I've mentioned this a few times here and there in different iterations but since President Biden has announced that some student loans are being forgiven, it seems appropriate to bring it up again.
Our current model of going to school, then going to college, and then getting a job has served America very well. The number of patents, the number of Nobel Prize winners, the GDP, etc... all tell the tale. The system works. It even works in areas that put such little value on education that being educated is seen as some sort of weakness; it's no coincidence that these places are also the most impoverished in the nation.
What isn't working so well is the way America thinks about education and leaves it up to the individuals to figure out how to get one. It's brazenly stupid on a number of levels. Chief amongst these are:
Who Qualifies?
When you've reached your 16th birthday, you can get student aid if you want. No qualifying. You don't have to take it.
How much can you get?
But it is there for you. Lets say you're in zip code 85002. The amount of aid you can get is the average semester hour of up to ten of the closest state-supported colleges or universities there are. So at 85002, you have Maricopa County Comm College, Arizona State, City College of Phoenix (if there still is one), Wesstern New Mexico State, South West Colorado State, etc... Set a radius from your residence of about 250-500 miles or so. The purpose is to get an average semester hour cost. So lets just say it's $500 a semester hour--just for the ease of math. The federal government, instead of asking you to take out a loan or try to qualify for grants or whatever, puts 60 semester hours into a bank for which only they have access. $500 X 60 = $30,000. Nobody is giving anyone $30,000 in cash. This is only used for education related expenses paid out by Uncle Sam itself. Chase, Wells Fargo, etc... have no role to play. Neither does the student really. They just get semester hours paid for.
How is it paid back?
Repayment is done through payroll deduction over your work life. You can pay it back sooner if you want. The payback terms are generous--over 30 years or so. So if you get 26 paychecks in a year and you've taken $30K, you will pay back $1,000 a year. Divide that by 26 paychecks and you will pay back $38.47 a paycheck. Add some interest and round it up to $40 or so. Maybe a bit more, maybe a bit less. Older borrowers would have a slightly accelerated payback period or course.
How Can It be Used?
Here is where the current system really sucks from what I can see. You're asking a kid who is 18 to take on $60,000 in debt with no real plan to pay it back. Maybe they decide they don't want to be a nurse or think teaching is their goal in life only to find they don't like teaching. Did you know what you wanted to do for the rest of your life at 18? Me neither.
Just some examples:
A 16 y/o who doesn't want to go to college. She wants to become a beautician. If there is a certificate to becoming a beautician at a local junior college, the government states that you're going to have to go to Maricopa County Junior College instead of DeVry. Sorry. If there isn't a beautician course there, she can go to DeVry.
A 50 y/o mechanic wants to open his own shop. He wants to take courses in business management. He can utilize the funds to take those courses.
A conventional welder wants to expand his craft to become an underwater welder. He can take courses to do so free of charge.
An 18 y/o who graduates High School and wants to go to a 4 year college out of state--Lets say Ohio State. She can take her $30,000 and apply it for the first _________ number of classes at Ohio State. It may pay for one year. The rest is on her through student loans, grants, work study, etc...
A middle-management night auditor at a nationally accredited hospital would like to take courses on learning to play a harp. She can do that but she has to realize that the funding will be taken out of her future paychecks whether or not she makes a cent playing the harp or not.
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The point is to get as many college educated persons into the workforce as possible. It isn't a matter of "it would be nice to have an educated work force"...it is a necessity. Hopefully it will lead to more content providers (labor being their content). Those are the true drivers of the economy. Content consumption is a multi billion dollar industry as well and more income in the pockets of average Americans via increased productivity, increased wages, and some entrepreneurial spirit will allow for that as well. We'll still have some students who are in debt...but this will flatten that curve as well.
Our current model of going to school, then going to college, and then getting a job has served America very well. The number of patents, the number of Nobel Prize winners, the GDP, etc... all tell the tale. The system works. It even works in areas that put such little value on education that being educated is seen as some sort of weakness; it's no coincidence that these places are also the most impoverished in the nation.
What isn't working so well is the way America thinks about education and leaves it up to the individuals to figure out how to get one. It's brazenly stupid on a number of levels. Chief amongst these are:
- If you don't have parents who encourage education, you're less likely to value it yourself.
- Having an educated workforce isn't an option for competitiveness...it is mandatory
- A college diploma is a great goal for some. For others, it shouldn't be forced upon them as we have done in many areas
- I'll add this one in...Education for the sake of education, in some cases, should be stressed. Studying history makes you a more interesting person even if your vocation or career is not dependent on knowing about the Lend/Lease program or what Magellan did.
Who Qualifies?
When you've reached your 16th birthday, you can get student aid if you want. No qualifying. You don't have to take it.
How much can you get?
But it is there for you. Lets say you're in zip code 85002. The amount of aid you can get is the average semester hour of up to ten of the closest state-supported colleges or universities there are. So at 85002, you have Maricopa County Comm College, Arizona State, City College of Phoenix (if there still is one), Wesstern New Mexico State, South West Colorado State, etc... Set a radius from your residence of about 250-500 miles or so. The purpose is to get an average semester hour cost. So lets just say it's $500 a semester hour--just for the ease of math. The federal government, instead of asking you to take out a loan or try to qualify for grants or whatever, puts 60 semester hours into a bank for which only they have access. $500 X 60 = $30,000. Nobody is giving anyone $30,000 in cash. This is only used for education related expenses paid out by Uncle Sam itself. Chase, Wells Fargo, etc... have no role to play. Neither does the student really. They just get semester hours paid for.
How is it paid back?
Repayment is done through payroll deduction over your work life. You can pay it back sooner if you want. The payback terms are generous--over 30 years or so. So if you get 26 paychecks in a year and you've taken $30K, you will pay back $1,000 a year. Divide that by 26 paychecks and you will pay back $38.47 a paycheck. Add some interest and round it up to $40 or so. Maybe a bit more, maybe a bit less. Older borrowers would have a slightly accelerated payback period or course.
How Can It be Used?
Here is where the current system really sucks from what I can see. You're asking a kid who is 18 to take on $60,000 in debt with no real plan to pay it back. Maybe they decide they don't want to be a nurse or think teaching is their goal in life only to find they don't like teaching. Did you know what you wanted to do for the rest of your life at 18? Me neither.
Just some examples:
A 16 y/o who doesn't want to go to college. She wants to become a beautician. If there is a certificate to becoming a beautician at a local junior college, the government states that you're going to have to go to Maricopa County Junior College instead of DeVry. Sorry. If there isn't a beautician course there, she can go to DeVry.
A 50 y/o mechanic wants to open his own shop. He wants to take courses in business management. He can utilize the funds to take those courses.
A conventional welder wants to expand his craft to become an underwater welder. He can take courses to do so free of charge.
An 18 y/o who graduates High School and wants to go to a 4 year college out of state--Lets say Ohio State. She can take her $30,000 and apply it for the first _________ number of classes at Ohio State. It may pay for one year. The rest is on her through student loans, grants, work study, etc...
A middle-management night auditor at a nationally accredited hospital would like to take courses on learning to play a harp. She can do that but she has to realize that the funding will be taken out of her future paychecks whether or not she makes a cent playing the harp or not.
=====
The point is to get as many college educated persons into the workforce as possible. It isn't a matter of "it would be nice to have an educated work force"...it is a necessity. Hopefully it will lead to more content providers (labor being their content). Those are the true drivers of the economy. Content consumption is a multi billion dollar industry as well and more income in the pockets of average Americans via increased productivity, increased wages, and some entrepreneurial spirit will allow for that as well. We'll still have some students who are in debt...but this will flatten that curve as well.
