The truth about student loans
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I'm not sure this is even worth criticizing because frankly this guy is completely clueless, but:
* The decreased program quality part seems to be skimmed over.
* Educational institutions that just react to market forces are bad educational institutions. Market forces result in grade inflation and low graduation standards, something I think most people agree are extremely unfortunate trends.
Alternative proposal: Redirect student loan subsidies from students towards institutions directly, possibly also bias the subsidies towards public institutions. The result should be lower tuition for everyone, mild downward forces on private institutions' tuition costs, hopefully no cuts to program quality and reasonable levels of affordability for reduced income students who will still rely on need-based aid more than loans and continue to have fairly cheap public schools they can opt to go to.
Some numbers: students pay $19,869.5 per term (http://www.nyu.edu/bursar/tuition.fees/rates09/ugcas.html). If each student takes 6 classes (between 18 and 24 credits), a class of 30 students pays $99,347.5 for one course.
Another number: a typical PTL in math gets $4-6,000 per class. Presumably the cost of a PTL in a less marketable subject is lower.
Unless rent for a classroom + admin overhead adds up to about $90,000/semester, there is plenty of waste to be cut.
Specific examples of waste: the climbing wall, counseling services, latino center, anime club, gym, soccer team, korean formal ball, resident assistants, multiple offices of affirmative action [1]. (These all exist at universities I've attended or worked for.)
Educational institutions that just react to market forces are bad educational institutions. Market forces result in grade inflation and low graduation standards, something I think most people agree are extremely unfortunate trends.
Come up with uniform standards, and separate the tasks of education and evaluation. Problem solved.
[1] If a university has three offices of AA, that's either 2 or 3 too many (depending on your views on AA).
* Climbing wall: At most universities I've seen these types of services are usually funding through a university recreation department that gets paid via student fees... voted on by the students. I.E. students went to an actual ballot and chose to raise their fees to supply things like this.
* Counseling center: I disagree this is waste. Parents tend to get angry when students throw themselves from buildings. Universities that provide psych help for their students can lessen the number of students who do this, which is helpful for retaining not only the students who would otherwise kill themselves, but the students who object to seeing a rain of their peers from the tall building on campus. It also tends to increase alumni donation rates, IIRC.
* Latino center / other AA type things: These are often student funded or sometimes funded through restricted funds where some interest group gives funds to the university specifically for this purpose. This doesn't always happen, but does more than you think. And yet again, these usually increase alumni donation rates among minorities and therefore net the university more than they paid, which means the university is simply making a smart investment, doubly so if they didn't even pay for it because someone else gave them funds to build it.
* Various student clubs: Again, these are typically funded by students at most universities through an activities fee their own student government put onto the thing. They voted on this, they decided to spend it where they spent it and on some campuses the administrators are in fact legally prevented from doing anything about it.
* Soccer team / sport programs: I'm not really a fan of sports programs being part of a university, but from a waste perspective not all of them are revenue losers. Some universities actually find they make money of teams and inspire a lot more private donations. Universities with strong sports programs tend to raise more money from alumni. I think this doesn't work out in practice for a lot of universities so I see this as potentially one of the better cases you've brought up as waste.
* Resident assistants: Actually a vastly cheaper alternative to paid university staff doing these types of tasks. This generally is a smart and low cost way to staff buildings and the opposite of waste.
We have a better way than voting to allocate private goods than voting: a market. Rather than allowing some students to vote for other students to pay for their entertainment, we should simply require that everyone pay for their own entertainment.
As for sports teams/etc, if they bring in money, keep them. Most don't. As for RAs, their services are completely unnecessary. My apartment building simply does not provide monthly pasta dinners, free light bulbs, an ice cream social at the beginning of the year, or endless spam about sorority events. Somehow I've survived.
Take up the market idea to the students. At most of the campuses they're the ones who control these fees and can chose to lower, raise, reallocate or toss them. Students overwhelmingly vote for certain types of fees consistently across campuses. Apparently they don't buy your market argument and frankly if they vote that stuff in that's their own choice and not much we can get riled up about. (These types of fees are typically not a large part of the overall cost of tuition. It depends on the system. A very few places are just absurd, most are pretty minor.)
