Ron Paul Wants To End the Federal Student Loan Program

On the heels of declaring his intent to axe a few departments from the federal government, Ron Paul has revealed more plans should he become President. The_THOMAS writes "Ron Paul wants to end Federal student loans stating that the Government involvement artificially inflates the cost of a college education and that once the government is out of the situation, students will be able to work their way to a college degree. What do you think?"

Comments

Subsidies inflate pricing.

[ZHaDoom]

Subsidies inflate pricing. I agree.

Re:Subsidies inflate pricing.

[BasilBrush]

And what of the flip side? The people who really achieve in the field they studies at University, but wouldn't have been able to go were it not for student loans. Are they a price worth paying for libertarian ideology?

Can America afford to be less educated?

Re:Subsidies inflate pricing.

[SecurityGuy]

The government runs many universities, including one of the ones I attended. Public universities run much the same as private ones do. A lot of the money that comes in doesn't actually go to teaching, and the way to success in one's department is not to be a stellar teacher, it's to get published a lot. The difference in tuition between the cheap public university and expensive private university I attended was that taxpayers payed most of my bill when I went to a cheap public university.

Re:Subsidies inflate pricing.

[mcgrew]

A loan isn't a subsidy. But if student loans were indeed the cause of the high price of college, what makes you think stopping them would make the price go down?

I went to school on the GI bill, and the state of Illinois paid my tuition. That's s subsidy. But I still had to work and was still dirt poor. That was in 1975; when did the school cost inflation begin?

Without student loans, only children of the wealthy will be able to go to college. The price keeps it out of reach of the working class, and always has. Education never was inexpensive.

Re:Subsidies inflate pricing.

[Crudely_Indecent]

And what's the flip side?

Traditional financing. You finance a car, a house, a TV, why not an education?

This puts college education back in the private sector (that is, without government meddling). Let the market decide.

Re:Subsidies inflate pricing.

[bluefoxlucid]

I actually advocated this to a coworker friday. Do we have a half-intelligent politician or a lucky retard? Even a broken clock is right once in a while, whether it's stopped or spinning backwards...

Student debt spins out of control because there's no accountability. The Federal Loan Program is an automatic bank bail-out, but for the universities. Without a student loan program, the universities have three choices:

• Find a bank to supply loans
• Operate as a bank themselves
• Demand students find their own financing

In the second case, the university must take on risk itself; in the first and last, they offload the risk to the student or a bank (the student can pay out of pocket or find a bank and get their own loan in the third case). In any case involving a loan, someone takes a risk of a default and a bankruptcy declaration, meaning student loan offerings will become more stringent. Tuition may decrease due to lack of liquidity--no access to free money means you can't sell as much crap.

The current situation leaves a case where universities have their greatest interest in getting students spending money freely. If those students default, who cares? There's no bank that cares, and the university doesn't care. This means they're best off encouraging students to get into debt they can't handle, and that they can charge ungodly high tuition levels and people will just pay it because the money is there.

Shove all that shit on the bankers and suddenly there will be some explaining to do if you want money handed to you. Another recession caused by excess borrowing WILL put a stop to this shit, and when the banks cry and the students complain they just can't afford college because bank loans aren't easy to get for $250,000 when you're a jobless starving artist, tuition will come down.

Re:Subsidies inflate pricing.

[buzzn]

Subsidies inflate pricing. I agree.

Because companies change what they can, rather than a fair cost. The answer to that is simple - let the government run the universities too. That's a much better fix than denying most of the young people a higher education as Ron Paul's proposal does.

Let's do an actual comparison: UC versus Stanford.... Undergrad tuition UC $13,200 for residents, $36,078 out of state, vs $13,350 quarterly for Stanford = $42,270 yearly. So the out-of-state tuition for UC is fairly comparable to Stanford. I don't see how Stanford is profiting heavily... although they are charging 9% more, we'd have to compare whether they provide a better education for the money, etc. However this does not demonstrate that government subsidies for student loans/pell grants inflate Stanford's pricing, nor that government is more efficient at providing a university education. You might then argue that state subsidy of the resident tuition causes out-of-state tuition to inflate, but you'd be hard pressed to actually prove that.

The unfortunate actual issue is that UC tuition has risen quickly over recent years as the state has been unwilling to fully fund it.

Re:Subsidies inflate pricing.

[bhcompy]

California had free higher education for residents paid by taxpayers(and it is set in the charter for higher education in the state, which all of the school systems now openly violate). From UCLA and UC Berkeley to Bakersfield Community College. Free. Over time this has changed while at the same time loans have been backed by the government and student debt has been increasing. Correlation doesn't equal causation, but it's there, it happened

Re:Subsidies inflate pricing.

[Nadaka]

Speaking as a successful software developer who needed student loans to attend college. Bullshit. Student loans SUCK, but they are the only thing that allows a large number of low to middle income people get into the career they want and need.

There are alternatives to student loans:
Ron Pauls solution: only the wealthy may attend college. Tuitions will skyrocket even farther because there are so few new students. Hundreds of universities are forced to close their doors and all we are left with are a lot of trade schools and the Ivy Leagues.
Something rational: Recognize that state universities are state universities and have no profit obligation and should not be run like corporations. Cut administrative costs (tuition increases go almost 100% to higher administrative wages and more administrative positions instead of to professors and facilities) and offer low or free tuition subsidized by the state.

Re:Subsidies inflate pricing.

[PortHaven]

Or it could mean that a lot of jobs that do not really need degrees would stop requiring it.

"Front desk administrative assistent. Must have master's degree."

Yeah...okay...it's insane. Soon McDonald's will require a BS degree for it's cashiers.

Re:Subsidies inflate pricing.

[Pawnn]

But...but...schools NEED a Dean of Campus, a Dean of Students, a Dean of Faculty, a Dean of Character, a Dean of Lawn Mowing, and a Dean of Deaning!

Re:Subsidies inflate pricing.

[RingDev]

How many 18 year olds do you know with good enough credit to buy a car, let alone a house?

How many private banks are going to be willing to fork over $20,000-200,000 for an education for an 18 year old kid with no credit history, no job, and a low likelihood of gaining employment in their first 5 years that will pay anything close to enough to be able to aford the payments on that loan?

The reason the federal student loan program exists is because it ISN'T profitable to make that loan. Most kids are going to default, and the banks will be left holding the bag.

The government program exists in a market where the private market doesn't want to go. That's a significant purpose of the government in a capitalist society.

-Rick

Re:Subsidies inflate pricing.

[SlippyToad]

The argument is that student loans are *why* universities are unaffordable. Besides

It's a lazy-ass argument. There are plenty of things that could be done, but Ron Paul's solution to the high cost of college is to simply cut off anyone who isn't already rich.

See, his education got paid for back in the 1950's. Probably by his parents. So, he's got his. Fuck the rest of us.

Re:Subsidies inflate pricing.

[Kierthos]

So, he's got his. Fuck the rest of us.

Ah, you understand the Republican philosophy perfectly.

