Congresswoman lets the air out of the inflated student loan industry, says there’s no reason for it

posted at 9:01 pm on April 14, 2012 by Tina Korbe

In a radio interview today, North Carolina Republican Rep. Virginia Foxx recounted the way she worked her way through college and said “there’s no reason” for students to graduate with $80,000 or $200,000 in student-loan debt.

ThinkProgress flagged the interview as though it somehow reflected poorly on Foxx, but I really fail to see how she’s not offering a hopeful message. She’s essentially just saying, “Hey kids, you don’t have to take on the crushing burden of student-loan debt! You have options.” Who doesn’t want to hear that?

True, college tuition is higher than ever — but that’s largely because the government pumps so much money into higher education, through loans and other programs. Hate to break it to future college students, but college tuition prices are likely to continue to go up. Through Obamacare, the administration completely took over the student loan industry. That’s a recipe for the creation of the same kind of bubble that eventually burst into the housing crisis.

Admittedly, it takes a delayed-gratification mindset to work through school. Alternatively, it might take humility to choose a school you can afford over the dream school you can’t afford. It’ll be worth it, though, when you graduate debt-free or with a debt you’ll actually be able to repay.

Occasionally, you’ll hear a person talk about student-loan debt as though the borrower had no choice but to take out the loan. Maybe life didn’t turn out the way the borrower expected. Maybe he entered the workforce when the economy was poor and doesn’t have a job with the kind of salary he expected. Those circumstances cause the borrower to look back on the decision he made to take out the loan and to try to avoid responsibility for it. Just because he thought he’d be able to pay it off when he took it out and now finds it’s not as easy as he thought, though, doesn’t mean he still didn’t decide to take out the loan. When you take out a loan, you are responsible to pay it back. That is the nature of a loan.

Nothing is more empowering in life than the realization that you can take responsibility for your own decisions — and change your decisions in the future if you don’t like the consequences of the decisions you’ve made up to this point! Why don’t liberals want individuals to experience that kind of liberation and empowerment?


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Tell it to Occupy Wall Street protesters. They want their student loans forgiven, and free tuition for all. And if you disagree that makes you a 1%.

Dr Evil on April 14, 2012 at 10:02 PM

This reminds me – I was in my local community Saturday morning
when I heard loud chanting, if you will.

Turning to look towards the commotion, I saw approximately
25 persons with “99%” signs marching down the street.

The kicker!!!!! Not one of them was a college student! They
were all middle aged and older. Looked like a bunch of whack
jobs!!!

Amjean on April 15, 2012 at 7:24 AM

Have the complaining college creeps ever heard of “work ethic”?

Try to get some.

I guarantee it will do more for improving your life than your
“top tiered” college education you hope is paid for by the taxpayers.

Amjean on April 15, 2012 at 7:34 AM

Amjean on April 15, 2012 at 7:24 AM

Obama has a gift for bringing out the worst in people (and the worst kind as well).

Roy Rogers on April 15, 2012 at 7:56 AM

While no one is happy with the hi jacking of higher education by the liberal speak and no one is happy with the cost of college, when you hear people put down a college education or a liberal arts degree…ahem, you know Mathematics and Physics and Chemistry are liberal arts degrees, you have to wonder what their agenda is.

You cannot be a doctor or lawyer without these degrees, and I don’t want my doctor to get an exception, I want him or her smarter than me. I am afraid you should also, not be a teacher without a solid liberal arts degree.

It is fashionable, so you hear talk radio hosts, who, went to Ivy quality schools, like Dartmouth, and to premium law schools, joining in the rant. But don’t confuse your dissatisfaction with the way things seem to be, with the necessity of four years of serious subject learning after high school.

It would be better for people to just say what they mean, than dis the idea of liberal arts education.

I will start. I think you should have at least one SAT score of 600 to qualify for a Pell grant for a liberal arts program. The government should set a limit on how many Pell grants it gives out, and give them to the neediest students with the highest chance of success in college. When that runs out, no more.

Pell grants should be for traditional college or community college.
Some other programs should be for business and trade schools. Right now some of the best training programs are private profit making organizations and this drives the liberals insane. There are also some groups out there fleecing the system enrolling students who are not qualified, to get the loans and grants and fees, then they dump them out when they cannot learn.

