Debtors.
You mean owing the national debt? No, it’s more immediate, it’s Sallie Mae, the most insidious instrument of personal debt in the country—courtesy of Barack Obama’s nationalization of the Student Loan Program in 2010. Obama announced his intention to do so in a White House presser in 2009. The dems expected strong opposition to the move. Instead, the ‘Pubs ignored the takeover, addressing the nationalization of healthcare instead.
If any of you listen to Dave Ramsey’s radio program, it won’t take you long to realize the most common personal debt today is…student loans—tens of thousands of dollars of student loans. Just this morning, one woman called in with over $100,000 of student loans for a Master’s in Education. She is having difficulty finding a job and those available have entry salaries less than $35,000 in her area. But now she’s finished and is required to start repaying her loans immediately, employed, or not.
The original student loan program was created in 1965 as a part of Johnson’s Great Society initiatives. As originally conceived, it provided for personal education loans guaranteed by the government, a semi-public corporation known as Sallie Mae, if the student met certain fiscal guidelines. The program was market driven with low rates. Students still had to qualify, but for those who did, the government guaranteed the loan.
I entered College in 1964 at a time when the student loan program didn’t exist. In my family, borrowing money was the last resort. I was able to acquire a scholarship that paid most of my tuition. In 1964, college tuition was much, much lower. Less than $300, for in-state residence, per quarter. My college, Southern Illinois University, was on the quarter system, four-quarters per year, at that time. In fact, the cost of room and board, was higher than tuition for many, including me.
How did I pay for those expenses not covered by my scholarship? I got a job and paid for it. I took a full course of classes and worked 40+ hours a week. The going wage was $0.75/hr. By the time I graduated, I was up to $1.15/hr. There was no minimum wage.
Over time, the Student Loan program expanded. Everytime it did, tuition costs went up as well. There is an old maxim in business—Costs expands to the limit of available funds. The more funding that is available, costs of programs and projects will expand as well. The same is true in financing education.
The increase of tuition and college cost was gradual over the years. The student loan program was market driven meaning that the lending institutions still qualified applicants while applying pressure on educational institutions to limit costs. Someone with little ability to pay, may not get a loan to a high-priced private institution. That limitation outraged liberals. In each revision of the loan program, the ‘qualifications’ of the applicants was lowered, until, with the passage of Health Care and Education Reconciliation Act of 2010, the entire student loan program was nationalized.
Higher education has become a fraud. High school graduates assume that getting a degree guarantees a job. They are not taught that nothing in life is guaranteed. I was amazed that some school districts actually promote careers as social workers and other ‘soft’ career paths, when the actual employment forecasts are practically nil.
Social work, nationally, is one of the lowest paying jobs in the market—if you can find one. Day after day, I listen to callers to Ramsey’s program. At least several times a week, a caller will call about exorbitant student loans, usually $50,000 or more for a degree in social work and no job. If those callers are employed, it is in some other field.
The result is that a college education, for all too many, is worthless. The abundance of college degrees in areas with no employment, dilutes the successes of those who did work to achieve a degree in hard sciences, medicine, or engineering where the employment prospects are, if not more plentiful, pay a starting salary that is enough to live upon and pay off any student debts.
Liberals now claim that higher education is a ‘right.’ At one time, acquiring a degree took years of hard work. When I went to college, the SAT and other national tests did not exist. Each college had their own, devised to meet that institution’s needs and goals. Institutions like MIT, Stanford, and the ‘Ivy League’ colleges had entrance exams tailored to eliminate all but the most qualified applicants.
I applied at a number of Universities, MIT, Stanford, CalTech, and Southern Illinois University. My mother and sister were graduates of SIU. It was viewed at the family school. I was accepted at all of the universities. The only one I could afford was SIU. I had a state scholarship to SIU, not to the other universities. Guess where I went…SIU. For me, that was affordable education.
My wife attended the same university. She worked, had a scholarship as well. She also had some student loans…personal loans to cover costs not covered by the scholarship. After we were married, that debt was the first we paid off. Compared to student loans today, it was minuscule. Today, students are encouraged to borrow, to acquire massive debt to pay outrageous levels of tuition, for an education that, in many aspects, is worthless.
The real fraud in higher education today is that student loans are not necessary. There are still colleges and universities student can attend and cash-flow the costs. You will have to work. You may not take a full load of classes. You may not be able to attend that ‘Ivy League’ university. You can, however, acquire a degree that will be accepted by any employer.
What Obama’s nationalization of the student load program has done is to remove any constraints by universities to control their costs. When there is no restraint on costs, when education is subsidized by taxpayers, when colleges cannot turn down applicants because of affirmative action programs, education becomes…less valued. When the value of a product is less, that product is on the road to worth-less-ness. Instead of a mark of achievement, a college degree becomes the equivalent of a GED.
We are enraged at the nationalization of healthcare, recognizing, rightly, the inevitable rationing of care and reduction of the quality of that care. The same results will occur in education, less actual education with the concomitant devaluation of college degrees and achievement.
We must end the nationalization of education from Common Core to Sallie Mae. Make education a valued and valuable product again.
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On February 17, I wrote about an open letter to the members of the Connecticut State police. In that letter, the members were warned about the possible consequences if they follow orders to confiscate firearms from Connecticut citizens who were suddenly made potential felons by a government gone mad.