6 ms·

It's possible that you're one of the unlucky people who falls into the combination you described above. Unfortunately, even the best system currently available

by whack 11y ago

It's possible that you're one of the unlucky people who falls into the combination you described above. Unfortunately, even the best system currently available will often have cracks, and you seem to have found the one that currently exists. The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fees.

amluto 11y ago
I tend to dislike systems of the form "if you make/own less than $X, you get $Y benefit". It often leads to nasty non-monotonic outcomes and like this. For actual public benefits, I'd much prefer to give all the benefits to all the people and raise taxes accordingly. This means that, as a CA resident, I think I should be permitted to deduct rent even if my AGI is $38,259, and I think I should get the full Affordable Care Act subsidy regardless of my income. The rules would be simpler and my taxes would be simpler. In exchange, I would gladly pay higher taxes to make up the deficit. For public university, it's a bit messier because of state residency rules. And for private universities, this wouldn't work at all unless the government directly subsidized private education. (But maybe the government should ditch all the complicated student aid and student loan benefits and offer a blanket subsidy for education at accredited universities.)
- marcoperaza 11y ago
  Throwing more free money at universities will just make things worse.
- _delirium 11y ago
  The universities I know of that have free-tuition programs do phase them out gradually, to try to avoid too much weirdness that would come from a hard threshold. For example, Harvard charges no tuition to students from households making under $65,000, but above $65,000 tuition phases in slowly, reaching full tuition only at $150,000+. However I do agree your proposed solution is better. Have universalist public programs that everyone can take advantage of regardless of income (tuition-free public university, no-charge public healthcare, etc.), and then instead of mucking with means-tested benefits and aid phase-outs as a way of indirectly taxing the rich, just tax them through actual taxes, the old-fashioned way.
  - Domenic_S 11y ago
    > above $65,000 tuition phases in slowly, reaching full tuition only at $150,000+ Which is still silly. Who has more to spend/better opportunity to save? Two parents that make $75k each in Mountain View or 1 parent who makes $64,500 in Nowhere, Indiana?
- jimbokun 11y ago
  "I think I should get the full Affordable Care Act subsidy regardless of my income" I appreciate your sentiment, but you realize all of the insurance companies will just raise their rates by the amount of the subsidy, right? More demand in the form of government money earmarked for a specific good, with the same supply of the good, means higher prices.
  - dangrossman 11y ago
    > you realize... right? Gosh, I really dislike that turn of phrase. Anyway, they can't do that, since the ACA has mandated that insurers spend at least 80 or 85% of premiums on health care costs since 2012. The insurers ride that line as closely as possible, since their profit has to come out of the 15% allowed margin. This means an increase in total premiums without a commensurate increase in the cost of claims cannot happen. If an insurer's payouts don't exceed the mandated Medical Loss Ratio, they have to refund their insured customers for the difference by mailing out rebate checks. I've received two such checks myself.
    - koolba 11y ago
      > Anyway, they can't do that, since the ACA has mandated that insurers spend at least 80 or 85% of premiums on health care costs since 2012. That part of the law is particularly terrible. It directly incentivizes keeping costs high as the profit of the insurer is a fixed (says max but that means exactly 15%) percentage of the gross. It's in their interests to have the price of everything go up!
      - Grishnakh 11y ago
        The whole law is terrible and it should be repealed and replaced with a nationalized system. As long as you have the insurance companies acting as middlemen, it's in their best interest to deny care as much as possible, to increase their profit. What actual good do they do? None, they just come between the patient and the caregiver.
        11y ago
- fovc 11y ago