An approach left and right ought to be able to agree on for Colleges, is a re look at their non profit status. It would appear to parents that they pay more so someone else can pay less. In fact admissions offices across America had certain goals of how many full paying students it takes to run their school. Hey, this is not right to charge one parent more for a non profit educational instutution, so another can pay less, and not give you a receipt as a donation for your taxes.

There should be a standard acceptable percentage of operating costs that a parent is charged at a non profit college, and no more. The parents do not have a right to take home new buildings, amenities, or sports equipment at the end of four years, but pay for things that go into the endowed value of the college. That is a donation. Give me a tax receipt I want to deduct it.

Parents and conservatives have to get onto the boards of Trustees and not cede that ground to the organizations that have such influence over the schools, many of the Accrediting organizations support all of the nonsense, the PC, the social justice in the curriculum, un Fairness, diversity as a code word only for approved kinds of diversity, never conservative diversity, because they have to show that they do these things so parents will know they are Accredited. None of this has anything to do with scholarly academics. They make them waste money hiring diversity officers, who are not diverse, but all the same, lawyers at about $200K a pop, who lord it over the human resources department and don’t let them hire anyone qualified.

I am just saying, we need liberal arts, but not the practices that are spoiling it for the best students and the best people. I know the best is a value judgement, but that is what you want for Excellence. Liberal arts programs are not supposed to be finishing schools for air heads or a gateway to professional sports. I see a lot of the exceptions began with trying to admit dunces to impress the nba, nfl, etc. State university systems across the u.s. are really guilty of that, and a lot of people who pooh pooh the liberal arts college here, are all fine with Athletes in liberal arts programs.

nuf said. Express yourself.

Fleuries on April 15, 2012 at 8:36 AM

Here is an example of how the student loans soar in value. My daughter received a loan with just a signature and got the tuition payment a few weeks later. Two weeks after that, a check for $1,700 arrived at her home. She called the school and asked what the check was for. They told her it was for a computer or whatever she thought would help in school (beer or a spring break trip, perhaps?).

Sending kids in school “free” money is a great way to inflate the money owed by the students. No telling how many checks would have arrived had we not told her to pay off her loan immediately and find another way to fund her master’s degree.

bizman on April 15, 2012 at 9:01 AM

Maybe if University’s stopped spending $40 million on a Student Union, $7 million on Presidential Mansions, and stopped paying President’s and Vice President’s over $240,000 and over $175,000 respectively then costs of going to college would not be so high.

I vehemently disagree with the author here when the author acts like we have a choice. Unfortunately, we are sometimes choosing a college in state instead of out of state to cut costs on our tuition bill. This leads to situations where we have only one college we can go to to obtain the exact degree we seek.

If only the author knew about EMU. I mean EMU never seriously had to spend over $100,000 on eliminating the telephone registration system to build a campus online pipeline system with a new email system. EMU and other colleges could cut costs by using free of charge GMail accounts for email.

Varchild on April 15, 2012 at 9:09 AM

I’m sick of these whiny little snakes . . . it took me 10 years of night school to complete my undergraduate degree and much sacrifice by my wife and family before I completed my post graduate studies. The parasitic little pukes make me sick.

rplat on April 15, 2012 at 9:13 AM

The Left always gets upset whenever anybody suggests that hard work is a solution…

cicerone on April 15, 2012 at 9:18 AM

@rplat So you are OK if 20 years of wasteful luxury spending makes future students take 20 years of their lives trying to pay for bottles of Merlot tucked away in Presidential palaces?

I am all for personal responsibility but don’t show me a university president like former Samuel Kirckpatruck with his slush fund money and tell me I have a choice somehow.
There is no choice beyond degree or no degree. And lately choosing No Degree is becoming more frequent as so many students turn a blind eye with all the wasteful luxury spending.

Student Governments are 10% liberalized and useless since they think the tuition goes up because oof a lack of taxpayer dollars and not because of wasteful spending.

Show me the reductions in wasteful spending and I am on your side Replay. But, I can show you the hundreds of thousands spent annually on Conference travels for professors as well as how secretive the athletics department at EMU is regarding their budget.

Varchild on April 15, 2012 at 9:25 AM

100% liberalized not 10%….made a
typo above.

Varchild on April 15, 2012 at 9:28 AM

Fleuries on April 15, 2012 at 8:36 AM

Since when have Physics, Chemistry, and Mathematics been “liberal arts”, exactly?
Even so, I have a Ph.D. in Physics, and would really have been much better off with a masters in an engineering field. If you aren’t one of the lucky few who stumble into a professorship in the pure sciences, you end up scrounging around in the private sector for some way to apply your pure science expertise.