Now, before anyone jumps in my shit and stirs, I'm not saying that the Democrats don't pull this kind of crapola too. They just don't tend to do it so overtly.

Re:Subsidies inflate pricing.

[RobNich]

Without student loans, only children of the wealthy will be able to go to college.

By that logic, the day that student loans end, all of the colleges will go bankrupt. No, obviously they will lower their prices until low enough that enough people can afford it that the college is solvent.

But the Federally subsidized student loan is a subsidy: the interest rate is artificially low, it can go unpaid for decades, the lender charges the government fees based on the amount of the loan, and the government guarantees at least part of the principal. Since the university and lender have incentive to increase the tuition cost, and the students have little incentive to find a lower price, the inflation occurs. It seemed to start in the 80s, but it would be difficult to determine the exact date it began based on this graph.

Also note that ending federally subsidized loans does not mean that there will be no student loans available. They may be more difficult to get, and they will have higher interest rates. But these will keep the tuition cost nailed roughly to the rest of the market.

Re:Subsidies inflate pricing.

[BasilBrush]

because we oversaturated the market with college educated people, who dont really need that degree for what they do for a living.

A university education isn't for a particular job, it's for life. People aren't commodities in a market. People are more than worker bees.

maybe, just maybe the prices will drop because they will need to admit more people to their schools instead of costs going up. i mean thats simple supply and demand right there

Supply and demand is just one aspect of pricing. At the end of the day, without subsidy, you can't price lower than cost. 3 or 4 years of tuition at university level, with all the buildings, staff, equipment and other things that come into that isn't ever going to be cheap enough for a young person with minimum wage earning parent(s).

I'm all for removing student loans, as long as they are replaced with grants or other ways by which everyone who is willing and capable of being educated at university level is enabled to do so.

Re:Subsidies inflate pricing.

[SlippyToad]

Ready any day's log for congress anytime in the last 4 years and you'll see exactly that.

I can see you are simply too lazy to even try to demonstrate your point. So, mine still stands.

Kind of fits with my general perception of glibertarians as the most intellectually lazy fuckoffs on the planet. You can't even type a few words into a search bar.

If you REALLY believe the democrats are different, you are REALLY oblivious to the world around you.

Until very recenty I followed political events quite closely. I know how members of both parties behave. I can and will provide rebuttals, but since you are just flat too fucking lazy to start somewhere in the fact-based world, I am not going to bother. My point stands. You're too LAZY to argue your own, so piss up a rope.

Re:Subsidies inflate pricing.

[BitZtream]

what makes you think stopping them would make the price go down

Really simple, and its something you shouldn't need to go to collage to understand.

Supply and demand. Schools will either go out of business or lower prices to increase demand. The million dollar deans will soon become 100k deans, and as that trickles down through the organization, professors who spend more time doing their own shit and wasting university resources will have to put more effort into doing their job than getting a free ride on someone else's bill because they spend 75% of their time playing rather than doing what they were hired for.

Without student loans, the price will go down. Making less money is preferable to 0 money, assuming you can stay in business. These smart people certainly can figure it out, don't you think? If not, than they probably weren't our money in the first place and again, things will be better.

Re:Subsidies inflate pricing.

[Altus]

So the answer is to cut off higher education at the knees and hope that eventually the market comes around before we enter a new dark age?

Maybe there is some other way we could go about doing this.

Re:Subsidies inflate pricing.

[Attila Dimedici]

However, since the advent of student loans, the cost of a college education has risen at an astronomically higher rate than inflation. If one looks at products which have a price increase significantly greater than the rate of inflation for an extended period of time (more than a decade), most, if not all, are products that are to one degree or another paid for with government subsidies of some kind.

Re:Subsidies inflate pricing.

[roman_mir]

A gov't GUARANTEED loan IS a subsidy.

It's a worst kind of subsidy, every gov't program that guarantees something only does so at the expense of everyone's savings - the Fed will print (inflate) and steal your purchasing power to pay the bad debt off (bail outs to banks, companies, home owners, eventually to students, etc.)

The prices will come down if gov't money is removed from making these guarantees and quality will go up. Right now quality is shit, because nobody competes on quality. It's not like fewer people will want to enter your facilities if your quality is not that great, because space is limited, but gov't guarantees are not.

Yes, if the gov't guarantees are cut the tuition prices will fall (as it should) and based on qualities a number colleges will fail and NOT as many people will go if they have to take a private loan and prove it's not a waste of time and money (and that's what you have to do, you have to prove that there is some value there, some asset, or that your degree will allow you to pay the interest and loan back).

But this is a GOOD thing. Not everybody should go to college, not by a long shot. Right now the number of sociology majors is ridiculous, who needs any of them? Nobody does, they are worthless degrees and they are given out like candy. It happens because of the money transfer from gov't to educational facilities and students are the collateral.

Students are collateral, money is given to universities, universities in their turn support the political system that gives them this money, and the vicious cycle continues and economy worsens and those degrees are not worth anything and the lie of Keynesian solutions grows as the Fed counterfeits further.

Re:Subsidies inflate pricing.

[bennomatic]

My first semester's registration fee at UC Berkeley: $600.00

My final semester's registration fee, also at UCB: $2400

Granted, I took five years, but still, 400% change in four years is really something. The state pulled back funding, the universities increased their costs to make up for it (and more?), and yes, private U's probably do take advantage of the situation by raising their own bars.

Re:Subsidies inflate pricing.

[HereIAmJH]

After a couple years, every university in the country will radically adjust their prices and cut waste in order to not cease to exist since no one will be able to afford the ridiculous cost anymore.

Either that, or they would more actively recruit foreign students. There have already been news stories of state funded schools preferring foreign students because they don't have to give them the in-state discount rate. We'll just end up with more tax funded institutions that Americans can't afford to attend.

A better solution would be to push trades and entrepreneurial skills in high school. Reduce the demand for student loans by showing students how they can earn a living without a college requirement. Many of the trades taught at Vocational Technical schools can earn above median incomes. Personally, I don't know that I wouldn't have been just as happy doing engine repair for the last 30 years as I have been working in IT. I certainly would have been healthier with a less sedentary job, and once you calculate in all that I have spent on education expenses I probably would have earned more.

Re:Subsidies inflate pricing.

[toadlife]

But income tends to grow with age so by the time one has kids going to college, I'd hope many parents are tending to the high side of median.

The median wage in this country is 28K a year, which is slightly less than double minimum wage and the media household income is around 49K, which if spilt between three (and most households are more) is a hare above minimum wage per capita.

Re:Subsidies inflate pricing.

[RingDev]

Not at all, it would just trend back towards where it was prior to the creation of the federal student loan program, and with the colapsing of the middle class, back to what it was prior to WWII.

Which is to say, we would have a 2 education system solution: Ivy League schools where the children of the rich go, and trade skill schools/apprentiships/OJT for everyone who won't ever have the opportunity to be rich.

It's just another way for the plutocracy to further strengthen its own position and isolate themselves from everyone else.

-Rick

Re:Subsidies inflate pricing.

