Student Loan Reform from a political junkie (me)

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I think the student loan issue, in the next 10 years, is going to become a politically charged issue. No other debt can seem to follow somebody around forever with no hope of being discharged.

Thank God I don't have any but I worry about my kids generations.

The reform I propose is simple - loan amounts are allocated based on the future salary of the given major. So, if an art major leads to an average salary of $35,000, then the max for 4 years should be $35,000. If a nursing major leads to an average salary of $60,000, then $60,000 is the 4 year max.

China, in a counterarguement on human rights issues, said of America that we are the only country that saddles 20 year olds with debt starting out in life. While I'm sure they were weaseling out of their own indiscretions, they did have a point.

I also quote some of our leaders of big technical companies (GE, Microsoft) who complain that colleges are graduating too many people in "athletic training" and not enough engineers and computer scientists.

They quipped, "If we want to be the massage capital of the world, we're headed in the right direction." But innovation and technology, we need to import thinkers and educated people.

What does the forum think?

[PrincessPerky]

so if GE and Microsoft are worried about the education, why don't they start helping? paid training is a thing of the past in many businesses, and yet they complain about untrained workers....

Also why are kids waiting till 18 to learn anything? what were they doing for the last 18 years that they need 4 more to learn how to make a living?

If you ask me apprenticeship is a lost art.

regardless no legislation will change the loan problem...there would be an easy or hard loop hole for people bent on charging up that degree.

[humandraydel]

Tying maximum loan amount to potential salary? Oh, please! No offense, but that is the biggest, most worthless band-aid I've ever seen.

So what, people like myself who had to borrow the entire cost of education can't go? I'm an engineer, btw, and I had to borrow more than my starting salary. Of course, 2 years out of school my salary is now more than my loan.

Problems need to be fixed at the root - which, in this case, is the enormous increase in the cost of education.

David Moss' suggestion: The government should stop guaranteeing companies that make student loans. Insure students instead.

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So what, people like myself who had to borrow the entire cost of education can't go? I'm an engineer, btw, and I had to borrow more than my starting salary. Of course, 2 years out of school my salary is now more than my loan.

You can go. . .just get this. . .and it's a novel concept. . .you'll have to pay for it.

I am not married to the idea of 1 year's salary = the total amount but I think there should be a formula tied to it.

Simply put, we need to have students to be able to pay the loan amounts back in a reasonable amount of time.

I realize also there's inherent value in being "educated" whether that's art history or nursing or engineering.

College teaches critical thinking skills and "breadth" education. That's fine.

But that and $3.00 will buy you a cup of Starbuck's coffee as they say. That should only carry you so far.

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so if GE and Microsoft are worried about the education, why don't they start helping? paid training is a thing of the past in many businesses, and yet they complain about untrained workers....

Good question. . .I guess

1. Healthcare benefits are such an expense they focus on that benefit
2. It's just cheaper to get an educated immigrant or outsource overseas for "intelligensia."

Also why are kids waiting till 18 to learn anything? what were they doing for the last 18 years that they need 4 more to learn how to make a living?

Well, good question also. . .why is a HS diploma essentially worthless? I don't know. . .maybe the States should have a school system til 20 y.o.?

I don't know.

If you ask me apprenticeship is a lost art.

regardless no legislation will change the loan problem...there would be an easy or hard loop hole for people bent on charging up that degree.

Well, what's the counterproposal?

Keep going on the course we are?

$X for any degree you want? Just get a degree?

The real solution would be to not give students a loan who are high risk. For example, if an art history major walks into Bank of America asking for $100,000 in student loans for a career that typically pays diddly squat, he should be turned down. Unfortunately right now, BoA gets paid regardless so there is no incentive to decline the loan request.

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Well, I'm not that extreme.

I do think things like art, music, and theatre enrich our culture and those graduates graduate with critical thinking skills and creativity as much as any other major.

I'm just not sure those majors should get the full benefit of tuition as something else should that taxpayors subsidize.

I beleive also that we should cut back on law school subsidies vis-a-vis student loans.

America doesn't need any more lawyers.

So it's not just a financial determination but as well as a social contribution in the formula.

I think an art major or curator of a museum contributes more to society than a personal injury atty.

Again, if someone wants to be a lawyer, they can pay their way through.

[mekish]

so if GE and Microsoft are worried about the education, why don't they start helping?

if they did that, they'd go bankrupt in not so long, and i think they do help as much as they can, case in point; Bill Gates paid for the Gates Laboratory at Stanford amongst other causes.

[humandraydel]

You can go. . .just get this. . .and it's a novel concept. . .you'll have to pay for it.

Wow, I guess I don't understand what a loan is! Here I thought I DID pay for it!!

I'll agree that potential student loan borrowers need a LOT more education regarding the consequences of their choices but putting a cap on the amount they can borrow isn't the answer. Besides, how do you even enforce that? Some law students will work at a big firm and start out at $125k while some will work for the government and make $40k. Or what about someone who gets a BA in history and then goes on to get a PhD and become a professor? Or gets an MBA and becomes an I-banker? Every situation is different and we should be encouraging people to make smart financial decisions instead of assuming they are stupid and only loaning them $X dollars for Y degree.

[humandraydel]

Again, if someone wants to be a lawyer, they can pay their way through.

And how do you propose someone with a BA in Poli Sci save $75-150k to attend law school? How do you propose someone with a BS in Biology (surprisingly low paying jobs!) save $75-150k for med school?

You know what? Statistics say something like 3 in 4 small businesses fail. I think we should stop giving small business loans!

[PrincessPerky]

Good question. . .I guess

1. Healthcare benefits are such an expense they focus on that benefit
2. It's just cheaper to get an educated immigrant or outsource overseas for "intelligensia."

if you fix education in America, we would have a better educated work force, and while some businesses try most do not, most people are out for themselves, why would we expect business to be otherwise? though as it currently stands I can totally understand the bottom line cause of outsourcing.

