We find ourselves at a crossroads of the realities of costlier higher education and the students who desire to participate.

The federal government saw the need to financially assist the auto industry because thousands of jobs were involved. The government was forced to “bail out” the rapacious money managers who created huge profits for themselves and placed the entire country, and the world, at risk of financial disaster, but they were “too big to fail.”

Ignored, now, are the thousands of university students who are in debt, unable to obtain credit and have difficulty finding employment. The number of these students, and education itself, are similarly “too big to fail.” Trillions of dollars are owed in student debt. Making matters more challenging, tuition increases have become the “new normal.”

While not everyone belongs in higher education, it is time to take action and use the report of the U.S. Senate Committee on Health, Education Labor and Pensions, which showed that American taxpayers are essentially supporting students of “for-profit colleges” whose loans exceed a default rate exponentially greater than the default rate for state university students.

This is an emergency. Our higher education system has gone from being the best in the world to 12th. Education is one of the cornerstones of democracy, and it cannot be allowed to fail.

Solutions include curriculum changes to allow students to graduate faster and learn what they need, sharing of programs among state universities and the restoration of the right to subject a student loan to the usual rules of bankruptcy. All serve to prevent disenfranchisement and disinterest by students in higher education.

Credit cards and other debts are dischargeable; so, too, should be student loans (except perhaps loans for students at “for-profit” universities). It should be accomplished by a regulation that allows a student loan from a state-supported university to be discharged in bankruptcy without negatively affecting the student’s credit score, if students would otherwise qualify.

It has become virtually impossible for many students to repay education loans and continue to pay their daily minimal living expenses and search for a job compatible with their degrees or experience. At times, the debt becomes so overwhelming that students are forced to drop out.

If we do not devise a new policy to assist the next generations, we will lose our educated population and continue to drop down the hierarchy of educated countries. We must encourage our graduates to complete their education and assist them in finding employment. The government can further assist by offering credits against debt, or in some fashion give credit to employers to incentivize hiring state-supported university graduates, and allow bankruptcy of student debt.

It is time to finally resolve the conundrum of enrolling students who do not graduate or producing graduates who may not find employment and are unable to repay or eliminate their student debt.

 

Henry Baskin is former chairman of the Oakland University Board of Trustees and principal of the Baskin Law Firm.