Friday, May 22, 2015

Fallacious Claim: Infusion of Funds to State Universities Would Solve the Student Loan Debt Crisis

Even when something is well-intentioned, the outcome can oftentimes turn out nefarious, or rather nefarious people can wind up benefiting. That is especially true when it comes to policy decisions and the disbursement of funds, even when the intentions are - as already stated - admirable.

One such example is the argument about state funds and budget cuts to state funded universities. Expert argue that if states were infused with cash and the coffers for institutions of higher learning were replenished, then somehow the student loan debt crisis would be solved. At least this solution is implied in a slew of studies about the way in which tuition has skyrocketed in recent years vis-a-vis state budget cuts on expenditures for higher education. One study argues that "a primary driver of student debt continues to be reduced state expenditures on higher education." Perhaps there is a correlation, but who is to say that if, as noted, the coffers were replenished, these institutions would allocate those funds to the right place, i.e., to the pockets of the students as well as students who have graduated, the ones who truly need it in order to obtain an education and pay down the debts they accrued as result of gaining said education?

It is problematic and frankly false to assume that these institutions would actually use the funds to cut the cost of tuition. What would compel them to do that? Is there anything by law that would ensure that they would cut costs that are astronomically high when they could benefit from them in other ways? The short answer: I doubt it.

So, to put it bluntly, an infusion of cash would not solve the student loan debt crisis. Chances are, the universities would use the funds to create even more bloated administrations, erect more buildings, basically spend it on anything other than to cover the costs of students or current borrowers.


Anonymous said...

I agree completely. To assume that universities would lower their tuition without force is almost comical. The non-profits may better educate but make no mistake, they still very much exist for profit.


P.S. Again, how does this help the 40 million who are already saddled/debilitated with debt?

Anonymous said...

Coryn, I want to organize with you, with Debt Collective, with anyone and everyone who knows we need to renegotiate these debts. It's time. We can't wait for politicians anymore.

Cryn Johannsen said...

@Anonymous May 27th - I agree. It is time. Let's do it.

Anonymous said...

Cryn, you are correct. Similarly, even if the spigot of new student loans ended tomorrow, the price of undergraduate education at traditional colleges would not decline. The assumption that they would do so is another fallacious claim.