured funds that can not be discharged in bankruptcy, these prices will contain to go up exponentially. As long as there is demand, the schools will continue to be able to increase their price.
Lucky, Florida is a state where the university prices are reasonable. State school is the only viable option here and it is why the demand for admission has increased so dramatically in the last decade. It might not be a top 20 university, but at least my kids will all graduate debt free with the ability to chose their career based on what they want to do , not what they have to do to pay a loan.
75
College debt is serious and complex issue. Unfortunately, there is a lack of realistic consumer education targeted towards students and helping them better understand their options and the long term implications of incurring significant debt. This situation is only made worse with non-completion students who amass great debt and have no degree to show for it. In addition to more affordable tuition rates, lower loan rates, I'd like to study the feasibility of some level of loan debt forgiveness at state schools paired with degree completion.
18
It's maddening, the cost of college has outpaced inflation so much that the private college my son currently attends costs 170% more than it did in 1999, the year he was born. I saved, knowing that he wouldn't qualify for financial aid, and every cent I set aside will be spent on his undergraduate degree. I had hoped there would be enough for at least one year of graduate school; there will be nothing left for postgraduate education. I saved, meaning I was diligent putting aside a significant amount each month (several car payments worth) from the year he was born. I only have one child, and I would not have been able to save enough for several children to attend a private college. If I didn't have the saving, I would 100% steer my child towards a public undergraduate degree, knowing that many careers require advanced degrees.
1
I'm an American living in the Netherlands and I bemoan what has happened in the US. I attended a private university in Florida. I had some financial aid and my parents covered the rest. My mother cleaned homes and my father was a carpenter. Upon graduation I went to work as a commodities broker in the 90s. I quickly paid off my loans because in no time I was making high 5 figure and low 6 figures. I thought my children could do the same. In the late 90s I found myself living in the Netherlands. Like many countries in Northern Europe it has a capitalist economy which buttresses an array of social programs. Society as a whole benefits - the patient with a chronic condition, the aspiring medical student from a not rich family. Sure we pay higher taxes for our tax bracket than our counterparts in the US. In fact, we pay about what US tax payers for our bracket paid in the early 1980s - gasp! But here's the catch - if I get sick I will get a bill that amounts to a dinner out, my medicines will cost a few euros not a a full grocery bill and we have access to super education and affordable higher education. My son goes to a well known university for a laughable and very very affordable price. I visit my parents several times a year and what I see is a cannibalistic capitalism at work. Greed that shuts people out, insularity that blinds people to the conditions of their brethren and all this amounts to an impoverishment of opportunity which breeds mistrust and contempt for others.
403
@NL2061DC Funny how what works everywhere else and what worked in the U.S. for years, building a strong country cannot possibly work in the U.S. today. That's craaziness, right? I wonder why so many Americans cannot see that what happened in Russia, with the dismantling and selling off to oligarchs of a country, actually happened here first. Americans built a great country together and the Reaganites proceeded to dismantle it and sell it off to a few who got rich.
57
@NL2061DC
Cannibalistic capitalism- Beautifully put. Two of my daughters who, though they had never lived in Canada before, are Canadian citizens. They attending top colleges there for less than 5k per year, plus they get generous financial aid. For awhile, I wondered how the Canadian taxpayers feel about subsidizing the girls' education. It turns out that those taxpayers will do just fine on its investment because the girls love it there and plan to stay. Instead of being saddled with a lifetime of debt, they'll be free to pursue their interests. The inanity of our education and health care system will some day come back to bite us.
44
@LK I’m a Canadian citizen, living in Canada but working at a US university. I’ve been there for over 20 years (tenured full professor) and have watched my students despair over the cost of their education and their need to make tough decisions and sacrifices to get their degrees. When my daughter was ready for university she could have attended my institution for half price the in-state fee. It was still considerably more than the cost for her to attend a very good Canadian school. She’s graduated with no student loan debt and has a terrific job. Making education truly accessible and affordable for all should be a top priority (rather than walls and tax cuts that benefit the wealthy).
12
One, college isn't trade school. We need philosophers, historians, and even women's studies majors. Just because those skills aren't recognized by employers doesn't mean they aren't vital for a functioning society.
Two, we've allowed college to get way too expensive and for it to lose it's intended purpose. The purpose of higher education is to create an intelligent, informed electorate with critical thinking abilities. It's no coincidence that Trump lost the college educated vote.
Spin off sports teams, stop building expensive unions, beautiful dorms and dining halls. Go to a primarily online system...badically cut costs in half. Then make college free. The increased tax base would pay for it.
1
Great ideas. It's nice to hear a republican talking about these issues. However--one thing you did not mention: interest rates. I have 7% interest rate on my government consolidated loans (these are not private loans--these are government loans). These were taken out just before 2008 when interest rates were very high. The government FORBIDS borrowers from refinancing their loans when interest rates change. All told (including graduate school), I had $70,000 in loans. For a year I was in forbearance (economy crashed the year I graduated!). But then I got a great job afterwards (relatively low-paying, but a solid, full-time job in my field), and I have been paying 10% every month (or whatever amount the Income-based programs require that I pay). Because of the interest rates—and despite paying for nearly 10 years—my loans are now $106,000. I am significantly FARTHER now from paying off the debt than I started. As you might imagine, I feel very, very frustrated (angry as well). I did everything Senator Alexander suggested in his article. But my financial situation is a disaster (and not yet getting better) because of the interest rates. Someday, when I win the lottery, the government will get their money with all the capitalized interest they are earning. And they will make a windfall on my family's suffering. Maybe they can "give it back" as a tax break to a billionaire somewhere.
442
@Chris
I agree. Education is an investment in the future of our country. Those who earn a degree should be charged a very low interest rate on their loans—say 2%.
34
@Mary
So, you just expect taxpayers (70% of whom have declined to go to a four-year college) to pay the difference between 2% and today's rates?
How is that "fair?" Shouldn't trial lawyers, pay their way? Surgeons?
Moreover, what is avoided here -- there are just too many USA colleges. Serious questions have been raised about too many college grads, and "college graduates" being over-qualified for many jobs. Young people, beware.
2
@Chris
The short answer would be, re-finance via private methods. And many think that is risky. Your choice.
Note to today's students: do not borrow excessively.
Quick rubric -- 1:1. If your expected first year's salary is $35,000 -- only borrow $35,000 total.
Above that -- contact your college president and demand s/he do something ASAP. That is her/his job -- tell them to do it, STAT.
2
I have a few suggestions, and I come from the perspective of being a parent with a daughter who graduated last year, a son still in college, and 18 months of financial adversity after having our income quartered and our health insurance lost after a forced "retirement."
We lost most of our income, and our total bills stayed the same, until my daughter graduated, at which point the "needs based" school actually *increased* our contribution. They decided we could afford 60% of our remaining income.
So - want to improve the process? The numbers produced by FAFSA and the CSS profile have almost nothing to do with what college will cost you. Making the forms simpler will make it easier for people to fill out documents that will produce results that have nothing to do with anything.
So - increase the amount of government grants, and include grants for smart kids to be able to afford good schools. Reduce federal interest to 1-2%. Do not back end load interest for graduates who cannot pay off principle monthly.
You want to help? Then make the loans affordable.
193
Funding is not the problem. Cost is the issue. I attended a very reputable state university in 1968. The tuition for the entire semester was $200.00. I paid for my education and worked full time living at home. I subsequently attended a well regarded state law school. The tuition for the semester was $1,000.00. $200.00 in today's dollars would be would be about $1,500.00. The tuition at my university, however, is now over $12,000.00 per semester, not including excessive other fees, book costs, etc. There is absolutely no way I could have earned an education at today's costs. How are the costs nearly 100 times greater than in 1968? The increase bears no relationship to inflation.
279
@Disillusioned Your post is eerily similar to my college experience except I went in the mid 70's and tuition was $250. That's a reasonable increase versus the late 60's. The easy access to student loans has allowed universities to continually raise tuition well above the rate of inflation. It's not unusual to see high 6 and low 7 figure salaries for university presidents who have become nothing more than fund raisers. Also, the number of administrators and layers of bureaucracy that permeate colleges today is multitudes greater than when I went. Finally, why are professors allowed to teach into their 70's and 80's. As some point, they have to make room for the younger generation.
16
@Disillusioned. The answer is taxes. Taxpayers used to value public higher education and they don't now. When the provost of my public university shows us the pie chart describing the school's income stream, the contribution from tax dollars is so small that it doesn't even get a wedge - it's just a line. We're a private university pretending to be a public one.
47
@Disillusioned
In 1968, Japan and Germany were minor economies, and China was a giant rice farm. Well, times have changed.
More to the point -- taxpayers who chose not to go to college, they said it was unfair for them to subsidize the educations of trial lawyers and surgeons. So, they demanded tax changes that they thought were fair.
7
The only problem with "Joe," the recently graduated engineer, is that all his supposedly "disposable income," isn't really disposable. I did a little quick and dirty math, and I imagined that Joe made $60K/year, and that he also lives in New York State. Joe also owes taxes, so his $60K is more like $48K.
Joe also rents, and granted, NY has higher rents than most places, but let's say that he doesn't have a roommate and he's paying roughly $1500/mo. Let's also assume that Joe the Engineer has a smartphone (he's an engineer after all) and that he has to pay for the internet. Perhaps he has also bought a used car and got a loan. He also has to commute by both driving and using public transit (he goes to a Park'n'Ride). Also, he's got to insure that vehicle, register it, insure his stuff in his apartment...
I'm praying at this point that Joe has employer-provided health coverage. If so, let's assume that that hasn't yet been taken out of his paycheck. Maybe now Joe has $600~$700 leftover at the end of the month, and he still hasn't shopped for food.
Oh, I forgot: Since Joe had a loan to pay for tuition college, I'll bet he opened a line of credit. His balance now isn't huge, but it's not insignificant (maybe $3~4K). He's paying that off slowly.
Finally, he's paying back his student loan to the tune of $343/mo. I'll bet you anything this leaves Joe with less than $450/mo. in "disposable income." (Also, Joe hasn't eaten yet.)
I sure hope Joe lives with Mom.
397
Joe can do what many of us did upon graduation & new to our careers: get a roommate. That decision alone adds $800 to his disposable income leaving plenty for food for one person. As Joe works his way up his career ladder, he will be better able to afford living alone if he chooses - maybe buying a small apartment, condo, townhome or house. Perhaps Joe next gets married or combines his income with a partner and now there are two incomes.
12
@MicheleA. Or he could live with mom, like I did as a member of gen-X. This isn't new. It's just getting more attention these days.
12
@MicheleA
My daughter rents in Brooklyn. Each of three roommates pay $1091 in rent, plus utilities.
39
My wife and I have been professors for over a combined 60 years. Part of the problem is a blind faith in the value of universal higher education leading to many indifferent and unqualified students who leave college with debt, no skills, an no ideas that inspired them. They believed that a degree, not necessarily an education, was necessary to open economic doors for them. These non qualified students dilute the standard for the many eager-to-learn students craving an education. Grading standards have been lowered, and teaching at research universities is often seen by many faculty as a necessary burden to advance research careers. Indeed, publish or perish has also led to a deluge of professional journals and submission of lame articles.
We have degraded skilled workers. As one who went into academia because I failed as a plumber, I respect and value the skills of tradespeople.
Raise the requirements for college admission, shrink the size, and therefore the expense of many colleges, give liberal financial aid to qualified students and stop the pretense that the shoe of higher education fits all feet!
134
@Fred Levine Thank you! I see this every day in my line of work.
9
@Fred Levine
I see this as a landlord every day. People aged 20-28 come looking for an apartment that are in $22-27k in debt with no degree and working min. wage jobs or just slightly higher.
There is no way out for them. They will carry that debt for years, not be able to afford a home, and are on the verge of eviction if something happens to them or their transportation (to work).
And this is occurring in a state with one of the most affordable state university systems (Florida). I can't imagine what it would be like in a state where public universities are expensive...
10
@Fred Levine
Well said, professor! Government workforce administrations throughout the country are beginning to push trade schools and 2-year business degrees for precisely this reason. We need to stop this nonsense that a post-high school liberal arts education is the only way to earn a decent wage or contribute to society.
Though back to the specific point at hand, we absolutely also need loan reform. The issues are not mutually exclusive...
9
Modifying loan repayment schedules or simplifying loan application forms will help some students. But it's not really addressing the cause of this problem, which Mr. Alexander conveniently ignores: the substantial decrease in government support for public universities.
As Michael McPherson and Mortin Owen Schapiro wrote in 1996, "From the early 1960's until the early 1980's, the story is one of growing public commitments to the finance of higher education. From the mid-1980's on, one sees a reversal of this trend toward expanded government support of colleges. As the share of college costs financed by the federal government and even more by state governments has fallen, the share borne by families has inevitably increased."
This trend has continued. According to the Center on Budget and Policy Priorities, "A decade since the Great Recession hit, state spending on public colleges and universities remains well below historic levels, despite recent increases. Overall state funding for public two- and four-year colleges in the 2017 school year (that is, the school year ending in 2017) was nearly $9 billion below its 2008 level, after adjusting for inflation."
Unless states and the federal government provide more money to public colleges, students will continue to accumulate massive, often unpayable, and grossly burdensome debt.
2
You left out one more. Stop paying ridiculous sums of money on football and athletic coaches. Few schools actually make money on football. Most require heavy investment by the university. If the NFL wants a farm system for future players, let them start a minor league like they have in other sports. Think of the money that will be saved on stadiums, equipment, football scholarships, and pass the savings along to the students in greater need.
10
You could have made this a lot shorter, and truer, if you had just titled it "Going To College Should Be Free."
2
Stop picking on art history. Jackie Kennedy's background in art, history, literature, and (gasp! for the illiterate) French brought us a respect for our architectural treasures, saving grand Central Station from demolition and restoring the White House to a place of national and historical pride. Her efforts were largely responsible for the creation of the Landmarks Preservation.
Without appreciation for aesthetics and culture, we will be condemned to more crass and confusingly dysfunctional blights such as the present New York Penn Station.
Education should also embrace quality of life applications, otherwise it is all just trade schools. Give humanity a reason to be.
If Pericles had put all the Athenians' tax money into more pageantry and war instead of building the Parthenon with the attendant exquisite sculptures, he would be an anonymous footnote in history instead of a defining highpoint in Western civilization.
Why are we always in a race to the bottom?
5
We need to make college affordable period. Paying this debt forever is nonsense. Anyone should be done paying in 4 years on a very small amount. Educating citizens is for the good of the country.
5
It’s very simple. Anything that’s subsidized will be subject to some form of abuse. In this case, making financial aid so readily available to everyone (including those who obviously can’t afford it), results in skyrocketing tuition with every school developing new country club level amenities and expanding their sprawling bureaucracies to woo the next sucker who willingly mortgages their life for a four year party.
Remove the subsidies and hold everyone (borrowers, lenders, schools) accountable. Yes college enrollment will go down. No you don’t need college degrees for the majority of jobs being created in the modern economy.
Finally with regard to your proposals to make it easier to borrow, it obviously needs to be harder.
18
@Andy Deckman: [No you don’t need college degrees for the majority of jobs being created in the modern economy. ]
The role of a college education is to expand one's horizons, not to provide vocational training.
Aside from that, while it is true that one does not need a college education for many jobs today, a college degree is necessary.
After SCOTUS ruled that is was discriminatory to require a high school diploma for employment, companies began to require college instead. A college diploma demonstrates to a potential employer that the holder has shown the ability to read, write and stick to a task.
The subject matter is generally unimportant and the pay difference between STEM and liberal arts is not a great as many claim.
1
@Andy Deckman correctly writes that "Anything that’s subsidized will be subject to some form of abuse."
But he fails to point out that anything that isn't subsidized is also subject to some form of abuse.
That's life!
2
@Andy Deckman -- sooo... you'll eliminate the H1-B visa, right? No reason American employers should be hiring programmers from India?
2
Well, having diverse ideas about making colleges affordable is a noble undertaking. A pressing question, it's urgency already remarked elsewhere, is this: What is be the best investment a country can make, if not in it's human talent...given that, as a result, it surely would benefit all of us in productivity and a real effort to work cooperatively towards the 'common good'? It would certainly cut down the current odious economic inequality; and, as important, via education, teach us to think for ourselves...and hope we get involved in politics and stop electing demagogues and chatlatans 'a la Trump' for lack of guidance in knowing our reality; our social needs and a sense of purpose demands it.
1
This dude has been a Senator for like one hundred years. He is in the party that cut (Senator) Pell Grants and did zero about the for profit college loan scams. Too little, too late. College needs to be affordable now.
