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Who'd Go To University Today? (spiked-online.com)
Are students being short-changed by their $60,000 degree courses? And does a university education in 2018 represent good value for money? A slew of recent government and think-tank reports aim to tackle these questions. And the answers they give are not encouraging. From a report: The Public Accounts Committee announced this month that the value of the UK's student-loan system is falling. Last year, the government sold a tranche of the student-loan book at a major loss. The portfolio had a face value of $4.4 billion, but was sold for just $2.1 billion: a return of 48p in the pound, according to the public-spending watchdog. Clearly, the current method of funding higher education represents a bad deal for the taxpayer.
But do universities offer good value for students? Not when you consider the fact less than half the money that students pay in tuition fees is actually spent on teaching, according to a report by the Higher Education Policy Institute. The rest of the money from tuition fees goes into other services and parts of the administration. These include admissions procedures, marketing, vice-chancellor pay and programmes to boost access for poorer students, as well as therapeutic services like mental-health provision and exam-stress counselling.
Universities today have far too much bureaucracy, fat-cat VC's salaries are far too high, and a great deal of what administrators spend money on is a hindrance to education. University bureaucracy is often at the forefront of coddling students, encouraging them to see exams and hard work as threats to their mental health. It is troubling to see that students are not only plunging themselves into debt at such a young age, but also that much of that debt does not go towards their actual education.
But do universities offer good value for students? Not when you consider the fact less than half the money that students pay in tuition fees is actually spent on teaching, according to a report by the Higher Education Policy Institute. The rest of the money from tuition fees goes into other services and parts of the administration. These include admissions procedures, marketing, vice-chancellor pay and programmes to boost access for poorer students, as well as therapeutic services like mental-health provision and exam-stress counselling.
Universities today have far too much bureaucracy, fat-cat VC's salaries are far too high, and a great deal of what administrators spend money on is a hindrance to education. University bureaucracy is often at the forefront of coddling students, encouraging them to see exams and hard work as threats to their mental health. It is troubling to see that students are not only plunging themselves into debt at such a young age, but also that much of that debt does not go towards their actual education.
The root cause of current higher-education problem is government backed student loans. Why is that? Well it's fairly simple. Student loans can not be discharged by bankruptcy. In addition companies that offer student loans have little to no risk - because student loans in the US are fully backed by the government.
As a result, there is no incentive to means-check people prior to giving them a loan. In point of fact, there is very little means-checking. In addition, because of the government backing of the loan there does not need to be a correlation between what a particular degree is likely to actually pay, and how much the education might cost.
For instance, an electrical engineer could go to a university on all student loans. As long as that person gets reasonable grades, they will have decent earning potential. Another student could go to the same university and get a degree in basket weaving. It will cost them about the same. But the earning potential afterwards is nil. They are unlikely to pay back the loan.
This has led to universities charging insane amounts of money for degrees that are near worthless. We can't and shouldn't protect people from getting worthless degrees. That's their problem. We SHOULD, however, remove the liability from the taxpayer for those worthless degrees. That decoupling would result in far more stringent means-testing. It would also mean that loan companies would no longer give students loans for worthless degrees.
A college degree would be worth more. Trade-schools would likely make a return. People would be naturally funneled toward degrees that are in demand. We would be better off all the way around. Keep in mind, this is very similar to what happened to the housing market. As long as loan companies could gives loans and hide the risk they will do so. In the housing bubble's case it was through the clumping together of mortgages to hide the risk. In this case it's the government hiding the risk.
"Students are demanding housing that graduates couldn't even afford in the past." My university has three students living in rooms that were built for one. This is true for most of the state college system (which also happens to be one of the best in the nation and the world). But let's not let facts get in the way of a good "cardboard box in the middle of the road" rant.