I was fortunate enough to go to college in the mid 1970s and tuition at Michigan State was $16 a credit. Room and board plus tuition was under $2500 a year. My parents were good enough to scrape by and pay for the first 3 1/2 years and by working at school I was able to pay for the last 1/2 year. I sent two kids to public universities in the 2000s-2010s and took out parent loans over $120,000 to do so. If I can get a little relief on my balance, wonderful. One of my kids paid off his own student loans already, and the other will likely have her balance wiped out.
Even if I had never taken out a dime of debt for them and my kids never took out loans, I’d still support this modest forgiveness program. The reality is that college education has become terribly expensive. I don’t blame the availability of loans for this, it’s simply supply and demand. The population has increased by over 50% in my lifetime but I daresay the supply of higher education has not. Nowadays you can afford college only if you’re extremely rich or extremely poor and qualify for need-based aid. For those in the middle, it’s either don’t go to college or saddle yourselves and/or your parents with a mountain of debt.
I think the right wing outrage over this isn’t based on any lofty principle, it’s simply that the “wrong” people are benefitting. Joe Sixpack is listening to Hate Radio on his lunch break and hears that the Democrats are giving his money to college grads. When he thinks of college, he thinks of liberals and the idea that liberals are getting their hands on “his” money sets him off.
In fact, many of those trade schools were actually private schools, with higher tuitions and fairly low job placement.
ITT Tech was massively advertised as the place to go to get ahead, and they ended up being one of the most egregious abusers. Devry, Art Institute and other vocational schools more or less did the same. Now, there were so egregious that many of those loans were forgiven even without this sort of blanket forgiveness, but the whole system is pretty predatory.
I’m not sure that you could ever work part-time at Burger Shack and pay Harvard tuition out-of-pocket. But I do know that tuition at the public universities in my state is less than $9000 for state residents so you don’t actually need to be born in the top 1% of income (which is a nearly $600K household income) to graduate without a huge amount of debt. I know many, many people ( both my age and my children’s) who took out student loans to attend private , more expensive colleges even while they/their families were paying more out-of-pocket than tuition at the public university would have been.
I am not necessarily opposed to this program and I am definitely not opposed to all forms of student loan forgiveness- but it’s not the case that it’s impossible to graduate without a lot of debt. Sometimes that debt is because someone chose to attend Syracuse University where tuition alone is about $60K a year rather than SUNY Oswego’s Syracuse campus where tuition is about $7K a year. Or because they chose to live in a dorm rather than commuting from the family home 30 minutes away.
How are people to tell, at the time that they make it, that it is “poor decision making”?
Yes, some things are obvious, or ought to be. Don’t drive your truck off a high bridge over a fast river because you feel like going swimming. But what’s being called “poor decision making” here is, again, a matter of taking the advice of those who are supposed to be in a position to give good advice, when very little contradictory information is available. And when people decide not to go to college, they’re often berated for that; and those who do go and do well are praised for that choice.
And the ones who do get well-paying jobs because they got those degrees are considered to have done everything right. (Note that I say “well-paying jobs”, not “good jobs”. The jobs they get may be ones they’re illsuited for and are miserable in; and some of the work done may do active damage to the society as a whole. But the criteria they’re judged by tends to be simply what they pay.)
The complaint that 17 and 18 year olds should be punished for making the “bad decision” of choosing to go to college, when that decision didn’t lead to their getting high-paying jobs (of which there are far fewer than there are people in the workforce) appears to me to have a great deal in common with those who sneer at people who made a choice to try starting a business which failed, while praising people whose business succeeded, and sneering at those who didn’t take the chance – the ones who praise “risk-takers”, but only those whose risks succeeded. It’s not a risk if it’s guaranteed to succeed! If you’re going to praise risk-takers, then you also need to praise the failures. Not punish them.
And this is not an area in which there are any certainties whatsoever. Not only can nobody be certain of their health, but nobody can be certain that the line of work they train for isn’t going to be overloaded with applicants either by the time they’re trained or later in life when they still need the job; or even that it’s not going to, in effect, disappear altogether.
This only makes sense if there were unlimited student loan forgiveness going forward. If you think that’s what’s happening, you read different news stories than I did.
The other problem with your statement is that, as others have pointed out, it seems to be based on the assumption that it’s possible to get through college without taking out student loans. For many students, this is not the case. If you want to dis-incentivize taking out substantial student loans, it looks to me like you have two choices:
Those people just shouldn’t go to college. (As noted, this would result in a less-educated society, with fewer doctors, etc.)
