Trump moves student loan administration to the SBA. You got a problem with that?

 Last month, The Wall Street Journal reported that 43 percent of borrowers who owe on their student loans weren't making payments. According to the WSJ, that's about 9 million people.

How about the 57 percent of borrowers who aren't delinquent? Are they faithfully making their monthly loan payments and whittling down the principal of their loans?

Not all of them. Approximately 2.5 million borrowers have economic hardship deferments that exempt them from making their monthly loan payments, and millions more are enrolled in Income-Based Repayment plans (IBRPs), which result in payments so low that they don't cover accruing interest. 

The General Accounting Office recently reported that 4.5 million borrowers who were current on their income-driven repayment plans were paying zero on their loans due to their low income. 

In 2018, Education Secretary Betsy Devos gave a speech comparing the federal student loan program to a looming thunderstorm. Only one out of four borrowers, Devos said, were paying down the interest and principal on their loans.

Do you think student loan repayment rates have improved since Secretary Devos made that speech six years ago? No, they haven't. In fact, almost no one paid on their college loans for three years due to the COVID crisis.

Indeed, the federal student loan program is in disarray, mainly due to the Department of Education's mismanagement.  DOE couldn't do a competent job when it was tasked with designing the standardized financial aid (FAFSA) application

Now, President Trump has transferred the administration of the student loan program to the Small Business Administration. If Trump hasn't been sued yet for this move, he will be soon. After all, his administration has been sued more than 100 times during the first two months of Trump's presidency.

Critics should refrain from slamming Trump's efforts to reform the federal student loan program. The only sector of the American economy benefiting from the status quo is the higher education industry, which charges students an exorbitant price for college degrees that often fail to prepare graduates for the world of work. 

What will happen to you if you take out student loans to get a liberal arts degree and can't find a job?

 Late last year, the University of Vermont announced it will shut down two dozen academic programs with low enrollment. 

Geology, religion, and Asian studies are on the chopping block, along with several language programs--Greek, Latin, and German.  At least three departments will close: Religion, Classics, and Geology. Some minors are being eliminated--Theatre and Vermont Studies.

All across the country, universities are shrinking or closing their liberal arts programs because fewer students major in those disciplines. Young people sense they are in a bleak job market, and many are shifting to more vocation-directed academic majors.

Indeed, Jeffrey Selingo and Matt Sigelman, writing in the Wall Street Journal, report that entry-level college graduate jobs have fallen 45 percent in recent years.  Many graduates will be forced into "lifeboat jobs," where they will be underemployed both in terms of salary and vocational development. 

"[T]hose who graduate into underemployment are five times more likely to remain stuck in mismatched jobs after five years compared with those who start in a college-level job," Selingo and Sigelman warn.

Should students stop majoring in the liberal arts? Not necessarily, Selingo and Siegelman argue. Instead, they give this advice:

None of this requires abandoning the liberal arts or social sciences; it's just a matter of ensuring that students also acquire marketable skills. English departments don't need to teach computer programming, but they should show students how to develop writing and critical thinking skills in ways that resonate with employers. And they should help students to acquire more technical skills, whether on campus, through internships or through the growing array of online  options.

With all due respect to Mr. Selingo and Mr. Sigelman, I am deeply skeptical of the proposition that liberal arts departments can make their academic programs more vocationally driven. 

Does anyone think a medieval-history professor will adjust his teaching style to help students acquire more technical skills?  I doubt it.

And how will sociology, political science, and religion departments develop internship programs that help students find jobs after graduation? I don't see it happening.

It is no good to say liberal arts departments can adjust their academic programs to make them more job-relevant. Students won't buy that line.  They know that a degree in liberal arts probably won't lead to a good job. That's why more and more of them are majoring in business.

Brutally put, it is madness for young people to take out six-figure student loans to get degrees in history, religion, political science, ethnic studies, or sociology.  In today's economy, an individual who takes out student loans to earn a bachelor's degree must immediately find a good job.  

What will happen to you if you borrow $100,000 to get a humanities degree and can't find employment? You will be forced to apply for an economic hardship deferment to get short-term relief from making your monthly loan payments.

But while you are skipping those payments, interest is accruing on your student loans. That interest gets capitalized so that your loan balance increases.

At some point, your student loan debt will become unmanageable, and then your only option will be to sign up for an income-based repayment plan that stretches out your loan obligations for a quarter of a century.  

And that will give you plenty of time to ruminate about the stupid decision you made when you were 18 years old to major in sociology with a minor in Vermont Studies.

Will this guy teach you critical thinking skills?