The Education Bubble & Poverty

A major problem with the student loan bubble is that federal financial aid goes to some students that are not in dire need, according to Steve Gunderson, president and CEO of the for-profit college Association of Private Sector Colleges and Universities.

Gunderson endorses “federal financial aid to the truly needy.” The former Wisconsin congressman was the one identifiable Republican on the panel at a D.C. Newseum policy summit sponsored by the National Journal and the Bill & Melinda Gates Foundation.

He said that today’s “barriers to professionalism” are hurting college graduates. The current “command and control system” is being pushed back and there are more calls for transparency and “not just regulation from top down” in education.

Unlike his peers in the education establishment, Gunderson does not “think there is a one-size-fits-all” education approach and said “we know they [students] do better with a minimum blended delivery system,” where both the Internet model and campus model are used together to teach college students.

Another panelist, Kevin Carey, who works for the New America Foundation as one of the directors of its Education Policy Program, put forward the argument, contrary to the leanings of most of the panel members, that the “most important reason to go to college is to get a job,” because “they want access to parts of the labor market” that are not accessible with just a high school diploma. Because “the control of credentials” (i.e. a college degree) is a “monopoly” run by the colleges, a college education tends to be ineffective, inefficient and expensive. “People pay because they have no choice,” concluded Carey.

To resolve this, Carey proposed that we “open up the higher education market” while having a “greater hold on quality,” not solely quantity of education and availability. This will allow colleges to “provide the kind of education that students need.” Even with student loans, there have not been significant changes in equality of education and no changes in race distribution in education.

But, he wants the student loan bubble and Pell grant program, which is a “$40 billion program,” to continue as “we’ll keep lending money until they can pay for college.” Until college tuition is lowered and the students themselves can pay it, student loans will not go away.

Yet another panelist, David Bergeron, Vice President of Postsecondary Education at the Center for American Progress, pushed for a British education model that is based on competency, or job skills and training. Instead of faculty being lecturers, “faculty become coaches and aides” in the learning process and help increase affordability. A point that all agreed on was how adults, when they return to school, should be able to apply their job skills to schooling. The problem with the American system is that there is “a lot of ambiguity about credentials and what they mean.”

Spencer Irvine is a staff writer at Accuracy in Academia.
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