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H. Kim Bottomly

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Student Debt: A Problem But Not The Problem

Posted: 07/03/2012 11:36 am

The U.S. public university system is facing a crisis and much of the discussion centers on student debt. However, student debt is just one symptom of the actual problem confronting universities.

I am the president of a private college, but all of my own education, like that of the great majority of Americans, was at state-supported institutions. Our university system was, in my day, the envy of the world. It is still that way now, but unless we do something to address how our public institutions are funded, our country's competitive edge will decline further.

How did we get here? The crisis actually developed over several decades. It began some 30 years ago when the federal government severely cut funding to states. States responded by drastically reducing their support of higher education, forcing public educational institutions to look elsewhere for funding. Raising tuition was a partial solution, one made easier by the availability of student loans. But shifting the cost burden onto the backs of young men and women simply postponed the crisis. It didn't cause it. It was caused by decreased levels of state funding.

The kind of good higher education that our country is known for is not cheap. It uses highly skilled labor and requires expensive equipment and facilities. When government stops subsidizing it, most of our citizens can't afford it. It's that simple.

Decreased funding is the central problem, and it is time we start talking realistically about how to solve it. Yes, tuition has risen to unsustainable levels. Yes, student debt is too high. Yes, universities need to become more efficient and keep a sharp eye on the bottom line. But higher education can tighten its belt to the bone, and the problem will still remain. And, state legislators are unlikely to find much more money for higher education. Further, although our citizens value higher education, it is doubtful they will vote for increased taxes to pay for it.

Our political leaders and their constituencies decided they didn't want the state to continue to pay the cost of a good higher education. We have a product we can be proud of, a product everyone wants, but a product no one has the ability or the will to pay for. And very few honestly admit this simple truth: you can't have the same product if you don't invest in it.

Either education has to genuinely change -- and become a very different product from the one that made us the most competitive nation in the world -- or we need to find some other way of funding it.

Unless the conversation turns to the real issue (rather than focusing on mutual finger-pointing), we will not solve the problem -- and our country and our citizens will be the poorer for it.

We need to stop blaming and start looking for solutions.

Here are a few simple ideas:

  • Acknowledge that the success of American public education has helped make the U.S. envied in the world, and commit to keeping it that way.

  • Improve education efficiencies. Public dialog to the contrary, the higher education business model was recently rated as "generally sound" by Moody's (Investment Report, January 2012), but more efficiencies must be found.

  • Recognize the new funding reality. Stasis, or even declining public funding, is becoming a fact of life. Universities need to expand their revenue options, which include private philanthropy, partnerships, and entrepreneurial ventures, while ensuring that any such expansions are consistent with their core mission (the faculty are the guardians of academic quality and their consultation on this point is crucial).

  • Change the governance structure. Public higher education needs better governing boards. Political appointments too often do not lead to the high-skill, well-informed governing boards needed in this new economic environment. Boards need a breadth of skills and experience, but most importantly need members who truly understand higher education. It is not just another business, and treating it like one will affect academic quality.

  • Modify the structure and amount of student loans to better match the earning potential of graduates.


These are just a few ideas. If we begin to focus on the real problem, more ideas will surface. But we must first recognize how we got here in the first place, and we must be steadfast in our determination to preserve our outstanding public education system.

 

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The U.S. public university system is facing a crisis and much of the discussion centers on student debt. However, student debt is just one symptom of the actual problem confronting universities. I...
The U.S. public university system is facing a crisis and much of the discussion centers on student debt. However, student debt is just one symptom of the actual problem confronting universities. I...
 
 
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HUFFPOST SUPER USER
Gerald Bowman
11:41 AM on 07/09/2012
People love to politic every issue to death these days. This is not about fiscal discipline. This is about class warfare. The children of the rich and ruling class go to elite private schools. Their children do not have loans. They don't see burying young people in debt as a problem. This is another great opportunity to shake down and rob consumers with questionable loan products.

Ultimately, in the mind of the 1% they can always import college grads from developing countries like Iran (yes Iran), India, and China or export jobs to the same foreign workers.The sad fact is we import more and more of our grad students and scientists,doctors and engineers. So good luck convincing Republicans that we need investment in public universities.
11:24 AM on 07/08/2012
i think - raising tuition was a partial solution, one made easier by the availability of student loans. But shifting the cost burden onto the backs of young men and women simply postponed the crisis.
http://thedebtsreliefreviews.com
09:41 AM on 07/07/2012
I notice no mention of controlling university employee costs, and eliminating the outdated concept of tenure.
01:17 PM on 07/06/2012
Don't let public universities charge tuition at all. They'll sure find ways to get more efficient then.
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cyclone70
When one facepalm isn't enough
03:12 PM on 07/05/2012
The local branch campus of the Big 10 school I attended in the late 70's early 80's charge me a little over 20 bucks a credit hour then. they are now $249 per credit and expected to go up another 9%

My question is - what value has been added to the college education that justifies a 12 fold increase in cost? way beyond any measure of inflation.

