College Affordability and Workforce Development

The current status of the college loan industry is akin to the over-inflated 2008 housing loan industry, it is a bubble ripe to burst. The federal government continues to subsidize loans and the push for increased PELL Grant amounts is increasing the influx of money into a broken system.

College graduates are in debt and ‘upside down’ on their life mortgages, before they have even had the opportunity to get their lives started. Government is paying more toward education than it ever has, and it is doing nothing but driving the cost up exponentially. Administrative cost and cost of student amenities are what we are now paying for, far more than the education itself.

The Real Reason College Tuition Costs So Much
By PAUL F. CAMPOS NY Times

Business principles such as return on investment need to be considered when assessing the viable cost of an education. Just as qualifying for any loan, we should be asking, can this loan be repaid prior to dispersing funds. If a student set out to become a teacher, a police officer, lawyer, doctor, or therapist we have data that correlate to their expected income. I believe that we should base a student’s potential to repay their loan, based on chosen profession, and as such base a government backed subsidy on this capped amount. A student expected to make $40,000 a year in their chosen profession, should not qualify for a $200K student loan, and quite honestly an institution preparing a student for a $40,000 a year job should in NO way be charging at times $200,000 or more. If students qualified for loans that reflected their true educational worth, prices of educational products would be forced to adjust.

For those of us struggling to pay our current loans, fair market refinance options need to be readily available. Continued and additional public options for service pay backs need to be extended for certain urgent need fulfillment, and as job skills evolve additional responsibility should be assumed by private sector funding. We should be creating an environment based on principles whereby industry leaders and job creators take the initiative to better support their needs in helping to develop a highly educated ultra-competitive work force capable of sustaining and defining 21st Century needs. This would not only benefit the sponsoring business, it would be benefit the individual employee, as well as our entire country.

Increasing reliance on private industry scholarships, paid internships, and sponsorships that require a commitment to work as repayment is a win win. It is a system that has proven immensely beneficial for our millitary academies, and one that could greatly and positively impact our current workforce development in matching both current and future needs in virtually every existing industry.

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