2009 January 01 Thursday
Universities Encourage Student Credit Card Debt For Profit

As regular readers know, I take a dim view of what has become of higher education. The old brick-and-mortar schools cost too much and are antiquated in their approach to education. But it is worse. Some universities make money by helping to get their students deep into credit card debt.

Bank of America’s relationship with the university extends well beyond marketing at sports events. The bank has an $8.4 million, seven-year contract with Michigan State giving it access to students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.

Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back.

Whatever happened to the paternalistic view that colleges should treat their students as wards to protect? I really do not think universities should exist to put people into bondage.

Too many people go to college. Too many drop out or graduate burdened with debts. Charles Murray thinks we should stop pushing students to try to learn college level material that is beyond their intellectual capability.

For most of the nation’s youths, making the bachelor’s degree a job qualification means demanding a credential that is beyond their reach. It is a truth that politicians and educators cannot bring themselves to say out loud: A large majority of young people do not have the intellectual ability to do genuine college-level work.

If you doubt it, go back and look through your old college textbooks, and then do a little homework on the reading ability of high school seniors. About 10 percent to 20 percent of all 18-year-olds can absorb the material in your old liberal arts textbooks. For engineering and the hard sciences, the percentage is probably not as high as 10.

Murray advocates for more certification tests for specific capabilities that employers need. Let people get demonstrable job skills. I think that's a good idea. I also think we need tests of college-level material that can be taken to demonstrate knowledge without enrolling in a college and physically attending classes.

Universities funded by taxpayers should put course lectures on the web for download. People should be able to watch lectures from home, study textbooks, and then take online tests to check their knowledge levels. Once they know they can pass tests for a topic they should be able to go to a testing center to take the tests with witnesses to verify they took each test. Passing grades should earn credits toward degrees or toward job skill certifications.

Share |      By Randall Parker at 2009 January 01 08:52 PM  Education

tim said at January 2, 2009 10:46 AM:

Until employers become less liable for the disparate impact of certification on NAM's, employers are always going to want a third party to do the credentialing. One huge competitive advantage of universities is that they are relatively insulated from charges of racism. All those hate-whitey classes did have a benefit.

Thai said at January 4, 2009 4:47 PM:

Randall, I really think you are doing the collective a great public service pointing out what a bubble education has become. Please keep up the good work. Now, if you would do the same with health care you would be doing a similar service.

Thai said at January 4, 2009 4:52 PM:

Oh, my information sources:

link 1.

link 2.

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