6 ms·

When you have students taking out Federal loans, the University getting paid with virtually no risk, and they don't if the student can get a job or pay off the

When you have students taking out Federal loans, the University getting paid with virtually no risk, and they don't if the student can get a job or pay off the loan, they have no incentive to curb spending. The federal government need to force these universities to take the risk and loan out money directly.

echelon 3y ago
It's all about risk. Currently the loans don't factor in the associated risks, and therefore are unlimited streams of funny money. The expected value of the degree, the cost of the degree program, chance of graduation, chance of employment, student risk factors (grades, attendance), etc. are important, yet not considered. When pricing is artificially kept independent of the underlying risk model, it leads to the kind of huge distortion we see today. All of this is immediately obvious, of course. But the counter argument has weight too -- that putting risk into the equation isn't equitable. Poor and underserved students won't receive the same access. A healthy medium might be to allow federal loans to continue for only programs with an expected value in four years that exceeds that of the degree program cost plus loan interest plus double the cost of living. Basically, just STEM, nursing, radiology, etc. at mostly community colleges and state universities. If you want an art school history major, you need a real loan.
- haldujai 3y ago
  > Basically, just STEM, nursing, radiology, etc. So "Basically, STEM or STEM-adjacent"? (depending how consider nursing) > The expected value of the degree To society or the individual? Calculated how? > If you want an art school history major, you need a real loan. So only rich people are allowed to be educated in the humanities unless you're willing to get what will be a very expensive and likely cost-prohibitive private loan? This seems like a step backwards. > A healthy medium might be to allow federal loans to continue for only programs with an expected value in four years that exceeds that of the degree program cost plus loan interest plus double the cost of living So basically only engineers? This wouldn't apply to anyone getting a graduate degree or even most other professions. A mathematician from MIT entering academia wouldn't meet this calculation. Neither would almost all physicians, even if you ignore years spent in residency, unless they're moving somewhere with a very low COL. Respectfully, as someone with a humanities undergraduate and two graduate STEM degrees, I find your proposition incredibly shortsighted and fails to consider the individual and societal value of non-STEM degrees beyond direct salary. I would argue my undergraduate degree has provided me far more value, financial and otherwise, than either of my other degrees.
  - lsmeducation 3y ago
    How much is the cost of your undergraduate major on average nationwide? Do you believe it is accurately priced in comparison to a STEM major? It’s a pricing issue. If we don’t agree it’s a pricing issue, then let’s pay everyone the same salary regardless of profession. There’s ideological value in everything, but we’re talking business here. The colleges CHARGE you something. They don’t gift you anything out of virtue. So talk money. I’d be willing to even accept a Nicotine warning label of sorts that colleges tell an English major at the start (and the parents). “hazardous warning label: hey, we are going to charge you 15k a year for this. you won’t likely make more than X in the real world with this degree. You cool with it? No refunds.”
    - haldujai 3y ago
