College Tuition Debts

I have a proposal to make, and I welcome your comments.

The current system of college tuition debts is both unacceptable and systemically unjust. Here’s how it works:

1. Banks make loans to 18-22+ college students without risk since students cannot default on the loans. I’m for folks not going default, but risk-free loans are brainless actions.

2. Students at 18, or even 22, often — this is quite accurate — do not realize the significance for quality of life that a 20K annual loan will mean for them once they graduate.

3. Parents and students and colleges need to develop a new level of integrity on these issues, but I have to contend that I think the parents are the most significant player in this triad of providing significant information.

4. But I have a big beef with the banks and it leads to this proposal:

To acquire a loan, a student must declare a major. Students can of course change majors.

My proposal means this: Banks must examine, say, what a given major will make over the first ten years after graduation. These things are not hard to determine. On the basis of what that given major earns after graduation the bank can responsibly determine how much to loan that students. A pre-law student, then, can acquire a bigger loan than a social work major. It’s not all that hard to determine how much an Education major makes in the first ten years and so determine how much debt an Education major can accrue and reasonably pay off.

About Scot McKnight

Scot McKnight is a recognized authority on the New Testament, early Christianity, and the historical Jesus. McKnight, author of more than forty books, is the Professor of New Testament at Northern Seminary in Lombard, IL.

  • http://bookwi.se Adam Shields

    The unintended consequence would probably be that colleges would start encouraging students to apply to high paying fields and start dropping low paying field degrees.

    I get the problem of high loans. It is a problem. But the overall problem is cost of living and unrealistic expectations, not just student loans. I graduated with 2 masters (social work and divinity) and 46K in debt (graduated 12 years ago). My wife and I paid it off in six years. She as a teacher has always made at least twice what I make as a non-profit consultant. It does help that she didn’t have any loans.

    I get your point about no-default problems. And clearly many colleges are taking advantage of students loans. But colleges are also accepting what the market will bear. Students and their families expect a posh lifestyle in college. And many people expect to live the lifestyle their parents have right out of college. It is just not realistic.

    A lifestyle should be worked into.

  • Ron Spross

    For the hard nosed libertarian/conservative in me this is a good idea. One happy consequence: over time one would expect teachers’ salaries to be driven up.

  • Rob

    Most of the folks I went to seminary with would never have gone without seminary loans and with this proposal, albeit a good one I think, they would not have been granted the loans based on a pastor’s earning potential.

  • Diane

    Adam,

    As one going through the parent-of-college-age children period right now, I couldn’t agree more that many colleges cater to the “posh lifestyle” expectations. I don’t know how much this drives costs up, but it’s a mistake on many levels, I believe. The old concrete block dorm rooms, where it was no embarrassment to turn a double into a triple or pile four to a room when the enrollment went too high and everyone shared the bathroom down the hall, the furniture in the “parlor” was from the dark ages and the food was designed to fend off starvation sent a good message that first you struggle, then you succeed. And I went to what was a considered a very competitive private college —and it was affordable for the average parent, about the cost of public 4 year university now in inflation-adjusted dollars.

  • Diane

    I believe a government policy needs to be implemented that heavily rewards schools that don’t raise their tuition over, say, a four year period, or better yet, rewards schools that find ways to lower tuition. I believe if there is a will there is a way. Maybe Pell grants need to be contingent on a school holding the line on cost increases. Maybe the government could offer more Pell grant aid–move that eligibility up to higher income students–to schools that lowered tuition even a tiny bit. And cut Pell grant support for those who up tuitions.We need a “new normal” in which tuition increases aren’t a given. It frustrates that no matter what the government does to help students, it all seems to get eaten up in higher prices. Basically, the government aid subsidizes schools more than parents or students.

    Giving out loans on the basis of majors will return us to a world in which certain lines of study are elite enclaves, supported by the students whose parents can write the checks. Perhaps that’s not the worst thing in the world and perhaps intrepid students without money would still find back door ways into following their hearts’ desire to study philosophy, art history or English literature.

  • http://LostCodex.com DRT

    The signal to noise ratio is too low to be fair. In other words, the variability in earnings from person to person and the lack of relevance of those earnings to some would make it unfair.