Count to 10 on April 15, 2012 at 9:30 AM

True, college tuition is higher than ever — but that’s largely because the government pumps so much money into higher education, through loans and other programs.

Everything is always the governments fault isn’t? Then again it’s always the government’s fault when the democrats are in power. Once the republicans take power, then its back to the lazy, uneducated Americans fault correct? Jeez

While one can argue that subsidizing student loans has had its toll on tuition cost, ever wondered the effect foreign students have had to it as well? And what do you propose we do to bring the prices down? Lower taxes for the rich and allow students to shop across state lines?

Uppereastside on April 15, 2012 at 9:31 AM

I’m 67 years old and the opportunity to work my way through college as was offer to me when I ran out of money in 1965, but that was not possible for a male; the draft was and did stare me in the face; I served instead of running to Canada as some did. Quite frankly, I have no dang sympathy for those buried in student debt. My sons have some student loan debt, but nowhere close to the hundreds of thousands I hear about.

amr on April 15, 2012 at 9:33 AM

Fleuries on April 15, 2012 at 8:36 AM

I have to say i agree with 99% of what you said. Nice post.

Uppereastside on April 15, 2012 at 9:37 AM

Fleuries on April 15, 2012 at 8:36 AM

I have to say i agree with 99% of what you said. Nice post.

Uppereastside on April 15, 2012 at 9:37 AM

@amr you are why University administrations get a way with hiding their budget figures.
Do a simple search for Eastern Michigan University and there are still examples where EMU is distorting the facts with their budget.

Nothing ever gets solved if good people keep choosing to do nothing.

Varchild on April 15, 2012 at 9:41 AM

@Fleuries

Amen. Your issues you bring up are issues present at my Alma matter.

Now parents and students together can fight this but unfortunately no one does.

Varchild on April 15, 2012 at 9:46 AM

The most depressing aspect of this is that the students who do get through, whether by incurring massive debt or working their tails off, are too often no smarter than when they started. Not only is college costing a fortune, it’s failing miserably.

creeper on April 15, 2012 at 10:05 AM

Everything is always the governments fault isn’t? Then again it’s always the government’s fault when the democrats are in power. Once the republicans take power, then its back to the lazy, uneducated Americans fault correct? Jeez

While one can argue that subsidizing student loans has had its toll on tuition cost, ever wondered the effect foreign students have had to it as well? And what do you propose we do to bring the prices down? Lower taxes for the rich and allow students to shop across state lines?

Uppereastside on April 15, 2012 at 9:31 AM

1. You’re first paragraph is a classic distortion and logical fallacy.

2. Where in the Constitution does the federal government find the power to be involved in education?

CW on April 15, 2012 at 10:13 AM

Varchild on April 15, 2012

You act as though students are forced to go to these schools.

CW on April 15, 2012 at 10:16 AM

If the govt got smart and cut half the funding for the schools and half the funding for the loans and grants, prices would come down. It is often forgotten that these programs prop up the liberal agenda and that for the faculty, create a utopia on earth.

aniptofar on April 15, 2012 at 12:24 PM

I have a bachelor’s in Mathematics and Statistics and my only objection to this “work through school” thing is that at least in the hard sciences and engieneering you are playing with fire to try put in the hours at work it takes to pay it all of while in school at the low wage a college student gets. If I was advising a kid I would tell them if they aren’t getting significant help from their parents

1) Stay away from private schools. You already pay taxes and will pay taxes to attend a public school. The huge debt isn’t worth it to eventual employeers that you graduated from private school. Many occupy Wall Streeters on top of majoring in women’s studies know this problem.

2) Don’t sacrifice your education or jeoperdize your graduation to please some moral or ethical standard others have about “paying your own” way. The drop-outs are filled with intelligent people who could have had a degree but were obsessed with going loan free. I would put Sean Hannity at the top of the list of people who could have made it through college but were pig-headed about how to pay for it. It isn’t a sin to have a reasonable student loan debt you can pay off over time at your higher college graduate wage. The main thing is make SURE you graduate and don’t let money be the problem.

