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Carlo Salerno dusted off a chestnut in IHE this week, suggesting that the way to get a handle on the student debt crisis is to force colleges to pay back any defaulted loans themselves. That way, he argues, colleges will have an incentive to control costs and only to run programs that are likely to lead to high-paying jobs.

It’s the sort of idea that sounds good if you assume that every college is affluent, every student graduates, recessions don’t exist, nobody ever transfers, everybody can afford to attend full-time and has no other economic obligations, everybody is fluent in English, and we have unit-record data for every student in the country.  Also, you’d have to forget everything you know about racial disparities in wealth and income, the open-access mission of community colleges, and basic fairness. Other than that, it’s not half bad.

These aren’t just details. 

I’ll take a relatively easy case to start. Jason starts at Local State U, intending to major in, say, accounting.  In his second semester, his father loses his job, and Jason has to drop out and move back home.  Clearly, Local State U must be punished!

A year goes by, and Jason enrolls part-time at Nearby Community College.  He muddles through, struggling with math but eventually managing to finish.  He goes to transfer back to Local State U, which only accepts 40 of his 60 credits.  (This actually happens.) While there, in his junior year, he falls in love with marketing and switches majors, losing more credits.  He runs out of money and drops out. Clearly, Nearby Community College must be punished!

Or, Ashley graduates with a degree in finance, but oops, it’s a recession year.  Clearly, it’s her college’s fault that the recession happened.

Or, Tamika does a year at community college, transfers early to Compass Direction State U, moves on to graduate school at Waspy U, and goes into, say, scientific agriculture, just as a new round of tariffs goes into effect and wipes out the local farmers who can’t export soybeans anymore.  Clearly, it’s the fault of her community college from eight years earlier. What else could it possibly be?

And that’s just at the student level. Institutionally, it would be hard to come up with a more potent weapon for destroying any sort of open-access institution.  Salerno briefly acknowledges that, pointing out that “public community colleges would surely resist,” before assuring us that the loss of access is merely a “trade-off.”  A trade-off for what, exactly, is left unspecified. He suggests that legislatures could protect open-access institutions by giving them more money. Well, yes, they could.  They could do that now, and avoid student loans entirely. There’s an entire movement dedicated to exactly that.

To see just how awful Salerno’s proposal would be in implementation, look at health care.  There’s an entire industry devoted to cost-shifting. HMO’s make money by not paying bills.  Doctors and hospitals fight back by hiring more administrative staff -- usually the enemy of cost-cutters, but never mind that -- to dot every i and cross every t.  HMO’s respond by raising the bar, muddying the waters, and generally being as evasive as possible. I personally had an HMO decline at first to pay for my daughter’s birth, on the grounds that her name and social security number weren’t on the original enrollment form.  They weren’t, because she hadn’t been born yet when I enrolled. The multiple hours that a staffer from HR spent on the phone, explaining that a new person is a predictable consequence of birth, represented a deadweight cost to the college. This is not a productive use of resources.

Any college faced with this rule, and trying to survive, would quickly turn its back on the people who need it most.  It wouldn’t even have to do it explicitly. Just target recruitment in some areas and not others, offer documentation only in one language, only have classes during the day, and you could easily shut out the riskiest populations.  It’s been done before. We know the drill.

Oddly for someone from a conservative perspective, Salerno’s proposal discounts individual responsibility entirely.  Every professor has had the student who simply can’t be made to care. Every professor has had the student who’s just passing through.  Why let students entirely off the hook? If a student spends a few months doing the thousand-yard stare before dropping out, never having cracked a book, why punish the college for it?  What message does that send to students? Other than simple animus aimed at educators, this one is a genuine mystery.

Yes, student debt is a problem.  It’s a problem of dropouts, which itself is largely a function of low incomes.  And it’s a problem of sustained public disinvestment in higher education, forcing colleges to shift some of the cost to students.  The free community college movement, #RealCollege, the Open Educational Resources movement, and a host of others are out there working to make a tough situation better.  If Salerno would like to join us, I’d be happy to have him. Or if he can somehow conjure up the world in which his proposal makes sense, I’d be happy to live there. But in this world, here and now, I’ll take a hard pass.

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