Student loan forgiveness and free college are bad ideas.

[Beeyon]

That must be awfully galling to those who have actually managed to pay back all or a huge portion of their loans. Even more so, what would we tell people who are thirty years old and who wanted to go to college, but couldn't afford to, and decided not to saddle themselves with debt. Now they are older, have a kid or two, and no education. Suckers!

As someone who had to make their way through school without familial resources, picked schools based on cost, and studied engineering... I don't get this attitude.

Do you rage about the people who received subsidies for their electric vehicle while you drive a decade old civic? Does the mortgage interest tax deduction of those who splurged on their residence keep you up at night? Are you already upset about tax credits already subsidizing higher education?

This seems like very selective outrage. Life isn't fair, and the "corrections" society makes aren't guaranteed to be fair.

That said, I am mostly against the proposals not as subsidies per se, but for who they are subsidizing. Writing off $50k of debt for a household making $100k seems like a poor use of resources. I favor small write offs for those who tried college, dropped out, and are saddled with some debt and no degree. Say a debt write off up to $5-10k with diminishing value after an income of $25k per year.

 

[Bob001]

In the United States, an awful lot of people start their working lives deeply in debt. The source of this debt is student loans. In order to get a higher education, they borrow very large sums of money, on the order of 100,000 dollars or more, which they start paying back after they graduate and get employed. Unlike ordinary loans, this debt cannot be forgiven in a bankruptcy proceeding.
.....

Without responding to your whole rant, the fact is that teachers colleges and land grant universities were created to make higher education avaiable to everybody, at a time when it was largely the privilege of the privileged. As recently as the '80s, they were cheap and sometimes free. Colin Powell and Henry Kissinger are among the luminaries who started their education at the City College of New York when it was tuition-free. The entire California state system used to be free.

College costs have increased dramatically largely because state legislatures and the federal government have reduced their spending on them, at a time when our society as a whole has decided that a college degree is essential for just about any entry-level job. Unlike many countries, the U.S. doesn't provide apprenticeships and trade schools that prepare people to hold satisfying, productive jobs without academic degrees. So people borrow money to get through college, or get left out of many of society's rewards for their entire lives.

I think it would be a mistake to wipe out existing loans, especially when people borrowed big bucks to attend private schools when they could have attended state schools for much less. But those state schools need to be cheaper and more accessible.

An educated populace benefits the whole society in measurable and immeasurable ways. That's why we have free public education through high school. Rich people can still go to prep schools if they choose, but basic education is available to everybody. The same principle should apply to college.

As to professional schools, it would also benefit the society to train more doctors, maybe waiving tuition or forgiving loans in exchange for serving underserved communities. I don't have any problem with people borrowing money to go to law school or grad school, but I can't imagine a reason for wiping out their loans, except maybe -- again -- in exchange for some public service.

You say 18-year-olds are too young to make decisions about borrowing a lot of money; I agree, although I would think their parents are actively involved in most of those decisions. Conversely, 18-year-olds are too young to be divided into a small pool "with potential," however you define it, and writing off the rest. Education is good for everybody.

 

[Checkmite]

In practice, though, what actually happened is that we told 18 year olds that they can have an unlimited line of credit, to spend four years living on someone else's dime, with not a lot of restriction on what they do.

Oops, your premise is immediately faulty, which renders the rest of your argument moot:

1. College loans are not unlimited
2. The money can only be spent on things directly related to education

What actually happens in practice is that per semester you only get a certain, fixed amount of money which is paid directly to the school for tuition; if there is a remainder it goes on a school-administered "student cash account card" that is only accepted inside the school itself at places like the bookstore and the cafeteria, so if you're lucky you'll end up with a balance that covers your books and maybe a portion of the student meal plan, or a few bucks to spend a la carte at the school vending machines. If you're unlucky - it depends on your "expected family contribution" metric - you'll have to cover some or all of that yourself. And of course anything extra, like dorm fees and your normal costs of living, comes out of your own pocket (mostly likely a job that you work while going to school, which leaves you with little free time).

