12 ms·

Taxing Mechanical Engineers and Subsidizing Drama Majors

81 points by barry-cotter 4y ago

ouid 4y ago
Make loans dischargeable in bankruptcy after some fixed amount of time. Say 10 years. Offer subsidies to loans that are older than this. Emminent domain all existing student loans. Ignore the resulting inflation.
- 40yearoldman 4y ago
  You can’t do that without also allowing lenders to not give loans. The entire mess is because we passed laws that require lenders to give loans out for school. Pre these laws, they were passed for “equality”, lenders would laugh you out of the office if you tried to take a 10k lone out on a degree with a low likelihood of being paired back. As a result we now have a bunch of crazy degrees people can get that have zero viability to make money, and even worse doctoral programs that just hand out Dr. Like it was candy.
  - dinedal 4y ago
    Look, it's obvious when it's an aged degree and you can easily see that the granting of that degree has little chance to a highly paid job. What do you do when it isn't obvious? When I got my student loans for my comp sci degree, it was right at the bottom of the dot-com bust. Everyone was convinced all tech was going to be outsourced and that it was a dead end degree, foolish to pursue. If the banks had any say in if I would have gotten loans that year, it would have been no. And I wouldn't have gone on to a lucrative career in tech. I'm not convinced that letting loan underwriters pick the future labor force allocation is the solution.
    - Swizec 4y ago
      > I'm not convinced that letting loan underwriters pick the future labor force allocation is the solution The trick is to not require loans for school. Works great in Europe, why not the richest country in the world?
  - ouid 4y ago
    did you fail to read the eminent domain part?
actionfromafar 4y ago
So the U.S. is on track to create a half-free university system, very convoluted and with extra steps and gate-keepers, tax funded? (It can of course never be completely free like some other rich western countries, because communism would ensue.) Superficially it sounds like the U.S. health system. Please, enlightened people, write something insightful, I'm here for the comments and would like to get a vibe for if the article is a hit piece or has good points. :)
- s1artibartfast 4y ago
  It is very much the same perverse incentives. Here, the less valuable education you get the greater the subsidy is. In healthcare, percent profit caps mean that the best way to increase profit is to increase prices
- t_mann 4y ago
  Similar thoughts here - just make public universities (almost) free and stop giving out loans, and you'd be where most European countries are. I guess the thing is that once you've added all those extra layers it's hard to roll them back because so many jobs indirectly depend on them now (administrators, bankers, collectors,...), and some of them have quite strong lobbies (cough, bankers, cough).
  - anonporridge 4y ago
    My understanding is that the trade off in European systems is a much more stringent entrance requirement. So, university is free, but a smaller percentage of people have the scores to get in. Only about 30% of German students go to university, vs 40+% of Americans. This isn't the worst idea. College in the US is overly fetishized and trade schools and/or going directly to work or starting a business is snubbed. The result seems to be a deeply overeducated, but under employable population and an aging trade class that is entering retirement without having fully passed the torch to the next generation.
    - t_mann 4y ago
      No, afaik that's not the case everywhere. Switzerland, which has the best unis on the continent, is pretty open registration for all nationals, in others it's sort of a mix. Selection happens during the degrees, exams aren't curved.
maerF0x0 4y ago
The relief policy has been terribly irresponsible: * Those who sacrificed and paid off their student debt receive no reward. Those who put 10k in ink or vacations on the books get a 10K payday. * People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not * The policy smacks of "vote us back in or else 10K wont be yours" In general I am strongly against policies which change the rules on and penalize people who sacrificed to better their life and better those who made relatively worse choices (or choices with known tradeoffs, but then the tradeoffs get mitigated at the expense of those who did something more taxing for a reward). You can tax the wealth out of those who chose to better their income, but you cannot tax the experiences (eg:travel) out of those who dissipated their resources today/in the past. For example, bad news for those who never had a dream to be a Mech Eng, but did it anyways for the good of their family. As a general observation being in America the past ~10 yrs I find America has a major problem with policies that pattern match this kind of subsidize the negative side of choices with tradeoffs to the detriment of someone else who made a sacrifice to receive a reward.
- deleted 4y ago
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- vsareto 4y ago
  This loan forgiveness wouldn't have needed to happen if schools had not raised tuition by insane amounts.
  - maerF0x0 4y ago
    schools wouldn't have been able to raise tuition by insane amounts if the gov't hadn't underwrote all those loans' risk
    - vsareto 4y ago
      Nah, that was an opportunity that universities saw to make more money and they took it without thinking of the larger consequences (which is where we are today having to do loan forgiveness). Nothing about government underwriting forced schools to charge higher tuition. They chose self-enrichment (not even profit to shareholders except for scam schools) over easier access to education and a more educated population. Universities should not be behaving like capitalists.
mech987 4y ago
I'm not sure how things will look by the time my daughter might be ready to go to college in 18 years- Would it be best for us to sock away money in a 529 plan, or to just let her take out loans to the greatest extent possible and pay them back after the fact?
- rr888 4y ago
  This is one of the worst results. No one is sure what will happen in 10 years time. Take out debt and hope for another writeoff? Its like Reagan's immigration amnesty.
- sologoub 4y ago
  Consider the many amazing institutions in other countries that either have no tuition or very reasonable tuition as an alternative if she doesn’t get into the best of the best in US. Even with crazy costs, Stanford/Harvard/MIT/etc are generally worth it for the right degree.
