With Biden's student loan debt forgiveness in limbo, lawmakers consider colleges' role

[ThatRobGuy]

With Biden's student loan debt forgiveness in limbo, lawmakers consider colleges' role

At a hearing meant to poke holes in the Biden administration's mass debt relief plan, both Republicans and Democrats agreed schools should have more skin in the game.

www.usatoday.com

Amid a clash Thursday over President Joe Biden's beleaguered student loan forgiveness plan, one theme emerged that at least some members of Congress could agree upon: Colleges need to take more responsibility for the debt crisis.

The House Subcommittee on Higher Education and Workforce Development, chaired by Republican Rep. Burgess Owens of Utah, held a hearing aimed at examining the implications of Biden’s student loan proposals for students and taxpayers. One of those – broad relief of up to $20,000 in debt for borrowers making less than $125,000 – is held up in the U.S. Supreme Court.

The two-hour hearing, the subcommittee’s first meeting this session, consisted largely of the usual partisan talking points. Republicans decried the burdens debt forgiveness places on “hardworking Americans” and the prospect of creating a culture of overreliance on loans. Democrats lamented the declining value of a Pell Grant amid skyrocketing tuition and the disproportionate rates of low-income Americans who have struggled to complete their degrees but are stuck with ever-mounting debt they can’t afford.

The general idea of better holding colleges accountable for the outpaced growth in tuition and student debt, however, appeared to garner bipartisan consensus.


On the aspect they seemed to agree on (holding the colleges, themselves, accountable), I like the sound of some of the proposals.

Salerno broached the idea of requiring colleges to co-sign the loans students take out. They would then be financially responsible if a borrower is unable to make good on their payments after graduating.

Gadkaree said the first step is clear: reinstating the gainful employment rule.
The rule, revoked under former President Donald Trump, required any program whose typical graduates’ debts exceeded a certain percentage of their income to improve their outcomes or risk losing access to federal funding. The vast majority of schools affected by the rule were for-profit colleges, which account for half of all student-loan defaults.


I would extend the second provision even further, and instead of just primarily hitting the "for profit" colleges (or as they also called them "low quality institutions"), I would also hit the "respectable" institutions as well when they're knowingly admitting people into programs (that are known to have a low job placement rate) and gleefully taking the federal loan money, and then leaving the borrowers out to dry when they get to the real world and realize their degree isn't very marketable.

For instance, every year in the US, there are 90,000 degrees conferred in Visual and Performing Arts, and 90,000 conferred in Journalism.

According to the Bureau of Labor statistics, the job forecast for those two fields are
Journalism: 4,600 openings per year over the next 10 years
Visual and Performing arts: 2,700 per year over the next 5 years (much of it not full-time salaried work)

If you do the math on that, that's not a great job outlook (and the colleges know that). But they're happily taking the money for enrollment into programs that they know have lower than a 10% job placement rate at 12 months. I think the colleges should take responsibility for that. It's their admissions advisors who talked the 18 year olds into pursuing non-viable degree in a "longshot" field.


I think that's likely why in countries where public colleges are free (to those who get accepted) like Scandinavia, they set very strict entry requirements for those specialized fields and enforce maximum quotas on them. They understand that "hey, everyone is chipping in on this, we don't need tens of thousands of kids emerging 4 years from now with theater degrees who end up working retail after society footed the bill"

 

[rambot]

Man Republicans are doing what they can to make sure average Americans don't get any help.

I wonder if they think million dollar investors in SVB should be protected?

 

[ThatRobGuy]

Man Republicans are doing what they can to make sure average Americans don't get any help.

Sounds like the provisions I was referring to (with regards to making the colleges be accountable for their role in the matter) have bipartisan support.

I suspect that the reason both sides are supporting that angle is because, despite having very different opinions on social program spending and the value of college in general, they realize that "half of people leaving college can't find a decent paying job in the field they studied for" represents a glaring flaw with the model regardless of who's getting stuck with the bill.


For instance, if this were the car industry and 50% of the cars people were being sold were breaking down at 10,000 miles. People can have arguments all day about whether or not people should have to pay for their own car repairs, or if some public entity should help people out who got burned by it with some sort of Lemon Law. But in reality, having a warranty requirement (so that the people selling the cars are on the hook) would go further to address the problem.


I'd suggest that a "college warranty" would go further to remedy this issue rather than propping up a bad business model.

