By now, most folks have seen the numbers on the Biden Administration’s initiative to forgive a substantial portion of outstanding college student loan balances: up to $10,000 or $20,000, depending on the type of loan; eligibility income ceilings of $125,000 for individual earners and $250,000 for families; more than 40 billion eligible borrowers; total taxpayer cost of forgiveness totaling $400 billion; and on and on.
The numbers have been eye-catching and have created substantial polarization on the overall issue, from euphoria for those who would benefit from the windfall to enmity on the part of those who’ve already paid their student debt or those who never incurred student debt in the first place. Opinions among those in this latter category are intensified by the irony that, as taxpayers, they would foot the bill for this government handout without having a say in the process.
And to further complicate the air around this issue, the final decision on whether the Biden administration’s plan will even happen now rests with the U.S. Supreme Court, a circumstance prompted by legal challenges filed by parties opposing the loan forgiveness move. Legal arguments over the Administration’s plan will not be heard until the end of February and, depending on the length of the court proceedings, final resolution could be weeks or months away.
In the meantime, students awaiting determination on this thorny issue will simply tread water, dealing with the anxieties associated with the future of their debt. And it’s not an insignificant issue, with the average individual federal student loan debt hovering in the $30,000 range. In fact, the total outstanding student loan balance—nearly $1.75 trillion—is shared by well over 43 million borrowers, with over half of all four-year college students have taken on debt by the time they leave school.
How did we get to this point?
The building of a $1.75 trillion debt has many causes, but one of the more amazing aspects of the student loan situation is perhaps the mostly overlooked root cause…the steadily escalating cost of higher education. USAFacts.org, a not-for-profit nonpartisan civic initiative, observes that “the price the average college student pays for a year of school has risen 59% since 2000.” There’s probably quite a bit of conjecture on the reasons why this is so, but that’s an issue for another day. For now, and in the context of student debt, let’s focus on another aspect of how the cost of college translates to the problem soon to be before the Supreme Court.
A recent study conducted by the Government Accountability Office (GAO) put a spotlight on college costs, specifically with respect to the information provided to prospective students in the form of financial aid offers. The GAO concluded that over 90% of the colleges sampled in the study were unclear when communicating the net price of attendance…something that clearly weighs heavily in the making of the commitment to enroll.
Half of the colleges in the study were found to have underestimated the net outlay families were committed to, while another 41% did not estimate a net price at all. Said another way, the basis many families use to make their decision on college attendance—the financial aid offers extended by colleges—often do not reflect the true cost of obtaining the education, an omission that ultimately leads to progressively amassing debt along the way when the smoke clears and the full costs become evident.
The GAO conclusions are based on a set of “best practices” developed in response to a request from the House Committee on Education and Labor to review college financial aid information and assess the clarity and completeness of the information provided. To meet this assignment, a set of 10 best practices were designed to measure to what degree a representative sample of colleges provided clear and standard information in a manner that would enable families to determine, for comparison, the full, true, and ultimate cost of attendance—a major ingredient in their commitment decision.
The best practices, which are explained in detail on page 7 of the official GAO report, were grouped into two main categories: (1) informing students about how much they will need to pay for college, and (2) providing critical information about the aid that is available to help students pay for it. Since many families acknowledge that what they will end up paying for college is the most important piece of information they need to understand, standardization of the true cost picture is essential to their financial planning.
The very real problem, and the link to the current student loan forgiveness debate, is that not knowing the ultimate cost can, and obviously does, result in debt creep as additional loans are added to the burden with the passing of time.
GAO Encourages Congressional Attention
In its concluding comments, the GAO report noted that Congress “should consider legislation requiring colleges to provide all students offered federal student aid with financial aid offers containing clear and standard information that follow best practices.” Recognizing the criticality of the college financing issue and, by extension, the notoriety of the current student loan forgiveness dispute, a bipartisan assemblage of U.S. Senators has assembled in support of S.1452 (Understanding the True Cost of College Act of 2021) introduced by Sen. Chuck Grassley (R-Iowa) last year.
Sen. Grassley, in commenting on the GAO report, noted, “It’s disturbing that so many colleges are misleading students by leaving out important details, conflating loans and grants and even understating total costs. Previous attempts to create voluntary standards have been unsuccessful, with students literally paying the price.” S.1452 calls for the Department of Education (ED) to develop standard terminology and a format for financial aid offer forms based on recommendations from representatives of certain groups, including students, veterans, and institutions of higher education (IHEs).
S.1452, of course, will not resolve the student debt forgiveness argument, but making it clearer what the total cost of college will be would go a long way toward understanding the commitment a family is making. Having a clearer understanding would enable families to more effectively arrange finances, and will help them make the final decision on the value of the commitment they’re making.