 

[crescent]

There are some pretty strict entrance exams in Germany.

Not everyone who wants a higher education gets one. That seems like a fine system.

If that's what politicians were proposing, then that would be something to debate. That doesn't seem like what they are proposing.

ETA: For reference, you can read about Bernie Sanders' plan here: https://berniesanders.com/en/issues/reinvest-in-public-education/


I didn't see any reference to entrance exams.

I don't see reference to doing away with ACT/SAT either. Those are, functionally, entrance exams.

As I read Sander's plan, elite colleges with high entrance requirements would still be elite - but that would be based more upon academic qualifications, not financial. There is nothing in there that says that every public university or college needs needs to accept everyone who applies. That seems to be a strawman in your argument - academic merit would still be a requirement for entrance, still with a gradient from competitive universities down to open-to-all community colleges.

I do note that Sander's model does not state how differences between low cost and high cost Uni's would be managed - but he does seem to focus on Public Universities, not private:

That means we have got to make public colleges and universities tuition free and we must substantially reduce student debt.

. Right away that removes the very expensive private colleges from the mix.

I don't disagree that Uni's would need to be more rigorously audited to keep unnecessary expenses down.

 

[Giordano]

MM, you presume there are affordable choices. But colleges that offer cheap courses often turn out to be scams or religious conversion factories - so more scams

The problem is precisely that students can't declare bankruptcy to rid themselves of excessive loans - if they could, universities would be much more cautious about who they accept and how much they charge.

I'm not certain from where you are citing this information:

The colleges that are scams offer expensive courses! They make their money this way.

Universities and colleges are almost always paid up front. Although some of the paper work has to be handled by the schools, they don't carry the loans. The student loans are obtained by the students from, and are owed to, some bank or other financial institution. Just like the typical home loan. For example, even if permitted to, all our students declaring bankruptcy would not affect the financial balance of the University of California at all: they don't owe the University any thing. Instead some bank or loan agency would get burned.

It is possible that some scam-colleges carry their own student loans; I don't know but I don't think so. They know that many of their students are not going to be able to pay them back in full. I think many of the scams strongly encourage and help the students to get loans, even lying when necessary, but they don't carry the loans themselves.

 

[Elagabalus]

As someone who had to make their way through school without familial resources, picked schools based on cost, and studied engineering... I don't get this attitude.

Do you rage about the people who received subsidies for their electric vehicle while you drive a decade old civic? Does the mortgage interest tax deduction of those who splurged on their residence keep you up at night? Are you already upset about tax credits already subsidizing higher education?

This seems like very selective outrage. Life isn't fair, and the "corrections" society makes aren't guaranteed to be fair.

That said, I am mostly against the proposals not as subsidies per se, but for who they are subsidizing. Writing off $50k of debt for a household making $100k seems like a poor use of resources. I favor small write offs for those who tried college, dropped out, and are saddled with some debt and no degree. Say a debt write off up to $5-10k with diminishing value after an income of $25k per year.

Agreed. This seems to be a "Why don't the young kids take college more seriously" thread with maybe an optional "like I did!" tacked on to the end.

 

[Beeyon]

if there is a remainder it goes on a school-administered "student cash account card" that is only accepted inside the school itself at places like the bookstore and the cafeteria

Are you sure about that? I'm over a decade removed from campus, and back then the remainder came to me as a check. Assuming this (the school cash card) is actually happening, the practice needs to be banned immediately. The idea that a school could require you to spend your loan money at the "company-store" is an outrage.

When I took thermodynamics the textbook used by the class had just printed a new edition. The university bookstore only had new copies of the new edition for $425. Off campus stores had legitimate used copies of the previous edition for $7. Requiring students to pay at their retailers would be a gross tax on their loan distributions.

 

[Giordano]

It's not very much like health care at all. There's a bit of overlap, but there are huge differences.

