Friday, March 16, 2012

Student Loans: America's Next Debt Bomb

I understated things earlier when I wrote that the student loan bubble “may” explode in taxpayers’ faces, as law professor Glenn Reynolds pointed out. An explosion seems increasingly likely. The Washington Post recently concluded that student loans could be America’s next “debt bomb“: “Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble,” notes the Post. “Bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.” Many of the “parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies.” In recent years, student loan debt has skyrocketed from $100 billion to $867 billion, “surpassing the $704 billion in outstanding credit card debt,” says UPI. There has been a massive “spike in” student loan debt owed to the Education Department over the “last three years.” Will these skyrocketing financial burdens lead to a clamor for massive bailouts at taxpayer expense?

This massive student loan debt is not buying much of an education for many students. At Minding the Campus, Mary Grabar discusses the slanted, error-filled writings used to teach English majors in America’s politically correct universities, where ignorance of history is apparently a selling point. Texts for English students celebrate Obama’s speeches, like his Cairo speech that contained historical errors, and treat them as if they were on par with the Gettysburg Address and Martin Luther King’s “I Have A Dream” speech. As Grabar notes, in the English texts that venerate Obama’s speeches, “Obama’s historical inaccuracies in” his Cairo “speech go unchallenged, like attributing the invention of printing to Muslims (it was the Chinese) or crediting Morocco with being the first to recognize the United States ( No–Russia, France, Spain and the Netherlands did it earlier).” As Grabar points out, “Obama’s claims in his Cairo speech are presented without any skepticism” by English textbook writers, despite the factual errors, and the fact that even the liberal Huffington Post noted the speech’s “lack of substance.”

As USA Today noted earlier, college students learn less and less with each passing year, according to recently-released research. “Thirty-six percent” of college students learned little in four years of college, and students now spend “50% less time studying compared with students a few decades ago, the research shows.” Thirty-two percent never take “a course in a typical semester where they read more than 40 pages per week.”

Actions by the Obama administration have increased college costs and driven up tuition. The administration has discouraged vocational training needed for high-paid, skilled factory work, contributing to a severe shortage of skilled factory workers — thus making it harder for factories to expand their operations and hire workers, including the unskilled workers among whom unemployment remains highest.


The Big Hoax of equal treatment in the schools

Thomas Sowell

There have been many frauds of historic proportions -- for example, the financial pyramid scheme for which Charles Ponzi was sent to prison in the 1920s, and for which Franklin D. Roosevelt was praised in the 1930s, when he called it Social Security. In our own times, Bernie Madoff's hoax has made headlines.

But the biggest hoax of the past two generations is still going strong -- namely, the hoax that statistical differences in outcomes for different groups are due to the way other people treat those groups.

The latest example of this hoax is the joint crusade of the Department of Education and the Department of Justice against schools that discipline black males more often than other students. According to Secretary of Education Arne Duncan, this disparity in punishment violates the "promise" of "equity."

Just who made this promise remains unclear, and why equity should mean equal outcomes despite differences in behavior is even more unclear. This crusade by Attorney General Eric Holder and Secretary of Education Arne Duncan is only the latest in a long line of fraudulent arguments based on statistics.

If black males get punished more often than Asian American females, does that mean that it is somebody else's fault? That it is impossible that black males are behaving differently from Asian American females? Nobody in his right mind believes that. But that is the unspoken premise, without which the punishment statistics prove nothing about "equity."

What is the purpose or effect of this whole exercise by the Department of Education and the Department of Justice? To help black students or to secure the black vote in an election year by seeming to be coming to the rescue of blacks from white oppression?

Among the many serious problems of ghetto schools is the legal difficulty of getting rid of disruptive hoodlums, a mere handful of whom can be enough to destroy the education of a far larger number of other black students -- and with it destroy their chances for a better life.

Judges have already imposed too many legalistic procedures on schools that are more appropriate for a courtroom. "Due process" rules that are essential for courts can readily become "undue process" in a school setting, when letting clowns and thugs run amok, while legalistic procedures to suspend or expel them drag on. It is a formula for educational and social disaster.

Now Secretary Duncan and Attorney General Holder want to play the race card in an election year, at the expense of the education of black students. Make no mistake about it, the black students who go to school to get an education are the main victims of the classroom disrupters whom Duncan and Holder are trying to protect.


The cost of ‘fair access' in Britain will be higher fees

Last time I posted here, I attacked Professor Les Ebdon’s plan to poison the well of British higher education by subjugating the admission criteria of our best universities to ‘progressive’ political priorities.

However, before and after that article I’ve found that ‘merciless meritocracy’ is insufficient to sway some of my progressively-minded student friends. Equalising university access chances between high-achievers and the rest is ‘fair’. So entrenched is their opposition to selective and private education, or even the ‘internal market’ of parent choice, that the argument that it is schools that have failed similarly go nowhere.

So we who support the continued excellence of our top-flight universities need a new argument. One less vested in meritocratic principle not shared by our opponents, and grounded in something that both sides understand. Something like money, for example.

The case is fairly simple. Since Tony Blair engorged it, higher education in this country has become very expensive for the government to provide. As a result, governments have had to introduce fees, which have not been popular with students. Yet the fees for enfranchised domestic students have been held down by the much higher fees charged to international students.

International students are one of the financial keystones of UK higher education, worth “billions” of pounds per annum. The Guardian figures from 2009 show that foreign students were facing fees of up to £20,000 a year.

International students are willing to pay such fees, for now, because the UK’s best universities rank amongst the best on earth. With access criteria designed to ensure global competitiveness and attract the best and brightest from around the world, universities like Oxford, Cambridge, Imperial College et al are maintaining their global position despite the slump in the UK’s relative performance in secondary education exams.

However, if we start channelling less capable students into these institutions in the name of ‘fairness’, what do we think will happen?

For a start, the universities will have to expend ever more time and resources bringing their entry-level students up to the standards required for rigorous undergraduate study. It is also probable that the standards of attainment by graduates will fall as people who weren’t ready pass through the system.

Sure, in domestic terms the government can undoubtedly nobble these results: we will doubtless start seeing ‘value added’ degrees to maintain the illusion of attainment if the likes of Ebdon have their way. But in international terms, our comparative results will slump.

Much more directly than secondary education results, this will matter. If our universities are not internationally competitive, they won’t attract the same quality or volume of international students. The cost in global connexions and revenue could be astronomical.

Once the universities lose this lucrative source of funding, the only ways to make up the shortfall will be higher fees for students or higher taxes on the general population. Poorer students will find themselves taking on more debt for degrees whose value is decaying.

All in the name of ‘fair access’.


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