Recently there has been almost nonstop media attention on Donald Trump’s indictments, and to a lesser degree, unanswered questions about what Joe Biden knew about Hunter Biden’s very lucrative business dealings and when he knew about them.
Lost in this media frenzy, has been attention on Biden’s unsuccessful efforts to date to launch his college student loan forgiveness initiative. This issue merits more dialogue and thoughtful deliberation especially since Biden has already proposed a new plan following the U.S Supreme Court ruling that his original proposal was unconstitutional.
To date, the debate on the cost, scope, and authority to approve any student loan forgiveness program fails to include a candid assessment of the underlying reasons for student loan debt. These reasons may be politically unpopular to acknowledge and even more unpopular (and difficult) to address. Here are suggestions for a better approach and better outcomes:
CHANGE THE CULTURE AT INSTITUTIONS OF HIGHER LEARNING. In a recent article in The Wall Street Journal, Holden Thorp, former chancellor at the University of North Carolina, Chapel Hill is quoted as saying “Offering everything to everyone all at once is unsustainable. Universities need to focus on what their true priorities are and what they were created to do.” I agree and suggest their true priorities should be conducting rigorous academic research and offering degree programs that result in their graduates mastering the knowledge and skills needed to secure gainful employment after graduation and be able to meet their legal and moral obligations to pay off their student loans in full.
LIMIT THE RATE OF TUITION INCREASES TO THE RATE OF INFLATION. In the same Wall Street Journal article referenced above, it was noted, “if the increased cost of attending college matched the U.S. inflation rate over the last 50 years, students would be paying anywhere from roughly $10,000 to $20,000 per year to attend public or private universities, respectively. Instead the nonprofit group College Board, reports the average annual price for attending a public college (tuition, fees, room & board, books/supplies) is currently between $22,690 for in-state students to $39,510 for out-of-state students — in 1971, it was just $1,410 a year. For students at private universities, the yearly cost has ballooned to $51,690 — in 1971, this was $2,930 per year.”
CUT UNNECESSARY SPENDING. The list of out-of-control spending examples is too long for a comprehensive recap in this commentary. Some especially egregious examples are:
One large public university spent $14.3 million to buy and renovate a monastery in Italy for a new study-abroad program. The monastery now has a landscaped garden, a faculty apartment and classrooms featuring painted frescoes. Another large public university spent $3.66 billion to upgrade its campus hoping to become recognized as one of the best universities in America. Despite that spending, in 2022 U.S. News ranked the school # 64 among public universities, a drop from their ranking 10 years before.
APPROVE BUDGETS USING SOUND MANAGEMENT AND ACCOUNTING PRINCIPLES. Peter F. Drucker said it best “Not – for – profit organizations need management more than business. Good intentions are no substitute for organization, leadership, accountability, performance, and results.” Historically that has not been a guiding principle widely embraced in academia. In The Wall Street Journal article, they concluded many colleges used a budgeting process where departments received the same amount of dollars received the previous year with an increase to cover inflation. Line-item budget amounts were seldom revised based on evaluating changing enrollment numbers or changing needs. As a result, one large public university recently projected 2022- 2023 expenses exceeding projected 2022-2023 revenue by $140 million. To address that projection the trustees approved a 5% increase in tuition and student fees even though that university is among the most expensive public universities in the country. Following that decision, one member of that university’s board of trustees said “I think the knee-jerk reaction was, OK, we’ve got to raise tuition. I think perhaps the knee-jerk reaction should have been, we need to get to work on the things we should’ve been doing for the last 10 years to address costs. If you’ve got a board that never asks about financials and just wants to talk about winning the next game or when the cocktail party is, they are not going to get a lot done.”
DRAW DOWN ON ENDOWMENT FUNDS. The average endowment at the top ten national universities with the largest endowments is approximately $28.4 billion. That is a billion with a B. Prudent drawdowns from these endowment funds are appropriate and only fair as many families across America are drawing down on their retirement accounts and savings accounts just to pay their bills which may include college tuition.
REJECT CONVENTIONAL WISDOM ABOUT A COLLEGE EDUCATION. A traditional four-year college education is not for everyone. Our society needs to provide greater support, respect and encouragement to those high school graduates who choose trade schools, community colleges, apprenticeships, military service or pursuing good jobs that do not require a four-year college degree.
DEPOLITICIZE THIS ISSUE. College student loan decisions must be based on good public policy, not on trying to secure votes in the next election cycle. A campaign election or re-election strategy designed to garner support from voters who owe student loan debt is pandering and it is wrong. It is based on the cynical but true observation that if you rob Peter to pay Paul, you can count on support from Paul.
David Reel is a public affairs/public relations consultant who serves as a trusted advisor on strategy, advocacy, and media matters who resides in Easton.