Hans Bader, senior attorney and counsel for special projects with the Competitive Enterprise Institute, examines the potential for a student loan debt crisis that could be more severe than the burst of the housing bubble.
In a post featured on OpenMarket.org, Hans explains the perverse incentives created by higher education subsidies:
Subsidies for colleges divert some young people away from vocational training that would lead to more useful, better-paying jobs. Joel Kotkin describes the rising demand (and pay) for trained manufacturing workers who need vocational training instead. While spurning vocational training, states spend billions on lousy colleges that graduate few students -- like Chicago State, "which has just a 12.8 percent six-year graduation rate." "Our colleges and universities are full to the brim with students who do not really belong there, who are unprepared for college and uninterested in breaking a mental sweat." "Nearly half of the nation's undergraduates show almost no gains in learning in their first two years of college, in large part because colleges don't make academics a priority," according to experts like NYU's Richard Arum. "36% showed little" gain after four years. Students "spent 50% less time studying compared with students a few decades ago."