Having recently completed my time at University, I feel that I have some slight insight in to the problem (s) that are caused by the "free" money that the federal and various state governments. My academic journey led me through junior college before I moved on to a 4 year program, and while I greatly appreciate the fact that there was federal and state financial aid available to me, the reason that I needed it (or more accurately, partly needed it) was due to the high cost of a post-high school education. Even by choosing to go through junior college before moving on to my chosen 4 year program.
Here is where we encounter the first problem with all the available government money. The 4 year school I attended (a public college) has seen its tuition increase about 400% over the preceding decade. The junior college I attended at least doubled in that same time frame.
To be clear: I am perfectly satisfied with the education I received at both institutions. They were top-notch experiences, and the amount I learned expanded my brain power exponentially.
Given that, was my educational 200 or 400% greater than what students earned 10 years ago? I find it to be highly unlikely. However, students will spend the money, because they are able to get financial aid, often with a heaping helping of federal guaranteed loans, which leads us to the second big problem with governmental aid: unsecured student debt.
During my college odyssey, I took out approximately $33,000 in federal loans. Do you want to know the process I had to go through to receive those funds? I simply had to "sign" my name on the dotted line (it was an e-form, so the signing was more ceremonial than literal.) No one asked about my actual prospects, they didn't even bother to check my GPA (which was actually pretty good, but still) or check references to see if I was good for the debt. The fact that I was enrolled in school was all they needed to clear me for tens of thousands of dollars of new debt.
It's not an exact parallel, but those that can recall 5-6 years ago when the home mortgage crisis struck this nation might see where I'm heading with this point. It's well and good to assume that student borrowers will pay back their debts ASAP, and in fact, the government takes steps to make that happen 6 months after someone has graduated or terminated their educational. There are several sub-problems within this problem.
We'll start with the biggie: the student is unable to find a job, period. I know how this goes, I've spent the last 12 weeks since my graduation looking for a job (I did find a temporary position for one month in that stretch working at a school.) I reached out to everyone I knew, I went through two separate staffing agencies, I filled out applications, filled out more applications, and sent emails to anyone and everyone who I thought might have a position open. My hard work was finally rewarded today: Tomorrow I begin a gig earning a whopping $9/ hour, and no, this is not a food service position where I can hope to earn some extra scratch. That's it, except for the mandatory overtime Saturdays (which I thought violated federal or state law, but apparently it does not, except in certain circumstances. I believe this may be one of them, but I'm not sure I have enough pull yet to point that out to the company, I haven't even earned a penny yet.)
Which leads to the second problem: Student borrowers who are determined to not earn enough money after the 6 month grace period (or at any period during their repayment period, based on family size and AGI) can file for hardship and have their debt repayment pushed off. Of course, this may lead to further interest being accumulated, but that's only helpful (to the government) if said funds are ever recovered, and if the expense it takes to recover said funds does not outweigh the net profit on the money lent out.
A tertiary problem with all of this federal aid for students was something I witnessed much more during my junior college time: students would 'attend' class just long enough to receive their refund check from the 'excess' financial aid they had received which was always in the form of extra loan money that was to be used for "living expenses". Listen, I'm not castigating those that found this loophole to help make their lives easier, but seeing as they stopped attending class, one has to wonder what their plans for that cash is, and if they were that desperate to gain those funds, how the government ever plans to recoup them.
Lastly (for today, at least), is this thought: all of this available aid leads many students and would be students to choose an educational path that is not necessarily proper for them. I chose to go the juco route because quite frankly, it was cheaper. Many students and their parents are not willing to do that and insist on attending a 4 year school for the entirety of their schooling career, often to the students' demise, as they are not necessarily prepared for the workload, or to be living away from home at that point in life.
This ties in with what I saw occur a couple of times during my first semester at the 4 year school I went to: professors admonishing, in a rather specific way the fact that many 'students' (one professor labeled it at 15%, I think he was being kind) weren't really qualified to be attending college. Based on the actions of the students in those classes, I had to agree with those assessments. It may simply have been a case of students not being capable in any different number of ways to handle coursework. It may also be that many students spent far more time looking at their smart phones than listening to lectures. I'd point the finger at those showing up hungover or stoned, but I think that's something that's been going on as long as their has been college on this continent, at least. Nonetheless, a goodly portion of those type of 'students' would not attend college if not for the easy government money. Whether or not this is good for the individual student, I can't say. What I do know is that it would be far better for the students who actually care about learning if there was less of those type 'students' in classes, and it would be better for the nation's bottom line, too.
