Good.
Res ipsa loquitur.
Go ahead, Senator, explain how this is fair. I’d love to know.
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Good.
Res ipsa loquitur.
Go ahead, Senator, explain how this is fair. I’d love to know.
Ethics Alarms 
She trotted out that bogus $50 per semester tuition story that makes it sound like that’s the only way she went to college again, I see.
I loved her response: “Of course not.”
Jerk.
jvb
She knows exactly what she’s doing: Pander to millennials who have gotten way over their head in debt and like Mrs. Santa Klaus, offer a magic solution. I am really gratified that this man exposed her true character.
That’s going to put her campaign doomsday clock at 100 seconds to midnight!
There is only one condition where the feds should forgive student debt.
The applicant finishes Officer Candidate School for one of the armed forces of the United States and accepts an active duty commission.
Half of the base pay will be garnished, and the applicant for relief will remain on active duty as a commissioned officer until the debt is paid in full.
The only away the debt will be forgiven is if the applicant is killed or permanently disabled as a result of combat.
How is that?
Sorry, Mike, but that is a terrible idea. The incentive for excellent officer performance dies if you place this sort of burden on those in charge of people’s lives.
Might as well simply force them to graduate college, then TELL them where they will work until the debt is paid (when they are about ready to retire, that is)
I understand your motives here, and appreciate them, but this is not the way.
Glad you jumped in, slick. I was getting loaded up for the same response.
I served in a medical army reserve unit quite a while back and the officers who had big medical school debts, were doing exactly just that. Of course they became commissioned officer and the reserves at that time were not activated. Not a bad deal for them.
I think some form of employer-paid tuition contract like that could be a major part of higher education reform. If there’s a job that requires an expensive education, but doesn’t pay well, and is somehow essential to providing some necessary public service, then there should be programs for carefully-selected candidates to receive their education at public expense in return for committing to a specified term of public service. The military does this all the time, from fighter pilots to doctors.
Another idea that I like would be to have universities agree to educate students on credit, in exchange for a fixed percentage of that student’s income post-graduation for a fixed span of years. If their degree qualifies them to work the fryer at McDonald’s, it would then become the university’s problem as much as the student’s, and never the taxpayer’s.
Anyone who wants to pursue studies that don’t have a public-service use and can’t convince a university they can deliver a return on investment can pay cash on the barrelhead.
The first part sounds like a punt, similar to Obamacare. Employers used to use healthcare as a recruiting tool. Corporate generosity then got turned into an unfunded government mandate to provide insurance to all full-time employees. The number of full time employees then dropped in some fields, and many companies provide high-deductible insurance that is next to useless for everyday costs (you pay for your everyday costs out of pocket AND an insurance premium just in case….). If education costs become mandatory, the number of employees will continue to drop, and bottom of the barrel education will prevail.
Although, if we are speaking strictly of public sector/service jobs, then the idea has merit. My uncle was clinical psychologist, but his entry-level job at a state hospital barely paid his bills. Of course, this was the 1970’s, when tuition for his masters was cheep enough that student loan payments were not part of his bill woes.
A friend of mine is a middle school teacher in a poorer city. Teachers in my state are required to get a masters within 10 years of getting their initial license. When she gets her degree, she’ll get raise for a few hundred dollars. It will take her about 20 years to recoup the cost of that degree based on the amount of that raise (this also doesn’t account for the time to recoup her bachelors, which she learned does not qualify for the quagmire that is the Federal Public Service Loan Forgiveness Program – example of another victim).
Another friend of mine works for a public agency, and needs a license to be promoted. Once he is promoted the state will pay for his license, but until he is promoted, he is on the hook for the cost. My company in the same field, however, will pay my license as it is business asset at any level. (It will also will reimburse post-graduate education costs that fit a business need, though you are still on the hook for the initial bachelors; I am in the private sector, however.) I will note, however, we are not in a low-paying field.
