Student Loan Debt: Addressing the Real Problems

Student loan debt has been a major topic of discussion during the current Democratic Presidential debates.  Student loans are a $1.5 trillion problem. Democratic proposals all center on loan forgiveness and free college.  Democrats know no other response than to throw huge piles of money at symptoms while ignoring the underlying problem. We need to talk about real solutions. 

Currently there are 44 million people with outstanding student loans.  Student loans are the second largest form of debt after mortgages.  The Institute for College Access and Success has stated that members of the class of 2017 owe an average $28,650. There are over five million loans delinquent and 5.1 million loans in default.    

How does one address such a pervasive problem?

Why it is necessary to go to college in the first place?  We are told it is necessary to prepare for a productive life in the working world, to attain the skills needed to compete in an increasingly complicated business environment.

There are currently 76 million students in college, 53 million undergraduates and 23 million graduate students.  In the 2014-2015 academic year, 1.9 million degrees were conferred. 

Do the actual professions in which many of these degree holders will actually find work really require four years of college or would a reduced selection of job-specific courses prepare them as well or better?

Colleges generally require 120-130 credit hours to graduate, spread between courses in one’s major area of study and elective courses.  The colleges tell us that electives are required to broaden knowledge, provide career flexibility or make the student better rounded.  Electives also serve to extend the time and money needed to graduate.  While some elective courses probably contribute to the utility of the major study, many do not.  They are simply fluff.  Even those that contribute might be obtained by alternate means. 

College is expensive. More than 100 colleges and universities have a sticker price in excess of $50,000 a year plus $15,000 on average for room and board.  The average tuition for private schools is $35,800. 

Why is college so expensive and increasing at the rate of 2.5 to 4 percent a year?  It begins with federal subsidies and easy tuition loans.  

Student loans backed by the federal government began in the 1950s.  At the time, relatively few people had college degrees.  In 1960, about 8 percent of the population had a bachelor’s degree.  In 1990, the percentage was 20 percent. In 2018, the percentage of people with at least a bachelor’s degree was 35 percent.    

One obvious driver is the difference in average income between those with and without a degree.  In 2003, the average income for a high school dropout was $13,459.  For a person with a H.S diploma and some college, that figure rises to $31,046 and for a bachelor’s degree, the average income was $51,194.  With an advanced degree, the average income was $90,781. 

Today, the ease of loans and the perceived condition that a college degree is necessary to do well in life have driven many people into the college ranks.  In response, colleges are building new facilities and inventing new courses of study to attract more students.  This requires more faculty and more administrators.  Government subsidies to colleges fund some of this but increasing the number of customers is also necessary.  Attracting students has become competitive, so buildings are fancier, living facilities more luxurious and more amenities are added.  All this comes at a cost, reflected in tuition rates rising at three times the rate of inflation. 

With nearly two million degrees a year being conferred, the worth of a bachelor’s degree is devalued and the job market is being flooded with degrees. Many of them are in study areas for which there is little to no real job demand.  Degrees are being granted for the sake of granting degrees with no consideration of how they will translate into a job and income.  The result is that attainable income no longer supports the debt load of getting a degree, hence the high percentage of student loans that are either delinquent or in default.

The current situation with student loan debt is unsustainable and cancelling the debt as the Democrats seem to be advocating is not the answer.  That is simply covering the rash and not curing the disease. 

There are actions that can be taken that would go a long way toward resolving the problem. 

The first and most obvious solution is to go back to basics.  Why is college necessary to begin with? 

Step No. 1 is to evaluate each course of study by the likelihood that it will lead to realistic employment.  Don’t grant student loans for studies that hold little chance of leading to a job. 

Step No. 2 is to eliminate educational frills.  Start by eliminating  elective courses not directly related to attaining a job-certified degree.  Next, eliminate nonessential amenities such as athletic programs, expensive athletic fields, and multi-million-dollar coaches.  If students want exercise and competition, have an intra-mural program.  Next, make living and dining facilities reasonable and comfortable but utilitarian.  Students are at school, not at a resort.  Next, require that students take 16 to 18 credits a semester.  Classes six days a week used to be the norm in many schools -- let’s get back to that. 

Step No. 3 is to go to school year-round.  There is no need to take off 25 percent of the year.  By going year-round and eliminating unnecessary courses, a degree could be attained in two to two and a half years

Step No. 4 is to reduce the total faculty and administrative personnel by requiring faculty to increase their teaching load.  Some professors only teach a couple times a week.  What’s wrong with working every day?  The rest of us do.

Step No. 5 is to more critically evaluate who really belongs in college and who doesn’t.  Many students would be better served by trade or craft training.  This would greatly reduce the number of students, resulting in less faculty and fewer facilities.  

Step No. 6 is to develop community and two-year schools to both triage potential students for academic ability and dedication and to teach basic courses in a much less costly environment.  Basic English, writing, and math, for example, may be necessary for further study but do not require an expensive campus setting with high-priced faculty and away-from-home living expenses.  Students could much less expensively prepare for more advanced study and determine if they are really academically oriented.  These schools could also offer professional skill classes in areas such as accounting, programming and office management.  They could also offer trade skills such as electronics, HVAC, welding, numerically controlled machining and office computer systems.  These are areas where real jobs that pay very well exist.

It is sometimes said that college is where young people mature.  It is doubtful that many parents are willing to pay $50,000 a year so their kids can grow up.  They can do that at home.  Going into the military for a few years is one obvious path to maturity that not only does not cost money but can confer significant college benefits. There are other options for gaining maturity.

The above is would greatly reduce the student debt problem in a lasting manner while more efficiently training people to enter the workforce more quickly and be more effective from their first day.  

Dave Ball is the author of conservative political commentary, a guest on political talk shows, an elected official and a county party official. 