Where, if a person does everything their supposed to do, and still can't get a job in the field they signed up for 18 months post graduation, they get a refund from the university. If the university themselves has skin the game, I bet they'll be a lot less eager to sign people up for some of those "long shot" majors.

I wonder if they think million dollar investors in SVB should be protected?

Actually, most of the pundits from that side that I've heard talk about it were content to let it fail. In my experience talking to conservatives on matters of bailouts, they seem to go too far the other way sometimes to a fault (where they're willing to let major institutions fail without a second thought about what ripple effects it may have)

 

[PsaltiChrysostom]

With Biden's student loan debt forgiveness in limbo, lawmakers consider colleges' role

At a hearing meant to poke holes in the Biden administration's mass debt relief plan, both Republicans and Democrats agreed schools should have more skin in the game.

www.usatoday.com

Amid a clash Thursday over President Joe Biden's beleaguered student loan forgiveness plan, one theme emerged that at least some members of Congress could agree upon: Colleges need to take more responsibility for the debt crisis.

The House Subcommittee on Higher Education and Workforce Development, chaired by Republican Rep. Burgess Owens of Utah, held a hearing aimed at examining the implications of Biden’s student loan proposals for students and taxpayers. One of those – broad relief of up to $20,000 in debt for borrowers making less than $125,000 – is held up in the U.S. Supreme Court.

The two-hour hearing, the subcommittee’s first meeting this session, consisted largely of the usual partisan talking points. Republicans decried the burdens debt forgiveness places on “hardworking Americans” and the prospect of creating a culture of overreliance on loans. Democrats lamented the declining value of a Pell Grant amid skyrocketing tuition and the disproportionate rates of low-income Americans who have struggled to complete their degrees but are stuck with ever-mounting debt they can’t afford.

The general idea of better holding colleges accountable for the outpaced growth in tuition and student debt, however, appeared to garner bipartisan consensus.


On the aspect they seemed to agree on (holding the colleges, themselves, accountable), I like the sound of some of the proposals.

Salerno broached the idea of requiring colleges to co-sign the loans students take out. They would then be financially responsible if a borrower is unable to make good on their payments after graduating.

Gadkaree said the first step is clear: reinstating the gainful employment rule.
The rule, revoked under former President Donald Trump, required any program whose typical graduates’ debts exceeded a certain percentage of their income to improve their outcomes or risk losing access to federal funding. The vast majority of schools affected by the rule were for-profit colleges, which account for half of all student-loan defaults.


I would extend the second provision even further, and instead of just primarily hitting the "for profit" colleges (or as they also called them "low quality institutions"), I would also hit the "respectable" institutions as well when they're knowingly admitting people into programs (that are known to have a low job placement rate) and gleefully taking the federal loan money, and then leaving the borrowers out to dry when they get to the real world and realize their degree isn't very marketable.

For instance, every year in the US, there are 90,000 degrees conferred in Visual and Performing Arts, and 90,000 conferred in Journalism.

According to the Bureau of Labor statistics, the job forecast for those two fields are
Journalism: 4,600 openings per year over the next 10 years
Visual and Performing arts: 2,700 per year over the next 5 years (much of it not full-time salaried work)

If you do the math on that, that's not a great job outlook (and the colleges know that). But they're happily taking the money for enrollment into programs that they know have lower than a 10% job placement rate at 12 months. I think the colleges should take responsibility for that. It's their admissions advisors who talked the 18 year olds into pursuing non-viable degree in a "longshot" field.


I think that's likely why in countries where public colleges are free (to those who get accepted) like Scandinavia, they set very strict entry requirements for those specialized fields and enforce maximum quotas on them. They understand that "hey, everyone is chipping in on this, we don't need tens of thousands of kids emerging 4 years from now with theater degrees who end up working retail after society footed the bill"

While I agree on the job outlook situation, there are a couple of points here.

Most people declare their major at the end of their second year. So I started college in 1986 as a Civil Engineer and graduated with two degrees, BS Chemical Engineering and BA Religious studies. So I'm not sure how 18 year olds should be locked into program X without being able to change. I havent worked in Chemical Engineering in 20 years. But now I work in a field that didnt exist in 1990 for a company that only got its start in 2000. However, it got bought out last year for just over 3 billion dollars.

Often people graduate with degrees that they don't intend to work in. A HS classmate graduated from Yale with a degree in American Studies. He ended up being an editor in chief for various music magazines such as Spin, Vibe and Rolling Stone. He has written several best selling biographies for musicians. One of his books was the source material for a movie that was shortlisted for an Oscar but didn't make the final nomination.

