Daniel Bennett, our respectable döppëlgängër over at CollegeAffordability, writes persuasively at Forbes about the right solution for the bankruptcy problem with student loans. My only objection is that he offers the colleges some wiggle room when he suggests that colleges should bear some of the costs when loans go bad. Hah. I say they should bear all of them.
One friend of mine manages a salesforce– the kind of people that professors only encounter when teaching their darling David Mamet’s “Glengarry Glen Ross”. He says that his salesforce only gets their commission when the customer actually pays. Never before. No way. No how. (He doesn’t swear, though, like Mamet. ) So a salesdroid can turn in billions of dollars in signed contracts, but the paychecks with the commissions only get signed when money comes in the door. It’s the only way to keep the salesforce honest.
In this case, the colleges are selling fancy theories and deep thoughts to society at large. College loans should be restructured so that the colleges only get the cash when the former student sends along that monthly tithe. Right now, the government blithely pays the cash up front. Fools. (Mamet would have unprintable words to offer to describe the government and the taxpayers.)
This is an ideal way to help put colleges back in the loop and give them ample incentive to create degrees that actually empower their students to pay back the loans.