Well, good question also. . .why is a HS diploma essentially worthless? I don't know. . .maybe the States should have a school system til 20 y.o.?

I don't know.

AAAAKKKKK nOOOOOOO not longer, less time, and voluntary voluntary learning is easier and cheaper and more effective, sure if you stop trying to pound times tables into teens the percentage not knowing might drop (and when was the last time you didn't use a calculator yourself?) but the students who want to learn will be able to go further and do more on less money, freeing up more for higher education.

It used to be you taught your kid all you knew and then if they were interested you found someone else to help for more (school, tutor, friend, apprenticeship, whatever) Now 'a days I am supposed to ship em off at 5 cause the govt said so...but I know more than a avg 5 year old, I even know more than my 5 year old, why would I ship him out already? The answer isn't more free school it is LESS, send the responsibility for education back to parents and onto people, not on a large system that can never compete with personal attention true education deserves. (no offense to any teachers, the system you have to work under is what I disprove of)

Well, what's the counterproposal?

I don't have all the answers and it is certainly easier for me to sit and say nope not that, nope not that either, than to come up with a decent plan, but in the amount of time I have I can make a couple recommendations.

Logically forced education is about as useful as 'a man convinced against his will' you might get temporary cooperation, but in the end you really haven't accomplished anything. So IMO, stop forcing education, make education of voluntary students of any age free, up to enough reading and math to do the taxes...not in depth or anything no need to put accountants out of their job, but assuming you have simple form EZ each year, you aught to be able to do that on your own in English with nothing but paper and pen. (so how many of you did it sans calculator?)

Beyond that I think low cost education of the sort that many park centers offer would be worth some tax subsidy, and incentives for business related to sponsor...

Robotech wants robotiscists, they aught to sponsor and supply materials for a low cost class at the local science center or library.

PrintstuffR us wants better writers they aught to donate supplies and time to a low cost workshop.

treehuggers anonymous wants more conservationists they aught to sponsor low cost classes and workshops.

You get the idea. Sure it might be cheaper short term to outsource, and plenty more low cost classes in conservation occur outside the US than in, but long term once you pull the free babysitting people will be scrambling for low cost classes...and make sure there is cheaper babysitting for kids who aren't interested (and kick out the kids who were forced in after a short attempt to acclimate em)


Oh and as to those who cannot cough up even the low cost, there would be plenty of money donated to cover if people felt responsible for it, not to mention you could use that fancy gym shoe money since it wouldn't be required anymore.

Well, I'm not that extreme.
.....
I think an art major or curator of a museum contributes more to society than a personal injury atty.

While I happen to agree personally on art VS personal injury lawyer, I think following the road of choosing what people can and can't get degrees in is not only hard to sell to the entitled class we have in America but I also think that even between close friends something will be near and dear to one while disliked by another....The last thing we need is more arguments about who should get what free.

(not to mention have you looked at what some art grants pay for? I like art, but I have limits, I hate that my tax money paid for someone to make a sculpture out of used....umm anyone eating stop reading....tampons...eww...not art IMO...)

Just thinking out loud here... what is the objective. Is it for kids to go to school for school's sake or is it for them to attain a baseline of skills and general knowledge and be productive in society?

I tend to agree with PrincessPerky that cookie-cutter K-12 schooling may not be the answer. A child may be naturally more intelligent than other children his age. Or he may be benefiting from good homeschooling. Or a child may not be up to the standard, either due to disability or lack of good instruction at home. Or a child may know everything there is to know about math and science but lack good grammar and literature skills.

Is it possible and is it cost-effective to customize children's learning? Put kids in only the classes they need, rather than teaching the exact same curriculum to everybody. Then as kids get older, let them do further customization for topics that will benefit them in their future careers.

Again just thinking out loud here.

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And how do you propose someone with a BA in Poli Sci save $75-150k to attend law school? How do you propose someone with a BS in Biology (surprisingly low paying jobs!) save $75-150k for med school?

Humandrydel,

Med. school may earn a bigger subsidy/loan cap than a lawyer because

1. Starting salaries are higher
2. MD's are in shortage
3. Their contribution to society is more profound for the taxpayor. Think of the MD working in a public health clinic taking in 50K/year. Now think of a business lawyer sitting in his office thinking up ways to get his "billable hours" up.

I think America has 1 lawyer for every 200 people. China has 1 lawyer for every 10,000 people.

And yet they manage to be a superpower.

You know what? Statistics say something like 3 in 4 small businesses fail. I think we should stop giving small business loans!

I don't know - I haven't examined the SBA system of loans.

If you want me to sharpen my axe, just say the word

It's funny - everybody is anti-entitlement until it means something to them and then oh, no, not me sacrafice - someone else.

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'll agree that potential student loan borrowers need a LOT more education regarding the consequences of their choices but putting a cap on the amount they can borrow isn't the answer. Besides, how do you even enforce that?

Humandrydel,

The subsidized and unsubsidized loans have caps on them already. It's jut equal for whatever major.

Some law students will work at a big firm and start out at $125k while some will work for the government and make $40k.

That's why you average it.

Or what about someone who gets a BA in history and then goes on to get a PhD and become a professor? Or gets an MBA and becomes an I-banker?

That's what averages are for.

A better question is:

What about a history major who then works corporate finance on Wall Street?

I think you have to give some credit that any major, from any university, gives you critical thinking skills and literacy - that should count for something. I am not saying cut off art and history majors and subsidize only what society/high tech. co.'s are demanding but I think the taxpayors should have a say in this and that the loans should be correlated with average salaries.