Finance Higher Education: There is certain desperation today to figure out what is next on the student loan front. Forgiveness and cancellation take center stage rhetoric without fiscal discipline, performance, or accountability.

Today, election politics hold higher education hostage.
The overreach of the Federal government is undoubtedly a problem. The U.S. Department of Education could fill the myriad of needs being funded and try to measure outcomes to create evidence-based policy. But those mandates seem to have been left behind for good.
Initially, we can all agree that the outcome of higher education must be better jobs, incomes, and futures for all Americans. The current program does not deliver this universally without huge financing issues and must be thrown out and rebuilt. Free is not the answer.
Here are our suggestions supported by performance-based financing for college and career & technical education programs:

1: The loan program should only pay for tuition costs.
A 4-year degree in Chemistry, History, Theater, Physics, Computer Science, or a technical training program should cost the same at every college with built-in adjustments based on an index. If an institution believes it should charge more, the institution should find financing for the amount not covered by the taxpayer/Federal dollars. This should apply to all colleges – from public to for-profit institutions. 

2: Tuition costs should be tied to forecasted income.
It is unreasonable to ask a teaching candidate to spend $60,000 in tuition costs when their starting salary is barely $40,000 and their annual loan payments are $6,000. These limits can be set based on a ratio to the salaries earned in these jobs in the first five years of employment, and payments can be deferred for two (2) years after graduation. 

3: Use existing welfare programs to cover non-tuition expenses.
Means testing is done using the FAFSA. Let’s incorporate this into welfare programs. We can even use the EBT card rails to advance the funds and control abuse by restricting spending by students on certain products. 

4: Tie rewards to students who graduate on time.
Students who graduate early or on time should be given gigantic discounts on interest rates. It is an incentive to complete the program of study on time and decrease student loan payments. 

5: Provider greater incentives to employers and get them engaged.
Lawmakers should provide incentives directly to employers to work with colleges to create custom programs based on their talent pipelines. Incentives should be based on students hired from these programs. 

6: Colleges should consolidate.
There are too many colleges and universities. It’s like having ten gas stations in a town of 800 people. In the city of Chicago alone, there are 86 colleges with almost 200 campus locations. That’s 86 Presidents, Administrators, hundreds of Deans, more professors, janitors, and hundreds more of everything.
Prudent consolidation aimed at serving the greatest number of students with the least cost of operations would allow billions of dollars to be redirected to education infrastructure rather than pure, non-academic operating expenses.

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