My company uses competitive pay and perks like education reimbursement to recruit the best talent (it also gave me a raise this year to keep me!) The pay is itself a subsidy of my sunken education costs, and generous enough that I could pay for another degree myself. But by paying for future education, it actively encourages employees to gain skills that will improve their and the company’s earning power.
But, if as a private company, it was required to pay for my degrees directly, it would have to lower my take home pay, and direct it in some manner to education. This actively puts me at a disadvantage, because I earned my masters before joining the company. I might be able to expense my student loans, but then someone who went to a private school gets their degree invisibly paid, while I who went to a public school do not see the savings.
Today, I pay less in loans the and keep more of my paycheck than the individual who went to an expensive school; with mandated education, we take home the same. I lose my autonomy and flexibility and part of my earning power, and the company has to be conservative with pay to cover education directly. It just adds complexity and risk.
As I said, in the public sector this has merit. However, the paying for education is ultimately the same thing as saying public sector service jobs should pay better. Social workers, for instance, get paid in peanuts, but must usually possess a master’s degree. Same with teachers and public hospital psychologists. These jobs are critical, and must exist. But public budgets are tight, and the most vulnerable groups served are also the least able to advocate and offset the cost of providing these services (ie, patients in a public hospital are not necessarily paying taxes, nor have the resources to advocate for increased pay for their doctors, compared to families in a wealthy town advocating for better pay for their children’s teachers).
In lower paying professions, providing the education reimbursement benefit for mandatory credentials has merit in helping reduce disparities in pay among similarly qualified individuals. This promotes take home wage stability, reducing resentments and help build morale. Ultimately, society needs to decide to invest in these professions. Without this public commitment, I would be wary of any program that both necessarily reduces take-home pay and individual autonomy.
It seems to me that Yet Another Government Program isn’t the solution to people making bad choices and borrowing way too much money to get degrees that have way too little value. The root of the problem is skyrocketing college costs, right? Why is college increasing in cost at 2-3 times the rate of inflation? It clearly isn’t because the product is increasing in quality. The cost to provide such a product hasn’t gone up appreciably – having a professor stand in front of a room of desks and drone on should cost about the same now (in relative economic terms) as it did 20, 50, or even 100 years ago.
One of the major reasons colleges keep raising tuition is simply because they can. Students have a virtually bottomless supply of money, provided by private lenders who are guaranteed repayment by the federal government. There’s virtually no risk to loan a huge sum of money to someone pursuing an art history degree – they can’t get out from under the debt with bankruptcy, and the government will help the lender collect the debt through a variety of means. So higher education is a product with subjective value and a relatively arbitrary price tag, funded by a pool of money that is virtually bottomless, being purchased by immature individuals who lack the critical thinking skills to analyze the value and wisdom of the transaction. Of course the price is skyrocketing.
Is there a simple solution to this? I think so: end government guarantees of student loans. Let people discharge such debts through bankruptcy just like any other consumer debt. Lenders would then have to be more selective in who they loan money to, and for which degrees. A student with a good academic record would have little trouble borrowing money to get a degree in, say, engineering or medicine (actuarially speaking, such a student would be a pretty safe bet to pay back their loan), but kids with C averages wouldn’t be able to find anyone to loan them $70K/year to get a women’s studies or theater arts degree, because that’s a bad risk. With less money being thrown around, colleges would have to return to price competitiveness to attract students, and costs should come back in line with the rest of the economy.
A side benefit to society would be a return to the days when a college degree was a legitimate accomplishment, rather than the “box to be checked” it has become today. For example, why in the hell are our primary schools requiring Master’s degrees for people to teach second or third grade kids? Any functioning adult with a high school education should be able to teach primary and middle school material.
Another side benefit is that a lot of college professors would end up having to find real jobs.
