There’s no denying it, the higher education system in the United States is in shambles. We’re all well aware that it’s highly possible that the next great financially-inspired economic crisis that our great nation could face may well be the proverbial popping of the student loan bubble. We rightfully pay great attention to the maneuverings of Wall Street barons, raising awareness and supporting the defense of our country’s most financially vulnerable citizens. However, we seem to pay little attention to a fragile swath of the American public, the college students and recent graduates that own over $1.4 trillion in student loan debt, according to CNBC.

To be fair, within the last decade, the federal government has aimed to increase accessibility to a college education by essentially absorbing what was once a diverse student loan market. While on its face, such a policy appears to have streamlined the oftentimes contentious issue of college financing, reality arguably paints a much different picture, one marked by a rise in both the presence of red tape, and in some arenas, incredible complexity. Government has now effectively created a one-dimensional system dominated by inflexibility.

For many students, the federal student loan program created a hospitable environment of stable interest rates and largely eliminated the potentially dangerous need for cosigners, yet such a patchwork solution has either avoided addressing altogether, or has outright given rise to a number of issues that plague students and drives them ever closer to the brink of financial ruin. What has come to the forefront are sloppy and counterproductive proposed remedies that will only exacerbate the spoiling of an antiquated educational system, despite the Secretary of Education’s vocal admissions that she grasps the gravity of the situation, as CNN Money reported in June.

Secretary of Education Betsy DeVos addresses the Senate in June. [Image by Win McNamee/Getty Images] Featured image credit: Win McNamee Getty Images

Currently, tuition rates, particularly for private universities, increase at a rate double or triple that of inflation, as USA Today reported. A simple bachelors degree is now an exceptionally expensive proposition that routinely sees a student’s total tuition bill break the six-figure mark. The problem is that while a bachelor’s degree was once the undisputed and longstanding gatekeeper to obtaining a reasonable salary, it has now been effectively relegated to a basic qualification, with an advanced degree taking its mantle as gatekeeper. We have somehow wound up with a higher education system that is both stagnant and marked by diminishing returns on student investment.

Now, to be a competitive applicant, to have any reasonable expectation of obtaining a salary capable of providing a comfortable living, that 22-year-old student, freshly printed undergraduate degree in hand, must continue along the educational track and enter into graduate school. Yet the cost of a graduate degree can easily match or exceed that of a bachelor’s degree, as sources such as Forbes have demonstrated.

For example, a two-year MBA from a top university can exceed $100,000. It can be in excess of $120,000 for a law degree, or upwards of $200,000 for a medical degree, in tuition expenses alone. Upon graduation, hundreds of thousands, if not millions, of American students in their mid-20s stand with a student loan debt equivalent to a mortgage, sometimes surpassing a quarter of a million dollars.

One innovative and popular way in which American students can dramatically limit their intake of exorbitant student loan debt is to study at foreign institutions, where tuition rates at premier institutions can be relatively inexpensive. For example, tuition rates at schools like the University of Cambridge or the University of Oxford are one-third to half that of their top-tier American counterparts, in many cases fees are roughly the equivalent of those commanded by flagship state universities.

University of Cambridge, King's College courtyard. Featured image credit: Dan Kitwood Getty Images

American students can further limit their expenses, particularly their living expenses, by enrolling in international taught degree programs offered either online or in a hybrid format. Moreover, prospective students can enroll in research degree programs that do not feature taught elements, advanced degree programs such as MPhils or Ph.Ds, which may not possess a residency requirement. The academic world, particularly internationally, has been wholeheartedly embracing “distance education” over the last decade, with some of the world’s oldest and finest universities offering a whole host of degree programs, in all sorts of disciplines, that range from the undergraduate to doctoral level.

Yet there’s a catch, one that highlights the utter dysfunction in our higher education system. Following the federal government’s veritable absorption of the American student loan industry nearly a decade ago, federal funding for many of the most cost-effective international study options was outlawed by statute. The regulation itself states, “A program offered by a foreign school in whole or in part by telecommunications, by correspondence, or as a direct assessment program is not an eligible program.” Effectively, this section declares that an American student would be eligible for a federal student loan to study for a degree such as a MA in History from the University of Edinburgh if they remain on campus, but are ineligible to apply for the same federal loan if they enroll in the exact same program offered online.

Indeed, the simplistic rationale often given for why this particularly inefficient statue exists is that the federal government is inherently wary of sending American tax dollars abroad. However, the real world effects of this dubious statute for the student is that the on-campus degree, due to living expenses abroad, has a price tag which is at least twice as large as its online twin. Moreover, many nations impose work restrictions as a condition of visa issuance. In short, such an arbitrary statute stands as a legal mandate which severely hinders students’ (many of whom would otherwise be working young and mature adults) ability to pursue not only a financially and logistically efficient study route, thereby reducing overall debt load, but impairs their very ability to concurrently serve as economically viable tax-paying members of society.

Government policy itself has greatly impeded students’ ability to harness the benefits of innovation by being financially barred from receiving an outstanding, yet reasonably priced, education that allows them to better compete in a global economy. Additionally, if a student were still persuaded to go the online or hybrid route, he or she is effectively forced to deal with one lender, Navient, formerly known as Sallie Mae. With its private sector competitors having largely been driven from the student loan game, Navient was left free to form a monopoly on the market, and unfortunately for the student borrower, the hallmark of a Sallie Mae/Navient student loan is that its interest rates are without ceilings. This is yet another unnecessary complication from an already ridiculously complex system.

News outlets have been producing a veritable plethora of features that proudly proclaim that the unemployment rate for recent college graduates is stunningly low. Pieces that only scratch the surface and don’t admit the dirty little secret that scores of graduates may be employed, but often in menial positions with wages so insufficient that a passable standard of living is a rarity. We hear a multitude of stories which argue that the United States’ economy either already has, or is at the precipice of having a shortage of college-educated workers, yet masses of recent graduates are either serving as bartenders, or are entering traditional graduate school programs in the desperate attempt to keep their loans deferred and stave off the wolves for just a little bit longer.

We often hear those either holding or running for political office make grandiose claims about fixing such a broken system, that they’ll make college both more affordable and accessible. We get plans that promise free tuition for all at public universities. Plans full of positive sentiment, but seemingly void of any realistic notions that doing so might only increase the demand of obtaining a college degree, and may not necessarily increase the supply of well paying jobs, which may well drive us ever closer to economic calamity. Such plans fail to account for the realistic possibility that a run on free education may result in a short-term devaluation of the undergraduate degree’s earning potential. While we may very well have a better educated populace, many may not be better off financially, particularly if the whole of the populace has to foot the bill.

The policy solutions to the higher education system’s woes that have been offered thus far are wholly inadequate. They attempt to apply narrow and outdated traditional remedies to new age and ever-evolving ailments. I need no handout, nor do I desire the current rigid and counterproductive system that treats student loans unlike any other form of debt, making some of them inexplicably immune to both bankruptcy and even the death of the borrower. All I need is a modern educational system free of bureaucratic red tape that prevents me from plotting my own educational course, one that doesn’t hinder my ability to obtain a comprehensive and cost-effective education designed to make me competitive in a variety of markets.

[Featured Image by Eduardo Munoz Alvarez/Getty Images]