Conan on April 15, 2012 at 12:26 PM

Hmmmm…how do we go about making real slaves of the American people, Timmy? Healthcare…student loans…Yes!

jan3 on April 15, 2012 at 12:34 PM

We just need to make everyone buy tuition insurance since everyone will eventually have contact with someone who went to college, or graduated from college, or lives near a college, or supports a college football team….

xblade on April 15, 2012 at 2:45 PM

Everything is always the governments fault isn’t? Then again it’s always the government’s fault when the democrats are in power. Once the republicans take power, then its back to the lazy, uneducated Americans fault correct? Jeez

While one can argue that subsidizing student loans has had its toll on tuition cost, ever wondered the effect foreign students have had to it as well? And what do you propose we do to bring the prices down? Lower taxes for the rich and allow students to shop across state lines?

Uppereastside on April 15, 2012 at 9:31 AM

1. You’re first paragraph is a classic distortion and logical fallacy.

2. Where in the Constitution does the federal government find the power to be involved in education?

CW on April 15, 2012 at 10:13 AM

Of course, classical liberal education is like garlic to a vampire for leftists, since it promotes critical thinking and skeptical engagement with the state. Gramscites have succeeded in denuding it to agitprop spewing “X Studies” hate-America idiocy, as seen by the popularity of Zinn’s A PEOPLE’S HISTORY OF THE UNITED STATES. (correctly described as “America with the good parts left out”)

ebrown2 on April 15, 2012 at 2:48 PM

I agree with Rep. Foxx. I went to a state university. My parents paid for my first semester’s tuition and books, and I lived at home. Following my freshman year, my dad was transferred to another city. I got a full-time job working the 2nd shift at a non-union manufacturing plant, and went to school in the daytime. I didn’t get a loan. I didn’t get any more help from anyone. I got drafted and spent 2 years in the Army because I didn’t take a full load for one semester. It took me 8 years to graduate, but I did… with no debt.

You hear folks think that one has to go to a high-dollar eastern university to make the good money. Maybe, but I’ve done OK. I’ve exceeded the Social Security wage limit for years, and according to Prez Obama, my wife and I are the ones who are not doing our fair share. Not fair to whom? I’ve worked my butt off and worked long hours to get where we are. We paid over $75k in federal income taxes last year at an overall tax rate a lot higher than the Obama’s reported rate.

President Obama thinks that I’m not being fair. It has to be because he thinks that all income belongs to the government. If you doubt me, you really need to sit down and listen to what he says. Every once in a while, like the Joe-the-Plummer moment, he really says what he believes. Without a doubt, he thinks that he and his ilk are entitled to determine how much of the government’s income you are entitled to keep.

WestTexasBirdDog on April 15, 2012 at 3:42 PM

Lots of people here haven’t been, or went when it cost $500, a horse, and a medicine blanket to go to state college. Ohio State is well over $9000 a year not counting any extra expenses. The loan bubble and government interference keeps driving tuition up despite hundreds of millions of dollars donated every year to the university.

1. Get government out of it and allow economic reality to act.

2. Cut back on extravagant administrative creep and “Greek columns” everywhere.

3. Roll many useless majors back into their parent subject. You will not get a job in linguistics, medieval studies, religious studies, etc.

4. Stop the propaganda that your useless major will get you a job… if it is not inherently apparent how you will find work with this major THEN YOU WONT GET A JOB.

Oh, and for all those saying just work a job, do you know it is nearly impossible to find a job that pays more than $8/hr? 1 or 2 books is weeks of work.

This is the government’s fault and not the students, who are gullible and easily swayed by a respected professor, dean, or admin staffer who will blow sunshine and rainbows up their but.

antisense on April 15, 2012 at 4:07 PM

*butt bollocks, what have you.

Oh, and as an added bonus? Any loans you take will be nearly doubled by the time you graduate. Didn’t know that? If you take out 10k a year it will be 16k by the time you graduate, at a 5% interest rate. Oh yes.

The ROI is going down hard but education as a whole pre-k to PhD is such an institution that it cannot be questioned. Otherwise you hate teachers and so on.

I should not complain though. Despite no assistance from parental units, I snuck into the banking world and managed to land some excellent positions. It pains me to hear some of my compatriots over at the university pine for a $9-$10/hr job after being like $50k in debt. Most of them had their parents pay for it though, which bothers me. Mine could have afforded to help me but decided to teach me a lesson. It was painful but effective.