I would argue it is more the “box to be checked” mentality that is driving cost, than the bottomless pit of money problem. In the 1970s and earlier, college wasn’t a default choice. Rather, it was one path among many that was scene as leading to a successful career. Two of my uncles never went to college and were able to buy homes and raise families in there 20s (another uncle mentioned above, struggled for a while in an entry-level job he could only get with a new master’s degree).
Because smart and motivated students often went to college, they would earn “big money” afterward. So college attendance because correlated with career success. College started becoming marketed to lower performing students, and a supply vs demand problem occurred.
There are only so many high paying jobs. College could provide a seat to students to fill those jobs at a reasonable price. As more students “demanded” attendence, supply of seats was limited. The marginal cost of adding new seats has driven up the costs of attendence in perverse ways.
The relative number of smart and motivated students hasn’t necessarily changed. However, colleges are competing for that small number. My college actually bribes valedictorians with a full ride scholarship to attend. Schools are adding redundant high end facilities and services to makes themselves attractive to the best students. The public, and lower (but not poor) performing students end up subsidizing the high performing students (who were going to go to college anyways).
Importantly, I do not disagree that the unlimited pot of money that is student loan borrowing enables this predatory behavior. I just think that it is the commodification of college that started the escalating costs.
Why then are community and lower tier colleges more affordable? It is because they are largely immune, for now, from the drive to attract the “best” students. The cost of putting a professor in front of a classroom, as you say, is nominally the same anywhere. The basic cost of building and heating the lecture hall is the same.
Community colleges serve their local area as they are (rather than attract from out of region). They often have bare bones facilities, rather than multi-million dollar academic, recreation, and dormitory buildings. They also often also work directly with local employers (hospitals, factories, etc) to teach the skills needed locally. There allocation of resources is more oriented to the needs of the economy – it is the original model discussed above!
It is often said that one could save money by attending two years of junior college and transferring. If everyone did this, however, we’d risk inducing the luxury experience escalating costs cycle at the junior college level.
The only way to control education costs is to deemphasize the luxury and prestige of college, and instead directly serve the economic needs of the school’s core students and local constituents. Schools have to stop wasting money on attracting the best students, and focus on educating there middle of the pack students in acceptable rather than luxurious facilities.
This system was decades in the making. Unfortunately, to Ms. Warran’s credit, some individuals may get screwed over in the transition. Marginal students counting on the unlimited pot of money to get them through school may find themselves in the lurch if the supply is cut off, or interest rates rise to offset increased lender risk. High debt risks be crippling to the employed student with a degrees, but what is the current alternative if a degree is required for most jobs?
The lead on education costs must come from civc leaders pressuring schools, particularly public schools, to control costs first. Sufficient education alternative that fill real areas of need in the economy must also be provided to take the pressure off the one-size fits all approach to bachelor’s degrees. Graduallt cutting off the unlimited pot of money is a part of the solution to give teeth to the transition, but aligning education to true economic and societal needs is the only way to control cost.
Solid, and COTD material.
I went to a local community college the first two years (and got an academic free ride) before transferring to Texas A&M (Whoop!)
I had little or no money, but served in the US Army (ooh-rah!) to get the GI Bill. I got scholarships, grants, and when forced, took out low cost student loans. I worked multiple part time jobs at the same time, filling my calendar carefully to be able to take care of my grades.
My kids could not do all of this today. Costs have gone up too far, and their skin is too white.
“Hey, you made really really bad financial decisions and focused on useless skill sets, let me entrust you with soldier’s lives and millions of dollars worth of equipment!”
No.
Debt slavery could be an option though…
Warren: “We need peons like you to keep working until you drop: I have a dacha to fund!”
“And I’ve got to buy a lot of kids’ votes, buddy! Don’t worry, when I turn the U.S. into Mexico, I’ll make sure you get a new washing machine from China once you’ve gone into the booth and voted PRI, I mean, Democrat, all the way down the line.”