      I don't know the national average of my major. I paid something around 35-40k/year in tuition for an english literature degree. My MD and MS (CS) were more expensive but also done later. All undergraduate degrees in the US have a pricing issue. I don't believe anyone should be paying 30-60k/year for one. > There’s ideological value in everything, but we’re talking business here. No, we're talking about university education which should not be a business. I don't consider an undergraduate degree training for a specific job, that's what technical colleges are for. If you want to argue we shouldn't subsidize university in general I could understand that but think it's a bad idea. I don't agree that STEM degrees are inherently more valuable than the humanities from a general education perspective which is what I view undergraduate degrees as. If we treat it as a business we should only subsidize courses essential for the workplace. Why am I subsidizing a web developer or a physician taking undergraduate calculus and physics? Having worked as both I have needed neither. > “hazardous warning label: hey, we are going to charge you 15k a year for this. you won’t likely make more than X in the real world with this degree. You cool with it? No refunds.” I think it's common knowledge that STEM graduates earn more, this was the case when I was in high school during the 2000s.
      - lsmeducation 3y ago
        No, we're talking about university education which should not be a business. Money and loans are involved, people pay, and people get paid. If we go even further on the money part, many consider it an investment. Anyways. Perhaps we should make the core liberal arts courses free of charge, and then create a pricing model for professional courses where the pricing model is more realistic about what is being offered, for what price, where the question truly becomes “is this worth it?”. That way we can finally separate the holiness of a core education away from specialized professional paths.
abeppu 3y ago
I think the federal government just needs to have a 'fitness standard' for schools to be eligible to receive federal loan dollars. Like, >80% of tuition dollars must be spent on instruction staff, instruction-specific facilities that serve students, students must be able to opt-out of substantial non-instruction services (e.g. dorms, recreational facilities), etc. If you want to build a new building that doesn't have classrooms, you need to find some other source of funding than students. I know people hate this, but I also think it would be reasonable if you weren't eligible to receive federal student loans until you had filed your own taxes without being anyone's dependent, or been out of high school for 2 years, or _something_. What if we still agreed that federal programs can help make college accessible and affordable -- but we should want students to have some perspective on what they want their life to look like, and what it will mean to pay off a giant pile of debt over years, and what kind of education might give them a chance at balancing those concerns.
- tyoma 3y ago
  Re: fitness standard. The federal government already has the bureaucracy for this in say the DCAA (https://www.dcaa.mil/ https://www.dcaa.mil/). I would very much like any universities accepting student loans to be audited and publish audited financial statements detailing where the money goes.
- Manuel_D 3y ago
  In theory, that's what accreditation is supposed to represent: a set of standards to ensure students are educated to a certain minimum bar for a given major. However, the cynical reality is that university is as much about signalling competence relative to the rest of the population as it is about learning. Fun fact: Stanford's computer science program is not accredited. The department explained that it's a mountain of paperwork to get accredited and it wouldn't benefit Stanford at all because it's already so prestigious.
  - aoki 3y ago
    By ABET. The institution as a whole is accredited. The question is whether accreditation from an engineering org is worth the limits they place on your curriculum. Stanford EE and CS and Cal EECS all say no, they’d rather give their grads more flexibility than have them jump through ABET hoops.
dv_dt 3y ago
It would also help to require administrative salaries to be below a certain percentage in order to qualify to accept federal loan money. (I would think 8% or lower).
- WalterBright 3y ago
  More regulation to micromanage things is never going to work. For example, what if you've got an opportunity to hire Feynman, but he expects 9%? Maybe you'll skirt the 8% requirement by giving him a company car to use. Nobody is smart enough to write a regulation that can't be gamed.
  - haldujai 3y ago