  • http://www.normmacdonald.wordpress.com norm

    I think point #2 is interesting. Somehow many give some 18-22 year olds a certain level of credit for understanding the complexities of capitalism and never question their ability to sit on their butts for weeks on end chanting, beating drums,carrying signs and disturbing the lives of those who actually have to work for a living.

    I may not have clearly understood the burden my student loan would have but I didn’t have a choice. My parents could not pay for my college. I knew working and paying a good portion of my college expenses and seminary expenses was both a necessity and a good thing.

    In our family our kids and several nephews have worked and paid their way through a community college for the first two years before they took on the expense of a four year institution. It’s worked for them and taught them a good deal about personal responsibility and commitment.

  • Kelly

    One variable left out is that for the longest time, students have been told that if they don’t go to college, they will almost certainly end up with a low-paying career. However, even if that is true in places, are students with $50K in debt any better off?

    Students have been fed a lie: Go to college or miss the American Dream. If for no other reason, I believe changes need to be made in the way student loans are handled than that college is the new Allentown.

  • Scott

    Is the issue the loans and banks (see the “Occupy” crowd) or the outrageous cost of a college education which has far outpaced inflation over the past generation?

    I am under 50 years old. With some family help (not big money by any stretch of the imagination) was able to pay off all loans within the grace period after graduating seminary. But today an average seminary student will have nearly $100k in college and seminary debt!

  • Scot McKnight

    Diane #4, from what I hear those sorts of things — posh lifestyle issues — have nothing to do with tuition. Tuition goes toward salaries and benefits, and the rise of medical costs has hammered colleges/universities too.

    This means I don’t think #5 is possible: if you can hold down medical expense raises, you can hold down tuition. I think that is true.

    Kelly, Yes, the numbers show a dramatic difference between what college grads earn vs. no college income.

  • T

    Scot,

    I think I’d like to see something similar done. I’m not sure what, but I’d like to see something else done. I’m leaning toward a promise by the student only to pursue certain areas of study that do produce substantial income as a condition of getting the loan. Alternatively, data for average salaries for all fields could be generated and the student’s top three or four choices would have to be disclosed to the student and the parents, along with how long repayment would take, and what percentage of salary would be eaten up with payments. This data should be numeric and graphical, and received by students a long time before the loan gets approved, with ample time to think and walk away.

  • http://www.seekingfaithfulnessblog.blogspot.com Holly

    Hm – you’re so right on, Scot. And yet, as many have mentioned, if the system doesn’t change there are always alternatives for the kid willing to make different choices.

    My oldest kid is 19, in his second year of college. He chose to stay home and go local for two years. Yeah, not quite as exciting as all of his friends packing up the car and heading off into the great halls of academia – but – he gets great home-cooking, laundry service, wonderful peer support, AND, he has zero debt, tucks away money every month for retirement, works two jobs (freelance programming and works for our local PBS station as web programmer.) He still has time for a social life, bought his first used car last month, and he is MAKING money while going to college. After he gets his two year degree locally (with a 4.0, mind you,) he will transfer for his four year degree. Even if he has debt then, it won’t be overwhelming. In programming, he’ll pay it back quickly.

    My second son is 17, homeschooling part time, going to college part time, working part time. :) He wants to be a musician, but since that doesn’t always pay well (at first,) he’s thinking he’ll get a two year paramedic certificate so he can work thru a four year.

    What’s wrong with that, specifically? My kids are super-kids, they aren’t extra good. They’re just normal kids – why don’t more people choose the low cost route? Is the degree (and debt) from a prestigious, private college worth it, really? Don’t awesome grades and no debt look almost as good to a private college if a kid transfers in as a Junior (with an AA?)

    I get the dilemma of what you are saying – and I, too, think the massive loans made to kids too young to understand are immoral.

    And yet….

    There are other ways. Massive student debt is not a foregone conclusion.

  • http://www.depressoliber.wordpress.com Steve Goddard

    The real way forward is to change the whole academic system. So many students (say 60%) have no business in college right after high school. The business sector should make provisions for internships after high school. On the basis of ability and performance the business sector should flip the bill for learning. Thus there is advantage for all parties to be well trained and equipped for specific careers.
    The whole loan issue is a symptom of a far greater problem of the academic system.

