Student Loan Forgiveness, Free College

#76
#76
The debt numbers are highly skewed towards private universities and graduate degrees. I'll have to see if I can find the data but saw recently the typical debt for a UG degree and it's more like $20K or something.

The big numbers (100K +) are typically either a couple degrees from private schools and/or professional degrees where the ROI might still be pretty good.

Bottomline, EW is using inflated debt #s to argue for a socialistic program that justifies a wealth tax.

I'm going to disagree with you on the private school/professional degree aspect. A whole lot of state schools have significantly elevated prices. Just in Oklahoma alone:

Tuition & Fees

Rates

Other websites have similar numbers overall:

University of Oklahoma Norman Campus - Net Price, Tuition, Cost to Attend, Financial Aid and Student Loans

There are ways to shave off some of that money, but overall, it's not hard to accumulate $40,000+ for a standard four year degree.
 
#78
#78
I'm going to disagree with you on the private school/professional degree aspect. A whole lot of state schools have significantly elevated prices. Just in Oklahoma alone:

Tuition & Fees

Rates

Other websites have similar numbers overall:

University of Oklahoma Norman Campus - Net Price, Tuition, Cost to Attend, Financial Aid and Student Loans

There are ways to shave off some of that money, but overall, it's not hard to accumulate $40,000+ for a standard four year degree.

Sure if you borrow every penny of the entire cost and additional monies for other stuff. Or you could live at home and work part time and even if you borrowed every cent of the OU cost your debt would be under $20K.

So let's see, I can get a degree from OU or a used KIA Sorrento...decisions, decisions.
 
#80
#80
The simplest and most effective fix to the problem is for the .gov to stop guaranteeing the loans. You need a loan to go to school, go to the bank.

Would screw me (at a minimum I'd never get a raise again) but yes.
 
#81
#81
Sure if you borrow every penny of the entire cost and additional monies for other stuff. Or you could live at home and work part time and even if you borrowed every cent of the OU cost your debt would be under $20K.

So let's see, I can get a degree from OU or a used KIA Sorrento...decisions, decisions.

Regardless, $40,000+ for a four year degree is insane.

Sorry, but there it is.
 
#82
#82
The donations I'm talking about in #2 are not donations to the sports program. For example, I doubt UAB's football program is profitable and I know athletics overall are not. However, the resurgence and investment in athletics by the university has generated a tremendous amount of donations to the university (not targeted at athletics). Clearly the same is true of schools like UT. The value of the sports programs is higher than the individual profit/loss. UK basketball is valued at 330 million! That ain't profit; it's exposure for the university and alumni affect for the school. Put another way, dumping basketball at UK would cost much more than just the loss of profit from the programs themselves.

To the point that you think the AD is profitable? If the AD can demonstrate this convincingly, then keep it.

I would never suggest dumping basketball at UK. I am betting there is no way most AD's are profitable because of the visibility they bring to their schools.

If you've ever seen a good club team at a college (BYU had great soccer and rugby teams), then it's easy to let go of this notion that all these various smaller sports need to be a part of the same machine as football and basketball. I am willing to bet UAB basketball would survive. Football will only survive off donations, which probably should be there if the program is creating enough visibility to get donations for other areas of the university.
 
#84
#84
Regardless, $40,000+ for a four year degree is insane.

Sorry, but there it is.

But it's not $40K - the link you posted is $28K and change and that includes room and board. The degree itself is under $18K.

It's like saying a $20K car is really $30K because I need food and a place to live!
 
#85
#85
To the point that you think the AD is profitable? If the AD can demonstrate this convincingly, then keep it.

I would never suggest dumping basketball at UK. I am betting there is no way most AD's are profitable because of the visibility they bring to their schools.

The AD is a cost center at UAB basically but the University as a whole brings in significantly more additional monies because of it's existence than it loses in costs. It's a net margin increaser for the university eventhough the AD itself generates less direct revenue than it's direct costs.
 
#86
#86
The simplest and most effective fix to the problem is for the .gov to stop guaranteeing the loans. You need a loan to go to school, go to the bank.
It's so simple, yet so many people don't (or refuse) to see this.

Bernie, Warren, AOC, and their ilk talk all the time about how so expensive college is and how its cost is rising so much faster than the general rate of inflation. That's totally accurate. But I never hear them ask or wonder why it is so expensive, and why it increases so much faster than the cost for other things. I imagine that is because asking such a question would require them to look at underlying causes and ultimately would point to the government guarantee as at least a cause of the problem. That doesn't fit their agenda, so they don't ask that question. Their "solution" is to just have the government pay for all of it.
 