Lizzie issued a clarification today. It is awesome bulls . . . uh . . . reasoning:
“Asked how she responds to him and others with the same opinion, Warren said, ‘Look, we build a future going forward by making it better. By that same logic what would we have done? Not started Social Security because we didn’t start it last week for you or last month for you.’
“When asked if she was ‘saying tough luck’ to those people, she said ‘No,’ but went into a story about how she was given a shot to go to college even though her family ‘had no money.'”
She is completely shameless. Man, I loathe her.
https://www.google.com/amp/s/www.cbsnews.com/amp/news/elizabeth-warren-democratic-presidential-candidate-responds-after-angry-dad-confronts-her-on-student-loans/
jvb
If there’s one thing I’ve learned about life, it’s that the question of whether you are being treated fairly, as a general rule, should never be the first question you ask. If it is, you will doom yourself to a life of frustration and sadness- as I’ve never met anyone who feels they have been treated fairly in any situation ever.
As a personal anecdote, when my sister got divorced, she asked what was fair. She has a parenting schedule that is not ideal, gets more money than she needs from her ex-husband, by all accounts “won” the divorce, and is absolutely miserable. When my marriage fell apart, I asked only, “What’s best for little guy?”, and didn’t give two craps about fair- I have a parenting schedule that is pretty close to ideal, get zero money-despite being the custodial parent, didn’t “win” a damn thing, and am extremely happy. This is because I know little guy is good- and if it’s unfair to me- who gives a hot damn?
Moral: Don’t ask what’s fair, ask what’s right.
Back to Warren- a few points:
1. The question from the gentleman was a totally fair question. On the other hand, his angry response was over the top for me- a bit. A more ethical response I think would have been, “Thank you, Madam Candidate, I will be voting for someone else.” But maybe that’s nit-picking.
2. Her response, “Of course not!” is, I think, the worst thing here. It’s as if she didn’t respect this individual or his perfectly fair question. Frankly, her lack of respect, to me, is a bit astounding- and that seems to be her modus operandi. In fact, I think hers is worse than Donald Trump’s admittedly vile brand of disrespect. At least I have a mild amount of respect for someone who at least says “Up yours” to me, or is otherwise rude. There’s a degree of bravery, despite the nastiness, for lack of a better word. Hers is the worst kind of disrespectful. It’s essentially “I’m right because I’m smarter than you, even though nothing about my career, my life, or my rhetoric suggests that’s actually true.” For those who aren’t lawyers, like Jack and myself, trust me when I tell you that being a lawyer doesn’t make her smarter than you. I’ve meant too many lawyers to believe that’s true- and I expect Jack has the same reaction. Ugh. She’s just the worst in this way-even worse than Ms. Clinton in my opinion.
3. But let’s explore the idea of loan forgiveness. Let’s stipulate, as we must, that it will be unfair. Nevertheless, is it a good idea?
A.) It cannot possibly be a good idea without extreme reform for colleges and even some graduate schools. The federal government is insuring loans for kids going to school for jobs that don’t exist, and they are paying thousands of dollars per year to do this. This is patently insane. The value of a college education is shrinking daily- half because of how easy it is to get information- and half because colleges are indoctrinating kids with stupid opinions and asinine conversations about things like “microagressions”. Major reform is necessary if this idea is going to hold water with sane people. Certain graduate programs are much the same. I’m a lawyer. I refused to pay full tuition for law school-believing it not to be worth it. I went to the best school that gave me free tuition. I graduated with a total of about 70,000.00 in debt. Thank goodness I did, as I only make about $60,000.00 now. I love the work I do- and keeping the loans low allows me to do it- without destroying my family’s future. However, I have a friend, let’s call her “A”. She went $200,000.00 in debt- makes about what I make, and it took her 3 times to pass the bar. (To be honest, as much as I liked her, the surprise for me was that she passed at all.) This system is patently insane. Why would the federal government insure a loan to “A”, when the reasonable bet was that she could never pass the bar? The lack of reform is the primary reason Warren’s idea is, frankly, stupid.
