The feds raise the amount a student is allowed to borrow and the schools follow suit by raising tuition and fees by even more. The feds guarantee the loans so the schools have no incentive to anything other than admit more students and cash the checks. Unqualified students drop out? The school already got paid. The feds are on the hook for the money. Only higher education loans an 18yr old with no job and no collateral six figures with no questions asked.

Cost of attendance at my alma mater, an excellent public school, is now $45k/yr. It was $15k/yr 25 years ago. The increase far surpasses inflation and wage growth.

Remove the fed guarantees. Put the schools on the hook for their admissions decisions. Bring vocational training back to high schools. Stop telling everybody they have to go to college. The trades are a viable path. Stop requiring degrees for jobs that don’t need one.

quote:

I agree with you that capitalism needs to sort this out. Why not remove the government from the equation entirely?

There's your answer.

If you do that, different schools will experiment with different ways to attract students. Some may even offer something similar to your proposal. Let the schools figure out how to attract students and how to get paid, like any other free-market business or service.

Once you take government out of the equation, the experimentation will begin.

I went to a rather prestigious and expensive Univerity, which allowed me to get into a very competitive field at the graduate level. I worked and paid one third of my undergraduate career, my parents paid a third and I got a loan which I paid off when I reached the age of 40. The government paid for my graduate education but got it all back when I was forced to work for the goverment for a few years. I just checked. The University I attended is now 86 grand per year.
It was imorpant to have quality faculty. Even the football team was forced to take difficult classes.

No, I don't think the 20% solves anything.

Back in the day, nearly 50 years ago for me, universities appealed for different reasons than today. Back then, a student might have a particular career goal and would seek a college or university with the best reputation for career success. So, the school had a strong motivation to educate for success.

Another kind of student was motivated but perhaps didn't have a specific profession in mind. Back then, having a four year degree meant something. It was already waning a bit, but having any degree opened doors otherwise closed.

Thus schools needed to show their graduates succeeded in order to attract new students.

Since credit was hard to come by, the education had to also be a good value. Tuition for my daughter was 10x what it was for me at the same private university! The school had become very luxurious from when I graduated to when she attended. (She came to her senses and transferred to the state U and graduated debt free.)

But our society changed over time to where everybody believed they must go to college or university. And many of them were unserious except to party and hook up. THey weren't flipping burgers like I did to pay tuition, so they feel no pressure to accomplish anything or to get value out of their expenditures.

I began investing for my kids college education when they were born. I dollar cost averaged into mutual funds every month. As a result I wrote the checks for the total amount. My youngest still has a sizable amount left. I also paid for two cars.
No borrowing whatsoever.

Nailed it!

quote:

Originally posted by ridewv:
I feel the schools themselves should be the ones financing the education. That would stop them admitting unqualified students to struggle 2 years before quitting. Also encourage degrees that actually prepare graduates for the best chance of success.

quote:

Originally posted by PASig:
It broke the day the government took over most student loan financing in this country.

As others have said, as long as the gubment is underwriting something, prices go up. When I graduated, my total student debt was between $2500-3000. But my student loan was administered by a local bank, and was just like a typical consumer loan.

My sons went to the same university as me. However, tuition for them was almost 650% more. And ironically, they went to a private liberal arts college before the university - It was cheaper to send them to that private college than it was to send them to the public land-grant university.

My older son is a pharmacist, but his student debt is over $100K AFAIK. My younger son in an Army officer, and had an Army scholarship for his tuition, but he still has some student debt as well.

Years ago I was speaking with a friend thirty years older than. He told his kids they could attend whatever college they wanted as long as they paid for it.

Yes, I read your entire post. So are you going to start up a University and try this out? Who is going to force all the money making learning institutions to do this?

There is no way this will ever be implemented.

Let’s play this out…

The average in state tuition with room and board is just over $27,000. So let’s say our student does what he is suppose to do and graduates in 4 years. That will leave him with a debt of over $108,000

Let’s assume a very generous loan rate of 5% APY and keep it simple that would add approximately $21,000 to the principal for a total of approximately $129,000

Now let’s say our graduate lands a great job and starts on the higher end of the average salary for a recent grad of $65,000. 20% of that salary is only $13,000 per year or a total of $52,000 for for years of payments.

So what happens to the remaining $77,000?

