Mark Cuban (who is an investor in an alternative education model) recently made some remarks on issues he had with Hillary Clinton’s student debt proposal. While he addresses the Clinton plan, there are a couple of points he makes that more directly apply to us that I thought were worth highlighting:
1.) Not all higher educations should be measured on a straight Return on Investment.
Many careers are really important to our culture, and often those occupations (teachers, clergy, social workers, musicians, etc.) aren’t built on financial models that pay well. Cuban’s point that “not everyone should be a STEM student” is important to educators as well as those interested in going into occupational ministry.
We should have an education model that doesn’t penalize those that want to go into lower paying occupations.
2.) Easy money is what causes dramatic rises in prices
I saw this first hand working in the mortgage and real estate industry in the mid-2000s. Lowered lending standards (created by large amounts of unused capital) allowed lots of buyers and capital into the market that changed the supply/demand ratio – driving up prices to unsustainable levels.
The key in this type of market (which higher education is currently in) is to use tremendous personal restraint. You need to know that the government, your financial aid office, or the culture at large (media, friends and family, etc.) won’t give you reliable lending guidelines or limits.
3.) Keeping administrative costs low is critical to your schools sustainability
As a plug here, I believe Denver Seminary has done a wonderful job at this. The campus is run debt free with a critical eye on cash flow, future financial challenges, and keeping costs low and in control.
I’m glad big thinkers are addressing these issues in the public forum.