That seems a hell of a lot cheaper than many American schools, which are crazy expensive compared to even the best schools everywhere else.
I guess my point is that when you say the (US) federal student loan program lets people get through four years of college with only $30k in debt, that low number has nothing to do with the student loan program and everything to do with the choice of a cheaper school.
~Max
It can also mean that the rest of the cost is paid via other means, such as the parents, scholarships, grants and so forth.
That’s for out-of-province students, generally. My son went to the University of Alberta, a well-regarded school, and it cost us around $5,000 for tuition. But out of province students pay a hell of a lot more. And of course if you are living away from home you have living expenses as well.
And private loans.
Federal student loans are fully forgiven if you die before paying them off, private loans do not. That reason alone is enough for me to steer people towards federal loans. Federal loans for some people also are eligible for other forgiveness programs, which is another very good reason to maximize that opportunity.
Also, given the constant political pressure to forgive student loans, it’s not a bad bet to take out loans on the assumption that you will never have to pay them back. And new rules in the U.S. that limit how much of your income you have to pay, and the balance being discharged without prejudice if you haven’t paid it off within X years makes the value of student loans even higher.
In Canada we have remission, which means that a certain percentage of your student loan is waived upon graduation. I suppose the idea was to incentivize people to stay in college, but it had perverse side effects. When I went to college remission was 40% for your first year, and 25% for subsequent years. So people who didn’t even need the money were maxxing out student loans and using the money to prop up their lifestyles. The really smart ones maxxed out their student loans and either invested it or banked it earning interest, got their remission, then paid the rest back.
The not-so-smart ones, of course, borrowed the money and had a four year party then wound up in debt with a crap degree, or couldn’t handle college and dropped out with high debt and forfeit remission.
This one sort of points up the big problem with that crowd’s thinking. They seem to think that the system should guarantee everyone the ability to do things on a shoestring, and anything that prevents that is looked at as onerous regulation.
In fact, the problem you mention isn’t a government regulation problem, it’s more of a capital problem. If they had the proper amount of money to start the company, they could afford the safety gear, or environmental gear or whatever, and they’d have enough money to do that AND grow the business such that they could make money. But these guys want to start their business with $200, someone’s garage, some Home Depot tools, and a handshake agreement with their brother in law’s mother to redo her windows, and then blame the government when that’s not sufficient, because they can’t pay to handle lead paint remediation or whatever.
Everything is viewed as interference or whatever, because they’re not able to do it in just the way they choose to, without really considering that with freedom comes responsibility. We see this with the anger over lead remediation in my example, and we see it with masks in the present day. Responsible businessmen or citizens would do those things because they’re the responsible thing to do, even if they’re free not to. But that particular segment of the population doesn’t quite get that.
As a society, we should absolutely want people to be able to start businesses with $200 and an idea. Why should the poor be shut out of business creation?
And whenever someone brings up excessive regulation, we always get told something along the lines of, “What, you want to get rid of fire regulations and food inspections? Or let anyone destroy the environment in the name of profit?” It’s a good debating tactic to instantly go to those regs that are most popular, but that’s not at all what we are talking about.
A better example would be a person who wants to open a small shop repairing something he knows really well, but discovers that just making sure he’s compliant with all the regulations requires hiring an expendive consultant, that all the reporting requirements require hiring an accountant, and the complex tax regulations require a tax lawyer. Then he finds out that a government inspection discovered his building is not ADA compliant because the bathroom door is too narrow for a wheelchair and the sink is 1" too high. So now he needs a $50,000 reno before he can open. But oh no, he now has to certify that the place is asbestos-free, or guarantee that none of his supplies come from certain countries, etc.
Or, you are a small used bookstore, and suddenly the Lead in Toys Act is passed in overly broad fashion and all the children’s books have to be destroyed at a total loss. And used books for poor children become harder to find and more expensive.
Then there’s the class of businesses that reach a certain size threshold and freeze there, because adding another employee will kick in a host of other regulatory demands and it’s just not worth it.
In some cities all public signage has to be improved by an inspector, including simple things like putting a SALE! sign in your window. And often these imspections are expensive and the inspectors operating on several-months-long waiting lists.
It used to be dead simple to set up a web business. Put up a web site with a shopping caet, and you are in business. But over time regulations have crept in. Now there are compliance requirements for cookie policies, data integrity requirements in some jurisdictions, tax reporting to every state you sell to, etc.