6
Dear Senator Alexander,
When the Democrats repeal your party’s corrupt tax breaks for billionaires and large corporations, we will easily be able to subsidize public colleges and universities to make them affordable again.
Yours Truly,
America
10
As a retired professor of history who regularly helped advise entering students, I have some thoughts. Consumer competition has seen expectations rise. Students ask how good are dorm, what of student rec facitities etc. Colleges have responed by offereing more luxurious accomodations or students do not come. This raises fees. Dorms used to be spartan concrete cubicles with community latrines and showers down the hall. Now they are suites with private reooms opening to a living room and also with private baths.
This is one factor.
Another and most important is state support for the lower former teacher college group. It is now 17% in Oklahoma where I currently live. Of course we also have one of the highest paid football coaches and even his staff has a salary approaching one million. Alabama is worse. Semi perofessional college sports demanded by alums etc is not required for most degrees. The old teacher college has now become a state university and uou can get a good undergraduate education there at around 20,000 or less. You do not need a Harvard of UCLA degree as and undergrad. Save that for a good graduate institution.
The real failure still falls to state legislators for most of these problems.
David Leonhardt’s piece on the state of the union in charts tells us that this is an especially difficult time for the young. I’d say not only are they saddled with school debt, they are working jobs with little potential for economic advancement while paying for healthcare and daycare. Forget about saving for the future. If student loan repayment interest rates are ever indexed to discretionary income, we’d justifiably be making monthly payment to them.
What does it tell us that so many of us recall graduating from college debt free, moving into productive jobs, putting a little aside each month for the future. This is not likely to be our children’s reality or future if they do not benefit from significant family wealth.
2
It's really a no-brainer - student debt increased dramatically only after states dramatically reduced their funding to public higher ed institutions.
Raise state funding back up to where it was prior to the Great Recession!
6
These are all good suggestions, but none of them address the fact that the cost has ballooned out of control over the past 30 years or so. Under no circumstances should a year of college cost $65K. I went to state med school 20 years ago and paid $11K per year in tuition. That wasn't the 50's, that was 1997!
I am a hospital employed physician and am constantly astounded by how much this mirrors the situation in healthcare. The common denominator is too many administrators. Why do you pay $20 for a band aid when you go to the hospital? - because you have to pay the salaries of the Director of Quality, VP of Quality Assurance, and VP of Quality Coordination (these are actual positions in my hospital, and make me wonder if they are real humans or just cardboard cutouts collecting a salary). Shameful.
7
@Anjou Hospital administrators are a favorite target. Have you asked the people who occupy those positions to explain to you what they do? Then tell us.
1
A wonderful plan to get more money in the pockets of lenders from more American families. Nothing to deal with the high cost of colleges, ie. the expansion of administrative costs, coaches and presidents who earn a million dollars per year, and degree programs that attract naive young people to narrow career specific curriculums where in fact there are very few jobs in the real world.
6
Please keep shining a bright light on this issue. One appalling thing about today's student loans is that they accrue interest WHILE the student is still in college or grad school. Payments don't have to be made while you are a student, but your debt is growing substantially with high interest rates (as high as 7%). Why not prohibit interest accrual on the debt while the student is in school? This straightforward rule would help reduce debt. Lenders would still make plenty of money on long-term repayment plans when the student graduates, but the loan amount would not go up while the student is studying full-time.
5
Alexander makes a great case for conserving the status quo of protecting lenders and ignoring outrageous costs to attend college while saddling graduates with their first mortgage payment (repaying the loans).
Under his schema, everyone suffers including the colleges and universities who will bleed students and lose tuition dollars to a burgeoning system of MOOCs, online mini-degrees and various flavors of lower cost alternatives to higher education. Disruption is here and gaining traction in higher ed.
Why take out $50,000 in loan and encumber years of debt when you can easily charge than $1,000 on your credit card for a course led by a team of subject matter experts, not indentured graduate students taking their long shots at a career rapidly becoming a historical oddity?
I agree that tuition and borrowing rates are too high. However, as with the mortgage crisis some of the blame should be directed towards the borrowers. How many students applied for grants, filled out the FASFA, did the first two years at community college, worked through school, etc vs going four years at university, not working and taking additional money for living expenses, and spending egregiously while in school?
A big problem is that when students graduate and get a job they want to live accordingly to the new salary. Bad idea. I owed 20k after graduating with a masters and paid it off in 3.5 years on a salary of 36k by living extremely cheap.
1
As the Titanic problem of student debt steams toward the iceberg, Alexander makes a few suggestions to fix the leaks in the lifeboats and make sure paperwork is reduced.
What on Earth was the point of this column? That students must incur significant debt in the first place is the problem. Streamlining the process so more students can take out loans is not the solution. Figuring out a better payment plan is not the answer.
State support of higher education has been declining since 1980 and the American Council on Education estimates that state support will be zero in about 35 years, at the current rate of retreat.
Costs increase, not primarily because of a race for facilities and amenities to attract students. College costs have increased disproportionately in greater part because the cost of books, technology and health care for faculty and staff have increased far more rapidly than the overall cost of living.
Wages for ordinary folks have been stagnant. Costs of education have risen because they are driven by expenses that are impossible to control. Public support has declined precipitously and is headed toward zero. So what did you think would happen? The margin between expense and revenue has been filled by student debt because we have abandoned our commitment to education. Alexander's meaningless suggestions aside, the iceberg is not going away. With debt increasing rapidly and the ability to pay staying the same, the system will implode.
9
My son is a senior and got accepted to all 5 of the colleges he applied to. Three were in state. I told him that I will fully pay for the in state colleges, but only able to contribute to out of state. I'm a single parent with zero support. I run a small business and am by no means flush with cash. Thankfully, he chose wisely and will earn his undergraduate degree while living at home with zero debt upon graduation. Now, when he goes to grad school, that's another story, but we'll deal with that when the time comes.
2
Bravo! Hope you can make these proposals reality, Senator Alexander.
First of all, thank you for this! I love how you are proposing well thought-out ideas.
As a college graduate, I have around 30K in student loan debt. I know many of my classmates have even more than me.
The problem I had for 5 years living in the US was that I couldn't seem to put a dent in it. Between the increase in the cost of living and the interest that accrued each month (around 7% interest), I found myself drowning.
Finally, I moved abroad and now I am working two jobs but I can finally make decent sized payments. What has been most astonishing is that I now bump into travelers from all over the world. I mention student loan debt and not ONE of them can relate. Instead, they talk about universities that charge a minimal fee or, if they have any debt, it is laughably small. This really is a uniquely USA problem.
Please, do something to help students! I don't think any of us are asking for a handout. I can't speak for my classmates but I was starry-eyed and hopeful by the prospect of graduating with a degree from a very good university and now I have learned my lesson. I just want an easier way to pay off the debt.
5
We have been paying into a 529 for our kids education since they were born. It is still not nearly enough. I'm not sure we wouldn't have been better off not paying anything as we have too much to qualify for financial aid and too little to pay for two tuitions at a good four year univeristy. College tuitions have increased well beyond the average for other items. According to Business Insider, between 1980 and 2014 college tuition rose 260% vs 120% for other consumer items. According to Forbes magazine, college tuition outpaces wage growth by a factor of 8. These are the underlying issues that have to be addressed, not simplifying application forms however laudable that may be. A college degree used to provide a ticket to a better life. It also created a better informed citizenry. Both these individual and social benefits are currently under threat from the rapid increases in tuition.
9
Did no one see this happening? Of course not. End the student loan business period.
What would happen? Hmmm colleges and universities would be forced to bring down their tuition to affordable prices, they would have to convince shoppers (students) they offered the best for the least. No more could they afford to be a farm system for the NFL and NBA (let them pay for it) with big stadiums and large coaching salaries. There would be fewer students graduating commanding higher salaries.
7
I think Mr. Alexander's proposals are good starting points, but I think they fail to address the issue of those already burdened by the debt. I also think that some further points are needed
-If a student currently with a loan wishes to renegotiate to a lower interest rate, there should be no obstacles to that. Just like a mortgage.
-If a prospective student has served in the military or national service, the college education should be free, or at least subsidized heavily
-As part of a re-entry program from prison, some sort of subsidy should be provided, with additional help if a loan is granted. What form that additional help should take, I don't know.
-Families should not be burdened by the debt if the student becomes disabled, or dies.
-loan grantors should be audited regularly
2
@Anthony Tedesco because I co-signed one of my son’s loans, should he die (God forbid) his loan becomes due and payable NOW and if I can’t pay (which I can’t) then my SS payment will be tapped to pay it - effectively ending my monthly retirement stipend. No way to put it into bankruptcy either of us (thanks Biden and Boehner). The interest should be .05% - the same as the banksters when they used our tax money to pay billions in bonuses after crashing the world’s economy (my son and I paid some of those taxes, btw). When you have paid back the original loan amount (but no more than 20 years) you’re done. No one gets anything for free (despite the rich-o’s claiming they get shafted cuz they were able to pay retail). Claw back the billions from billionaires and corporations. Let the NFL and NBA pay for coaches, stadiums and athletes. Jack up payments from states to 50% or more.
1
I don’t disagree. The system is very poor and the burdens and psychological stress in your life are all the more horrible because they are unnecessary and the product of the desire of the advantaged to maximize that advantage.
The unfortunate reality is that given the current senate, really addressing the problem won’t happen. While sadly what i stated will not help you at all, I’m thinking that if it will help someone it’s better than nothing. Immediate relief for some and then throw the bums out and fix the problem
Our daughter is currently a sophomore in college. I cannot get over how expensive it is. For a BS degree! Tuition plus all the fees. The fees are something no one talks about. Add to that housing, food, incidentals and books, and it borders on ridiculous. They talk a lot about the perks: fancy gym, I mean really fancy. They ask for donations to their endowment. They buy up property. They pay NO taxes. They have a bloated administration. They also have a lot of adjunct professors teaching classes. Not that they aren’t good; on the contrary, they are quite good. They just aren’t paid well. So the university is a money making machine. The university system itself needs the overhaul, not the loan system forced upon students. Who is looking at that? Seriously this is ridiculous. I encourage all parents to have their kids look at Community Colleges. My daughter, on top of University, is also taking art credit courses at a community college. And guess what. It is awesome. And her professor at the CC is also a professor at a university. I wish Community College did not carry the stigma of lower end. Seriously. It is the way to start. You can transfer the credits. You can stay out of debt. Even if you go out of state for it, it is still a bargain. And they seem more invested in their students. More invested in helping them get employed. Something 4 year institutions seem to care little about. We can all complain about costs and loans but here is a viable, less expensive option.
16
“Under either one of these options, taxpayers will be made whole and borrowers should not have nightmares about repaying student loans.”
Taxpayers benefit from higher education in many ways. They should be at the forefront of efforts to reduce college tuition.
Further, college administration is bloated with high salary positions. The small (2,500 part-time students) college next door to my house pays its two top administrators $300K and $200K per year. That’s way too much (and does not include the cost of benefits, which are typically 30% to 35% of salary).
Next, look up the salaries of state officials on the Internet and look at how many state university and college coaches earn $250K to $5 million per year. College football teams, for example, can have a dozen or more highly paid coaches earning 3 times and more what college teachers earn.
Colleges and universities are corporations that pay a wide array of administrators and coaches salaries teachers can only dream of. And guess who pays for this: students.
Then the loan sharks have a feeding frenzy. Senator Alexander does not speak the truth. His proposals are all a distraction from the topic of crushing student debt.
4
College and universities are not the issues. Fifty years ago, high school graduates had more knowledge than most master level college students today. The educational system in the US has essentially elongated the learning process unnecessarily. Having a student pay a university thousands of dollars to learn algebra one is ridiculously wasteful and those students don’t belong in higher learning environments. Too bad, so sad.
2
@Pilot -- your claim that "Fifty years ago, high school graduates had more knowledge than most master level college students today" ... is just nuts.
I started at an Ivy League university in 1981, tuition was $7000 a year. It is now over $50,000 a year. Nothing in our economy has octupled in price since 1981. Not housing, not gold, nor labor costs.
How do university costs increase exponentially if nothing else in the economy does? The more money the government gives to universities AND the more debt students take the more expensive the university becomes. Meanwhile the debt cripples the economy.
Helping students "pay" by increasing the availability to government money, increasing debt forgiveness, or making it easier to borrow money only makes the problem worse. More available money just makes colleges more expensive.
Supply and demand doesn't apply to college degrees because an Ivy league degree is considered so paramount people will do whatever it takes financially to obtain one. They figure, wrongly in most cases, the degree is financially worth the expense-no matter how high.
Tuition is a game. A price is given, but then you're told you'll get financial aid. But you don't know how much until you're accepted. How aid is determined is a secret and probably ethnically based.
Suggestions: 1) Student loans should be voidable upon bankruptcy. This would provide a way out of loans and alter the flow of money to the universities. 2) Make tuition prices and financial aid transparent, like shoes.
If no one can pay, no one would go. Tuition would have to come down. This is the key to dealing with the problem.
9
@jkemp -- Do you bother to appreciate that $7,000 in 1981 is the equivalent of $20,378.11 today?
So yes, the face value of your Ivy league tuition has gone up by about 2.5x, in real dollars ...
But did you actually PAY the university its full tuition when you went? How many students do actually pay it today?
The plain fact is that full tuition at the Ivy Leagues is only paid by two classes of students:
* some foreign students, inevitably those with very wealthy parents
* domestic students with poor test/grades, and very wealthy parents
Your plaint about "an Ivy league degree is considered so paramount people will do whatever it takes financially to obtain one" is a definition of idiocy.
The claim "you don't know how much you get until you've accepted" only applies to people too stupid to visit and barter, or even pick up the phone. Consider this a gut-level reality check: if you are either so rich or stupid that you believe this -- then there you go!
Your observation that the real deal is a barter that they don't want anybody else to know if you got a much better one ... that's true.
But to deal, you need to have options. Not going to to the Ivy of your choice really is an option.
Good proposals, but Senator Alexander does not mention the absurdly high, non-negotiable interest rates students are paying. Our daughter, insisting she would do law school on her own, finished with $130,000 in debt. Her various loan rates ranged from 6-8% (at the same time my mortgage was under 4%). She works in the public sector and was part of the loan forgiveness program. She diligently made income-based monthly payments, and at the end of six years, the amount owed totaled $193,000. Fearing she would be forever mired in debt, we paid off the loan last year.
How absurd that a young person who is doing all the right things could be mired in an unpayable, ever rising debt. We are fortunate to have the means of paying it off (not without pain). How many parents have that option?
15
@clapol
You paid it off after 6 years? It sounds crazy... Why pay it off if you were in the program? Did you not trust the government to forgive the loans? That must have been the case. Still... it sounds crazy.
Thank-you for keeping us in your thoughts and prayers. The cost of an educated society is borne by the individual at too high a rate. We need intellectuals despite what Trump and his ilk may say. This class will disappear. Intellectualism will be tied to socialism and we all know how that goes. So keep it up! We are all in this together!
Perhaps another reason college has become unaffordable is the endless escalation in tuition costs. There's no inherent reason that the costs of college's core educational mission should be increasing at the rate it does, but for two reasons.
People continue to pay. I once spoke with a dean at an elite university who said that as long as there was no marked decline in the calibre of the applicants, the rate at which tuition increased would remain high.
"keeping up with the Jones', is another reason. Schools watch each other, and if one school builds a "state of the art" amenity, other schools feel impelled to do the same. These amenities may have little to do with educational excellence, but may have something to do with attracting students willing to pay.
3
@Stephen V. Hulse -- you are talking private schools, and the "official price." Only fools or poor candidates with rich parents ever pay that price.
Making it easier to borrow and repay a loan does nothing to address the root problem: the staggering cost of college education in the United States (and graduate studies, which are increasingly necessary to compete in today's job market). I'd argue that it's already stunningly easy for students entering college (teenagers!) to take out huge loans that may follow them the rest of their lives. It's great to have the conversation about simplifying these processes, but this does not improve the status quo of students financing extremely expensive educations with high interest loans.
3
As yet another person with "soul-crushing" student debt - the kind where I chuckle with morbid glee that it won't be passed to my daughters when I die - I appreciate the discussion.
I believe the issue of raising children while paying student debt needs to remain in the discussion as well. While I know it is difficult for all of us with student debt, I and other colleagues who have children have absolute horror stories about living paycheck to paycheck. It is a struggle to house and feed a kid while paying off student debt. It doesn't matter if you work public or private sector. It doesn't matter what you make - if my paycheck goes up, it just means more money is going to pay off my loans.
