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A college degree is a lousy investment

why doesn't Bernie just propose eliminating all student loan debt via executive order, no tax required?
 
I'm fine with eliminating student loan debt, provided it isn't phased out for income like the student loan interest deduction. It has always pissed me off that, if you are measuring school success by resulting income level, those who made the "better" choices in school/career path and did really well with those chocies are punished while those who made "worse" choices from an schooling to income perspective get the full benefit. I know that isn't the overall way to evaluate educational choice from either a societal or individual perspective, but tax policy has chosen to link the deduction to income, so that is the proper analysis for purposes of tax policy. The deduction phase out never made any sense to me.

If the theory is that student loan debt is bad and should be cancelled, it should be cancelled for everyone who has it, including those who made the best of the opportunities arising from the debt, and not just those who arguably made the worst choices as they pertain to income level. The guy making $200k from his biochem degree should get the same loan forgiveness benefit as the Italian Lit major working at Starbucks.

My other question is whether this is a one time thing or recurring? Like if one of these clowns appears to have a chance of getting elected, should I stop paying my student loans for a while because they are going away anyway? And how bad would it suck to still be in high school when the kids a few years ahead of you get everything forgiven?
 
Make it a combination: 1/3 paid by taxpayers, 1/3 eliminated by rule, 1/3 left for student to pay. Adjust the ratios if you like. Part of the loss to taxpayers and society for allowing it to get to this point. Part of the loss to the lenders who abused the system. Part of the obligation survives for the student.

And whatever the proposal does to address the current outstanding debt, it also needs to address the problem going forward. Make future loans interest free and dischargeable in bankruptcy. Cap what amount the government will guarantee. That will change behaviors of schools and lenders immediately. If you don't take those steps, we'll need another student loan bailout every 5 years.
 
You can't make student loans dischargeable in bankruptcy. Almost every student graduates without a damn thing in their name. They would all file bankruptcy the day after graduation, discharge all debts and move on without the lenders getting a dollar. Even the rich kids would jump on that train, the parents just would put absolutely nothing in the kids' name at any point. That system would collapse the first year.
 
2&2 Slider To Leyritz said:
You can't make student loans dischargeable in bankruptcy. Almost every student graduates without a damn thing in their name. They would all file bankruptcy the day after graduation, discharge all debts and move on without the lenders getting a dollar. Even the rich kids would jump on that train, the parents just would put absolutely nothing in the kids' name at any point. That system would collapse the first year.
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Then no one would offer loans, cratering demand, which would force colleges to reduce costs
 
thatguy2016 said:
Then no one would offer loans, cratering demand, which would force colleges to reduce costs
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Somewhat but reducing costs would be problematic. They would recruit fewer low income and middle class students. They would cut campus construction projects. They’d fire staff. They’d “hire” volunteer adjuncts. They’d slash some grad programs. They’d force faculty to devote more energy to getting grants.

I know conservatives like to think of universities as these elite ivory towers but universities are among the largest employers in any cities. Even community colleges are major employers in many rural areas.

This is another area where we are talking about symptoms and bandaids instead of the real problem. Income and wealth inequality. You’ve got parents worth tens of millions of dollars and teenagers without a dime to their name competing for spots to pay the same amount of money for the same education. How do you price something like that? Part of it requires low income people to get loans to make up for the inequality with the promise that the education will help them make up the gaps in their lifetimes.
 
Pretty sure it would force colleges to close, not just reduce costs. That would be what eliminating mortgages would do to the housing industry, or what eliminating car loans would do to the auto industry. There needs to be viable credit for certain big-ticket aspects of the economy to function, and there is nothing wrong with that. Education is unique because the lender can't foreclose on it and take it back like the lender can do with a house or a car. But from a societal perspective there still needs to be some level of credit involved to make sure we are generating an educated workforce. The question is how to properly prioritize and collateralize that credit.
 
TownieDeac said:
Not sure why this even requires an analogy. I worked multiple jobs through college and still graduated with mid 5 figure debt, which took me the better part of a decade to pay off. But if my friends who took out more debt than me had their remaining debt forgiven, I'd be happy for them. Or for the next generation of kids for whom college is more expensive. Why would I want everyone to struggle? Because I loved it so much?
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I really don’t get this. If I buy a home and 5 years later my friend buys a home when interest rates are lower, I’m not going to be mad. I’ll be happy.

Why should I be mad that Elizabeth Warren wants to take 2 cents from someone 50,000,001st dollar of wealth to pay off student loans? We should be mad that the math works out like that. Clearly our economy is only working for a small number of people. The crazy thing is the wealthiest people will more than make it back after young adults are more able to buy cars and homes and health insurance and have weddings. It’s a good investment.
 
PhDeac said:
Somewhat but reducing costs would be problematic. They would recruit fewer low income and middle class students. They would cut campus construction projects. They’d fire staff. They’d “hire” volunteer adjuncts. They’d slash some grad programs. They’d force faculty to devote more energy to getting grants.

I know conservatives like to think of universities as these elite ivory towers but universities are among the largest employers in any cities. Even community colleges are major employers in many rural areas.

