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College costs are out of control. Here are some key solutions to the problem. dailysign.al/2IY854Y via @lindseymburke @DailySignal
. Because federal loan money is handed out with little scrutiny as to the student’s ability to pay it back, colleges have had free reign to raise prices at levels often double the inflation rate.
Flush with all that money, their first spending priority often isn’t the classroom but the bureaucracy.
From 1987 to 2012, America’s higher education system added more than half a million administrators, doubling the number of administrators relative to the number of faculty.
From 1987 to 2012, America’s higher education system added more than half a million administrators, doubling the number of administrators relative to the number of faculty.
To pay for these ever-increasing costs, students are borrowing more money and taking on more debt. With $1.5 trillion in outstanding student loan debt, and more than a million people defaulting on their loans, taxpayers are picking up much of the tab for this broken system.
While politicians often suggest throwing more money at the problem, that will only make things worse.
In fact, the surest way to stop the sharp rise in both college tuition and student debt is to get the federal government out of the student loan business.
In fact, the surest way to stop the sharp rise in both college tuition and student debt is to get the federal government out of the student loan business.
That cuts off the open spigot of money that has allowed colleges to increase costs virtually without limit.
Restoring private lending will make the loan market more responsible and cause colleges to rein in costs, creating more affordable choices for students.
Restoring private lending will make the loan market more responsible and cause colleges to rein in costs, creating more affordable choices for students.
Private lending will also limit taxpayers’ exposure to billions of dollars in loan defaults.
One emerging private lending solution is coming from colleges themselves in the form of income share agreements.
One emerging private lending solution is coming from colleges themselves in the form of income share agreements.
This allows students to obtain financing from their schools and pay it back based on a percentage of their income after graduation. That means their payments are lower when their income is lower, ensuring that loan payoffs are more affordable, or they can pay them off quicker
This allows students to see—before they take on debt or choose a major—what types of careers will allow them to pay off their loans quicker and what kind of future they are investing in. This kind of savings and transparency is a win for students, taxpayers, and fiscal sanity.
