<p>The article is about for profit law schools. Yet, you could replace the schools with just about every remaining school model in the country that lacks name recognition. The model depends on an influx of students with disposable family income, or in most cases the ability to borrow. Inasmuch as the for profit school deserve and get the black eyes, most public schools now exist for similar reasons. And mostly to protect the lifestyles of a few chosen at the expense of plenty. </p>
<p>We just have not realized the extent of the pipe dreams sold to the current and future generations. </p>
<p>Name recognition? There are more 3,000 colleges and universities in the US. How many would the average CCer be able to name and locate on a map? How many colleges and universities are discussed or represented on CC? At best a few hundred of them. How many schools have an endowment below 50 MM? </p>
<p>The criteria might vary from one state to one state, but recognizing that many schools have little to no name recognition is pretty easy to understand. </p>
<p>The few chosen? Administrators and tenured research faculty. </p>
<p>^^The Everest franchise in our area is closing, but I don’t know a single person who finished there and got a job in their field. Our local hospitals would not accept their Medical Assistance graduates. </p>
<p>The one thing the article is curiously silent on, other than by making scary allusions, is the bar passage rate - 72.9% of first-time test takers from Florida Coastal in 2013. While not stellar, that’s not really enough of red flag to scare people off (although the tuition cost should be.)</p>
<p>Whether undergraduate or graduate, non-profit or profit, students have to do their own cost-benefit analysis of where they go to school, and in what subject, how much it’ll cost, and what the employment prospects will be. </p>
<p>The larger point the article makes is correct, however - since taxpayers are backing these loans, we, in effect, become the buyers. So, the real source of the problem is in the Direct PLUS program - loan limits are basically determined by the school (and the students’ willingness to sign up for them.) As long as they’re accredited schools, there doesn’t seem to be any safeguards to prevent bad loans - they can charge any amount, to students that have no chance to earn enough to pay the loans back. </p>
<p>Since the schools themselves, and in this case, the ABA don’t seem to want to police themselves, the answer seems to me to be to penalize the schools for loan defaults - in a sense, making them co-signers to the loans. Or simply disqualify them from further Direct PLUS loans if their default rate exceeds some percentage. </p>
<p>You can’t deny people the right to make bad decisions - but you can, and should prevent people from making bad decisions when you’re underwriting those choices. </p>