This really might be the end of ITT

So what consequence should a state university face because one of its alumni defaults on a student loan?

Student loans are unsecured debt. With secured debt the default situation is pretty simple; don't pay your car loan and they take away your car to recoup the money owed.

Student loans aren't secured against anything but a gamble that you'll get a good job in the future and use your salary to pay off the loan.

Default rates may be high for graduates of some for-profit schools. But they aren't zero (or even close to it) for public universities and private non-profit schools. So what ill consequence should Penn State suffer for all of the philosophy majors they unleash onto the world who end up working as baristas? Believe it or not there are graduates of Ivy League schools who are under or unemployed as well. If Harvard is so great then couldn't an art history major argue that they expected the university name, not their major, to carry them to career success? Was Harvard negligent to allow the person to major in gender studies?

Some of these, I think, are actually reasonable questions in the scheme of student loans. For years you just got loans. Sometimes you need a cosignor. But, overall, schools brag about how your inability to pay won't keep you from studying whatever you want.

At what point do we look at the lenders, public and private, and say "Whoa now, you loaned $80k to someone to study anthropology and you're surprised that they only make $20k per year and can't pay you back?"

Or is it the school's responsibility to ensure that a student relying on financial aid and loans only studies something that is likely to bring in a decent paycheck? The dark slippery slope I see there is a perfectly normal looking campus where you can tell the rich students by their majors in Classics and the poor students by their being directed into nursing.

 

Imitating Jesus is a good thing i.e. trying to do good things for others.

 

I believe that American Public University will take them; possibly Western Gov Univ might take them, too. He should check into these two.

 

That statement above is inherently false. You did an excellent job in shooting it down. My take is that for-profits have to offer something greater than what the state is offering. If for-profits are offering the same or lower quality education then the state should provide the education. I am not sure why the state should be involve in providing student loans to for-profit. I just do not get it. I am not against for-profits; I just think that they should operate without state supported student loans.

 

We agree insofar as I don't think ANY private school should be collecting government welfare. There are private universities with itsy bitsy teeny weeny endowments that rely on Title IV just as much as the University of Phoenix. Why should they get government money?

Why should religious schools get government money for cranking out ThDs and M.Divs?

 

The government should just tell the students that are getting these loans that they won't pay for it...hmmmm..... pretty sure that won't go over well...LOL. You may not see value in religious schools but the students that are religious sure do. Lets just say the government stopped giving loans to religious schools if so where does it end and who decides what degree programs have value? Even at public schools there are tons of degree programs that could be cut and it would be beneficial to the federal loan issue and they aren't religious.

 

Overall student default rates are at 11.8%. It's already not going over well.

It has nothing to do with whether I or the individual sees value in it. Title IV for religious colleges is the voucher system applied to higher ed. It's using government money funded by ALL taxpayers to provide religiously specific education to followers of that church, denomination or moral philosophy. It's a misuse of government funds.

You say that like it would be a terrible thing to actually evaluate likely earning potential post-graduation before loaning people money. Do you also oppose credit checks for car loans? If you are going to spend $100k on a religious education (BA and M.Div./MHL etc) and you only stand a chance of making $30k in a pulpit job then that's probably not a very good loan to make. If you want to major in art history, classics, sociology etc. then I'm not saying you shouldn't get loans. But you should be eligible to borrow far less than someone going into debt to study medicine or engineering.

I'm not sure why this is a controversial idea. If I go and buy a house the mortgage company doesn't just give me the same amount of money as the person who came in before and after me. My loan is based upon my ability to pay and my likelihood of default. Good credit can indicate less likelihood in defaulting. Having a nice paycheck can indicate that I am likely to continue earning at least what I make at that point in time and possible more in the future.

Student loans shouldn't be the Make-a-wish foundation where we help a poor kid realize his dream of majoring in comparative Latin American literature or an individualized major focusing on popular culture. They are loans to allow you access to higher education.

Federal financial aid and federally subsidized student loans are part of the problem. Schools know they can count on that money coming in. The result is the prices rise.

I know I've shared the example from my former economics professor before so please forgive the repetition. In his example:

We all live in a world where the government decides that every man, woman and child in the U.S. receives a government backed $25 gift certificate to the Olive Garden even year. It is non-transferable. It is non-redeemable for anything other than goods and services offered at the Olive Garden. They don't roll over so you have to use it or lose it in any given year.