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  - rr888 4y ago
    >Stanford/Harvard/MIT That's a good solution, everyone should just study there.
    - sologoub 4y ago
      That’s not what I was saying at all - if you get the chance to study there, you should, otherwise there are amazing institutions that don’t require going into debt that one may not be able to pay off.
- jgwil2 4y ago
  If you can afford to sock away the money then you should. You may ultimately pay more than other people, or you may not, but you will have the comfort of knowing that she can afford to go to college without taking on a lot of debt.
Tangurena2 4y ago
$10k is a trivial amount when compared to the amount of loans current students end up with. At many public universities, it amounts to a single semester. Community colleges used to be free - fully subsidized by taxpayers. Until Reagan. As California stopped funding vocational education and community colleges, other states followed along. Making student loans exempt from discharge in bankruptcy has been a massive subsidy to the financial markets. With a guaranteed source of income (from loans to students), universities have raised rates far faster than inflation. Even the textbook companies don't care about prices - pricing for American textbooks is outrageously high. No one cares. Until Biden advocates for some tiny relief for students - then everyone complains. It is like some parody of the Trolley Problem: "debt relief is a betrayal of all the people who the trolly has already run over!"
- skellington 4y ago
  CCs are still free or nearly free in almost every state. In CA, 50% of CC students pay 0 while the rest pay around $550 per semester which is nearly free.
  - licyeus 4y ago
    California CC tuition is not representative of the rest of the country. In-state tuition for a full-time (15 credits) student at Salt Lake Community College is currently ~2100 per semester. At Denver Community College, ~3000 per semester. That seems "nearly free" from our perspective in the tech industry, but when I was a young adult making $13/hr it was a challenge.
- throw8383833jj 4y ago
  i think this is one area where price caps actually make sense: college text books and college tuitions. Just make it illegal for public colleges to charge more than a certain amount. as for text books, we need to encourage professors to reuse the same text book for at least 5 or 10 years. that will increase the resale value of the books. or better yet, have universities rent out books at some minor fee that they can recoup over 10 years.
thro388 4y ago
I never understood why children should be able to give a consent to such loans. There is a young and naive person, that can not legally drink, but somehow is able to understand complicated legal contracts! Make student loans part of personal bankruptcy, and see what happens!
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- sokoloff 4y ago
  One thing that I'd expect you'd see is lenders requiring co-signers and/or pledges of assets, something that not everyone has.
  - thro388 4y ago
    Good! They will not get 40 years into unpaidable loans! If university education is such a goldmine, any bank will loan them, it must be like 20% per annum profit!!!
    - sokoloff 4y ago
      As long as you're not both academically smart and financially poor.
      - thro388 4y ago
        Is there actually a correlation between university education, intelligence and high income? Or is it just a scam on young people? Last time I checked most lessons were freely available on internet, without paying $200000 gate keeping fee!
        sokoloff 4y ago
        It's got nothing to do with that correlation. My point is that it closes off opportunities for smart-and-poor people. (Today's system also has drawbacks, but let's not forget that it does afford opportunities to people who wouldn't otherwise have them.)
subroutine 4y ago
Instead of income based repayment, I would rather see very low interest rates on student loans (like 1.5%). That way everyone pays the full amount they borrow, there is still incentive to repay promptly, borrow less, earn a higher wage, and those with low income can at least pay off the loan interest so their loan does not balloon. And it's simpler. Another thought I had (not completely fleshed out)... Federal student loans could help cap tuition costs somewhat like medicaid/medicare. The fed offers a fixed amount per semester (say $4k) to each student. The catch is that a uni can only accept fed loans if their tuition is fixed at the cap. (i believe this is how medicare negotiates reasonable prices for meds - "if you want to accept medicare here is what we will pay for Rx, and it's all or nothing").
- sokoloff 4y ago
  > incentive to repay promptly, borrow less In an environment where inflation is running well over 5% and 1 Year Treasuries are yielding 4%, there is no [economic] incentive to pay off a loan at a 1.5% interest rate. You would literally be better off to buy 1 Year Treasuries than pay off that loan (and consequently, to borrow as much as you could).
  - maerF0x0 4y ago
    I think we should be careful not to discount the idea where the 1.5% likely was actually a stand in for a variable to be discovered/optimized
  - awinder 4y ago
    That’s not how loans work, if it was credit card debt yeah you could pay a minimum forever, but education loans have terms attached with fixed payments.
    - sokoloff 4y ago
      Yet people have loans outstanding 20, 30, or more years after taking them out, so obviously there's some amount of flexibility in the system. In any event, on its face, this system would not encourage prompt repayment but rather the opposite: the slowest possible repayment.
sheepybloke 4y ago
This article is bad to the point of laughter. While it starts out talking about economics, the real point is to rail against other programs that aren't engineering, calling them worthless. Innovation doesn't just come from engineers. That point is laughable. On top of that, calling other degrees worthless just because their field doesn't pay well is also indicative of other problems in the system. For example, my wife is a stage manager for multiple ballet companies. She's quite successful in the field. It doesn't pay well, but she's needed to do the productions. Or think about an editor who went to school for english. They can get a job out of college, but only around 30k and can barely make ends meet. But saying they aren't innovative or pushing their fields because they don't scam VC's for money for their crypto app is silly and diminishing the impact and importance of the arts on our lives. And maybe if more people changes their view and saw how impactful the arts are, my wife might be paid a bit more and can more easily pay off her degree.
