Funding Failure

One of the topics that's been kicking around the GOP Presidential race is that of student loans.  At least one candidate, Ron Paul, says he wants to phase them out altogether.

I wouldn't be in favor of that, but I really do think that the entire topic needs to be revisited, as it's helping to fund failure, and has a weird impact on our economy.  This is the reason why.

Generally, student loans are a government backed system in which private young individuals receive funding for university or college irrespective of the needs of the economy, or the wisdom of their choice.  I'm not suggesting, of course, that we should override the choices of individuals who make study choices that are not likely to advance our collective economic well-being, but I do feel that it's a bad economic choice to fund them.

Students of the history of student loans often point out that they've been a boost to the American economy, which is somewhat true, but which really confuses the loans with the GI Bill, which was an outright grant.  At any rate, what they fail to note is that the early post World War Two American economy was such that that the student population (largely male) was unlikely to be study something that wasn't directly useable in the work sphere, and that having a college degree in the 1945 to 1975 time frame was rare enough that nearly any college degree could translate into business utility.  Neither of those factors is true today.  Indeed, at this point in time college degrees have become so common that a lot of them have no economic value to their holders at all.

This is not to say that pursing a college degree is worthless. That would hardly be true.  But if the government is to back the study of something, it ought to be something useful to the nation as a whole.  Not something that's likely to have no use to the nation, and which moreover is likely to have no real value to the holder in later economic terms.

As an example of this, which I've already noted here, one of the protestors at the Wall Street occupation was reported to have a $90,000 student loan for the study of art.  Why would the nation help fund this.  If she wants to study art, the more power to her, I just don't want to help.  In economic terms, this isn't going to help the nation at all, and frankly she'll be really lucky if she ever fines a job.  By funding her, we've made ourselves poorer and, chances are, her too.

What I'd propose to do is to restrict funding to areas where we really feel we need to boost the nation's educated populace.  If we're weak in the sciences or engineering, that's what I'd fund.  Other areas where we need new workers, who need an education to obtain it, would likewise be eligible for loans.  I wouldn't bother funding art students, or literature students. That doesn't mean their studies are unimportant culturally, or personally, but rather if they are important, it's in a manner that cannot be economically judged, and therefore people shouldn't be taxed to help fund it.  Law is the same way.  The nation has a vast oversupply of lawyers and I can't see any good reason to give a person a loan to study that.

I don't think that this would mean these other fields would dry up by any means.  But it probably would mean that a lot of people who don't qualify for private scholarships and who don't otherwise have the means of obtaining such a degree would do something else. Frankly, however, that would be a good thing, as by funding the non economic, we're fueling the hopes of a lot of people who aren't going to be able to find employment later.

And, no, I didn't have any student loans, thanks to the National Guard.