Life difficulties aside, I am constantly faced with the reality that I can't put money away for my kids' education. That's the real problem: if you can't save, this cycle of student debt won't stop.
I'm not trying to hide the facts. Raising kids is tough no matter the circumstances. My debt is mine, period. But we need find a way to stop that cycle, or we are going to stagnate - in perpetuity - one of the few chances that children have of reaching above their parents.
4
@htg
You're wrong to say "the debt is mine." The system created this level of debt--AND they taught you take blame for it.
Was George Bush correct when he said "The Poor are poor because they are lazy?"
It is the same mentality. Help your children by fighting against a corrupt system. People are making money on your guilt. It is intentional.
I borrowed the maximum amount that Senator Lamar mentions in this piece ($28,500) over the course of four years, at interest rates ranging from just under 4 percent to almost 7 percent. For the majority of my loans, interest began to accrue as soon as the loans disbursed, and this interest capitalized before I entered repayment, increasing my total principal balance to more than $30,000. It wasn't until after I graduated that I realized I had been charged an origination fee, which is included in my principal loan amount and is sent to the federal government.
I'm very lucky because I've been able to manage my payments, and I have parents in a position to help me should I need it. If Congress were really interested in reducing student borrowing, they could consider revising some of these loan terms - lowering interest rates (especially for graduate students), subsidizing interest payments for a greater number of students while they are in school, and eliminating origination fees. They could also increase maximum borrowing limits so that students don't have to borrow the higher interest PLUS Loan or from private lenders. Student loan debt is a huge issue for Gen-Xers and Millennials, and Senator Lamar's proposals just aren't good enough. Congress makes $$$ off the federal student loan program, and they'd much rather burden the young than raise taxes on their parents - very short-sighted.
6
Bottom line is that college is just too expensive for the middle class; even at state schools. Not one mention in this article about just reducing the cost of tuition. Students don't need a sushi bar or water park as part the campus. The fleecing of Americans by Americans continues unabated.
9
The long term consequences of high, punitive student (and parent) loan debt threaten to imperil our economy. And God help any adult (with children) who returns to college for a graduate degree and does so even partially with loans... only to take out more student loans so that his children can attend a quality college. And: over the past three decades, colleges have become administration top-heavy and administrator salaries have created gross income inequality between administrators and college employees who are not faculty. Student loan borrowers should be at least partially bailed-out... for their sake and for the sake of America's future.
1
I apparently grew up in the golden age of public education in California. After a stint in the Navy, I went to the local junior college, then to Cal Poly, and on to UCLA for post graduate work. While I had to work 25-30 hours a week all year to live, tuition was essentially free. I am eternally grateful to the system the gave me this wonderful opportunity. As it turned out, my education let me have a very fulfilling career and incidentally, to earn a lot more money than I ever had expected.
I wish everybody had the same opportunity that I had, but alas that is no longer the case. Now we are looking to the 'government' to solve a problem that they have created by re-ordering public spending priorities. The current practice of offering 'no-doc' loans to everyone is just cruel. To wit, the stereotype saga of the Starbucks barrister with a masters degree in cultural studies and $87,000 in student debt. I ask, couldn't an adult of have told him that a degree in 'cultural studies' would probably never put him in a position to pay back $87,000?
3
With all due respect Senator Alexander, you and I are products of a secondary education system that resulted from our parents giving their all in WWII. Those GI's came home understanding the tremendous benefits of education through the GI bill. They, in turn, supported the idea that easy access to public universities for their kids was a necessity. A solid education would propel future generations into the middle class and sustain the nation as a world leader.
Now it's our turn successful baby boomers, let go some of that cash to help our kids through higher taxes, so they have the same opportunities we did.
While some search for a way to make a buck off of students, politicians must understand the need to keep public education cheap, so future generations can be all they can be.
You've achieved a lot Senator. Help others do the same. For our children's sake and the nations, play the long game for improving our nation, rather than assisting special interests make a quick dollar today.
2
Evidently you didn’t read the article. Higher taxes aren’t need just some common sense.
Undergraduate degrees have about as much worth as a High School Diploma used to. A huge amount of money spent at absurdly overpriced colleges is totally wasted and the quality of the "education" at those schools is not a good value. I also remember when the mark of a successful person is that they could afford to pay for their own children's education and didn't have to use other people's money to do so. Looking back at all the sacrifices we made so the kids could get their multiple degrees from fantastic schools, I wonder if that was just being a chump. Sure, there are many parents who can't do that for their kids but there are plenty of parents who could but are unwilling to make financial sacrifices, so they load up the kids with debt that is an anchor for years.
3
All of Senator Alexander’s proposals are good. What do we do, however, about the for-profit schools which are not fully accredited, and which often award a degree that is not worth the paper on which it printed in the job market?
1
Make a law to limit the amount that students and parents can borrow for college from all sources to $10K per year...you would see dramatic drops in tuition by institutions scrambling to keep their doors open without the borrowed money honey-hole. Colleges could afford this if they cut the number of administrators to the standard two positions that existed when I was a student...the President and Dean...and eliminated the big salaried positions of Chancellors, Associate Chancellors, Assistant Chancellors, Provosts, Associate Provosts, Assistant Provosts, Vice-Presidents. Associate Vice-Presidents, Assistant Vice-Presidents, Associate Deans, Assistant Deans. Associate-Assistant Deans, Assistant-Associate Deans, etc. Also, instead of relying on part-time poverty-paid adjunct professors with no benefits and grad students to teach only 70% of the student-contact hours (the average nation-wide), use them for 100% of the teaching.
6
This is a solution that makes sure that the lenders are paid back in full. There is nothing proposed that deals with the cost of higher education or the term of debt obligation. A very Republican proposal.
10
My son borrowed about $43K on his way to his Masters degree. During his Masters program, he deferred payments but interest kept accruing. Subsequently, over the past 8 or so years he has paid back about $70K. He still owes another $70. What we do to these kids is deplorable.
6
@J. Clifford I’d say he did this to himself. A person getting a masters degree should have been smart enough to figure this out.
There should be a hard nosed cost-benefit analysis of higher education. For Cost - There are studies that require expenses such as equipment and specialized instructions (think lab access vs reading a $10 book and writing a paper). The benefit can be easily calculated as the article points out.
If we actually had "free market" system - humanity degrees would be dirt cheap. That they are not cheap shows that the market is not behaving properly. If the market is not behaving properly, the goverment and the courts need to be involved.
This also may require an audit to of educational institutions. Where does the money go? My son recently took a early course at my alma mater. Same class rooms, slightly better labs, and a 15X tuition increase. There is a new building here and there - MBA one stands out -but the tuition there is crazy.
Where is the money going?
1
@Tom,
Good question. Where IS the money going? There really should be an audit. With tuition costs spiraling as they have, and the easy availability of loans with their restrictive interest rates... what is going on?
In fact, change a few key words and the whole industry starts looking like a pyramid scheme.
I went to college 40 years ago and even with a scholarship and jobs I had to take out a small loan. But it was manageable. I took the cost of the college I went to and did inflation analysis. The cost of my education in today’s dollars would be around $78,000, including room and board and books. But the tuition at that school now is closer to $50,000. Yes, they give out various scholarships, but seriously - $200,000 without the additional expenses of room and board? It pains me that my child cannot go to my alma mater, but I don’t think the cost is justified any more. We also went to a presentation at her school on Financial Aid options. I remember the presenter who was from a private school nearby stated, without batting an eye, that the cost of attendance for their school was $65,000 per year. What is the ROI for that? They were serious about students taking out loans and if that wasn’t enough, the parent should get a Parent-Plus loan.
I have drilled into my daughter’s head that cost IS important; that it is better to graduate without a pile of debt and that there is no shame in starting at Community College. So her plan is: Community College with a job for a year or two, then transfer. I have enough saved to pay for the final two years without loans. Then she can go into her chosen career and start her adult life without the worry of crushing debt and I can retire (hopefully) without also trying to pay off a Parent Plus loan.
3
The US has fallen behind the rest of the world in providing cost effective solutions to healthcare and education. And Alexander's solutions do nothing to fix the root problems or their offshoots. Like healthcare, we spend more per capita on education and get less results. But there is nothing in the Make America Great Again playbook to address either of these crippling problems. Rather than tax cuts for the top 5% of the nation and the huge trillion dollar deficit they have caused, it may have given the economy a boost for years had our government done something to reduce student debt. Young people no longer can contribute to the economy like they did in previous generations because of student debt. They can't afford houses, furnishing, furnishing them, buying consumer goods -- things that fueled economies in past generations as young people got married and sought the American Dream. That dream has been drowned in student debt and the impact of it on our greater economy has not been properly examined yet. At some point it will get examined, and we will then learn of the far reaching economic impacts of student debt on the larger economy. And then people will say ":duh, why didn't anyone talk about this previously." It's a game changer for sure... one like healthcare which 95% of the industrial nations of the world have already figured out while we try to position ourselves as "exceptional" and continue to ignore economic realities that will kill us in the long term.
4
I read and re-read this article, and see it as nothing more than a marketing tool for the financial student loan industry, NOT as any help to students.
- How to reduce the complexity of the aid application so that two million MORE students will apply for loans.
- How to calculate Joe's future financial situation to milk just the right amount of payments out of him without defaulting on the loans.
- How colleges can maximize the number of tuition-paying students without regard for the students future financial well-being.
In short, how to make THE LOAN as necessary and indispensable as the degree itself. When did that happen? How did we let that happen? Colleges, Universities and Trade Schools have somehow all become storefronts for student loan lenders to ensure that all students - regardless of whether they even finish the program - are saddled with an almost life-long emblem of their alma mater: the Debt.
Graduates get TWO pieces of paper nowadays: The Degree... and the Promissory Note.
This needs to change.
14
I was afraid for a moment that the Senator might have had some negative things to say about predatory for-profit colleges and the remarkable cost structures of higher education providers. But that danger seems to have passed.
1
I filled out the FAFSA questionnaires for both my daughters over their college terms, and my opinion is that anyone who can't do so isn't college material. The questions, though many, are not difficult. Whether all of them are really necessary is a separate question.
The family contribution derived from FAFSA is not realistic, esp. for families in high cost areas.
Student loans should be capable of being refinanced.
While tuition is high, students are also burdened with more and more fees. For my daughter's last semester, fees totaled 25% of the cost (other than housing).
Universities have too many administrators not involved in teaching. In also think there are too many garbage majors, including anything that includes "studies" in the title.
Whether the federal government should even be in the business of student loans is another question I'd like to see addressed.
4
How do we make the answer "yes" to all of Lamar's questions. The answer is not to allow our students to accumulate such debt in the first place, the same as other advanced Western democracies. My neighbor in Nashville, the late Alice Bugel, paid 0 tuition to become a registered nurse at the U. of VA in the late 1930s. She later served as a surgical nurse with Gen. Mark Clark's army all through Italy. One of my Political Science teachers at Humboldt State University in CA went thru HSU paying 0 tuition in the 1970s. Since then States have failed to fund higher education, a combination of diverting funds away from students and greater costs associated with more non-teaching support and higher pay.
Also skyrocketing construction costs: Memorial Gym at Vanderbilt cost $1.5 million to build in 1957, compared to a far less expansive new gym/sports center at HSU which came in at $54 million. In addition all 3 recent "green" buildings at HSU use no green energy, i.e. no solar or wind.
The question to Sen. Alexander: Why have state governments failed to adequately fund higher education, and what incentives can the Federal Government offer to make that happen again? A simple answer--a new tax for this purpose. As governor the first of two acts by Alexander was to raise the sales tax a full penny to fund education, the other to halt the selling of pardons by the outgoing governor, both very popular. Where is he now with the corruption surrounding the Trump administration?
1
You certainly have a number of good educational institutions. But many more only do an exceptional job when it comes to marketing their image. More foam than substance. Impressive libraries, vegan food in the restaurants, bloated admin and faculty.
The outcome are potentially ruinous levels of debt at graduation if your parents failed to make enough money in their lifetime to pay your tuition in cash...
6
This is a thoughtful article but what is clearly missing, as others have indicted, is the interest that student loans charge (with compounded interest) and rates that are unconscionable. Business loans, home mortgages, and even refinancing loans do not do what student loan interest rates/policies do to borrowers.
Legislation should be passed to stop this gauging and should include a way out for those currently caught in this noose.
10
With all due respect, Senator Alexander's suggested 'solutions' fail to acknowledge one of the main elephant's in the student debt room- outrageously high, and still rising (unsustainable?) tuition rates per hour, even at state universities. Where is the clarion call to moderate these state school's presidents 3 and 4 million dollar salaries to a
much more earthly number?? Or the eye rolling huge salaries of these sports coaches.
Or why the business and corporate sector has been allowed to no longer offer employees, either full and/or 30 plus hour part-timers, a portion of tuition reimbursement. In Senator Alexanders proposal, I see nothing about how we've let the corporate world off the hook on this. We used to have co-sponsored employer/university cooperative programs of paid internships, apprenticeships, tuition reimbursements. Where did all those programs go, more importantly, why did our politicians let them die off.
I also disagree with those saying 'not everyone is college material'. Those are same people who seem to enjoy watching others suffer so they can control them easier. We actually do need everyone to have a solid adult understanding of the basics of finance, health, and commerce.
Mr. Alexander???
6
@RLC, in NC where you live, the Chancellors at UNC-CH and NCSU make about $600-750,000 per year. The Chancellors at lower tier universities make much less.
Problems arose in academia when state support was cut on an annual basis and students and their parents took on a consumer attitude. You may believe that all students are "college material," but after teaching at the university level for 30 years there are students who do not have the academic background to succeed and assume that having paid tuition they deserve an "A" in a class for simply showing up. I had a number of undergraduate students tell me they did not buy books and did not read the assigned material and could not conceptualize why they were not doing well in class!
Students and their parents need to learn how to manage money, to spend it frugally--if they do not have the funds, don't borrow assuming they will get a "good" job and worry about paying the loan back later. There is no reason why more people don't attend community college and finish their first two years prior to transferring to a 4-year institution. Finally, the government has been in bed with the financial industry to guarantee loans while the lender charges outrageous interest rates to students. This needs to be changed by the Federal Government, but given the numbers of lobbyists and donations to our Congressmen, there is little chance of change in the near future!
@EDH and Rajan
My point is that state tuition has no justifiable
reason for ballooning to the inflated rates they are now compared to thirty years ago of course except that the pols and the bankers have convinced the people that borrowing makes it all so possible to charge these usurious fees and tuitions. They love it that we bought it all hook line sinker. They pay less taxes, they get all the interest and fees, and their buddies get elected to keep it all churning in their favor.
We should be ashamed.
Please include Parent Plus and Parent Plus Consolidated Loans. My husband and I took out a Parent Plus Loan for our younger child, calculating that our income would allow us to repay the loan with minimal interest within the 10 year period. Three years into repayment, my husband lost his job and our only alternative was to consolidate the loans and re-cast them for an additional 25 years, thus losing the 3 years we already paid. Furthermore, the only income based payment for Parent Plus loans is 20% , which is more than our 25 year graduated payment. If our income drops again we will be required to re-cast the loan once again for another 25 years and risk garnishment from our social security, while still making mortgage payments as well.
Our son owes $60,000 and is on a 25 year income based payment, however the income based amount does not take into account cost of living in the NY/NJ Metropolitan area. His salary is insufficient to pay rent, medical, not to even mention a car loan, and as a result is now $12,000 in credit card debt just to live.
5
@robin Parent Plus and PPC loans are THE worst! Caveat emptor.
There are some items that are being overlooked here. First of all, most of us should graduate from high school with the skills necessary to find a good entry level job. Other countries manage to educate their young to that point. They use apprenticeship programs and do not water down the curriculum for students who do not go to college. College is not a requirement for most jobs in those countries. It should not be here either. Second, since college is reserved for those who are able to handle the work, a college degree means more. In America a college degree is the equivalent of what a high school diploma used to be. Rather than improving our educational system by paying their fair share, many corporations are upping the requirements for jobs to include graduate degrees. Those requirements pile on even more debt.
What about on the job training? That used to be the norm in America. By requiring college degrees, graduate degrees, and experience for entry level jobs, employers have put the entire burden of deciphering what sort of training/education will garner a person an interview to the potential employee. We aren't made of money. We can't spend our entire lives training, playing catch up, or being behind the eight ball when it comes to earning a living.
The cure for this is to revamp our education system, to remind companies that on the job training is valuable, and to have apprenticeships and job training programs that lead somewhere.
9
The good senator proceeds from an invalid assumption: that students should pay tuition.
We don’t ask babies to pay for diapers. We don’t require families to pay fees to have their children educated. We didn’t used to require unthinkable sums to go to college, either. We shouldn’t, and don’t have to.
