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  #151  
Old 04-24-2019, 08:41 AM
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Why don't state education boards just lower tuition fees with the wave of a pen? Seems like they have that power.
  #152  
Old 04-24-2019, 08:45 AM
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That's the way it used to work. Since ObamaCare, the federal government is loaning the money themselves. Banks aren't involved in the process really at all anymore (which came as a bit of a surprise to Maxine Waters too, I think, so don't feel bad)
Huh... my loans were Stafford loans, which were by a private lender, but since they're backed by the government, had a lower interest rate than comparable entirely private loans.

I didn't realize the government is directly loaning money now. What's the advantage of doing that exactly? Seems like they picked up all the overhead and trouble, without actually making any money on the deal.
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Old 04-24-2019, 08:49 AM
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Why don't state education boards just lower tuition fees with the wave of a pen? Seems like they have that power.
Because monetary input must match monetary output. Unless you want the schools to borrow money, that wave of a pen would need to include concomitant cost reductions or state funding increases. Which are decisions they could make.
  #154  
Old 04-24-2019, 08:53 AM
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Huh... my loans were Stafford loans, which were by a private lender, but since they're backed by the government, had a lower interest rate than comparable entirely private loans.

I didn't realize the government is directly loaning money now. What's the advantage of doing that exactly? Seems like they picked up all the overhead and trouble, without actually making any money on the deal.
The government accountants figured it would save them a fair bit of money. That's why they did it: they were looking for ways to offset the cost of Obamacare and figured this would help some.
  #155  
Old 04-24-2019, 09:03 AM
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I found this a rather good take on the plan and student loans in general today. ISTM it touches on both the positive assertions and negative comments posted in this thread thus far.

The important thing is that the cost of college today is far out of proportion to what it was not so long ago. The current situation is simply unsustainable on a societal level. Do I have any gripes about all the money I've paid off for my student loans? No, and I'm almost finished paying that off. Granted, I did not need to use student loans for all of my college education: I got MGIB, attended community college, and finally graduated from a state university. I also did take a number of courses while I was overseas both before and during military service. One could say that the majority of my education was paid for with other people's money, some of which I have spent the last fifteen years repaying. Yet, I still have no gripe if Senator Warren's plan is enacted.

I got an education, I got employment, and others deserve the same opportunity. As I said, the current system is unsustainable and, since it takes a double-miracle practically to have student loans discharged in bankruptcy, it will become even more unsustainable in the near future. This is not reparations. It's simply a move to make a college education what it purports to be.
As you noted that article is a good one:

Quote:
But the biggest impact of student loans may be on those who decide not to apply for them at all. In contrast to the over-educated stereotype, most young people did not go to college. In a survey last year, 70 percent of millennials said finances played a role in their decision about whether and where to attend university. In the middle of an economic recovery that so far has delivered most of its benefits to the college-educated, erecting a financial wall around higher education could leave millions of Americans behind.

So however you feel about the specifics of Warren’s plan, it’s important to acknowledge the reality that young people face. There’s little evidence to suggest that millennials differ from previous generations in moral values or work ethic. There is abundant evidence, however, that they inherited vastly different economic and educational conditions than their parents.
  #156  
Old 04-24-2019, 09:14 AM
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I wonder what the effect would be on athletic scholarships?

Only a few people make it to be a professional so the big reason parents shell out the big bucks is for a scholarship to pay for college. But what if that need wasnt there? Why even work to play on a college team? Just for the glory of saying you played for State? Maybe. In some sports. But for most athletes the time commitment that they put in right now wouldnt be worth it without the fear of being cut from the team and losing your scholarship.
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Old 04-24-2019, 09:16 AM
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Why don't state education boards just lower tuition fees with the wave of a pen? Seems like they have that power.
Well actually right now the states subsidize colleges but if the federal government will now pay the tab, why should the states give the universities any money?
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Old 04-24-2019, 09:17 AM
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I already did challenge that, and it seems that it is peculiar to claim that Trump's narrative is of gloom when he himself talks about minorities and the poor doing better under him.

Again, not challenging your point, the point that I and the other poster made stands, per Pew, the purchasing power of most Americans has stalled. "After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978"
Is Pew using CPI-U, CPI-U-X1, CPI-U-RS or PCE (or, are they using R.O.U.S. .. this last one being a trick question )? Since it looks to me, skimming the article, that it's from the Bureau of Labor Statistics, I'd guess it's one of the former, probably CPI-U-X1. If so, then you might want to dig into some of the objections to using those stats to draw the conclusions they are drawing. If they are using PCE then...never mind. If they are using R.O.U.S. then my suggestion would be to run, very fast...
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  #159  
Old 04-24-2019, 09:18 AM
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Again, not challenging your point, the point that I and the other poster made stands, per Pew, the purchasing power of most Americans has stalled. "After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978"
"The average middle class person has virtually stagnant pay over the last several decades" and "today’s average hourly wage has just about the same purchasing power it did in 1978" do not have the same meaning. UCBearcats may have meant one thing while typing something else, but we can only go by what was actually written. And the average person gets paid more over time -- see any BLS CPS earning-by-age table. The average wage is masked by entrants and exits from the job market: https://www.frbsf.org/our-district/a...wth-good-news/
That is, grandma retires, dad gets a raise, junior gets her first job. That decreases the average wage even though nobody is suffering. We have 10k boomers hitting 65 every day, so I expect this demographic masking to continue.
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Old 04-24-2019, 09:32 AM
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"The average middle class person has virtually stagnant pay over the last several decades" and "today’s average hourly wage has just about the same purchasing power it did in 1978" do not have the same meaning. UCBearcats may have meant one thing while typing something else, but we can only go by what was actually written. And the average person gets paid more over time -- see any BLS CPS earning-by-age table. The average wage is masked by entrants and exits from the job market: https://www.frbsf.org/our-district/a...wth-good-news/
That is, grandma retires, dad gets a raise, junior gets her first job. That decreases the average wage even though nobody is suffering. We have 10k boomers hitting 65 every day, so I expect this demographic masking to continue.
Is this mike on?

