Seriously. The first time I heard about this concept was when I was well in my 20's about a guy in the UK.
It boggles my mind why anyone would think it's a good idea to put people that early in their lives in debt.
The alternative is having the rest of the population pay for your education. Even the ones with a low wage and no or low education. That doesn't seem fair to them.
The ones with low wages don't pay a lot of taxes
This is extremely spurious, especially given that there's a significant fraction of the student population studying things that are fundamentally not terribly useful from a money point of view (think about philosophy and any of the cultural studies).
> The alternative is having the rest of the population pay for your education
The Netherlands does this, and you can easily tell by viewing the discrepancy between yearly costs for someone from outside the EU versus someone from inside the EU. You'll figure out that the money comes from somewhere, and that somewhere is the government.
Oh? Corporations are a thing. An educated workforce is valuable to corporations. The corporation taxes can be increased to reflect the cost of creating that educated workforce.
Lets stop talking about taking people and go after corporations where the real money is. (Esp since the wealthy hide their money in corporate tax structures)
Corporations aren't a thing. They're a legal construct. They're owned by shareholders, who are mostly institutional investors ... pension funds, 401k, etc ... everyday people. So you will be taxing everyone. The same people who already pay income taxes on their earnings. And that's assuming they don't just pass the additional cost down via increased prices on whatever it is they produce.
If you want to tax the wealthy, this is not the way to do it.
It's also not "free" for everybody. How much you pay also depends on situation your household is in (mostly a combination from total income and how many kids you have). It's possible that you have to pay nothing, or in worst case something like €5000/year for university, but then you're in situation where you can easily afford it (healthy upper/mid class double income and only one kid).
But costs in our system are out of control. University of Maryland has only 25% more students than University of Amsterdam (30,000 versus 40,000). But it has twice as many staff (about 5,000 versus 10,000) and triple the budget ($670 million versus $2 billion).
Also, random side tangent, but I doubt you'd be able to convince America to get rid of college sports, it is too big of a thing here..
Times change. Old wealthy white males selecting men based on athletic abilities, big muscles and ability to work hard and then not paying them for their work in return for free housing. We used to call that slavery, now we call it college sports.
[1] https://www.npr.org/2019/09/30/765834549/college-athletes-in...
It seems like niche, and women's sports would take the biggest hit if we approached it based purely on making money. I know someone that got a full ride for cross-country running. She would not have received that, if it were revenue based.
P.S. Whether "student athletics" is a good idea is beyond the scope of this discussion.
And as a percentage of income, TV revenue is a huge part of the revenue for non-capital expenses. SEC and Big 10 schools get on the low end of $40 million/year on TV revenue along. ACC will get close to that, but not sure because their network just launched. Pac12 could get that much, but that whole conference is mismanaged.
As much as I hate it, in Texas, college Football is a profit center and the only way to get serious research funding from the state.
Personally, I think High School Football and funding is a much larger problem in Texas.
0% interest also helps prevent debt from blowing up here.
And most students having multiple world top 5% universities within 1 hour by free public transport, also helps as students can spend part of their student life living at home, it's a lifestyle choice, not a necessity for many to move out.
Athletic departments operate as separate business entities from the University. What this actually means varies from state to state and university to university. Some are private corporations, some are government entities, some are non-profits. However, in general these things are true: No, the university does not directly pay a football coach 5 million a year. No, the university does not pay half a billion dollars to build a stadium.
Athletics gets it revenue from four main sources. 1) Apparel licensing. Often any piece of clothing with the university's logo often goes to the athletics department, not the school. (again, varies) 2) Ticket sales, concession, and parking sales for sports events 3) Television rights 4) Booster donations. The last two can be a huge, huge part of the athletics department budget. For better or for worse, university athletics is an egotistical playground for rich alumni.
As an example, Texas A&M pays Jimbo Fisher $7.5 million a year to be their head coach. However, we earned $43 million alone from television rights in 2018.
An Athletics Director's job is really to worry about #4. #3 takes care of itself via conference membership. 1 and 2 are the responsibilities of operational underlings.
If done right, the athletics department gives back profits directly to the university. Usually it breaks even, but even then, it's not really a break even. Athletics scholarships is a money transfer from the athletics department to the university for the athlete's tuition. This is typically around 20k per year per athlete. If done wrong, a little money goes from the academic side to athletics. Rutgers University is one of the "most subsidized" athletics programs. That "subsidy" in 2018 was $10 million out of a 1.5 trillion dollar budget. In the big picture things, 0.6% of your budget for branding and facilities use rights isn't that awful.
TL;DR - University athletics operates as a separate legal business entity from University academics. Claims that "you're stealing money from the math department to pay for sports!" often isn't true.
