In the past two weeks, and after the court ruling, it seems DOE finally taking a small step to manage the student loans debts.  DOE is one, perhaps among many entities that has granted these institutions to operate.  Therefore, according to the logical thinking it, DOE also has to clean the mess that it has participated in creating.  What if:

1. The license to operate was never be granted and
2. Supervision and accountability are applied consistently
3. Policy on for-profit institutions never existed?

Then there will be a minimal of public pains, outcries or even zero crisis.  May be!

It is interesting to note that this policy shift occurred after the administrator publicly admitted that the US is facing student loan debts crises.

A college closure news usually followed by sad stories of the students who get caught in the middle.  This also applied to Virginia College students in Pensacola, FL who found out that the institution has abruptly close its door.  The accrediting agency (ACICS) withdrew its accreditation, which was cited as the main reason of its closure.  Perhaps, it is not a coincidence that the same accrediting agency regained its federal recognition recently from the DOE as reported in the following article.  The public hopes that this latest action has not been designed to gain short-run public trust on the agency which has suffered a major blow a couple of years ago.  American public eager to see a consistent action.

Perhaps, the American public may need to ask themselves on their decision to attend  for-profit organizations who run a higher ed.  If the public does not have the confidence,  then do not take the bait, or enroll, or buy the promises.

We all know that cheating at US colleges occurs in many forms, across programs, majors, level and institutions.  There is a good chance that the federal fund or loans are used to pay for cheating.  What shocking is that the cheating is on the rise with no sign of declining and no ones seems to care.  One thing that is pretty important from what the service provider said is that the college professors or instructors are:

1. Lazy and
2. Do not care.

It is truly sad to see that the don’t care attitude happens every where from the institutions, teaching staff and students–they are all try to get through the system in easy way.  Therefore, one may not need to be surprise that some leading US companies are losing their competitiveness to others.  This is not just an education, buy also a human tragedy.

Today, we learned that what the Association has hypothesized about six years ago finally has been confirmed by the college administrators. After denying or silently agreed with AAEA’s econometric study, the US College presidents admit that they have operated inefficiently in the past.  After AAEA revealed how poor the operational cost has been managed.  As results, the American public has lost their confidence to support some of the institutions.  Declining financial support has a significant bite on the ability of them to operate.  Like a circle, any good or bad decisions will finally have the cause and effect chains.

No one can make her or his own decision without affecting others in the system.  After so many years of BAU, finally their past policy hunt them down.  According to the article, the first item that the public asks, when the institution asks for more funding or donation is to show that they, the institutions, have operated efficiently as shared below:

1. Demonstrate efficiency
Before university leaders ask for more state support, they must demonstrate that they are being more efficient with the funding they currently get. Those universities leading the way on this front – including exemplars such as the University of Wisconsin system and The Ohio State University – are directly connecting savings gained from lower operational costs with noticeable reductions in the cost of attending college. In fact, Ohio and Wisconsin were ranked No. 1 and No. 9, respectively, in lowest tuition increases over the last decade.

While a lower tuition may be one indicator, there are other more important measurement metrics on efficiency.  AAEA has proposed to apply revenue to cost ratio as an ultimate institutional metrics to manage operational expenses.

The regulator’s recent speech mentioned pretty clear the source of systematic errors.  Majority involved in higher ed has acted like dairy farmers who hardly can wait to cash cow lawfully or even if they have to cross the line.  Moral as mentioned in Adam Smith’s monumental work is not important anymore.  Everyone tries to maximize their own interest.  This is one of the reasons why the student loans are complex and impossible to handle.  It may need supermen and superheroes combined to get it fix.  However, both superheroes and supermen are found in the fiction books.  Therefore, in reality, it is almost impossible to find solutions for the loan debts.  It may take the two sides of the aisle work together to solve this issue before it gets out-of-control.

It is now pretty clear that there is no public policy prepared to manage the US student loan debts–at least not in the near future.  It seems that the regulator would rather (1). Blame others; (2). Do nothing policy; (3). The issue is too touchy and difficult to solve; and (4). Waiting for miracle to happen to solve it.

Apparently, the US policy makers do not have the ability, will or way-out to deal with skyrocketed student loans.  The reason is simple in that the majority of the participants in some ways are the contributors and creators of the systematic errors.  In such a case, one contributing player could do is to eliminate her or his own errors, yet she or he does not have any ability to manage systematic errors that have been added by other players.  For example:

1. Interest rate is determine by the Legislative Branch.  Therefore, the Executive does not have any control to change that.
2. The second example could come from the Executive Branch and the loan servicing companies (NNI or NAVI) who have been awarded the contract to collect the loan payments.  Any implemented business policy or strategy irregularities applied by these companies cannot be control by the Executive.
3. Recently the regulator revived its sanction on ACICS to be in business again,  ignoring the findings of comprehensive studies that have been conducted by the US Senator Elizabeth Warren.  Pretty ironic.

Having studied this issue for many years, the Association come to a conclusion that student loan crises will get worse in the future because no one is able, want or plan to manage it.  Secondly, the borrowers should not expect to get any help if they are stumbled and get caught into it.  Therefore, read the fine prints carefully before signing any promissory notes.