In the United States, an awful lot of people start their working lives deeply in debt. The source of this debt is student loans. In order to get a higher education, they borrow very large sums of money, on the order of 100,000 dollars or more, which they start paying back after they graduate and get employed. Unlike ordinary loans, this debt cannot be forgiven in a bankruptcy proceeding.
The huge number of people saddled with such a large amount of debt has become a social problem. It prevents people from buying houses or cars. It depresses their lifestyle. It even influences marriage and relationships. People are reluctant to become involved in a serious relationship with someone who has 150,000 dollars in debt, because they know that his or her debt will be a millstone for their own financial future.
To help solve this problem, some politicians have proposed a couple of different ideas. One is to simply write off the debt. That's it. Be free. I haven't followed the details of the proposals, and none as far as I know has actually made it into an actual congressional bill to be voted on, so I don't know exactly who picks up the tab, but I'm guessing that the government pays off the banks, or perhaps the banks are left holding the tab, or perhaps some combination.
The other solution, going forward, is to simply make college free. Then there will be no student debt problem for the next generation.
This thread is to discuss the merits of those proposals. I think both of those are truly awful proposals.
To explain why, I will begin by explaining why I think the student loan program went so wrong in the first place. The idea behind them is noble enough, and seems sensible on the surface. By going to college, a person becomes more employable and earns more money, but college is expensive. The student loan program allowed more people to access college education, and then they would use their additional earnings to pay back the cost of that education, and once that cost was paid back, they would enjoy the benefits of their lifestyle that was enabled by that college education. Meanwhile, society gets a benefit by having a greater number of educated people capable of taking on professional assignments. Win-win.
In practice, though, what actually happened is that we told 18 year olds that they can have an unlimited line of credit, to spend four years living on someone else's dime, with not a lot of restriction on what they do. They had to study something, and maintain at least some sort of academic standing, but really there weren't a lot of restrictions on them. They could study engineering, or medicine, or guitar playing or sociology. The could also pick the provider of these services, which means they could pick a school that had spartan dormitories and few student services, or much nicer living quarters and a really nice student center with a pool, and lots of student services. Of course, the school with the pool was more expensive, but that was a problem that wouldn't come up until at least four years away. To an 18 year old, that's a pretty long time.
Giving 18 year olds that sort of choice is a recipe for disaster, and as a society, we have reaped what we have sown. The result is predictable, and we are in it today. It's hard to imagine anything stupider than letting an 18 year old borrow unlimited money with very few restrictions on their behavior.
As hard as it is to imagine, politicians have found a way to make it even more stupid. Instead of giving the students unlimited funds to borrow, they are proposing unlimited funds that will be borrowed by somebody else. (I say "borrowed", because God forbid we should actually raise the taxes needed to pay for these proposals.) With the "free college" proposals, there isn't even the voice in their heads say, "Hmmm....I really do like political science, but I'm racking up a lot of debt. Maybe I should study something I can actually use to get a high paying job." No, instead they would be free to pursue their love of sculpture, without having to worry about never being able to buy a house.
And, just for completeness, some politicians want to make the stupidity retroactive. Shift all that debt from all of those bad decisions away from the people who made those decisions, and onto the rest of us. You owe 100,000 dollars? Never mind. We'll pick up the tab.
That must be awfully galling to those who have actually managed to pay back all or a huge portion of their loans. Even more so, what would we tell people who are thirty years old and who wanted to go to college, but couldn't afford to, and decided not to saddle themselves with debt. Now they are older, have a kid or two, and no education. Suckers! You could have spent four years partying while taking a light load in sociology. You would have been no better off than you are today, but it would have beat the hell out of stocking shelves at Wal-Mart in your early 20s.
The core of the problem is that 18 year olds are, for the most part, morons. I work with high school kids on a robotics team. Their youthful enthusiasm, creativity, and desire to make the world a better place really inspire me. Someday, they'll be decent human beings, but today I'm going to have to tell them to shut up about Star Wars, get off their phones, and finish the stupid robot. The idea that that group of clowns could get 100,000 dollar loans is really frightening to me, and that's the Robotics team. The same thing is happening with the basketball players and the people who can't be bothered to join any clubs because they are too busy playing video games.
Meanwhile, giving these kids more choices has even corrupted the institutions themselves. There is a huge pot of money available to school administrators if they can sign up a bunch of kids using loan money to pay school administrators. Once upon a time, to get that money, they had to be attractive to wealthy parents, who would be concerned about good value for their money. Today, the schools have to be attractive to teenagers borrowing money. Not surprisingly, the cost of education has increased faster than inflation, and the biggest parts of the budget increases have been in student services.
If we are to subsidize higher education, and I would support doing that, we need to let the adults make the decisions. Subsidize medicine, engineering, and important stuff a lot. Only subsidize kids who are good enough to actually make a contribution to society with their education. And if you want to study sociology, use your own money, or mom and dad's. It's their problem if you live in their basement and spout off about the unfairness of society.