As for taking the market idea to students, I advocate doing exactly that. Allow students to opt out of student activity fees (but they can't join clubs) and make sure the government doesn't subsidize them.
Incidentally, a student in the 49% who voted against student fees is NOT paying student fees by choice.
I think our system is broken in that a lot of students who don't gain much from being on a research campus are pushed to research campuses anyways. My theory is we need to separate training and education so that people who need training in fields can go to low-cost non-research involved places and learn the skills they need. Whereas people who truly need an education among some of the best researchers in the world go to the research institutions and do research along with their coursework.
The latter is not necessary for a vast majority of college students and I think we need to stop pushing students into a system where degrees from research universities are valued independent of the need for that type of background.
In the UK, people used to "read" for a subject. Then they would take their exams. I'm not sure that system really worked though.
The German system that took over with end of degree Finals also has certain very obvious advantages in ensuring people learn but the bundling of teaching, examination/certification and research is historically contingent.
yummyfajitas suggested some time ago asking a local university how much it would cost to take a course at a local university by examination, and I'm presuming that was a deadpan way of saying 95%+ of Universities would have hell freeze over before doing that, but the system seems to work just fine for accountancy. I see no reason why it couldn't be greatly expanded.
...frankly this guy is completely clueless...
I was torn between downvoting, commenting and ignoring you, and I clicked before I thought it through.
Giving money directly to the schools is not even wrong. Costs are totally out of control as it is. But you are correct that we have a great university system, so I figure you're at least hitting on something and are best left to your own devices.
Sorry for the downvote. No conspiracy was afoot.
To clarify: I completely agree costs are out of control. I just don't agree the solution is simply to defund it.
The system isn't perfect (and one of many issues is unis compromising difficulty/quality for full fee paying overseas students), but I'm pretty happy with it and paid off my debt easily enough.
I assume some other countries do a better job again.
My alternative plan is much closer to what you're saying than what the video's plan was. You don't actually seem to disagree with me at all. I'm curious where you got the impression you did.
I observe that in my state, which historically has been a state with quite a high level of funding for higher education. And I observe that nationally there seem to be several states well known for lavish funding of higher education that are in severe economic downturns right now. In light of this, I'm wondering how an advocate of continued high levels of taxpayer funding for higher education makes the case that that is really beneficial for the overall economy of a jurisdiction. Could it be that there is less "investment" with dependable return in such taxpayer funding than people whose incomes derive from higher education claim?
The other point you're making is that states with strong educational investments are hurting worse right now. I think you might find that those states are hurting worse because the difference between the amazing acceleration of everything they felt when the economy was good is just so out of step with the stagnant environment that comes about when the economy is bad that they simply had more to lose.
If you're referring to California, then that's a situation that has a lot of factors, many to do with the fact that the California Constitution is simply an document which is downright insane and progressively continuing to get more insane as voters keep lobbing stuff into it.
Many students choose completely useless programs (straight to unemployment), students don't fell entitled to criticize anything, and of course the universities don't treat them like paying customers.
the alternative is to stop having the government directly subsidize higher education through grants and loans. instead let taxpayers keep that money and fund schools themselves. do you know how the ivy leagues got to be the ivy leagues? by raising prices until demand and supply met instead of artificially low prices and quotas^1.
the best plan would be to raise prices until demand is slightly lower than supply so that you have room for poor merit students.
1. colleges were quite a bit different before WW2. that's when public funding of university research really took off, due to military interest.
I wish I could post this link to HN and have it sit at the top for a while because I think everyone should read this book.
Gatto, who was an NY and NYC teacher of the year and publicly resigned in the Op Ed of the WSJ, traces out the origins of compulsory school and it's detrimental effects brilliantly.
There are pieces of it that are broken, but the assumption that some new better system will inevitably and miraculously emerge if only we had the political will to smash what we have to pieces is silly.
I'm for reform, I'm not for blindly destroying something we have and simply crossing my fingers in hope that it becomes better that way. If you're concerned about how education runs, feel free to propose a new system, but don't simply assume that if we smash it with a sledge hammer something better will emerge. Frankly the only thing that's likely to result in is ensuring the US lose its superpower status permanently. (I think people often forget just how much of our military advantage is predicated on a research infrastructure that involves US universities. Universities here do a hell of a lot more than just teach students. Frankly anyone who supports our military needs to consider that our existing system of universities critical to its success. Smashing this system is as reckless as proposing to simply cut funding to the military and then expecting them go to fight China or take over the middle east or whatever.)