- bravo22 4y ago
  If other people aren't willing to trade their magical tokens for your services then your services are not valuable. That is not the same thing as saying just beacuse you have no valuable skills you deserve to die of hunger and disease.
  - sheepybloke 4y ago
    People are quite willing. The entertainment industry is huge, between TV, concerts, theatre productions, etc. However, does that money come down to the artist or the people doing the work? The issue is that this idea also applies to other people areas as well, such as teacher or journalists. These are services that are valuable, but they are not paid well.
    - bravo22 4y ago
      They're paid based on supply and demand through their employers. Meaning the organization favours paying someone in a management position a higher salary, rather than the rank and file. The same industry pays certain actors or musicians outsized fees. This is not a question of ethics or fairness, it is supply and demand. You can only pay X people Y amount when starting with K dollars. I am not trying to be pedantic here but simple rules at large scale produce complex results that may sometimes seem counter intuitive or unfair. Evolution is simple rules applied at scale and it produces results that don't seem quite right but are obviously effective because they survive.
juve1996 4y ago
The efforts to discredit this policy are truly fascinating - that's how you know how effective it is, it truly is a threat. But this article is correct, that this is not sustainable and a longer term policy is needed. Plenty of people are benefitting dramatically from this, and for once it's not the mega rich getting tax breaks or the fraud rife PPP loan fiasco.
- fallingknife 4y ago
  Yes, a $500 billion bribe right before a midterm election is absolutely an effective policy. No one is arguing against that. At least the PPP was approved by congress, and the people unfairly enriching themselves from it are doing so through crime, and not the intended purpose of the policy.
  - skellington 4y ago
    An executive order that Biden has no legal right to enact. This is what we get from the party that values "democracy." Bypass all legislation if you can't get what you want and if a law is passed democratically that you don't like then tie it up by using the legal system and activist judges forever. There is very little "democracy" happening in our system currently.
    - juve1996 4y ago
      If he has no legal right to enact, sue. The remedy exists and has been used before against executive orders.
- xtracto 4y ago
  As an outsider to the US and a person that leans more into "socialism", I find these type of threads really interesting. It's so different (from my principles) where most American commenters that are against this policy are coming from. I would not have a problem in providing relief to the poorer through social policies. My take is that at the end of the day is part of the social contract I "accept" when living in the society. Some people had it harder, some made poor choices (including drug addicts, people studying philosophy, people choosing not to study, etc), but in my (socialist maybe) view, it is in MY interest for them to be good-standing members of society. Otherwise, we risk them becoming criminals.
egberts1 4y ago
Choose your career and own it too. Subsidizing others because of their choice is not a choice but tyranny. After all, after education, technology should be any nation’s #1 priority, just to survive.
- loudmax 4y ago
  It's bad policy, not tyranny. It's populist, inefficient, unfair and counter productive. None of this is tyranny, just bad economics. When you throw terms like "tyranny" around it obfuscates just how bad living under a tyranny really is. Cut the hyperbole and save terms like "tyranny" for actual tyrannical regimes, of which there are enough actual examples to go around.
  - egberts1 4y ago
    It’s also the quickest way to kill a nation. That’s a form of tyranny against society.
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docfort 4y ago
This is a long comment, but the summary is that this article tries to talk about externalities, but doesn't look at a big enough picture. Like complete lack of economic regulation (markets cannot accurately price all externalities), or universal basic income, the article makes good points about the market distortions introduced by this policy. It offers a concrete example of the cost of a graduate student at Columbia University[1]. The article asserts that most of the cost of student loans is actually to cover living expenses. For the Columbia graduate student, the article estimates about $30k annually, which agrees with Columbia’s estimate. Using their estimates at the link [1], I computed the annual cost of non-tuition elements, including rent, as $37,522. Columbia estimates rent at $23k, with other living expenses pegged at $7k. Fees account for roughly 20% of non-tuition. The tuition is about $52k annually for a doctoral program and is more expensive for Master’s students. All of which is to say: this article's example doesn't understand true student costs. To bring the cost of attendance down, often universities with large endowments (like Columbia’s $14.35 billion) will privately subsidize tuition for some students, sometimes by half or more. Let’s say half for the typical student. This doesn’t change fees or COL. So now annual rent is on-par with tuition. So then the student is on the hook for "only" $60k per year, or $300k over the course of 5 years (remember, doctoral program). If the student is good, then the university will pay a stipend of $40k annually, bringing the shortfall to a more reasonable $20k per year. But you cannot have another job if you accept the stipend. So $20k in loans per year, or $100k once they graduate. Compared to the average US mortgage of $460k in 2022, it's the size of a home downpayment. For this lucky student, the article computes the government's additional cost to support this student as twice to house someone on Section 8. Most US students will not attend a private selective institution with a large endowment, but the sticker price is still very high, sometimes comparable to Yale or Columbia [2]. This is because the price is a signal