Taps..

Again, not countering that, the point was about purchasing power, your article does report on the item I'm not criticizing (in reality that growth is good, but needs improvement; again, because of the lesser purchasing power) but it does not do any comparison with past purchasing power.

https://www.nytimes.com/interactive/...ob-market.html
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The federal minimum wage, currently $7.25 an hour, has not increased since 2009, and its purchasing power has never returned on a sustained basis to what it delivered in the 1960s and ’70s.

In response, some state and local governments have passed laws raising minimum wages to as high as $15 an hour, arguing it is the best way to ensure that low-wage workers who otherwise have little leverage are able to earn a living wage and share in the country’s economic growth. That movement has produced a backlash in Republican-controlled statehouses, where lawmakers have tried to pre-empt localities from enacting their own minimum wages.
  #161  
Old 04-24-2019, 10:52 AM
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I also agree that a blanket forgiveness program would be profoundly unfair. There are a lot of people out there that made an economic decision to invest in an expensive high value educational degree, such as a law degree, an MD or an MBA.

And in many cases this was a sound decision and the degree will provide the return on investment that they anticipated. And I don’t see any reason why we should enrich these people, many who come from privileged backgrounds.

And frankly, if someone was dumb enough to pay a quarter million bucks for a useless degree at a for profit college they selected because it has luxury apartment dorms and swimming pool - I don’t want to help them either.
I am in favor of free or low cost state and city college, i think NYC made a great move by making CUNY ( City University of New York) free to most students.
And I could support a program like HARP, maybe making provisions to refinance the worst loans at low or no interest. But blanket forgiveness? No way.
  #162  
Old 04-24-2019, 10:59 AM
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I think the idea is pretty awful myself. Not for the moral hazard reasons, though I think those have merit as well. Very simply, the problem I see with increasing student loan debt is that tuition has risen in response to increased supply of money. Student loans became more plentiful, and universities responded by increasing tuition, the cycle continues and we're looking at inflation in the college education space.

I see it similar to the housing bubble in the run up to 2008. People getting hordes of money they previously wouldn't have been able to, drives up the price until at some point the bottom falls out of the unsustainable rise. Being against NINJA loans isn't equivalent to being opposed to people owning their own home. Being opposed to student loans being used for purposes that would never yield a sufficient return to repay them is not equivalent to being opposed to higher education.

The way it is being done now I think is unsustainable. Forgiving loans having the government pick up the tab is like putting out a fire with gasoline.
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Old 04-24-2019, 11:29 AM
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Well actually right now the states subsidize colleges but if the federal government will now pay the tab, why should the states give the universities any money?
Indeed. They could then triple the tuition. Why would the students care? The feds are paying.

So then we will have the feds start introducing measures to control tuition costs and mandating that certain programs be cut to keep those costs down.

Then the upper tier schools starting with the Ivy League will buck that system and say that they won't accept the federal vouchers.

Eventually we will get to the "new normal" whereby the college paid for by the feds is not viewed as desirable by employers and only those who went to the schools which did not accept the federal money as being truly cert worthy. Students from middle class homes will want to attend those schools and take on debt.

So, we will end up right back where we started, except with an uber-massive government entitlement which if proposed to be eliminated will be met with cries of "Republicans want to end education for poor people."
  #164  
Old 04-24-2019, 11:42 AM
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I think the idea is pretty awful myself. Not for the moral hazard reasons, though I think those have merit as well. Very simply, the problem I see with increasing student loan debt is that tuition has risen in response to increased supply of money. Student loans became more plentiful, and universities responded by increasing tuition, the cycle continues and we're looking at inflation in the college education space.

I see it similar to the housing bubble in the run up to 2008. People getting hordes of money they previously wouldn't have been able to, drives up the price until at some point the bottom falls out of the unsustainable rise. Being against NINJA loans isn't equivalent to being opposed to people owning their own home. Being opposed to student loans being used for purposes that would never yield a sufficient return to repay them is not equivalent to being opposed to higher education.

The way it is being done now I think is unsustainable. Forgiving loans having the government pick up the tab is like putting out a fire with gasoline.
I don't recall if PJ O'Rourke originated the line, or just quoted it, but it ran "if you think health care costs a lot now, wait til you see what it costs when it's free". Same thing with college tuition.

