Saturday, December 19, 2015

Indentured Servitude

I just noted the following in the NY Times by Mankiw:

Another approach is to find better private mechanisms to finance higher education. Senator Marco Rubio, who is seeking the Republican nomination, wants to establish a legal framework in which private investors help pay for a student’s education in exchange for a share of the student’s earnings after college. In essence, the student would finance college less with debt and more with equity. The Rubio plan does not let the student get away without paying, but it does help spread the risk from the educational investment.

This is not Mankiw but is Rubio. This is a classic example of being totally blind to the problem. Higher  Ed costs more for a variety of correctable reasons. They are:

1. Government mandated overhead has exploded. Namely Deans for this and Deans for that and policies here and there just add to costs.

2. Buildings costs lots to build and even more to maintain. College Presidents like to build stuff, it meets their self perceived mandate. Yet I have never met a College President who fully understood life cycle costs.

3. Services to students and staff have exploded. From new gyms, swimming pools and yes the sacred cows of football. MIT once had sports for sports sake. Now, alas, they are going Varsity.

4. Student Support has also exploded. The well coddled student has one type of support for this and one for that. Guess what? That costs, lots!

So creating Indentured Servitude is wrong, and frankly it demonstrates some terribly shallow understanding of the problem and perhaps we should ask what the leading candidate wants? Oops, you're fired! Yep, that cuts costs.