And what does that mean for those of us who have already paid it back? Are we getting a check back, because I'd sure like that money back. As to your question, it would probably hurt some of the schools, but they've been over charging for years, and would certainly cause some ripples with that much government spending if they are going to pay for the degrees but the economy should see an uptick if people had money to spend. It'll never happen though, they could never justify paying off someone's worthless general studies, liberal arts, or poly sci degree.
It probably means the same thing as people who were sent to jail for marijuana possession before it was legalized. It means fuck them.
But what about current student loan policy? Okay, let’s write off a trillion dollars in outstanding student debt. There will still be a whole slew of current and upcoming students who will be taking out loans for school. Is there any additional thought behind this idea besides helping out people like me? It just feels like a cheap way to shore up votes. Like the campaign for high school class president promising a 4 day school week or something.
I don’t want free tuition for anybody except useful people. Not everybody should go to college, we need the failures and hard-ups of society to work shitty jobs.
If I recall correctly, the Government doesn't hold the debt, only guarantees it. The banks hold the debt - so, is Bernie saying the Government is going to pay it off or fuck the banks over? Two totally different outcomes - one causes the entire college system to fail immediately because banks won't lend any more, the other shores up Democrats votes while not solving a damn thing.
Don't know what other ideas are but this makes the most sense to me. It would be two fold, when 2/3rds of people who could never get a loan don't end up getting a loan then colleges see a huge drop in revenues. They might have to actually price their degrees based on what the market will be able to pay, ultimately lowering college cost all together.
I just dont know what offering free tuition actually solves. As some mentioned, it certainly doesnt make someone more marketable nor does it incentivize schools to lower tuition rates. They are still increasing costs to lobby for those loan dollars. And that increase hardly goes to improving the actual educational aspects. When I was in school, the CT state schools all raised rates 6% one year. The very next year, UCONN completely renovated the student union and built a bunch of other useless shit. The two buildings I spent most of my time in for classes were almost falling apart. Also as @xrayvision mentioned, what happens to the kids that take out loans next year, and the year after that? The bubble just builds up again. The vast majority of people that need debt forgiveness are not the people that obtain a 4-year degree. They drop out or fail out. The majority of debt holders that default have less than $10K in outstanding loans; its somewhere around 70%. Theres an inverse relationship between the amount of debt and rate of default due to marketability and salary right out of school. As most things Bernie Sanders, it just doesnt make a lot of sense. Plus, none of it is free. Its all on the backs of the tax payers, again. I paid my loans off last year, why should I have my taxes raised to help someone pay theirs?
On another note, the Democratic debates start tonight and tomorrow night, with 10 candidates each. Thats quite a crowded field. Tonight is: Bill de Blasio, Tim Ryan, Julián Castro, Cory Booker, Elizabeth Warren, Beto O’Rourke, Amy Klobuchar, Tulsi Gabbard, Jay Inslee and John Delaney. Tomorrow is: Marianne Williamson, John Hickenlooper, Andrew Yang, Pete Buttigieg, Joe Biden, Bernie Sanders, Kamala Harris, Kirsten Gillibrand, Michael Bennet and Eric Swalwell. Im just excited for Trumps live-tweeting.
One discussion I've seen about student loans is that the program didn't have it's intended affect. The original idea was that with more people getting college degrees you would raise a lot of people's potential for income throughout their life, which helps the overall economy, but that's not what happened. Instead of giving people with college degrees higher pay companies raised the requirements for entry level jobs. Which then made college degree a necessity. I'm all for student loan forgiveness, because it's an acknowledgement that the program didn't work as intended, but it needs to be coupled with a solution to the problems that it created. That solution may be some form of free education, because I think companies will be very slow to lower their requirements for entry level positions. If there's a way to force companies to lower their highering requirements that would be the preferred solution, because as many people pointed out a lot of these degrees don't have much application in the work force.
I dont see why companies should be forced to solve that issue. People should be taught that career and skill marketability is a thing and that youre not entitled to a high paying job with a BA in Psychology or some other social science degree. They should be allowed to fulfill those positions with a candidate that at least has some meaningful background for the position, especially something specialized or competitive. Just as people have the the choice to study whatever they want, companies have a choice on whether to hire them. Nevertheless, the current job market is so strong, companies are running out of applicants to fulfill roles. So they are naturally beginning to lessen the requirements anyway.