The idea behind this plan AFAICT is
  • There are a significant number of people who want to go to college, and could succeed in college, but are prevented from doing so because they can't afford or don't want to incur the debt, and
  • if those folks do go to college, their earnings over their lifetime and therefore the amount of taxes they pay will be raised enough that it will offset the cost of their tuition.
Right now, people take the risk that incurring debt and getting a college degree in something marketable will pay off. Their earnings will go up by enough to make the bet worthwhile.

If the government is paying, then it doesn't matter if your earnings go up (to you) or not. Someone else is paying anyway - if your passion is Art History or Theater of Film Studies or something, and it doesn't pay off, oh well. Four years wasted, but you just go out and get the same job you could have anyway.

A friend of mine got his Ph.D. in Neopunic Orthography. He is a nice enough guy, and pretty smart overall. But he was working as a manager, and the ability to discuss the niceties of funerary inscriptions did not crop up very much.

Regards,
Shodan
  #165  
Old 04-24-2019, 11:48 AM
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Is Pew using CPI-U, CPI-U-X1, CPI-U-RS or PCE (or, are they using R.O.U.S. .. this last one being a trick question )?
That acronym doesn't mean what you think it means.
  #166  
Old 04-24-2019, 11:51 AM
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That acronym doesn't mean what you think it means.
No? What else does it mean? What I THINK it means is Rodents Of Unusual Size, but perhaps it's something else?
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  #167  
Old 04-24-2019, 11:53 AM
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I think the idea is pretty awful myself. Not for the moral hazard reasons, though I think those have merit as well. Very simply, the problem I see with increasing student loan debt is that tuition has risen in response to increased supply of money. Student loans became more plentiful, and universities responded by increasing tuition, the cycle continues and we're looking at inflation in the college education space.

I see it similar to the housing bubble in the run up to 2008. People getting hordes of money they previously wouldn't have been able to, drives up the price until at some point the bottom falls out of the unsustainable rise. Being against NINJA loans isn't equivalent to being opposed to people owning their own home. Being opposed to student loans being used for purposes that would never yield a sufficient return to repay them is not equivalent to being opposed to higher education.

The way it is being done now I think is unsustainable. Forgiving loans having the government pick up the tab is like putting out a fire with gasoline.
Hmm. I'm not sure of that. Students loans as we've currently let them be designed are non-market based and downright predatory. Even with that we're beginning to see four-year schools - private ones - fail and shut down because there's not enough bang-for-buck.

But I don't disagree with you on 'making more money available makes prices rise'. We see the same thing in health care. Take away insurance and a the health care industry would face significant pressure to adapt or die. That could spur a lot of innovation while being astonishingly chaotic during the transition.

But it's more complicated that it looks on the surface. There's a real correlation between the level of education in a population - not just in practical subjects - and the overall productivity-per-worker as well as an increased skepticism in the population of institutional behaviors. I, personally, think increased productivity and a greater number of people doubting our large organizations is a good thing. Others may disagree.

A quick though on an idea to deal with these? Start off two a few things.

1) Provide education with full rides to the top 10-20% of students at every high school. I believe GWB put this in place during his time as governor or Texas.
2) Limit the amount that can be borrowed - even from private sources - for college. This applies downward pressure on rising college costs.
3) Make students loans bankruptable. Give the lenders some skin in the game. Make them have to assume risk to make the loans. As it is it's another example of 'privatized profit/socialized risk' that we see so often in the financial industry.
  #168  
Old 04-24-2019, 11:58 AM
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Hmm. I'm not sure of that. Students loans as we've currently let them be designed are non-market based and downright predatory. Even with that we're beginning to see four-year schools - private ones - fail and shut down because there's not enough bang-for-buck.

But I don't disagree with you on 'making more money available makes prices rise'. We see the same thing in health care. Take away insurance and a the health care industry would face significant pressure to adapt or die. That could spur a lot of innovation while being astonishingly chaotic during the transition.

But it's more complicated that it looks on the surface. There's a real correlation between the level of education in a population - not just in practical subjects - and the overall productivity-per-worker as well as an increased skepticism in the population of institutional behaviors. I, personally, think increased productivity and a greater number of people doubting our large organizations is a good thing. Others may disagree.

A quick though on an idea to deal with these? Start off two a few things.

1) Provide education with full rides to the top 10-20% of students at every high school. I believe GWB put this in place during his time as governor or Texas.
2) Limit the amount that can be borrowed - even from private sources - for college. This applies downward pressure on rising college costs.
3) Make students loans bankruptable. Give the lenders some skin in the game. Make them have to assume risk to make the loans. As it is it's another example of 'privatized profit/socialized risk' that we see so often in the financial industry.
Those all sound reasonable to me, with some checks and balances in place. I'd vote for such a plan. I also agree with you that a general well educated populace is an overall benefit to society in and of itself. I also think that it makes good economic sense, regardless. The trouble is balancing everything, as well as fairness and access. The first bullet you provide especially would be something to balance with those checks in place to make sure it's not just the elite (i.e. smartest or those who get the best grades at least, which aren't always the same thing) get the benefits.
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  #169  
Old 04-24-2019, 11:59 AM
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I think the idea is pretty awful myself. Not for the moral hazard reasons, though I think those have merit as well. Very simply, the problem I see with increasing student loan debt is that tuition has risen in response to increased supply of money. Student loans became more plentiful, and universities responded by increasing tuition, the cycle continues and we're looking at inflation in the college education space.