Many object the tuition-free college as too expensive, and as a sop to the upper middle class on the backs of those who don’t attend. There are holes in that argument — an educated populace has benefits beyond one individual’s degree — but it’s also possible to finance higher education only on the backs of those who go to college.
Imagine a lifetime surtax on income of 0.5% per year of college. A 4-year degree would cost 2% of lifetime earnings. No one disputes that a college degree does, on average, raise lifetime earnings by more than that, more than 10x that, in fact. And the burden is small: compared to Alexander’s 10%, a mere 2%, less than a measly annual raise.
We can provide college to everyone who qualifies, tuition-free. Instead of front-loading the cost and placing the risk on the student, we back-load the cost and socialize the risk. The fantastically successful will overpay, and those who struggle won’t be bankrupted. And the scourge of student loans devouring the opportunity and youth of our young are consigned, as Reagan said of communism, to the ash bin of history.
7
@James K. Lowden I like this proposal; However, Im sure there will be unforseen problems associated with it. It is a good concept that should be examined by Colleges, Banks and Governemnt.
Magically, the problem solves itself if our test case is someone who can earn $60K a year right out of the box with only an undergraduate degree, and only has to borrow $28K.
So, let's look at what it would take to have only $28K in debt. Current annual in-state tuition, room and board at UCLA is $33,901 for an in state resident, $61,915 for non California residents (comparable to many private college bills). So we're assuming a student could fund 79 to 89 percent of their college costs through grants and savings. That's a lot of dough. Could you afford to buy three new cars in four years, with cash? That's about what it is equivalent to. Oh and by the way, if the parents were able to save that much, it was probably at the expense of their 401K contributions.
Now let's look at how many college grads earn $60K out of the box. Not teachers. Not most social service jobs. Some but not all health care jobs. Oh, and will you be needing a graduate degree to advance? Or just to get the job? Price out the cost of getting a MSW versus the median earnings of social workers. Do the same for librarians.
Senator Alexander is trying to minimize the problem in order to avoid having to admit something more radical needs to be done to fix it.
11
Much like health care, we are not focused on the root cause of the problem, the overall cost structure. We are stuck in a mire where the professionals who deliver these services are paid more than society as a whole can afford. Until doctors and professors are willing to reduce their expectations of pay we will be cursed with ever mounting costs of medical and education services. Society incurring more debt to fund these lifestyles is not a good answer.
3
@William Smallshaw:
Best to check your facts. While the median physician doctor is paid a six figure salary, the median doctor (Ph.D.) teaching college courses is not. Indeed, quite a few are paid so little they can't afford homes in other than in manufactured home parks.
College costs are out of control, certainly. But not because teachers are paid too much. They're part of the crew suffering from the student loan albatrosses around their necks, not part of the crew causing the suffering.
2
William Smallshaw: I am a tenured professor with 15 years experience and I make what public school teachers make in my state. Maybe 15 years ago, Professors made above average wages (this is of course not to account for the extra money we are still paying for in student loan debt). Not any more. Just like the rest of society, the executives ha hem, I mean Administrators, make exorbitant wages, but not the professors. Even more egregious: most professors now do not have tenure, but are contingent. Higher ed is part of the new gig (see: poorly paid) economy just like everyone else since the 2008 recession. The Republican evil plan since the 80s, and they sold us trickle down economics, worked... for the 1%.
@William Smallshaw
Doctors in this country routinely finish their training at age 30+ with $500k in loans to repay.
Professors? Colleges are using more and more adjuncts who are paid a few thousand dollars per class and no healthcare benefits.
Stop blaming individuals who are trying to pay their bills like everyone else when it’s large drug companies, insurance companies, for-profit hospital chains, and universities acting like investment banks that are upping the cost for all of us.
The publicly funded higher education (community colleges and state universities) should be free with the proviso that graduates will commit to a public service requirement ( teaching , health care, military service etc) of a certain period ( not to exceed, say 2 years) to be completed within the first 10 years of garduation and a commitment to donate to a general national scholarship fund a certain sum ( say $10,000 in the first 20 years). It is not a loan, no interest or profit seeking intermediaries needed. A future obligation to be taxed for the benefit of free education. The balance of expenses to run the institutions will come from general federal and state revenue streams. It is a twist on the original GI bill of the 1940s and 1950s. So much simpler and remove the administration of financial aid from the college administrations at the same time.
2
"Senator Lamar Alexander, Republican of Tennessee, is the chairman of the Senate’s education committee and was secretary of education and president of the University of Tennessee."
Thank you for your hard work on this important issue!
2
This article actually should read "How to make it easier for students to go into massive debt and how to ensure they pay for it through their paychecks later." This still assumes that ill-educated students are to blame for their terrible financial commitment and doesn't acknowledge at all how inflated tuition is now.
Undergraduate degrees before this bubble could be payed for by young adults working 1 job during school (full time in the summers). It needs to cost that much again, a decade of payment for entry into a working class that has seen nearly no wage growth since before Reagan is cruelty and is already having terrible affects on housing, childcare, and other markets.
As for the existing debt, interests have to be capped at 1%, debt must actually be forgiven for public servants (teachers, non profit workers, cops, etc). And there should be a income based repayment plan that only lasts 5 years after which a young person in their mid-late twenties would be freed to start saving for home ownership, medical bills, etc.
7
The problem isn't the loans but the universities that charge "get rich" fees and tuition. At my son's college, the fees are the same cost as the tuition. Many of the universities charge high tuition costs and the professors instead have grad students instruct the class while the professors make more money consulting, writing books, publishing articles, etc. Another reason is University administration where there are more admin people drawing six figure salaries for no reason.
Universities know that students have access to loans scholarships, and other financial aid and therefore are abusing the education system.
3
“Is it worth it?” Let’s get talking about this part of the program. I think America slipped into the college-is-necessary-for-everyone mindset as a result of the tremendously useful support accorded returning WWII veterans. This responded to defensible changes in the workplace, technology, and the economy. Don’t forget, the US mobilized and evolved extremely rapidly during that war and it was easy to predict what skills were needed going forward.
Unfortunately, this rotted into the fundamentally undirected, scattershot system we have today, where the only answer given to that question is that college graduates on average earn more than high school graduates. This may be true, but it is a poor answer. Yes, we have lots of colleges, but nobody is measuring their ability to enhance the economy, intelligence, or least of all, individual benefit to their customers.
So the product winds up a blind purchase, but the cost is absolutely concrete.
No, this isn’t a diatribe about the payback from a liberal arts education, or why someone who paints fingernails for a living is stuck with student debt, or why labor unions failed their ancient training functions.
It’s all about trying to figure out where individuals, and the country need to be in ten or twenty years, and how government can participate in facilitating appropriate process.
And yes, it’s a little bit about the GOP not helping very much since Eisenhower.
4
Supposedly the 50 states are models in which various approaches to government can be tested. Why, therefore, doesn't at least one state offer an accredited but bare-bones, no-frills institution dedicated to minimizing costs while satisfying academic requirements?
Another proposal not mentioned by the writer: student loan forgiveness. On paper, borrowers who work at a non-profit institution and have made 120 payments (ten years' worth) are eligible for student loan forgiveness. Only students with federal student loans are eligible (which leaves out students with the more expensive private loans).
But even for students with federal loans there is a loophole: only students who have not consolidated their loans are eligible. For those of us whose debt exceeded $100,000, loan consolidation allowed us to lock in very low interest rates and save thousands of dollars. In my case, it meant paying only 2% interest on my $120,000 student loan debt. Unfortunately, the consolidation passed the debt from the government to a private bank, and made me ineligible for student loan forgiveness.
I will never regret taking on this debt, as it allowed me to get the education I needed to get a very good and secure job, doing work that I love. And I don't regret consolidating my loans when I did. By doing so I've saved thousands of dollars in interest.
But why punish those who made sound financial decisions? A lot of the problems that we have with student debt are the result of the government not wanting to rein in any of the profits that banks are making off the backs of students. The loopholes in the student loan forgiveness program are just one example.
2
Ironically, what this student loan debt opinion doesn't highlight is this debt is non-forgivable - it is for life whether you lose your job, have health issues, or are unable to repay. Ironically, we provide huge tax breaks and bailouts to large corporations but when it comes to the average US Citizen we forget that our economy thrives on educational aspiration and career paths that raise folks living wage.
The system of US education has become a commodity in many ways (much like futures on wheat) once credit cards and student consumer debt was introduced. Why else do state universities budget, forecast and market to out of state students and foreign applicants? Does one ever question the internal increasing compensation and growth of management infrastructure at universities?
Add to this factor that many universities who have housing don't offered subsidized units or enough housing so there are students who also are homeless while attending university. Most university housing on campus is built for market rate rents (even if the housing in three to a dorm room). So if you are given a financial aid package, you are probably still paying top dollar for tuition, room and board while the government backs up the cost. Sort of like the Walmart employee on food stamps and medicaid.
14
Why do banks get money from the Feds for practically nothing but investing in our future is usury? Students loans should be interest-free.
14
Unidentified person from Denver should take a class in economics. Someone needs to pay the cost of money over time. Interest free loan? The cost of money will end up being absorbed by the tax payer. Where is Bernie when you need him?
The first idea is great. The second, maybe. The third idea is a pig in a poke, standard punish the teacher fare.
To use Alexandar's example, suppose our B.A. engineer turns out to be followed by a crowd of B.A. engineers, who flood the market, driving down pay prospects for all engineers. (Sound familiar software engineers?) The result is likely to be a glut of well-trained people struggling to pay off their college loans.
If we follow Alexandar's recommendation, we should punish the schools who encouraged students to study engineering. They should be less eligible for federal money.
Or suppose there is an economic downturn. Every employer can now pay their employees less, making it harder for their employees to pay off student loans.
Or suppose big sectors of the economy become captured by monopolists, or close enough. Again, the hit to wages will redound to abilities to pay off loans, which, according to Alexandar's plan, will then entail that schools who were foolish enough to educate people should receive fewer federal dollars.
Not a great idea.
What was the matter with universal post-high-school education, again?
4
Again, the proposal doesn't go far enough. There's no reason student loans shouldn't be dischargeable in bankruptcy when the borrower has to do so for other serious reasons, like getting cancer. These are the situations in which the student loan corporations are literally making a killing charging interest and penalties (while ruining the credit of even responsible borrowers) while someone battles for their life.
I'm glad the Senators are taking this on - but their ideas seem based around the young, white, upper-middle class, male college grad who is going to follow the typical life trajectory of the IBM man of the 50's. As long as the U.S. practices Volatility Capitalism, with discriminatory hiring and promotion practices, frequent layoffs, little sick time for catastrophic illness, and the costs of illness foisted entirely onto those who dare to do something outrageous like getting cancer, there will be debt that cannot be repaid by the borrower.
This proposal also doesn't address the generational warfare being practiced by providing free college or writing off the debt of every generation prior - while forcing today's students (of whatever age, including working adults who are told to go back to college to "retrain") into indentured servitude. To quote the recent speaker at Davos, the issue is taxes, taxes, taxes, and the rigging of the system so that a few get wealthy and everyone else is a longterm debtor to them.
6
The albatross is maligned again. As written in Coleridge’s “The Rime of the Ancient Mariner,” the albatross is a complicated symbol and its meaning is often misunderstood. For sailors in those days, the bird was an omen of good luck. They believed that it carried the souls of dead mariners and could protect them from harm. It is the Mariner who senselessly, out of boredom, kills the innocent bird. The other sailors force him to wear its dead body around his neck as punishment. As penance, the Mariner spends the rest of his life retelling this story so others will not make the same mistake.
I know someone who never graduated from college (his mother passed during his sophomore year, sending him into a temporary tailspin), yet he owes thousands of dollars in student debt. He now works in a produce warehouse making minimum wage. Thankfully, he doesn’t have to make payments at this time due to his low income, yet the debts are looming, ready to eat into any gains he may make.
3
There is no reason for all loans to not be income repayed based on a % of income for 8 years.
Call it the 8-8 plan (Hermain Cain can take the credit). For 8 years, you pay 8% of your income over those years. If you go to grad school the clock stops during those years then resumes.
It incentives schools to get their grads jobs, it allows highly skilled grads to pay their fair share and doesn't lock young people into a terrible debt trap for their lives.
Also, for those of you that care, it allows the artist types to keep doing their passion while not being totally crushed under loans.
...Not that difficult Mr. Alexander!
4
@Arturo What would happen after 8 years? Would the remaining debt be forgiven?
Skyrocketing tuition is a result of gross inefficiencies at colleges and universities. These inefficiencies are encouraged by government subsidies. Get the degree online and the cost is reduced. Innovation and competition work wonders, so saith the Regent.
4
Sadly, Alexander fails to mention the ginormous gorilla at the door: the interest rate on student loans, which are higher than rates for most other kinds of debt, and for which there is hardly any flexibility.
Some courageous Member of Congress or President will propose refinancing all student debt to a flat 2%. Call it an investment in the nation’s future. Call it fair.
16
I don’t know where. Sen Alexander gets his numbers, but finding Government grants for college is like finding a needle in several haystacks. The greed brought by Ronald Reagan did away with grant programs for college students , and student loans began to explode. Alexander conveniently doesn’t mention that the ability to file bankruptcy was taken away in 1996, which is unbelievable, especially since we currently have a serial bankrupt president in Donald Trump, but student borrowers don’t have that option. Alexander doesn’t mention Graduate students. Currently, a BA is not enough for upward mobility, a graduate degree is required to move ahead. There’s even less true financial aid available, so graduate students have to resort to additional loans. Lamar Alexander is either incredibly naive, disingenuous, or more likely all of the above. The solution is to forgive all student loans. Bring back the educational grants programs obliterated by Reagan. Make work study viable. Do away with student loans, and leave them as a last resort solution, and if used, then the interest rate should be the same as what Wall Street and banks receive, never above 2%. All loan maintenance should be done by the government, and remove the gangsters like Navient and other vultures who just pick at the flesh of student borrowers. The present student loan system is a monument to gangsterism, and out of control greed and must be radically changed.
10
The problem is the interest rate. Why should the government be using student loans as a money-making vehicle? If our 30- and 40-somethings could buy houses instead of paying exorbitant interest to Uncle Sam, we would boost our economy overnight. And if you are wondering why families are having fewer children, it’s because a normal family can’t afford life, student loans, and daycare at the same time. This situation is untenable. It is crippling our economy and taking down the middle class. If (former) Senator Alexander and the rest of Congress wanted to fix it, they could do so simply by lowering interest rates or writing down a percentage of the loans.
7
Lamar Alexander is considered a moderate Republican and his willingness to work with Democrats on this issue is encouraging. However, this op-ed totally misses the point. Americans should be entitled to free public College education. Bernie Sanders, among others have repeatedly made a strong case for this.
As for existing student debt- the programs to mitigate or relieve debt are a confusing proliferation of exceptions- inconsistently applied. It is also a thorny issue- requiring a mixture of both compassion and responsibility. Should Seniors with survival incomes and limited savings be paying off student debts incurred decades ago? Should Harvard graduates saddled with tens of thousands of debts be relieved of this debt? To what degree should income come into play? The reality is that this debt is not only an economic burden to individuals, but the society as a whole.
But the issue starts and hopefully ends with free College education. But only in America is this considered a radical concept. I wonder why.
6
I remember the stress of filling out the FAFSA for the first time. I have a PhD and had trouble filling it out. I don't understand why it can't be simplified.
Also, I think it's criminal that my son's student loan has a much higher interest rate than my mortgage and car loan. The US needs to start prioritizing education!
9
These ideas are examples of republican thinking, everything for those who give the loan and nothing for the borrower. Making it easier to fill out an application form only makes it easier to obtain the debt. Perhaps tuition and other costs should be completely subsidized up to a certain amount say 10,000 dollars a year. This would make it very affordable for lower income students. why such high interest rates? 2 percent repaying the cost of making the loan should be standard as governments should not make a profit off of those just getting started. And of course owed student loans should be completely tax free and deductable. And while we're at it make any schooling necessary to obtain a skill completely supported by government subsidies.
Why do Republicans only come up with ideas that help the government or bank and not the students that should be their focus? Republicans are not the friends of anyone, except the 1 percent of course.
5
The banking and education industries have lobbied Congress to guarantee loans for students. Guess who benefits from these loans? Not the students, who end up not only with huge debts but often enough don't even get a decent education. Another scam, compliments of the business-Congressional complex.