My point was that companies started raising requirements for positions that typically didn't require a college degree. If you want to go in to a specialized field you obviously need to get the relevant degree. Why does an administrative assistant need to have a four year degree? A lot of companies require that level of education for that position because there is a glut of people in the work force with college degrees. Then you look at that cost of even a state school and it becomes more baffling. Why does someone need to go $50,000-$80,000 in debt to do data entry? It's a very messy problem and as others have pointed out there will need to be a cultural shift as well to fix it.
On paper they dont, but look at this way: Say im hiring for a full-time Administrative Assistant position that pays $50K. I get 50 applicants. 35 of which have college degrees, 15 do not. Out of those 35 college degrees, 20 of them went to a top 50 school. Out of those 20, 5 of them had a 3.5 GPA at graduation. I interview those. Out of those 5, 1 of them comes highly recommended from a peer in the same industry. That one person then gets the job. The company didnt force any of those people to apply. Now, the cost of that person's education was $75K on a $50K salary. But they got the job and 49 did not. Add in the intrinsic value of learning the industry, other aspects of the company, face-time with executive management, etc. and they may have opportunities to move laterally in the company to another position with a better career path and upward mobility.
I understand all that, which is why I said that the government will likely have to do something to bring the cost of education down. I don't think it's likely that companies will go and lower their hiring standards. Also, the scenario you laid out seem like it would be an outlier. The job is likely paying $35,000 and there probably isn't much room for advancement, or lateral movement. The worker still has $60,000 in debt though. My overall point is that the cost to enter the workforce has greatly outpaced the wage rate, leaving younger people with a much greater debt load than previous generations. That is obviously going to have a impact on our overall economy, and we need to do something to address it.
They didn’t force them to apply but by the nature of eliminating the degree less folks out of hand you’re forcing them to have to invest quite a bit for a low level job that certainly shouldn’t have to require focused college degrees. I don’t know if your example even acknowledges his point. I’m not a government is the answer type particularly if they interjected themselves and caused the problem in the first place. There is already a cultural shift towards trades not in huge numbers yet but enough that the conversation has shifted to how little the huge college investment pays off so little. Cutting of the flow of money and tightening loan requirements would have an effect on schools and the economy in general as the labor pools shift. Businesses would have to compensate by lowering standards or paying for education if the position demands it. That is if you can keep H1Bs reigned in.
This comes up a lot in discussions my wife and I have with our parents. While they loudly state people need to look more into trade school, we have to gently (and frequently) remind them that they pushed college down our throats as soon and as often as possible. Trade schools were okay for those kids.........You know. "Those" kids. The shop kids, the delinquent kids, or the otherwise not bright enough to get into a decent college type kids. Not their kids. Never their kids. How would they be able to brag to their other middle/upper middle class white friends about their kids being carpenters or plumbers? That being said, while our parents did push college, they at least had the sense to push us into career paths that had, at the very least, good financial potential. And granted, them paying for our school removed the loan burden altogether. But they made sure that we would have a marketable background to always fall back on to ensure we had a stable financial environment. I feel like that is where a lot of parents and guidance counselors routinely shit the bed. They don't really pull the kid aside and make them consider what is and isn't a good idea. I hope that the concept of having a gap year starts happening in the US. While it's great that some teenagers have their life figured out early and can take the next steps without any issues, I feel like a lot really don't. Taking a year to figure out your shit would help tremendously. Also, pushing the idea that maybe you don't need to go to some fancy upscale school to get a good job and that a local/instate/public one will do just fine. I'm not setting the world on fire, by any stretch, but I have a well paying job and went to a rinky dink buttfuck nowhere school for my degrees. Maybe I don't have four years' worth of party stories, but I'm not drowning in debt either. My wife (who is a librarian) has this conversation with her friends (specifically, librarians or people working/studying to become librarians) all the time. To be a librarian in Illinois, you have to have a Master's degree (at least, depending on what type of librarian you want to be) for a job, that may start you out at $40....maybe $50k a year. Despite poor financial prospects (and dealing with a system that's really hard to break into) people will still frequently opt to go to the private university in Illinois that offers that degree. They'll come out with upwards $100k in debt.....But hey! They got the in classroom experience! My wife did distance learning with a school in California and paid a fraction of that. She may not have gone to a fancy school, but she works on a specialized team in the main branch in downtown Chicago. And doesn't have any debt to go with it.
