Hate student loans? The case for college gift certificates

Make education about consumer choice, not elitism. Photo: Why can't going to college be as simple as buying a gift card? (Lisa Poole/AP Photo)

HONOLULU, June 30, 2013 — With Congress washing its collective hands on Stafford loan interest rates, many young Americans are concerned about the possibility of completing a higher education in today’s volatile economy. On Monday, interest rates for the subsidized Stafford loan will spike to 6.8 percent.

Sadly, the path to a college degree has devolved over the years into one of the most difficult and heart-wrenching rites of passage for young people. America has made higher education less about profession and more about personhood, where high school seniors are under immense pressure to have letters of college acceptance before graduation lest they be labeled “slackers” with “no direction in life.”

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Between the gauntlet of highly questionable public high school curricula, mandatory state exit exams and increasingly competitive college entrance tests, young people who actually make it into higher education must find some way to finance degrees that are only getting more expensive with each day. 

Student loans have allowed millions of Americans to complete the bitter education rite, but as the last ten years have shown, the inability to get good jobs upon graduation make paying them off a cruel reward for surviving four years of academic enhanced interrogation. It’s time that America reform this process and allow a free market solution to make education about consumer choice, not elitism.

Issue college gift certificates

Take a look at the modern day cell phone market. There are two ways consumers can acquire high quality smartphones. Most consumers choose a favorite cell provider, select a phone and sign up for a two-year contract. For individuals who don’t want the commitment of a monthly rate or who want to give a phoneless friend a gift, there is the option of prepaid cell phones which can be “reloaded” with minutes and app purchase credits. Thanks to this system, most of the population owns a cell phone.

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Why can’t higher education in America be the same way?

Universities need to make money and young people want to get degrees. Why not sell pay-as-you-go college gift certificates to consumers? Consider the possibilities this would open.

Say for example that Bobby, age 17, has always dreamed of attending an Ivy League school but despite being diligent in his high school studies only has a 3.25 GPA because he is bad in math. Bobby’s girlfriend Sally wants to make him feel special, so for the past six months she has been saving a portion of her part-time income to purchase a $3,000 gift card from a certain prestigious college. When redeemed, the gift card grants the holder automatic, immediate acceptance into the school and the credit to register for $3,000 worth of semester hours.

While Bobby may not have been able to survive the SAT or have a 4.0 GPA because of his academic limitations, thanks to Sally he can leapfrog all of his peers and take a class of his choice in an area that he excels in.

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If Bobby is good in art, he can take an Ivy League class and get a 4.0 on his first-ever college class during the summer. In the case of low income students, families and friends could pool their resources together and buy one gift certificate after another for college students, providing both acceptance and a pay-as-they-go option. It would also monetize education in a way that would expand the profit to previously unrelated industries.

Is there any reason you shouldn’t be able to buy a college gift certificate from WalMart in the same rack as Google Play and iTunes cards?

This free market solution immediately erases the heartache of competing for scholarships, begging for loans, weeping over brutal standardized entrance exams and makes education a good to be purchased rather than a rite to be earned. Just like some people save to buy an Android phone and others are given a pre-paid phone for their birthday, why can’t school be the same way?

Do we really need to make our children feel academically unworthy any longer? The free market allows altruism, generosity and initiative to triumph over waiting lines, frustration and debt.

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Danny de Gracia

Dr. Danny de Gracia is a political scientist and a former senior adviser to the Human Services and International Affairs committees at the Hawaii State Legislature. From 2011-2013 he served as an elected municipal board member in Waipahu. As an expert in international relations theory, military policy, political psychology and economics, Danny has advised numerous policymakers and elected officials and his opinions have been featured worldwide. Now working on his first novel, Danny resides on the island of Oahu.

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