How much is enough? Several hundred thousand a year, a million, more? Top heavy pay checks for people who simply give an order to others who actually do the work. Could this be responsible for much of the obscene college cost? How about overpaid coaches and staff for sports programs, (I believe they are called “games”), or some professors that rely on intern help to admin. all their classes, etc. Some professors may be worth the annual pay, but some of the student annual outlay isn’t. And if we keep sending our kids to learn about stealing someone else’s company (hostile takeover – Biz class) or other non-productive vocations we will have no-one to do, or want to do any actual work.
And don’t expect across the board transparency from the college accounting offices on what the real costs of the tuition are. It is possible that in some situations I might also be embarrassed to divulge what my salary and benefits were taking out of student tuitions compared to my work week.
And before you hit back on that statement, think about it. If everyone’s hearts were in the right place, a little more consideration for the students might be evident. Maybe even get by with just one Lexus.
I believe it goes beyond just the cost itself. Another area that colleges fail students is that every college should provide a cost/benefit analysis for every area of study and degree: “So you want Bachelor of Arts degree in English from College ABC. Here are the jobs likely available to you. Here is the likelihood that you will be placed in one of those jobs with an English degree upon receiving that degree. Here is the likelihood that you will be working in the same field using that degree in five, ten years. Oh, and here are the likely salaries.” Of course, that would require the colleges to maintain a relationship with their students which could be beneficial to both. Alumni Associations already keep track of former students to beg for money, so maintaining a relationship is doable. Any additional costs associated with providing that key information should be absorbed by setting priorities. Surely, providing complete, accurate information for student decisions should take priority over manicured lawns, luxury dorms, new football stadiums, etc.
I don’t know of a time when college wasn’t expensive. This wasn’t something that people weren’t aware of, and it should have been obvious after the first semester. Like credit cards it’s easy to get caught up in buy now and pay later. Even though it was for a good cause – education. And now, millions of people who jumped on this merry-go-round are crying foul – we were tricked. According to National Center for Education Statistics of those who took loans; 39% had no degree, 10% had a technical certificate, 11% had an associate’s degree and 40% had a bachelor’s degree. 39% just wasted our money. The rest did get “something” of which 40% actually accomplished their goal. The money’s gone, the university has spent it, it’s non refundable, but the student debt remains. It’s like the money we’re giving to Ukraine, it’s gone. So when it comes to wasting billions of dollars who would you rather waste in on – student loans or Ukraine? I vote for Ukraine.
Having once taught in a university, I became quite unpopular by pointing out that eliminating tenure allowed administrators an opportunity to impose their political agendas on profs and students.
Room and board is another boondoggle. Once upon a time they were shared, tiny rooms with no AC. And 60 guys using one big bathroom. Now it’s hard to see the difference between dorms and highly ranked hotels. Due to our kid’s grades and saving we were able to escape academia without debt. We told the kids, get grades and pay your own room and board if you wish to go away.
Lastly, large groups of students end up in college because high schools love to brag on their college entrance shares. And, the kids they’re sending are far from ready to be in college, losing entire semesters and years to remedial courses. While the meter runs. And it’s quite likely these young people will not graduate with anything. Not every kid needs to go to college. And it may well be they didn’t want to there in the first place.
If Congress really wanted to reduce the cost of college education, it would decree that any college or university that received federal funds, directly or indirectly, shall charge no more for tuition, fees, room, board, books, and supplies than it did in 1990.
The corrupt education industry that’s to big to fail? Taken over by the socialist left liberal progressive’s many decades ago of which we are bearing the fruits there of, now. Promoting the big lie that, after you get a degree you will have learned common sense, make tons of money and a huge salary in the workplace. Laboring kids with mountains of debt. And the monies paid by these kids and their families going into the coffers of the left liberal ideological activist think tanks and political groups. And into the college leftist professors pockets and the college leftist administration pockets. By way of huge salaries, generous retirement and endowments.
The corrupt education industry that’s to big to fail? Taken over by the socialist left liberal progressive’s many decades ago of which we are bearing the fruits there of, now. Promoting the big lie that, after you get a degree you will have learned common sense, make tons of money and a huge salary in the workplace. Laboring kids with mountains of debt. And the monies paid by these kids and their families going into the coffers of the left liberal ideological activist think tanks and political groups. And into the college leftist professors pockets and the college leftist administration pockets. By way of huge salaries, generous retirement and endowments. The University of Wisconsin Badgers just hired a new football coach in Madison, WI. His starting salary is around $7.5 million a year. For a coach. To watch guys hit each other and throw a ball around. Go figure.
