A Guarantee on a Higher Degree
Anchor Rising commenter mangeek sends along this Huffington Post post on student loans:
A strange milestone was marked this week in the history of student loans. The total balance of all outstanding US student loans (given as $730 billion in DIY U, based on OMB estimates) is now estimated by Mark Kantrowitz of Finaid.org at more like $830 billion — $605.6 billion in federally guaranteed student loans, which have interest rates fixed and in some cases interest subsidized by the government, and a further $167.8 billion in private student loans, with interest rates that hover around 18-20%. Furthermore, Kantrowitz says, $300 billion in federal student loan debts have been incurred in the last four years.
This means the total balance of student loans has just surpassed the total balance of credit card debt for the first time in history. Each makes up roughly a third of the money Americans owe, mortgages excluded.
The writer, Anya Kamenetz, tags education loans as especially bad, because they aren’t subject to bankruptcy extinguishment, and “and in the case of federal loans, that means being pursued until you die.” Personally, I’m not so sure the measure of a particular form of debt should be how easily one can avoid paying it off.
Be that as it may, mangeek suggests getting rid of government guarantees for loans (and, presumably, government direct loans) “to all but the most promising students.” For my part, the topic raises an idea: What if colleges were to begin differentiating themselves by offering some sort of loan forgiveness or guarantee themselves, based on graduates’ ability to find and maintain the jobs to which their degrees are supposed to gain them access?
Higher-education consumers would surely find that proposition very attractive, not the least because it would indicate that the institutions aren’t likely to let too much fluff and academic baggage interfere with the mission of imparting knowledge and preparing students for life as adults.