for value. The actual price that a student, whether mechanical engineer or not, will pay for college is NOT what it says on the tin. The article is correct in that it can be abused since it is technically forcing the government to pay for loans after a certain amount of time for those students who haven't found a well-paying job. So this legislation that the article complains about is a possible way out of this mess, at least in the short term. This is indeed more generous than the state money that it is replacing (since most students are educated by public universities). I think the real question is whether we want to encumber long-term those who didn't figure out a way to use their degree to earn a lot of money, and whether money is the right way to measure their contribution to society. Entertainers (including athletes) will typically earn much less over their lives than a ML researcher, but well, they're more fun to observe for a lot of people. Most US teachers and professors will struggle to earn enough money that they aren't subsidized by this program, but hopefully the pandemic has taught people about their value. You could argue that this is really a public-works program because isn't it better that people follow their passions instead of maximizing their individual profit? Specifically, isn't the drama major more likely to substantially contribute to the public sphere instead of a quant? Not saying quants don't help, but public money should help the public sphere. And for those who might quibble about where their taxes go: I sure am glad that I live in a country that other global would-be superpowers think very carefully about attacking (the majority of the US annual budget is military). Not a perfect place by a long shot, but my taxes definitely go to the public good, if not always efficiently. [1] https://www.gsas.columbia.edu/content/cost-attendance https://www.gsas.columbia.edu/content/cost-attendance [2] https://www.nytimes.com/2022/09/14/podcasts/the-daily/college-student-debt.html https://www.nytimes.com/2022/09/14/podcasts/the-daily/colleg...
gnicholas 4y ago
Interesting to see "BA Biology" in the "most subsidized" list. Is that because it's a popular default major at many schools, and unlike a BS it is less rigorous? I went to a school that only granted BAs, except for Engineering, so all of our Bio majors were BAs. I don't know how common or uncommon this is, or if there are schools that offer both BAs and BSs in Bio.
- wink 4y ago
  No idea how it is in the US, but here in Germany even ~20y it was said that a plain degree in biology is kinda useless, you kind have to tuck on a PhD (I'm deliberately not calling the first one undergraduate degree, because our system used to be Diploma (~10 semesters) + Dr. after that, and not BSc+MSc+PhD.)
- bbatha 4y ago
  I had a lot of BA in Biology friends who were pre-meds. They got the BA so they could fit the other required pre-med classes in that didn't count towards BS requirements. It would also make sense that we subsidize a medicine related degrees.
churchill 4y ago
zackmorris 4y ago
I'd like to share this video, which I feel explains the crux of the debate around allocating funds for one cause or group of people over another: https://www.c-span.org/video/?520337-5/sen-rand-paul-ukraine-aid-bill https://www.c-span.org/video/?520337-5/sen-rand-paul-ukraine... I find myself agreeing with about 10-20% of what he says. His basic argument is that it's not the government's place to take from one group and give to another. The fallacy in his argument is that the government's primary job is specifically to gather funds through taxation and allocate those funds to certain groups, governed by the public's intentions as determined through the electoral process. Our elected officials are our proxy within our democratic republic, making those kinds of decisions on our behalf every single day. In other words, his argument isn't supported by fact. It's ideological. IMHO, rather than deciding if we send $40 billion to Ukraine or fix the lead pipes in many of our cities, the government can and should do both. Given the choice between reducing the student loan burden, or reducing the national debt, the government can and should do both! You see what I'm saying? This notion of choice in who will be helped and who will be hindered is a fallacy. The government is bigger than us, we need to stop thinking of it in terms of an individual struggling with their microeconomic finances, and realize that it can be more like a superhero and help many people simultaneously through the emergent behavior and opportunities created by macroeconomic policy. I think what's missing in our government today is this sort of visionary consideration of human potential, and the political will to enact policies that materially help people in need, rather than wealthy and powerful people in the status quo who don't need our help in the first place. If we follow his argument to its logical conclusion - the reduction or elimination of government spending with the private sector left to its own devices - then only one form of government fits that: autocracy. That's where we came from before the American Revolutionary War, and we've been headed back there again under 40 years of trickle-down economics and the rise of wealth inequality the likes of which the world has never seen. Billionaires are the new aristocracy. We're in a positive feedback loop where every time things get worse, people vote for the same people who caused it, making things worse still. Then that side blames the other and the process repeats itself. That's the seduction of seemingly rational-sounding arguments like the one against student loan forgiveness, which always align with the status quo. We can use that as the signal to know that the argument is disingenuous.
- 4y ago
variadix 4y ago
I don’t think the government should be involved in student loans at all. If people could file for bankruptcy and banks had to do their job it seems like many of these issues would be solved. If a bank was going to provide a student loan that they wanted paid back they would look at: * what the graduation rate of your major is and what the average annual income is for your major * your GPA, test scores, and other factors that can be used to predict graduation rate * the cost of the university and how likely your are to be able to repay that amount given the above I don’t think the free market is perfect, but it seems apt to handle most of these issues without resulting in all of the issues people currently have with student loans.