The death of a dinosaur is a messy thing. The colossal institutions of “higher learning” have become bloated and unsustainable because what they produce cannot exceed the value of what they cost, in the vast majority of cases. They are unable to reform themselves. They have no wisdom. They offer worthless degrees and are overwhelmed by self-destructive ideologies. They can’t even allow alternate points of view to be expressed!
With a few rare exceptions, most who go through these institutions end up with a load of unsustainable debt and a brain full of dinosaur dung.
Biden’s way of stealing elections by offering free money from those who actually earned it the honest way vice how he has gotten money throughout his lifetime-a true scoundrel!!!
College costs, like medical costs, began to skyrocket when the government got involved. If Joe average had to pay the entire cost, colleges would either have to lower prices or lose most of their students! When my dad’s siblings went to college, they worked their way through. Couldn’t do that with today’s prices!
Stop making every damn job out there require a college degree when not every job needs one!!! Experience used to count and now it doesn’t! Just cuz someone got a degree doesn’t guarantee they are knowledgeable or mature enough to enter the work force!!! When everyone gets a degree, the degree is worthless in the market place! Pretty soon everyone will need a PHD just to work, while those who can’t become slaves to the leftist machine fuelling all this! And wages will need to be 1 million + a year just to survive!!! Colleges should be the ones paying off these loans, make them accountable for their extortion, NOT the taxpayers!
The colleges have increased the cost of tuition far & above the inflation increase. Forty years ago, who ever would have believed University Presidents & Football coaches would be paid +$1 Million per year. The top management at Universities jumped on the same bandwagon as most of corporate CEO s did starting around 1990. This is hurting the education in USA & will continue to do so unless ????
Who exactly is benefiting from the college attendance and it’s cost It hardly is a student who after 4 years is unemployable because the information he received is useless Who is to be blamed for making a poor choice and being charged an arm and the leg for it That old adage about the sucker being born every minute seems to be true
This discussion is real easy…if you can’t afford a Ferrari, go buy a Hyundai or a bicycle or don’t go to college…this would help immensely to drive costs down at these bloated institutions who only teach garbage anyway…it stinks to pay for the Ferrari and little known to the purchaser, it has no engine or transmission so you will never get your money back! Buyer beware!
I worked my way through college without taking out a loan (when tuition was reasonable). I should not be forced to pay for someone else’s education. And the colleges should be held accountable for false advertising.
On the 3rd child going into college. The lies told are amazing. Child One. Want to finish in 4 years, no we changed your major, that class you took as a sophomore doesn’t count any more, you need this class. Oh, I’m sorry, you can’t take just one class, you have to take a minimum of 12 credits. That will be $13k please.
Child two, there are 125 students in your class going for the same Major you want to select as a sophomore. Nope, there were 550 students going for that major and 4.0 GPAs didn’t make it. Transferred.
Child three, the government sends all the financial data to the child cutting out the parents. Testing is now optional so that 1400 SAT, meh. So, a real conversation with the head of admissions to me as the parent, we would like to off your child a scholarship of $X. I said, that’s nice but you are 10k too low. This is no longer the name of the school, this is a business transaction. Ante up.
Defund Woke Colleges
Fund Voc/Tech Ed, STEM
Go to Trade School..most colleges are indoctrination centers.
First, when I went to college, I knew almost to the penny how much tuition was going to cost for the next 2 semesters, I knew how much textbooks were going to cost, and I knew how much lodging was going to cost. The costs of hoagies in town, beer, a few plants, and trips home or into the countryside were unknowns, but I knew I had to budget for them. Working before, during, and after semesters was a given to supplement what I needed. I don’t understand why colleges aren’t being very clear about student costs. Well…obfuscation, obviously… Hook ’em in, and keep chumming the water to keep them there.
Second, I just checked the inflation rate since 2000, and that number is 73%. So, the increase in college costs, according to the information in this article, at 59% is quite a bit lower than the general inflation rate over those years. Don’t tell your college president I said so! Nevertheless, college costs are overpriced.
Third, colleges in the U.S. have enormous endowments, with Harvard leading the pack by several lengths. Still, the average amount in all endowment funds is over $1.16 billion, with many boasting tens of billions of dollars invested to keep them functioning in perpetuity. Why can’t they arrange financial assistance for their students? The idea of student loan forgiveness really angers me… I guess we’ll know in a few months if a household making less than $250,000/year will be given a write-off paid for by someone making $40,000/year. Unfair. Totally unfair.
Unless the student is committed to a career that demands 4 or more years of a college education, I will guess that most can function perfectly well learning the trades, working in the family business, or taking appropriate courses at community colleges or larger universities directed at a particular career path. Pardon me, but I do think college degrees for many of us are unnecessary. There are lots of ways to be successful in this society without hanging a diploma on the wall. And that’s no guarantee.