    Regulating administrative overhead as a single line item with a fixed percentage is micromanaging?
    - ssivark 3y ago
      Yes, because somebody might innovate an education model where administrative salaries are 90% of the cost but students learn well, and earn well. An 8% cap would close off such avenues for progress. In general (going back to basic cybernetics/control theory), it’s better to regulate outcomes (what you actually want) rather than inputs, unless you’re sure you have the correct model of the system. So it’s much better to make collages share the risk, rather than the government footing the risk and instituting regulations and processes.
      - dv_dt 3y ago
        How is setting up a control system not in some sense regulating? I’m genuinely curious.
        ssivark 3y ago
        It most definitely is — I don’t think I’ve stated anything to the contrary?
lsmeducation 3y ago
I always had a very simple way to do student debt forgiveness: 1) Have universities foot the bill, not the tax payer (shocking, I know). A literal refund. 2) Institute an audit every 5 years on their price to success rate on a per major basis. Have them refund north of 50% of the tuition if overpriced. Cool, now run your little game. This is literally a consumer protection issue and this industry has hid far too long under the veils of sanctity of “but tis’ but education, maaaaan”. —- Like many have already mentioned, the federal loans going toward these costs are essentially like donating to a charity that you will never get actionable data on. Did the money go to the right place? Did it work? No? Okay, stop donating to that charity, as nice as it feels to be charitable. If a charity doesn’t work, it doesn’t work, doesn’t matter how great it sounds. Even a charity named Education.
- sokoloff 3y ago
  What does “work” mean in this case? If a student goes to university and gets a degree in medieval French literature and then serves coffee for life as a job, the university did its job iff the student demonstrated a level of mastery of medieval French literature. The inadvertent economics education that came later was not the university’s doing and they take no credit nor blame for it.
  - musicale 3y ago
    > What does “work” mean in this case? That the money was spent responsibly, for some definition of responsibly. Probably this doesn't mean the sort of abuses detailed in the article. > If a student goes to university and gets a degree in medieval French literature and then serves coffee for life as a job, the university did its job iff the student demonstrated a level of mastery of medieval French literature. I'm unconvinced that it would be good to disband humanities departments, or to ban non-STEM degree programs and/or degrees that don't involve training for a specific career path. Last I checked, even MIT has a humanities school (though it seems to be combined with art and social sciences.) Our society seems to have enough react programmers and could probably use more medievalists, as well as other humanities grads - people who understand the human condition, have some sense and understanding of history, know how to exercise critical thinking skills, and can read and write well. These are skills that could serve someone well in a variety of jobs. [Moreover, as more jobs (including supposedly highly skilled tech jobs) are automated out of existence, many of us are likely to end up in low-paying service jobs - at least until the robots take those as well.]
deleted 3y ago
[deleted]
mrtesthah 3y ago
That's the wrong argument to be making. Education should be free. https://www.brookings.edu/articles/is-free-college-a-good-idea-increasingly-evidence-says-yes/ https://www.brookings.edu/articles/is-free-college-a-good-id...
- sieabahlpark 3y ago
  [dead]
AdamJacobMuller 3y ago
Agreed, simple solution though. Students pay a maximum of N% of their income over Y years and anything above this is forgiven. The university has any forgiven amounts deducted from their actual cash payments for future student loans.
- beej71 3y ago
  This is an Income Share Agreement, which I certainly approve of. Another option available to public schools is that you can use tax as a mechanism for collecting that money.

