| To me, fundamentally the issue is one of alignment of incentives. Right now, there are students who can come to Perdue who are looking for university as an "investment" in their own future: they want to spend $100k to get more than $100k back over their lifetime. But the fact is, some of those students are studying subjects which will never pay them back for their investment; and others will never make that money back no matter what subjects they study. So the question is, what incentive does Perdue have with regard to these students, under the "unforgivable student loan" system? 1. From a pure short-term financial perspective, it has an incentive to get as many students in the program as possible. 2. From a reputational point of view, there may be some damage to having lots of students graduate without getting jobs 3. Perdue is made of human beings, many of whom actually have feelings and morals; those people feel much happier when their students' investment pays off, and feel much worse when their students' investments don't pay off. And the point is, at the moment, for students in the category of people we're talking about, you have #1 fighting #2 and #3. That's always going to be an unstable system where things fluctuate between "terrible" and "not quite so terrible". Consider the incentives in an ISA system. The incentives are now aligned: Perdue would have a vested interest in the success of their students after graduation: the more money their students make, the higher return they get (up to a point). If a student wants to come in and major in Underwater Basket Weaving, they can say, "Perhaps a degree in in Accounting or Education might be a better choice." And if they do offer Underwater Basket Weaving, they'll be sure to add in classes on the Economics of Underwater Basket Weaving, Advanced Basket Weaving Management, and so on, to make sure that those students are actually prepared to make money after they graduate. |