American colleges and universities have a growing credibility problem. The recent college admissions scandal has only reinforced long-standing suspicions that the admissions process is rigged.
Meanwhile, the schools churn out more and more graduates burdened by massive student loan debt who are all too often unprepared for success in the job market. The Center for College Affordability and Productivity reports that nearly half of all working college graduates are in jobs that don’t require a college degree.
Although students, taxpayers, and parents are rightfully questioning whether college is worth the ever-rising tuition, colleges for the most part have made no moves to demonstrate a commitment to delivering value for money.
At the heart of the problem is the federal government’s near-monopoly on student loans. Reduce reliance on federal loans and make schools have some skin in the game, and colleges will become more accountable. Paying for school will become more manageable as well.
This idea is not necessarily new, but its practical application is. More than 60 years ago, economist Milton Friedman argued that having lenders co-sign a student’s debt would ensure both mutual benefit and risk between student and the lender.
Moreover, it offers unparalleled transparency in terms what the student can expect in return. Purdue, for example, would tell a student entering that program what they would expect the student’s starting salary to be upon graduating with a certain major.
Americans deserve bold reforms to fundamentally change how we think about paying for college.
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