I see it similar to the housing bubble in the run up to 2008. People getting hordes of money they previously wouldn't have been able to, drives up the price until at some point the bottom falls out of the unsustainable rise. Being against NINJA loans isn't equivalent to being opposed to people owning their own home. Being opposed to student loans being used for purposes that would never yield a sufficient return to repay them is not equivalent to being opposed to higher education.

The way it is being done now I think is unsustainable. Forgiving loans having the government pick up the tab is like putting out a fire with gasoline.
Agreed. As an example, some time ago, my grandmother showed me the tuition bill from my father's college education. He went to a local state run university. In 1968, tuition was $154.00 per semester. If you plug that into an inflation calculator, it comes to $1,124.92 in 2019 dollars.

That would be well within the means of most families to save for. It would be well within the means of any student to work their way through school. Good students, the ones most likely to succeed in their career path, could still get scholarships to pay for that. But we had the federal loan program which inflated these numbers far beyond a person's ability to self pay.

Instead of realizing the error and getting out of the boondoggle, the government wants yet another program with even more unintended consequences.

I went to a state school in 1994. By the same calculator, tuition should have been $655.83/semester. It was $950, nearly 1.5 times the rate of inflation.

Today it is $3,816/semester, almost four times the rate of inflation since 1968, and nearly double the rate of inflation since 1994.
  #170  
Old 04-24-2019, 12:13 PM
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Indeed. They could then triple the tuition. Why would the students care? The feds are paying.

So then we will have the feds start introducing measures to control tuition costs and mandating that certain programs be cut to keep those costs down.

Then the upper tier schools starting with the Ivy League will buck that system and say that they won't accept the federal vouchers.

Eventually we will get to the "new normal" whereby the college paid for by the feds is not viewed as desirable by employers and only those who went to the schools which did not accept the federal money as being truly cert worthy. Students from middle class homes will want to attend those schools and take on debt.

So, we will end up right back where we started, except with an uber-massive government entitlement which if proposed to be eliminated will be met with cries of "Republicans want to end education for poor people."
Sounds reasonable, until one notices that that is not what usually happens in developed countries were college is free or the price is not onerous.

https://www.businessinsider.com/how-...cation-2016-11

Last edited by GIGObuster; 04-24-2019 at 12:14 PM.
  #171  
Old 04-24-2019, 12:20 PM
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A quick though on an idea to deal with these? Start off two a few things.

1) Provide education with full rides to the top 10-20% of students at every high school. I believe GWB put this in place during his time as governor or Texas.
2) Limit the amount that can be borrowed - even from private sources - for college. This applies downward pressure on rising college costs.
3) Make students loans bankruptable. Give the lenders some skin in the game. Make them have to assume risk to make the loans. As it is it's another example of 'privatized profit/socialized risk' that we see so often in the financial industry.
Quick thoughts as well:

1) It seems like a great idea, but then there are problems as well. Let's say that my kid is in the top 35% at his school and will have to pay for his college. What is to stop me from moving to a poorer and underperforming district so that he is now in the top 20%? The "per school" argument smacks of affirmative action (and a debate for another thread). Why should I have to move somewhere within the state for this benefit; should really be the top 10 to 20 percent in the state. If we are investing money, then those worthy shouldn't be an accident of geography.

2) But then we get what I talked about. The elite schools will go above the caps and we will have the rich/poor dynamic again. Some super smart kid from a middle class family simply cannot go to Harvard even if his grades and test scores merit it.

3) I agree with the old system of bankrupting student loans; i.e. you must wait 5 years. Without that wait, a 22 year old graduating from college could file for Ch 7 bankruptcy as he or she likely has no assets which need protection. Live within your means and with cash for the next few years and then start your thirties with clean credit and no debt. Too much potential for abuse.
  #172  
Old 04-24-2019, 12:33 PM
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I found this a rather good take on the plan and student loans in general today. ISTM it touches on both the positive assertions and negative comments posted in this thread thus far.

The important thing is that the cost of college today is far out of proportion to what it was not so long ago. The current situation is simply unsustainable on a societal level. Do I have any gripes about all the money I've paid off for my student loans? No, and I'm almost finished paying that off. Granted, I did not need to use student loans for all of my college education: I got MGIB, attended community college, and finally graduated from a state university. I also did take a number of courses while I was overseas both before and during military service. One could say that the majority of my education was paid for with other people's money, some of which I have spent the last fifteen years repaying. Yet, I still have no gripe if Senator Warren's plan is enacted.

I got an education, I got employment, and others deserve the same opportunity. As I said, the current system is unsustainable and, since it takes a double-miracle practically to have student loans discharged in bankruptcy, it will become even more unsustainable in the near future. This is not reparations. It's simply a move to make a college education what it purports to be.
This is the problem in a nutshell. Student loans are good on an individual level and wasteful on a societal level. Young people who are in debt for college should be upset, but they should be upset at the actual problem, the mandatory nature of college, and the subsidies the government is paying to the greedy college administrators.

