In a development that may be disconcerting to those pursuing degrees in less traditional fields, the Department of Education (ED) has declared its intention to recommence the collection of defaulted federal student loans, starting May 5.
This marks the end of a five-year hiatus in collections, which was initiated in March 2020 due to the COVID-19 pandemic. The Biden administration did not resume collections during its tenure. The current student debt in the United States stands at a staggering $1.6 trillion, as reported by the ED.
White House Press Secretary Karoline Leavitt has voiced concerns over the sustainability of the current situation, stating, Fewer than four out of ten borrowers are in repayment. This is unsustainable, unfair, and a huge liability for American taxpayers why should Americans who didnt go to college, or went to college and responsibly paid back their loans, pay for the student loans of other Americans?
The ED predicts that almost a quarter of the federal student loan portfolio could default in the coming months. Leavitt confirms that the government has the authority and intention to collect defaulted federal student loan debt by withholding money from borrowers, tax refunds, federal pensions, and even wages.
The New York Times, in its analysis of the situation, suggests that the reasons behind the high number of borrowers failing to repay their loans are complex. However, the paper later concedes that many people are unable to incorporate a significant monthly bill into their household budgets after such a prolonged pause in collections.
This situation raises questions about the financial acumen of those who take out loans and fail to repay them. It also highlights the need for colleges to select more conscientious individuals, given the financial responsibilities that come with higher education. The current scenario suggests that many institutions of higher learning are more interested in collecting tuition fees than in ensuring the financial stability of their students.
According to U.S. News & World Report, there are at least one hundred colleges with an acceptance rate of 96% or higher as of 2023. This contrasts sharply with institutions like Harvard University, which maintains a selective admissions rate of just 3.5% as of 2023-24.
This disparity can be attributed to the two types of universities that exist today: those that focus on issuing diplomas and those that produce "elites." Both types of institutions rely heavily on credentialism, with degrees often serving as consumer goods rather than indicators of education. This is evident in the fact that prestigious universities like Stanford and Harvard offer entire lecture series for free on Youtube, indicating that their primary purpose is accreditation rather than education.
The escalating need for credentials to prove competency is a result of the prohibition of direct assessments of merit and competency. This is particularly true for universities like Princeton and Columbia, which have adopted "test-optional" policies, allowing them to bypass disparities in standardized testing results between different groups.
However, even when viewed as an investment towards a high-paying career, many universities fail to deliver on their promises. The trillions of dollars in student loan debt clearly indicate that a degree does not necessarily pay for itself.
At the undergraduate level, many universities are proving to be less than useful. They fail as trade schools, producing graduates who are unable or unwilling to repay their debts. They also fail as centers of rigorous academic work, producing philosophers who are unable or unwilling to think critically. Their primary function appears to be generating revenue and indoctrinating young people into ideologies that may not serve their best interests.
It is time for the American people to reconsider their support for these failing institutions. This involves shifting the financial burden of student loan debt and university costs away from taxpayers and onto the responsible parties.
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