I fought for years against demands that programmers be licensed. So far we’ve won, but if we hadn’t you couldn’t work on any commercial web site without having some form of professional programming license, which would drive costs through the roof and require more compliance reporting.
And the thing is, for a small business these regulations have an increasing marginal cost. For a sole proprieter, the first regulation that requires an hour per week costs 1/40 of productivity. But add twenty of them, and that cuts productivity in half. And each one added costs proportionally more because it takes that hour out of an ever-smaller collection of hours available to actually do work.
Large corporations love these regs, because they act as a barrier to entry to competition. Especially in the heavily-regulated financial services industry, in which regulatory demands have driven almost all the small players out of business.
You may notice fewer companies going public these days. In fact, IPOs have declined by about half since the early 2000’s, and much of this is due to the extra regulations placed on public firms due to large regulatory systems like Sarbanes-Oxley, which are extremely expensive for smaller public firms.
I already told the story of the day care I was on the noard of. Our employees were great - empty-nest mothers and young mothers with young children. We had high satisfaction rates, and because we didn’t have to pay much for the employees day care was affordable for the lower-middle class community it served. Then we got hit with a new regulation: All employees had to have a degree in education or in at least the third year of an education program. It devastated us. We had to fire all the employees the kids loved and who were willing to work for perks and low,wages, and replace them with disgruntled unemployed teachers or young women in school who really didn’t like being around small children but needed the money and work experience.
We had to raise salaries, and our daycare rates. Child satisfaction plummeted, parent complaints rose, and the city had to increase the day care subsidy to offset the higher wages the new staff demanded. Without the increased subsidy to parents, that regulation would have put us out of business. For no reason other than to placate a special interest group that had the ears of legislators.
Our city just passed a ‘tree protection’ regulation that requires anyone who does commercial work within 5 meters of a city tree get a government permit for the work. A huge amount of landscaping work is done within 5 meters of a city tree. So now people who need some yardwork done have to pay for that. This regulation came out of someone complainng to city hall about some workers who damaged a tree. So now we all have to pay a price forever more, and there is zero evidence that it will do any good at all.
There are a LOT of regulations like this.
I realize this is off-topic at this point, but did you suggest maybe just fine the dudes that damage city property instead of doing permits?
~Max
Fines paid by the guilty wouldn’t be as lucrative as charging everyone a fee.
i didn’t really suggest anything, but yes, I think that would be much better. Just say that any damage to a city tree will result in a fine of X. Instead, they’ve created a large burden on everyone for this ‘problem’ which I had never heard of before the regulation came down.
There are a LOT of regulations like that out there.
is a chart of IPOs in the US since 1999. There was a big drop 2000 - 2001. Regulations? Or maybe the collapse of the bubble. 2020 was very close to 2000 levels.
Maybe the economy had more to do with it than regulation.
You do know why Sarb-Ox is a thing, right? Not because of some raging regulation fetish, but because the execs of Enron (remember them) tried to get off with an “I know nothing, nothing” defense. You think that a CEO or CFO signing off on results shouldn’t know what they are signing off on?
So, you think the Great Depression needs a rerun? Is it really that outlandish to regulate companies taking peoples money? If there are no regulations a lot of people lose a lot of money before the scam is caught, plus it is very hard, in the US at least, to convict all but the most blatant of financial ripoff artists.
The problem with that is that if the fine is big enough the companies complain that they are getting destroyed by a mistake, and if it is small enough it becomes a cost of doing business.
For context, W signed SOX in July 2002.
So long as they put in a new tree when they mangle one, who cares? It’s a tree.
~Max
Regulations are a mixed bag; when they’re a barrier to entry that’s usually a bad situation, unless there are good reasons for it. For example, licensing doctors, lawyers and engineers is a GOOD thing, even if it is a barrier to entry to the profession (or some levels of it in the case of engineers). Who wants some jackass who went to “medical bootcamp” diagnosing disease and prescribing medications? Or some guy calling himself an engineer designing bridges?
But I fully recognize that there are a host of rather pointless regulations, or at least ones where the burden is incorrectly placed on the small business owner. Sourcing regulations for example should be the province of the Feds- if they don’t want you buying Cuban stuff, then they need to police that, not require small businesses to keep track of that. Or things like signage regulations that are onerous.