Or is the US credentialing system, or perhaps academic research system the best in the world? I don't see a compelling reason why controlling costs on the education side would harm the credentialing and research parts of the system.
The education parts of the university and the research parts of the university are not staffed separately. In a research university the people who do research are some of the same people who design lesson plans. The idea is that this enhances a student's educational experience.
I agree though, that tuition is indeed too high. But I'm willing to stand by the assertion that our education system is the best in the world too, not just our research system. This is even more true when it comes to our graduate programs.
It would actually be pretty easy to cut salaries without impacting research; pay separately for teaching and research. Teaching a class pays $4-6k/class, or whatever market rate for a PTL is. Grant supported research pays a market rate salary for research.
Then we get teaching for cheap, but don't sacrifice the quality of research.
As for enhancing a student's educational experience, meh. Some people are good at research and teaching. Far more people are good only at one. Because universities want grant money, this usually means good researchers but bad teachers provide teaching (and waste time not doing research). Not sure how this "enhances" a student's educational experience.
Until this happens it's generally not feasible to pay teachers next to nothing and research staff a lot on the same campus. Then all the students just complain they're not being taught by real professors and they truly will pay twice or four times as much at a different school to get taught by research-based professors. (Who often, as you point out, can't lecture for crap half the time.) Universities do some amount of work to ensure that research pays above grade and teaching only faculty get paid on a completely separate grade, but the expectations of the students generally keeps this from happening in a better way.
That said, there are some students that really do benefit from learning with and participating with the top researchers in the world. Those students do need to continue to go to research institutions for their education and do benefit substantially from the research activity on a campus.
I won't dispute this either. But to say that students who go looking for quality can find more quality in the United States haphazard nonsystem of higher education than they can in other countries is not the same as saying that United States higher education delivers good value for money. Higher education in the United States also absorbs astounding amounts of money.
Many economists of education (I will mention Mark Blaug, but you could find others) point out that if we must talk about public subsidies for schooling, the place to put them is in the K-12 system with its presumably compulsory attendance, rather than in the higher education sector. Public subsidy of higher education tends to operate as a transfer of funds to the less able rich (who can afford to take time off from the labor force to attend college) at the expense of the more (academically) able poor, who still find it difficult even to be admitted to college, much less to complete it.
http://www.businessweek.com/magazine/content/03_27/b3840045_...
http://www.educause.edu/ir/library/pdf/ffp0621.pdf
http://www.educause.edu/ir/library/pdf/ff0615S.pdf
http://www.tcf.org/Publications/Education/carnrose.pdf
http://www.tcf.org/Publications/Education/kahlenberg-affacti...
http://harvardmagazine.com/2005/05/a-thumb-on-the-scale.html
http://www.theatlantic.com/doc/200511/financial-aid-leveragi...
http://www.thecrimson.com/article.aspx?ref=510012
http://www.equaleducation.org/commentary.asp?opedid=1240
http://www.jkcf.org/assets/files/0000/0084/Achievement_Trap....
http://www.reason.com/news/show/123910.html
Transnational comparisons (yes, including with China) tend to show that the most successful strategy for national strength is to devote the most public funding to broad educational programs for the early years, and to allow much support of higher education by the students in higher education, relying on their savings, their current income, private charity (including discounts from the colleges), and their creditworthiness. Countries with higher education funded largely by private funds actually have greater participation in higher education that reaches a broader segment of the population.
I agree with you on another point, I am not convinced we provide good value to most students for their money. I think fees and tuition is too high.
I do not think the solution to that is simply smashing the universities with a hammer, which is what this guy in the video proposes.
I remember producing paydown charts in the early 90s and thinking it'd take forever to pay my loans off, but I planned the amounts I wanted to pay each month (more than the minimum whenever I could) and it got done. My rising income over the years helped more than I could have predicted when I started.
EDIT: I mean this as an honest question, not proving a point or something. I was under the impression that these loans have pretty low interest. If the interest is low I would pay as little at a time as I possibly could.