Originally posted by smlsig:

quote:

So what happens to the remaining $77,000?

https://www.youtube.com/watch?v=BAjxn2US7J8

I was expected to work to pay a substantial portion of my tuition. I took a factory job in Chicago where I loaded 55 pound boxes of Karo corn syrup for eight hours. I made much more than my mother whowas a newspaper editor. In order to buy a used VW I took on a second job in the shipping and receiving department of a newspaper. I went from one job to the next. That sort of thing seems foreign to kids these days. Most of my friends had similar jobs.

quote:

Originally posted by ZSMICHAEL:
I went to a rather prestigious and expensive Univerity, which allowed me to get into a very competitive field at the graduate level. I worked and paid one third of my undergraduate career, my parents paid a third and I got a loan which I paid off when I reached the age of 40. The government paid for my graduate education but got it all back when I was forced to work for the goverment for a few years. I just checked. The University I attended is now 86 grand per year.
It was imorpant to have quality faculty. Even the football team was forced to take difficult classes.

Notre Dame?

The schools have too much government money and are bloated. I am thoroughly convinced that 50% of university administrators could be fired today and classes would continue on just fine.

I may not remember this story exactly but, one of our former members JALLEN told a story from I think 1950s. He played trumpet in a band at a New Year's Eve party, made about $300 and that paid tuition for a semester at University of Texas.

Yep. It was academically challenging to say the least. Athletics were in abundance. We had more athletic equipment for the students than any other University except Ohio State. All male in those days. We commiserated with the Navy Midshipmen whom we have played every year since the 1940s,who had a similar environment.

I have been a professor since 2000.

Most, including universities, have forgotten the original purpose of the university, the core curriculum. We tried to codify what it meant to be 'Da Vinci's' Renaissance Man.
A true citizen and cultural man should have XYZ. No one has ever really agreed on what that is, but the point is that by studying Art, Religion, Athletics, Math, Social Sciences, Philosophy et al. you become this Renaissance Man. (FWIW this is referenced as the Canon) THEN you study for a trade (if needed) Ben Franklin is my favorite candidate for this, printer, inventor, politician etc.

The trick is this was expensive, and so communities only sent their best, the rest went to work in the salt mines. (que larger discussion on the evils of the industrial revolution and child labor etc.)

Fifty years ago it was treated like a gateway to get out of Blue Collar multigenerational entrapment (however you see it) but then it all changed when most of those jobs were shut down and shipped out. Now we proudly declare that 99% of all kids must go to college. But society has NEVER supported that. At best it is 75%. Many would love to be gainfully employed work hard, marry, have kids etc.
But when we tell them to 'go to college' for no good reason, force debt on them, we wonder why it fails.
Today, in an effort to appease these masses that do not really understand the difference in the trade school, and university, we have countless ridiculous degrees that do NOT lead to employment.

I believe a reset is coming. What University and trade school, and High School, etc. will look like. No one knows. It is not crippling debt that finally kills it though.
It is generative AI that is killing it.

quote:

Originally posted by ibanda:
The schools have too much government money and are bloated. I am thoroughly convinced that 50% of university administrators could be fired today and classes would continue on just fine.

I may not remember this story exactly but, one of our former members JALLEN told a story from I think 1950s. He played trumpet in a band at a New Year's Eve party, made about $300 and that paid tuition for a semester at University of Texas.

Dang I miss JALLEN. He once called me down after a negative post I made, It hit me hard. It was a real attitude check. Not many make me feel that way.

The reason there is so much bloat in the administrator ranks is that there are few avenues for promotion. Work well at your job, nobody cares. You wont make more. i.e. staffer processes 75 application when only 40 are required. So the only path to reward this employee is middle management. and then everyone is just protecting their empire.

Professors get three promotions in their career (assistant, associate, and full). I have delayed my promotion to full because it will be the last one. And that is depressing in a way. I could move into administration, but nope, I like being in the classroom. I am having fun researching and developing AI policy and procedures. So in a way it is fun again.

^^^^^^^^^^^^
I believe it was the 1960s when JAllen attended UT. In those days UT had the number one or two team in the country{football}.
I have taught part time at several Universities, and I could never understand why administrators were paid more. The President of many state Universities pull down high six figures. Many hospital administrators make substanially more than the physicians.

quote:

I have taught part time at several Universities, and I could never understand why administrators were paid more. The President of many state Universities pull down high six figures. Many hospital administrators make substantially more than the physicians.

Yeah... and the football coach even more than the administrators.

Missouri Head Football Coach Eli Drinkwitz's salary averages $10.75 million annually under a new six-year extension (through 2031), totaling $64.5 million in base compensation, with his 2026 salary set at $10.25 million, making him the highest paid public employee in the state.

^^^^^^^^^^^^^
Good point. However the top ten college football teams pull in millions each year if they have a winning team. The amount they receive from TV contracts, deals with Nike etc is in the millions. On the other hand paying Brian Kelly to coach LSU to the tune of 53 million was crazy.