My wife (a lawyer) has commented in the past that every stupid thing you see on a product label is there because some idiot did exactly that, and the company got sued. So when the package of sparklers you buy at the 4th of July says “Do not insert in rectum”, that means someone somewhere stuck a lit sparkler up their ass. I have to figure that regulations often work similarly; everything that’s regulated is a result of someone somewhere having done exactly that and f-ed things up for someone else. Or at worst, they’re common-sense regulations, like “all workers doing asbestos abatement have to wear specific PPE”, where yeah, it might be a pain for the employer, but people are stupid as fuck and will NOT wear appropriate PPE and end up with mesothelioma down the road if not for regulations like that.
The problem is when they’re applied too broadly or restrictively. Like for example, if some municipality required lead paint abatement or asbestos abatement PPE in buildings older than some arbitrary year because they MIGHT have asbestos or lead paint. That’s absurd. But requiring that renovations on houses built before a certain year have an inspection to determine whether they do? That’s entirely reasonable. And that cost ought to be passed on to the person financing the renovations, not the renovation company.
Same goes for someone making tacos in their kitchen and selling them out of a cooler at job sites; health code regulations are there for a reason, and so are the associated inspections. People GOT sick from unregulated places in years past. The question is where to draw that line? What level of risk is appropriate to allow small scale food producers, versus protecting consumers from potentially ill-prepared food? It’s not one way or the other; maybe certain kinds of food are ok, while others still require the regulations?
sock post removed
The big problem I have with the decline of the fixed benefit pension is that it in effect, requires the general public to be savvy financial planners, or pay a lot of money to someone else to do it for them. I mean, I’ve been to business school and am an intelligent guy. But I don’t have the time or the inclination to look over the prospectuses of every fund my 401k wants to invest in, nor am I that familiar with the financial markets to feel like I’m making an informed decision. I know enough to be dangerous, and I know it. So I pay the company that administers my 401k to manage it for me. Which makes me uncomfortable in no small amount, but what other alternative do I have?
And I’m sure there are people who are less educated and/or less intelligent who just don’t have a clue and muddle through as best they can, both losing money and not getting the maximum return they can, which is almost criminal.
I feel like maybe some sort of hybrid should be the default. Not a defined benefit plan; those are too unwieldy and onerous these days for companies to fund. But something other than a “We’ll match 25 cents for every dollar you put in your 401k. Peace out.” plan by the company. Maybe some kind of large-scale professionally invested fund that you own X many shares of, and that the company pays for the management on, and that has certain regulatory requirements to prevent shenanigans and overly risky investments. That way, people could put their money into their retirement fund without having to sweat whether they handle it correctly, and also be assured that they’re very unlikely to lose money. And be able to roll the value of their shares into the next company’s plan if they switch jobs.
I don’t know… the 401k scheme just seems to me like it puts undue burden on people who aren’t properly prepared or equipped to handle their retirement finances. Kind of a “Oh well, sorry you distributed your 401k into the wrong funds. Have fun eating that dog food in retirement.” situation.
That said, I don’t think the employer should be on the hook for economic downturns either. That’s a big problem with defined benefit pensions; they put the company on the hook for a fixed amount whether or not the company is profitable or if the investments meant to fund it are doing well. Most can’t hack that- only governments can somewhat reliably do that.
I don’t know about your plan - but I have a 457K (which is very similar to a 401K ) and my husband has a 401K - and in both of them , there are options that don’t really require a lot of knowledge. For example, I have a good amount of my account in target date funds, which shift the asset mix as the targeted retirement date approaches , which means I don’t have to do this myself. I decide how much I want to put into these targeted date funds and which ones ( there’s one available to me with a target date every 5 years up to 2060) so it’s not that the administrator manages my account - but someone does manage these particular funds. Seems like that might be similar to the hybrid you are looking for.
That’s what I’m doing as well. I’m not so sure that it’s that common though; from the crazy-assed questions I’ve heard asked at the various 401k related meetings that all my employers have held, I get the impression that people are either absolutely clueless, or they’re trying to micromanage this stuff. Neither of those is going to get good results IMO.
Basically what I’m talking about is something a step back from what we have; everyone would be in on it, and it would be managed in the aggregate for the entire company, and have requirements to not do crazy stuff like put everything in one basket.
Do you know the fees charged by these funds versus other possible funds? A few years back I understood that they were relatively expensive.
I got advice from my financial planner about what 401K funds to pick so that my entire portfolio would be balanced.
I’m not knocking that type of fund - very useful if you only have one or two, and they’re not likely to lose a lot of value.