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Notes -
To me the answer is the way we structured the payment for college more than anything. There were two things that set student loans up to be a giant mess. First, because the government guarantees the loans, everyone gets one. There’s no reason not to admit anyone who applies because they can always pay the bills. The second was that students cannot discharge tge loans in bankruptcy. Which now removes any concern that the student needs any sort of real job afterwards, so the quality of the program doesn’t matter. Add this up, and essentially the school doesn’t lose money if they don’t demand students learn anything. In fact, since more students enter behind where they should be, it’s actually a negative to expect too much. If the students are washing out, you lose money.
Well, let me add a third — administrators don’t have equity in the school. Right now, schools are eating their seed corn (turning out shitty products but coasting on reputation). Since people still get jobs out of college people are still willing to go to college. But if that stops, then your second point no longer applies.
And hence my third point—management isn’t aligned with the long term incentive of the college.
This is starting to happen on the student side. I see more and more kids choosing other paths because they see the costs, watch parents and older siblings struggle to pay back the loans, and want nothing to do with it.
I think once the firehose of graduates slows, businesses will catch on.
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