A hypothetical, there is a pageant where all of the eligible maidens in a country compete for a chance to marry one of 10 aristocrat bachelors. Those who succeed will live the cushy life of a duchess and those who fail will have to live normal lives like the rest of us. Since the pageant is about beauty, someone has the idea to get plastic surgery before the pageant and then they win one of the spots. Soon everyone who competes in the contest is having lots of plastic surgery and because plastic surgeons are scarce the price is bid up 10 and 20 times what it was when only a couple of people were using plastic surgery. Many women are burdening themselves with huge amounts of debt for the plastic surgery and the vast majority are not winning the pageant anyway. So the government starts handing out loans and subsidies for plastic surgeries. The plastic surgeons see this and raise their prices accordingly.

A dishonest senator decries the situation and says that the solution is for the government to provide free plastic surgery for everyone who wants it. Others say we should do away with the pageant and stop wasting so much money on plastic surgery. Those people are called haters of beauty and asked why they don't want poor girls to grow up and marry aristocrats.
  #173  
Old 04-24-2019, 12:42 PM
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Sounds reasonable, until one notices that that is not what usually happens in developed countries were college is free or the price is not onerous.

https://www.businessinsider.com/how-...cation-2016-11
What does happen in those countries? Do more people end up with degrees? No the US has a slightly higher percentage of people with college degrees than Finland which was you cite.
Is the quality of education better? No, the US has 15 of the top 20 universities in the world and Finland has 1 in the top 100.
Is the economy better? No, America has a higher GDP per capita, higher economic growth, and half the unemployment rate.
  #174  
Old 04-24-2019, 12:43 PM
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I've seen the suggestion of making the schools partially responsible for defaulted loans. Never with a detailed analysis though.
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Old 04-24-2019, 12:48 PM
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If there's anyone in this country who's going to be in a position to pay off loans, it's college grads. I like handouts but college professionals are the last demographic that I'd give them to if we've still got money left over after zeroing out every other kind of debt on the planet.

I absolutely won't begrudge anyone who actually manages to get any kind of handout in this nation. I paid off my loans the hard way but then again college wasn't nearly as expensive. The most outraged at this will likely be the boomers who went to school back when a stockboy could earn 6 figures and moonpies costed a nickel.
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Old 04-24-2019, 01:37 PM
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Indeed. They could then triple the tuition. Why would the students care? The feds are paying.

So then we will have the feds start introducing measures to control tuition costs and mandating that certain programs be cut to keep those costs down.

Then the upper tier schools starting with the Ivy League will buck that system and say that they won't accept the federal vouchers.

Eventually we will get to the "new normal" whereby the college paid for by the feds is not viewed as desirable by employers and only those who went to the schools which did not accept the federal money as being truly cert worthy. Students from middle class homes will want to attend those schools and take on debt.

So, we will end up right back where we started, except with an uber-massive government entitlement which if proposed to be eliminated will be met with cries of "Republicans want to end education for poor people."
The negative consequences are obvious. That’s why socialism is so dangerous. It’s a sugar coated poison pill and the politicians who push it are knowingly promoting counterproductive ideas for political power.

All I know is I have dibs on the warthog at the zoo if so-called “progressives” come to power.
  #177  
Old 04-24-2019, 01:40 PM
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Hmm. I'm not sure of that. Students loans as we've currently let them be designed are non-market based and downright predatory. Even with that we're beginning to see four-year schools - private ones - fail and shut down because there's not enough bang-for-buck.

But I don't disagree with you on 'making more money available makes prices rise'. We see the same thing in health care. Take away insurance and a the health care industry would face significant pressure to adapt or die. That could spur a lot of innovation while being astonishingly chaotic during the transition.

But it's more complicated that it looks on the surface. There's a real correlation between the level of education in a population - not just in practical subjects - and the overall productivity-per-worker as well as an increased skepticism in the population of institutional behaviors. I, personally, think increased productivity and a greater number of people doubting our large organizations is a good thing. Others may disagree.

A quick though on an idea to deal with these? Start off two a few things.

1) Provide education with full rides to the top 10-20% of students at every high school. I believe GWB put this in place during his time as governor or Texas.
2) Limit the amount that can be borrowed - even from private sources - for college. This applies downward pressure on rising college costs.
3) Make students loans bankruptable. Give the lenders some skin in the game. Make them have to assume risk to make the loans. As it is it's another example of 'privatized profit/socialized risk' that we see so often in the financial industry.
With regards to item #1 that needs to be combined with a minimum score on the ACT or SAT. Some if not many high schools are dreadful.
  #178  
Old 04-24-2019, 01:51 PM
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A quick though on an idea to deal with these? Start off two a few things.

1) Provide education with full rides to the top 10-20% of students at every high school. I believe GWB put this in place during his time as governor or Texas.
2) Limit the amount that can be borrowed - even from private sources - for college. This applies downward pressure on rising college costs.
3) Make students loans bankruptable. Give the lenders some skin in the game. Make them have to assume risk to make the loans. As it is it's another example of 'privatized profit/socialized risk' that we see so often in the financial industry.
I like #1 and #3. I think some subsidy for some group is good, I don't know about full rides though. #2 I'd say no. If someone wants to make the choice to borrow, they should be able to. However, if the gov backed student loans stopped, or were reduced, then it would have the same downward pressure without being as authoritarian.
  #179  
Old 04-24-2019, 03:05 PM
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Is it really so bad a situation?