Here's a situation that can come up in our current educational system. An 18 year old person can decide to borrow 100,000 dollars over the course of four years to enable that person to study ornamental horticulture. It turns out that the demand for ornamental horticulturalists is not as big as the supply, so they will either get a job unrelated to their college degree, or they will get a low paying job within their chosen field. Either way, they must repay that loan, without even the option of bankruptcy.

What's the analogous situation in health care? They can go into just as much debt due to treatment requirements, but the alternative is death, so they would probably decide it's worth it.

Now, if we just forgive the loan, that's great for the borrowers, but, what's in it for the rest of us?

And if we make it free to pursue a path of studies in ornamental horticulture in the future, what's in it for those of us who are paying the bill for the "free" stuff? And, if both schools are free, why would the kid not opt for the one with the new aquatic center that is free for student use?

What's the corresponding case for medical care?

Sorry, you picked a bad example. A degree in ornamental horticulture opens up a lot of job opportunities in careers from plant breeding and genetic engineering to landscape design and farming. And there is a big boost in salary with that kind of degree over its absence (i.e. what is essentially a gardener). So that's what is in it for us paying the bills: another well employed citizen making money and helping the state economy as well as strengthening the agricultural base. And other tax payers will in turn help pay the bills for our own children when they pursue their own careers whether in computer coding or in art.

If both schools are free and one has a new aquatic center? Well the student will balance out how good the school in scholastically and in terms of reputation vs their desire to swim in the evenings in a new pool. And in my experience most will select primarily on the basis of the former.

Why do you think colleges students are so dumb and shallow that the majority of them would chose a fancy pool over setting up the foundations for a career that will span the rest of their lives? They (and their parents and advisers) realize how competitive the job market is and that the school they go to, and their grades and letters of recommendation, are crucial to get a good job.

And for those who pursue majors that are not as directly linked to money as some others: great! Society benefits from smart knowledgeable people in many, many different ways. Knowledge itself is a very valuable commodity.

 

[Giordano]

What if they are studying art history?

All power to them! Do you think art is meaningless to society?

 

[theprestige]

All power to them! Do you think art is meaningless to society?

Cargo cult argumentation, via passive-aggressive rhetorical questions.

What material benefit accrues to society, by diverting human effort to this cause? Rather than letting the humans making the effort enjoy its benefits directly?

 

[Cain]

Free college is a good idea. Free college for everybody is... maybe not such a good idea. Why does everyone have to go to college? For a lot of the job market, higher education is just a positional good. There is also the problem of incentives.

I think I've told this anecdote before. I used to teach at a small university where a colleague would charter buses to take students to the Getty for an extra-credit assignment. It was just a way to get their bodies into a world-class museum. A bunch of kids would sign up, and then Friday morning or Saturday morning came around, and they'd rather sleep in than board the bus. The school would spend a thousand dollars on a bus that wasn't even used, so something needed to change. The revised policy was that students had to pay $12 to reserve a spot, BUT they'd receive a full refund if they made the trip. Shirking plummeted dramatically.

As far as the original post is concerned, there is a problem with universities and all of their ridiculous amenities. A modern gym, a lazy river, wtf?

The conservative "starve-the-beast" strategy of tax cuts can encourage MORE government spending. That is to say, tax cuts grow the government. This is because people get four trillion dollars worth of spending for only three trillion dollars in taxes, and figure it's not such a bad deal. Eventually, the bill will come due -- though you hope to stick it to future generations. College students can enjoy their cathedrals and pyramids without any initial sacrifice, so why not? They figure they'll get a high-paying job since the university is more expensive/prestigious. And maybe they will.

The students who are 100+K in debt are often better at repaying their loans than students who are 5K in debt. The thing about debt forgiveness is that it could very well redistribute money to people who already have high incomes.

 

[C_Felix]

I don't know about forgiving student debt, or how to go about that...

...but...

If I were in charge, I'd make student loans locked in at 1% interest rate.
The banks have a right to make money on their loans, but, in the case of wanting to be educated, I believe, what could be tantamount to usury, should be legislated out of existence.