5
1. Unless the student loans rates are pegged to the ultra low rates that big banks pay to borrow, and te existing students loans can be refinanced to the prevailing ultra low rates, the education financing system is simply ripping off future productive citizens. The Congress, especially the House with Democrat majority, has the power to pass such a bill. The Democrats on student loan rates and refinancing are all talk and no ACTION.
2. If six states can have 2 years of free college tuition, what is preventing other states to follow suit? The majority of students attending college drop out in the first two years of college. Free tuition in the first two years will allow many students to attend community colleges and gain some marketable skills.
6
How about we stop dancing around the obvious and go for the low-hanging fruit?
1. Make my student loans, or at least the interest payment portion, tax deductible. This seems fair if Goldman Sachs can deduct a portion of a penalty assessed by its regulators for the bank's role in the mortgage crisis.
2. Lower my graduate school interest rates. I shovel nearly $900 per month toward my student loans under a 20-year income-driven repayment plan and may never touch the principal. Can someone explain why my student loan interest rates are nearly 40% higher than my mortgage? Educating the workforce of tomorrow is different than turning students into cash cows.
Senator Alexander should take a hard look at really investing in human capital by diverting more money for education rather than rearranging existing payment schemes.
31
@Steve AMEN! It blows my mind that the highest tax deduction I can take for the many thousands of dollars I pay per year on student loan interest is a paltry $2500, and I don't hear any politicians talking about changing that. It would make a huge difference to my financial situation if I could take a higher deduction.
The federal government is essentially double-dipping: it taxes me on the money I earn as it comes in, and then I pay an exorbitant interest rate on my federal student loans. I'm happy to pay back what I borrowed, but the terms should be fair – at least as fair as the terms given to corporations and the banking industry.
College is not for everyone, nor does it necessarily lead to gainful employment. Students need to consider their majors and determine if there is a demand for the "skills" they are learning.
What I neglected to mention was I could pay my for my first semesters by working a part-time job, registering on time and paying the bill in full before the next semester.
Four years later I wouldn't have been able to pay for one semester working a full time job.
3
All two year community colleges should be free. This will allow students who want to go into a skilled trade to get a good job without debt. In addition, it will allow students who want to go to a four year college to take the first two years free.
3
What about graduate school and post-graduate degree loans? This is where it gets untenable for many. And increasingly, schools don’t have funding for all graduate students. This doesn’t really address much larger graduate degree loans.
6
A good start Senator, but not enough.
An issue, in my mind, that needs to be addressed, is the out of proportion cost that colleges and universities charge for attending their institutions.
6
Why not explore an option to refinance at the government subsidized rate? For myself and many of my friends and colleagues, the thought of paying loans off on time (10 years) simply isn't possible. Life happens, and unfortunately certain careers create debt that balloons to an amount that is much larger than the average amount borrowed by students. Having children almost isn't possible. Allowing this would certainly cut into the revenue generated from student loans, but having interest rates at 6 and 7 percent for unsubsidized loans can be unbearable with large debt loads. Something needs to be done, especially when an estimated 400k people didn't buy homes last year because of student loans.
Students, and their parents, need to get smarter about where they're going to school (i.e. community colleges and state schools). Not every student can afford a private school and an excellent education can be obtained from state institutions at a deeply discounted rate. For years, colleges have been selling an experience, but all those kids need is an education. The thought that the federal government is allowing students to borrow $40k a year or more for their bachelor's degree is unsettling.
Finally, college isn't for everyone. The trades are starving for good people. Student's shouldn't be lead and pressured down a path of education and potential financial ruin to obtain a degree that could potentially be utterly useless when fresh out of school.
5
Create a national service degree for young people.
Let them earn full college/university scholarships if they: join the military, work in disaster relief, become a teacher's aid, work as a hospital assistant, community organizer for federal projects, or other selected jobs. While they are in these positions they can complete intro courses on line and earn tuition credits towards full degrees. This also gives them time to decide what they really want to do while they get valuable work experience.
College and university is an unreal experience for so many kids just fresh from their hometowns. A year or two of work experience should be required in many cases to allow them to figure out their futures. Otherwise college is often just too much partying, not enough planning and years and years to have to pay it all off.
4
Going to college should be a matter of common sense and financial responsibility. There are many MANY colleges and universities and that are more affordable than big name schools. Heaven forbid a student would put in the first two years at a very affordable junior college! Further it makes no sense to borrow tens of thousands of dollars for a degree that will not return that investment (i.e. fine arts, liberal arts or education) and were the school provides little of no differentiation. No one forced these people to borrow and they, not the taxpayers, should be held accountable for their decisions.
Coming from a lower class family, we wore hand me downs, ate macaroni and peas, one of my mothers specials. I wished to have a better life. When I asked for new sneakers, my mother told me to babysit. I did many jobs from an early age. I cannot imagine not working. I was the only one in my family to get a masters and live independently. I afforded raising a child and sending her to college. This generation has a host of other problems. My daughter found grad school financially very different. Schools had begun to eliminate tenure which is now the status quo. Professors would need an extensive education but had no full benefits. The expense of higher education is untenable. Almost every means to offset higher education is being gutted and loans are given to collection agencies who are unscrupulous. All of the 30-40 somethings are struggling with living a life w husbands and children with costs that are depressing. Rents are 4plus times what they were, sliding scale day care almost non existent. As a teacher, I recommended college and looking back know it all has to be reconfigured....the gutting of the middle class.
28
Dear Senator Alexander,
The simplest would be to do that, what the potentates did centuries ago and the dictatorial regimes did in the 20th century: declare their debts null and void. Forgiving the students' debts may be not an economically best solution, but it is the most compassionate and charitable.
13
Student loan simplification is a good idea but what about interest rate? In the recent recession as mortgage interest rates decreased, student loan interest did not. This country can afford to place a maximum interest rate of 3% on student loans which would stop financial institutions from making huge sums on the backs of our kids. All of our students should have access to college and future access to affording a home. Shame on us.
11
My husband and I pay 1200 a month in student loans. This year payed about 12k a year in interest a total of 15k. Our lowest interest is 6.8% we paid the 7.9% off already. We have all government loans. We Pay 1200 a month on the 25 year plan. We started at 250k in 2013 and are down to 130k this year. When we didn’t have a kid we paid much more. This was for my husband to go to pharmacy school. I would love if we could pay pre tax that would be a huge help. I also wish there is a way that the interest was closer to my mortgage at 4%, but I do understand what a risk student loans are. We understand we took out the money and are responsible to pay it back.
9
Colleges have played a role in increasing education costs.
They should tighten their belts and reduce tuition and other costs. Stop offering discretionary products and services that have nothing to do with education -- like top rate gyms that rival the best the private sector has to offer and forcing students to pay for those facilities even if they never set foot inside them. Look for ways to eliminate highly paid administrators and other positions that fail to add educational value.
11
When I was in school, I got very good test scores and grades. Everyone was looking at colleges. I felt like I was the only person looking at the tuition in 2000. I asked about it. I was told, "Don't worry, you'll get loans and you can go!" I responded with, "They're going to want that money back eventually."
I went into the military for six years before I went to school and got my degree with no debt.
Tuition is an abstraction for a teenager. It's just a number for a kid who has never had the financial responsibilities and appreciation for the magnitude of that money. It's simply something you sign up for and don't think about the consequences. And people figured that out and preyed upon those teens with a viciousness. Now many of the people I went to school with struggle with meeting those obligations. I see an entire generation that is very wary of putting themselves out there financially. Once burned, twice shy.
19
@Chris Hinricher funny, I was told something similar when I asked about the cost of a medical procedure at around the same time: don't worry about the cost, insurance will cover most of it.
ALWAYS, ALWAYS WORRY ABOUT THE COST!
I have known Senator Alexander through working as a reporter on Capitol Hill years ago and I know him to be a thoughtful, decent and, yes, caring person. However, I have to say this: the student loan program can't be fixed without blowing it up and starting over. These proposals sound like a great way to make small improvements by arranging the deck chairs on the Titanic much better than now.
Before this commentary, there has been very little coverage of just how messed up the whole system is. Talk about national emergencies, this is one, big fat emergency. Trapping each rising generation in a mountain of debt that can't be escaped, putting the debt collector's hand on students for a a decade or more is a disaster.
What is one of the most important aspects of being young in our rich, successful nation? Freedom. The freedom not to have to take the best paying job so you can go mountain climbing, work to aid those who have less than you, even just to go surfing. Debt takes it away.
I attended college when tuitions were much lower, so, when family problems ended my support from my father after the first year, I was able to pay my tuition and expenses by working part time, on occasion for six and seven days a week. It was difficult, but at least I didn't face the debt monster, feeling the weight of the world on my shoulders.
We have to come up with something entirely new. What was supposed to be a great benefit has been transformed into an unfair, even crippling burden.
25
Many readers commenting here paid for college with modest wage part time and summer jobs. 40 years ago.
Tie state and national funding of state universities to the earning capacity of college students. As the value of that wage shrinks, state support increases, and vice-versa. That way, today’s students in 30 years can share stories about how they paid their way through college.
6
Follow Bernie Sanders, free education at state colleges. We can afford it by raising the taxes on the rich and cutting defense budget that is going out of control. What kind of country we are if we can’t educate our own children.
7
@Kodali
I agree with you that we could probably afford free higher education if we rethink our national priorities. However: let's start with improving el-hi education. Now, graduates leave high school with diplomas but have no speaking, writing, research or analytical skills. Much less the discipline needed for 'higher' education. They pursue the credetial but not the education. What a farce, what a scam. So let's not extend our poor quality education to the university level.
1
@Kodali Yes, the government must test students and control what the student will study and where they will study. Left to their own decision process, students simply will study what they like, not necessarily things that will get them a job. The government must step in and control the entire process or it will be a financial disaster just like the student loan program. The Golden rule applies: He who has the gold makes the rules. In addition a restructuring of university education will require dispensing with many professors in the "humanities" and a drastic increase in the engineering, science, education, and computer science fields. We can't pay for more students that will never get a job after taking a 4 year degree in art history, theatre, sociology, or psychology. A complete overhaul is required.
@farhorizons
On the contrary, if college education is free, more students will apply, making the admissions more selective. This will oppose the spread of poor quality to the college level.
Bipartisanship Senate support for common sense legislation that will raise the standard of living for millions, alleviate financial stress and uncertainty and result in less fraud? Oh wait, this is the way it is supposed to be.
2
What about refinancing protocols? What about the systemic defunding of public institutions? You are simply applying financial workarounds without the ethical, even moral, variables here. Start with the question: Are current costs ethically defensible?
14
This of course will happen in exactly 4 years - immediately after I make the final payment for 12 years of college tuition for the last of my 3 kids.
1
Mr. Alexander misses the point that the increasing costs of higher education and the need for students to take loans is a symptom of the huge transfer of wealth from younger generations to older generations. If those from the Baby Boom and Gen X invested adequately in public higher education to begin with, current students would not be forced to carry the burden of student loan debt.
13
@Tom I’m part of Gen X and would love to have the funds to invest. However, even though I have a Bachelors degree, after working in the legal field for 20 years, I still wasn’t able to do much more than live paycheck to paycheck. I’m now in grad school, soon to graduate and worrying about paying off those student loans. The world is a different place than how my parents and grandparents told me it would be and I think that needs to be taken into account and adjusted for in a larger, general sense.
57
@Michelle I think Tom is referring to investment of public funds over the last 5 decades away from public education, with increasingly large tax breaks that have been voted for by Boomers and Gen Xers alike. I don't think he's referring to individual investments in stocks, etc
1
@Tom
The average college debt is still about the cost of a first used car for the typical student
If individuals make horrible and silly choices that saddle them with six figure debts then that is an outlier and hardly representative of most folk's experience.
This topic is infuriating and Senator Alexander's efforts are welcome. One additional point not mentioned - the fact that the federal government profits from these poor kids and families - our middle class one included. My son received two federal loans for college. On graduating and beginning repayment, he was forced to pay off the lower interest loan first before paying off the higher interest loan. Admittedly there are many families that cannot cover any college costs, but in a country with a dwindling middle class, we need also recognize that many middle class families are paying for what they can out of retirement savings and the like. If baby boomers are not leaving the work force by age 65, it's often because college costs have bankrupted any savings they had built up. Many of us will have to work till we are physically unable. Make America great again?
7
There has to be an end to lifelong debt. Any meaningful solution must permit bankruptcy as well as end debt repayment when the “student” reaches 65 years old.
14
@Laury Kenton
But, Lauray, lifelong debt is the American way. Look at the indebtedness of the US government, of US business. Maybe individuals need to worry less about being in debt, just paying what they need to to stave off garnishment of wages and property.
1
So many of the comments on this article call for loan forgiveness, no-cost tuition and other "free rides" that colleges and taxpayers simply cannot afford.
Free everything for everyone, even (or especially) non-citizens, is a socialist mirage.
Confiscating the wealth of a relatively small number of US billionaires may provide a one-time windfall, but watch what happens when billionaires and multi-millionaires move offshore.
As Margaret Thatcher so aptly put it, "The problem with socialism is that sooner or later you run out of other people's money."
3
@Ro Ma and so what suggestions do you have? Perhaps free college isn't a possibility, but we should certainly be able to ask why states and the federal government have under-funded education and why the media more or less demonizes those who teach--and why the average citizen just acquiesces or outright agrees with this new austerity. You're pushing against one extreme by touting the words of someone who was at the other extreme, which isn't helpful at all.
I think it was Pascal who said, "I want to be the man that embraces both extremes to fill all that is in the middle."
We should at least work for a middle ground before we reduce someone's world to smoke and ash. Thatcher was a smoke and ash person.
1
@Ro Ma Well, the middle class and below have certainly run out of money by giving it to the top 10%, haven't they?
1
@Ro Ma Then how about bankruptcy big money people do it all the tim when they don't want to pay there loans back just ask Trump.
1
Community colleges help many students choose an affordable path to a college degree; don't overlook or underestimate how much a student can save by starting there!
9
@Alice Sadly, because of peer pressure or parents inflated value of a four year institution, a community college is not chosen.
1
It's so refreshing to not read comments bashing tenured professors for once.
Many professors cannot afford to send their children to the colleges where they teach. Indeed, many of them are still paying off their own student loans.
The result is going to be a loss of talent in teaching and research. Why would any bright kid go into such a profession? And the truth is, as tenure-track jobs disappear, most do chase their interests will be ground up in the adjunct market.
The expense of college and university education is having effects beyond the obvious.
16
@Renee Most faculty and staff at most colleges get substantially reduced tuition for their children.
3
Only at private universities. Public schools are usually prohibited from offering lower tuition to dependents of faculty and staff.
9
That’s true, but what does it say about a college’s rising costs if their own employees couldn’t afford to send their child to that school if not for tuition remission?
2
Written like someone who has never experienced the dark side of the student load system. The generosity written about is tied to the income of a student’s parents and that creates a gap. Said gap results in a student not being eligible for grants nor being able to count on support from the family. Forcing students to choose between student debit and their future prospects is a wretched game!
How about an initial step of lowering the interest rate for student loans? You could then follow this with a system that allows student loan repayment to occur pretax every paycheck. That is the best you can do with a corrupt, rotten system that preys on people trying to secure their future.
27
It is good to focus attention on this critical problem. One aspect that is not as obvious is the drag on innovation. I am involved in a technology start-up that needs bright up-to-date engineers. One problem is that such start-ups typically cannot afford to pay normal full salaries and often need to offer a piece of the company in equity in exchange. However, this requires a new person to be able to live on a low salary for a few years as the company and their equity grows.
With huge college loans this greatly limits how many bright young minds can take chances to innovate and drive the changes needed for our country. Rather than just making it easier to pay back loans, we need to reinvest in our colleges to reduce costs so there aren't so many onerous loans.
7
A college education formerly was an investment we collectively made in our young. Now the bankers have turned it into an extractive industry like mining, and we extract all our young's intellectual capital in the form of student loans as it is being formed.
24
@Tom, correct. I'm all for post-high school education, it's essential in our current work force. However, anytime the government steps in with money, or guarantees for repayment, the wolves of Wall Street begin gathering and developing plans to milk it.
We also need to get basic economics back into our primary education curricula. Students, and their parents, seem clueless as to the borrowing consequences on their children.
And lastly, one political party in particular needs to stop using the disingenuous word "free" in discussing education, healthcare or anything else. The goals are admirable but nothing is free.
I started reading before noticing who wrote this. When I got to the third paragraph, I knew it had to a Republican. Senator Alexander's proposal of a 10-year repayment plan would have changed my life, but not in a good way.
I went to the best schools, graduating from law school in 1991. While some of my friends spent soul-crushing years in law firms to pay off their student loans, I went almost immediately into public service. Because I refinanced my loan (it was easy with no "red tape"), I still have 11 years of repayments. I have a good life, great credit, pay lots of taxes, and donate to many charities including all my former schools.