College should be made more affordable (like it used to be). I’m all for this, but I think the only way this can happen is if the government gives more money to universities and/or students.
I’m not positive that throwing money at the problem will help as much as it we might hope. Universities used to be at least moderately frugal with the dollars that came in from tuition or endowments. They really aren’t anymore.
I don’t know the best way to get costs down, I imagine that replacing at least some of the in classroom lectures and recitations with online courses could help, but that’s really the problem that needs to be addressed.
I wouldn’t mind if they made it so that you can’t get student loans to pay for for-profit universities either. Those should be discouraged.
It would also be interesting to see labor laws to protect students. I had many times when either or I a co-worker was given an ultimatum by a boss that we had to work a shift that interfered with a class or be fired. I don’t know how common it is, but I know a number of people who did not finish their degree, and were left with a pile of debt for nothing, because they had to choose between work and school.
There are lots of ideas. States and localities could offer free tuition at 2-year community colleges for people below a certain income level – that would essentially cut the cost of a four year school in half, for those who want to continue and get a four year degree.
States can certainly control how much they send to state schools – designate a couple of them extremely reduced cost for in-state students, or maybe free for those finishing their last two years after getting the first two at junior college.
This is a solvable problem – we know this because other countries have solved it to some extent.
It feels like that’s a good topic for another thread, though.
Whether $125,000 makes sense from a practical standpoint, I think it’s a bad idea politically. A lot of people, many of them struggling in the current economy, are going to look at it and think “The government is giving money / forgiving debts of people who are making way more than I am.”
So I fear this will do more harm than good to the Democrats in this year’s elections.
That’s the upper limit, and will be a small portion of borrowers.
Is there a specific number that you think would be practical?
I hear that claim about pretty much everything the Democrats propose or do.
There are quite a number of people out there who fairly rightly complain that the Democrats haven’t done anything to improve their lives, so why should they come out and vote for them. This will improve the lives of tens of millions. I think that that’s the sort of thing a good government should do, and will give them a reason to support it.
I came across this, found it amusing. No idea who she is, but I agree with the sentiment.
My whole point was about how it would be perceived politically, not about what would be practical.
From that particular standpoint, I suspect they would have been better off not having an upper limit than having one as high as $125,000. The anchoring bias is making people think of folks earning $125,000 when they think of who will benefit from this.
Republicans would piss and moan if the relief had been $1.98. They will be angry at anything that Biden does. They weren’t going to vote Democratic in any event. Some Democrats will be pissed that Biden didn’t cancel it all. But I think the impact on the midterms pales in significance compared to the overturning of Roe.
This is an industry that has had price increases rapidly outpacing the general rate of inflation for an extended period of time. Even granted a positive externality, it’s not the case that such benefits scale with marginal spending beyond a certain level. The externality, to whatever extent it exists, comes from a well-lit classroom with a reasonably competent instructor who can explain a linear transformation that maps a vector to a scalar multiple of itself. Bloat in uni administration doesn’t remotely count toward that.
Quite the reverse, actually. The net effect at the margin has the opposite sign.
State university tuitions have been outpacing inflation by 3 or 4% annually for quite a long time. Private four-year (non-profit) institutions have been exploding in costs for students at an even more ridiculous clip. Tuition at private schools is almost twenty percent higher in real terms in just the last ten years.
If we’re going to include “externalities”, then it should be pointed out that the negative effects from marginal university bloat, at the current level of spending, probably outweigh the positive by a factor of four or five at least. Perhaps even higher than that, to whatever extent that the “signalling” theory of education is true. Even given that the average value of higher ed spending is still extremely high, the marginal dollar might be close to a 100% loss at this point. Just resources set on fire, from a flagrant unwillingness to control costs, justified by shoddy reasoning that uses the overall prestige and importance of the industry as an excuse to distract attention from the mountain of marginal waste, all of which happens to directly benefit industry insiders.
(I’m not going to quit my job, though. If this position is going to exist anyway, then at least I’m better at it than the next random schmuck would be.)
I haven’t been asking anyone in this thread whether they think that student loan debts should be able to be discharged via a bankruptcy filing. What I’ve been asking is whether people who complain that student loan forgiveness is bad because it “rewards bad decision-making” or “creates moral hazard” etc. ALSO believe that bankruptcy provisions for failed business owners are bad for the same reason.
How “last” should it be? AFAICT, every year about 1 in 1000 US businesses and more than 1 in 200 US households file for bankruptcy. Is allowing them to do so “rewarding poor decision-making”?