B.) Let’s assume we do reform- and we only insure decent bets- lawyers with good LSAT scores, and majors in college that lead to actual work (unlike say, an English major like my dumbass 18 year old self). Well, then, the question becomes is there a compelling reason to forgive loans- or to have the government take them on? The answer may be revealed when I occasionally go out to the bars on a weekday with my disabled ex-father-in-law (we’re still cool). You look around, there isn’t a millennial in sight. And this is pretty common in other areas as well- restaurants- and other places where money is usually spent and where the local economy churns. When I ask my friends why I never see that- they all say the same thing- we simply don’t have the money. What’s that going to do when the generations above us- first the baby-boomers- and then Generation X pass away- and leave only us- with no money to keep the economy churning? Is that a compelling reason to think about loan forgiveness- would it be better, in the long run, for America and its economy- if we took this step. It’s not totally obvious that it would not be better for America.
And now to, in part, answer the question I just posited. I think the answer is that it would be bad, at least, for a core value that is central to America: personal responsibility. Generally, I think, that Americans believe you should dig yourself out of a hole when you create it. The one problem that gnaws at me is how easy it’s become to dig yourself this hole- at 18 years of age- when, if you’re like me, you’re an absolute moron. If we don’t have significant reform, then this negative will be especially pernicious- because we will teach people that you can dig this whole- and everyone else will get you out of it. Among the reforms we need are as follows:
(1.) Teachers who are trained from the beginning that college is NOT the only path to success. My least successful friends from high school were the ones who went to college without understanding which ends the means of college would ultimately serve. We cannot encourage students to go and “find themselves” or whatever other nonsense we say nowadays. Have a plan. Figure out if that plan will be served by college. If, like Jack’s son, you want to work on cars- maybe college isn’t a good financial bet. [Forgive me if Im wrong on his interests, Jack- you wrote about this some time ago.]
(2.) The government has to either not insure loans, or at least, have some, you know, basic common sense standards. If you were a “D” student throughout school, maybe that isn’t the kind of student loan that should be insured. Doesn’t make you a bad person- not everyone is designed for college work or jobs aligned with college work. In addition, if you’re going to major in “Women’s Studies” or, “English”, maybe we don’t insure that either. [Being an English major was so stupid- I could read since I was five. What a monumental dumbass I was.] It wouldn’t hurt if colleges had to prove that they were providing value to get those loans insured- in the form of college-level jobs. Same for law schools. Same for any
other professional schools.
(3.) We NEED financial training in school. Of, frankly, the Dave Ramsey kind. I was taught how to improve my credit score- by my well-meaning parents. The credit score is a scam designed to convince people to get more into debt- so they can get a better score. My parents are proud of their 849 credit score- and extremely protective of it. I’ve tried to tell them how moronic this is- once you’re at about 740 it no longer matters- but the idea of the score is like moths to a flame for them. My personal debt situation would be so much better if I had the kind of financial training that would have actually helped me- instead of the credit score trap training.
C.) Let’s assume we do al those reforms. That still leaves a generation of kids who didn’t have the reforms- and took out student loans that may have been, and often were, extremely stupid and have a negative net value. (If I took out $200,000.00 to go to law school, my debt would have made my degree in economic terms, less than worthless based on pure math.) Does that make sense? Should we free a generation from this horrible debt, even though it’s unfair to those who saved and did what was right, and even though it flies in the face of the core American value of personal responsibility? If we don’t, will it eventually create a major economic crisis?
I think the answer depends on whether, as Warren says, we actually have a crisis on our hands. Frankly, I’m not sure we don’t.
[Finally, just so my biases are clear- I would benefit from her proposed plan, but I would not vote for this plan- I think the major problem is it encourages persons to do what I think are extremely stupid things- such as- for instance- going to law school at full price.]
I’m sure I missed something in the analysis- this is a pretty complicated issue.
Solid.