  • hammerroc

    I actually work at a student loan lender, and lenders have always been an easy target as the “bad guys” lending thousands to students who are getting strapped with huge loans prior to entering the workforce.

    Currently though, all Federal loans are administered by the Federal gov thru the Direct Loan program which congress slipped into the ObamaCare bill. This accounts for the majority of the loans being made at this time, and lenders have nothing to do with these loans anymore. (and btw, default rates have increased since then).

    hmmm, having spam issues – will try to continue in a later post.

  • Zach

    Scott of post #9 is on to something. I am one of those students with nearly $100k of debt from college and seminary. I hindsight I was wrong to take on so much debt, I think I might have been wrong to take any debt.
    Easy loans have driven up the cost of tuition over the last generation. Maybe loans aren’t the answer. Maybe paying as we go is.
    From Collegesavings.com: Over the previous 50 years college costs have increased by an average of 6.47% a year – nearly double general inflation (3.35%).

  • Bob Smallman

    ” A pre-law student, then, can acquire a bigger loan than a social work major.”

    That sounds logical, but the NY Times carried an article several months ago about all the law school grads who had enrolled assuming high-paying jobs when they graduated — only to find that the law schools’ promise of “95% employed graduates” included those working at McDonalds as well as at prestigious law firms (and everywhere in between). Even young lawyers are having to work second and third jobs to try and pay off their school debts.

  • hammerroc

    Private lenders still do have their own private loans, but almost 100% of them require a co-borrower. And to say that student loans are risk-free due to not being discharged in bankruptcy is misleading. Lenders run as businesses, and when default rates go up, its harder for lenders to obtain funding for future loans, so lenders have wised-up in being more careful in their underwriting of student loans.

    The real problem that needs addressed in the cost of education – not the lenders.

    My own kids are a few years away from college, but our plan is to encourage them to find some kind of job out of high school for a few years, maybe take some gen ed courses at a commuter school, get a better idea of what they want to be when they grow up, and then make a better educated decision higher education at that point.

  • http://bookwi.se Adam Shields

    When the economy was better I read a number of articles about schools that found that when they raised tuition, more students applied because there was an assumption that higher costs meant better eduction. That may have changed over the past couple of years. But like the discussion of teacher salaries yesterday, education and cost of education have a fairly week relationship.

  • JRS

    Or we could adjust the cost of college based on the earnings potential of the major. Pre-law pay more. Education pay less! :)

  • Scot McKnight

    Scott #9,

    Hear, hear. Your terms are as inflated as costs. Look, brother, my career has taken place during these same years that you complain about as
    “outrageous” and I can assure you the costs have risen dramatically but not because salaries and pay of admin, professors and staff have risen. This has to do with benefit dimensions, and I suspect if you look at the medical expenses of your benefits of your health package you will see what we are seeing.

    I work among profs who take on other jobs to make expenses; I work with profs who are not paid well and who struggle to pay off debts and yearn for some kind of break so they can purchase a home; in other words, these aren’t the days to become a prof if the goal is to have a posh life. Tuition costs are on the rise, indeed, but it’s not because schools want to …

  • jplakin

    I worked through college and received very little help from parents. I graduated without debt and was able to get through seminary with only a small loan from my grandparents. I work with college kids and see that they get student loans and then go buy video games and spend 5-7 hours a day playing games. I don’t think we are asking kids to work for their education. It is part of the “enablement” issue that we have in our society. College kids think it is their right to go to school, be irresponsible, accumulate debt, and get serious about life later. Sorry about the generalizations but I see this all the time….

  • Brad

    Why is your “big beef” with banks Scot? Could it be because you work for one of the parties involved who might have a lot of guilt on their part?

    Let’s talk candidly about Universities supposedly being a bastion for equality but they are more than happy to saddle students with debt that will drive them into the margins the rest of their lives. Where is the moral responsibility for a University to not allow (or charge for that matter) $30K a year for a sociology or Women’s studies degree that will result in $120K in debt with no job prospects?

