| The title asks "Who's to Blame?" That's regrettable wording. We could apportion blame in a number of ways but that wouldn't really help prevent a situation like this arising again. There are three main actors in this case: - The university that charged huge tuition fees for a course in Religious and Women's Studies.
- The financial companies that loaned the huge sums of money needed to pay for those fees.
- The poor girl who took out the loans to pay the tuition. One could criticise the university either for charging such expensive tuition fees or for failing to provide advice that the girl needed. However, you could also argue that the university was acting in its own (financial) self interest. That self interest would have been damaged if the girl had gone to a cheaper university. One could criticise the companies that loaned the girl the money, money that they must have known she would spend a lifetime repaying. However, again, they acted in their own financial self interest, knowing that they'd probably get their money one way or another. One could also criticise the girl but the article makes it clear that she thought that she was acting in her own self interest by getting a degree that she thought would be of great help to her career. Many commenters here have suggested that either the girl could have benefited from better advice when choosing a degree course (which would have helped her to better act in accordance with her self interest) or that student loans should be dischargeable under bankruptcy (which would be an incentive not to loan to students who would find it impossible to pay the loan off). How about a third option, give the university an incentive that is better aligned with the interests of the student after graduation: instead of charging large tuition fees up front, a university could instead say "in exchange for getting a degree from us, you owe us a certain percentage of all of your future income." A lot of people are prepared to voluntarily give a tenth of their income to the church so why not to your alma mater? I guess it would be the equivalent of selling "shares" in yourself to the university rather than taking out a loan. I'm sure there are a million reasons why this wouldn't be workable but it would be rather wonderful if the interests of the university and the student could be aligned in this way. |
Here in Mexico the Tec of Monterrey (which is one of the best private Universities) does that. They give you a loan/scholarship based on a combination of good grades and socio-economic status. The students get 90%, 80%, 60%. If they get 80%, that means they have to pay 20% when they are in school, 40% is a scholarship and 40% is a loan.
One of the consequences of this is that most loans/scholarships are given to the engineering students. The fact that the school has a stake on the future success of the student makes them more careful on who to give the loan/scholarship to. I always assumed this was the way done in the U.S. but after reading the article and the comments here, it seems like it is not.