About 99% of schools lose money on athletics and require direct institutional support to survive. That means, yes, stealing money from the math department.
In practice it doesn’t really work out that way. Students just pay more in tuition and get the same education they would have if they paid less. Just look at UNT and what they did a few years ago. Raised tuition to fund a new football stadium.
If you’re looking at this from the perspective of Texas A&M you’re looking from the wrong perspective.
http://www.ncaa.org/about/resources/media-center/news/athlet...
1) "Grant-in-aid" are a large portion of expenses and are scholarships. This is the athletic department paying the market tuition bill for an athlete. This qualifies as an expense, but clearly has direct benefits to academics. For the university and academics, it's a "good expense."
2) "Direct Institutional Support" is the category that you're after. This is money directly paid by the academic side to the school. However, it's rarely a direct money transfer. Most of them are discounts on tuition.
https://www.forbes.com/sites/kristidosh/2017/06/12/the-bigge...
I'd argue these waivers, especially a Title IX waiver, is ultimately a very good expense for the academic side and society as a whole.
Another large revenue is Government support - support from the state government. While this is a direct money injection, you can't claim that the money would have otherwise gone to academics. You can argue that it should but that's different. Further, it's cyclical.
Of course, I'm not going to pretend there aren't other forms of support from the university and student fees. However, those are small compared to the budgets as a whole. Yes, the university often does chip in for stadiums, but the university will get rights to use the stadium like for commencement ceremonies. Money spent by universities usually (should) get something in return besides an investment in branding.
Finally, like it or not, athletics play a huge role in brand awareness and prestige for the school. If you look at the tiers of schools, that is, Ivy's, Tier 2's, etc., there's little movement inbetween tiers, but there is a lot of jockeying within the tier. Athletics is the most visible way of doing so. When Doug Flutie threw a Hail Mary for Boston College, the following year, they tripled the number of applications they received.
Athletics is a money losing endeavor for virtually every college in the nation.
Whether money losing athletics is a net benefit for colleges is an attempt at reframing the argument. There are lots of ways to spend money that may be net positive but that isn’t what is being discussed.
At least 99% of colleges could unequivocally save money by getting rid of their athletic departments.
The most heavily subsidized accusation is often said, so I looked it up on Rutger's budget report. It's there and within the past two years, it has been around 10 million, minus tuition waivers that I described above.
The other comment responder's NCAA report is good, but again, it's wrong to draw conclusions without knowing what those terms are. There's definitely good expenses for academics on both the athletic department side and the university side.
There is way to much added on to American universities in terms of student services and endless beuracracy. We do have the community college systems which are less or free in the case of running start [WA] or IB in other states.
Generally not, they are funded by members and alums.
I also like to think back to what Peter Thiel says about higher education. It could be something similar to the 2008 housing crisis....where people were borrowing money to buy overvalued housing. Higher education to a certain extent could be people are borrowing large sums of money to get degrees that don't hold much value in the market place....so it becomes impossible for these people to ever repay the loans....overvalued assets and leverage spells bubble. I know people who borrowed 100k+ to get a degree in sociology only to realize after the fact that sociology is a worthless major. They then went back to spend another 100k to get a degree in nursing to finally become gainfully employed.
All currency issuers can always pay any debt denominated in their native currency.
Whether higher education is producing a quality product at a fair price is a completely different discussion.
Whether the degrees being produced align with the workforce needs is yet another different discussion.
Whether jobs actually require the degrees that employers specify is yet another different discussion.
And that decision is made when they are legally children, and they're bound to it for the rest of their lives.
Hell, most Uni students are 18, which means they're a legal adult. Most of them have been driving cars and fucking for years before then -- why wouldn't they be able to make choices about a career?
There is a reason why debt in nations is always mentioned as a percentage and not a raw number - the raw number is meaningless.
IMO, I think there is going to be a huge market for software companies that can adequately verify someone's aptitude. If I am an employer, I want the best people I can find in my specific industry. I don't care if they have a degree or not. The problem is how do you find these people in the masses of people out there. If software was created that could evaluate people's skills directly, then that would be huge.
Measuring aptitude isn't hard and we've got firms that have been doing it quite well for decades with high predictive power on future success in the domain for which aptitiude is tested.
But employers don't care about aptitude (capacity to learn a skill), because we aren't in a system of lifetime employment. They care about present skill. And, it's uolely we are going to find good tests for that that don't involve lots of samples of applying the skill, which for simple tasks that can be repeated dozens of times an hour is easy and already readily available, for complex abstract processes that involve a mixture of lots of small task skills integrated through abstract reasoning, a quick easy test would be a breakthrough. But I think there is good reason to think that that is fundamentally intractable, the issue not being in the testing method but the nature of the phenomenon being tested.
there's been a bunch of articles about it, such as https://www.forbes.com/sites/prestoncooper2/2018/01/08/emplo...