[darjen]

You may be a successful software developer, but you don't understand economics very well. Lowering federal student loan support will decrease the demand for degrees. This will cause demand for college to drop. Therefore, the price of degrees will also drop to more affordable levels.

Re:Subsidies inflate pricing.

[HereIAmJH]

Simple to fix. Forbid it at the State level for State schools.

Wouldn't it be ironic if Ron Paul's Libertarian plan to cut student loans resulted in more government regulations and oversight?

Re:Subsidies inflate pricing.

[luis_a_espinal]

Speaking as a successful software developer who needed student loans to attend college. Bullshit. Student loans SUCK, but they are the only thing that allows a large number of low to middle income people get into the career they want and need.

There are alternatives to student loans: Ron Pauls solution: only the wealthy may attend college. Tuitions will skyrocket even farther because there are so few new students. Hundreds of universities are forced to close their doors and all we are left with are a lot of trade schools and the Ivy Leagues. Something rational: Recognize that state universities are state universities and have no profit obligation and should not be run like corporations. Cut administrative costs (tuition increases go almost 100% to higher administrative wages and more administrative positions instead of to professors and facilities) and offer low or free tuition subsidized by the state.

^^^ This. This a million times.

I find Ron Paul's position akin to an bone-headed, no-hold-barred adherence to an extremist interpretation of laissez faire capitalism and libertarianism, everything else be damned. This is just the libertarian doppelgänger of the tragically known Maoist great leap forward. I do subscribe (to a point) with libertarianism, but this is just insane!

Ok, we cut federal student loans. Great. Does that immediately solve the problems of high cost of education? No. Will it solve it? Maybe... if you are willing to believe federal intervention is the primary culprit of the rising cost of education (it is not.) We need a serious reform in education. Too many people go for a 4-year degree, and far too many companies require such a degree for jobs that, in truth, only require a AA/AS degree.

But a true reform requires support for vocational school at the HS and post-HS level (as done in the German and Japanese models of education), providing for true and diversified alternatives (at the county community college level) other than a 4-year degree. Cutting federal student loans simply does not resolve the root cause, and will cause people to pursue any form of education, independently of whether they are qualified or not.

It's not fucking rocket science to come up with something rational. But nooooooooooooooooooooooo, we have to go ZOMG! berserkers all the way to the fringe extreme of an ideological kaleidoscope. What Ron Paul is suggested is akin to having a headache, and instead of looking at the root causes, he's suggesting a lobotomy.

Ron Paul has completely jumped the shark on this one. He has foregone all reasonable explanations and solutions to the rising cost of education by pushing an extremist, radical and harmful action as a solution solely for ideological reasons.

Re:Subsidies inflate pricing.

[chill]

You misunderstand Ron Paul. He is a strict constructionalist. If regulation and government is necessary, it should happen at the State and local level. It is the large *Federal* government, who has overstepped their Constitutional bounds that he objects to.

Re:Subsidies inflate pricing.

[s73v3r]

Only for a couple of years, and its a nessecary evil.

Bullshit. Try telling people that making jobs LESS available for the next few years is a "necessary evil."

After a couple years, every university in the country will radically adjust their prices and cut waste in order to not cease to exist since no one will be able to afford the ridiculous cost anymore.

Based on what evidence? And furthermore, why the fuck should the poor and middle class have to suffer for your ideology? Why should the poor and middle class be cut out of college educations for the next few (more like 20-30) years?

Re:Subsidies inflate pricing.

[dgatwood]

After a couple years, every university in the country will radically adjust their prices and cut waste in order to not cease to exist since no one will be able to afford the ridiculous cost anymore.

That's just laughable, and tells me that you have no freaking idea what's been going on in higher education for the past two decades. I've watched as the states have slashed and slashed the subsidies that they pay for in-state residents. As that budget shrinks, sure, they cut where they can, but any realistic cuts were made almost two decades ago back when they started slashing the subsidies. What remains are the unrealistic ones—the changes that would reduce the quality of the education you receive.

Educators aren't willing to compromise the quality of education to save a buck, and as a result, for the past several rounds of state subsidy cuts, every time the state has taken more money out, the cost of education has gone up proportionally. There are no more cuts that can usefully be made when most of the operating costs are teacher salaries and benefits (which are still usually below industry norms), and when the rest is going into building maintenance, which you can only defer for so long before it comes back to bite you.

Sure, in theory, you might be able to cut out some administrative positions, but the administrators are the ones in charge, and they'll never decide to cut themselves, which means that you cannot possibly achieve any cuts that do not gravely impact the quality of education unless you start by replacing all of the leadership from the top down. It's like trying to kill cancer by starving the patient. The cancer is still going to take all the energy it needs, so the only real effect is that the patient won't get the energy that he or she needs. You have to start by cutting it out, then go from there.

More to the point, nearly every single recent cut in government subsidies to higher education has resulted in a tuition increase. You'd have to be completely naïve to believe that the next such cut will miraculously cause tuition to drop. The only effect that cuts to federal student loans will have is that the poorest students will be unable to attend. That means that there will be fewer students paying tuition.

The problem is that students still have to be able to get all of the classes they need to graduate within any given four-year period. That means you'll still need roughly the same set of classes, which means that you can't cut faculty except possibly in certain general classes like freshman English composition (which are mostly taught by poorly paid part-time adjunct instructors anyway, and thus have almost no real impact on the bottom line).

Because, faculty have to get paid by the class/hour, not by the student count (the alternative would be absurd), this means that you'll have roughly the same total operating cost divided by fewer people paying those costs. In other words, guaranteed higher cost. Anyone who says otherwise is simply delusional.

Now I will admit that making college less affordable might cause improvements in the breadth of our K-12 education offerings to compensate, but to do so requires bringing in more people at that level, so you're really just shifting the costs around into a program where all the costs are borne by the state instead of only part of the cost, which clearly increases the use of public funds, not decreases it. Also, there are a lot more K-12 schools, so increasing the quality of education at that level is a lot more expensive than increasing the quality of education at the state college level.

I should emphasize that all of this is fairly basic math, coupled with a fairly basic understanding of the history of the program in question. It's downright scary that Ron Paul is so utterly clueless about the things he wants to cut and the effect that it will have, as that tells me that he hasn't bothered to do even a few minutes of actual research on the subject. That's the absolute last kind of person we need as our next President.

Re:Subsidies inflate pricing.

[chill]

Sigh...no. The idea is *if* government regulation is necessary, then the lower level it occurs at the better. The issue is the interpretation of the phrase "if government regulation is necessary". He leans a lot more towards "no, it most likely isn't" than most people.

It really helps to put your partisan preconceptions aside and listen to what *he* says. This actually works for *ALL* politicians, believe it or not.

Stop listening to what other people -- supporters or detractors -- say and go right to the source. Follow that up with an analysis of what he has actually *DONE* over the years. You can see for yourself whether he does what he says and whether or not his actions are consistent with his words.

Re:Subsidies inflate pricing.

[bolthole]

Maybe there is some other way we could go about doing this.

This is a great thing to do, if you also make sure that the low cost educational avenues are met. To do so, would be trivial. Even by "government program stupidity, which ensures at least 200% overhead.

