Save your money - Don't go to College

They aren't invested in student outcomes

Knowledge may be priceless, but education is clearly not - Peter Thiel.

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How did we get trapped?

Before 1970 there were no financial-aid programs. You didn't go to school or get money from the government if you couldn't afford it. 

In 1978, congress passed the Middle Income Student Assistance Act. So any undergraduate in any economic class can qualify for federally subsidized loans (pell grants). These were generous student aid policies that more and more families applied for. 

Slowly the government was subsidizing 25 years of growing tuition rates. 

The Bennett hypothesis: "Knowing that students will get this financial-aid money, the university raises fees and tuition and takes advantage to capture that themselves." 

The University of Oregon did a study that showed that for private - for-profit schools, "an increase in Pell aid was matched nearly one to one in tuition hikes." 

Harvard and George Washington University showed that for schools where federal loans were available, tuition increased by 75%. 

Federal Reserve Bank of New York, Vedder said that for every new dollar of federal student aid, tuition is raised by 65 cents.

That is how we had come to 1.7 trillion dollars in student loan debt. 

In 2007 the Public Service Loan Forgiveness program was created to forgive any college graduate that works in the public service sector for ten years. 

The federal government is a direct holder of student debt about 1.2 trillion of the 1.7 trillion. So while they could technically do student loan forgiveness, the question is then who pays for it in the long term?

What kind of message does this send to graduates who did the right thing? What could this mean for students in the future? 

I understand the draw. I myself have over $40,000 of student loan debt. Post-college, debt seemed like a never-ending hole of despair. I felt like an indentured servant to the system. That now I would have to work a job I wasn’t crazy about to pay off the school I was told would lead to a better life. Student loan forgiveness could save most of us from financial ruin—a reset. As of right now, student loans are the only debt that you can't declare bankruptcy on.

Yet on the other side of the spectrum, there are those who did the right thing. Students who worked so hard to pay off their debt fast so they could be lifted from their burden of it. There are families who made thoughtful decisions and sacrifices to their retirement to pay for their children's schools. I have a nursing friend who went from 150K to 30K in less than a year, paying off over 120K in loans. Do they get a refund?

I wouldn’t mind the rise in tuition if higher education meant obtaining specialized skills for complex jobs. But that isn’t the case.

Our tuition and compliance to paying for these degrees lifted universities, paid for administrators raises, new department heads, modern recreational facilities, and our sports teams. 

Our higher education system does not produce the same value as it once did. 

Skills in the classroom don't mean skills on the job. 

Universities don't have to pay anyone for their failures to educate. How is this okay?

Would we tolerate any other business that made false claims on their advertising, and consistently delivered faulty products? We need to hold colleges accountable. If they are trusted to teach, then they should take on some of the risks. 

If Universities paid for the student loans, they would restructure entirely. Possibly to find ways to improve student outcomes at the lowest cost.

Our government should crack down on universities that fail to educate. Universities are considered nonprofits, so they don't have to pay taxes. They don't get fined for having a high dropout rate or for failing to deliver their promise to get kids out the door in four years.

Universities should pay half of the student's loans if they default on them. 

If universities didn't operate with financial aid money, they would gain independence from the criteria required by Washington. They wouldn't be constrained by their requirements or "standards." They could restructure their spending and use of their endowment to give financial aid and work with the Department of Education. 

Further investment in their students would look like income share agreements where universities pay some of the cost while getting some share of postgraduates' incomes. 

Then universities will focus on the niche skills, useful degrees, and promises that they deliver on.

By using their endowment and funds, their focus would be on what they deliver.

They would only take in ready students, not just ones who can afford to put off "adulting." Their message would be centered on the quality instruction that they provide, the knowledge that only they can give. They would be known for the hireable, functioning adults that they churn out. 

But over the years, the priorities of universities have gone astray. They have deviated from their role as a public good and moved into the realm of a highly profitable business. 

Many college Presidents are worried about "budget cuts," but they are just concerned about having less growth then they did in the last ten years. Growth isn't necessary during a crisis. The endowments could probably still operate the university without income for at least a year.