Yesterday’s WSJ – Parents are Drowning in College-Loan Debt:
Millions of U.S. parents have taken out loans from the government to help their children pay for college. Now a crushing bill is coming due. Hundreds of thousands have tumbled into delinquency and default. In the process, many have delayed retirement, put off health expenses and lost portions of Social Security checks and tax refunds to their lender, the federal government…“This credit is being extended on terms that specifically, willfully ignore their ability to repay,” says Toby Merrill of Harvard Law School’s Legal Services Center. “You can’t avoid that we’re targeting high-cost, high-dollar-amount loans to people who we know can’t afford to repay them.”
We already knew, of course, that many former students are suffering under the burden of their student loans for years and decades, and that the problem is so common and so severe that it is impacting major purchases of things like houses and cars, and probably also marriages and business formations. The article indicates that in many cases the exploding costs of higher education are devastating their parents as well.
And a few days ago:
The California State Auditor has delivered a damning assessment of the management practices at the single largest university system in the United States. The Chronicle of Higher Education reports:
The California State University system has increased its hiring of managers at a steeper rate than its hiring of other employees over the past 10 years, according to a new state audit.
And in a report on the audit released on Thursday, the state auditor, Elaine M. Howle, wrote that the system could not sufficiently explain why it needed all the new managers, including deans, head coaches, and vice presidents, among other positions. […]
The audit also found that the system’s 23 campuses did not have policies for periodically comparing their spending levels or reviewing their budget limits.
In other words, administrators have been hiring more administrators for make-work positions and giving each other raises without sufficient accountability in a self-perpetuating cycle of bureaucratic decay that is sadly endemic to academia at large.
For many people, college is one of the largest investments they will ever make. Yet kids and their parents are encouraged to sign up for long-term indebtedness without serious analysis of risks, and alternatives. The payoff, of course, goes to the higher-education complex and especially to the growing number of college administrators. As the WSJ article notes:
The financing fueled a surge in college enrollment. Between 2005 and 2010, enrollment grew 20%, the biggest increase since the 1970s.
And more enrollment means more money, debt-fueled or otherwise, coming in the door…and hence more and better-paid administrators. Regardless of whether all the new students actually come out ahead or not, regardless of whether anyone actually learns anything or not. And at least in the California system, it appears that the senior executives cannot be bothered to apply ordinary and prudent methods of budgeting and financial analysis in managing the vast sums of money that have been entrusted to them.
The Lexuses and McMansions of the rapidly-growing class of college administrators are paid for with a great deal of human suffering on the part of students and their parents…not to mention taxpayers in general.