 

[Checkmite]

Are you sure about that? I'm over a decade removed from campus, and back then the remainder came to me as a check. Assuming this (the school cash card) is actually happening, the practice needs to be banned immediately. The idea that a school could require you to spend your loan money at the "company-store" is an outrage.

That's how it worked for me.

When I took thermodynamics the textbook used by the class had just printed a new edition. The university bookstore only had new copies of the new edition for $425. Off campus stores had legitimate used copies of the previous edition for $7. Requiring students to pay at their retailers would be a gross tax on their loan distributions.

Maybe it's different between schools? What I know for certain: the government and/or lender paid the total directly to my school, not to me. After subtracting tuition and "lab fees" as appropriate, and after buying my books and supplies at the bookstore "on my account", the rest was disbursed by the school onto the student card, and that was it. I used it for food, I managed about 3 lunches a week for four weeks before the card was empty and I had to add money. Now that you mention it, I believe any money that would theoretically have been left from the loan at the end of the semester would've been given back to me by check, but - yeah, no. I guess I was always free to spend my own money to buy the books offsite, and then wait for the "refund" check at the end of the semester, like I could afford to that. Also, some classes state in their syllabus that they require the newest or otherwise specific editions of the books, so buying a random older edition for cheap isn't always an option.

For what it's worth, I was able to resell the books back to the bookstore at the end of the semester and that money was paid directly to me. Of course we're talking books whose list prices were $500-plus and I think once I got $50 back for one, $30 for another, but the rest always got me $18-$25. I never got more than $120 or so total back for books at the end of any semester, and yay it was cash, but I usually put more than that back onto the card for food each semester so...yeah, that's what "unlimited credit and few restrictions" looked like for me.

 

[Checkmite]

Free college is a good idea. Free college for everybody is... maybe not such a good idea. Why does everyone have to go to college?

They don't. Why do you think college being free for everyone who wants to go translates to "everyone has to go to college"?

 

[ArchSas]

Oops, your premise is immediately faulty, which renders the rest of your argument moot:

1. College loans are not unlimited
2. The money can only be spent on things directly related to education

Yeah, I'm glad someone else caught that, too. As someone who's actually been to college and used student loans within the past few years in the US (unlike the vast majority of people on this forum as far as I can tell), it's pretty obvious to me that MM has no idea what he's talking about. That whole rant is just elitism, "kids these days"-ism, and right wing strawmen. I was considering giving an actual response to it, but it's too far in the "not even wrong" category for that to be worthwhile.

Seriously, every time I come to this board, I'm astoundingly disappointed at the kind of "skepticism" shown here.

 

[Meadmaker]

Do you rage about the people who received subsidies for their electric vehicle while you drive a decade old civic? Does the mortgage interest tax deduction of those who splurged on their residence keep you up at night?

When on the internet? Yes. (In other words, in real life I don't rage, but on these forums, I add emphasis sometimes. But I am against them.)

But it's not a comparable issue. It would be more like if I drove a decade old civic, and my neighbor drove an expensive car that they bought with a loan, and then at some point the government said it was really horrible that people have all this car debt, and it should be forgiven.

Or they decided that people can't really afford cars, so the government will buy the cars.

Are you already upset about tax credits already subsidizing higher education?

The way it is proposed? Yes. Once upon a time, there were a small number of people who attended college, and the curricula were largely determined by the people providing the subsidies regulating the number of people, including the size of the departments. The number of art professors, which determined the number of available slots in the art department, was selected by the university governors, and was highly influenced by the needs of society.

With "free college", at least in the Bernie plan, we would let students decide what to study, and whatever it was, we'll pay for it. In that link I posted earlier, Bernie laments that some people have to seek high paying jobs instead of following their dream of being an artist, just so they can pay back their student loans. Uhhh…..Bernie? That's the way it's supposed to work. I'm pretty ok with that.

That said, I am mostly against the proposals not as subsidies per se, but for who they are subsidizing. Writing off $50k of debt for a household making $100k seems like a poor use of resources. I favor small write offs for those who tried college, dropped out, and are saddled with some debt and no degree. Say a debt write off up to $5-10k with diminishing value after an income of $25k per year.