81 points by barry-cotter 4y ago

ouid 4y ago

Make loans dischargeable in bankruptcy after some fixed amount of time. Say 10 years. Offer subsidies to loans that are older than this. Emminent domain all existing student loans. Ignore the resulting inflation.

40yearoldman 4y ago
You can’t do that without also allowing lenders to not give loans. The entire mess is because we passed laws that require lenders to give loans out for school. Pre these laws, they were passed for “equality”, lenders would laugh you out of the office if you tried to take a 10k lone out on a degree with a low likelihood of being paired back. As a result we now have a bunch of crazy degrees people can get that have zero viability to make money, and even worse doctoral programs that just hand out Dr. Like it was candy.
- dinedal 4y ago
  Look, it's obvious when it's an aged degree and you can easily see that the granting of that degree has little chance to a highly paid job. What do you do when it isn't obvious? When I got my student loans for my comp sci degree, it was right at the bottom of the dot-com bust. Everyone was convinced all tech was going to be outsourced and that it was a dead end degree, foolish to pursue. If the banks had any say in if I would have gotten loans that year, it would have been no. And I wouldn't have gone on to a lucrative career in tech. I'm not convinced that letting loan underwriters pick the future labor force allocation is the solution.
  - Swizec 4y ago
    > I'm not convinced that letting loan underwriters pick the future labor force allocation is the solution The trick is to not require loans for school. Works great in Europe, why not the richest country in the world?
- ouid 4y ago
  did you fail to read the eminent domain part?

actionfromafar 4y ago

So the U.S. is on track to create a half-free university system, very convoluted and with extra steps and gate-keepers, tax funded? (It can of course never be completely free like some other rich western countries, because communism would ensue.) Superficially it sounds like the U.S. health system. Please, enlightened people, write something insightful, I'm here for the comments and would like to get a vibe for if the article is a hit piece or has good points. :)

s1artibartfast 4y ago
It is very much the same perverse incentives. Here, the less valuable education you get the greater the subsidy is. In healthcare, percent profit caps mean that the best way to increase profit is to increase prices
t_mann 4y ago
Similar thoughts here - just make public universities (almost) free and stop giving out loans, and you'd be where most European countries are. I guess the thing is that once you've added all those extra layers it's hard to roll them back because so many jobs indirectly depend on them now (administrators, bankers, collectors,...), and some of them have quite strong lobbies (cough, bankers, cough).
- anonporridge 4y ago
  My understanding is that the trade off in European systems is a much more stringent entrance requirement. So, university is free, but a smaller percentage of people have the scores to get in. Only about 30% of German students go to university, vs 40+% of Americans. This isn't the worst idea. College in the US is overly fetishized and trade schools and/or going directly to work or starting a business is snubbed. The result seems to be a deeply overeducated, but under employable population and an aging trade class that is entering retirement without having fully passed the torch to the next generation.
  - t_mann 4y ago
    No, afaik that's not the case everywhere. Switzerland, which has the best unis on the continent, is pretty open registration for all nationals, in others it's sort of a mix. Selection happens during the degrees, exams aren't curved.

maerF0x0 4y ago

The relief policy has been terribly irresponsible: * Those who sacrificed and paid off their student debt receive no reward. Those who put 10k in ink or vacations on the books get a 10K payday. * People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not * The policy smacks of "vote us back in or else 10K wont be yours" In general I am strongly against policies which change the rules on and penalize people who sacrificed to better their life and better those who made relatively worse choices (or choices with known tradeoffs, but then the tradeoffs get mitigated at the expense of those who did something more taxing for a reward). You can tax the wealth out of those who chose to better their income, but you cannot tax the experiences (eg:travel) out of those who dissipated their resources today/in the past. For example, bad news for those who never had a dream to be a Mech Eng, but did it anyways for the good of their family. As a general observation being in America the past ~10 yrs I find America has a major problem with policies that pattern match this kind of subsidize the negative side of choices with tradeoffs to the detriment of someone else who made a sacrifice to receive a reward.

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vsareto 4y ago
This loan forgiveness wouldn't have needed to happen if schools had not raised tuition by insane amounts.
- maerF0x0 4y ago
  schools wouldn't have been able to raise tuition by insane amounts if the gov't hadn't underwrote all those loans' risk
  - vsareto 4y ago
    Nah, that was an opportunity that universities saw to make more money and they took it without thinking of the larger consequences (which is where we are today having to do loan forgiveness). Nothing about government underwriting forced schools to charge higher tuition. They chose self-enrichment (not even profit to shareholders except for scam schools) over easier access to education and a more educated population. Universities should not be behaving like capitalists.

mech987 4y ago

I'm not sure how things will look by the time my daughter might be ready to go to college in 18 years- Would it be best for us to sock away money in a 529 plan, or to just let her take out loans to the greatest extent possible and pay them back after the fact?

rr888 4y ago
This is one of the worst results. No one is sure what will happen in 10 years time. Take out debt and hope for another writeoff? Its like Reagan's immigration amnesty.
sologoub 4y ago
Consider the many amazing institutions in other countries that either have no tuition or very reasonable tuition as an alternative if she doesn’t get into the best of the best in US. Even with crazy costs, Stanford/Harvard/MIT/etc are generally worth it for the right degree.
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- rr888 4y ago
  >Stanford/Harvard/MIT That's a good solution, everyone should just study there.
  - sologoub 4y ago
    That’s not what I was saying at all - if you get the chance to study there, you should, otherwise there are amazing institutions that don’t require going into debt that one may not be able to pay off.
jgwil2 4y ago
If you can afford to sock away the money then you should. You may ultimately pay more than other people, or you may not, but you will have the comfort of knowing that she can afford to go to college without taking on a lot of debt.