    Why talk about regulating the banks and no conversation about regulating the Universities? Many of our nation’s universities are better at capitalism than just about any corporation out there. Some have endowments that would allow them to drop tuition by over 75% if they really wanted to, but rather they continue to charge outrageous rates that have far outpaced inflation in order to stuff their coffers.

    Why blame the banks when they are the one’s who have provided the money to make the Universities as rich and well off as they are? It is all the dollars the banks have provided that have allowed for the campus expansions, new faculty, upgraded dorms, new degree programs, and many more visions of the President’s of universities.

    Your complaint Scot sounds like Apple being angry at Visa for funding the purchase of so many of your customers who bought ipads and iphones. Your right…all Visa’s fault.

  • Kristin

    You are definitely right with #2: a big problem is that students are not counseled into making sound economic decisions.

    For grad school I looked into a prominent private school (to remain nameless) and the extent of financial counseling I received was a list of loans I qualified for, and some minor explanation about the ones that had deferred interest and those that didn’t. That was it. The kicker is that after showing hesitancy about all of it, she said “If you sign the acceptance letter we may be able to work with you some more to lower your costs.” Really? So apparently, the goal of the financial aid office is NOT to help students make the best financial decisions, but to not let money keep enrollment down.

    (I decided on the state school instead.)

  • Paul

    What about putting a cap on interest rates for college loans? I consolidated my loans 8 years ago at 2.75% and as a result have a much lower monthly payment than many of my family members and friends.

    Would this be possible in the industry?

  • Mark

    I like the idea, but wouldn’t that break one of the golden rules of university pricing? The sticker price on most universities is the same regardless of Engineering degree or Dance degree. I would think that universities would have to devolve pricing down to a department level, or they would have to agree within themselves to subsidize certain areas much greater and do so overtly now and not behind the curtain of the aid package. I say overtly because the amount of loans in that package for a dance major or a theology major would have to be greatly reduced. Do you think the big science departments would agree to fund the latest critical studies departments?

    One other thought. I’m sure that my seminary is an outlier in many cases as it is denominationally sheltered. But its yearly operating budget was roughly $19M. I’ll be generous and say that for that $19M it graduated 200 pastors a year for the denomination. (It hasn’t done that for a number of years, but that is probably closer to the capacity). That means it spends $95,000 per year to teach a student. Now the tuition was something like $23,000. Something doesn’t add up in the numbers. That comes back to the core question of what is the mission of many of these institutions. My seminary would howl at the simple division above. With some justification. But other than operating on the good will of the people of God who support that mission because it teaches pastors – the model would need to be reworked. Seminaries are just the pure play of this. Humanities departments are next in line.

  • scotmcknight

    Brad, you hammered me on this one. So let me say again what I thought I meant in #3. Students, parents, and schools are to blame and we need a new integrity at all levels.

    Some of what you say about colleges needs adjustment but don’t you think if banks, where the money comes from, pushed this one it would help?

  • DLS

    I saw this quote recently:

    “College: a place where you are taught to get angry at the bank who lent you $100,000 to go to college.”

  • http://bricksandmortar.wordpress.com Rukshan Fernando (@RukshanFr)

    Scott,

    Some interesting ideas. I am beginning to tell my prospective students that if they plan to take out more loans than what they can make in their first year as a social worker they should consider another major or another college. I would prefer not to do this, but I don’t see how it makes much sense to encourage an 18 year old to take on massive amounts of student loan debt. A state school is a fine option!

    I think some in the liberal arts/humanities need to consider rethinking how they encourage students to go to graduate schools to acquire more debt, especially when the jobs for these disciplines isn’t there…

  • http://homewardbound-cb.blogspot.com ChrisB

    Scot, under that system the more expensive schools would have to close down their liberal arts programs and probably everything but business and engineering.

  • TJJ

    The current system is broken. Another way to approach it is a loan forgiveness program based on graduation, years worked, and income actually earned over a ten year period after graduation.

    In other words, there should be a way for students who do the right things, ie graduate, and then have a consistent work record, to have the loan balance reduced, to reward that. Otherwise, graduates can get so pressed financially and so behind on the loan repayment, that they just quit paying and let the loan default, etc.