I think of my monthly loan payments as the tax I have to pay for getting a great education without being born rich in America. You hear horror stories about lawyers and doctors with huge loans. Those are my friends; they are doing okay. Of course, it could be better; those of us not born to wealth could have the same opportunities as those who are. But Senator Alexander's out-of-touch, patronizing "non-solution" is not the answer.
11
I would also provide additional repayment periods of 15, 20, 25, and 30 years. We also need to consider the amount of interest charged for federal loans. High interest rates on a large principal make the loan extremely tough to pay back. Public loans for graduate school should also be a part of this conversation. The interest rates on my federal loans for graduate school ranged from 6.8 to 8.5 percent. I don't mind paying the loans, but the high rates truly create a millstone around the neck and erode the financial benefit of the education. High monthly payments also limit career mobility by reducing choice. Finally, I don't necessarily think students (undergrad or graduate) expect a complete free ride, but I do think that they don't want to be impoverished by getting a higher education--which is supposed to help solve that problem in the first place.
16
The universities and govt have set up a bear hug which will inexorably leads to higher prices and pain.
I like many parts of this, since it focuses on mechanisms rather than band aids e.g. anyone can take any course of study, but if the students in that department don't pay back loans, then the university suffers. This means weak programs of little social value (won't list them to avoid flame war) will no longer pursue these students to pad enrollment and increase fees. Nice trick, using an engineer as an example. They are not the issue, the problem is the 160k undergrad degree in
Some other ideas
1. Limit aid based on percentage spent on administration, sports and non-research/classroom facilities. Reward no-frills colleges with a bonus to allow graduates to graduate cost free.
2. Limit discriminatory pricing (sticker fees eg top rate paid vs average). If govt is subsidizing, colleges should not run additional tax system to fleece the upper middle class who already paid taxes, or need an arms race in facilities to attract cash cows.
3. Shorten path to professional degrees. In other countries you often apply to med school out of HS. Many are ready for it.
4. Increase supply of college graduates by lowering of costs by universities by for example rewarding decreasing cost per graduate by expansions in capacity. Right now we give more aid to students to increase supply, but it results in raised prices by universities -backwards.
3
Start with lowering the interest rates. I guarantee that alone will make a huge difference. And I'm not talking about private loans, but the federally backed department of education loans presented to students as "low interest." All of my loans are through the DOE, and the interest is over twice that as the interest on my mortgage. It's unconscionable.
22
@Robbie
Your mortgage is backed by collateral (your house). Therefore, lower risk. Your student loan debt is unsecured. Moreover, loans are given to individuals who do not yet have any earning history. While investment in higher education provides a good return for you, it doesn't offer the lender (even the DOE) any security/collateral or certainty about your future ability to repay the debt.
Not sure when you went to school, but since 2013, the rate on federal student loan is tied to the 10 year Treasury bonds. As those yields rise in response to market forces, so too do the interest rates charged on loans.
I'm all for some reasonable reform to student lending and even more for better financial education for students, but I don't buy the interest rate argument. The rates on student loans are far lower than other forms of unsecured debts (i.e. credit cards).
@Robbie Your mortgage is secured by your house which can be repossessed and sold. Your student loan is secured by your ability to generate future earnings and devote them to paying it back, a much dicier proposition. Thus the foolish "no discharge in bankruptcy" rule that creates such destruction. Without that rates would be higher, but lenders would be forced to actually research what the student planned to do with the loan. The interest on your loan is half the rate on your credit card balance. Thank the government for that, much as it hurts to do so.
The system as it stands is broken. Let's devote more money to making good state schools cheaper and more money devoted to scholarships (for students, not athletes.) Lets develop more degrees that can be earned while you work (and maybe be subsidized by employers.) Yes, demanding a college degree for every job is crazy. How about demanding a degree within a set number of years of employment?
Finally this: "Administrators have a specific question: “Can you do something about the jungle of red tape that wastes money on overhead that could instead be spent on students?” Yes we can. Eliminate 25%-50% of administrators now.
1
@beth. No student should be paying 7% interest on a student loan and no bank should be making millions off the backs of college students.
5
If you want to improve "process" and put better efficiencies in place then....Yes! This is all good stuff. But the elephant in the room (apologies to Sen. Alexander) is what has driven the increased cost of higher education.
Number one is that as a society we have collectively devalued higher education and shifted it onto the student and family. The fact is that while the cost to a college of educating a student has gone up over the last 40 years, the increase of the cost TO THE STUDENT has gone up considerably more. This gap is completely due to States prioritizing other expenditures at the expense of funding public schools. Democrats should have no problem making this argument!
Secondly, by making so much money available to students in the form of aid and loans, colleges and universities have less incentive to hold down costs. It's the same principal as real estate: Low interest rates makes money more available which in turn drives up the cost of RE. Republicans should have no problem making this argument!
If you just take a pie chart and look at where state expenditures are going today, and compare it with a pie chart of 40 years ago, you may find that some re-balancing is in order, and education may come out ahead. As a further benefit, if the cost of public schools came down as a result, private universities would have to take notice in order to compete for students.
We just need to look at our own history for answers to shift the paradigm.
9
This is a made up problem. It is made up because of our blind dedication to a system of higher education created in the Middle Ages Europe. We focus on place to establish standards of learning instead creating criteria that emerge from the requisite in the learning. We create in the minds of learners an incapacity and lack of agency that forces them into this expensive bargain. This whole system is wasteful of talent and potential and extremely damaging to what little democracy we have been able to muster. We have all the tools and expertise, we merely need to reconfigure to allow everyone in the US to afford the kind of higher learning support and excellence they can aspire to without the cost of Harvard, Stanford or some other ridiculously undemcocratic institutions.
3
I do think this is a decent start. I look forward to seeing the final legislation. I would Also suggest making all of the interest paid on the loans tax deductible. Currently only a small percentage is deductible.
1
Senator Alexander raises some good points and has ideas worth pursuing. I would like to add to the mix of options.
Parents need to be made more aware of the option of starting an Educational Saving Account (529), which can be used for vocational, technical, 2-year & 4-year, and graduate programs across the country. All the earnings are tax free provided they are used for qualified educational expenses.
If you start contributing $50 a month at birth, you'll have $16,000 by age 18; $36,000 if you contribute $100. This assumes a modest return annual of 5%.
Use compounding interest in your favor. You and your child are better off having money grow than having student loan debt grow
I suggest the government embark on an awareness campaign about the benefits of and how to access 529 plans. I would even go one step further and suggest that every child be eligible for a $100 grant from the government to kick start a 529 plan.
3
Let's start with this one, Lamar: Student loan debt - by design - is the only debt in the US that cannot be bankrupted and can be consolidated only once through the current process. Congress passed those laws. Like every other debt, student loan debt should be bankruptable. The drum beat of "the student loan bubble" that will crescendo soon puts the responsibility in the wrong place. Congress and the financial industry created this problem; congress can solve it.
10
You do not have to have money to go to College
More than one of my students financed their education via the ROTC. And on average, they were more successful later than those who did not
5
@Ivy League -- I did, though my path though was very unusual and could not be repeated today.
ROTC comes with a service commitment. It's different now than it was in my generation, and I am reluctant to say that my experience is entirely relevant today.
Today's service commitment is
"You can serve full time in the [Army, Navy, Air Force] for three years (four years for scholarship winners), with the balance in the Individual Ready Reserve (IRR).
Selected Cadets may choose to serve part time in the U.S. Reserve or National Guard while pursuing a civilian career."
My experience was a shorter active-duty requirement that I thought was fair and valuable; but the problem (big problem!) came up with the reserve requirement. You don't get to pick where you do that, though there was some negotiation. The place they wanted me to do that was a rural base a long way from any decent job in my field, and even farther from a decent graduate school. I was an engineer, something they valued ... and eventually I was able to get them to agree to something I could live with ... but don't take it for granted.
That "pursuing a civilian career" phrase had an application back then too, but remember it's discretionary -- their choice, not yours.
1
@Ivy League But someone with flat feet, or can only hear out of one ear is basically screwed. ROTC is not an option for them.
Or, how about colleges and universities stop wasting money -often taxpayer money - and lower the cost of getting a degree? I've lived in a college town and know many people who work in academia. Few professions are as privileged and as much of a waste of money These tenured professors get to have huge vacation time, year-long sabbaticals where they may attend one conference and write the entire year off as "research (often for a useless topic), and if/when they do teach sometimes it's just one or two few classes a week to a few students. I've seen doctoral candidates go to Europe, all expenses paid, to present a paper at a conference. I could go on and on, but the point is, none of this is necessary for students to get an education. If universities focused on teaching, and if professors were treated like employees at any other company, maybe students wouldn't have to mortgage their future to get an often useless degree.
7
The president of the University of Pennsylvania is paid $3.5 million a year. Housing is thrown in, and probably an entertainment allowance. Why in the world are we treating university heads like CEOs?
22
If you want to attract capable people, you have pay the market rate for capable people.
1
@DRS the "market" is fundamentally flawed.
1
Senator Alexander writes:
The next time a student asks “Can I afford it? Is it worth it? Can you make it simpler to apply for aid and pay back loans?” I want to be able to answer yes.
I’d like to know where in his piece he actually addresses, “Can I afford it? Is it worth it?” Making it simpler to apply for and pay back loans does not address the metaphorical financial albatross that hangs around the necks of graduates. It more accurately rearranges the deck chairs on the Titanic.
11
I recently took a course on udemy that cost perhaps $200k to produce that has been taken 45,000 times. It cost me $20. Add a means to interact with other students and an accreditation and exam system and one should be able to get through the intro courses in most majors for less than $500 total while living at home or anywhere. The current model has proven itself obsolete and overly expensive. It’s dragging down the economy.
3
As a retired college professor who taught at both private (Duke and Northwestern) and public (University of Michigan and Stony Brook) universities, let's stop counting the repayment options and focus instead on a few other things to reduce the debt burden. First, stop charging high interest rates on all students loans. It's outrageous that students pay two to three percent more than a mortgage loan. Second, simplify students debt relief through increased public service options. For example, my oldest son is paying off a $150,000 medical school loan and would gladly have worked for the V.A. where there is a major physician shortage for five years in lieu of his loan debt. Third, work with states to make their colleges, which two-thirds of college students attend, tuition-free by requiring that all federal grants must have their indirect costs allocated to tuition reduction. American public higher-education used to be tuition-free and that should be the goal again. Instead, it's been my experience over three decades that states like Michigan and especially New York have drastically reduced support to their colleges and universities while raising tuition. It's criminal that we've saddled students with crippling debt that many will never be able to repay. That burden can and must be reduced.
37
All great ideas, but I have another one. How about not allowing lenders to front-load the interest during repayment? With the loans I had, only a fraction was going towards principal; most of my monthly payments of about $1000/month were applied to the interest. I refinanced and am finally seeing a noticeable difference in my balance.
14
In your hypothetical engineering student example, $18k on necessary expenses seems awfully low to me. If said student lives in a major city (like Chicago), likely he's paying $1000/month for rent, even with a roommate. Tack on another $300/month for utilities--water, electric, phone, cable, internet, heat. Car payment, $500/month. Gas for car, $100/month. Does said engineer eat? How about $400/month for food? If he's in a contract job, he will also need to buy health insurance. How much is that? Don't forget to deduct state and federal income taxes from that $60k before arriving at discretionary income.
9
No no no no no.
This is a scam, and changing the financing rules isn't going to help getting rid of it.
Once more: college today is about getting kids to buy something they don't need, and can't use, and getting them to pay for it with money they don't have.
Most high school graduates - I use the term loosely - have no need for an academic education. Maybe 20% have the ability to get one, if it is taught to the standard that once applied. Maybe 2-3% will actually make a career of their academic education.
The current situation has 50% of 4-year students leaving with no degree and a huge debt. Of the remainder a big chunk are unemployable. Great system, huh? Just the sort of thing we need to grow to encompass more students, so that we can raise that 50% number even higher.
It's simply a scam, and it has to stop.
8
@Daedalus
"Once more: college today is about getting kids to buy something they don't need, and can't use, and getting them to pay for it with money they don't have."
Absolutely spot on, Daedalus. American consumerism at its worst. And now some politicians want US taxpayers to subsidize free college tuition? Until we work on our elementary and high school programs so that graduates leave with the skills needed to succeed in college, we need to focus on improving lower level free public education.
I listen to college-educated athletes give interviews and I wonder, "How in the world did any university credibly give you a degree? You can't string a single sentence worth of words together correctly, and let's not even talk about your diction."
College isn't for everyone. It's a scam in many ways. We over-value credentials that mean nothing. PhD degrees are getting to be 'head candy.' I work with many who have little grasp of history, grammar, even logic.
2
I'm sorry Mr. Alexander, you don't understand lending - neither does Congress.
I lent money for over 40 years - you don't lend money to someone who doesn't have the ability to repay the loan back.
Period. No exceptions.
No student can predict if they will graduate or find a job.
I heard last week, there was a proposal to eliminated all student debt - the government should write off $1.5 trillion.
What should happen now, it to eliminate the government's student lending program. No more federally insured loans. None.
Grants. Grants provided to students based on need - lowest income students are provided with the largest grants. The grants are provided as long as the students maintain minimum GPA's and courses taken. Grants are not repaid.
We are burdening our children with loans they will never be able to repay - it's predatory lending to students.
The government's never going to collect even half of that $1.5 trillion - $202.2 billion is either in default or forbearance - an additional $200 billion is in early stages of delinquency - it's a crisis - those are children who owe that money.
The cost of college tuition has risen disproportionately due to the government's lending program. The grant program would be geared to direct students towards community colleges and those schools which are still affordable.
Mr. Alexander, we need to eliminate the program entirely as there is no solution to the current problem. None.
32
@JMS
Exactly! Same scenario as Fannie and Freddie aiding in the mispricing of mortgage risk inevitably led to Mortgage crisis. So does Gov't backstopped lending allow Universities to misprice their tuition. Thank you for clear concise picture you present.
6
@JMS: when there are no more loans and "easy money"….colleges will face empty classrooms.
They will figure out in a HURRY they have to lower prices!!!
When I was in college in the 70s, the school's Financial Aid department was first and foremost about scholarship opportunities, and thus deserved its name. As I helped my kids through, I found that the like-named departments at their schools were working with a much larger fraction of students, but mostly what they did was help students and their parents take out loans.
Student loans are not financial aid. Calling them that is a damaging falsehood. When you take out a car loan, or a mortgage or a credit card no one calls it financial aid. We do not say that they are car aid or home aid or shopping aid. They are debt, and disguising them as 'aid's is deceptive. Student debt based on prospective future income is potentially ruinous, but thanks to present laws cannot be wiped out even in a bankruptcy. This is true whether or not the student graduates and actually obtains that potential for enhanced income. When my graduate started work in his field, studentloans.gov set his income adjusted minimum payment so low that it did not cover the accruing interest, much less reducing the principal. This is not student financial aid. It is long term debt imposition. And that interest was set by the government program at twice the going rate for mortgages, with that being collected by private companies that service the loans the government arranged. That is loan-sharking, not aid.
21
@Allfolks Equal. Excellent comment. Thank you.
I like many of your ideas, Mr. Alexander. However, these two statements are in conflict with each other:
“Can you do something about the jungle of red tape that wastes money on overhead that could instead be spent on students?”
“My third proposal is a new accountability system for college programs based upon whether students are actually repaying their loans.”
An accountability system would require a building full of administrators who track students in the years following graduation. (I know from personal experience that this is not easy to do.) People who prove themselves to be superior trackers/hounders – saving universities big bucks - will make half a million dollars a year because it will be worth it to universities. Please consider the unintended consequences.
3
How about more state aid for public universities?
Back in the early 1960s, I was able to work my way through school, working half time in the university library, and full time in the summer, while paying out of state tuition. I did have to take out a student loan my last quarter--for $300.
Why can't students do this today? There is no way, with costs as the are. We are no longer investing in our universities and are expecting persons just starting out in life on their own to foot the bill.
Talk is cheap. Supporting education is expensive. But it is worth it. Look what the GI Bill did after WWII. It helped millions with their education, and they helped build the middle class we are now losing. It also helped many persons, like me, through graduate school many years later.
Invest in education again. Enough with all the loan proposals.
8
@onlein: sir, it is not 1960.
EVERYTHING was cheaper back then. Gasoline was 26 cents a gallon! A nice house cost under $25,000.
$300 then would be like $4000 today.
You can buy a car for $1800!