Tangurena2 4y ago

$10k is a trivial amount when compared to the amount of loans current students end up with. At many public universities, it amounts to a single semester. Community colleges used to be free - fully subsidized by taxpayers. Until Reagan. As California stopped funding vocational education and community colleges, other states followed along. Making student loans exempt from discharge in bankruptcy has been a massive subsidy to the financial markets. With a guaranteed source of income (from loans to students), universities have raised rates far faster than inflation. Even the textbook companies don't care about prices - pricing for American textbooks is outrageously high. No one cares. Until Biden advocates for some tiny relief for students - then everyone complains. It is like some parody of the Trolley Problem: "debt relief is a betrayal of all the people who the trolly has already run over!"

skellington 4y ago
CCs are still free or nearly free in almost every state. In CA, 50% of CC students pay 0 while the rest pay around $550 per semester which is nearly free.
- licyeus 4y ago
  California CC tuition is not representative of the rest of the country. In-state tuition for a full-time (15 credits) student at Salt Lake Community College is currently ~2100 per semester. At Denver Community College, ~3000 per semester. That seems "nearly free" from our perspective in the tech industry, but when I was a young adult making $13/hr it was a challenge.
throw8383833jj 4y ago
i think this is one area where price caps actually make sense: college text books and college tuitions. Just make it illegal for public colleges to charge more than a certain amount. as for text books, we need to encourage professors to reuse the same text book for at least 5 or 10 years. that will increase the resale value of the books. or better yet, have universities rent out books at some minor fee that they can recoup over 10 years.

thro388 4y ago

I never understood why children should be able to give a consent to such loans. There is a young and naive person, that can not legally drink, but somehow is able to understand complicated legal contracts! Make student loans part of personal bankruptcy, and see what happens!

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sokoloff 4y ago
One thing that I'd expect you'd see is lenders requiring co-signers and/or pledges of assets, something that not everyone has.
- thro388 4y ago
  Good! They will not get 40 years into unpaidable loans! If university education is such a goldmine, any bank will loan them, it must be like 20% per annum profit!!!
  - sokoloff 4y ago
    As long as you're not both academically smart and financially poor.
    - thro388 4y ago
      Is there actually a correlation between university education, intelligence and high income? Or is it just a scam on young people? Last time I checked most lessons were freely available on internet, without paying $200000 gate keeping fee!
      - sokoloff 4y ago
        It's got nothing to do with that correlation. My point is that it closes off opportunities for smart-and-poor people. (Today's system also has drawbacks, but let's not forget that it does afford opportunities to people who wouldn't otherwise have them.)

subroutine 4y ago

Instead of income based repayment, I would rather see very low interest rates on student loans (like 1.5%). That way everyone pays the full amount they borrow, there is still incentive to repay promptly, borrow less, earn a higher wage, and those with low income can at least pay off the loan interest so their loan does not balloon. And it's simpler. Another thought I had (not completely fleshed out)... Federal student loans could help cap tuition costs somewhat like medicaid/medicare. The fed offers a fixed amount per semester (say $4k) to each student. The catch is that a uni can only accept fed loans if their tuition is fixed at the cap. (i believe this is how medicare negotiates reasonable prices for meds - "if you want to accept medicare here is what we will pay for Rx, and it's all or nothing").

sokoloff 4y ago
> incentive to repay promptly, borrow less In an environment where inflation is running well over 5% and 1 Year Treasuries are yielding 4%, there is no [economic] incentive to pay off a loan at a 1.5% interest rate. You would literally be better off to buy 1 Year Treasuries than pay off that loan (and consequently, to borrow as much as you could).
- maerF0x0 4y ago
  I think we should be careful not to discount the idea where the 1.5% likely was actually a stand in for a variable to be discovered/optimized
- awinder 4y ago
  That’s not how loans work, if it was credit card debt yeah you could pay a minimum forever, but education loans have terms attached with fixed payments.
  - sokoloff 4y ago
    Yet people have loans outstanding 20, 30, or more years after taking them out, so obviously there's some amount of flexibility in the system. In any event, on its face, this system would not encourage prompt repayment but rather the opposite: the slowest possible repayment.