Student loan debt has been a major topic of discussion during the current Democratic Presidential debates.  Student loans are a $1.5 trillion problem. Democratic proposals all center on loan forgiveness and free college.  Democrats know no other response than to throw huge piles of money at symptoms while ignoring the underlying problem. We need to talk about real solutions. 

Currently there are 44 million people with outstanding student loans.  Student loans are the second largest form of debt after mortgages.  The Institute for College Access and Success has stated that members of the class of 2017 owe an average $28,650. There are over five million loans delinquent and 5.1 million loans in default.    

How does one address such a pervasive problem?

Why it is necessary to go to college in the first place?  We are told it is necessary to prepare for a productive life in the working world, to attain the skills needed to compete in an increasingly complicated business environment.

There are currently 76 million students in college, 53 million undergraduates and 23 million graduate students.  In the 2014-2015 academic year, 1.9 million degrees were conferred. 

Do the actual professions in which many of these degree holders will actually find work really require four years of college or would a reduced selection of job-specific courses prepare them as well or better?

Colleges generally require 120-130 credit hours to graduate, spread between courses in one’s major area of study and elective courses.  The colleges tell us that electives are required to broaden knowledge, provide career flexibility or make the student better rounded.  Electives also serve to extend the time and money needed to graduate.  While some elective courses probably contribute to the utility of the major study, many do not.  They are simply fluff.  Even those that contribute might be obtained by alternate means. 

College is expensive. More than 100 colleges and universities have a sticker price in excess of $50,000 a year plus $15,000 on average for room and board.  The average tuition for private schools is $35,800. 

Why is college so expensive and increasing at the rate of 2.5 to 4 percent a year?  It begins with federal subsidies and easy tuition loans.  

Student loans backed by the federal government began in the 1950s.  At the time, relatively few people had college degrees.  In 1960, about 8 percent of the population had a bachelor’s degree.  In 1990, the percentage was 20 percent. In 2018, the percentage of people with at least a bachelor’s degree was 35 percent.    

One obvious driver is the difference in average income between those with and without a degree.  In 2003, the average income for a high school dropout was $13,459.  For a person with a H.S diploma and some college, that figure rises to $31,046 and for a bachelor’s degree, the average income was $51,194.  With an advanced degree, the average income was $90,781. 

Today, the ease of loans and the perceived condition that a college degree is necessary to do well in life have driven many people into the college ranks.  In response, colleges are building new facilities and inventing new courses of study to attract more students.  This requires more faculty and more administrators.  Government subsidies to colleges fund some of this but increasing the number of customers is also necessary.  Attracting students has become competitive, so buildings are fancier, living facilities more luxurious and more amenities are added.  All this comes at a cost, reflected in tuition rates rising at three times the rate of inflation. 

With nearly two million degrees a year being conferred, the worth of a bachelor’s degree is devalued and the job market is being flooded with degrees. Many of them are in study areas for which there is little to no real job demand.  Degrees are being granted for the sake of granting degrees with no consideration of how they will translate into a job and income.  The result is that attainable income no longer supports the debt load of getting a degree, hence the high percentage of student loans that are either delinquent or in default.

The current situation with student loan debt is unsustainable and cancelling the debt as the Democrats seem to be advocating is not the answer.  That is simply covering the rash and not curing the disease. 

There are actions that can be taken that would go a long way toward resolving the problem. 

The first and most obvious solution is to go back to basics.  Why is college necessary to begin with? 

Step No. 1 is to evaluate each course of study by the likelihood that it will lead to realistic employment.  Don’t grant student loans for studies that hold little chance of leading to a job. 

Step No. 2 is to eliminate educational frills.  Start by eliminating  elective courses not directly related to attaining a job-certified degree.  Next, eliminate nonessential amenities such as athletic programs, expensive athletic fields, and multi-million-dollar coaches.  If students want exercise and competition, have an intra-mural program.  Next, make living and dining facilities reasonable and comfortable but utilitarian.  Students are at school, not at a resort.  Next, require that students take 16 to 18 credits a semester.  Classes six days a week used to be the norm in many schools -- let’s get back to that. 

Step No. 3 is to go to school year-round.  There is no need to take off 25 percent of the year.  By going year-round and eliminating unnecessary courses, a degree could be attained in two to two and a half years

Step No. 4 is to reduce the total faculty and administrative personnel by requiring faculty to increase their teaching load.  Some professors only teach a couple times a week.  What’s wrong with working every day?  The rest of us do.

Step No. 5 is to more critically evaluate who really belongs in college and who doesn’t.  Many students would be better served by trade or craft training.  This would greatly reduce the number of students, resulting in less faculty and fewer facilities.  

Step No. 6 is to develop community and two-year schools to both triage potential students for academic ability and dedication and to teach basic courses in a much less costly environment.  Basic English, writing, and math, for example, may be necessary for further study but do not require an expensive campus setting with high-priced faculty and away-from-home living expenses.  Students could much less expensively prepare for more advanced study and determine if they are really academically oriented.  These schools could also offer professional skill classes in areas such as accounting, programming and office management.  They could also offer trade skills such as electronics, HVAC, welding, numerically controlled machining and office computer systems.  These are areas where real jobs that pay very well exist.

It is sometimes said that college is where young people mature.  It is doubtful that many parents are willing to pay $50,000 a year so their kids can grow up.  They can do that at home.  Going into the military for a few years is one obvious path to maturity that not only does not cost money but can confer significant college benefits. There are other options for gaining maturity.

The above is would greatly reduce the student debt problem in a lasting manner while more efficiently training people to enter the workforce more quickly and be more effective from their first day.  

Dave Ball is the author of conservative political commentary, a guest on political talk shows, an elected official and a county party official.