echelon 3y ago

It's all about risk. Currently the loans don't factor in the associated risks, and therefore are unlimited streams of funny money. The expected value of the degree, the cost of the degree program, chance of graduation, chance of employment, student risk factors (grades, attendance), etc. are important, yet not considered. When pricing is artificially kept independent of the underlying risk model, it leads to the kind of huge distortion we see today. All of this is immediately obvious, of course. But the counter argument has weight too -- that putting risk into the equation isn't equitable. Poor and underserved students won't receive the same access. A healthy medium might be to allow federal loans to continue for only programs with an expected value in four years that exceeds that of the degree program cost plus loan interest plus double the cost of living. Basically, just STEM, nursing, radiology, etc. at mostly community colleges and state universities. If you want an art school history major, you need a real loan.

haldujai 3y ago
> Basically, just STEM, nursing, radiology, etc. So "Basically, STEM or STEM-adjacent"? (depending how consider nursing) > The expected value of the degree To society or the individual? Calculated how? > If you want an art school history major, you need a real loan. So only rich people are allowed to be educated in the humanities unless you're willing to get what will be a very expensive and likely cost-prohibitive private loan? This seems like a step backwards. > A healthy medium might be to allow federal loans to continue for only programs with an expected value in four years that exceeds that of the degree program cost plus loan interest plus double the cost of living So basically only engineers? This wouldn't apply to anyone getting a graduate degree or even most other professions. A mathematician from MIT entering academia wouldn't meet this calculation. Neither would almost all physicians, even if you ignore years spent in residency, unless they're moving somewhere with a very low COL. Respectfully, as someone with a humanities undergraduate and two graduate STEM degrees, I find your proposition incredibly shortsighted and fails to consider the individual and societal value of non-STEM degrees beyond direct salary. I would argue my undergraduate degree has provided me far more value, financial and otherwise, than either of my other degrees.
- lsmeducation 3y ago
  How much is the cost of your undergraduate major on average nationwide? Do you believe it is accurately priced in comparison to a STEM major? It’s a pricing issue. If we don’t agree it’s a pricing issue, then let’s pay everyone the same salary regardless of profession. There’s ideological value in everything, but we’re talking business here. The colleges CHARGE you something. They don’t gift you anything out of virtue. So talk money. I’d be willing to even accept a Nicotine warning label of sorts that colleges tell an English major at the start (and the parents). “hazardous warning label: hey, we are going to charge you 15k a year for this. you won’t likely make more than X in the real world with this degree. You cool with it? No refunds.”
  - haldujai 3y ago
    I don't know the national average of my major. I paid something around 35-40k/year in tuition for an english literature degree. My MD and MS (CS) were more expensive but also done later. All undergraduate degrees in the US have a pricing issue. I don't believe anyone should be paying 30-60k/year for one. > There’s ideological value in everything, but we’re talking business here. No, we're talking about university education which should not be a business. I don't consider an undergraduate degree training for a specific job, that's what technical colleges are for. If you want to argue we shouldn't subsidize university in general I could understand that but think it's a bad idea. I don't agree that STEM degrees are inherently more valuable than the humanities from a general education perspective which is what I view undergraduate degrees as. If we treat it as a business we should only subsidize courses essential for the workplace. Why am I subsidizing a web developer or a physician taking undergraduate calculus and physics? Having worked as both I have needed neither. > “hazardous warning label: hey, we are going to charge you 15k a year for this. you won’t likely make more than X in the real world with this degree. You cool with it? No refunds.” I think it's common knowledge that STEM graduates earn more, this was the case when I was in high school during the 2000s.
    - lsmeducation 3y ago
      No, we're talking about university education which should not be a business. Money and loans are involved, people pay, and people get paid. If we go even further on the money part, many consider it an investment. Anyways. Perhaps we should make the core liberal arts courses free of charge, and then create a pricing model for professional courses where the pricing model is more realistic about what is being offered, for what price, where the question truly becomes “is this worth it?”. That way we can finally separate the holiness of a core education away from specialized professional paths.

abeppu 3y ago

I think the federal government just needs to have a 'fitness standard' for schools to be eligible to receive federal loan dollars. Like, >80% of tuition dollars must be spent on instruction staff, instruction-specific facilities that serve students, students must be able to opt-out of substantial non-instruction services (e.g. dorms, recreational facilities), etc. If you want to build a new building that doesn't have classrooms, you need to find some other source of funding than students. I know people hate this, but I also think it would be reasonable if you weren't eligible to receive federal student loans until you had filed your own taxes without being anyone's dependent, or been out of high school for 2 years, or _something_. What if we still agreed that federal programs can help make college accessible and affordable -- but we should want students to have some perspective on what they want their life to look like, and what it will mean to pay off a giant pile of debt over years, and what kind of education might give them a chance at balancing those concerns.

tyoma 3y ago
Re: fitness standard. The federal government already has the bureaucracy for this in say the DCAA (https://www.dcaa.mil/ https://www.dcaa.mil/). I would very much like any universities accepting student loans to be audited and publish audited financial statements detailing where the money goes.
Manuel_D 3y ago
In theory, that's what accreditation is supposed to represent: a set of standards to ensure students are educated to a certain minimum bar for a given major. However, the cynical reality is that university is as much about signalling competence relative to the rest of the population as it is about learning. Fun fact: Stanford's computer science program is not accredited. The department explained that it's a mountain of paperwork to get accredited and it wouldn't benefit Stanford at all because it's already so prestigious.
- aoki 3y ago
  By ABET. The institution as a whole is accredited. The question is whether accreditation from an engineering org is worth the limits they place on your curriculum. Stanford EE and CS and Cal EECS all say no, they’d rather give their grads more flexibility than have them jump through ABET hoops.

dv_dt 3y ago

It would also help to require administrative salaries to be below a certain percentage in order to qualify to accept federal loan money. (I would think 8% or lower).