95% of classes, involve sitting in lectures. There is no reason to be paying thousands of professors in a field, to be teaching the same overall subject matter, but in thousands of slightly different and unique ways. The subject matter itself, is uniform.

khanacademy.org style: you record ONE person, doing a lecture series, and share with everyone. for miniscule incremental cost.

The only "must be fresh every time" required action, is verified testing of the individual in the class. 2-5 hours per class, per semester. Shove 20 people in a room, hire a person for a reasonable hourly rate... $20 an hour? that's $1 per person per hour. Add another $1 for room rental costs, etc. $2x5 hours == $10 per class per semester. There is NO REASON that base line college should cost more than this.

You want more handholding? fine, pay more. but for those who can handle the above scenario, there's no need to make them pay more than the above, to get their "piece of paper" enabling them to get a job.

Re:Subsidies inflate pricing.

[BasilBrush]

I've been part of the hiring team. If someone has 10 years of experience, I dont give a bean what degree they have, or if they even have one.

You're missing the point. It's irrelevant what you as part of a hiring team think. You didn't work for the degree. The degree isn't yours.

A degree teaches people how to think critically, boosts intelligence, confidence, ability to self-motivate, how to relate to peers, gives an appreciation of a much wider range of what life has to offer. etc. A university education makes a person better.

If you just did it for the sake of the interviewers on your first couple of jobs, then I feel deeply sorry for the shallowness of your experience. And the waste of 3 or 4 years of your life.

Re:Subsidies inflate pricing.

[Fjandr]

Yes, the US can afford to be less educated (secondary education, that is).

Advanced societies still depend on a great deal of work that does not require an advanced education to accomplish. Placing an undue emphasis on secondary education puts vast sums of money into places that don't really benefit anyone (except the education industry and the banks that finance it).

Creating artificial scarcity harms everyone. It inflates the cost for those who would pursue it anyway, and it creates new costs for those who likely will never recoup them.

Universal primary education is a good thing. Universal secondary education, not so much. It's only sustainable as long as you can externalize all the work which doesn't require an advanced education. Smaller countries can do that easier than larger ones, but once opportunities for lower-hanging work disappear, you have marginalization of what's left who can't find work in their native countries. Eventually, all you have left are the service industries and niche businesses for those who do not achieve advanced degrees. Then you have the lowest tier of the higher-educated pushing the un-educated out of the only jobs they have left, all for wages that won't ever pay back the educational investment.

Re:Subsidies inflate pricing.

[dgatwood]

Two comments: first, tuition has grown far faster than inflation yet real estate, salaries, etc. have not. The implication is costs grew somewhere and we ought to be able to squeeze that cost back down.

I should point out that this is a useless metric. The primary reason for the increase in tuition is that the states have slashed their education spending. Thus, tuition is having to cover a progressively increasing amount of the operating costs of public universities. Similarly, Ivy league tuitions are increasing faster than inflation to keep out ahead of the state schools, as the cost of tuition plays a key role in their prestige.

So basically the argument comes down to whether it's fair for the cost of education to be distributed across the entire population or not. I would argue that the entire population benefits from a well-educated populace, and that although subsidies increase the cost of tuition by increasing availability, and thus increasing consumption, the assumption that this higher cost is bad is founded upon the flawed assumption that a good education is nonessential—a completely wrongheaded and dangerous mindset that threatens to dig our country even further into intellectual poverty. Allowed to continue unabated, eventually our nation will be so far behind the rest of the world that we'll be in an intellectual depression from which we can never recover.

Indeed, the sole reason that the dollars those students earn at their jobs are able to purchase as much as they do is that those dollars are built upon the increased education and overall value of the American worker. The money that the next generation earns will be worth more because of the money that this generation gets as subsidies, and on the whole, there is conservation of net wealth. Thus, the net effect of these subsidies is not truly taking money that could be used for other things, but rather represents a broad, general redistribution of wealth from those who amassed huge fortunes by standing on the intellectual shoulders of those who came before them to the people who have not yet had the opportunity to do so.

Now Republicans don't like that because they forget that with great power comes great responsibility. They forget that the rich did not amass their wealth on their own—that their wealth would not have been possible were it not for someone extending those handouts to them in one form or another, whether it was the construction of the roads that they used for transporting goods, the schools they attended, or the police that prevented looters from breaking into their bank and robbing them. Thus, they incorrectly assume that they should have no responsibility for continuing to pay a percentage of their income to support this once they have successfully become wealthy. Indeed, it is at that point that they owe the most back to the society that helped them get where they are today.

Re:Subsidies inflate pricing.

[kingramon0]

See, his education got paid for back in the 1950's. Probably by his parents. So, he's got his. Fuck the rest of us.

He paid for his own education by working over the summers. He wants people to be able to do that again, and NOT be in debt for life for a degree.

I think he is right. Government subsidies tend to make prices go up.

Re:Subsidies inflate pricing.

[dgatwood]

What programming theories did you learn in college that were applicable to a day to day job?

You're misunderstanding the purpose of college. The purpose of college is not to teach. The purpose of college is to provide an environment conducive to learning. If you're working while you're going to college, sure, you come out of it with a piece of paper, but you did not have the same opportunities to absorb new information that you would have had if you hadn't been trying to squeeze your college experience into the gaps between work shifts.

Case in point, the reason I have a job now can be tied directly to my extracurricular activities at college. Specifically, I was actively involved in programming mailing lists. I now work for the company that provided those lists, writing books about how to write software.

The easiest example I always see is source control. Most college grads have never used any type of source control management so this ends up being the first thing that has to be taught to a new grad.

Although I agree that colleges should probably teach this, you're misunderstanding the reason for doing so. The purpose of college is not to teach you technical skills. That's what a trade school is for. The reason people should learn a version control system (any version control system will do) is that it makes it easier to employ good coding practices without worrying about breaking something.

The reason colleges do not provide a broad background in the use of specific tools is that the tools change depending on your environment. I primarily use git. Your company might use Perforce. Another company might use RCS, CVS, Subversion, or any of a dozen others. Outside the context of teaching a more broadly applicable skill, knowing the details of a specific version control system is not likely to be helpful in the long run. Because the details vary widely from job to job, the right place to learn it is on the job.

By contrast, the big things I learned in college were good object-oriented-programming design models, database design and SQL, debugging, compiler design (I can't tell you how many parsers I've had to write, much to my amusement, thinking back at how certain I was that I would never need to write one), and a bit of security. Despite all of these ostensibly being well outside my job description, they've all been invaluable in doing my job.

It's not just the coursework, either. All that messing around on the campus UNIX box taught me shell scripting that eventually led me to Perl and PHP, which I've used on a number of occasions. And that foreign language links site I helped maintain taught me HTML, CSS, and CGI programming, which has saved my @$$ and those of the folks around me on many, many occasions. And the socket programming skills I picked up on the side while running an Internet "talker" has been invaluable as well.

