Friday, January 14, 2011

Albeit for different reasons, I agree with those who want cutbacks in the amount of government financial aid and loans given to those attending for-profit colleges and tech schools. Unlike most of the critics, who I believe dislike the very concept of for-profit school, I agree with Donald Graham that they do serve a purpose... I just don't think the federal government needs to be giving or even loaning money to students to attend these schools... or any school for that matter.

If Graham, as well as those in charge of the so-called public universities, thinks that the students attending their schools are gaining an education well worth the cost, then let them provide the financial aid and loans to the students themselves. Why should a company with the deep pockets that the Washington Post Company has need the federal government to loan money to their customers (oops, I mean students)? With all of the money the Harvards and the Princetons and the Yales have, why shouldn't they themselves be financing the cost of being a customer?

It is of a similar vein to the arguments for making mortgage loan originators keep a portion of the loan themselves... businesses are going to be more careful with who they loan money to if they have to eat the loan if the borrower doesn't repay.

The same should be true for schools. Let's hold them responsible for making sure they're only admitting those students who have the desire and the brains to pay back the loans. And if the schools look at certain kids and decide that they don't quite measure up, shouldn't that be taken as prima facie evidence that we as a society shouldn't be loaning that person money?