Tim’s Plan (or vague ideas) for Addressing Student Debt
– Any college that accepts government backed student loans can only charge a set tuition rate, rather like how doctors get billed by HMOs, the doctor may send a bill for $100, but since they belong to the network, they’re only going to receive $50. Colleges that don’t like being paid a lesser amount can refuse to accept government backed student loans. If this means that only state colleges see federally backed loan money, then more expensive schools will discover the effects of supply and demand and eventually their tuition rates (which have skyrocketed past most of the rest of the economy, double medical costs even) will have to drop or they’ll have to stick to recruiting only rich kids and hope they get enough to cover the budget, while state schools grow.
– Student loan interest rates are set high enough to cover administrative costs, and no higher, if this means rates are a fraction of a percent, so be it.
– Part of the student loan plan application should list the degree being sought, and the average incomes for this degree, and the percent employed in these fields after graduation, and it should list a schedule of payments and average living expenses to see if the degree will support the loan.
– Students going into shortage fields deemed essential, such as maybe education, health or engineering would see a further tuition decrease, and lock the student into a major.
© 2015, Tim Boothby. All rights reserved.