There has been significant focus on legislation pertaining to limiting interest rates on higher education federal loans. Many citizens, pundits, and legislators are worried that there is a student loan bubble that will pop. The secret is that the bubble’s root cause is a sinister fact that is buried out of site, away from public scrutiny. At the root level, education is a political power tool. “Ye who controls the chalkboard, controls the world or at least the US”.
Asking the question, “What is the purpose of education?”, will garner answers as diverse as the alphabet. With that in mind, it only makes sense that educational issues continue to grow and accumulate to the point where the education market becomes visible to the individual consumer (higher education) resulting in an enormous financial bubble. It has been said that any system is perfectly designed for the results that it is achieving. Forrester (1989) stated that any attack on a single point within a system will be repulsed by the remainder of the system resulting in failure or worse yet unintended consequences that are declared a victory. Efforts focused on just the loan issue will simply fail or worse result in unintended consequences that ripple across society permeating a new wave of issues and problems.
Focusing for a moment on student loans, there are several issues are inherent in the discussion (1) employment for advanced degree graduates – this is just the leading edge of the issue because it has been the result of years of marketing wanderlust resulting in a very visible excess of MBA’s and other advanced degrees especially as the job market shrinks. (2) Even more troubling, is the number is the current bachelor degree graduates entering the labor market in need of jobs and unable to pay back student loans. (3) The federal government measures higher education completion rates based on a six year time frame from start to completion for a four year degree.
Completion rates have not changed significantly in decades. Almost half of all college students fail to complete, leaving an individual who lacks the education and more than likely has a significant student loan debt load to carry. Although there are several consistent reasons that student fail to complete higher education programs, financial ability to pay for college continues to be a top issue. Another top issue affecting completion rates is student readiness or preparation. A large number of today’s high school graduates find themselves in remedial classes during their first year or two of college, bolstering basic math and writing skills they lack leaving high school but which they will need for college resulting in an average 6 years to get a degree.
Future blogs on this subject will further explore current educational challenges by examining the problem of higher education completion rates and the impact and legacy of the 1964 ESEA on today’s society.
by John Reneski MBA TM, August 3, 2013
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