  There was an article recently where Finland was considering something along those lines. [1] is all I was able to find quickly: > The Finnish government, elected earlier this year, is planning to introduce a tax-free monthly payment of 800 euros ($865) to all adult Finns, regardless of income, wealth or employment status. The payment would replace most other state benefits. [1] http://money.cnn.com/2015/12/07/news/economy/finland-basic-income-800-euros/ http://money.cnn.com/2015/12/07/news/economy/finland-basic-i...
shkkmo 11y ago
> The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fees. How does it justify that? We want to punish them with debt because their parents might have provided them with some opportunities? The current system of funding higher education penalizes children of parents who don't prioritize college. There is no point to this and it just helps perpetuate privilege. We should stop unfairly assuming that parents are willing and able to pay for college.
- lmm 11y ago
  We have a limited amount of subsidy to allocate where it will do the most good. Most of the time the children of rich parents - even those who had little interest in college - have more advantages overall than even a fully subsidized poor student would have. So it makes sense to focus our subsidy on those poor students.
  - Domenic_S 11y ago
    Rich parents? Hilarious. You way overestimate where the line is drawn. When I went to UCD, my parents' income was ~$70k (in California) and I got some subsidized loans, then mostly unsubsidized loans, then they made my parents take out PLUS loans in their own names (more accurately, they capped the amount of loans I could take personally and the only way to make up the delta is either family cash contribution, or parent PLUS loans). Except for a small amount of interest subsidy, I got $0 financial assistance. Now, my own personal situation is a deal of my own making -- I decided to sign on the dotted line. But in the aggregate, considering all the other students like me --- I'm actually shocked at the push back in this thread. The same group of people that bemoans the death of the middle class can't see how this is a part of the problem? I feel lucky. I was in one of the last generations to get halfway-decent interest rates. My younger brother is paying through the nose (what is it now, 6-7%?).
    - lmm 11y ago
      Yeah, 70k is well into rich territory. What's the median income again?
jqgatsby 11y ago
Sorry, what you call a 'crack in the best system available' is the life I've had to live. I've had to take less societally-beneficial jobs because they paid more, while my loan-free friends were off joining the Peace Corps or teaching. I think the world is made a worse place when people like me are turned into mercenaries. MIT thinks it's okay to boil down someone's financial future into a single dominant number (parental income). What if your parents had a lot of debt because of a major illness or death? What if that supposedly high income is counter-balanced by living somewhere expensive because that's where the high-paying jobs are? The fact that none of that is taken into account means it's not about bad luck, it's about an unjust system. MIT could afford to make tuition free, but the popular misconception that they're levying a tax on the rich means they won't. If you want to control how much one generation passes on to the next, there are far better mechanisms to do that than college tuition.
- vecter 11y ago
  How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.
  - tanker 11y ago
    That's an interesting problem. I have a few ideas 1) Replace tuition with taking x% of income for y years following graduation. I'm not sure how this would work in regards to low-income degrees / departments. For example, would the low return on investment for an arts department mean it would get less funding? I suppose this would cause universities to optimize their education for earning potential of graduates. Could have interesting effects. Not all beneficial. 2) Could they use their endowments to essentially provide interest free loans? I'm guessing their would be lots of problems with this that I can't see. 3) You pay nothing while in school, but you pay a straightforward fraction of the school's operating costs for the next x years. I like this concept. If you make x long enough, your graduates have an interest in ensuring future students are able to contribute to the cause. Of course, they also have an interest in keeping costs low. That could create poor dynamics. Improvements would have to come from donations, not be a part of the budget.
  - 11y ago