COTD material
Agreed. I selected a more marketable degree in high school as I knew I’d have loans. That kind of insight is not beyond teens.
As the father of two children deep in student loan debt (hey, if we had an extra $200-300 per month per child from birth to graduation, we could have had a full college fund, too, but we knew the loan problem going in, and we are paying them back), I think that the least she could have done was have an economic reply prepared. As in, “the kids graduating with so much debt today are the engine of tomorrow’s economy. With the amount of debt that most of them have, they will be unable to buy new houses, new cars, and otherwise unable to stimulate the economy…” Because that’s the case. I won’t go into the rant about how expensive tuition was when I went to college, or that my son’s was literally ten times that cost even though he wasn’t making ten times the summer wages I did (I paid cash for my degree – my parents never had a college fund), because I know that said rant never helps. People just think kids should “find a way to do it like we did.” Whether or not we agree on the student loan crisis or the idea that cancelling student debt would stimulate the economy, at least Warren should have an answer prepared for this question that she was bound to get. Oh, and for the record? My kids wouldn’t benefit, because my wife and I made too much money to qualify for govt. loans, so we had to go private. Our expected contribution per year, based on our salaries? $26,000. Works out to about 20% of our pre-tax income as a couple.
(1) The fact that she laughed at this man and said “Of course not!” tells you all you need to know.
(2) My father told me that they did do student loan forgiveness once in the past. The problem is that all student loans (now) are run by the government. There is a revolving pool of money. Loans are made from this pool, payments are made back in. When you forgive the debts…no loans for the next generation. That is apparently what happened last time. The loans were forgiven, the banks didn’t make any money, so the banks stopped giving loans. The people who want loan forgiveness are just plain selfish or they are recklessly trying to buy votes with taxpayer money. There is no way around it.
(3) All assistance programs are designed to help the irresponsible and punish the responsible. It isn’t just the loans that are the problem. It is the FERPA system. When I was in college, I didn’t qualify for any student loans, any scholarships. All scholarships at my (state) institution were race and gender based (no white males allowed). But what about loans? Well, I didn’t qualify. Two people in my graduating class, going to the same school, got loans and work-study, but not me. My mother was rather annoyed and went to financial aid and asked why people with double to triple our income qualified and we didn’t. The response? Your income doesn’t matter, your debt does. They had vacation homes and boats and took vacations to Europe. They bought brand new cars every 2 years. I and my parents worked and saved. Our (older) cars were paid off. My father didn’t make enough money to be allowed the debt those families had. We weren’t rich enough to be ‘poor’ enough to qualify!
FERPA needs to be based on the family’s last 5 years of income. I know that is not perfect, but it is a lot better than what we have now.
(4) The federal government runs the student loan program. Taxpayers shouldn’t be footing the bill for graduates the country doesn’t need. We need engineers, physicians, nurses, welders, plumbers, etc. The loans should only go to people studying in areas of need. If you want a degree in psychology, pay for it yourself. This would also fix a lot of the ‘I spent 9 years getting a B.A. in inderdisciplinary art history, graphic design, and sociology and can’t find a job to pay off my $400,000 in student loans’. It would let the students know what areas are in demand on the job market. When I graduated, there were 12 chemistry graduates and 950 psychology graduates. Why? One major is easier than the other and both pay the same in student loans.
I believe you are thinking FAFSA, not FERPA, but either way – that system has indeed changed since you were in college. The debt loophole is definitely not a thing, or my kids would have gone for free… Anyway, I want to say that changed sometime in the early 2000s; friends of mine with a 1998 HS graduate bought a huge new house in order to achieve the marks you are talking about, but friends with a 2004 (ish) grad did not benefit. The parents of the 04 grad also talked about their son’s college’s financial aid presentation: apparently there were also parents getting “divorced” in order to send the kid to college on one income. The kicker was that the parents were still living together, so that rule had to be changed as well. Now you have to prove separate residences.