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#87
#87
Suggestions for reducing the cost of education:

Gut administration
Gut athletic departments (sports get no $ from the university/taxes and profitable sports should help to fund the universities)
No more new buildings/classrooms to accommodate growth (handle the influx with online classes)
Put limits on textbook expenses
Increase professor load through more online courses
Just step 1 alone would go a long way. My Brother in law works in the University system here in Georgia and some of the stuff I hear from him is mind-blowing.
 
#89
#89
Just step 1 alone would go a long way. My Brother in law works in the University system here in Georgia and some of the stuff I hear from him is mind-blowing.
There's zilch incentive to gut administration as long as there's a gravy train of new students coming onto campus. That gravy train, and all the debt that comes with it, is sparked by the federal guarantee on student loans. None of these schools are just going to gut admin in a vacuum.

So much of the inane stuff on college campuses - turning them effectively into resorts/places to hang out, bloated admin, the stupid useless majors, textbook costs, in addition to just how expensive room/board is to begin with - is caused by the federal government goosing demand for higher education.

There's zero incentive for banks not to make these loans because they're guaranteed and non-dischargeable in a bankruptcy, then colleges fall over themselves to make themselves as attractive as possible to prospective students, which makes tuition even more expensive, which leads to more guaranteed money.
 
#90
#90
But it's not $40K - the link you posted is $28K and change and that includes room and board. The degree itself is under $18K.

It's like saying a $20K car is really $30K because I need food and a place to live!

$28K per year...
 
#92
#92
Just step 1 alone would go a long way. My Brother in law works in the University system here in Georgia and some of the stuff I hear from him is mind-blowing.

Here's the kicker - if the government is going to pick up the tab the administrative bloat will only grow as they will demand all sorts of reporting and special programs for various pet causes. As payer they can demand.
 
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#93
#93
The AD is a cost center at UAB basically but the University as a whole brings in significantly more additional monies because of it's existence than it loses in costs. It's a net margin increaser for the university eventhough the AD itself generates less direct revenue than it's direct costs.

I'm skeptical, but I'm sure this is true with some universities. However, the opportunity cost needs to be factored. Would my university (SUU) get more endowments putting, say, $5M/year into mediocre sports or into its prestigious arts programs.

We found a statistically significant positive relationship between membership in Division I-A (the powerhouse schools athletically) and academic reputation. The relationship was pretty strong. Other things equal, a mid-quality school might rank roughly 350 if it were not in Division I-A, but typically would rank around 300 or a little better if it were in Division I-A. Having pretty bigtime football and basketball is associated with a meaningful improvement in perceived academic reputation, as measured by Forbes and CCAP.

By contrast, schools with lesser athletic prowess (or even non-participation in football) in Division I-AA received no benefit from that status, and those in the lower Division II were actually adversely impacted by their lesser athletic reputation. Seemingly, participation in sports at the highly commercialized and visible upper levels has real payoffs.

That is money that could be spent in other ways that might enhance reputation. Using our own university (Ohio University) as an example, we asked the question: what would happen if the money used to subsidize athletics went instead to enhance instruction? Instructional spending is positively associated with academic reputation too. It turns out that roughly half the reputational gains from athletic participation are wiped out from the reduced spending on academics. In the case of some schools, it would likely completely wipe those gains out. And, of course, the statistical estimations are just that, estimates, and are average behavioral responses – some schools will perform better, but others worse, than the average.

Sports And University Academic Reputation
 
#94
#94
The debt numbers are highly skewed towards private universities and graduate degrees. I'll have to see if I can find the data but saw recently the typical debt for a UG degree and it's more like $20K or something.

The big numbers (100K +) are typically either a couple degrees from private schools and/or professional degrees where the ROI might still be pretty good.

Bottomline, EW is using inflated debt #s to argue for a socialistic program that justifies a wealth tax.

I’m glad you responded because I was interested in your perspective. I never considered no incentive to reduce cost from the school side. Costs would skyrocket under the EW proposal.

What about some checks and balance to the program? I think the issue is not so much everybody goes to school, but that it doesn’t require mortgaging your life the day after graduation. Maybe put restrictions that you have to be accepted into the program AND graduate. Limit it to degree programs that have a marketable value. The EW proposal can even have a cap, creating an incentive to keep costs down for taxpayer to fund 100%. Only cover UG degrees. Don’t include room and board. Some of that is anti-market, I get it. But if loans are already guaranteed (I think they are) by the government then this should be better with certain limits. You can make it where the student has more skin in the game and keep costs reasonable.

