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Muda69

How Colleges Have Made Students Poorer and Undereducated

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https://www.jamesgmartin.center/2019/11/how-colleges-have-made-students-poorer-and-undereducated/

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There is general agreement among higher education observers and reformers that tuition and fees at public universities have increased at an unsustainable pace. It’s equally uncontroversial to note that financial aid hasn’t kept up with unrelenting tuition increases, leaving students in the lurch.

In his new book, The Impoverishment of the American College Student,” James V. Koch lays out exactly how bad it has been—and how we got to this point. The book is extremely detailed and heavy on data. Koch brings together the latest and most relevant academic research on college costs. It’s a welcome new tool to help make informed policy decisions that address the real problem of college costs.

Koch starts by describing the dismal landscape of college costs. He cites some alarming statistics. Published tuition and fees for in-state students increased from $7,470 in 1997-1998 to $20,770 in 2017-2018. From June 2000 to June 2016, the increase was 184 percent—almost double the increase in the cost of medical care.

Those increases in tuition and fees have far outpaced increases in wages, making it more difficult for low-income and middle-income families to afford college. (I think “impoverishment” is perhaps too strong a word, but the problem is certainly a serious one.)

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He says, forthrightly, that “[t]oo many institutions of higher education have become grasping enterprises that operate primarily to further the interests of faculty and administrators…rather than those of students and citizens.” Tuition increases, for example, are a choice. Faculty and administrators keep demanding larger budgets, trustees vote for them, and students pay the price.

Some of the ways in which universities enrich themselves are easy to see and Koch highlights them in his analysis: an amenities “arms race,” rapid administrative growth, curricular bloat, and almost ubiquitous mission creep.

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The availability of generous federal financial aid, although well-intentioned, makes this enrichment easier to accomplish.

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Yep, it's clear the huge expansion of the "free and easy" federal student loan program started this mess, and there is no end in sight.

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33 minutes ago, Muda69 said:

https://www.jamesgmartin.center/2019/11/how-colleges-have-made-students-poorer-and-undereducated/

Yep, it's clear the huge expansion of the "free and easy" federal student loan program started this mess, and there is no end in sight.

I would say it’s more to do with private student loans than public ones. The banks have way more of an incentive to push college than the feds.

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8 minutes ago, DanteEstonia said:

I would say it’s more to do with private student loans than public ones. The banks have way more of an incentive to push college than the feds.

Incorrect, Dante.   There is approx.  $1.5 trillion in federal student loan debt vs.  $119 billion in private loans:

https://www.americanprogress.org/issues/education-postsecondary/reports/2019/06/12/470893/addressing-1-5-trillion-federal-student-loan-debt/

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About 43 million adult Americans—roughly one-sixth of the U.S. population older than age 18—currently carry a federal student loan and owe $1.5 trillion in federal student loan debt, plus an estimated $119 billion in student loans from private sources that are not backed by the government.3 Moreover, college debt is even more concentrated among young people. An estimated one-third of all adults ages 25 to 34 have a student loan.4 And while it is true that not every student borrower is in distress, student debt is an issue that both has an acute effect on many borrowers’ lives and raises broader concerns for the overall economy.

This report focuses only on options for federal student loans, which are the largest single source of college debt, representing more than 92 percent of outstanding student loan balances.12 In addition, because federal student loans are held or guaranteed by the federal government, it is easier for the executive or legislative branches to implement program changes that can help borrowers, regardless of when they borrowed.

That said, it is important to acknowledge that there are other types of student debt that need future solutions. For example, borrowers hold an estimated $119 billion in private loans for college.13 Private student loans carry no government guarantee against default and typically have less generous terms than federal student loans, such as the ability to repay loans based upon income.14 In addition, families may also accrue college debt through the use of credit cards or home equity loans, but there are no available data on the extent to which these forms of credit are used. These items merit further discussion and their own set of solutions, which at the very least should start with making private student loans easily dischargeable in bankruptcy.

And it was one of your liberal heroes,  Mr. Obama, that helped to create this mess of debt:

https://www.investors.com/politics/editorials/obama-created-student-loan-crisis-with-1-trillion-in-loans/

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In 2010, Obama eliminated the federal guaranteed loan program, which let private lenders offer student loans at low interest rates. Now, the Department of Education is the only place to go for such loans.

Obama sold this government takeover as a way to save money — why bear the costs of guaranteeing private loans, he said, when the government could cut out the middleman and lend the money itself?

The cost savings didn't happen. In fact, the Congressional Budget Office just increased its 10-year forecast for the loan program's costs by $27 billion, or 30%.

What did happen was an explosive growth in the amount of federal student loan debt. President Clinton phased in direct federal lending in 1993 as an option, but over the next 15 years the amount of loans was fairly stable. The result of Obama's action is striking. In each of the past six years, federal direct student loan debt has climbed by more than $100 billion. (See chart.)

And since Obama keeps making it easier and easier to avoid repaying those loans, it's a problem that taxpayers will eventually have to shoulder.

Through words and actions, Obama has encouraged irresponsibility on the part of student borrowers. He constantly talks as if student debt were an unfair burden they unknowingly had foisted upon them.

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Edited by Muda69
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