And if the truth be told, I could live with some sort of small writeoffs or forgiveness. As noted earlier, I would certainly be ok with allowing bankruptcy, and think it is shameful that we don't.

 

[Meadmaker]

Oops, your premise is immediately faulty, which renders the rest of your argument moot:

1. College loans are not unlimited
2. The money can only be spent on things directly related to education

So, what's up with the debt crisis?


I mean, is it extremely important if it is "unlimited" (yes, I know that's what I said) instead of "based on a formula that takes into account family income, personal assets, and the cost of whatever institution oi higher learning you happen to attend"?

The point is that you can borrow a heck of a lot of money. So much money that you might never pay it back, that it will at least be a significant burden for a long time, and that politicians will get elected, or at least try to get elected, by promising that maybe you won't have to pay it back. And future people will incur at least as much cost, which means enough that it would be a huge burden on their lives, except that someone else will pay for it.

And all the other stuff is still true as well. Those 18 year olds aren't going to make better choices of how they spend their time if they never have to pay the bills for that time themselves.


Somehow, we've gotten into a situation where millions of people are in debt up to their eyeballs, beyond anything they can pay back without a significant burden, and people are trying to find ways to make sure that they can transfer that burden to somebody else. It doesn't seem like a great solution to me.

 

[Meadmaker]

I don't see reference to doing away with ACT/SAT either. Those are, functionally, entrance exams.

The difference is that in Germany, if you don't pass the exams, you don't go to school. It's not that you don't go to an elite school. You don't go to school. The state will not make your education free unless you meet some strict requirements.

And I don't know how they decide who studies what, but I'm guessing that there aren't unlimited art subsidies available. Under the German plan, you might still be able to follow your dream of being an artist, but if so you will do so after being trained in something the government deems worthwhile. (As I say I don't know how they do it in Germany exactly, but I'm guessing that with the government picking up the tab, the number of students in sociology is limited in some way. Perhaps someone can enlighten us.)

There is nothing in there that says that every public university or college needs needs to accept everyone who applies. That seems to be a strawman in your argument

Since I never said, suggested or implied otherwise, it can't be a strawman....on my part.

But, under Bernie's plan, lots more people could attend some sort of college, and the taxpayers would foot the bill, and then those kids could pursue their dreams to be artists instead of getting a job with enough income to repay their student loans. (For those who didn't click the link, that's not an exaggeration. It's right there in the plan, right there on Bernie's web site itself.)

 

[lionking]

Cargo cult argumentation, via passive-aggressive rhetorical questions.

What material benefit accrues to society, by diverting human effort to this cause? Rather than letting the humans making the effort enjoy its benefits directly?

Art historians like Sister Wendy and Robert Hughes have educated, informed and given pleasure to millions of people. They have done so by explaining the context of the art, the social conditions which helped produce it, the influence of the art and its legacy.

You seem to put no value on people who enhance the enjoyment of art. I do. Art history is important to many. If it’s not to you, your loss.

 

[Meadmaker]

Why do you think colleges students are so dumb and shallow that the majority of them would chose a fancy pool over setting up the foundations for a career that will span the rest of their lives?

Two reasons.

One is I hang out with 18 year olds. (Robotics team.)

The other is, I researched it.

Tonight, I simply typed into Google, "Why is college so expensive?" Here's the first link: https://www.businessinsider.com/why-is-college-so-expensive-2018-4

And, what are the answers?

It will talk about the role that financial aid plays in driving up costs, and the burgeoning cost of student services, in which they include dormitories and "facilities". (That would be the swimming pools. Yes, it would also include the labs.)

18 year olds in general aren't the most responsible sorts.

The grownups really need to make more of the decisions.

Meanwhile, to reiterate, there really is a student debt problem in this country, and it really came from somewhere. The solution to it is not to find a way to keep doing all of the things that caused the debt problem, except shift the burden away from students and onto taxpayers.