sheepybloke 4y ago

This article is bad to the point of laughter. While it starts out talking about economics, the real point is to rail against other programs that aren't engineering, calling them worthless. Innovation doesn't just come from engineers. That point is laughable. On top of that, calling other degrees worthless just because their field doesn't pay well is also indicative of other problems in the system. For example, my wife is a stage manager for multiple ballet companies. She's quite successful in the field. It doesn't pay well, but she's needed to do the productions. Or think about an editor who went to school for english. They can get a job out of college, but only around 30k and can barely make ends meet. But saying they aren't innovative or pushing their fields because they don't scam VC's for money for their crypto app is silly and diminishing the impact and importance of the arts on our lives. And maybe if more people changes their view and saw how impactful the arts are, my wife might be paid a bit more and can more easily pay off her degree.

bravo22 4y ago
If other people aren't willing to trade their magical tokens for your services then your services are not valuable. That is not the same thing as saying just beacuse you have no valuable skills you deserve to die of hunger and disease.
- sheepybloke 4y ago
  People are quite willing. The entertainment industry is huge, between TV, concerts, theatre productions, etc. However, does that money come down to the artist or the people doing the work? The issue is that this idea also applies to other people areas as well, such as teacher or journalists. These are services that are valuable, but they are not paid well.
  - bravo22 4y ago
    They're paid based on supply and demand through their employers. Meaning the organization favours paying someone in a management position a higher salary, rather than the rank and file. The same industry pays certain actors or musicians outsized fees. This is not a question of ethics or fairness, it is supply and demand. You can only pay X people Y amount when starting with K dollars. I am not trying to be pedantic here but simple rules at large scale produce complex results that may sometimes seem counter intuitive or unfair. Evolution is simple rules applied at scale and it produces results that don't seem quite right but are obviously effective because they survive.

juve1996 4y ago

The efforts to discredit this policy are truly fascinating - that's how you know how effective it is, it truly is a threat. But this article is correct, that this is not sustainable and a longer term policy is needed. Plenty of people are benefitting dramatically from this, and for once it's not the mega rich getting tax breaks or the fraud rife PPP loan fiasco.

fallingknife 4y ago
Yes, a $500 billion bribe right before a midterm election is absolutely an effective policy. No one is arguing against that. At least the PPP was approved by congress, and the people unfairly enriching themselves from it are doing so through crime, and not the intended purpose of the policy.
- skellington 4y ago
  An executive order that Biden has no legal right to enact. This is what we get from the party that values "democracy." Bypass all legislation if you can't get what you want and if a law is passed democratically that you don't like then tie it up by using the legal system and activist judges forever. There is very little "democracy" happening in our system currently.
  - juve1996 4y ago
    If he has no legal right to enact, sue. The remedy exists and has been used before against executive orders.
xtracto 4y ago
As an outsider to the US and a person that leans more into "socialism", I find these type of threads really interesting. It's so different (from my principles) where most American commenters that are against this policy are coming from. I would not have a problem in providing relief to the poorer through social policies. My take is that at the end of the day is part of the social contract I "accept" when living in the society. Some people had it harder, some made poor choices (including drug addicts, people studying philosophy, people choosing not to study, etc), but in my (socialist maybe) view, it is in MY interest for them to be good-standing members of society. Otherwise, we risk them becoming criminals.

egberts1 4y ago

Choose your career and own it too. Subsidizing others because of their choice is not a choice but tyranny. After all, after education, technology should be any nation’s #1 priority, just to survive.

loudmax 4y ago
It's bad policy, not tyranny. It's populist, inefficient, unfair and counter productive. None of this is tyranny, just bad economics. When you throw terms like "tyranny" around it obfuscates just how bad living under a tyranny really is. Cut the hyperbole and save terms like "tyranny" for actual tyrannical regimes, of which there are enough actual examples to go around.
- egberts1 4y ago
  It’s also the quickest way to kill a nation. That’s a form of tyranny against society.