  • RobS

    Not a bad idea — trying to at least give a logical match of potential future earnings to the amount of debt to have a better chance the debt is serviced well.

    The frugal & mature liberal arts student at age 23 might be able to service double what the financial irresponsible engineer would at the same age. I’m not sure we can guarantee we can stop one from buying a brand-new SUV as well.

    Truly it’s hard to legislate smart. Two thoughts though: 1) financial education early so the parents might consider if they’re willing to help, setting aside some money 15 years in advance to help it grow and reduce the potential debt needed. Certainly this would be up to the ability of the parents. 2) if the bank has multiple guarantees and protections to get the money, the interest rate should be very competitive. With low risk comes low reward. If the bank has bankruptcy protection on student loan debt, then commanding a higher interest rate is ridiculous & regulating/limiting that seems fair.

    The federal government insuring or discharging debt is going to breed more ridiculous action I’m afraid.

  • DLS

    @30. “The current system is broken. Another way to approach it is a loan forgiveness…

    - Just to be clear, ‘loan forgiveness’ just means having other people pay it back instead of the student.

  • Diane

    RobS,

    We started years ago saving for our three children–as middle class people we simply couldn’t save enough as college costs outstripped inflation.

    Scot,

    Isn’t much of the increased cost going into the proliferation of administrative positions? More and more teaching faculty are contingent or adjunct. It’s not uncommon for contingents to go without health benefits.

  • seanleroy

    I don’t advocate giving the banks any more authority, say-so…nothing! Plus, you can’t always so easily predict what someone will make once they graduate, since that depends on so many variables.
    Students wouldn’t have to take such high loans if the costs weren’t so high. I believe that’s where change needs to happen and if it doesn’t a college education for many/most in society will be a thing of the past.
    Here’s a case in point our daughter goes to a university in WA state…How about a “meal” plan that is more than what we pay in groceries for a whole family of 5 (plus an 85 pound Lab)? How about “hidden” fees like $60 to have her finger prints done (necessary for her major), when she could walk down the street her and have it done for free? I could go on and on…what about text books? Half her teachers require books for which they only assign one or two chapters – not worth the price (say nothing about what the books are actually teaching her!) And then there’s tuition…She paid more for a local community college than I paid for an out-of-state rate at a University – and no that wasn’t that long ago!!! Ok…rant over.

  • Jason Lee

    I like the idea of putting more restraints on the greed of banks preying upon the young.

    A bigger question underlying this debate, however, is why medical care is so strangely expensive in the USA compared to other developed countries? …and the USA has lower life expectancy than these same other countries. As a society, we’re getting less benefit at a higher price.

  • Dana Ames

    I borrowed money for college. My children borrowed money for college. The vast majority of that borrowed money came not from banks but from the Federal Government.

    The percentage of education expenses represented by that borrowed money is much higher for my children than it was for me. In addition, there seems to be much less money which does not have to be repaid, in the form of grants and scholarships, channeled through colleges these days; “eligibility for financial aid” used to mean eligible for a mix of scholarships, grants and loans in that priority; it now simply means “qualified to borrow money”.

    Beyond that, because of peoples’ allergy to the concept of taxes representing people paying something in, in order to benefit everyone, the things that actually benefit everyone (education, infrastructure, etc.) are not being funded. Some folks want fewer taxes so that everyone else’s benefits cut, except their own. The hypocrisy of this position astounds me.

    I’m all for eliminating waste and fraud, and I am not an advocate of “redistribution of wealth”. The college funding problem is a symptom of a larger cultural lack of willingness to simply share in order for there to actually be an attempt at equal opportunity.

    Dana

  • http://www.seekingfaithfulnessblog.blogspot.com Holly

    oh. Gwarshk. I meant to say that my kids *aren’t* super-kids. Instead, while trying to be humble I obviously made a Freudian slip. :) Of course, their grandmother thinks they are geniuses.

    So, yes. Change the system. But until then, think smarter than the system. (I have four teens at present, and my husband is a pastor turned social worker. So yes – college costs are on my mind.)

