1) Federal loans do not have limits on amount.
2) Loans are non-discharged (you can't shed them in bankruptcy).
3) There is no intensive for schools to charge less. (schools likely should have skin in the game if borrowers end up shedding debt through time expiration or bankruptcy).
4) Loans or the amount of the loans are not weighted at all by the future prospects of the person.
I have other issues with college today. They weren't originally set up for getting people trained for work, but many people now look at them as a form of trade school. But many of the majors available aren't actually job training in any fashion. Most people would be better served by trade schools or apprenticeship, but the US hasn't figured out how to do this well yet. This is more of a cultural problem, that I hope employers can figure out. Coding bootcamps seem to be an answer for the software industry, but we need to push more people that way, rather than college.
This is false.
> Loans are non-discharged (you can't shed them in bankruptcy).
They’re also not collaterized. As a taxpayer, I’d be very much against a non-collaterized loan that anyone can get without much care for credit risk, that’s dischargeable in bankruptcy. In private sector, dischargeable debt with no collateral, like credit card debt, has 20%+ rates for people with low credit scores.
> 3) There is no intensive for schools to charge less. (schools likely should have skin in the game if borrowers end up shedding debt through time expiration or bankruptcy).
If debt is held by federal government, the students defaulting will not be much of an incentive to the school.
> Loans or the amount of the loans are not weighted at all by the future prospects of the person
Indeed. The most recent loan forgiveness plan is basically mechanical engineers subsidizing drama majors.
Employers including technology companies used to provide training and apprenticeships but purposely shifted their job training costs on to job seekers and the education system. You are in effect looking to those that are largely responsible for the current situation to provide the solution.
AFAIU, both historically and today, most apprenticeships are managed by unions through programs funded (in part) by union-contracting companies. This benefited companies as they didn't have to maintain apprentice programs themselves; and it benefited unions and especially apprentices as apprenticeships weren't tied to any specific company, providing some (albeit limited) employment mobility from the outset.
As unions have receded, so to have these programs, or at least the visibility of these programs.
Most people would be better served by trade schools or apprenticeship, but the US hasn't figured out how to do this well yet.
This may apply to college dropouts, but college still pays way more than trades, and also trades work req. a lot of training and time and you have to join a guild.
Coding bootcamps seem to be an answer for the software industry
Except that bootcamp grads tend to be woefully deficient in skills and also have a hard time finding jobs, also bootcamps can be very expensive and inflate their success metrics. I am not saying that college is the answer, but it's not bootcamps.
Only the parts involving housing, education, transportation, employment, and investments.