The cost of a college education is out of control. In fact, the business of saddling students with inordinate debt, whether they complete a degree program or not, is the dirty business of colleges.
One answer to the $1.5 trillion problem facing indebted college students of all backgrounds and income levels is free college.
The real cost of free college would be borne by taxpayers and the students it would fail in more ways than one.
Socialist policy purveyors advocate free college to lift all boats with the tide. However, as laudable as that goal appears, free college is nothing more than a ruse.
The ruses don't stop there, either. Recently, a friend and colleague of mine, Tom Gentile, brought to my attention a growing issue that's affecting millions of Americans: A tragic new movement called "reHIREment."
Yep, you read that right. And it means exactly what it sounds like. Millions of retirees, or folks about to retire, are having to throw away their dreams of retirement to go back to, or stay in, the workforce.
Some of these retirees - or "reHIREes," as Tom's calling them - have to return to work out of frustration, fear, or just because they have no other choice. It's a sad way to spend your would-be golden years, but it's quickly becoming a reality for a growing number of the population. It's estimated that by 2024, only six years from now, 13 million "reHIREes" will still be in, or return to, the workforce.
You can protect yourself, though. It's not too late. Click here to learn more about how Tom can help keep you from becoming another part of the statistic.
But don't go thinking that these "reHIREes" didn't apply themselves or were lazy. In more ways than one, their fate was not their fault.
Like not getting the pensions they were promised. A pension is just as much of a grandiose illusion as free college is. It's all a corrupt business, and today, I'll break down for you why free college is a problem.
Here's why free college is a bad idea, who it would hurt, and who it would really help...
"Free" Doesn't Really Mean Free
Free college would never be free. Someone must pay for buildings, books, educators, and administrators. That can only be taxpayers.
Coming up with a formula to tax individuals or entities, whether a flat tax or a progressive tax, is the first problem.
There's no equitable way to levy a specific tax earmarked to pay for free college. One estimate making the rounds of discussions about free college has the cost estimated at $75 billion a year.
That's for starters.
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The size and power of any government bureaucracy necessary to administer free colleges would only grow, along with the cost to feed that bureaucracy.
Of course, that's a benefit to the socialist policy purveyors of free college because it guarantees them monolithic voting blocks.
America already has an enormous problem with its public schools.
Whether it's politicized arguments over curriculums and books, dropout rates, or the power of teachers' unions to protect an entire class of poorly prepared, disinterested educators (certainly not the majority, but a big enough problem to infect most school systems), expanding that net to encompass public colleges surely frightens everyone.
Then there are the students themselves.
A college education, whether free or paid for, doesn't guarantee class-takers or graduates a job and certainly is no guarantee of a career.
If a college education is free, what is its value to students?
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The same students who claw their way through college, whatever the cost, because they want an education and better opportunities will always shine. And the students who don't consider a college education worth the paper they're given at graduation won't apply themselves anymore because college is free.
How will employers be able to differentiate between graduates of cookie-cutter college factories?
What Do You Think?
The following excerpt highlights another issue. It's a synopsis of a recent study by Brookings on something close to free college. It's eye-opening.
This study examines one of the first randomized control trials of a program similar to many free colleges and promise scholarship proposals. The Degree Project was launched in Milwaukee Public Schools (MPS) in 2011. Students in 18 randomly selected high schools were promised up to $12,000 to pay for college, at essentially any in-state institution. These funds were sufficient to cover all tuition and fees at the local two-year college - making it a form of free or debt-free college. The funds could also be used to attend four-year colleges, covering more than one year of tuition, and fees. To receive the funds, students had to graduate on time from an MPS high school with at least a 2.5 cumulative GPA and a 90 percent class attendance rate, and fill out the Free Application for Federal Student Aid (FAFSA).
The Degree Project had some impact on students' motivation, college expectations, and steps toward college, such as applying to more colleges and FAFSA completion. However, it had no effect on the performance measures and no effect on whether students went directly on to college. The most recent evidence does suggest that the scholarship may have slightly increased persistence and graduation in two-year colleges, though not in four-year colleges. We are continuing to track these effects; however, it seems clear at this point that many of the potential benefits, during and just after high school, did not emerge.
A larger lesson is that students need more than the promise of additional financial aid to increase their high school GPA. Students also need to be in environments that help them achieve the specified academic performance requirements. TDP promised one major resource - $12,000 for college attendance - which increased students' motivation and aspiration for college. But TDP did not change the high school environments that are also part of the college-going process. To increase college enrollment, students need more support from their schools. Students need specific, ongoing information about how to meet college-related requirements. They need structured institutional support long before they become rooted in the paths that are unlikely to lead to academic success in high school or college. In the absence of these supports, interventions such as TDP might reinforce existing systems of class and/or racial stratification (Gamoran, 2010; Oakes, 2005; Kuttner & Rifelj, 2017) while maintaining deficit views or stereotypes of lower-achieving students or students of color who they believed would never meet the program requirements (Ladson-Billings & Tate, 1995; Leonardo, 2013; Steele, Spencer, & Aronson, 2002; Valencia, 2010; Lewis & Diamond, 2015). Rather than accepting or reinforcing the forces that produce such vast inequalities in students' college outcomes, financial aid and other programs need to be designed to combat them.
I've put forward my ideas about how to cut the costs of higher education in this space many times, to very positive reviews and comments.
It's your turn.
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The post The Real Cost of Free College appeared first on Wall Street Insights & Indictments.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.