In 1960….only about 15% of all high school grads went on to college. It was unobtainable for most, they had to WORK….right out of high school.
In 1960, there were many fewer colleges. State aid only had to help out a very students, and they were the top, smartest kids.
TODAY we expect every kid to go to college, even illegal aliens! Every kid who hates school and gets Ds and Fs is expected go anyways.
There are hundreds more schools and they all want money.
All we did was dumb down and devalue the importance of a college degree for EVERYONE.
1
You can easily save 40-80% by going to Canada or Europe. Many English language BA programs are three years saving you even more and you will have an edge getting into graduate school. Housing and medical cost are often also a fraction. E.g. typical tuition in:
Canada: $15,000
Netherlands: $10,000
Germany: $6,500
Ireland: $21,000
UK: $25,000
6
It all starts with Universities who suffer from a EDIFICE COMPLEX. Stop the overbuilding. Cut salaries by 50 %o for tenured professors who rarely, some never, teach.
Stop building dorm rooms that rival suites at the Ritz Carlton.
Reduce administration expenses by 25 %.
10
K Parson
Most of what you say is on target. However generalization of tenured professors is dead wrong- or perhaps you are talking about professors at private elite colleges
Tenured professors at state schools, especially at those just under the the level star campuses usually work to the point of burnout. They have high teaching loads and little financial support for research (but still expected to publish)- making matters worse is Trump’s latest tax move. Salaried employees can no longer deduct unreimbursed expenses- so that trip to the archives for the next book is money that goes into a black hole- or the money a professor pays out of their own pocket for a laptop to use as home is gone
Perhaps the ballooned salaries of college presidents (and football coaches) should be studied/ salaries of a million plus a year is a crime at a school where faculty are under paid, students over pay- and high level administrators are REALLY overplayed
7
I have mixed feelings on this topic. On the one hand, we have an industry that is systemically handcuffing the finances of huge swaths of our population.
On the other hand, we have a huge swath of our population that (as consumers) continue to make decisions which enable the industry to get away with the high costs...
If we had a stronger culture of college-goers who emphasized low-cost for value education then (supply vs. demand) the industry would have to respond.
3
The gross inflation of the cost of a college education correlates almost exactly with the decline in state spending on public higher education. As the price of a public university tuition has risen to cover the shortfalls in funding the private institutions have felt free to raise their prices even more. We pay for K-12 eduction because we understand that if a citizen can't read, write or do the elementary math necessary to make change then they are effectively unemployable and will alway be a burden on society. We have reached the point where that calculation extends to a bachelor's degree. Maybe, rather than restructuring the debt obligation our students are taking on we should realize that it is a common good to provide a reasonable education for all and pay for it collectively.
4
@Arnason A decline in state spending has nothing to do with the rising cost of private institutions. And having someone graduate with a useless major does nothing for the public good. Maybe everyone shouldn't go to college if they have no clue as to what they are going to do.
4
@Jackson It has something to do with it. Private universities used to be much less expensive, too. I know of a private university where the tuition and room and board costs for one year was $1200. Not $12,000. Private schools had to compete for students.
1
@Jackson . . . Of course it does, or have you not heard of the marketplace. Lowering the price at state schools would force private colleges to lower their prices to compete.
Why are university administrators receiving such high salaries?
Students are in debt, faculty members struggle to find full-time jobs as universities go to part-time instructors, and administrators salaries are at an all-time high.
Then there are the hidden costs behind competitive athletic programs.
19
Bottom line, affordable not necessarily total free college education was the backbone of this country post WW2.
With republicans blatantly changing it to help the rich and shaft the student with democrats de facto going along with it despite their protests we have come to this travesty of justice.
Reasonable people can differ re if the Senator's proposals are the best or others are better but the bottom line is that higher education should be affordable and not the current albatross around a student's neck like it is today.
4
A plan that allows students to pay a maximum of 10 percent of the borrower’s discretionary income and a policy that holds the college programs accountable both sound good to me. Britain has a similar system and as I understand it, after ten years, the student no longer has to pay. Knowing America, that last but would be too much to hope for. In any case, be quick, Mr Alexander - I have another kid in the pipeline!
4
1--) Other industrial countries subsidize their citizens' education through college when warranted; this would be a true meritocracy and a great investment for our country's future.
2--) Colleges can charge whatever they like; they know there is a scarcity. At the same time the US gov't puts few restrictions on colleges with more on the loan takers. Link the eligibility of colleges to be the benefactors of US gov't grants and loans to keeping their costs from increasing faster than CPI. Factor in the success of their graduates as well.
3--) Do not turn college loan recipients into indentured servants. Business folks can lose millions on a casino or high rise building and write it off in bankruptcy. Why not a special process for bankruptcy of student loans? Otherwise the US gov't is guaranteeing loans only for the banks. Any surprise there?
Post script--) While Mark from Las Vegas bemoans that 'Liberals created the problem by overselling the value of a college degree.', a better educated populous is the bedrock of democracy; having your plumber knowing history or your electrician knowing philosophy is not a detriment but a boon to society especially if it encourages entry into those fields which cannot be outsourced.
The honorable Senator has been in office for a long time. I would have expected him to have done something about all this by now. Must be running for re-election.
9
@JohnK Actually, he will not run again.
In most advanced countries tuition costs are a small sliver of what we pay as higher ed is publicly funded. They are getting what they pay for. Why aren't we??
It is long time for everybody to come together and get serious about fraud, waste, abuse, corruption, bid-rigging, sweatheart deals, and corruption--at alll levels of health care, defense, and infrastructure. Think about it: where the heck is all the money going?
Let's see the total picture of financial punishment:
1) the obscene cost of health insurance: premiums, co-pays, and pre-deductible cost-sharing. (In almost all advanced economies these costs are covered almost in full by single-payer or NHS regimes)
2) Add: the array of tickets, fees, and surcharges imposed by local governments as a revenue stream, shouldered by those least able to pay.
3) Add: hefty property taxes shouldered by homeowners as well as renters. (most european countries eschew significant property taxes)
4) Add: income tax which approaches european levels on its own!
2
It shouldn't cost a fortune to get a college education. The more enlightened countries in the world provide their citizens with universal education and health care. We can't do that in this country because the Republican Party is allergic to social programs.
6
Other countries produce qualified university graduates unburdened by huge debt, a surplus apparently, because they emigrate here as engineers, physicians, etc. in large numbers. We see them every day in our high tech firms, as staff in medical facilities, as faculty in our own universities, etc.
There seems to be no mention of how other countries manage to afford this when we cannot. Adopting workable and proven ideas from other countries is not always a bad thing.
8
@Penseur . . . Because then we'd have to mention SOCIALISM.
Appreciate the need for discussion and ideas. But this simply won't change the cost - just alter methods of financing and loan repayment. And Sen. Alexander's idea of what's discretionary income seems very subjective given differences in cost of living and job opportunities/unemployment rates, across different communities nationwide.
My family is "high earning" and even we debate the cost of American universities for our kids. We likely won't quality for aid and simply don't know if a quarter of a million dollars is worth it?!?!?!
That's where the problem lies.
11
Mr. Lamar these all sound like sensible proposals, but they are at best a bandage and aspirin for a patient that is bleeding to death.
It seems Federal guarantee on loans that cannot be expunged in bankruptcy is yet another giveaway by our representatives to a wall street racket that has now ballooned to obscene proportions. Where do you stand on this issue Mr. Lamar?
There is also a very interesting podcast three part series by Malcolm Gladwell on the high cost of education and the role high endowments have in perpetuating these costs. Universities are tax-free entities, such as Stanford with a 22+ billion dollar endowment earning interest tax free, what as a society are we getting back from these tax giveaways when most of these endowments go towards educating a very small group of the elite and community colleges are underfunded?
The education system in this country, like the health care system, both of which should serve the common good of society have been perverted by money to an obscene extent, and our political representatives are directly complicit in this.
19
Why is it that nobody blames the colleges and universities? The more money the that the government makes available, the more tuition goes up. According to CNBC tuition at Harvard in 1998 was $17,000, in 2018 it is $ 44,000. That is obscene. These supposedly - not for profit - universities are sitting on Billions in tax free endowments while burying students in debt.
42
@Dan M
I am in agreement Dan, college is too expensive. Tuition rates are too high and much of this is due to colleges wanting to improve the look of the colleges by buildings being constructed on the campus, usually student apartments, which are quite nice these days (I don't have the kitchen some of of the college apartments have) and the cost for all these new buildings and general infrastructure is passed onto the students in the form of tuition.
8
@Dan M
But what do most students actually pay, after grants and other discounts, and how has that changed from 1998 to 2018?
1
@Dan M Couldn't agree more. My second child will be attending college next year. Outside of the academic ranking of the school, the three most considered factors in his, and many other students', decision where to attend are 1) the luxuriousness of the dorms, 2) the extravagance of the student athletic facilities (as good as the best health clubs in many cases) and, 3) the quality of the food served. It's ridiculous the amount of money being allocated to these facilities. Stop the madness!
5
I work with young mothers in their 20's, most of them have college degrees. Many of them return to work when their baby is only a few weeks old, when maternity/parental leave with reduced pay is an option, because they have to pay their loans. Let's have a maternity deferment on student loans, similar to the deferment for grad school and the Peace Corps. No payments, and no interest. We need to support mothers who want to be with their babies. If a woman has a new born she should be allowed to care for her child for the first year.
27
College must be affordable!
Healthcare: College graduates are more likely to land jobs that either include healthcare in their benefits package or pay enough to buy basic healthcare leading to less dependence on Medicaid or government subsidized healthcare.
Birth Rate: Graduates burdened by exorbitant student loan payments are more likely to delay or forgo marriage and parenthood since they simply cannot afford the cost of a large enough apartment, healthcare and childcare so they can continue to work. Forget about ever buying a house.......
Home Ownership: Student loan debt sometimes nearly equals the amount of a mortgage payment. Many graduates take two or three decades to pay it off, and the debt balloons if payments are missed due to unexpected unemployment or a health crisis. Inasmuch as home-buyers stimulate the economy, putting homeownership back into the reach of 30-40 year old college graduates would be helpful.
Retirement: An entire generation of debt-burdened graduates is unable to even think of saving for retirement during the most important decades - their 20s-40s when money will have the timespan to compound and grow before retirement age. Given the economic stress of future waves of retirees with nothing but social security to fund their old age, ignoring this problem is only kicking the can down the road.
Public Universities must be affordable. A minimum amount of debt, easily paid off before 30, should be the goal.
10
Nine years bound to student loan payments represents a failure of the system, not a success. Skyrocketing tuition costs need to be addressed.
10
What are you going to do for the students of the past thirty years who were lied to, cheated, and misled by the Sallie Mae's and other college loan collectors authorized by the Education Department to take aa $20,000 debt and turn it into $100,000?
"There are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. alone. The average student in the Class of 2016 has $37,172 in student loan debt."
Do you realize how much would change in our economy if these 44 million borrowers were relieved of the burden of debt - most of which is interest, penalties, fines, and not college tuition?
Most of these borrowers were graduate students, professionals, four year college grads - not people who never got degrees.
Set them free!
37
Have you been to a college campus recently? Looks like a 5 star resort. Kids and parents are paying for the unneeded "fluff" that they seem to demand. You get what you pay for? How about finding a "bare bones" college without the fluff and the price tag? Does that even exist? If not, why? Isn't college a place to learn? Apparently not.
30
@Sarah99
There is a kind of "arms race" to attract students to campus. Prospective students and parents visit different campuses, and are more impressed by the "5 star resort" than a "bare bones" campus. Cuts to education force universities to treat students like potential customers. The schools simply have fewer resources beyond tuition to stay afloat. This situation affects public institutions more than private ones.
Of course
6
@jrinsc
(Apologies - I hit "submit" accidentally.)
Of course, all universities and colleges would prefer to focus on education. As I mention in my comment below yours, there are many complicated reasons for rising tuitions costs. But I agree that this race to make facilities more like resorts is insane. But it's what the customers want.
2
Intercollegiate athletics is one 'fluffy' yet apparently sacred part of most colleges and universities that dilutes focus from academics. The argument that intercollegiate sports pay for themselves is weak, like studies that portray publicly funded stadiums as a net financial gain for communities. When athletic coaches earn more than college presidents it is clear the wrong priorities are set. The sports advertising complex of the NFL, NBA, MLB and broadcast media could fund their own feeder stream through designated party schools.
3
I applaud Senator Alexander's proposals, and hope they are debated seriously. The reasons for student debt are complicated, though they include bloated administrations and competition among universities to build increasingly fancy facilities to attract students. But for public universities, perhaps the biggest factor in rising tuition is massive funding cuts made by Republican state legislatures. These cuts serve several purposes:
1) They force colleges to consider eliminating (or scaling back) humanities programs, in favor of STEM programs and job training. This helps corporations, who in turn help Republicans.
2) College and universities are considered liberal, so Republicans see little political advantage to helping them. Why create a questioning, informed electorate rather than compliant workers?
3) Most importantly, increasing student debt helps private lenders. Because it's nearly impossible to discharge student loans in bankruptcy, $1.5 trillion is a huge win for the banking industry, who again support Republicans.
Senator Alexander is an outlier in his party, and I hope he can persuade his colleagues of the importance of student debt. Unfortunately, like the issues of health care and climate change, most Republicans prefer short-term profit and their own political careers over long-term strategy and the stability of our nation.
21
Liberals created the problem by overselling the value of a college degree. College is only really necessary if you're going into business (accounting or finance), medicine, law, teaching, information technology, or engineering. If you're not aiming at a career in one of those areas, you should really think hard before shelling out a lot of money for college.
2
@Mark most of us do think hard about it for ourselves and for our children. Declaring your opinion does not make it true by the way. And some of us deeply value education and learning beyond the financial ramifications. Yes, those matter. Other aspects do too. This very argument I am making which requires a clear articulation of ideas in these comments and asking the reader to hold my ideas which differ from yours..I learned to do this in college. It takes years to learn to read, write and think critically. One can argue that these skills are valuable in all walks of life not merely the ones you mentioned.
10
@Mark . . . "College is only really necessary if you're going into business (accounting or finance), medicine, law, teaching, information technology, or engineering." So, about 90% of the economy. Thanks for the insight.
1
@Mark. I don't recall any "liberals" sneaking into my house when I was in high school, forcing me to apply to college. Whatever happened to taking responsibility for one's own decisions? Don't "conservatives" believe in that anymore?
1
About to send a child to college. We need better usury laws I would never sign a contract that couldn’t be negotiated.
7
We talk about student debt for school but what about tuition? Let’s get that under control. Perhaps tuition should be tied to degree. Degrees with less potential income pay less, the higher the profession maybe the higher the payment.
More important let’s talk about the injustice of telling us parents What We Can Afford and saddling us with parent plus loans if we want our child to go to a school he has worked hard to get accepted to. We are coming into retirement age but can’t even think about it because of our loan debt. With little choices of payment plans we will be doing this for another 9 years. On top of that our sons keeps looking for other jobs because he feels an obligation to help. Which we have not asked for nor want him to feel this is his responsibility. We need to rethink college affordability.
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@Glo
No, rather than tie tuition to major, tie loan amounts to major (and future earnings potential).
1
@Glo: sorry but nobody is ENTITLED to their first choice of school.
You go where you can afford to go.
I wanted a lot of stuff when I was 18 too, but my parents disabused me of that notion.
1
If you want get the student's attention, cut the price of text books. Especially books used in the first two years. English Comp, American History and Calculus 1 doesn't change, every 3 years. Ditto Physics 1 and 2, foreign languages.
The next time you're at the wine buffet, ask the college president how much he makes. He's probably not a lawyer or heart surgeon.
How many millions for the coaching staff?
The cost of education is not high because the paper work is too hard. It's just greed.
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@Mike
Books are considerably cheaper now than ever, if you take the time to do searches on the title and IBDN and are willing to buy loose leaf foreign editions or well used textbooks. Just bypass the ridiculous prices at the campus bookstore.
College presidents are earning a fraction of other CEO types, still too much but hard to pin tuition for 30,000 students on his/her $300K salary.
Sports brings in money ..
Housing and food prices are way too high. More people should consider living at home rather than borrowing $1000 a month for university housing .. transfer from your local campus to the flagships and if that is not possible, lobby your state legislatures to make it so (many states have good routes from community colleges but not 2nd tier state schools).
And loan "grants" do not encourage thrift in how much is borrowed, really students should consider every dime, from textbooks to sharing off-campus housing etc to keep their debt from exploding.
And no, you can't charge 7% interest when banks are only paying 0.05% on checking accounts. Make that interest rate market rate, the security is the onerous non-dischargeable nature of these loans as well as parent loans ...
