In other words, the student (patient) and the university (doctor/hospital/pharmacy) agree to do business, and the government (insurance company) pays regardless of the price.
That obviously creates major price distortions. Expect college to get a lot more expensive before it gets cheaper.
But without government intervention, why would this suddenly also work for majors which are not economical (but relevant for society) or for students which have a less good probability of success?
My fear is that an exclusively private program could in the end kill those majors and/or keep a lot of people from studying that are still able to do so today.
So incoming freshmen might see options like this:
State school, engineering 5% interest
State school, lib arts 8% interest
Private school, engineering 7%
Private school, lib arts 12%
This would also be a huge signal in terms of assessing the value of a degree from a school. I'm not saying that those with higher interest rates are less desirable, but in terms of an investment, they are a riskier. The interest rates would be mostly determined by historical loan performance of those that went to those schools and majored in those fields.
More importantly, it would demand the highest interest rates from the group of students that will presumably have the most trouble paying them. You say yourself that the interest rates would probably be higher than they are today. That sounds to me as if it would make crippling student debt more likely, not less.
Is that necessarily a bad thing? I think it'd be a great idea for the market to send you signals that paying $50k for an art history degree is probably a terrible idea.
That's a hard question. It gets into the much larger matter of whether the market is a good arbiter of what has social and cultural value, or whether the government needs to step in and subsidise certain things because it really does know better than the wisdom of the masses, who will always prefer Cheetos and ballgames to polenta and Shakespeare.
But, as pc2g4d notes, the right way to deal with that is for the government to directly stimulate demand for art history. Not to give cheap loans for students to study art history and then live the rest of their lives in debt.
Personally, I don't buy that the world needs more music and film majors. We seem to have far more music and film than we need already. I can understand why economically irrational young people might think it's fun to spend 4 years watching films, but I don't think we should be subsidizing that choice.
I would certainly concur with that. I think we're in agreement.
It does — but in the right place. Pay a lot to librarians, professors and historians, and then they'll be able to pay commercial rates for their education and banks will offer better loan terms.
That's the problem you should be fixing. Not giving out education for free, but make education that is relevant for society be economical.
> or for students which have a less good probability of success?
Well, to put it frankly, why would you want to finance their education in the first place? Regardless of who's paying, a bank or a government, it just doesn't make a lot of sense.
No, actually the obvious solution - at least in most of the western world - is more public Universities.
Now, since that goes against the american way of thinking you must come up with other solutions that involve private enterprises, but it's surely not the obvious solution.
That's always been my beef with the "college for everyone" movements. That instantly de-values jobs that don't require a college education.
But anyway, your statement may be true but how do you determine who "needs" to go to college and who doesn't?
If I (as a European) remember correctly, one of the US core values is the pursuit of happiness. That would imply to me that everyone should at least be given the chance to go to college - whether or not they decide to go (and graduate) is a different question.
If I (as a European) remember correctly, one of the US core values is the pursuit of happiness. That would imply to me that everyone should at least be given the chance to go to college - whether or not they decide to go (and graduate) is a different question.
I don't disagree with this, necessarily. I disagree with rhetoric that implies if you don't go to college, you are a second class citizen.
Anecdotally, I think these tides may be slowly changing. I feel like a lot of people are beginning to see the value in craft (bakers, mechanics, carpenters, beer brewers, etc.)
I have no idea. But a few years ago, you could have said the same about truck or taxi drivers - and now it seems feasible that those jobs will be automated away in ten years.
For electricians, you could imagine that IoT/home automation tech will change a lot: Home electrics could become more complex and more locked-down, requiring additional qualifications. In the worst case, independent electricians could find themselves in a similar situation that independent car repair shops are today.
Or a company like TaskRabbit could employ their own electricians/plumbers/carpenters/etc... (at worse conditions) and decide to roll up the market.
Those are wild guesses. But my point is that jobs may change quickly in the future. having a broad education and additional qualifications gives you a better chance to deal with "disruption" in your area.
I disagree with rhetoric that implies if you don't go to college, you are a second class citizen.
That's not what I wanted to tell. But I don't think we are in a position to decide that. And I don't think it's correct to simply assume that college education plays no role and to conclude from that assumption that it's OK if certain people never get the choice to go to college.
A computer can do a lot of the pre-cutting.
I would see this going in the direction of some auto mechanics--that you have to be certified by a particular company in order to work on their equipment. But, yes, as you point out, independent electricians, as a vocation, aren't going anywhere soon. There are too many homes (particularly in the east) with very old wiring.
An analogy in education would be, government funds a certain jumber of public, free or low-cost universities, but you can also pay more to go to a better, private school (without the government paying/guaranteeing for it).
Jokes aside, what we really should do is get government out of the business of paying for private education. In theory, joint public and private efforts sound good. In practice, they have all the flaws of both the private and public sectors and end up being inefficient, ineffective, and expensive. (cf. housing, military contractors, etc.)
Depends in which practice. In Europe (e.g. Slovenia), public universities are reasonably good, cheap (free), and serve the majority of the population. In the UK, I think council housing was a great idea - until they started selling it off (i.e. privatizing it).
Public universities are simply public. There's no problem with them and they can in fact be both good and cheap.
> In the UK, I think council housing was a great idea - until they started selling it off (i.e. privatizing it).
Exactly. If the government wants to operate public housing, that's fine. The problem is when the government starts giving private enterprises control of the housing and the opportunity to make profits while government still foots the bill.
People need education. They don't need an expensive social club that happens to teach.
A need would be something more like a community college and less like Harvard. Or maybe if you are going into research, community college + graduate school at university.
And that's a very generous definition of need.
(Personal experience tells me that champagne improves my quality of life, though I don't have a further education experience to compare it to.)
It also happens to any good or service we decide to fund publicly: the civil servants' unions which provide it insure that their members capture as much money as they can.
Providing it publicly doesn't at all mean that it will be provided cheaply.