I think the problem with some of the posters here is they dont know many of the new graduates and see how they are tackling this problem.

Yeah, now someone will link to some statistic but from what I see kids go into college now with their eyes pretty wide open (mostly). They and their parents do their homework. We put money into a kids 501 college savings plan. Their are scholarships galore.

Now someone will spout out how expensive a year of college is. But thats full price. Students often pay much less with financial aid packages. Students shop around for colleges with the best value.

Also why not just attend a local community college and live at home for 2 years and save big?


What I would like to see are economic incentives for the billionaires out there to open there wallets and provide more scholarships. For example in South Dakota a man started a Build Dakota scholarship with $50 million with the goal of developing South Dakotas workforce.

We need more of those.
  #180  
Old 04-24-2019, 06:28 PM
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Agreed. As an example, some time ago, my grandmother showed me the tuition bill from my father's college education. He went to a local state run university. In 1968, tuition was $154.00 per semester. If you plug that into an inflation calculator, it comes to $1,124.92 in 2019 dollars.

That would be well within the means of most families to save for. It would be well within the means of any student to work their way through school. Good students, the ones most likely to succeed in their career path, could still get scholarships to pay for that. But we had the federal loan program which inflated these numbers far beyond a person's ability to self pay.

Instead of realizing the error and getting out of the boondoggle, the government wants yet another program with even more unintended consequences.

I went to a state school in 1994. By the same calculator, tuition should have been $655.83/semester. It was $950, nearly 1.5 times the rate of inflation.

Today it is $3,816/semester, almost four times the rate of inflation since 1968, and nearly double the rate of inflation since 1994.
One thing to keep in mind about public colleges/universities when comparing tuition then and now is that tuition =/= total cost of education. Most states poured vast sums of tax dollars into those schools, basically subsidizing education. In a series of retrenchments, beginning in the 80s and really gathering steam over the past decade or so, states are cutting back the amount of the subsidies, so in addition to tuition rising with inflation and in response to student loan availability, tuition is rising because students are expected to pay a greater share of the cost of educating them.

See, for example, this study from the Center on Budget and Policy Priorities: over the decade from 2008 to 2017, forty-four out of forty-nine states cut inflation-adjusted spending per student in the state's publicly-funded higher-education institutions, by an average of 16 percent. In 1988, tuition covered about one-quarter of the cost of instruction at a state school; by 2016, it accounted for nearly half.
  #181  
Old 04-24-2019, 06:41 PM
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"The average middle class person has virtually stagnant pay over the last several decades" and "today’s average hourly wage has just about the same purchasing power it did in 1978" do not have the same meaning. UCBearcats may have meant one thing while typing something else, but we can only go by what was actually written. And the average person gets paid more over time -- see any BLS CPS earning-by-age table. The average wage is masked by entrants and exits from the job market: https://www.frbsf.org/our-district/a...wth-good-news/
That is, grandma retires, dad gets a raise, junior gets her first job. That decreases the average wage even though nobody is suffering. We have 10k boomers hitting 65 every day, so I expect this demographic masking to continue.
I am referring to the purchasing power of dollars from 19xx to today. Yes because of inflation and COLA the raw dollar amount has increased.

In some fields the actual salary has decreased for people, i.e. education. The middle class has not advanced over the last several decades compared to the 1%.
  #182  
Old 04-24-2019, 09:43 PM
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The government accountants figured it would save them a fair bit of money. That's why they did it: they were looking for ways to offset the cost of Obamacare and figured this would help some.

And you have evidence for this?

Last edited by Monty; 04-24-2019 at 09:43 PM.
  #183  
Old 04-24-2019, 11:46 PM
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And you have evidence for this?
Sure. See here (PDF - the relevant bits are on pages 6 & 7:

Quote:
Originally Posted by CBO
Education Provisions Contained in the Reconciliation Proposal
Subtitle A of title II of the reconciliation proposal would amend the Higher Education Act of 1965, which authorizes most federal postsecondary education programs. The reconciliation proposal would eliminate the federal program that provides guarantees for student loans and replace those loans with direct loans made by the Department of Education. It would also increase direct spending for the Pell Grant program and other education grant programs. CBO estimates that those provisions would reduce direct spending by $5 billion over the 2010–2014 period and $19 billion over the 2010–2019 period (see Table 7).

Federal Student Loan Programs. On net, CBO estimates that the reconciliation proposal would reduce direct spending in the federal student loan programs by $28 billion over the 2010–2014 period and $58 billion over the 2010–2019 period.

In the Federal Family Education Loan (FFEL) program, private lenders originate loans to postsecondary students; the federal government makes payments to those lenders, guarantees them against significant loss in the case of default, and provides funds to guaranty agencies to help administer those loans. In the direct loan program, eligible borrowers receive nearly identical loans that are administered by the Department of Education and funded through the U.S. Treasury.

The reconciliation proposal would eliminate new loans in the FFEL program beginning in July 2010. Under the proposal, CBO expects that all of the guaranteed loans that would have been made under current law—estimated to be roughly $500 billion through 2019—would instead be made through the direct loan program.