We just never know where things might guide someone.

 

[rambot]

Sounds like the provisions I was referring to (with regards to making the colleges be accountable for their role in the matter) have bipartisan support.

I did notice that. I meant more that the GOP have been fighting it from the gitgo and with great gusto.

I suspect that the reason both sides are supporting that angle is because, despite having very different opinions on social program spending and the value of college in general, they realize that "half of people leaving college can't find a decent paying job in the field they studied for" represents a glaring flaw with the model regardless of who's getting stuck with the bill.


For instance, if this were the car industry and 50% of the cars people were being sold were breaking down at 10,000 miles. People can have arguments all day about whether or not people should have to pay for their own car repairs, or if some public entity should help people out who got burned by it with some sort of Lemon Law. But in reality, having a warranty requirement (so that the people selling the cars are on the hook) would go further to address the problem.

I don't know the program well enough. Is there debt forgiveness if you also go to a trade school or only community college/uni type?

I'd suggest that a "college warranty" would go further to remedy this issue rather than propping up a bad business model.
Where, if a person does everything their supposed to do, and still can't get a job in the field they signed up for 18 months post graduation, they get a refund from the university. If the university themselves has skin the game, I bet they'll be a lot less eager to sign people up for some of those "long shot" majors.
Actually, most of the pundits from that side that I've heard talk about it were content to let it fail. In my experience talking to conservatives on matters of bailouts, they seem to go too far the other way sometimes to a fault (where they're willing to let major institutions fail without a second thought about what ripple effects it may have)

And that gets tricky because people don't necessarily do research into what fields/areas will be good for job prospects will increase their employability chances. Instead they REALLY wanna take that class on the Franco-Russian War....

I feel bad for the suckers who go for PhD. You wanna talk about a flooded market. Hooof! Most of my PhD friends are CRAAAAAAAZY under employed.

 

[Ana the Ist]

With Biden's student loan debt forgiveness in limbo, lawmakers consider colleges' role

At a hearing meant to poke holes in the Biden administration's mass debt relief plan, both Republicans and Democrats agreed schools should have more skin in the game.

www.usatoday.com

Amid a clash Thursday over President Joe Biden's beleaguered student loan forgiveness plan, one theme emerged that at least some members of Congress could agree upon: Colleges need to take more responsibility for the debt crisis.

The House Subcommittee on Higher Education and Workforce Development, chaired by Republican Rep. Burgess Owens of Utah, held a hearing aimed at examining the implications of Biden’s student loan proposals for students and taxpayers. One of those – broad relief of up to $20,000 in debt for borrowers making less than $125,000 – is held up in the U.S. Supreme Court.

The two-hour hearing, the subcommittee’s first meeting this session, consisted largely of the usual partisan talking points. Republicans decried the burdens debt forgiveness places on “hardworking Americans” and the prospect of creating a culture of overreliance on loans. Democrats lamented the declining value of a Pell Grant amid skyrocketing tuition and the disproportionate rates of low-income Americans who have struggled to complete their degrees but are stuck with ever-mounting debt they can’t afford.

The general idea of better holding colleges accountable for the outpaced growth in tuition and student debt, however, appeared to garner bipartisan consensus.


On the aspect they seemed to agree on (holding the colleges, themselves, accountable), I like the sound of some of the proposals.

Salerno broached the idea of requiring colleges to co-sign the loans students take out. They would then be financially responsible if a borrower is unable to make good on their payments after graduating.

Gadkaree said the first step is clear: reinstating the gainful employment rule.
The rule, revoked under former President Donald Trump, required any program whose typical graduates’ debts exceeded a certain percentage of their income to improve their outcomes or risk losing access to federal funding. The vast majority of schools affected by the rule were for-profit colleges, which account for half of all student-loan defaults.


I would extend the second provision even further, and instead of just primarily hitting the "for profit" colleges (or as they also called them "low quality institutions"), I would also hit the "respectable" institutions as well when they're knowingly admitting people into programs (that are known to have a low job placement rate) and gleefully taking the federal loan money, and then leaving the borrowers out to dry when they get to the real world and realize their degree isn't very marketable.

For instance, every year in the US, there are 90,000 degrees conferred in Visual and Performing Arts, and 90,000 conferred in Journalism.

