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Wait, I paid how much on [student loans] to learn how to run D&D?
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We got a problem it's student loans, let's talk about em here, i'll try and make an effort post later.
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Everything else is just details and getting the political power to do it.
My grandparents went to the University of Michigan in the early 50s for IIRC, $100 for fall semester and $75 for winter (football tickets being the difference). That's about $1,666/year in 2019 dollars which is manageable with a summer job.
When I went for undergrad from '03-'07 it was about 7.5k/semester. When I went to grad school in 2015, 10k/semester. That's all in state. It's basically outpacing inflation by 600% since the 1950s.
No, the labor market destroyed tuition. Both by making degrees more valuable and because productivity growth for teachers lags behind other industries because it can't be automated which means increased labor costs.
As these plans are being put forth by the more progressive liberals, any plan is going to at best pay currently accrued interest, and I wouldn't be at all surprised to see a forced haircut on the buyouts, limiting the amount of interest paid on any given loan. But even just taking into account the loss of the projected interest revenue, a full buyout of the student debt would be a net loss for the lending institutions.
The only people that would directly benefit are the debtors that have their loans forgiven, although there would be huge secondary effects from the massive injection of spendable money into the economy that this would bring.
Depending on if we are talking about a full debt forgiveness or not and the degree to which college would be made free to attend, there would be negative repercussions for the lending institutions themselves, or at least the people that they employ, as those that were focused mainly or solely on student debt would have vastly reduced business opportunities going forward. I'd feel a little bad for any employees losing jobs over this, although the legislation could include a mandated severance for any businesses forced to wind down operations as a result. I would shed no tears for the businesses themselves though, they have been an increasingly dangerous parasite and deserve worse than whatever outcome would have an actual chance of happening.
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I honestly just dont understand it as a point of contention.
The percentage of degree holders in the US in the 1950s was also roughly 1/4 what it is now. You're also ignoring other limiting factors in access, some of which exist today still but to a lesser degree (especially for lower income families).
Also discussing details and asking questions about potential policy effects != arguing that education is only for the select few and everyone else can kick rocks. Nor is it questioning the inherent value of education.
On a personal level, I feel vindictive as fuck to the dirtbags that reap exorbitant profits from the student loan industry. I want them tarred and feathered, their ill gotten gains snatched away and redistributed, with them made to watch.
On an intellectual level, a buyout funded by some measure that at least soaks the rich a little is fine. Rationality should rule when designing actual laws.
I'm torn because I don't want to see universities lose any of their money. At least, not public ones. Full disclosure, I work for a public university that I love. In fact, they are who gave me my degree, and I always want to give back. But I've also seen deferred capital investments, the massive budget shit Illinois went through, and the fact that many still can't afford it when we are relatively affordable. I am afraid that if all student loans are forgiven, the university wouldn't get investments. I could see a world where those student loan payments become alumni donations, where we get more money out of that.. but I'm not sure how it would all work.
Really, the bigger fear is free tuition. Again.. if universities don't get paid, or worse if it is unevenly weighted so smaller liberal arts colleges don't get paid... well, that could hurt us in the long run, I feel.
Strengthening labor unions to ensure that there's no wage stagnation, benefits, and conditions improve.
Health care needs to be reformed to ensure equal access to higher education.
Guaranteed retirement pensions to ensure that those working manual labor jobs are not made into an under class.
There's a lot I like about the European and German models, but I don't like the rigidity. In order to go to their 'university' one needs to be tested into their academic track just before Jr High and once in it's extremely Difficult to test out. So I hope that there is something that preserves the community college level as an alternate, later path into higher education and career changes that the current US system has.
*Because if given half a chance the rich will enjoy the added value more education brings to the system, while forcing labor into a race to the bottom and cutting public programs as much as possible.
My perspective on this is probably a bit different since I don't live in the US, but I do work in higher education. I'd love to see tuition fees reduced or eliminated in the UK, but like you I'm strongly suspicious that it would damage university funding. Could there be a shift in taxation or government spending so that tuition fees could be lowered without financially harming universities? Technically yes, but I doubt that that would be the case in practice, and I think what would realistically happen is that you'd see tremendous pressure on university staff to either bring in more research grants or shut down the teaching which is no longer profitable (which, to an extent, is already happening - things would just be more extreme in this hypothetical scenario).
Not exactly ideal circumstances for providing an education to our students.
Loan forgiveness (without serious measures to reduce the cost of higher education for future generations) is exactly the kind of "fuck y'all, I got mine, who cares about the young" policy we lambast the boomer generation over.
the "no true scotch man" fallacy.
But I also think the situation is sufficiently absurd and out of control at this point that student loan forgiveness is the only way to avoid a decades-long slow-recession even if tuition-free went live tomorrow.
I agree that not addressing the cost in a free tuition scenario is not a good idea. That would be like implementing a single payer healthcare system and allowing our astronomical healthcare costs to remain the same
Because states aren't funding colleges like they used to.
Also a lot of middle management bloat.
A cascade reaction between universities and lending companies.
