Carl Person: Regulatory Cost of Student Loans Is 95% of the Loan

Emailed to IPR by Carl Person, a candidate for the Libertarian nomination:

New York, NY, October 20, 2011. Carl Person, Candidate for the Libertarian Party’s nomination for President, made the following statement today concerning USA Today’s 10/19/11 lead story “Student loan debt surpasses $1 trillion – Burden could drag economy in future”.

The regulatory cost of the federal student loan program is $850 billion, as to the outstanding $1 trillion in student loans. For every $1,000 in student loans, $850 is a cost of governmental regulation and the elimination of competition from low-cost training programs and schools, caused by 50-state regulation of post-secondary (higher) education. This regulation includes post-secondary vocational education. The lower-cost training programs are shorter and locally provided, resulting in additional savings in comparison to distant campus colleges.

If government student loans did not exist, degree-granting schools would have to reduce their expenses and their prices as other businesses are required to do. If the 50 states ended their regulation of higher (i.e., post-secondary) education, including vocational training programs, private enterprise would create vocational training programs and schools offering instruction resulting in marketable skills at about $2 per hour of classroom instruction, or about $2,000 per year for a student. This should be compared to the current annual college expense of about $10,000 to $70,000, or about $40,000 on the average for campus based higher education.

The cost of unregulated local vocational training is only 5% of the cost of 1 year of campus college, and about 1-1/4% of the cost of a 4-year college (campus) education.

I was a post-secondary vocational school owner/manager for 18 years and am able to make these statements from my own experience in the school business.

One trillion dollars is wasted, and will be a continuing waste of additional trillions of dollars unless we

(1) eliminate the U.S. Office of Education,

(2) eliminate the federal student loan programs, and

(3) pre-empt (i.e. forbid by federal statute) all state regulation of post-secondary vocational training programs and schools under the interstate commerce clause and/or the 1st Amendment right. The potential proprietary school owners have a First Amendment right to commercial freedom of speech; and potential students have a First Amendment right of free speech to receive instruction to create marketable vocational skills without the interference of state or federal regulation).

If elected President of the United States, I would direct the Justice Department to commence an action to establish such First Amendment rights of students and the owners of post-secondary vocational training programs and schools.

The saving of $ trillions in costs to students and their families is miniscule in comparison to the losses our economy is suffering by depriving U.S. citizens and residents of a competitive marketplace for post-secondary vocational education.

The nation’s unemployment problem is directly related to state and federal regulation of post-secondary education. Such regulation has left the country with college programs that grant degrees in fields for which there is little employment opportunities while preventing low-cost vocational training programs and schools from offering training needed to fill the millions of jobs waiting to be filled among the nation’s 26,000,000 small businesses. Government, big business and the military are not hiring college graduates, and small business can’t use them because they lack the skills needed by small business.

In summary, the regulation of education has predictably caused the United States to become an economic mini-power. In fact, it has resulted in having no Presidential candidates from the Democratic and Republican Parties having any idea how jobs can and should be created, and a voting public whose only source of instruction is the major media (which won’t let these issues be heard at any Presidential debate).

One last thought, has your education enabled you, on your own, to come to the above conclusion?

Carl E. Person

Libertarian Party, Candidate for Presidential Nomination 2012

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