The question
Should universities bear financial risk for student debt?
Make institutions share responsibility
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Sian Beilock
Sian Beilock argues that schools producing high debt and weak job outcomes should bear some responsibility. Financial exposure could give institutions a stronger reason to control price and improve the return on a degree.
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She does not endorse a particular liability formula, and Dartmouth's loan-free aid makes its own situation unlike many institutions'.
I did okay. I went to Fordham. I did okay. The point I'm trying to make here is, shouldn't you, the university, be on the hook for these loans? And shouldn't you be responsible for the outcomes for these students? And would you be in support of having the loans and the amount of the loans match the desirability of the degree and its ability to monetize in the post-graduation?The College Crisis: Heads of Dartmouth & Berkeley Debate the Decline of US Universities ↗
Seek to 5:25
I'm in favor of the institutions having some responsibility. And at Dartmouth, we take that responsibility very seriously.The College Crisis: Heads of Dartmouth & Berkeley Debate the Decline of US Universities ↗
Seek to 6:28
I push back and say I don't think the market is working exceptionally well because I think students are coming out overburdened with loans without the kind of job prospects that we have responsibility.The College Crisis: Heads of Dartmouth & Berkeley Debate the Decline of US Universities ↗
Seek to 7:29
Let enrollment choices discipline schools
Rich Lyons
Rich Lyons argues that students will stop borrowing for institutions that fail to provide an economic pathway. He points to strong outcomes and career-readiness work at Berkeley as evidence that market feedback can operate without a new financial-liability regime.
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His defense focuses on Berkeley and acknowledges pressure elsewhere in higher education; it does not show that indebted students can avoid losses before the market adjusts.
The word responsibility, I'm an economist, is a responsibility, the financial liability at the end of the day or as people have been saying, look, if we are not providing an economic pathway for our students on average, at Berkeley, you're talking about Berkeley now or Dartmouth, that people will stop coming and they will stop taking loans. So that market mechanism is working pretty well as it is and we are producing really wonderful outcomes. I think the earlier question about what about more than 1,000 higher ed institutions in this country, and I think there is pressure on the whole system, but we are certainly making sure we have a brand new program called Social Sciences Career Readiness Internship Program. And so we are launching lots of new things to make sure that we are providing that kind of support.The College Crisis: Heads of Dartmouth & Berkeley Debate the Decline of US Universities ↗
Seek to 6:38
Compare debt, completion, earnings and program closures at schools with and without risk-sharing. A useful policy test would separate high-price, low-return programs from institutions already providing substantial need-based aid.