As far as software being able to judge people's aptitude... this is certainly interesting and I'm pretty sure I know some startups dabbling in it. The general problem though is hard - it's basically automating interviewing in some form. Which is easier if you let humans' write the questions & evaluation methods, but of course is then only as good as what you are screening for.
Calipari’s ~$9 million a year may seem high for a state employee, but his performance is easily measurable and comparable to others in his field.
- student reviews - consistency with publishing - faculty peer review
If a professor isn't liked by the students and is lagging in publishing, there's a good chance they're mostly dead weight. Likewise, if their peers consider the professor's research worthless and teaching ineffective, they could actually be harmful for the University.
In essence, does the professor still fit the reasons they were granted tenure?
That being said, I don't think that's the right place to focus. I heard that there's a ton of overhead that could be trimmed, such as administration overhead (probably dealing with financials). It would be interesting to compare private and public schools to see what their costs look like and see if maybe we can simplify things to cut costs.
https://www.businessinsider.com/most-expensive-colleges-in-t...
I think if you really want to look at how to lower costs you look at how the community colleges do it. Rick Perry (for all that is wrong with that guy) was spot on, when he basically said that it shouldn't really cost much more per year for a 4 year college as it does at a community college. Thats really the key to free college. When people look at Sanders plans, the conveniently forget that we manage to educate these same kids for 13 years without bankrupting the country, adding another 4 years should be a small increase, not a budget busting problem.
https://www.governing.com/gov-data/education-data/state-educ...
Which puts the average at $11k a year (about 1/2 to a 1/3 is overhead outside of first line teachers salaries).
d. Cut cost by reducing the number of teachers, lectures, computers/lab meterials.
I don't think we'd see an increase in collateral as an increase in interest rates, to account for the risk of non-collection. This would likely result in STEM and highly-qualified students lobbying to have interest rates take into account declared major or GPA or some such thing.
But in general, we would still see your #2 as a consequence.
I think you're assuming that lenders care what kind of degree you have. Someone who takes a few gap years to establish savings and credit will end up with better interests rates. As it should be. Kids should rack up a few years in the real world before they drop 80-200k and ruin their lives with debt.
I agree though that if this ruling holds on appeal and becomes the law of the land then we're going to see a lot of debt written off.
"Graduates of Outer Bumfuck University average an annual income of $60,000! We offer tuition at Outer Bumfuck for your choice of:
- $10,000 per semester - 2% of your income for 10 years, per semester (deferred until your first full-time employment)"
There are obvious holes in this plan (e.g. a short-term cash shortage, the potential for abuse by students), but it seems fundamentally sound. It also provides counter-pressure to inflating the job prospects of graduates, since the university comes up short in cashflow if their stated numbers are wrong.
This system also provides a sort of insurance plan for college students. You'll never be stuck with loan payments exceeding your income, since your total cost is based on your income!
Currently, if you don't pay for college, they just stop you from enrolling in more classes. You don't enroll in classes, you don't get a degree. Very clear cause and effect. In a future income system, the student doesn't pay their fee, and maybe the school files a collection action on them, if they can track them down...
Could you elaborate on this? Would that collateral just be a higher cash to loan ratio on the part of students or are you referring to something else?
Since students basically have zero assets, another commenter pointed out, the more likely scenario is simply higher interest rates due to the increased risk to the lender.
The fraud is that they told the middle class this was their key to financial success, or at least financial security. And yet we're talking about a massive scale debt bubble that is holding back an entire generation of young workers. It was a lie. I believe they knew it was going to be a lie. But they also "knew" the taxpayer would be on the hook, so they didn't care. That's why I think the taxpayer should shove it back on the universities by holding them accountable for selling students a lie.
It's really unfortunate that we changed from an attitude that education is a public good that benefits everyone - e.g. employers getting access to a more educated workforce, the economy being better for everyone, etc - to it being an investment in individual people, that those same people are then expected to pay for up front.
Let's play out a causal chain:
1. If it becomes possible to get out of student debt through bankruptcy, then there must be additional collateral posted by the debtors.
2. This will cause fewer loans to be made, which will reduce the available pool of money sloshing into higher ed.
3. Enrollment and revenues will fall, forcing universities to:
a. Fight for some other form of government-ensured revenue stream (beyond the funds that state schools already receive). Get the popcorn out for this political rhetoric.
b. Reduce scope and conserve the more limited funds coming in the door. This probably starts with eliminating the endless program offices and initiatives that serve to swell the ranks of non-teaching staff.
c. Compete on price and return on investment by improving quality and employment rates of graduates.