The Federal Credit Reform Act specifies that the cost of new federal loans and loan guarantees be recorded in the budget in the year that the loans are disbursed, and that the cost be calculated as the net present value of the government’s expected cash flows over the lifetime of a loan or guarantee, using interest rates on Treasury securities of comparable maturity to discount the estimated cash flows.5

Using this methodology, CBO estimates that eliminating new guaranteed loans and replacing them with direct loans would yield reductions in direct spending of $61 billion over the 2010–2019 period. CBO also estimates that the expanded program for direct loans would incur about $5 billion in additional administrative costs during that period. However, those additional costs are classified as discretionary spending and are subject to future appropriation; they are not incorporated in the estimates of changes in direct spending and revenues reported in this letter.

Last edited by HurricaneDitka; 04-24-2019 at 11:48 PM.
  #184  
Old 04-25-2019, 12:52 AM
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I am referring to the purchasing power of dollars from 19xx to today. Yes because of inflation and COLA the raw dollar amount has increased.

In some fields the actual salary has decreased for people, i.e. education. The middle class has not advanced over the last several decades compared to the 1%.
And yet college costs have greatly outpaced general inflation. Why? The obvious answer is, again, too much money for that particular expense. Isn’t it ironic that when the government distorts the market for political gain that the market responds in a way that actually is counter to the stated intent?
  #185  
Old 04-25-2019, 09:05 AM
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I am referring to the purchasing power of dollars from 19xx to today. Yes because of inflation and COLA the raw dollar amount has increased.
Here's real median personal income:
https://fred.stlouisfed.org/series/MEPAINUSA672N
  #186  
Old 04-25-2019, 09:06 AM
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One thing to keep in mind about public colleges/universities when comparing tuition then and now is that tuition =/= total cost of education. Most states poured vast sums of tax dollars into those schools, basically subsidizing education. In a series of retrenchments, beginning in the 80s and really gathering steam over the past decade or so, states are cutting back the amount of the subsidies, so in addition to tuition rising with inflation and in response to student loan availability, tuition is rising because students are expected to pay a greater share of the cost of educating them.

See, for example, this study from the Center on Budget and Policy Priorities: over the decade from 2008 to 2017, forty-four out of forty-nine states cut inflation-adjusted spending per student in the state's publicly-funded higher-education institutions, by an average of 16 percent. In 1988, tuition covered about one-quarter of the cost of instruction at a state school; by 2016, it accounted for nearly half.
That's a good point as well. If the states have decided to cut their budgets by not funding their state schools so much, why should the feds essentially give them free money for doing so? And what is to stop this trend from accelerating if the feds now pay for everything?
  #187  
Old 04-25-2019, 09:07 AM
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That is what I've been asking. There are ways of preventing this, but I don't see it in EW's proposal.
  #188  
Old 04-25-2019, 09:18 AM
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I wonder what the effect would be on athletic scholarships?

Only a few people make it to be a professional so the big reason parents shell out the big bucks is for a scholarship to pay for college. But what if that need wasnt there? Why even work to play on a college team? Just for the glory of saying you played for State? Maybe. In some sports. But for most athletes the time commitment that they put in right now wouldnt be worth it without the fear of being cut from the team and losing your scholarship.
I'm not following this at all. What "big bucks" are parents shelling out to get a scholarship?

Also, are you saying that if student loans were forgiven then college would be free? I doubt most people get loans that cover as much as an athletic scholarship does.
  #189  
Old 04-25-2019, 09:24 AM
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In general, they have higher taxes and a lower military budget.
In general, a first world UHC system saves sufficient money compared to the US system to cover that nations military expenses and the total education costs from grade one through university.

Those national also have numerous other benefits.
  #190  
Old 04-25-2019, 09:25 AM
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I'm not following this at all. What "big bucks" are parents shelling out to get a scholarship?
(Some) parents spend big bucks on sports training, but I couldn't tell you the scale.
  #191  
Old 04-25-2019, 09:35 AM
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I don't support loan forgiveness for federal loans unless the person receiving forgiveness is providing something of value in return to the taxpayer. If they're working for the federal government (or on their behalf as a contractor) perhaps that could be an incentive: eliminate the red tape and in addition to salary, we could help that individual by eliminating a set dollar amount of the remaining student loan balance for as long as they remain employed.

But I'm not a fan of just forgiving loans and free college, and this kind of gimmickry without talking seriously about how we're going to get the 1% to pay for any of this first is nonsense, and frankly, it makes me take Warren and Sanders less seriously.
  #192  
Old 04-25-2019, 12:27 PM
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I don't support loan forgiveness for federal loans unless the person receiving forgiveness is providing something of value in return to the taxpayer. If they're working for the federal government (or on their behalf as a contractor) perhaps that could be an incentive: eliminate the red tape and in addition to salary, we could help that individual by eliminating a set dollar amount of the remaining student loan balance for as long as they remain employed.

But I'm not a fan of just forgiving loans and free college, and this kind of gimmickry without talking seriously about how we're going to get the 1% to pay for any of this first is nonsense, and frankly, it makes me take Warren and Sanders less seriously.
The solution was mentioned early, any forgiveness or free tuition should be means tested.
  #193  
Old 04-25-2019, 12:52 PM
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... This is also why we can never actually improve things in this country because too many people would be bitter that *they* didn't get to take advantage.