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docfort 4y ago

This is a long comment, but the summary is that this article tries to talk about externalities, but doesn't look at a big enough picture. Like complete lack of economic regulation (markets cannot accurately price all externalities), or universal basic income, the article makes good points about the market distortions introduced by this policy. It offers a concrete example of the cost of a graduate student at Columbia University[1]. The article asserts that most of the cost of student loans is actually to cover living expenses. For the Columbia graduate student, the article estimates about $30k annually, which agrees with Columbia’s estimate. Using their estimates at the link [1], I computed the annual cost of non-tuition elements, including rent, as $37,522. Columbia estimates rent at $23k, with other living expenses pegged at $7k. Fees account for roughly 20% of non-tuition. The tuition is about $52k annually for a doctoral program and is more expensive for Master’s students. All of which is to say: this article's example doesn't understand true student costs. To bring the cost of attendance down, often universities with large endowments (like Columbia’s $14.35 billion) will privately subsidize tuition for some students, sometimes by half or more. Let’s say half for the typical student. This doesn’t change fees or COL. So now annual rent is on-par with tuition. So then the student is on the hook for "only" $60k per year, or $300k over the course of 5 years (remember, doctoral program). If the student is good, then the university will pay a stipend of $40k annually, bringing the shortfall to a more reasonable $20k per year. But you cannot have another job if you accept the stipend. So $20k in loans per year, or $100k once they graduate. Compared to the average US mortgage of $460k in 2022, it's the size of a home downpayment. For this lucky student, the article computes the government's additional cost to support this student as twice to house someone on Section 8. Most US students will not attend a private selective institution with a large endowment, but the sticker price is still very high, sometimes comparable to Yale or Columbia [2]. This is because the price is a signal for value. The actual price that a student, whether mechanical engineer or not, will pay for college is NOT what it says on the tin. The article is correct in that it can be abused since it is technically forcing the government to pay for loans after a certain amount of time for those students who haven't found a well-paying job. So this legislation that the article complains about is a possible way out of this mess, at least in the short term. This is indeed more generous than the state money that it is replacing (since most students are educated by public universities). I think the real question is whether we want to encumber long-term those who didn't figure out a way to use their degree to earn a lot of money, and whether money is the right way to measure their contribution to society. Entertainers (including athletes) will typically earn much less over their lives than a ML researcher, but well, they're more fun to observe for a lot of people. Most US teachers and professors will struggle to earn enough money that they aren't subsidized by this program, but hopefully the pandemic has taught people about their value. You could argue that this is really a public-works program because isn't it better that people follow their passions instead of maximizing their individual profit? Specifically, isn't the drama major more likely to substantially contribute to the public sphere instead of a quant? Not saying quants don't help, but public money should help the public sphere. And for those who might quibble about where their taxes go: I sure am glad that I live in a country that other global would-be superpowers think very carefully about attacking (the majority of the US annual budget is military). Not a perfect place by a long shot, but my taxes definitely go to the public good, if not always efficiently. [1] https://www.gsas.columbia.edu/content/cost-attendance https://www.gsas.columbia.edu/content/cost-attendance [2] https://www.nytimes.com/2022/09/14/podcasts/the-daily/college-student-debt.html https://www.nytimes.com/2022/09/14/podcasts/the-daily/colleg...

gnicholas 4y ago

Interesting to see "BA Biology" in the "most subsidized" list. Is that because it's a popular default major at many schools, and unlike a BS it is less rigorous? I went to a school that only granted BAs, except for Engineering, so all of our Bio majors were BAs. I don't know how common or uncommon this is, or if there are schools that offer both BAs and BSs in Bio.

wink 4y ago
No idea how it is in the US, but here in Germany even ~20y it was said that a plain degree in biology is kinda useless, you kind have to tuck on a PhD (I'm deliberately not calling the first one undergraduate degree, because our system used to be Diploma (~10 semesters) + Dr. after that, and not BSc+MSc+PhD.)
bbatha 4y ago
I had a lot of BA in Biology friends who were pre-meds. They got the BA so they could fit the other required pre-med classes in that didn't count towards BS requirements. It would also make sense that we subsidize a medicine related degrees.

churchill 4y ago

zackmorris 4y ago

I'd like to share this video, which I feel explains the crux of the debate around allocating funds for one cause or group of people over another: https://www.c-span.org/video/?520337-5/sen-rand-paul-ukraine-aid-bill https://www.c-span.org/video/?520337-5/sen-rand-paul-ukraine... I find myself agreeing with about 10-20% of what he says. His basic argument is that it's not the government's place to take from one group and give to another. The fallacy in his argument is that the government's primary job is specifically to gather funds through taxation and allocate those funds to certain groups, governed by the public's intentions as determined through the electoral process. Our elected officials are our proxy within our democratic republic, making those kinds of decisions on our behalf every single day. In other words, his argument isn't supported by fact. It's ideological. IMHO, rather than deciding if we send $40 billion to Ukraine or fix the lead pipes in many of our cities, the government can and should do both. Given the choice between reducing the student loan burden, or reducing the national debt, the government can and should do both! You see what I'm saying? This notion of choice in who will be helped and who will be hindered is a fallacy. The government is bigger than us, we need to stop thinking of it in terms of an individual struggling with their microeconomic finances, and realize that it can be more like a superhero and help many people simultaneously through the emergent behavior and opportunities created by macroeconomic policy. I think what's missing in our government today is this sort of visionary consideration of human potential, and the political will to enact policies that materially help people in need, rather than wealthy and powerful people in the status quo who don't need our help in the first place. If we follow his argument to its logical conclusion - the reduction or elimination of government spending with the private sector left to its own devices - then only one form of government fits that: autocracy. That's where we came from before the American Revolutionary War, and we've been headed back there again under 40 years of trickle-down economics and the rise of wealth inequality the likes of which the world has never seen. Billionaires are the new aristocracy. We're in a positive feedback loop where every time things get worse, people vote for the same people who caused it, making things worse still. Then that side blames the other and the process repeats itself. That's the seduction of seemingly rational-sounding arguments like the one against student loan forgiveness, which always align with the status quo. We can use that as the signal to know that the argument is disingenuous.

4y ago

variadix 4y ago

I don’t think the government should be involved in student loans at all. If people could file for bankruptcy and banks had to do their job it seems like many of these issues would be solved. If a bank was going to provide a student loan that they wanted paid back they would look at: * what the graduation rate of your major is and what the average annual income is for your major * your GPA, test scores, and other factors that can be used to predict graduation rate * the cost of the university and how likely your are to be able to repay that amount given the above I don’t think the free market is perfect, but it seems apt to handle most of these issues without resulting in all of the issues people currently have with student loans.