College is not about learning basic coding skills. You can pick that up on your own. (I was already a passable coder by the time I entered college.) College is for providing the skills that turn a code monkey into an engineer, for providing enough time and resources for someone to learn outside the classroom, and for providing the opportunities that help students discover their own paths to meaningful careers after graduation. Every minute you spend during college doing menial work flipping burgers is a minute you could be spending doing something that you can actually learn from. And that is why college is so important—because everything you do has the potential to advance your future career someday—not just in the short term, but decades down the line.

Re:Subsidies inflate pricing.

[StillNeedMoreCoffee]

Besides not having a clue about Education, how it works or whats going on in a University. The idea that shoving people in a room and thinking that $1 per student for "rental" costs makes any real sense.

As for the purpose of an Instructor neigh Educator in the class, if showing the material, in written or video form was effective then you would find those institutions that are for profit and run by business men, implementing that years ago. They haven't because it is not as effective a teaching tool as having someone there to answer your questions, on the spot and to clarify things not understood through example, analogy.
Everyone comes to the classroom from a different background. All disciplines have their own sub-dialect. The Educator translates that sub-dialect for the un-initiated so they can understand and adopt that sub-dialect going forward in their studies. I have yet to pick up a book on material that spoke exactly my sub-dialect, causing me to miss-understand or do extensive work tracking down the problem. So having an Educator there is the most efficient, I would estimate about 500% more efficient than the material alone. Then there are the aspects of focus and the synergy of the group of questions fielded answering questions you did not even know you had.

Having a $20/hr temporary worker cheapens that whole idea of an Educator and comes from a missunderstanding of what is really going on, what its value is and what its long term effects are.

What

Re:Subsidies inflate pricing.

[fyngyrz]

A degree teaches people how to think critically, boosts intelligence, confidence, ability to self-motivate, how to relate to peers, gives an appreciation of a much wider range of what life has to offer. etc. A university education makes a person better.

Someone's been drinking the koolaid straight from the pitcher.

The best job applicants I have had (in programming and electronic design) have been the self-taught ones. Because they are *already* intelligent, motivated, inventive, creative, critical thinkers. Putting lipstick on a pig doesn't turn it into an Orion slave girl. Neither would teaching it to put the lipstick on itself.

If you're really a high quality engineering type, you'll prove it before a college ever gets its hands on you. And if you're the best, you won't waste your time in college at all. You'll buy books and do research on your own while the college kids waste time muddling through unrelated topics, being inculcated with years-old outlooks on relevant technical topics, and after graduation, are then years behind the really excellent candidates, who've probably already done quite a few useful things, some of which may have been excellent money earners.

But hey... if you're looking for another warm body to fill staff at mangement-driven junkware mills like defense contractors and Big Company Inc., by all means, select only from college graduates. And good luck with that. LOL.

Re:Subsidies inflate pricing.

[fyngyrz]

Despite all of these ostensibly being well outside my job description, they've all been invaluable in doing my job

And every one of them could have been learned without college, and likely faster, in an environment where you were actually aimed at getting something concrete and useful accomplished. The fact that you credit college for teaching you these things makes me ask: Why didn't you already know them???

And right there you failed the job interview.

Re:Subsidies inflate pricing.

[Falconhell]

What a strange system you have in the US. Here in .au student loans are given by the government and recovered via tax system once a certain level of income is reached, 2% extra tax is cherged.

Re:Subsidies inflate pricing.

[PeanutButterBreath]

Over time this has changed while at the same time loans have been backed by the government and student debt has been increasing. Correlation doesn't equal causation, but it's there, it happened

Gee, did anything else happen in CA during this period? Economically? Politically? Demographically?

Most of the money that I spent to get a degree from UC did not go to the school. Are government backed student loans responsible for the huge cost of living in CA? Are government backed student loans student loans responsible for effectively stagnant or even falling wages for students trying to work their way through school?

Re:Subsidies inflate pricing.

[fyngyrz]

If you honestly expect people to know that much stuff straight out of high school, then basically you're expecting every one of your employees to be complete nerds who have no extracurricular activities other than eating, breathing, sleeping, and coding.

No, I expect the best to quit high school - it is a far worse time sink than college is. Basically a pen to keep the sheep in. There's plenty of time, opportunity and resources available at zero cost to the inquiring mind. Plenty even in my day (the 1970's, really... I had to make do with books), but today, far, far more, and far more easily acquired. But I agree, it's difficult to pursue real math studies, or electronics, or physics, when some wank is telling you to make laps around the gym, or making you poke a football around for the benefit of the local merchants, or mis-explaining civics, the constitution, or giving you a watered down version of history. Still, we have to keep the left side of the Gaussian off the streets, so high school is, in its own way, important.

No, right there you failed the job interview. Even asking a question like that would result in me slamming the door in your face.

See, here's the thing. Although born into poor circumstance, I quit high school, started my own company, am now wealthy and the outright owner of several more companies, etc. I have numerous commercial products to my credit, both hardware and software. None of them involved investors, angels, etc. My name is in the engineering journals, copper-plated onto many PCBs, found in the ARRL handbook, and so on. I'm also a musician (many decades, in case you're curious... rock and blues), a music studio owner, a writer, an editor, a photographer, delight in a fine family and some lovely pets, all ensconced in a 7,000+ sq ft home on a large lot in the center of the city -- that I bought for cash. I also own several other homes. I am very well read in several areas -- my library accrued thousands of books, all of which I have read, before I went to electronic books -- I paint moderately well, illustrate, create and sell t-shirts just for fun, and I'm a black belt with two books on martial arts to my credit. Among other things. I feel reasonably well rounded, though perhaps you'd disagree, which is fine, as your opinion there is entirely without effect. IMHO, one of the reasons I am well rounded is specifically because I didn't waste years in high school or college, but instead, actively chose learning paths that would accrue real, tangible benefits over time. And I would add that most graduates (of anything) are not "well rounded", they are simply years behind the curve, educated to issues they really don't need to know, while being sadly misinformed about many others -- hence the average American's debt position, many misunderstandings of government, toxic nationalism, pitiful religious wankery, and so on. Critical thinking is rarely found in general, and certainly not as a consequence of traditional schooling.

Anyway... basically, I own all the doors around here outright. Not banks or other credit purveyors. Not my parents. Not stockholders. Not partners. Not the government. And I owe zero for college loans, simply because I didn't bother to waste my time there. I'm a very active business owner. So between the two of us, I wonder who really does more interviewing? And perhaps you'd take a wild guess at the question of which doesn't have to worry about being interviewed - ever?

Ron Paul should give away his money

[loftwyr]

Maybe if he had to actually work for a living at a minimum wage job, he'd stop asking those with little to no money to give up their chance to be raised up.

Re:Ron Paul should give away his money

[tmosley]

He gives back his salary every year. He makes NO money off of being a Congressman.

Re:Ron Paul should give away his money

[Anrego]

We're talking about a loan here.. the idea is it gets paid back.

As to why.. I'd say educating people is generally a good idea. Even if the money was a direct give-away.. I'd rather tax dollars be spent education people so they can contribute something to society vice welfare.

