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Student Loan Forgiveness

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Good article. I also didn't know how that college graduates were such a small part of the population.

 

Bachelor degrees or higher are about 33% of the 25 and older population.

 

I can understand why Mr. Roche and many Gen-x'ers like him might take this somewhat narrow view of college education as just another all-about-me undertaking.  For one, he is probably unaware that college education used to be, at worst, affordable and, in many cases, essentially free.  But its deeper than that.  He never addresses the core question: why do we as a society want to have college education?  Clearly its because college educated citizens are essential for a thriving society.  Following his attitude to a logical end, why not charge for high school, junior high school or kindergarten.  Clearly a high school graduate makes more than someone without a high-school diploma - I would suspect  Mr. Roche would expect them to pay for the privilege of a higher income too.

We want people to go to college.  We incentivize them with a livable income because of their high value to society.  No matter what one's profession, we as a society want trained citizens and should do everything to make getting a first class education as attractive as possible.  Only in America do we self-destruct by putting every obstacle possible in the path toward allowing people to achieve their potential.

 

Hi Paul,

I am not sure what's "narrow" about my view? I am fully aware that college used to be far less expensive in the USA. That is, in large part, because it was less valuable relative to other job opportunities. But as the USA became a more skilled and service oriented economy that relative value gap widened. And the cost of college changed as a result of that. College isn't free because the value of a college degree has skyrocketed.

Now, that will very likely change in the future. I actually suspect that college will become less and less valuable moving forward and that some other system will slowly phase it out (mentorships and other competing human capital systems), but for now the evidence is clear.

In any case, I am all for subsidizing education. The US govt spends more per student than any other country. I am not saying this is bad or that we shouldn't do it. I am not saying that we shouldn't have student loans or any govt aid.

 

"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche

I stand somewhat corrected.  In my opinion, your article focused on college education more as a commodity rather than a necessary component to a thriving society.  A college educated citizen is a "gift" to society.

I don't believe the skyrocketing cost of education is due to the "value" of a degree.  A college degree was just as valuable to society 50 years as it is today.

I question your statement that the US pays more per student than any other country - I'll have to research that.  But I suspect that "payment" includes costs that many other countries provide to the general population that, in the US, are dumped onto the individual student.  For instance, the cost of health care is a universal "payment" in other countries. In the  US college professors must include health care costs in their "fee" for service.  We are comparing apples and oranges and need to know what externalities are included in the statistics.

I don't doubt that the mode of education will change drastically - it already has.  Many universities have become giant sports enterprises with massive undeserved endowments. Lots of room for cleaning house.  With families having children later in life, the order might even be changed to allow for mandatory non-military service to the country before college.

So I am saying, we shouldn't have a need for student loans.  My tuition at a private college was essentially free and I was paid to attend graduate school.  You probably have not experienced that paradigm so its understandable that it might seem somewhat odd and unnatural to you.

I think the problem is that you can't really make school free in the USA because the government doesn't have the budget space. The estimated cost of the Sanders plan is $75 billion per year. That means it's probably much higher. But the point is that the USA doesn't have the budget space for that without much higher taxes.

In my opinion, there are much bigger battles to be won first. I'd like to see healthcare 4 all before free college. Future rich college kids don't need the financial aid, but the elderly and unhealthy do.

Sanders is a classic not too bright populist.   It's always somebody else's fault.   In Sanders's case it's the rich and Wall Street.  In Trump's case it's non-white immigrants.  Both peddle ridiculous, mostly fact free, views and policies.

Both health-care and higher education are more expensive in the USA than anyplace else.  Why?  Because both are labor intensive and are mostly high wage markets.   A big driver of college cost is the salaries of professors which have risen as their market value outside of college has increased substantially in line with most other PhD level jobs.   Granted the highest paid are generally self funded through research grants (which while necessary distort the system) but it is a case where trickle down economics sort of works.

The unfairness of Sanders plan is huge.  It mostly benefits those who made an investment in their education, but who statistically benefitted from the class based bias in K-12 education to get to higher ed.   Now he wants to increase the societal bias of socio-economic class.

I'm all for more education, but to have any impact on socio-economic bias in education we should focus on the common denominator, K-12 education.

I think the federal student loan programs have also contributed to the much higher than inflation increases in college tuition (and room and board) costs.  Schools work hard to legally game the system to help students get financial aid and loans, with few incentives to be price sensitive.  There's also the competition among some schools to offer the best amenities - stuff that's just not necessary in obtaining an education - and stuff that wasn't on campuses back when I was in school (1977-1981).  I do think education is quite valuable- but that certainly doesn't always mean college.  Higher education will continue to evolve - and the internet will play a bigger and bigger role.  Skilled trades deserve more attention from politicians like Bernie Sanders (and Donald Trump) too.  We can't push a button and suddenly emulate the successful German model for apprenticeships in technical fields, but we can improve access to technical/vocational education.  I live in Florida -and you what is more popular than beaches in Florida?  The answer is AIR CONDITIONING.  I know a few local business owners that attended our local vo-tech school and went through the HVAC program.  Those guys got some work experience after obtaining their certifications - then went out on their own and started their own HVAC service businesses.  After many years of lots of hard work - those guys are in good financial shape - and I happen to know that they are able to pay themselves more than plenty of lawyers I know - and as much as some doctors I know.  I know plumbers who traveled a similar path, and now make good money.

Well, the fact that Europe has no problem providing free and/or affordable college education completely disproves any excuses here on why the most powerful country in the world can't handle it.

Ending student loans, which BTW disproportionately impact minorities, would present a huge boon to the economy - its a no-brainer.  Instead of  being whining "no-fair" cry-babies ,those who have paid back loans would certainly benefit.  People who are forced to take shit meaningless jobs to pay back exorbitant tuition bills would be freed to pursue meaningful careers.

Its the most backward argument I can imagine to oppose positive change because others have suffered under an old broken dysfunctional system.

The reason Europe can afford all the stuff that the USA can't is because they don't have the insanely huge military budget that the USA has. Trump doesn't make many good arguments, but one thing he gets massively right is that the rest of the world takes advantage of us for our military. Granted, we've let that happen, but it's still the truth.

In theory, we could cut the military budget back and divert a lot of that spending towards healthcare and education, but that's impractical because so much of the military budget is basically fixed costs that can't be easily diverted or unwound without hurting a lot of people who rely on the income. That's why it's a political non-starter to cut the military budget and it's why it seems to be a one way train to an ever larger military.

Of course, we all know the USA can "afford" these things. The question is whether they will cause high(er) inflation and what level of inflation are we willing to tolerate to get all this "free" stuff? After all, nothing is free in the aggregate. We pay for it through taxes and/or inflation in the end.

"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche
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