Why do colleges charge so much? Because government subsidized student loans allow them to.
Imagine if guaranteed loans and loan subsidies were gone. Imagine if students could get loans only the way businesses did: if they had a clear plan on how to make enough money with the loan to pay back the full loan.
First, fewer students would have access 200k loans. That means that colleges would either have to drastically lower prices, or just go out of business.
It would also mean that colleges would shift to a service oriented mindset, beneficial to students. They would focus on how well they taught students, instead of focusing on research with undergraduate education an afterthought.
It would also encourage students to consider other ways to get higher education. Teaching quality in many universities is so poor that many students are essentially independently studying anyway. When students realize that there are independent exams that carry more weight than college degrees, many will end up going that route. They will realize that passing an actuarial, financial sector, LEED certification, programming, or IT certification exam will be far more valuable in the marketplace than a college degree.
Massive student debt would be a thing of the past, since college tuition would not be that high. Student debt default, which taxpayers currently cover, would be much rarer. Students would only get loans when banks thought they could pay those loans back. Banks aren’t perfect at that, but they are better at it than naive 18 year olds who have not considered a single option other than college.
The nightmare of college debt, ludicrous tuitions, and indifferent educational quality would be replaced by low cost, student focused education.
Vice Chair, Libertarian Party
Author, Lies, Damned Lies, and College Admissions