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Student Debt Payback Lags – WSJ

Lets face it, the value of a college education has as much to do with the motivation and drive of the student as it does with the performance of the institution. Don’t tell that to the liberal left because it upsets their plan to make college “free” and con everyone into believing throwing money at this goal solves all kinds of problems, especially their favorite; inequality. 

Some of these loans go to schools that have no chance of graduating students who will earn a decent middle-class living. Some of these loans go to students who have no motivation to complete an education and put it to good use. I’m sorry, but beauty school is not higher education and I submit that supporting such for-profit schools does nothing more than trap people in low paying jobs. 

The focus on government is now on the colleges; trying to hold them accountable for their students failures [“expose schools that leave students worse off than if they had gone directly into the workforce”. ]. That’s like holding the schoolroom teacher accountable for student performance and ignoring the parents and family unit. The left also ignores government policy that holds no one accountable, throws money at the problem and in fact encourages abuse and lack of individual responsibility. 

Populist rhetoric fools many with it’s simplistic promises to make everything better with appealing sounding solutions and yet no one appears to question the actual results or cost. The examples abound. 

We decry the very low participation rate in the workforce while at the same time in many states the combined state and federal welfare benefits and tax credits create an income equal to the national average for full time workers. Why are we surprised?

Why are we surprised that generous college loans and even more generous payback and forgiveness policies coupled with no criteria on the “education” obtained leads to abuse and billions of lost taxpayer money?

By ANDREA FULLER and DOUGLAS BELKIN Sept. 13, 2015 

More than half of students at 347 colleges and vocational schools defaulted on their loans or failed to pay down even a single dollar of their debt after seven years, according to a Wall Street Journal analysis of federal data released Saturday. Despite the low repayment rates, students at these predominantly for-profit schools received $2.2 billion in federal loans last year, the Journal analysis found. The schools include four-year, degree-granting colleges as well as two-year colleges and certificate-granting professional schools, such as beauty academies and technical institutes.

The findings highlight the rising concern over student debt, which has become an issue in the 2016 presidential race and a focus of the Obama administration. At issue: whether universities are offering strong returns on the investment students—and the government—are making.

The government extended a total of $134 billion in loans and grants in 2014 to students to pay college costs. 

A Wall Street Journal investigation published in June found that accreditors rarely penalize colleges with the lowest graduation rates and highest loan-default rates. The issue has gained attention as cumulative student debt has reached $1.2 trillion. 

Nearly seven million students with debts haven’t made a payment in a year, according to Education Department data released last month. Students are especially vulnerable if they leave school with debt and no degree. David Bergeron, a former higher education adviser to President Obama, said the administration is trying to expose schools that leave students worse off than if they had gone directly into the workforce.

Source: Student Debt Payback Lags – WSJ

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2 replies »

  1. For all those old enough to remember the show $64,000 dollar question, here is the answer that I just learned. The answer is NO. The question was the cost of one year at Penn State where most degrees are now taking 5 years to complete.

    Co-worker’s daughter got a $15k scholarship to Penn State. She really did not know which degree she wanted. At an estimated $320k, I can’t possibly think of how to even start paying that back if it were student loans.

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  2. Government has to take the profit out or limit the loan amounts to get the tuition under control. Under my theory that college is not for everybody, I think that there is a place to these vocational schools. Make them get accredited before student can get loans. Only pay the school after the student completes the class or degree. One of two things will happen with that last suggestion. Massive fraud with degrees issued without attendance or mandatory study groups to help the students graduate. How do you thing the military ensure that their soldiers learn in some fields?

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