I have long believed that America’s patchwork, complicated method of financing higher education makes no sense. I watch working students taking one more class than they can really manage in order to meet aid eligibility requirements; I see the university employing dozens of people to shuffle the paperwork; I see parents struggling to complete complex forms–and of course, we’ve all seen the reports of unmanageable student loan debt. The need to repay that debt constrains the choices of graduates who might go into lower-paying but more satisfying jobs, makes periods of unemployment more terrifying, and probably restrains the sort of consumer spending that would boost economic growth.
An article in the recent issue of the Atlantic suggests scrapping the whole system and replacing it with a far simpler, more transparent approach. I hope a couple of paragraphs from that article will tempt you to click through and read the whole thing.
With what the federal government spent on its various and sundry student aid initiatives last year, it could have covered the tuition bill of every student at every public college in the country. Doing so might have required cutting off financial aid at Yale, Amherst, the University of Phoenix, and every other private university. But at this point, that might be a trade worth considering.
The under-funding of public university systems and Washington’s attempts to compensate have also helped nourish a giant barnacle on the side of higher-ed: the for-profit college industry. As scarce classroom space at community and open-admission state colleges has filled up, students turned towards alternatives like Kaplan University and University of Phoenix, which charge tens of thousands of dollars for degrees with dubious job market value. They get away with it because of federal aid. I call it the 10, 25, 50 problem: They educate ten percent of students, who take out about a quarter of all student loans and are responsible for about half of all defaults. In the meantime, they suck up about $8.8 billion, or around 25 percent, of all Pell Grant money.