    :)

  • http://www.craighurst.wordpress.com Craig Hurst

    The solution for seminaries is for first churches and then denominations to pay for educating their future church leaders. We know what they will make and more that 40% of them have families by the time they are in seminary.

  • http://restoringsoul.blogspot.com Ann F-R

    Brad, #22, ISTM you gravely misunderstand the source of whatever wealth colleges or universities may have in terms of physical plant or endowment. NPU, where Scot works, actually has reduced tuition costs at least once, recently, when other colleges were increasing tuition. Banks may provide loans, but loans require repayment and don’t contribute to the assets, but to liabilities.

    One reason that colleges and universities are more dependent on private funds – such as tuition and fund-raising campaigns from alumni – is directly related to the decrease in public funding because legislators have decided that an educated populace is not a “public good”.

    There are significant operational and accounting differences between a for-profit bank, which should be regulated to prevent abusive practices toward customers, risky market-making with depositors’ money, and neglect of fiduciary responsibilities to shareholders’ investment, and not-for-profit colleges and universities which report to and are held accountable by different authorities.

    My POV is informed by working in banks & investment banks before directing a non-profit, fwiw.

  • Steph

    If I knew I would be eligible only for smaller loans because of my field of study, I would choose a cheaper college. Initially, that might be good, for me as an individual anyway. Mission accomplished. I’ve made a wiser choice.

    However, I’m wondering about the long-term effect on the lower-paying professions as the majority of the professionals choose the cheaper colleges.

    With loans unavailable to people entering lower-paying professions, expensive colleges would have to limit the fields of study offered, focusing on the ones that were drawing students. The alumni would get good jobs and possibly give generously to the alma mater. The alma mater would charge high tuition as well as have a base of wealthy alumni to turn to. Result: The wealthy colleges work hand in hand with the wealthy graduates and “rule the world.” Cue evil laugh. Isn’t there some part of truth to this though?

    Private colleges would have to close or teach only those who are destined to be the wealthy among us, since they are the only ones who could get the loans to afford those colleges.

    Also, what an incentive to pay teachers less. Since the profession is considered not to pay that well, big loans would not be available, or perhaps no loans would be available, and the student would go to a cheaper college, which makes it easier to justify not spending state funds on providing better salaries since not only the IQ but also the quality of the training of these individuals is now thought to be lower….. (See the discussion, yesterday?, about teachers and IQ on the Creed site. I am not making the claim, but responding to the claim.)

    Of course, all this depends on the idea that cheaper colleges produce lower quality services….

    The English PhDs out there would not only have the current problem of having few jobs available, but what jobs there were would be in universities or colleges with fewer resources (if lower tuition leads to fewer resources). Of course, if you have no sympathy for the liberal arts, it’s not a disconcerting scenario.

  • Steph

    How much would a foreign language major studying Arabic have been expected to make 20 years ago? How much now?

    Regarding churches paying for seminary, that allows them to pull way too many strings. We’ll pay if you go here, but not here. Of course, I don’t know that context well, but in the missions world, it would look like this: We’ll fund you in seminary if you go to the 10/40 window, no wait, to the former communist block, no wait, to work with people group x,y,z, to do Bible translation, no wait, to do medical work, no wait…… What, your mission board is doing what? Sorry, the agreement is null and void. You owe us this much…..

    I’m big on critiques, low on ideas, but:
    I like what T says in 11, the idea of post high-school internships in 13, and I see Chris B already made much of my argument in 29.

    And thank you for the system warning preventing me from making a duplicate comment. Goodness knows, I’m long-winded enough.

  • http://hopefulfragment.blogspot.com/ neil

    I can only speak of my experiences here in Texas but the reason tuition has gone up here has nothing to do with the banks or the university’s budget but the culture of “tax cutting” and thinking it has no effect on the public.

    Our community colleges have seen a near 10% drop in state support the last 10 years. Local taxes have not been raised as this would be have to be voted in by the public as well and I live in a conservative area. We expect this trend to continue and plan on at least an additional 5% cut in the immediate 2-3 years. All of this has been made up in cuts in student services, lack of hiring but mainly through tuition and fee increases. This too will continue.