This is another area where we are talking about symptoms and bandaids instead of the real problem. Income and wealth inequality. You’ve got parents worth tens of millions of dollars and teenagers without a dime to their name competing for spots to pay the same amount of money for the same education. How do you price something like that? Part of it requires low income people to get loans to make up for the inequality with the promise that the education will help them make up the gaps in their lifetimes.
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You are way off base if you think that is the real problem. Maybe the top 1% (and probably less than that) has tens of millions of dollars. The other 99+% are all in generally the same boat when it comes to college - the student has to take loans. Focusing on that 1% is petty and a waste of time. Ignore the 1% and focus on reforming the system for the 99%.
 
It won't let me edit that, meant to say that the student has to take loans and/or work, save, drain, savings, etc. Very few are just pay-as-you-go full freight from a checking account.
 
2&2 Slider To Leyritz said:
Pretty sure it would force colleges to close, not just reduce costs. That would be what eliminating mortgages would do to the housing industry, or what eliminating car loans would do to the auto industry. There needs to be viable credit for certain big-ticket aspects of the economy to function, and there is nothing wrong with that. Education is unique because the lender can't foreclose on it and take it back like the lender can do with a house or a car. But from a societal perspective there still needs to be some level of credit involved to make sure we are generating an educated workforce. The question is how to properly prioritize and collateralize that credit.
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Not really. Perhaps the most consistently ignorant line of thinking on here is comparing a college education and higher education to the auto or housing industry.

Some colleges would close. The shitty predatory for profits Obama tried to get rid of would close. Sure. But most universities have plenty of assets and revenue streams that they would figure out a way forward. The elite private schools would raise tuition and focus on recruiting high dollar parents and their kids and become more selective by wealth. So they’d cut their class sizes and fire some staff and low level administrators. The ripple would help lower tier privates stay in the game.

Public schools would force states to cough up more funding. State U isn’t going to shut down.

Maybe construction on the new downtown campus or State U-UAE campus slows down. But universities would adjust. The lowest income people would be screwed.
 
2&2 Slider To Leyritz said:
You are way off base if you think that is the real problem. Maybe the top 1% (and probably less than that) has tens of millions of dollars. The other 99+% are all in generally the same boat when it comes to college - the student has to take loans. Focusing on that 1% is petty and a waste of time. Ignore the 1% and focus on reforming the system for the 99%.
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That 1% is way more than 1% of the college student population. Obviously that impacts pricing. Doesn’t Wake have some absurd percentage of students from the top 10% in income?
 
PhDeac said:
I know conservatives like to think of universities as these elite ivory towers but universities are among the largest employers in any cities. Even community colleges are major employers in many rural areas.
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I do think of Wake Forest as pricing itself as an elite ivory tower. Most people, my children included, should review the cost of attending Wake Forest and conclude that there are more affordable higher education options available, including community colleges.
 
PhDeac said:
That 1% is way more than 1% of the college student population. Obviously that impacts pricing. Doesn’t Wake have some absurd percentage of students from the top 10% in income?
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90 percentile household income in the U.S. is like $180,000/yr. Do you really think most of those families are capable of paying full tuition at Wake or Duke?
 
No. But we can afford it a lot more than most. Obviously that's the bottom of that range. 90-99% goes from 180K to 430K.

Here's the stat I was thinking about:

https://www.nytimes.com/interactive/projects/college-mobility/wake-forest-university

The median family income of a student from Wake Forest is $221,500, and 71% come from the top 20 percent. Less than 1% of students at Wake Forest came from a poor family but became a rich adult.
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22% are from the top 1% (#8 in the nation)
49% are from the top 5% ($235K+)
 
PhDeac said:
Not really. Perhaps the most consistently ignorant line of thinking on here is comparing a college education and higher education to the auto or housing industry.

Some colleges would close. The shitty predatory for profits Obama tried to get rid of would close. Sure. But most universities have plenty of assets and revenue streams that they would figure out a way forward. The elite private schools would raise tuition and focus on recruiting high dollar parents and their kids and become more selective by wealth. So they’d cut their class sizes and fire some staff and low level administrators. The ripple would help lower tier privates stay in the game.

Public schools would force states to cough up more funding. State U isn’t going to shut down.

Maybe construction on the new downtown campus or State U-UAE campus slows down. But universities would adjust. The lowest income people would be screwed.
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How is that any different than the auto industry? Auto manufacturers all have diversified assets and revenue streams other than simply US individual consumer new cars - international sales, parts, service revenue, fleet sales, trucking, financial holdings, etc. Hell, Honda makes lawnmowers and Mitsubishi used to make jet engines, I have no idea if they still do. If you eliminated US consumer auto loans, some auto manufacturers would close while some would make changes and do just fine. It is pretty much the exact same thing.
 
So what’s your point?
 
You said:

Perhaps the most consistently ignorant line of thinking on here is comparing a college education and higher education to the auto or housing industry.
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I think they are pretty solid comparisons with respect to the consumer debt driving each one, with the obvious caveat that there are a lot more colleges than auto manufacturers. There are definitely more consistently ignorant lines of thinking on here.
 
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