I do think there should be a little more oversight to ensure people who get these loans are doing something with at least a reasonable chance of turning into a job. If you want to get a degree in liberal arts or music .. burn your own money.

Re:Ron Paul should give away his money

[AmazinglySmooth]

I've heard that becoming a medical doctor is easy.

Re:Ron Paul should give away his money

[Goaway]

Because the government wants an educated populace to carry the country's economy.

Re:Ron Paul should give away his money

[jythie]

Because the government has an interest in the overall economy and long term planning? Student loans came out of the discovery of the economic advantage of the GI Bill.. it increases the number of skilled people available to industry and helps get good people the skills to be useful rather then only the people with money. Emergent systems like pure capitalism only go so far, there are advantages to thought and planning when dealing with complex systems.

So it is less that they are 'responsible' and more 'it is part of their job and to the country's advantage'.

Re:Ron Paul should give away his money

[MightyYar]

Because without government education, you end up with a large uneducated class of people. When a bunch of uneducated people have voting rights, they will vote themselves so many government programs that you'll wish you'd bent your libertarian views just a smidgen. Venezuela is a good example.

I say this as someone who's ideology is based in libertarian, but with a hefty dose of pragmatism.

Re:Ron Paul should give away his money

[hedwards]

Which is a really good justification for him shutting the hell up when it comes to issues of welfare. I can't personally afford to work for free, in fact most Americans can't afford to do so either. We just don't have the money in the bank to allow for that. Perhaps if the GOP kleptocracy would stop looking for new and innovative ways of stealing from the poor to give to the rich, we might be able to afford to give back more.

At the end of the day, any politician that can afford to do that, whether or not they do, has no right to suggest that we cut back on our minimalist safety net.

Re:Ron Paul should give away his money

[jareth-0205]

He gives back his salary every year. He makes NO money off of being a Congressman.

You idiot. He has enough money so that he *can* give back his salary. He's not and never has been living hand-to-mouth. That's the entire point the original post was making!

Re:Ron Paul should give away his money

[tibit]

The problem is that the federal student loans, while genuinely useful to some, have been exploited pretty much to death by the for-profit colleges. Those do powerful marketing and have pretty much established the idea that everyone should go to college, no matter what. It's the same with diamond jewelry: somehow a semi-rare rock is elevated to cult status, and every woman in the U.S. feels that getting a big one on a golden ring is cool and shit. The colleges merely took a good marketing lesson from DeBeers and applied it to a different market. The outcome is pretty much the same. Couples get into debt for shiny rocks. Students get into debt for college education that can be very well useless to them. Nothing new here, move along.

As much as I think some of RPs ideas are overreaching, I do believe that axing or at least reforming the federal loan program is a must. As an alternative to axing, I'd limit its availability to people who to non-profit schools. I'm sure a more extreme option exists, say limiting it to people who go to non-profit public schools.

Re:Ron Paul should give away his money

[_KiTA_]

What a great talking point. Do you have any evidence of this whatsoever? Because there are actual laws, regulations, and all sorts of other fun things (like the fact that this money has to be paid back and can't be wiped out by bankruptcy) that make what you're suggesting completely implausible.

It's a bit like the old "Don't help the homeless, they're really all rich and slumming it" meme that was going around when I was in high school. A fun way to distract ourselves from real problems.

Re:Ron Paul should give away his money

[BasilBrush]

Education doesn't just benefit the person educated. It benefits society.

Re:Ron Paul should give away his money

[jareth-0205]

Why is it the governments responsibility to pay those "with little to no money" way through college?

And I thought the American Dream was all about equal opportunity... about breaking entrenched class systems and allowing anyone with ability to improve themselves. If you have no way to save enough money to buy a good education, how is that better?

Re:Ron Paul should give away his money

[wintercolby]

Many of the "hippies" of the Occupy Wall Street movement got degrees in fields that typically pay well, from schools that are respected, in the hopes of getting jobs that paid well. It's a fact of economies that young workers take the brunt of high unemployment. When experienced employees become available, they are hired before inexperienced employees.

Re:Ron Paul should give away his money

[CRCulver]

And all those countries some are going to list for me with "free healthcare" and "free education" all have one thing in common, they are either failing or were bailed out by the U.S. of A.

That's a bizarre claim. Take Finland, for example: same welfare state as its Nordic neighbours, including universal healthcare and no tuition fees. It's doing pretty well economically, so it's hardly "failing", and they have refused to join NATO and provide for their own defense, so the USA is hardly "bailing them out."

Re:Ron Paul should give away his money

[DrXym]

There are actually people out there that sign up for college, get their grant money, drop out of college, and then repeat the same thing at another college a few miles away. I hope that's not what you mean by "direct give-away", but that's what's happening.

Then you prosecute them or force them to pay back the interest at a punitive rate. Loans are not abused by the majority of students and if it produces a more employable and educated workforce it is in the interests of the country to supply them. It's an investment basically.

Re:Ron Paul should give away his money

[BasilBrush]

Sadly Britain for one also ow has students that leave with large debts. Not as big as America - the vast majority of Universities are public sector, and fees are capped at £9000 per annum.

It's a shame. When I did my degree, 100% of fees were covered by grants, along with some proportion of living expenses, depending on parents means.

Sad to see things get worse rather than better.

Re:Ron Paul should give away his money

[fuzzyfuzzyfungus]

I have relatively little interest in the question of what Dr. Paul may or may not be doing personally; but that is sort of the whole point of paying politicians a salary.

On the minus side, you do run into situations where City Counselor McSleazy passes an obscure bill such that the clock for his retirement started when he worked as a volunteer at the library one summer back in high school, leaving him to retire at 40.

On the plus side, if being a politician actually pays in vagely the same bracket as other jobs requiring similar qualfiications, you don't have a class of "representatives" that is 100% either bought-and-paid for because they couldn't afford it otherwise, or economic gentry who can afford to retire from day to day work in order to focus legislating in the favor of the local gentry.

That's why, historically speaking, legislative salaries have been something of a contested issue between the proponents of approximately egalitarian democracy, and the proponents of limited-sufferage democratic aristocracy. Career politicians generally leave a slime trail, and it is hard to like them as a class; but if you can't can't earn wages as a legislator, you can be pretty much assured that legislating will be done entirely by people who have other ways of obtaining support...

Re:Ron Paul should give away his money

[donscarletti]

Salaries for congressmen is one of the cornerstones of a true democracy. Before that, only those with large passive income (through land and industrial investments) could afford to invest the time into politics. Removing such things would obliterate all hope that one may be represented by anyone who has any other interest than making the rich richer and preserving the status quo.

Ron Paul would like a return to the glory days of American democracy where leaders would not mooch off the state and instead draw an income from honourable means, like plantations in Virginia.