Reminds me of this:

“The true meaning of life is to plant trees, under whose shade you do not expect to sit.” —Nelson Henderson.
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Seems to be people are judging on a moral instead of an economic basis. Judging the morality of economic proposals is a mug's game.
Normally I would strongly agree with these sentiments. The fact that, for example, some blacks died before they were given civil rights is no reason to deny rights to the living!

BUT, in this case the unfairness would be tangible and immediate. A worker (Alan) sitting next to another worker (Bob) with identical job, competence and education, would see his fellow driving a flashy sports-car while Alan drives a clunker because Alan played by the rules and scrimped to repay his debt. I love Senator Warren but I would come to hate her if I were Alan and this policy were enacted.

If the problem is that tuition should have been subsidized during the 2000's then subsidize it retroactively. Reimburse 20% or $5000 per year (arbitrary example figures) whichever is smaller whether student loans are outstanding or not. Some would get their loans cut, others a cash rebate.

Very expensive? Sure! But don't make the rebate unfair just to make it cheaper.
  #194  
Old 04-25-2019, 01:02 PM
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Presumably "whether loans are outstanding or not" would be extended to "whether the recipient went to college or not." Because there are probably people who didn't go to school who would have gone at the discounted price. So basically it's a one time case payout to anyone between the ages of 22 and 35 or something
  #195  
Old 04-25-2019, 01:10 PM
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Tuitions should be subsidized or otherwise reduced going forward, so those who opted against an expensive education would have a second chance.

Yes, it will be difficult to balance the program's fairness with simplicity but, since hundreds of billions of dollars are at stake, an effort should be made.
  #196  
Old 04-25-2019, 01:14 PM
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A quick though on an idea to deal with these? Start off two a few things.

1) Provide education with full rides to the top 10-20% of students at every high school. I believe GWB put this in place during his time as governor or Texas.
2) Limit the amount that can be borrowed - even from private sources - for college. This applies downward pressure on rising college costs.
3) Make students loans bankruptable. Give the lenders some skin in the game. Make them have to assume risk to make the loans. As it is it's another example of 'privatized profit/socialized risk' that we see so often in the financial industry.
I like points 1 and 3, but point 2 potentially makes it much harder for poorer kids to go to college. The rich already have huge advantages in getting higher education. If we add #3, I don't think we need #2. The market will already quickly figure out what a good limit for loans is, since if they loan people too much money they won't get paid back in the bankruptcy.

I think you probably need a whole different process for bankruptcy of school loans, though. Like, they shouldn't be dischargeable immediately or fully, or there's a huge incentive to get your valuable education, immediately declare bankruptcy, then go on to have your higher-paid professional career. But after, say, a decade, yeah.

Last edited by iamthewalrus(:3=; 04-25-2019 at 01:15 PM.
  #197  
Old 04-25-2019, 02:36 PM
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I'm not following this at all. What "big bucks" are parents shelling out to get a scholarship?

Also, are you saying that if student loans were forgiven then college would be free? I doubt most people get loans that cover as much as an athletic scholarship does.
Most kids who aspire for a college scholarship need training and to play in competitive leagues way higher than high school. Easily $10,000 a year for several years for sports like baseball, hockey, swimming, and even higher for others like gymnastics. So its easily in the $100,000 range over the years.
  #198  
Old 04-25-2019, 02:40 PM
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What then would be the point of working hard for ANY scholarships if college was going to be free?

I dont think you all realize all the details and work parents and kids put into getting scholarships. Its practically a full time job seeing all the paperwork one must send in to get even $500 from this place or $1,000 from another.

Finally, once your in college, whats the point of working hard and striving to get thru in say 3 years taking 18 credits a semester instead of 14?
  #199  
Old 04-25-2019, 02:49 PM
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I'm not following this at all. What "big bucks" are parents shelling out to get a scholarship?

Also, are you saying that if student loans were forgiven then college would be free? I doubt most people get loans that cover as much as an athletic scholarship does.
I think the idea is that if you are a Division I football prospect with a chance to make the NFL, then great, this will not affect you.

But if you are a women's volleyball player, for example, whose talent level was barely good enough to get a scholarship and have no designs on taking your volleyball career any further, then why, first, as a parent dedicate thousands of dollars to these volleyball camps and travel teams starting when the child is in the womb, and second, once you start school, why devote countless hours to practicing volleyball and travelling, and playing on the team, when the government is going to pay your way anyways.

It's not just sports, but also academics. I remember my senior year filling out applications and writing essays to different scholarship boards explaining what experiences I could share by growing up in a small town, what I would do to educate people on the evils of drunk driving, or how I felt the Lions Club was a positive influence that could help the community.

Also, more importantly, was putting my nose to the grindstone to get good grades and studying for the ACT to get good test scores to get into school. Engaging in extracurricular activities was also considered (at least we were told) important.

If it is all free anyways, why should a high school student do anything but make the bare minimum to pass if he or she has no designs on an elite school?
  #200  
Old 04-25-2019, 02:54 PM
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If it is all free anyways, why should a high school student do anything but make the bare minimum to pass if he or she has no designs on an elite school?
Snipping mine.

Because they want to? Heaven forbid we let our children do things because they enjoy them instead of because it will look good to a scholarship committee.

Last edited by Chisquirrel; 04-25-2019 at 02:55 PM. Reason: Removed a nut
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