As more and more people went on to higher education, more and more of them had to take out loans to do it. When universities realized people were just borrowing the money anyway they started upping rates. More lenders got in the game, offering easier and easier to acquire loans, so universities kept jacking up the costs and etc and etc.
I don't have any proof that's what happened but it's the only thing that makes sense to me given how quickly it occurred. I went to school, dropped out for a couple years, then went back and stayed through grad school. All of that took probably a decade in which time the cost of tuition went up by more than an order of magnitude. No actual change in costs on the part of the universities could explain that rapid of a rate of increase.
Warren and Sanders have proposed policies that lower interest rates on student loans, but that's about it. If there's anything else, I haven't seen it.
I should be clear that I don't consider mere subsidies to be a solution to the problem. Making the federal government take on the astronomically exorbitant costs of higher education is not the same as trying to keep costs down in the first place.
the "no true scotch man" fallacy.
I actually read a very interesting article about this in The Economist. It asserts that this a result of Baumol's cost disease:
Trying to make more use of less expensive staff is an attempt to increase productivity per dollar but clearly it is not enough. Which is why price controls are only going to result in a decline in quality.
I'm not one to say burn the whole thing down, but boy is it tempting in this case.
Teachers are, unfortunately, not the only folks who work at a university. It could be that administrators and researchers (and, you know, sportsball coaches) are the cause of the labor cost inflation, even if instructoral payroll has gone down by comparison.
From what I've found salaries and benefits remain the single largest expenditure and the percentage spent on administration has not changed much.
There are two leading theories on why education costs have been rising faster than inflation: Baumol's cost disease and Bowen's rule. They're complimentary theories - and plenty of evidence suggests that both are true.
Baumol's cost disease affects lots of industries, not just education. As technology improves, workers in some industries see significant productivity improvements - at least, the high-skilled workers who are left after their low-skilled underlings are laid off do. Even in industries that don't benefit from productivity boosts, those organizations still need to compete for workers. If I'm a white collar office worker in Palo Alto, why would I work for Stanford rather than Google, unless Stanford can offer a competitive salary? (Similarly, if Google workers have increased the cost of living in Palo Alto, non-tech-workers will eventually end up moving away, forcing Stanford to raise its salaries if it wants to compete.)
Obvious counterargument is obvious: wages and productivity have been decoupling since 1970. Wages have been stagnant while productivity has increased. How can we have Baumol's cost disease during a period of wage stagnation?
The rebuttal is that wage stagnation is not uniform across all regions and education levels. Wages stagnate in average as some wages increase and others decrease. Living in a major city, being further up the income ladder, or having a college degree are each factors that predict that my wages won't stagnate. And these are also largely the workers that educational institutions have to compete for.
However, as I alluded to, Baumol's cost disease is not the only explanation. There's also Bowen's law.
Traditionally, students have not been particularly price-sensitive. They want to go to the most prestigious school they can get accepted to, and they mostly aren't shopping around on cost. Very few students say "Sure, I was accepted to Yale, but I chose to go to Connecticut State instead to save money." (That might be slowly changing, as more and more people become aware of the cost inflation of higher education.) Consequently, there's only weak pressure on universities to compete on cost.
Students are also not particularly value-sensitive. It's almost impossible for a high school senior to accurately judge whether the actual education provided by one school is better than another. When students evaluate universities, they do so largely on reputation (which may or may not actually correlate with the quality of undergraduate education) and on non-educational amenities like how nice the residence halls and library are. Consequently, there's only weak pressure on universities to compete on educational value.
Similarly, universities have found that there are student recruitment and retention benefits to student-facing institutional initiatives, like mental health services, career counseling, and sexual misconduct investigations. These programs aren't necessarily bad things in and of themselves, but without any particular cost controls, they tend to grow. Many of the administrators & office workers assigned to these non-teaching roles are doing things that in prior decades would have been done by faculty, or not done at all.
Additionally, a university's prestige has some of the features of a Veblen good: higher prices signal more prestige to the prospective buyer.
Finally, almost all accredited universities are nonprofit. Without a profit margin to boost stock prices or dividends to give back to shareholders, there's very little incentive for universities to save money. They're going to spend whatever revenue they reap. (Note: this is absolutely not an argument in favor of for-profit colleges. It is important to know, though, because it means that simply putting the regulatory kibosh on for-profit colleges, while it may be beneficial to do so for other reasons, isn't really going to put a dent in education costs overall.)
So you put all of this together and you have a situation where:
Universities can charge however much they want...
...they will spend every cent they collect...
...they will spend it on stuff that increases their prestige...
...like athletics, facilities, and high-profile institutional initiatives...
...and these expenditures bring along with them additional non-teaching staff.
the "no true scotch man" fallacy.
Personnel costs likely have an effect on the increasing cost of tuition even if it isn't the sole factor.
Here's what I am paying into instead of Social Security.
https://en.wikipedia.org/wiki/State_Universities_Retirement_System
(I was stupid enough to drag my feet and get on the "Traditional" plan instead of the Self Managed plan, and I can't switch off unless a new plan comes along.)
