Without college we will not succeed. Does college guarantee success, or is success up to you? The Declaration of Independence clearly states, “Life, Liberty and the pursuit of Happiness”, no guarantee!
We have all seen the headlines exposing the scam by wealthy people to get their children into big name colleges. The FBI investigation is called “Operation Varsity Blues”. It appears that these helicopter parents faked their children’s athletic ability, and hired coaches to assist and correct admission exams and bribery. This parental effort was not about the child’s education but was all about attending a prestigious college and networking with other elite young adults. Do you care about what these people did?
Do you think that each individual should accept more responsibility for their college education? Is college a Constitutional right? Should all college be free? What about the professors at today’s colleges? You know the saying, those that can, do, and those that can’t, teach. We protect professors with a job for life known as tenure. It is estimated that a college ties up between $10 and $12 million to support a single tenured professor for a 35-year career.
College is becoming more expensive each year. Back in the 60’s and 70’s college admission departments were small with only a few people. Today admissions departments are very large. Why is that? The colleges want your child to get every federal dollar they can because that money goes to the college. In 2010, President Obama signed legislation ending federal subsidies to private banks that had been giving student loans, which means that the Federal Government is now the lender of choice for most students. Colleges know that the Federal Government will guarantee money so the college can increase tuition each year.
In the late 1940’s the average cost to Yale was $450.00 per year, and that equates to $8,071.00 in 2018. Tuition for 2018 to Yale was $53,430.00. What has caused this increase? Could it be guaranteed Federal Government money, which I believe has caused a 6% average yearly increase for college tuition since the mid 70’s? Students graduate with massive debt.
Do you believe that there should be less Federal Government involvement in education? If the government is removed how will a student get funding for education after high school? I grew up with the belief that if I earn it and pay for it, I will appreciate it more. Was that true for you?
Ownership of a house or a car is not a given, if you qualify for a loan you will pay for it. Let’s apply the same principle using the 5Cs & P to student loans: Character, Capacity, Capital, Collateral, Conditions and Purpose.
CHARACTER: Does the student loan applicant have good character — good class behavior, good attendance and helpful to other students, community, family and friends?
CAPACITY & CONDITIONS: What is the capacity to repay the loan? What is the profession, and what is the employment expectation after graduation? Where does the graduate plan to live after graduation? Does that profession and job exist where the student plans to live? The graduate’s employment prospects determine interest rates. If there is low employment opportunity after graduation the interest rates increase. If there is ample employment opportunity the interest rates decrease.
CAPITAL & COLLATERAL: What is the student’s net worth? (NOTE: Certainly Mom and Dad will co-sign but the student is the true receiver of the loan.) Student capital is SAT and ACT scores, GPA in school, extracurricular activity in school and the community. After a year in college the activities in college and GPA of the college transcript would be presented as collateral. This will also affect the interest rate.
PURPOSE: What is the purpose of the loan? Is the purpose a sound and principled purpose? (NOTE: This is a reality check.) Many graduates have useless degrees. I know many who went to school to be a psychologist, which sounds glamorous but offered little employment opportunity. They had to go back to school to get an education for something that offered employment. Students who faced reality prior to entering college might have avoided wasted time and borrowing so much money.
Why consider the 5Cs & P? The student is forced to look at things through a reality lens. Remember that students are simply told that college is the answer and guarantees success, no matter the career chosen. Forcing the student to view their college choice through the 5Cs & P will cause the student and the parents to review the student’s career choice. This is a performance based loan; the borrower (student) is compelled to do well in school because doing well and choosing an employable career affects the interest rates on the loan.
My problem with government involvement as it is today is that it is just guaranteed money for the college. Students should not have to pay interest or make payments while in school. (NOTE: 2018 the current student loan debt is $1.5 trillion.) How will they pay back the debt? Removing the government from the process will stop the flow of guaranteed money to a college. Students will shop for the best deal.
QUOTE: A college degree guarantees nothing. Successful schooling beyond high school demonstrates to an employer initiative and drive. Additional education demonstrates to an employer that you are trainable and the assumption is that you can read and comprehend. BY: THE AUTHOR