Brown University has the right idea regarding college loans:
Brown University is eliminating tuition for students whose parents earn less than $60,000, after decisions by fellow Ivy League universities to bolster financial aid as their endowments grow.
The university, in Providence, R.I., said on Saturday that it also planned to substitute grants for student loans in the financial aid packages of students whose families earned less than $100,000 a year. The new program cuts reliance on loans for all students regardless of family income, the university said in a statement posted on its Web site.
When I attended Boston University to study journalism, the school’s chancellor, John Silber, once said that he intended to run the place like a business. Most of the students and faculty were understandably upset because universities, of course, are not businesses. Their sole purpose is not to make money; it is to educate tomorrow’s leaders. Universities promote the public good and should be regarded as non-profit organizations.
This is why the skyrocketing cost of higher education — BU now costs close to $50,000 per year — is such a burden. (For more detail on the harm that higher-education and student-loan expenses are doing to today’s students, I highly recommend “Generation Debt” by Anya Kamenetz.) Most universities have extremely large endowments, and they do not need to charge ever-increasing tuition rates while replacing grants with loans.
Universities, however, can do whatever they wish because for all intents and purposes, they are monopolies. Everyone is told — falsely, I might add – that they must go to college to have a good life, and this leads to excessive demand for a limited supply of spaces in classrooms and dormitories. As a result of the law of supply and demand, the price increases.
Few colleges, I expect, will emulate Brown. So it is up to students and parents to get the free market to work in their favor. High-school students need to be told that not everyone needs to attend college. Not everyone even wants to do so. As I wrote in a prior post, the world needs scientists and plumbers – and people in both professions can earn a very good living. (Plumbers also have job security — they can never be outsourced!) The negative stigma that American society attaches to blue-collar jobs needs to be erased.
I also encourage American high-school students to get their undergraduate degrees from universities in foreign countries — not only is it cheaper to study the same material, they will also learn about other languages and cultures. As a result, they will be better prepared to compete in a globalized world as well.
When the demand for American higher education declines, so will the price.