Re:Ron Paul should give away his money

[janeuner]

The average annual income for an individual with a high school diploma is $35k. For an individual with a bachelors degree, it is $50k.
Source: http://en.wikipedia.org/wiki/Household_income_in_the_United_States

For a married man in that tax bracket, the difference in income is taxed at 15%.
Source: http://en.wikipedia.org/wiki/Rate_schedule_(federal_income_tax)

The average annual cost of tuition at a public university in 2009 was $7020.
Source: http://en.wikipedia.org/wiki/Higher_education_in_the_United_States#Finances

Last year, 7.2 percent of those loans to public universities resulted in a default.

Assumptions: 4 years to complete a bachelors degree plus 1 year to start repayment and loans have a 3% APR and are dispersed in full at the start of the school year. Let's also say the government bears the full cost for all defaults, and the defaulter never pays a cent in taxes.

Subsidized Interest: $7020 * (1+2+3+4+4 years) * 0.03 = ~$3000
Marginal cost of default: $7020 * 4 * 0.072 = ~$2000

Marginal annual tax revenue from graduate: ($50k - 35k) * 0.015 * 0.928 = ~$2000

So, for a college student on a loan-driven ride through college, the total cost to the government is about $5000. That cost is recovered from said graduate within 3 years via increased income tax revenue. Since most workers will remain in the economy for another 30 years, this investment represents a 10:1 return on investment.

There are separate issues wrt private schools, MAP grants, etc. But this exercise almost always shows a substantial return on the investment. This isn't about poor lazy people. This raises people out of poverty, with a side dose of increased tax revenue and decreased welfare costs.

Only a fiscal lunatic would eliminate subsidized loans.

Re:Ron Paul should give away his money

[TheCRAIGGERS]

I do think there should be a little more oversight to ensure people who get these loans are doing something with at least a reasonable chance of turning into a job. If you want to get a degree in liberal arts or music .. burn your own money.

While it might sound good on paper to only give money to those careers that "matter", one should consider that the arts do provide much of our culture and entertainment.

Besides, do you really want somebody that would normally have been a liberal arts major blundering their way through engineering and building the bridges you drive across?

Re:Ron Paul should give away his money

[tmosley]

Wow, nice way to set up a situation where literally anyone who argues against your case has no right. Either they are independently wealthy, and they have no right to ask us to stand on our own two feet, or they take money from the government, and therefore they are hypocrites.

And how EXACTLY do you figure that student LOANS are a part of the safety net? Notice these aren't GRANT programs he is calling to end. Or did you forget about the tens of thousands of dollars of non-dischargeable student debt that you are likely stifling under?

Re:Ron Paul should give away his money

[Nadaka]

No there are not.

1: grant money takes time, you don't get it until half way through the semester. Long after nearly every school closes its late registration.
2: You can't get the same grant at multiple schools at the same time.
3: It is illegal to be enrolled in more than one school at a time (at least where I went).

Re:Ron Paul should give away his money

[Anonymous Coward]

Ron Paul can be creditably accused of many things, but being an aristocrat isn't one of them. He paid for his education with military service, and retired from medical practice (OB/GYN) to go into politics. He is at least consistent in his principles, and as honest a man as you're going to find in politics.

Re:Ron Paul should give away his money

[elrous0]

Why is it the governments responsibility to pay those "with little to no money" way through college?

It's not their responsibility, it's their INVESTMENT. It's in the government's interest to have a well-educated, well-trained populace for the same reasons it's in their interest to build roads and power lines--because it attracts good industry and economic development. What do you think would happen to Silicon Valley if only the rich could afford to become engineers/programmers? I tell you what would happen. All of those high-tech companies would relocate to Europe or China, or some other country that actually invests in an educated populace. The U.S. would slowly sink into 2nd-world status.

Re:Ron Paul should give away his money

[Nadaka]

LOANS. Loans get payed back, with interest. People who get student loans do pay it back. They have to because they can not go bankrupt on those loans. The only exceptions are those who become disabled and unable to work, and even in that case it is a decade long process.

Re:Ron Paul should give away his money

[jasenj1]

Your numbers work with people paying in state tuition at public universities. But how many people do that? You have to factor in where people actually go to school. One of the big factors of the complaint I've read about is the number of private for-profit schools charging $20+k per year.

Also, as someone else pointed out, high unemployment disproportionately affects young people. So we should see those default numbers climbing over the next several years as graduating classes find fewer jobs, and recent grads slip into bankruptcy.

And while I'm posting, let's not forget that there are State governments, too. Ron Paul is a VERY strong advocate of a smaller Federal government, but letting the States do what they want. He wants to eliminate lots of programs at the Federal level because the Federal government has taken over the country in ways it should not have.

States can run the same math you did and subsidize college education for their citizens.

- Jasen.

Re:Ron Paul should give away his money

[d3ac0n]

Because without government education, you end up with a large uneducated class of people. When a bunch of uneducated people have voting rights, they will vote themselves so many government programs that you'll wish you'd bent your libertarian views just a smidgen.

Except that we have a large educated class of citizens...

Who have used that education to take advantage of the system and have voted themselves so many government programs that...

Hmm... I think I have found a flaw in your logic.

The point is, of course, that one cannot spend money on government programs in order to SAVE money on government programs. You just end up with more and more government programs that spend more and more money until the whole house of cards collapses in on itself.

To put it another way: You can never spend enough or legislate enough to make life fair or create "social justice". If you really want the best for all, just get government out of the way and let people sink or swim on their own. You do them no favors by taking from Peter to prop up Paul.

Re:Ron Paul should give away his money

[tnk1]

You're right. He does have money and he doesn't need his government salary.

However, the problem isn't with what he does with his salary, the problem is with the situation where people are attacking Ron Paul instead of attacking his position. He is entitled to both his salary and whatever he has made in private life. And that doesn't make him any less qualified to make a point about what is needed to improve the country.

I don't live in Africa, but I doubt anyone would call me out about condemning abuses and corruption that happens there. The fact that I am not needy does not make me unqualified to make decisions to help alleviate the problem. Indeed, being somewhat successful might well make me more qualified to help other people be more successful. Of course, that doesn't mean I am the only voice that should be listened to, we do need the viewpoints of the unemployed, the students and the otherwise disadvantaged to make a good policy, but we seem to be arguing that only a needy person has any right to talk about the safety net, and that is just plain wrong. After all, it's the well-off people in previous Congresses who set it up to begin with, was it not?

Mind you, I don't like his idea of pulling the rug out from under the student loan system, but I don't like hearing talk about him being rich and therefore unable to empathize with anyone else. It makes me think that his opponents in this case have no better points to make than an appeal to emotion and the language of class division.

Re:Ron Paul should give away his money

[MrNthDegree]

There is no chance to be "raised up", the best college/university will get you is to the top of the social class you're already in (in this class-based society, which the not-so-well off try to forget). The more people who get a bachelor degree, the lesser it is valued. In order to compete, one needs to be above the rest. Therefore, loans will not help, the solution is to drive down the costs of getting that bachelor degree for those who are not-so-well off.

As an actual student living on below minimum wage and relying on the benefits system, I can tell you loans have never been and never will be the solution. Grants too will never be the solution - the solution is to make the system accessible to those on any income, by only inflating the costs only after graduate level. By having post-grads pay a small fee plus a percentage of their salary to fund those who have not yet graduated, the system would become fair regardless of income and social status - the only deciding factor would then be intellect and technical merits (entry requirements would be raised so as to prevent funds being wasted on idiots and lazy bums).

