Two columns offer opposite solutions: Get rid of them completely, or make students borrow even more?
This student loan business is getting fun. Today, on Bloomberg, Richard Vedder, the director of the Center for College Affordability and Productivity, tells us that it is time to get the government out of student loans entirely. His call for unilateral student loan disarmament goes nicely with last week’s opinion piece from the Atlantic’s Jordan Weissmann telling us that students aren’t borrowing enough.
Vedder supports his argument with data showing that colleges are graduating too many students for whom there are no appropriate jobs — too many bartenders with bachelor’s degrees — while claiming that loans are driving up tuition costs. Weissmann supports his own argument with data showing that students who borrow are much more likely to graduate.
Both of these theses can be true at the same time, of course. It seems intuitively likely that if you borrow a lot of money to pay for your education, you feel a certain amount of investment in seeing the process through. Similarly, it is pretty well known that the U.S. isn’t producing enough graduates with marketable vocational skills.
But I am skeptical of any piece that is predicated at least in part on the supposed tight connection between student loans and tuition hikes that doesn’t mention at all the fact that the largest driver in higher tuition costs at public universities and colleges — which account for 70 percent of all higher ed students in the U.S. — is cuts in direct government funding. It’s also a little dodgy for Vedder to cite a study by MIT’s Claudia Goldin as supporting his tuition link argument, when in fact that study only found a relationship between loans and tuition hikes at for-profit schools and specifically disclaimed any such link for public schools.
Likewise, for Weissmann, it is a bit shocking to see a line like this — “To all those high school guidance counselors out there: Make sure your students don’t have an irrational aversion to debt, no matter how much we in the media scream about it ” — without acknowledging how high levels of debt can constrict career options and destroy lives. There’s nothing irrational about an aversion to debt, particularly in the case of high-interest private sector loans.
You know what’s kind of interesting, though? The Obama administration’s “gainful employment” rules, which tie student loan availability to an educational institution’s ability to demonstrate decent graduate rates and low student loan default rates, seems to strike at the heart of the problem that both of these opinion writers are getting at. If you want to increase graduation rates, make sure that the schools that are raking in student loan revenue, particularly in the for-profit sector, are actually graduating their students. And if you want to make sure that those students who are graduating are getting jobs, then make sure that those same schools can prove that their students aren’t defaulting on their debt, something that most likely will require that the students have “gainful employment.”
Although I’ve been bashing on this for months now, it still seems to me that one of the great untold stories of the student loan crisis is how the Obama administration, in the face of incredible lobbying and congressional obstructionism, has directly confronted the problem by cracking down on abuses in the private lending world and raising standards for the for-profit sector. We don’t need to go all or nothing on ending student loans or ramping them up even higher; we need to make the system work better.
More Related Stories
- There's no substitute for government disaster relief
- Holder signed off on search warrant for reporter
- Mississippi could begin prosecuting women for miscarriages
- Mike Judge: "Bowling for Columbine" made me pro-gun
- Closing Gitmo is not enough
- Murkowski: Palin too disengaged to run for Senate
- In IRS scandal, new GOP tactic is ignorance
- Code Pink activist berates Obama at national security speech
- Cuomo: "Shame on us" if New York City elects Weiner
- Coburn calls questions about tornado aid "typical Washington B.S."
- Conspiracy theorists clash over London attack
- Voting is not a right
- Destroying the planet for record profits
- Ahead of Obama's speech, U.S. acknowledges four American drone killings
- Pic of the day: Barack Obama at prom
- Anti-Islam backlash in London after machete attack
- Must-see morning clip: Bill O'Reilly visits "The Daily Show"
- Obama’s drone speech will probably be maddening
- Boehner: "Inconceivable" Obama didn't know about IRS targeting
- Obama to announce new effort to close Guantanamo Bay
- House supporters of KXL received $56m from fossil fuel industry
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11