The first few years would be fantastic. Couples would go and stuff themselves full of mediocre pasta and overly sweet desserts. Wine, appetizers, throw it all in. Bring the kids. Bring Grandma. Big, awesome free meal.

How long do you imagine it would take before the Olive Garden raised its prices? That money cannot go anywhere else. You are going to spend it at the Olive Garden because you don't want to feel like you left money sitting on the table. So they jack up the prices. Now the $25 that would have easily covered your entree, drinks, a dessert and an appetizer only covers half of one entree. Before this program was in place a date for two would cost you $50. Now it costs you $50 again but the Olive Garden is getting another $50 from the government. And you continue to pay it because, again, why leave that money on the table?

Such is financial aid. Take it away and private colleges, religious and otherwise, have to survive off of endowments, philanthropy and tuition. Knowing that consumers will only pay so much creates a cap on where that tuition is likely to go. Many schools would close because they rely on government welfare to remain open. The only schools that should be receiving that money, in my opinion, are public schools open for all.

 

I think it's all but over. I saw this yesterday. The buzzards appear to be circling.

ITT Tech stops all new student enrollment - Aug. 29, 2016
http://gizmodo.com/rest-in-peace-itt-tech-you-bastards-1785946020

J.

Phone recording: "We're sorry. All life-support machines are in use. Please hold to maintain your priority. Your call is No. 67 in the queue."

 

To me it is a bad business plan when a for-profit entity only survival depends on government supported loans, subsidies etc. Some entities can only survive only on government funding, such as mediocre education, defense, VA, Medicare, and as a Canadian I may include universal health care. As capitalist, I support the private sector building a better mousetrap and maximizing shareholders’ wealth. ITT was not offering a better mousetrap.

 

Yes, fellow Canadian. I'm sure if you get sick, you run to your private doctor and pay direct. :laugh: :laugh: Universal health care may not be the best mousetrap as YOU see it. But for some of us mere mortals, it's a Godsend - and for a whole bunch of people - the only affordable mousetrap.

A bunch of years ago, there was a radio "contest" of sorts - people could vote for "The Greatest Canadian." Winner: Tommy Douglas, the Socialist who brought in universal health care. And yeah - I couldn't agree more.
If it weren't for Canada's health care program, I'd have either died or been $100K in debt last year. I guess there are some who'd have liked me to have that outcome. Are you one?

J.

"A Canadian is just an unarmed American with health care." - Comedian, John Wing Jr.

 

My vote is for universal health care. I can't think of anything better. If you are wealthy in Canada and can't wait them it is easy to go to the USA, and enjoy free-market healthcare.

 

Sorry - read too fast, mistook your meaning and then it was too late to erase my post. On re-reading, I saw that you consider health care as one of several things that need government funding to be accomplished - not as something that shouldn't require it. Sorry for my intemperate remarks.

* I still think there are people that would like to see me croak - but I hear there's wonderful (free) treatment for paranoia. :smile:

J.

 

I've an excuse for my lack of clarity. First I blame it on the alcohol, if that does not work then I blame in on the creole patios pidgin thing. Universal health care is the best thing since the wheel was invented, or is that since slice bread.

 

Depends on your point of view. They made GOBS of MONEY for a LOT OF YEARS, and no one's going to jail. If it's over, the people in charge will just laugh all the way to the bank...then find a new scam.

 

The government also controls interest rates on student loans and offers the benefits of forbearance, deferment, income-based repayment programs, and not requiring credit checks. If one doesn't foresee needing any of these things or simply has an aversion to government loans and grants, then that person can always get a private student loan.

My understanding is that the public service loan forgiveness program is not just to get people to work in lower-paying positions at non-profit organizations, but it is also meant to get people to work in lower-paying occupations. For example, some states have a loan repayment program for mental health professionals due to shortages, especially in rural areas and the inner city. These programs not only get people to consider working with less affluent clientele, but it also gets people to consider entering occupations that require an expensive education while not paying enough to justify the debt.

 

Well, Steve, the US did have Martin Shkreli - And you're welcome to him, by the way. :shock:

J.

 

Who was Martin Shkreli?

 

He was front-page news last year, Ted. "Most hated man in America." From the Wiki: " In September 2015, Shkreli received widespread criticism when (his company) Turing obtained the manufacturing license for the antiparasitic drug Daraprim and raised its price by 5,556 percent (from US$13.5 to US$750 per tablet), leading him to be referred to by media as the "most hated man in America".

Here's the Wiki. https://en.wikipedia.org/wiki/Martin_Shkreli

J.