WalterBright 3y ago
More regulation to micromanage things is never going to work. For example, what if you've got an opportunity to hire Feynman, but he expects 9%? Maybe you'll skirt the 8% requirement by giving him a company car to use. Nobody is smart enough to write a regulation that can't be gamed.
- haldujai 3y ago
  Regulating administrative overhead as a single line item with a fixed percentage is micromanaging?
  - ssivark 3y ago
    Yes, because somebody might innovate an education model where administrative salaries are 90% of the cost but students learn well, and earn well. An 8% cap would close off such avenues for progress. In general (going back to basic cybernetics/control theory), it’s better to regulate outcomes (what you actually want) rather than inputs, unless you’re sure you have the correct model of the system. So it’s much better to make collages share the risk, rather than the government footing the risk and instituting regulations and processes.
    - dv_dt 3y ago
      How is setting up a control system not in some sense regulating? I’m genuinely curious.
      - ssivark 3y ago
        It most definitely is — I don’t think I’ve stated anything to the contrary?

lsmeducation 3y ago

I always had a very simple way to do student debt forgiveness: 1) Have universities foot the bill, not the tax payer (shocking, I know). A literal refund. 2) Institute an audit every 5 years on their price to success rate on a per major basis. Have them refund north of 50% of the tuition if overpriced. Cool, now run your little game. This is literally a consumer protection issue and this industry has hid far too long under the veils of sanctity of “but tis’ but education, maaaaan”. —- Like many have already mentioned, the federal loans going toward these costs are essentially like donating to a charity that you will never get actionable data on. Did the money go to the right place? Did it work? No? Okay, stop donating to that charity, as nice as it feels to be charitable. If a charity doesn’t work, it doesn’t work, doesn’t matter how great it sounds. Even a charity named Education.

sokoloff 3y ago
What does “work” mean in this case? If a student goes to university and gets a degree in medieval French literature and then serves coffee for life as a job, the university did its job iff the student demonstrated a level of mastery of medieval French literature. The inadvertent economics education that came later was not the university’s doing and they take no credit nor blame for it.
- musicale 3y ago
  > What does “work” mean in this case? That the money was spent responsibly, for some definition of responsibly. Probably this doesn't mean the sort of abuses detailed in the article. > If a student goes to university and gets a degree in medieval French literature and then serves coffee for life as a job, the university did its job iff the student demonstrated a level of mastery of medieval French literature. I'm unconvinced that it would be good to disband humanities departments, or to ban non-STEM degree programs and/or degrees that don't involve training for a specific career path. Last I checked, even MIT has a humanities school (though it seems to be combined with art and social sciences.) Our society seems to have enough react programmers and could probably use more medievalists, as well as other humanities grads - people who understand the human condition, have some sense and understanding of history, know how to exercise critical thinking skills, and can read and write well. These are skills that could serve someone well in a variety of jobs. [Moreover, as more jobs (including supposedly highly skilled tech jobs) are automated out of existence, many of us are likely to end up in low-paying service jobs - at least until the robots take those as well.]

deleted 3y ago

[deleted]

mrtesthah 3y ago

That's the wrong argument to be making. Education should be free. https://www.brookings.edu/articles/is-free-college-a-good-idea-increasingly-evidence-says-yes/ https://www.brookings.edu/articles/is-free-college-a-good-id...

sieabahlpark 3y ago
[dead]

AdamJacobMuller 3y ago

Agreed, simple solution though. Students pay a maximum of N% of their income over Y years and anything above this is forgiven. The university has any forgiven amounts deducted from their actual cash payments for future student loans.

beej71 3y ago
This is an Income Share Agreement, which I certainly approve of. Another option available to public schools is that you can use tax as a mechanism for collecting that money.