My real theory is they want to pay them off when I am in my 40′s or 50′s so they can blackmail me in their old age.

antisense on April 15, 2012 at 4:15 PM

When the Junior Logician was born, the whole family started contributing to a college fund for him. As a result he has a good chunk of change set aside for his education (albeit a smaller chunk thanks to 4 years of a crappy market.

This year, we started looking at colleges and college costs. After weighing all of the options, he decided that if he stayed at home and went to the University of Utah (half an hour from here) he could get his Masters degree and still not incur any debt. It was more important to him get the higher degree than it was to go out of state and maybe go into debt.

LL

Lady Logician on April 15, 2012 at 8:09 PM

antisense on April 15, 2012 at 4:07 PM

Is that 9000 in-state or out of state? That was another deciding factor for the Junior Logician. In-state tuition at the “U” is about $6000. We also decided to get him a Kindle – more and more universities are going to electronic versions of their textbooks. E-textbooks are a quarter of the price (in most cases) of regular textbooks (and weigh a heckovalot less). The cost of the Kindle will be paid for in savings the first year.

There are ways (as we are finding out) of doing college cheaper. You just have to be willing to look for them.

LL

Lady Logician on April 15, 2012 at 8:16 PM

its called predatory lending. America: land of the debt slave, home of the bank.

bingsha on April 15, 2012 at 11:24 PM

I’m late to this discussion, as I was offline this weekend. One thing that I’d like to add is a a case study with which I am familiar. It may be unique, or it may be true elsewhere, and indicative of a larger trend.

I am familiar with the financial aid workings of a particular “elite” university. The financial aid package consists of:

1) Parent Contribution
2) Work-Study
3) Loan
4) Grant

The decision regarding parent contribution is “arbitrary, but don’t tell anyone”.

The Work-Study is somewhat consistent, but there are certainly some work-study jobs that are preferable to others.

The loans are determined in a manner that institutionalizes socialist “Social Justice”, and that I think is unfair. More on this in a moment.

The remaining amount (after parent contribution, work-study, and loan) is covered in a grant that does not have to be repaid. So, the smaller the loan amount, the greater the grant amount.

The student’s annual student loan amount is determined by the parents’ income level…

If the parents’ income is less than $40,000 then the loan amount is $0. In other words, that student will graduate with no student loan debt to repay.

If the parents’ income is greater than or equal to $40,000 but less than $55,000 then the loan amount is $1,000 per year. In other words, that student will graduate with $4,000 student loan debt to repay.

If the parents’ income is greater than or equal to $55,000 but less than $70,000 then the loan amount is $2,000 per year. In other words, that student will graduate with $8,000 student loan debt to repay.

If the parents’ income is greater than or equal to $70,000 but less than $85,000 then the loan amount is $3,000 per year. In other words, that student will graduate with $12,000 student loan debt to repay.

If the parents’ income is greater than or equal to $85,000 but less than $100,000 then the loan amount is $4,000 per year. In other words, that student will graduate with $16,000 student loan debt to repay.

If the parents’ income is greater than or equal to $100,000 then the loan amount is $5,000 per year. In other words, that student will graduate with $20,000 student loan debt to repay.

So, the greater the financial success of the parents, the greater the financial punishment to the student. One student will graduate with no debt to repay, while another student will graduate with $20,000 to repay, for no other reason than that their parents made more money (and also very likely paid much, much more in “parent contribution” than the parents of the first student, who graduated with no student loan debt.)

It’s “spread the wealth”. It’s “social justice”. The parents who make $100,000 are not only going to pay a lot more in “parent contribution” towards their child’s $50,000+ per year education, but also their student is going to graduate with $20,000 in student loan debt, while the parents who make less than $40,000 are going to pay very little in “parent contribution” towards their child’s $50,000+ per year education, and their student is going to graduate with ZERO in student loan debt.

Is that fair? Is that just? Why should one student graduate debt-free, while the other is burdened with $20,000 in debt to repay?

It is not a “level playing field” at all. The second family will receive much, much more in “grant” money from the university in their financial aid package. And the first family will pay much more in parent contribution and their child will graduate with $20K of debt to repay.

Again, it is not a “level playing field” at all. Some families and students are given preference not only in admissions but also in highly preferable financial aid packages and grants. In some scenarios, one could even make the case that it is a form of “reparations”, just by a different name.

ITguy on April 16, 2012 at 9:05 AM

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