College Debt is the New Normal

Professorial types are excited by a plan, courtesy of Michael L. Hays of New Mexico, to solve the college debt crisis. The irony is, it would put the onus of responsibility for college loans on some of the most irresponsible institutions in the United States today—colleges and local and state governments.

“We need to put college funding on a sensible basis,” Hayes, a PhD, writes.

“The government should not lend money indiscriminately to anyone who wants it for college: serious students, students unsure of their purposes, students for whom college is a substitute for unemployment, students who want a two- or four-year vacation, etc. Instead, it should lend to colleges based on their demand for funds; in turn, the colleges would make loans to students whom they believe, on the basis of their already existing application processes, would be likely to benefit from college and repay their loans; in turn, the colleges would use their repayments to repay the government. Schools would assume the costs of their mistakes—perhaps some small allowance (ten percent?) for the inevitable mistakes—;

Otherwise, states would be guarantors of the loans of public colleges and universities. Private, especially, for-profit schools, would also assume the costs of their mistakes and require private-equity guarantors of their loans. For-profit schools, usually living off the federal dole and providing a poor education, would be forced to upgrade themselves, or be driven, out of business.”

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