    Are there cost-cutting measures that universities and colleges could implement? Yes, this could help marginally. Can regulation help students manage loans? Most definitely. However, ultimately, we live in an ever-increasing culture of “if it doesn’t benefit me directly, I don’t want to pay for it”.

  • KLE

    Education or any other industry will always charge what the market will bear. What if there were no loans allowed? What would happen to tuition? My guess is that it would go down as schools competed for students.

    As a pastor, I ponder how much Jesus charged for training the 12 and wonder what he would think of our current model.

    I reflect on a school I taught for a week at in Brazil where students took classes in the morning and worked at small businesses set up by the school to make money in the afternoon. Professors and students lived on campus in buildings built by previous students. Tuition was $1 a month. Each student left with both a trade learned and enough Biblical training to start and pastor churches.

    Of course, there were no fancy flower beds, luxury offices or glossy brochures. No carpeting or beautiful fountains. Just solid practical education provided by passionate teachers at no dollar cost to the students.

    In our wealth driven society, I am afraid that the Brazilian model would never work. The perception is that the diploma is worth what you paid for it, period.

  • Zippy

    Actually for Christians, the Church itself may be the biggest problem. I gained more practical knowledge about Christian finance in a 13 week Dave Ramsey course than I have during decades of church attendance. That is a problem.

    “The borrower is slave to the lender,” is still just as true in 2011 and will always remain true. Until we are serious about teaching that to our kids and living that way ourselves, the church will continue to produce slaves.

  • Diane

    KLE,

    Although I am a progressive, I have to agree with you: Maybe the only hope is to eradicate student loans. Perhaps religious schools with a concern for the Biblical issues around debt could lead the way. That would, of course, be sacrificial …

  • Richard Johnson

    This is an interesting discussion. One question I would ask, especially of those of you who have been involved in the selection of a pastor for your congregation. Would a candidate for minister who did not possess a degree from seminary ever be considered for selection as minister of your congregation?

  • Kaleb

    Scot,

    I think your proposal would work you out of a job. Private institutions would be hammered because they are much more expensive than their public counterparts. Which means that the loan given to a business student at your school would cover much less of tuition than say a public university. I agree that the fairness to students is the big issue though and your proposal would at least be a start…but it would draw students to the least expensive institutions in the long run.

  • Fish

    It is a textbook example of how concentrated wealth both steers government toward favorable policies to the wealthy and removes the ladder of education from the poor.

    The wealthy who control government do not see higher education as a public good; the public good to them, rather, is decreased taxation.

    The result is reduced government funding to higher education, which in turn drives higher tuition.

    Increased tuition, in turn, again tilts the playing field in favor of the wealthy, either by a simple affordability screen or, more insidiously, large debt loads on the non-wealthy that cannot be discharged through bankruptcy.

    It is ironic indeed that access to higher education, which once was the means for the poor to improve their income, now has become a means of keeping them where they are.

  • BJ

    I’m an ordained minister. You can’t be ordained unless you have a M. Div. As an ordained minister I make vastely less than a business major with half my education. I would not be able to serve my congregation without the loans I had to take to get my education. Less loans equals fewer ministers. This system seems to make the rich richer and the poor stuck.

  • RobS

    @Diane (33) — I understand & believe you. But by saving something you were able to reduce the amount of potential debt you faced one day. I’d submit it’s more reasonable to pay for a big purchase one day by saving in advance and having interest work for you. The alternative is going into debt and having the interest payments work against you. So, I’d suggest not losing hope on the effort.

    @Zippy (44) — Good info. My wife and I teach the 13 week Dave Ramsey class. Sadly, there are not many people looking to join. I think believing the Bible in financial matters (giving & wise stewardship in general) is very hard for adults. We should have 50 (or 200) people in a class, begging for the info to change their life. Most will go about doing the same things they have done & get the same result. The rich young ruler claimed to keep all the commands but didn’t want to let God have authority over his material possessions… no change in human behavior 2000 years later I’m afraid!

    Although I guess it’s a bit hard when churches borrow money all the time to tell the flock they shouldn’t…!


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