In the mean time, the campus has been on a building boom, yet the enrollment numbers havent changes much - why were the old buildings adequate then, but not now?
01:45 PM on 07/05/2012
Here's a thought. I work for a university library where the branch head's little pet project, something which will in no way benefits the students, now stands at $80,000.00. Our school just announced it's raising tuition (again) because of stupidity like this. When one doesn't have competent administration in place to say NO, the students will continue to pay more and more with less and less benefit. Of course, no one listens to the peasants who work there, so it will just continue until no one can afford college anymore.
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guveqzero
Inventor and Innovator
10:47 AM on 07/05/2012
Education doesn't matter in a country that allows unfair competition from abroad in labor. That is the problem, there is no demand for your product. Unless changed, it means your institutions are going to shrink.
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Kai-HK
Don't Share My Wealth! Share My Work Ethic!
10:22 PM on 07/04/2012
‘How did we get here? The crisis actually developed over several decades. It began some 30 years ago when the federal government severely cut funding to states. States responded by drastically reducing their support of higher education…’

TRANSLATION: ‘How did we get here? Simple: We became make-work institutions for bloated unionized administrators, exponentially increasing the number of non-core personnel for every professor teaching, while at the same time using are cartelized protections to charge whatever we wanted to fund our rapacious salaries and benefits. More importantly, when finally our gluttony became so immense that the taxpayers--mostly the poor short-order cooks, store clerks, and landscapers--as well as the uneducated that have to fund our grand lifestyles through sales and income taxes, we then had no alternative but to turn to parents and students in order to fund our greed. We did this by, again, using our cartelized protections to allow us to change what we wanted since we are not in a perfectly competitive market. Parents wiped out savings and cashed in 401K’s and students took on ruinous debt to fund our extortive tuitions that our unionized employees demanded at the expense of the citizens, taxpayers and parents and students on which we prey. But rather than own up to the fact that we are greedy…we would rather claim that ‘decreased funding’ and the need to again put the screws to the taxpayer is the REAL problem.

Typical.

Kai
03:53 AM on 07/05/2012
Absolutely right-on-the target post. Gotta be your fan.
04:40 PM on 07/04/2012
The corporations can move whereever. It seems if the usa consumer is not buying the rest of the world struggles.
The corps could care less about education, they are only looking for tax breaks and welfare like the banks.
Smaller groups are better and more efficient.
02:19 PM on 07/04/2012
It's not a problem for corporations. They are already moving to Asia, where governments are breeding the next generation of highly skilled employees by building new universities and science parks.

You simply have to know your priorities. In the US they seem to be mostly football, baseball, basketball and tax cutting.
09:10 AM on 07/05/2012
and MILITARY SPENDING
01:28 PM on 07/04/2012
Increase efficency and hire more highly paid do nothing executives to do so?
Isnt that what healthcare, banks and gov. Are doing? Seems costs go up no mattet what, yet quality is descending down.
No way would I go into debt for anything. Show me the money.
HUFFPOST SUPER USER
kamact
Market Observer
12:52 PM on 07/04/2012
It's amazing that even though the Internet is widely used, it has not created created materially efficiencies that are reflected in lower costs for higher education...perhaps the TBTF banksters are also extracting value in this market and benefiting from "artificially higher" costs...America has become the land of the "for-profit for a few"...
02:20 PM on 07/04/2012
If you had ever been at a university, you would know that none of the material taught there can be taught over the internet....
HUFFPOST SUPER USER
David Faisel
mrfaisel34
02:34 PM on 07/04/2012
music appreciation?
11:22 PM on 07/04/2012
Are you being facetious?
11:30 AM on 07/04/2012
Or, you know, you could just raise taxes to pay for it.

Ideally higher education shouldn't charge tuition, so everyone has access and nobody feels like they're "buying" their degree. It already does mainly depend on public money, regardless of where you go or how much students are charged. Even so-called "private colleges" are mainly funded by the government, either directly or indirectly.

Also, most of the "new funding reality" being described amounts to selling off those publicly funded assets to private individuals and groups. Like the oligarchs looting Russian state industries after the fall of the soviet union, the decline in the US is marked by the rich getting richer buy buying public property at a pittance.
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victorianism
Theultrathinnothingnesshasabeautifulendforusall.
09:23 AM on 07/04/2012
All of these 'few simple ideas' can start getting done before the federal/state funds pour in, which---the raining thing---is, of course, happy to hope for and dream of, but will never happen once more, unless and hopefully until the country is able to get rid of most Republicans. Ironically, it's the Grand Old Republican Partiers who proposed and instituted America's envy-of-the-world rudimentary, high school, and higher education system, all against the will of old liberal Democrats.
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dmgoss
Sapere Aude
07:41 AM on 07/04/2012
#3 is totally right on. You might also add the mass firing of bloated administrative staff whose individuals often come from the corporate world, and expect to be paid commensurately, freeing up money to actually hire some teaching staff from the mob of adjuncts currently slaving in the coal mines of education for little pay and less security.