According to the Bureau of Labor statistics, the job forecast for those two fields are
Journalism: 4,600 openings per year over the next 10 years
Visual and Performing arts: 2,700 per year over the next 5 years (much of it not full-time salaried work)

If you do the math on that, that's not a great job outlook (and the colleges know that). But they're happily taking the money for enrollment into programs that they know have lower than a 10% job placement rate at 12 months. I think the colleges should take responsibility for that. It's their admissions advisors who talked the 18 year olds into pursuing non-viable degree in a "longshot" field.


I think that's likely why in countries where public colleges are free (to those who get accepted) like Scandinavia, they set very strict entry requirements for those specialized fields and enforce maximum quotas on them. They understand that "hey, everyone is chipping in on this, we don't need tens of thousands of kids emerging 4 years from now with theater degrees who end up working retail after society footed the bill"

Cosigning the loans???

Could be good....could result in the colleges offering garbage jobs to grow their administrative structures until the debt is paid off.

Ideally, it causes them to severely defund and cut back on worthless degrees.

 

[rambot]

Cosigning the loans???

Could be good....could result in the colleges offering garbage jobs to grow their administrative structures until the debt is paid off.

Ideally, it causes them to severely defund and cut back on worthless degrees.

While I would argue that there are no WORTHLESS degrees, there are too many people getting degrees of little value to them and society.

 

[PsaltiChrysostom]

While I would argue that there are no WORTHLESS degrees, there are too many people getting degrees of little value to them and society.

IMHO, if you get a STEM degree, you should take some liberal arts minor. If you major in a liberal arts degree, you should get a STEM minor. This way there is practicality and the humanities.

Is a college degree solely to get a job or are they also to develop the person into someone extraordinary?

"No matter what anybody tells you, words and ideas can change the world! (...) We don't read and write poetry because it's cute. We read and write poetry because we are members of the human race... And the human race is filled with passion! Medicine, law, business, engineering... These are noble pursuits and necessary to sustain life. But poetry, beauty, romance, love... These are what we stay alive for!" - Mr. Keating - Dead Poets Society

 

[ThatRobGuy]

I feel bad for the suckers who go for PhD. You wanna talk about a flooded market. Hooof! Most of my PhD friends are CRAAAAAAAZY under employed.

Yeah, it's the same here states-side. Of all the people I know, most have Master's degrees and even those start to become a stretch.

Not so much because the fields themselves lack the openings, but because of certain perceptions about what kind of money they'll be demanding (and some of those perceptions are pretty well-founded if you've ever been on the other side of the interviewing table)

I'm not sure if their college instructors are telling them "masters degree means you can demand more money", or if they're reaching that conclusion on their own (or perhaps it's realizing that the amount of student debt is so much that they're aiming for a super high salary), but I've interviewed a few kids out of college who had Masters degrees in computers science and some of them I liked on the interview, but the money they'd ask for was borderline absurd for a person who's never actually worked in the field in a professional capacity.

The one that sticks out in my mind was a kid from Case Western with a Masters. Right out of college, was asking for $90k and wanted to come in as a Sr. App Dev. Ended up going with the kid with an Associates degree from Kent State, he was more than happy with $65k. Either one was going to need to be trained and get some experience before they could fly solo on projects.

 

[rambot]

Yeah, it's the same here states-side. Of all the people I know, most have Master's degrees and even those start to become a stretch.

Not so much because the fields themselves lack the openings, but because of certain perceptions about what kind of money they'll be demanding (and some of those perceptions are pretty well-founded if you've ever been on the other side of the interviewing table)

I'm not sure if their college instructors are telling them "masters degree means you can demand more money", or if they're reaching that conclusion on their own (or perhaps it's realizing that the amount of student debt is so much that they're aiming for a super high salary), but I've interviewed a few kids out of college who had Masters degrees in computers science and some of them I liked on the interview, but the money they'd ask for was borderline absurd for a person who's never actually worked in the field in a professional capacity.

The one that sticks out in my mind was a kid from Case Western with a Masters. Right out of college, was asking for $90k and wanted to come in as a Sr. App Dev. Ended up going with the kid with an Associates degree from Kent State, he was more than happy with $65k. Either one was going to need to be trained and get some experience before they could fly solo on projects.

Yes. I agree. Strangely, and I can't speak to the exact jobs but I belong to some reddit communities, and they share advertisements asking for PhD preferred for a 16$/hr job.