Note to mods: I put this in "social issues" because I wanted to focus on the problem itself rather than the politicians who are proposing solutions. Also, although it's an American problem, I wanted international perspectives. However, it could go into "USA politics." I just thought this was a better fit.
The huge number of people saddled with such a large amount of debt has become a social problem. It prevents people from buying houses or cars. It depresses their lifestyle. It even influences marriage and relationships. People are reluctant to become involved in a serious relationship with someone who has 150,000 dollars in debt, because they know that his or her debt will be a millstone for their own financial future.
To help solve this problem, some politicians have proposed a couple of different ideas. One is to simply write off the debt. That's it. Be free. I haven't followed the details of the proposals, and none as far as I know has actually made it into an actual congressional bill to be voted on, so I don't know exactly who picks up the tab, but I'm guessing that the government pays off the banks, or perhaps the banks are left holding the tab, or perhaps some combination.
The other solution, going forward, is to simply make college free. Then there will be no student debt problem for the next generation.
This thread is to discuss the merits of those proposals. I think both of those are truly awful proposals.
To explain why, I will begin by explaining why I think the student loan program went so wrong in the first place. The idea behind them is noble enough, and seems sensible on the surface. By going to college, a person becomes more employable and earns more money, but college is expensive. The student loan program allowed more people to access college education, and then they would use their additional earnings to pay back the cost of that education, and once that cost was paid back, they would enjoy the benefits of their lifestyle that was enabled by that college education. Meanwhile, society gets a benefit by having a greater number of educated people capable of taking on professional assignments. Win-win.
In practice, though, what actually happened is that we told 18 year olds that they can have an unlimited line of credit, to spend four years living on someone else's dime, with not a lot of restriction on what they do. They had to study something, and maintain at least some sort of academic standing, but really there weren't a lot of restrictions on them. They could study engineering, or medicine, or guitar playing or sociology. The could also pick the provider of these services, which means they could pick a school that had spartan dormitories and few student services, or much nicer living quarters and a really nice student center with a pool, and lots of student services. Of course, the school with the pool was more expensive, but that was a problem that wouldn't come up until at least four years away. To an 18 year old, that's a pretty long time.
Giving 18 year olds that sort of choice is a recipe for disaster, and as a society, we have reaped what we have sown. The result is predictable, and we are in it today. It's hard to imagine anything stupider than letting an 18 year old borrow unlimited money with very few restrictions on their behavior.
As hard as it is to imagine, politicians have found a way to make it even more stupid. Instead of giving the students unlimited funds to borrow, they are proposing unlimited funds that will be borrowed by somebody else. (I say "borrowed", because God forbid we should actually raise the taxes needed to pay for these proposals.) With the "free college" proposals, there isn't even the voice in their heads say, "Hmmm....I really do like political science, but I'm racking up a lot of debt. Maybe I should study something I can actually use to get a high paying job." No, instead they would be free to pursue their love of sculpture, without having to worry about never being able to buy a house.
And, just for completeness, some politicians want to make the stupidity retroactive. Shift all that debt from all of those bad decisions away from the people who made those decisions, and onto the rest of us. You owe 100,000 dollars? Never mind. We'll pick up the tab.
That must be awfully galling to those who have actually managed to pay back all or a huge portion of their loans. Even more so, what would we tell people who are thirty years old and who wanted to go to college, but couldn't afford to, and decided not to saddle themselves with debt. Now they are older, have a kid or two, and no education. Suckers! You could have spent four years partying while taking a light load in sociology. You would have been no better off than you are today, but it would have beat the hell out of stocking shelves at Wal-Mart in your early 20s.
The core of the problem is that 18 year olds are, for the most part, morons. I work with high school kids on a robotics team. Their youthful enthusiasm, creativity, and desire to make the world a better place really inspire me. Someday, they'll be decent human beings, but today I'm going to have to tell them to shut up about Star Wars, get off their phones, and finish the stupid robot. The idea that that group of clowns could get 100,000 dollar loans is really frightening to me, and that's the Robotics team. The same thing is happening with the basketball players and the people who can't be bothered to join any clubs because they are too busy playing video games.
Meanwhile, giving these kids more choices has even corrupted the institutions themselves. There is a huge pot of money available to school administrators if they can sign up a bunch of kids using loan money to pay school administrators. Once upon a time, to get that money, they had to be attractive to wealthy parents, who would be concerned about good value for their money. Today, the schools have to be attractive to teenagers borrowing money. Not surprisingly, the cost of education has increased faster than inflation, and the biggest parts of the budget increases have been in student services.
If we are to subsidize higher education, and I would support doing that, we need to let the adults make the decisions. Subsidize medicine, engineering, and important stuff a lot. Only subsidize kids who are good enough to actually make a contribution to society with their education. And if you want to study sociology, use your own money, or mom and dad's. It's their problem if you live in their basement and spout off about the unfairness of society.
Note to mods: I put this in "social issues" because I wanted to focus on the problem itself rather than the politicians who are proposing solutions. Also, although it's an American problem, I wanted international perspectives. However, it could go into "USA politics." I just thought this was a better fit.
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