2
Here are two quotations from this article.
At the beginning:
"Our country has most of the best colleges in the world. We also have the most graduates paying off college debt. Roughly 40 million borrowers owe $1.5 trillion in student loan debt."
At the end:
"While total student debt is high, the average loan for a four-year college graduate is about the same as the average car loan."
We don't however get much of a sense of how #1 fits with #2. Is the the "crisis" a crisis of outliers? If so, we have to address the specific question of how they got to be outliers.
Maybe the answer lies in the the first paragraph of this article:
"A college graduate paying more than $1,000 per month on student loans recently wrote that he had been told 'to chase down a bachelor’s degree by any means necessary.' But, he added, “no one mentions just how expensive and soul-crushing the debt will be.”
I don't mean to be callous. But really? "No one mentions" that getting into a lot of debt can be "expensive"? You can't read two pages about college without somebody mentioning it, and then some.
In such cases, it's not enough to call for education about college debt. There is some key faculty of confronting the obvious that's missing here.
2
Another typical GOP non-solution. It’s fine to make the form and the payment plans simpler, but those are not the real problems. The problems are principle and interest. Lower or eliminate those and we get somewhere. The reason Republicans have to offer up non solutions is that a serious approach cost money and raising taxes or diverting a few dollars from defense is out of the question for them.
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There is no reason to charge Interest on student loans at a higher rate than we charge banks. Zero while in school and One or two percent when out is plenty - it’s the interest that is soul crushing as it builds and compounds for years before they begin to pay it all back. It’s like taking a reverse mortgage in your teens and spending the rest of your life to pay it back
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@Deirdre
Loan costs are higher because the loan has no collateral - if the loans were discharge less in bankruptcy, the rates would be even higher.
If you can’t afford the cost, the go somewhere cheaper, do ROTC or attend part time. People have to learn that decisions have consequences.
2
No one forces these borrowers to take out loans. I worked after school in high school, worked part time through college and graduate school and graduated with a tiny loan debt that I paid off in a year.
How about providing students and parents with more articles on how to minimize loan debt? How about more information on alternatives like community college and state colleges?
How about more information on college majors that don’t lead to well-paying jobs?
5
How about a minimum wage that covers the cost of a year's tuition if you work part time during the school year (32 weeks) and full time during the summer (16 weeks) like was possible in the 70's. That would be about $11/hour to cover in-state tuition at UVA ($15,200/year), one of the most expensive in-state tuitions in the country.
2
When did you graduate? I venture a guess tuition was substantially cheaper
Turn OFF the "guaranteed" federal student aid.
You won't see the suggested retail price drop until then.
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@Moehoward This is a popular talking point these days. I'm curious where it came from? Don't forget the unintended consequences!
With a third child finishing what is his final semester of college, I am intimately aware of these problems. A more transparent repayment system is a start, but these ideas of Alexanders are milquetoast and don't go far enough to reform a system that is badly corrupted and out of touch with reality. I can only imagine that soon many college and universities are going to collapse as taxes to pay for education, endowments, and what students and parents are able to afford, even with loans, fail to meet the income schools need to survive. Fewer students, too, are going to be willing to go into debt. We need a more rational system, such as going back to the low cost education of the 1960s and 1970s, as well as supporting comprehensive programs to increase earnings so that families and students can afford college without going into debt. And we need to rescind the recent upper class tax cut and use it to reduce student loan interest to zero and help students be relieved of loans once that have paid a certain amount. In other words, we need much more radical solutions to this problem than are proposed. I am actually angered that Alexander accepts the current status quo of high debts and interest (these loans should be no interest) for education.
11
@Roger Reynolds Indeed. Trump is "entitled" to a "good story" from the NYT, while whole generations are "entitled" to lives of indentured servitude to pay for their educations. Student debt is in no one's best interest, except the people profiting from it. Their profits are impoverishing an entire nation. Education is a bedrock value of this nation. As it goes, so go we all.
Investment in amenities seem to be the trend on many college campuses vs. investment in academics or instruction. Is there a future earnings increase that can be correlated by providing these often expensive amenities? Both parents and students seem to want them offered so students can continue to enjoy their "preferred lifestyle" while learning. I, for one, don't want to pay for "free" college as long as it includes such entitlement to comforts vs. learning. Many average students would be better off at community colleges, not at 4 year universities where they leave with a mountain of debt. Or worse, their parents do.
6
Helping low income families attend college is a very important campaign, but it’s not the main issue at hand.
Costs of higher education are enormous, and the real problem is with our old notions of pushing every child to go to college, no matter the cost. I pursued a brand name college degree because “that’s what you do after high school”. I racked up $125k I student loans in 4 years, and pay well over $1200 each month to pay them back, and will continue for 10 years. I’m not building wealth, and I’m barely scraping by with a well paying job.
Meanwhile, friends whose parents paid for their education reap the immediate benefits of a well paying job right after graduating! Imagine an extra $1200 a month in your pocket!
College expenses continue long after graduation, reduce our spending power, and threaten our futures. College only costs so much because we have the “ability” to borrow to pay for it. We need a complete overhaul of the higher education system.
34
Escalating tuition costs are a direct result of student loans. The problem with student loans, is not the interest rates, it is not the payments, it is the loan themselves and false guarantee of a college education. Everyone knows someone who went to college majored in a ridiculous subject and never used their degree. Every year required college courses teach you less and less only to force increased course loads in order to qualify for graduation or a particular job. Today's education system is a mafia and the loan system helps keep the 1% that run these colleges in business.
8
The cost of tuition is the biggest problem. Yes, the country has many excellent universities. A large number have deans and administrators at those same schools are making over $1 million per year off the backs of people paying more than $60k/year for tuition, room and board. Meanwhile, large endowments that could help lower the cost for more people are not used. $60k/ year for the super rich may not matter and it does not matter for the poor who can qualify for grants and the like. But, there is a vast group between where $60k/year can be crippling.
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@Peter
Oh no, the "endowments" are indeed used, used to lend money to students so they can attend said "school" and the "loan" they repay is to said endowment, which grows exponentially.
1
Fastest way to deal with the student loan problem?
1. Eliminate for-profit "colleges" which have ruined countless lives and have little academic or professional merit. These institutions are responsible for much of the debt surge.
2. Increase federal and state support for community colleges, which are cost effective and deeply linked to the communities they serve. Remember that half of all college students attend community colleges!
3. Reduce the interest rates that the federal government charges. Why are they so high?
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@Cousy
Include for-profit "universities" in item number 1. Although the most egregious example founded by an infamous con-artist has already been eliminated.
6
Senator Alexander has done much for education, from the days of Bush 41's initiatives to his current concern about paying for college.
Laudatory efforts these many year, but the rising rates for higher-ed tuition are usurious everywhere, as student loans are so easy to get. Colleges have kept raising their rates, knowing full well that students can find loans to pay for them.
It's incredible how high tuition rates have risen....higher than most any commodity or service provided, save pharmaceuticals. What's forgotten is the huge financial burden students carry for years. Some, lifelong. It almost makes it a disincentive to get a college degree. Shame on higher-ed for what amounts to highway robbery!
Senator Alexander and his team need to find a way to rein in this madness. Two factosr to look at is how easy it is to get a student loan and the amounts they can borrow.
6
Not sure where they are getting a 4year degree for @$30,000. Any 4 year college that I know of is at least 15-18,000 per year, including room and board. I suppose if you don’t include R&B....I have 3 children that attended the University of Michigan and currently tuition is about $15,000 a year (depending on if you are a lower or upper classman) for 4 years that’s $60,000. Michigan State University is just slightly less expensive. I would not have been able to attend college at all. Lets figure out why college is so expensive. Then figure out how to get the kids that want to attend college a way to pay for it.
6
The cheapest in-state public school in Virginia is right at $19,000 a year with room and board. UVA is $31,000. This doesn't include books and school supplies, lab fees, travel expenses, computers needs, or personal items.
1
Some good ideas. Counseling should start on the high school level. Students can save money by doing things like going to community college for their 1st two years and, if possible, living at home, something a 4 years school is less likely to suggest as an option.
5
First, the FAFSA is nothing compared to the CCS profile, and both were quite a challenge. I didn't dare submit the CCS profile until I'd been over it at least five times (no exaggeration) and every time I found mistakes or things I'd misunderstood that could have greatly affected the aid package. I finally submitted because it was a day before the deadline. There has to be a better way.
Second, I have two very different children so I have experienced the process from two very different angles. One child excels at school, aced the SAT and got admitted to an Ivy League school with a huge financial aid package that ensures we parents pay almost nothing. The other child is an above average student but not the top. This child's grades and SAT scores were solid, and so this child got into a strong school, but not Ivy League. The school doesn't have the endowment the other has, so this child's financial package was a combination of grants and loans (the max. a student can take) and the parent contribution also required that we parents take out a loan. State school would be a little cheaper -- but not much! It's frustrating to see that child one, graduate with an Ivy League diploma and no debt, essentially is starting life in a privileged position over child two, who will have a lot of debt and no Ivy League diploma. Most kids are in the position of child two. It's at this mid level that we need to be offering more financial support. The top students will get what they need.
6
Even worst than student borrowers being saddled with the debts -is their parents having to assume the debt if the student defaults. I am one such parent. This occurred when I was informed that I needed to cosign my son's loans to consolidate them ten years ago, months before the Market Crash. So here I am, a 73-year-old retiree, forced to live in Mexico to be able to afford paying the enormous interest (and barely any principal) incurred by my son's failed attempt to get an education. Because of the lender's policy, I must pay 120 PERFECT payments (full amount, on-time for 12 years) before I can even apply for relief. These loans are exempt for bankruptcy protection). Well, to meet this condition, I must (at 73-years of age!) make years more of payments living in a foreign country. I see years of financial exile ahead of me. Or death. This is the great cruelty of the US Student Loan Program: stick the parent(s) with it! Something is seriously wrong in the 'kingdom', a country where everything in life is monetized and for profit. One last comment: a student has the rest of his/her life to repay a loan, but so does the parent-except that a parent's years are limited as the Grim Reaper awaits at the back door.
19
@Jack The Ex-Patriot EXACTLY... this is a selfish gambit by the universities, fear based, that make Americas families finance the lifestyles of tenured professors, administrators that get a kick out of building new buildings and the whole industry as a whole. This is a sin!! just like our health system. Get the govt. out of the college system and the market will correct itself!! or.. regulate every school that takes federal $'s.. have a balance sheet that is sustainable and offers the best possible resources per dollar spent.
The average student debt may be as high as a car loan but takes longer to pay off because car loan rates are less than student loans rates. That is the biggest problem with student loans. They are a profit center for the US Treasury.
Student loans which are non dischargeable in bankruptcy should be priced at risk free 10 year treasuries. Currently 2.7%. If we are going to print money at least fund activities that will provide the country with future growth and increases in productivity and provide a positive good.
38
How about addressing the rampant snobbery about state universities and community colleges. So many people take out loans for schools they simply cannot afford when there are more affordable options available. Both of my kids are at SUNY schools and they are great!
13
@Amy. You make a critical point. I see kids in my town take out loans for ‘big name’ elite private schools where they receive limited aid. (Any middle/upper middle class family who completes the CSS Profile knows there’s no aid for their child.)
Unless their parents have saved for college, they then graduate with tens of thousands of debt. State schools or the community college/state school route makes good financial sense.
5
Things are worse than the picture painted here. Law students face averages of $100,000 in debt with declining income prospects. Med students face double that, although their ability to pay off the debt is better, at least for the moment.
The escalating tuition costs throw another kink into the calculations. It looks like some schools offer more and more aid on the backs of future students.
This is not to say Mr. Alexander's ideas have no merit. But they will not be enough if the cost of college continues to rise at past rates. Maybe this rate is slowing but it has still outpaced inflation.
3
Since only about 30% of jobs actually require college level instruction to be able to accomplish, only ~40% of students should be on track to college admissions. As such, that process should only be available to those who can afford it. The remainder can be placed in tracks to trade schools and other jobs, based on current and predicted future business needs. It is beyond wasteful that we have retail stockers, warehouse workers and oil change techs with unnecessary high school diplomas and baristas and call center operators with college credit. At New York’s average cost of $23,000 per student per year, a single big box store employing 100 represents a waste of $9.2 million taxpayer dollars. Across 1.2 million “associates” that equals $11.6 trillion.
4
@From Where I Sit
Oh for heaven's sake. Every kid should get a high school education. I don't want some dope who can barely read, write, or speak English and who knows almost zero about American or World History to be stocking shelves like a serf at Walmart or any big box store anywhere. Maybe if they all had at least a solid high school education they could do some rudimentary math and some independent research and realize just how totally they're being screwed by their billionaire overlords. Yesterday's reporting about how InstaCart steals the tips pathetic grocery delivery people are entitled to felt like the last straw. Yet, I'm sure there will be another straw brought to my attention quite soon.
These people are our living, breathing, thinking electorate. I'm sure the Republicans would like nothing better than a population of morons they can easily manipulate at the voting booth, but I pray, daily, that our citizens wake up and start thinking critically about the global problems we all share, and for that we need them to get at least a solid high school education. Otherwise, we're just a third world country.
College? I agree, we need to rethink things. But, I received an advanced engineering degree from a flagship state university in the early 1970's when tuition was free. That was a time when poor but talented kids like me were given the opportunity to contribute to our economic success at a high level. Now? I'd be stocking shelves at Walmart.
Tuition rates in the US are higher than anywhere I know of in the western world.
They have to be cut drastically.
Cut out all the "hotel", "entertainment", luxury aspects of colleges and universities.
This will effect the college experience?
What you have now effects one's life forever in paying off this education.
Stick to education and research.
City and state universities have to go back to what they originally were in terms of tuition and they too have to cut back to the basic educational and research necessities.
Donors to private universities have to understand educational priorities.
The icing on the cake is turning the cake toxic.
7
Make student loan debt dischargeable in bankruptcy.
It used to be until "bankruptcy reform" pushed by Republicans and the banking industry and signed into law by Bill Clinton in the late 1990s. Prior to that, student loan debt was, like all other consumer debt, dischargeable in bankruptcy.
People like Trump assume million$ in risky debt & if it doesn't work out, they file bankruptcy repeatedly.
Most students who graduate from college will take their credit report & obligations seriously and won't file to discharge their loans unless their situation is critical.
Currently if you have student loan debt and become sick, disabled, have a family emergency or lose your job, you're trapped with no recourse.
Once student loans became non-dischargeable, interest rates on student loans skyrocketed & colleges costs snowballed because lenders & colleges recognized they had a captive audience locked into their student loans who couldn't afford to quit college and walk away - which was once an option. Not anymore. Students couldn't quit. They had to graduate so they could eventually make enough money to repay their loans.
Catch-22.
This is a racket.
My graduate degree from a state university in the 1970s cost $2000. It should be no more than double or triple that now but actually costs about $28,000.
Think seriously before you take out student loans. The current system is completely stacked against student loans debt being affordable or manageable.
42
I wish I put my tuition on credit cards like some did, but was counseled against it due to the high interest. Biggest regret ever. Any kind of shopping drinking and dining fees racked up on credit cards can be discharged in bankruptcy, but getting an education is a lifelong permanent punishment...its as if our government is against an educated population because idiots are easier to manage.
The issue is not the loan but the increasing cost of a college education. Gone are the days when a student could be both a full time student and fund their educational cost through a part time job. I worked my way through college back in the late seventies, graduated in 4 yrs and with no debt. The cost of higher education today makes that option impossible.
34
On top of actual solutions to the financing side of the equation making loan rates more accommodating to those who need it most, we also need better education for teenagers and parents about the true cost of education. More families and schools should be guiding their children toward state colleges where the total cost is usually about 50%.
Let's face it, the majority of 16 year Olds won't understand amortization and loan repayments until it's too late... We need to show them what living a life of debt is like. Just because you like the campus of that out of state schools doesn't mean you should spend 200% more on it. This isn't children's fault....its on adults to help them understand one of the biggest decisions in their life and the impact on their future.
6
It’s no accident that higher education has been the sector of the US economy that has experienced the highest inflation rates over the past few decades. College was affordable until government stepped in to ‘help’ with loans, grants, student aid, and Title IX.
8
@Alan. Today, the maximum amount that a student can borrow in government subsidized student loans over the course of a 4-year undergraduate education is $19,000. The maximum when I was a student in 1989 was $13,250. An increase in federal loan availability of $5,750 over the course of thirty years is not the cause of tuition increases. If students are borrowing in excess of the $19k, it is because they (and their parents) are borrowing from non-government sources.
1