This would be for public universities, trade schools, pilot licenses, commercial drivers license, etc...almost anything a 529 can be used for would be a good starting point. It may even drive more towards some of the trade schools because they would be fully or nearly fully covered by the program.

Admittedly I haven’t thought much about it, but on the surface the idea isn’t awful in and of itself. There are worse things the government is and could be subsidizing. A more educated and skilled workforce isn’t a bad thing.
 
#98
#98
colleges fall over themselves to attract students to their school because there's a ton of competition. An artificially-created level of competition.

Competition cutting which way? Competition to be higher on the school rankings?

If there was competition on the tuition front, prices wouldn't be double+ the inflation rate.
 
#99
#99
Anyway, my point was if a student goes $50-100K in debt over the course of their schooling, at what point do they actually start making a "living wage" as opposed to socking everything they can against a student loan?

All depends on amount borrowed, job obtained, how thrifty you are, etc.
 
I’m glad you responded because I was interested in your perspective. I never considered no incentive to reduce cost from the school side. Costs would skyrocket under the EW proposal.

What about some checks and balance to the program? I think the issue is not so much everybody goes to school, but that it doesn’t require mortgaging your life the day after graduation. Maybe put restrictions that you have to be accepted into the program AND graduate. Limit it to degree programs that have a marketable value. The EW proposal can even have a cap, creating an incentive to keep costs down for taxpayer to fund 100%. Only cover UG degrees. Don’t include room and board. Some of that is anti-market, I get it. But if loans are already guaranteed (I think they are) by the government then this should be better with certain limits. You can make it where the student has more skin in the game and keep costs reasonable.

This would be for public universities, trade schools, pilot licenses, commercial drivers license, etc...almost anything a 529 can be used for would be a good starting point. It may even drive more towards some of the trade schools because they would be fully or nearly fully covered by the program.

Admittedly I haven’t thought much about it, but on the surface the idea isn’t awful in and of itself. There are worse things the government is and could be subsidizing. A more educated and skilled workforce isn’t a bad thing.

Purdue is experimenting with some "free tuition" whereby the university will lay claim to some amount of future income from the student. Not sure it's a great idea but it's interesting.

I agree that if we are going to pay for post K-12 then it should be broader than traditional 4 year colleges and should include the trades for sure.

I'd like to see some work/service requirement in exchange for tuition - CCC like perhaps but something where the recipients have to make a contribution to the community or country in exchange for what they are being given.

If we're going to forgive loans then I still think the vestiges of private lending need to be compensated. If the government wants to waive their own repayment then so be it but invalidating private debts is theft.

I'd much rather see some type of voucher system (e.g. $5K/year to use for education) than making college free.

Big Problems I See:

1. "free" mentality doesn't exactly encourage effort (I'm being generous). I can tell you that the people paying for college themselves (and making the financial sacrifices) take it a whole lot more seriously than those who mommy and daddy sent to college. I'd expect the ratio of "new" students into the mix from free college would heavily favor those that aren't very motivated vs those that are motivated but didn't have a chance before. I can also tell you that when a class hits a critical mass of students who don't GAS then the entire class suffers.

2. building on #1; it will likely water down (even further) college education.

3. the "Medicaidization" of higher ed. The government will have a panel of regulators and bureaucrats looking to "cut costs" using a one size fits all.

4. states will look for ways to contribute less to higher ed (or nothing at all). Currently revenue streams for higher ed (public schools) is a) state funding, b) tuition, c) extramural funding (eg. research funding) and d) endowments/giving. If the Feds pay for everything then states will dump their contribution. Instead it will be a Medicaid model where the states have to pay part and the Feds pay the other part. This mix will be problematic state by state.

5. the payer controls the payee - whatever the whim du jour of the current leaders in charge is will be foisted upon any participating university. Priorities will be driven by how best to appease the DoEd to ensure the money keeps flowing.

6. wealth taxes have been shown to be unreliable sources of income and building a massive entitlement onto them means other forms of revenue will be needed to fill the shortfalls. It's like funding your state on sales tax or tourism dollars; when the economy turns you costs remain fixed due to entitlement rules but your revenue falls. You either cut elsewhere or raise other taxes to fill in.

7. systems that provide a benefit only if you keep your grades up (eg. Hope scholarships) create grade inflation (see #2).

There's more I'm sure but EW's "let the government control everything" mentality is a disaster.
 
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