Obama to End Private Student Loan Funding

[Mokele]

The "Budget Freezes" are the results of S&D

 

Not actually. Most of them are anticipatory, rather than as a direct result of any observed decline in enrollment or donations. Even my school has a freeze on (in more ways than one right now due to the damn snow), mostly due to projected lower returns from the endowment.

 

An important thing to consider is that classes are not isolated things that can simply be cut or added. If you cut too many, students graduate unprepared, and the status of a degree from your school goes down, affecting long-term earnings.

 

Furthermore, cutting classes doesn't save money. Tenured faculty members and their TAs are still employed whether they teach or not, so by having classes, all you're doing is making them work more for that money. At most, you could fire adjuncts faculty and cancel their classes, but they're a miniscule portion of the budget, and some are hired out of *necessity* in order to coordinate & manage high-demand classes (at my last school, we had two adjunct faculty whose *sole* job was managing the monstrous, 800+ student Intro to A&P course).

 

If the schools were *really* serious about saving money, they'd close down the athletics programs and fire the horrendously over-paid coaches.

[SH3RL0CK]

 

If the schools were *really* serious about saving money, they'd close down the athletics programs and fire the horrendously over-paid coaches.

 

Come on now, lets be realistic here. After all, which is more important; a quality engineering department, or taking your football team to a bowl game every year? You can't overstate the value of winning big games, I'm not even going to begin to illustrate the many obvious ways the athletic programs builds a solid foundation of excellence for all the students.

 

You sound like you have no school spirit. [/end sarcasim]

[iNow]

While it's off topic, those coaches tend to bring in far more revenues, investments, and future students than they cost in annual salary.

[Mokele]

While it's off topic, those coaches tend to bring in far more revenues, investments, and future students than they cost in annual salary.

 

Actually, if you google around, you'll find that there have been several studies done which show that only a tiny handful of schools (less than half a dozen) actually make money on atheltics, even considering alumni donations. They're a net loss for vast majority of schools.

[SH3RL0CK]

While it's off topic, those coaches tend to bring in far more revenues, investments, and future students than they cost in annual salary.

 

 

To add to Mokeles point, how much of these revenues and investments actually help the academic programs? For example, its fine if rich alumni want to donate money to build a new football stadium (which I'm sure is counted as investment). But I fail to see where this will develop any significant scientific breakthroughs.

 

Regarding the future students attending one school over another just because of the winning football program, I suppose this could be true. These students might not be the most devoted or intelligent students (otherwise they would be looking at, say, the reputation of the medical school as opposed to the football program); but certainly this might be a consideration for some.

[iNow]

Schools doing well in sports also get more media attention (free advertising).

Those donated dollars don't all go to "new stadiums" and many times can be spent as needed by the school administration.

The extra visibility brings more students and more people donating funds.

 

Let's say the coach makes $1.5M per year. His program brings in revenues of $12B per year. There are costs for the sports program of $6M per year. That's still $4.5M per year coming into the school from one sports program, and those funds can be used however they want (i.e. not just in sports or for new stadiums).

 

Either way, I accept Mokele's point that this is not as common, and that most schools don't actually make money on athletics. Mine did (University of Texas), so I was just making the point that it's not beyond the realm of feasibility.

 

 

 

 

None of this is on topic, though, so I'd prefer to leave it at that. It was an off-the-cuff comment at the end of Mokele's post and it's tangential to the discussion anyway.

 

http://www.usatoday.com/news/education/2009-02-26-educationbudget_N.htm

[Obama] wants to increase the discretionary budget for the U.S. Education Department to $46.7 billion, a 12.8%, rise. Obama will save $4 billion a year by ending a long-standing government-subsidized college loan program, in the process beefing up a direct loan program created by President Clinton in 1993 that would make the federal government the only source of federally supported college loans.

 

The subsidized program, known as the Federal Family Education Loan program or FFEL, dwarfed the direct loan program last year, loaning $56 billion to about 6 million students last year. By contrast, the direct program loaned about $14 billion to 1.5 million students.

 

The switch would benefit families, said Rich Williams of the U.S. Public Interest Research Group, a student advocacy organization. "For years, lenders and banks have been overly subsidized to deliver student loans," he said.

[Pangloss]

Wow, that suggests that they haven't even budgeted the $56 billion that they'll need to start giving to students immediately after the budget is signed. Perhaps it's in there somewhere else, like on the entitlement side instead of the discretionary side.

 

The main concern I have is that this is a massive growth area, which means massive spending growth -- that pot could double in size MANY years before we start reaping benefits in decreased servicing costs and repayments from newer "growth" students.

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Edit: I wonder if this might be a good opportunity for a new Savings Bonds-type program. Fixed rate of return, long duration, money specified by law to go only into the federal student loan program.

 

Just a random thought.