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Thursday, May 16, 2013

Blowing Bubbles.. Lovely (Student Debt) Bubbles...

In yesterday's New York Times, there was an article on student debt entitled aptly enough, 'Student Debt and the Crushing of the American Dream'..

It really wasn't much of a read-- same old tired cliches and anecdotes.. education is vital to compete in 21st century... blah blah... this is turning into another crisis .i.e. 'bubble'  ..etc.. etc..

There were some interesting and relevant stats however in the piece.  For instance:

"Student debt for seniors graduating with loans now exceeds $26,000, about a 40 percent increase (not adjusted for inflation) in just seven years... almost 13 percent of student-loan borrowers of all ages owe more than $50,000, and nearly 4 percent owe more than $100,000."
So how do we address this problem and solve it?

We mean Truly solve it?

First, one can not address a problem unless they look at it in its proper light.  College education is NOT a right... Repeat..  College education is NOT a right!!...  And again Repeat...

Attending college is not even really much of a privilege like having a driver's license to operate a vehicle

It is merely a life choice each individual must make.. In many ways no different than deciding "Do I succumb to peer pressure and try that line of coke?'  or 'Do I sleep with my boyfriend when he has no protection?'
Second, before we address solutions to the student debt stranglehold, we must honestly delve into why most young people go to college.

For some, its a genuine desire to be educated and improve their chances at a better future.  For others, its really not...  It is a four year excuse to party; to drink, smoke, toke, do other hardcore party drugs, fuck around (both figuratively and literally) and attend pep rallies.

And what ultimately happens is these people either ultimately drop out, put on academic suspension then discharged, or have 4 year degrees in utter worthlessness with little actual knowledge retention of the education they received..

If you think we're mistaken, that's OK..  We're not but you can think it...
And of course there's others who are not intellectually equipped to handle college but still can find their way into some Junior or Community College and struggle along while the debts keep compiling.

So what to do.. how to fix this?

Our solutions will be based on whats in the best interest of young people attending college and not the universities or banks or government who benefit so greatly from the status quo.

Remember, universities love things as they are because they can keep raising tuition every year without any normal economic concerns of supply/demand forcing cuts in tuition. As long as the only requirement for a student loan is a social security number and a pulse, no motivation to do otherwise..
And banks and Wall St. love things as they are because the debts carry all your life.. no bankruptcy discharge..  So they can garnish wages, place liens on your home, take from anything you may pass by way of inheritance to next of kin...

And government loves things as they are because it prolongs unemployment and no administration Ever wants a bad legacy.  It doesn't look good in their personal Library.

OK.. Onto the solutions:
1)  College time to be halved --

There's absolutely no reason to mandatory require students to attend college for four years other than to make profit.  If a student knows his major, the whole process of acquiring a degree should take no more than 60-75 credits Maximum.

30-45 credits specific to the major and the rest electives.

If a student is undecided or changes majors, that is fine.. go as long as you wish till you figure yourself out.  But no longer punish those with a clear vision of their professional future with an additional 2 year plumping of academic junk food.

And nothing compulsory that was taught in HS i.e. English, foreign language...  If a college or university felt a student was worthy of admittance, they need to trust that HS education provided the knowledge in these subjects already.

2)  Tighten admittance requirements --

As we said before, college attendance is Not a right and many young people are genuinely not intellectually equipped but attend nonetheless out of indirect peer pressure to fit in or no other idea how to better themselves.

All accredited universities whether state run or private..  Any college who receives even a dollar in Federal financial aid can accept no student with a GPA below 3.0   No exceptions for athletic scholarship or racial, ethnic or social situations.

3.0 GPA-- Firm minimum.   2.99 GPA is not good enough.   And any transfers accepted from other colleges must maintain 3.0 as well...

For Junior and Community Colleges, the mandatory GPA minimum is 2.60.

Less than 2.60 GPA and you don't attend.. You go the vocational route...

That brings us to the third point..
3)  Greater emphasis on vocational and trade schools --

This society has to stop filling the heads of young adults and their parents this bullshit that anyone can be a doctor or a lawyer or other academic.  Its simply not true.

A person if determined enough can go overseas where the academic demands may be less rigorous but personally, we'd never retain a physician who graduated from the University of Nairobi or Mongolia National College.

What America needs to  survive and thrive is more tradespeople--  carpenters, roofers, mechanics, plumbers, air-condition and heating repair, landscapers..  THESE are the jobs that can Not be outsourced
4)  Controlling how student loans are applied --

No student loan can be used to pay for room and board when attending an out of state University.  This means if you live in South Carolina and you want to attend Georgia Tech or NC State, you better come up with the room and board on your own.   But any SC school you attend, the room and board will be covered in the loan.

Why??  Simple.  State run schools charge upwards of 3x as much for out of state students' tuition than in-state.   In state college may be $3k a semester for locals and $9k for out of staters...

So hopefully this policy would steer many to stay home or close to it to get essentially the Same education.  Every penny you waste in student loans are a nickle you're ultimately paying back.
5)  Extend the debt burden to others --

All student loans for those under 21 require parental or guardian signatures.  Like in a mortgage, car loan, etc, where the borrower doesn't have sufficient credit, a  co-signer is needed and will now to be equally responsible legally for seeing the debt is repaid

This means the parent or guardian will be extremely pro-active in ensuring the right college is chosen at the right price and the son or daughter isn't pissing that money away on parties and fun because debt collectors will come after them just as hard as the unemployed college grad who can't pay.
6)  Encourage living before studying --  To ensure you minimize the number of students who waste tens upon tens of thousands of dollars simply trying to figure what they want to do as a living, the government sets up a program encouraging young people to wait.

For those who do not attend undergrad until their 21st birthday, the government will pay 25% of in-state tuition costs for the two years of attendance (remember, in solution #1, we halved the time it takes to achieve a degree) and will receive a locked in interest-rate of 0.9% instead of 3 to 7% for others.

The goal is to have young people live.. travel.. get a job..  mature in some way so when they're ready to go to college, they are focused on the academics and not the social sideshows.
We really don't ever expect to see any of these ideas implemented -- too many people and institutions would be adversely affected and as we've said numerous times, the System does absolutely nothing for your benefit unless it can acquire a greater benefit in return.

But that's how you deal with the student debt burden and control the 'bubble'.