I had a friend with a PhD in history. His dissertation was on a particular cross border hydroelectric dammed river. He understands but is not super happy, that he has trouble getting teaching jobs. He's gainfully employed but not EXACTLY in his speciality; and he does just fine. So that's good.


That's kind of absurd too. But your situation? That makes complete sense. I think the biggest loss that comes out of higher learning is tremendous amount of hubris and lack of humility that comes with "extra schooling". Not for ALL, but for....too many.

 

[iluvatar5150]

Yeah, it's the same here states-side. Of all the people I know, most have Master's degrees and even those start to become a stretch.

Not so much because the fields themselves lack the openings, but because of certain perceptions about what kind of money they'll be demanding (and some of those perceptions are pretty well-founded if you've ever been on the other side of the interviewing table)

I'm not sure if their college instructors are telling them "masters degree means you can demand more money", or if they're reaching that conclusion on their own (or perhaps it's realizing that the amount of student debt is so much that they're aiming for a super high salary), but I've interviewed a few kids out of college who had Masters degrees in computers science and some of them I liked on the interview, but the money they'd ask for was borderline absurd for a person who's never actually worked in the field in a professional capacity.

The one that sticks out in my mind was a kid from Case Western with a Masters. Right out of college, was asking for $90k and wanted to come in as a Sr. App Dev. Ended up going with the kid with an Associates degree from Kent State, he was more than happy with $65k. Either one was going to need to be trained and get some experience before they could fly solo on projects.

I think folks probably have their perspectives skewed by the FAANG and Fintech shops. From what I understand, $90k is way low for those guys - they pay their interns at least that.

 

[RDKirk]

The easy way to solve the problem: Allow debtors to liquidate college debt by bankruptcy. That one thing will solve the problem, both immediately and in the future.

Current debts will be losses to banks because that's what should happen when bankers make risky loans. Banks will come up with their own ways to fund students going into fields that promise a better chance of repayment.

The decrease in the easy money supply will force students to take courses that will pay or go into other fields that need less time before results start to pay off.

The decrease in students will force colleges to re-evaluate the majors they offer.

 

[Ana the Ist]

The easy way to solve the problem: Allow debtors to liquidate college debt by bankruptcy. That one thing will solve the problem, both immediately and in the future.

Current debts will be losses to banks because that's what should happen when bankers make risky loans. Banks will come up with their own ways to fund students going into fields that promise a better chance of repayment.

The decrease in the easy money supply will force students to take courses that will pay or go into other fields that need less time before results start to pay off.

The decrease in students will force colleges to re-evaluate the majors they offer.

Banks don't back many of those loans. I don't know what percentage, but they are federally backed. The banks just middle man the loans.

 

[Ana the Ist]

IMHO, if you get a STEM degree, you should take some liberal arts minor. If you major in a liberal arts degree, you should get a STEM minor. This way there is practicality and the humanities.

Is a college degree solely to get a job or are they also to develop the person into someone extraordinary?

"No matter what anybody tells you, words and ideas can change the world! (...) We don't read and write poetry because it's cute. We read and write poetry because we are members of the human race... And the human race is filled with passion! Medicine, law, business, engineering... These are noble pursuits and necessary to sustain life. But poetry, beauty, romance, love... These are what we stay alive for!" - Mr. Keating - Dead Poets Society

There's a romanticism to education that tells people knowledge has an inherent value....and one can grow in value in proportion to their education.

This is....as I said and think, a romanticism of education. Knowledge does have value....but it's not always a positive value. It can be a negative value as well.

 

[RDKirk]

Banks don't back many of those loans. I don't know what percentage, but they are federally backed. The banks just middle man the loans.

No, the banks are not merely "middle-manning" the loans. The money is the banks' money (or rather, the money of their depositors). The federal government does back them, by my proposal to permit bankruptcy defaults would remove the federal backing, putting them at the status of any other loan.

Of course, I realize this would never happen, because Congress won't pass a law that the banking industry does not want.

 

[Ana the Ist]

No, the banks are not merely "middle-manning" the loans. The money is the banks' money (or rather, the money of their depositors). The federal government does back them, by my proposal to permit bankruptcy defaults would remove the federal backing, putting them at the status of any other loan.

Of course, I realize this would never happen, because Congress won't pass a law that the banking industry does not want.

Yeah and banks would sue the federal government for breach of contract....they would need to be grandfathering in all the bad loans.

When you say you understand they are backed by the federal government....what do you think that means?