My example illustrates how the high cost to enter the workforce exists in the first place, its a product of the existing system of capitalism. I dont know how you artificially drive down the cost of education by exerting pressure by the government hand or by resorting to collusion and having it actually work. Its not the governments job to prop up the economic viability of whatever your degree is or whether you have a degree in the first place. The market will auto-adjust and recalibrate itself anyway, thats what happened after the Great Depression recovery. The government should stop guaranteeing the loans, thats what will tighten the loan requirements. The schools wont give a shit if the government will just pay off the defaults. It mirrors whats happening all over again in the mortgage market.
College professors earn an average of $70-75k/year. Are universities profiting tremendously? I know that the cost of school largely relies on the fact that a student can secure a loan for a huge amount so they will charge a huge amount. I guess I’m curious what kind of overhead schools have and what kind of financial damage they would sustain from being forced to charge less.
My friend likes to joke that the University of Michigan is a very lucrative hedge fund that dabbles in education and healthcare. Yearly revenue is in the ballpark of $9 billion and while they do spend an exorbitant amount of money, a lot of it is on buying up more of the town and building massively expensive buildings that they don't pay taxes for because it's a public university. They also have a $12 billion endowment that nets them a massive amount of money in investments alone. So maybe universities aren't PROFITING per se, but they are amassing an enormous amount of money and property.
Not directly related, but maybe a perspective from another country: In Germany we have a three tier school system, the split occurs after 4th/5th grade. Only the highest tier allows you to go to university/college. There technically are possibilities to get there later even if you have a "lower" school diploma, but let's leave that out for now. We also have seen this "everyone needs to go to college" mindset and more and more people got pushed into the upper tier school even if they would have been better suited elsewhere, which led to a lowering of standards (subjective opinion, although there shouldn't be as many people with a great gpa as there are right now. I don't think we got smarter). This led to the exact same thing, entry level job requirements rise, even trade schools prefer applicants with a higher degree now, even if that was never intended that way. Plus we also have a lot of people with degrees of questionable use... Bottom level, it made the situation worse for everyone that can't get this education and wastes the time and potential income of people who would've been better off learning a trade. Those who did learn a trade are in luck right now, as there's also a shortage of plumbers etc because now all those people didn't start trade school and they earn like crazy.
I don't even have a degree and this mindset is frustrating as hell. I remember being told in high school by everybody that as long as I had a degree, the field didn't matter and I was good to go. It's my understanding that people that do have degrees in their field are still finding it difficult to get an entry level job, let alone something with a high salary. Even if someone manages to get a job in their field, the cost of repaying their loans will keep them out of buying homes and having families. If I had gone to college and was still paying off my loans and heard "career and skill marketability is a thing", I would have screamed. In a perfect world, people would be responsible for their own actions and everything would exist in a vacuum. The problem is that it doesn't. Guidance counselors tell kids to just get a degree at 17 and then get told at 27 that they should have thought about their field of study by people who had better resources than they ever did. Why does this generation get a red hot poker up the ass for listening to the advice of people who were being paid by taxpayers to help them? Moving the goalposts for success and telling people to suck it up after the fact seems like horseshit to me. And another thing. I'm starting to get fucking sick and tired of the market dictating everything. Why is it okay that some hedge fund manager gets to shrug his shoulders when the 401k's he's gambled on shits the bed in some artificial bubble his coke snorting boss created? That this behavior is not only tolerated, but rewarded, makes me furious. If I thought I could live without flushing my toilet ever again, I'd have converted my earnings to army surplus and moved into the wilderness years ago. As it is, being at the whim of some asshole who doesn't give a shit about me, my family or the world in general outside of whatever overpriced thrill is available that night fucking sucks.