At our university, even adjuncts need to have an expensive minimum certification/education level. So naturally, that means that our teachers may have their own loans they are paying down. I do believe our athletic director makes more than our president, or at least is comparable, but there is also a LOT of alumni donations to the athletic department.
... To be honest, many times we've considered going private. For as little money as the state gives us anymore, we still have to meet a ton of regulations.. and we're one of the few viable/healthy public universities in the state!
Yes, I uh... work at a university. Also I don't think of instructors and lecturers as being 'teachers' as the term is used here. Usually teaching is just a small part of their role.
If Baumol was using 'teachers' just as a stand-in for "not engineers", it wasn't clear in the text. But what we can say is that a great many salaries have not kept pace with the upper end of salary inflation, including teachers, and nurses, and other workers in areas that according to that principle should apparently remain competitive (including researchers for that matter -$35k post-doc salary in NYC is pretty par for the course). So I'm still a bit in the dark about how this non-existent "rising pay" has led to the educational fee inflation.
From direct experience, factors like persistent cuts to government funding for educational purposes are the cause of fee rises in many countries, not just the US. I suspect that here the run-away feedback cycle between predatory loan systems, administrations that view students as a commodity/cash-cow, and the frankly ludicrous weight placed on peripherals like sports infrastructure, seems like it must contribute somehow, although I don't have the data.
edit: Feral has the data! awesome.
Yeah, that was the first thought that crossed my mind - where would I even go to look that up?
...
Looks like the Financial Aid Office has a breakdown.
https://financialaid.illinoisstate.edu/paying/cost/table-group-7.php
(Disclaimer: I am NOT promoting my place of work, and I do not want to come across as implying that. I recognize that private vs. public universities are very different in cost structure, as are what state you attend or country you are in. I'm just trying to come at the idea of forgiving student loan debt from the perspective of how it affects my place of work. )
.. Personally I really wish my status as a Civil Servant would wipe out my debt. Not sure how many years I need to work here for that to kick in.
Edit: Okay, found tuition rates but not how they were calculated. Also found some mandatory fees (IE fees charged per hour enrolled that are not tuition)...
Mandatory fees per hour
General Activity……..…$12.05 Ath & Rec Facilities….$12.32
Athletic and Service…...$20.14 Health & Wellness.......$11.04
Redbird Arena…………...$5.83 Instructional Support.....$2.50
Bone Student Center….$11.20 Grant-In-Aid…….…...$0.33***
Campus Enhancement…$6.74 Student-to-Student…$0.13***
Total fees per hour…………………………….………………$82.28
Outreach fees:$82.28 per hour may be charged instead
of mandatory fees for special programs.
I tend to lean more towards Bowen's rule, personally. Because if we imagine a world where the cause is 100% Baumol's cost disease, we'd expect to see a world in which individual salaries in academia are rising, but would be no major changes in proportional headcount (either in employee-to-student ratio or in teaching-to-nonteaching ratio) nor would there be any major changes in proportional expenditures on facilities and amenities.
That's not really the effect we're seeing though. As Paul Campos of the New York Times described,
the "no true scotch man" fallacy.
This all tracks true for me.
My wife is an administrator at a community, before that she was one at a major private University (commute was too long after she moved in with me). She works in mental health with kids that are not doing well and/or are about to drop out due to life factors. Also helps kids that are coming back do so with a plan and be prepared for being a student once again even if they weren't one in years. Her salary is not amazing but it's not nothing either. Her kind of job didn't exist 20 years ago, it was sink or swim as far as the schools were concerned.
A friend of hers at another school told me they had to increase tuition because colleges similar to the one he was working at were doing so, and if his college didn't, they would look relatively less prestigios (kids would think "i don't want to go to the bargain basement school, i want a good one") and they'd get less students of they didn't raise the price.
Another thing to consider is that universities have taken on a lot of the traditional roles of federal, state, and local governments. Drugs are designed in universities, major environmental and public health grants are managed out of universities, public works projects are designed and administered through university centers, and universities are even starting to run K-12 schools. One of the reasons universities have so many poorly paid adjuncts is that the tenured professors are increasingly too busy to teach classes because they are running the little empires that accrue around these additional function.
This all requires staffing and administration that goes beyond what the grants pay for. The result is that the education of college students is somewhere around the fifth or sixth priority for many major universities, but the economics mean that the students are still footing part of the bill for all of this.
It's basically a stealth tax on the middle class, disguised as a personal expense. And since that tax is paid upfront, the middle class gets to pay interest and fees to the private sector along with their stealth tax.
Is there a more detailed breakdown of any of the proposals? because I have approximately one million questions about this.
From inside the public side of academia, the federal government is basically the entity that pays the bills, followed by the students, the states, and then the donors, foundations, and nonprofits. Universities have had to hire armies of evaluators and administrations simply to keep up with the regulations from the federal government. Turning the various public institutions over to federal control would just make official the non-official relationship that already exists.