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The deal between the government and private colleges is that those private colleges are training our critical workforce and adding net value back into the syste

by zaroth 6y ago

The deal between the government and private colleges is that those private colleges are training our critical workforce and adding net value back into the system by increasing lifetime earnings and economic growth. The government guarantee on debt dollars right now is absolute. Schools get paid no matter what, and have no liability for actually providing an ultimately valuable service. Here’s an alternate arrangement. The school and government together co-guarantee the debt. Students’ monthly payments start 1 year after graduation or after the first year of less than 50% enrollment, payments are strictly calculated based as a percentage of income, and after 10 years of payments the government guarantee is retired. Any remaining balance on the loan then becomes dischargeable in bankruptcy and the school is liable for any unpaid balance. Or something along that lines. The program should be structured in a way that the government is only guaranteeing debt that is in proportion to the earnings power actually achieved, and the school becomes liable for debt that is out of proportion with the actual earnings power achieved. Of course it’s a law of averages. Certain students will fail due to no fault of the school but overall a private school should be responsible for providing measurable value in proportion to its tuition charges.

lotsofpulp 6y ago
> The deal between the government and private colleges is that those private colleges are training our critical workforce and adding net value back into the system by increasing lifetime earnings and economic growth. Source? As far as I can tell, some genius politicians figured out they can lower taxes or keep taxes low by removing and reducing taxpayer funding for colleges, and replacing it with free non dischargeable loans for anyone who can fill out the FAFSA. There is no altruism in saddling kids with debt rather than paying for schooling with tax money.
- zaroth 6y ago
  I think the problem is not a lack of funding. Economically, the more you spend on a problem like this, the less you get back for every dollar spent. This isn’t a manufacturing problem where cost decreases with scale. Throwing more dollars at this will just decrease the average outcome per dollar. A part of the problem is just the notion that everyone should even be going to two or four year university. > In 2017, state and local governments spent $297 billion, or 10 percent of state and local direct general spending, on higher education. Higher education was the third-largest source of state and local direct general spending in 2017, roughly equal to spending on health and hospitals. > At the post-secondary level, the United States spent more than the average (1.5%) for OECD countries on total government and private expenditures at 2.6%. Only three other countries spent 2% or more of GDP on post-secondary education. Those countries were Canada at 2.4%, Australia at 2%, and Chile at 2%. https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/higher-education-expenditures https://www.urban.org/policy-centers/cross-center-initiative... https://www.investopedia.com/ask/answers/020915/what-country-spends-most-education.asp https://www.investopedia.com/ask/answers/020915/what-country...
  - lotsofpulp 6y ago
    >In 1977, state and local governments spent $105 billion on higher education (in 2017 inflation-adjusted dollars). In 2017, they spent $297 billion. >Higher education spending has remained relatively constant as a share of total state and local spending over time. In both 1977 and 2017, 10 percent of direct state and local direct general expenditures went to higher education. According to the source below, there are at least twice as many people attending higher education between 1977 and 2017, not including the ones who do not complete 4 or more years of college: https://www.statista.com/statistics/184272/educational-attainment-of-college-diploma-or-higher-by-gender/ https://www.statista.com/statistics/184272/educational-attai... There's obviously a ton of waste in the system, such as the college sports business that has nothing to do with education and is clearly a taxpayer subsidy for private interests. But it seems like taxpayer spending per student is down quite a bit (can't include taxpayer backed loans, of course). And I definitely agree, there is no need for everyone to go to a 4 year liberal arts school.
  - imtringued 6y ago
    >A part of the problem is just the notion that everyone should even be going to two or four year university. That would require structural reforms to fix the economy or to provide an alternative education path that is tied to economic productivity. In other words it is not going to happen.
bluGill 6y ago
You need to account for the "Mrs" degree. Someone goes to school to find a spouse, get married and has no income. Although "Mrs" is specific to females, my personal experience includes more males that have done this than females. The sexism is used to make the point easier to understand, and but its reflection of reality died around 1950 if it ever was one.
- zaroth 6y ago
  Ok then you make the loan payback rate based on household income instead of personal income. I mean it’s a full decade, or let’s say even 15 years. If it’s worth under-earning your degree just to avoid paying off the loan, then the degree was way over-priced.

by zaroth 6y ago

lotsofpulp 6y ago

> The deal between the government and private colleges is that those private colleges are training our critical workforce and adding net value back into the system by increasing lifetime earnings and economic growth. Source? As far as I can tell, some genius politicians figured out they can lower taxes or keep taxes low by removing and reducing taxpayer funding for colleges, and replacing it with free non dischargeable loans for anyone who can fill out the FAFSA. There is no altruism in saddling kids with debt rather than paying for schooling with tax money.

zaroth 6y ago
I think the problem is not a lack of funding. Economically, the more you spend on a problem like this, the less you get back for every dollar spent. This isn’t a manufacturing problem where cost decreases with scale. Throwing more dollars at this will just decrease the average outcome per dollar. A part of the problem is just the notion that everyone should even be going to two or four year university. > In 2017, state and local governments spent $297 billion, or 10 percent of state and local direct general spending, on higher education. Higher education was the third-largest source of state and local direct general spending in 2017, roughly equal to spending on health and hospitals. > At the post-secondary level, the United States spent more than the average (1.5%) for OECD countries on total government and private expenditures at 2.6%. Only three other countries spent 2% or more of GDP on post-secondary education. Those countries were Canada at 2.4%, Australia at 2%, and Chile at 2%. https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/higher-education-expenditures https://www.urban.org/policy-centers/cross-center-initiative... https://www.investopedia.com/ask/answers/020915/what-country-spends-most-education.asp https://www.investopedia.com/ask/answers/020915/what-country...
- lotsofpulp 6y ago
  >In 1977, state and local governments spent $105 billion on higher education (in 2017 inflation-adjusted dollars). In 2017, they spent $297 billion. >Higher education spending has remained relatively constant as a share of total state and local spending over time. In both 1977 and 2017, 10 percent of direct state and local direct general expenditures went to higher education. According to the source below, there are at least twice as many people attending higher education between 1977 and 2017, not including the ones who do not complete 4 or more years of college: https://www.statista.com/statistics/184272/educational-attainment-of-college-diploma-or-higher-by-gender/ https://www.statista.com/statistics/184272/educational-attai... There's obviously a ton of waste in the system, such as the college sports business that has nothing to do with education and is clearly a taxpayer subsidy for private interests. But it seems like taxpayer spending per student is down quite a bit (can't include taxpayer backed loans, of course). And I definitely agree, there is no need for everyone to go to a 4 year liberal arts school.
- imtringued 6y ago
  >A part of the problem is just the notion that everyone should even be going to two or four year university. That would require structural reforms to fix the economy or to provide an alternative education path that is tied to economic productivity. In other words it is not going to happen.

bluGill 6y ago

You need to account for the "Mrs" degree. Someone goes to school to find a spouse, get married and has no income. Although "Mrs" is specific to females, my personal experience includes more males that have done this than females. The sexism is used to make the point easier to understand, and but its reflection of reality died around 1950 if it ever was one.

zaroth 6y ago
Ok then you make the loan payback rate based on household income instead of personal income. I mean it’s a full decade, or let’s say even 15 years. If it’s worth under-earning your degree just to avoid paying off the loan, then the degree was way over-priced.