by whack 11y ago

amluto 11y ago

I tend to dislike systems of the form "if you make/own less than $X, you get $Y benefit". It often leads to nasty non-monotonic outcomes and like this. For actual public benefits, I'd much prefer to give all the benefits to all the people and raise taxes accordingly. This means that, as a CA resident, I think I should be permitted to deduct rent even if my AGI is $38,259, and I think I should get the full Affordable Care Act subsidy regardless of my income. The rules would be simpler and my taxes would be simpler. In exchange, I would gladly pay higher taxes to make up the deficit. For public university, it's a bit messier because of state residency rules. And for private universities, this wouldn't work at all unless the government directly subsidized private education. (But maybe the government should ditch all the complicated student aid and student loan benefits and offer a blanket subsidy for education at accredited universities.)

marcoperaza 11y ago
Throwing more free money at universities will just make things worse.
_delirium 11y ago
The universities I know of that have free-tuition programs do phase them out gradually, to try to avoid too much weirdness that would come from a hard threshold. For example, Harvard charges no tuition to students from households making under $65,000, but above $65,000 tuition phases in slowly, reaching full tuition only at $150,000+. However I do agree your proposed solution is better. Have universalist public programs that everyone can take advantage of regardless of income (tuition-free public university, no-charge public healthcare, etc.), and then instead of mucking with means-tested benefits and aid phase-outs as a way of indirectly taxing the rich, just tax them through actual taxes, the old-fashioned way.
- Domenic_S 11y ago
  > above $65,000 tuition phases in slowly, reaching full tuition only at $150,000+ Which is still silly. Who has more to spend/better opportunity to save? Two parents that make $75k each in Mountain View or 1 parent who makes $64,500 in Nowhere, Indiana?
jimbokun 11y ago
"I think I should get the full Affordable Care Act subsidy regardless of my income" I appreciate your sentiment, but you realize all of the insurance companies will just raise their rates by the amount of the subsidy, right? More demand in the form of government money earmarked for a specific good, with the same supply of the good, means higher prices.
- dangrossman 11y ago
  > you realize... right? Gosh, I really dislike that turn of phrase. Anyway, they can't do that, since the ACA has mandated that insurers spend at least 80 or 85% of premiums on health care costs since 2012. The insurers ride that line as closely as possible, since their profit has to come out of the 15% allowed margin. This means an increase in total premiums without a commensurate increase in the cost of claims cannot happen. If an insurer's payouts don't exceed the mandated Medical Loss Ratio, they have to refund their insured customers for the difference by mailing out rebate checks. I've received two such checks myself.
  - koolba 11y ago
    > Anyway, they can't do that, since the ACA has mandated that insurers spend at least 80 or 85% of premiums on health care costs since 2012. That part of the law is particularly terrible. It directly incentivizes keeping costs high as the profit of the insurer is a fixed (says max but that means exactly 15%) percentage of the gross. It's in their interests to have the price of everything go up!
    - Grishnakh 11y ago
      The whole law is terrible and it should be repealed and replaced with a nationalized system. As long as you have the insurance companies acting as middlemen, it's in their best interest to deny care as much as possible, to increase their profit. What actual good do they do? None, they just come between the patient and the caregiver.
      - 11y ago
fovc 11y ago
There was an article recently where Finland was considering something along those lines. [1] is all I was able to find quickly: > The Finnish government, elected earlier this year, is planning to introduce a tax-free monthly payment of 800 euros ($865) to all adult Finns, regardless of income, wealth or employment status. The payment would replace most other state benefits. [1] http://money.cnn.com/2015/12/07/news/economy/finland-basic-income-800-euros/ http://money.cnn.com/2015/12/07/news/economy/finland-basic-i...

shkkmo 11y ago

> The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fees. How does it justify that? We want to punish them with debt because their parents might have provided them with some opportunities? The current system of funding higher education penalizes children of parents who don't prioritize college. There is no point to this and it just helps perpetuate privilege. We should stop unfairly assuming that parents are willing and able to pay for college.

lmm 11y ago
We have a limited amount of subsidy to allocate where it will do the most good. Most of the time the children of rich parents - even those who had little interest in college - have more advantages overall than even a fully subsidized poor student would have. So it makes sense to focus our subsidy on those poor students.
- Domenic_S 11y ago
  Rich parents? Hilarious. You way overestimate where the line is drawn. When I went to UCD, my parents' income was ~$70k (in California) and I got some subsidized loans, then mostly unsubsidized loans, then they made my parents take out PLUS loans in their own names (more accurately, they capped the amount of loans I could take personally and the only way to make up the delta is either family cash contribution, or parent PLUS loans). Except for a small amount of interest subsidy, I got $0 financial assistance. Now, my own personal situation is a deal of my own making -- I decided to sign on the dotted line. But in the aggregate, considering all the other students like me --- I'm actually shocked at the push back in this thread. The same group of people that bemoans the death of the middle class can't see how this is a part of the problem? I feel lucky. I was in one of the last generations to get halfway-decent interest rates. My younger brother is paying through the nose (what is it now, 6-7%?).
  - lmm 11y ago
    Yeah, 70k is well into rich territory. What's the median income again?

jqgatsby 11y ago

Sorry, what you call a 'crack in the best system available' is the life I've had to live. I've had to take less societally-beneficial jobs because they paid more, while my loan-free friends were off joining the Peace Corps or teaching. I think the world is made a worse place when people like me are turned into mercenaries. MIT thinks it's okay to boil down someone's financial future into a single dominant number (parental income). What if your parents had a lot of debt because of a major illness or death? What if that supposedly high income is counter-balanced by living somewhere expensive because that's where the high-paying jobs are? The fact that none of that is taken into account means it's not about bad luck, it's about an unjust system. MIT could afford to make tuition free, but the popular misconception that they're levying a tax on the rich means they won't. If you want to control how much one generation passes on to the next, there are far better mechanisms to do that than college tuition.

vecter 11y ago
How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.
- tanker 11y ago
  That's an interesting problem. I have a few ideas 1) Replace tuition with taking x% of income for y years following graduation. I'm not sure how this would work in regards to low-income degrees / departments. For example, would the low return on investment for an arts department mean it would get less funding? I suppose this would cause universities to optimize their education for earning potential of graduates. Could have interesting effects. Not all beneficial. 2) Could they use their endowments to essentially provide interest free loans? I'm guessing their would be lots of problems with this that I can't see. 3) You pay nothing while in school, but you pay a straightforward fraction of the school's operating costs for the next x years. I like this concept. If you make x long enough, your graduates have an interest in ensuring future students are able to contribute to the cause. Of course, they also have an interest in keeping costs low. That could create poor dynamics. Improvements would have to come from donations, not be a part of the budget.
- 11y ago