Re:Ron Paul should give away his money

[SlippyToad]

He is not a politician, he is a Statesman

He is an ignorant blowhard who thinks his medical degree makes him an expert on economics. Any problem that is too complicated for Ruin Paul to understand, he simply proposes destroying all affected institutions.

This isn't statesmanship. It's demagoguery. But you as many Glibertarian fanbois are so entranced by the simplicity of Ruin Paul's message that you apparently fail to actually think any of his ideas through to their conclusions.

Which are disastrous. Ruin Paul's political philosophy seems to be that since government has been unable to completely solve every problem perfectly, we should just stop using it. Of course, he forgets that all of these solutions, including the government itself, came into being because the original problems were real and in need of a solution that the so-called "free market" had failed to provide.

As it will fail to solve this problem as well. Doing nothing about a problem is not a solution.

I can tell you what happens to people who do nothing while living in some lotus-dream that it's all going to fix itself -- they end up HOMELESS, HOPELESS, JOBLESS, and DEAD. Your philosophy proposes treating all of our urgent social needs like a drug addict treats his personal needs -- by ignoring them.

Unfortunately, after we've paid the price by doing it your stupid way, YOU will not be around to help us clean up the mess. I'm pretty sure of that one. Lazy is as lazy does. And your philosophy is in a nutshell, LAZY. I have zero respect for it.

Re:Ron Paul should give away his money

[tibit]

This is insightful. Something to think about. The demand, though, is partly caused by availability of money. Private student loans won't be given out so easily, as they have fair risk, and would be subject to bankruptcy. It's the federal guaranteeing of stuff (FHA loans, student loans, etc) that creates bubbles, because it puts leverage where it doesn't belong. In a fairy world, poor/disadvantaged people should be able able to afford housing. In the real world, there's a point at which one realizes that part of those people being poor and disadvantaged is lack of financial planning skills. Federal programs should work on that first -- on genuinely teaching people how to manage their money, how not to get into debt, etc. Of course the banking lobby might not like that too much, since it'd cut into their profits...

Re:Ron Paul should give away his money

[Anrego]

I used to think that way.. why should my tax dollars taken from my paycheck which I work hard for go to someone else who contributes nothing to society.

But the truth is, while I didn't exactly grow up rich, I didn't grow up poor. It's largely random chance that I was born to middle class parents .. and as I didn't have to claw my way up from poverty, I try not to judge those who would have to in order to get to my lifestyle.

I don't have much problem with my tax dollars going towards helping out those less fortunate (I'm Canadian though, we tend to be a little more minded in this direction) .. as long as it's not being spent foolishly or abused, and with an emphasis on fixing the problem rather than just keeping the status quo.

Re:Ron Paul should give away his money

[Monchanger]

Government can not create wealth, the only thing government can do is distribute the wealth of others. It would be better that the money was not taken from the original earner in the first place.

I couldn't afford college. I'd never get a private loan - not at a reasonable rate I would go for. So the federal government did two things for me. First, it guaranteed my student loans, even paid the interest on half for a few years. Second, it gave me Pell grants, this "free money" you're bitching about. My state also contributed by letting me attend at half tuition first my local community college at then at the public University.

In the years since I graduated*, I've been bringing in multiple times my non-degree income, and paying orders of magnitude more in federal and state taxes. In five years I've more than paid back in federal and state taxes the above amounts of "free money", and I've never missed a loan payment. That wealth was not created by private business - it was created by government, despite Dr. Paul's protestations. And I've got decades more to work, contribute back, and lessen the "burden" on you. You're welcome!

So that's why the government needs to help people who can't afford college. Because people way smarter than privileged pricks like you have a LOT to contribute to society if only given a chance. But hey, don't let reality shatter that pink fantasy world you Ron Paul cultists live in. "Taken by force"- ha! What a bunch of smug, selfish sods you lot are.

* in three years while working during all but one semester, so go fuck yourself if you want to complain about "your" money being "wasted". Your problem isn't with us poor kids- it's the rich kids who don't appreciate daddy's money who are inflating demand for education without producing value for society.

Re:Ron Paul should give away his money

[metiscus]

Because people way smarter than privileged pricks like you have a LOT to contribute to society if only given a chance.

I worked full time to pay for my college education; I did not receive a cent of aid or funding or loans outside the standard in-state tuition that is available to all. I am not certain of what "privilege" that you are acrimoniously referring to. I was afforded the privilege of working to pay my own way and earning my current level of success without the assistance of the federal government. I invested in myself and the return on my investment has been significant. I am glad that your education has enabled you to become such an example of astute and open minded dialog as your reply to my post clearly illustrates.

"Free" money

[tmosley]

Subsidized student loans are "free" money that enslaves most for a lifetime, moreso today than at any time in living memory. There was a time when working part time over the summer would be enough to pay ALL college expenses, now you have to work some 35 hours a week during the semester plus full time in the summer and over breaks. This is outrageous.

Re:"Free" money

[CRCulver]

Subsidized student loans are "free" money that enslaves most for a lifetime.

I must agree. Look at young people in other Western countries: when they finish their education, they have the option of travelling for a while, or they can start to do seasonal work, save up their money and spend the rest of the year at leisure. Meanwhile, American students are frantic to find a job as soon as they graduate, because the demands for repayment come 6 months after their graduation date and there's no letup. By the time many have repaid their loans, they feel too old or are too burdened with a family to drop things for a little while and pursue whatever interest they have.

Re:"Free" money

[garcia]

Ahhh, yes. The old misconceptions about college!

College is not necessarily a free-for-all experience where you spend the weekends drunk/recovering and Thursday nights doing the pre-party for those who are suitcasing it that weekend.

No, college is about being an adult and making adult decisions. I've worked for colleges in a variety of roles over the last 10 years and two of those years were in admissions for a community/tech college.

Here in Minnesota you can go to college and complete your undergrad for very little money. You start as a PSEO student in HS and the state pays your way through many of your first two years of college undergraduate credit without your taking out any loans. They count towards your HS diploma AND your college degree.

If you don't choose to go that way (or even if you do) you can enter the state's community college system and live at home (working part time hopefully) while taking college courses at costs far lower than you'd spend elsewhere--especially out of state.

Then you move on to an in-state four year institution, preferably close to home so you don't have to pay many boarding expenses and ride mass transit or carpool to save on driving costs. Then you complete your degree with very few student loans and nothing hanging over your head.

---

However, most people instead have dreams of grandeur and take out ridiculous student loans to attend some out-of-state school or in-state private institution which sets them back far more than they could ever afford. Instead of checking the lists for the mid-life salary range for a graduate of one of these schools they instead check the Best Party Lists instead.

No, this doesn't apply to everyone--like those of us who had a scholarship or some other way of affording school without loans lasting forever--but it seems to be a growing trend of those complaining now.

You are a legal adult at 18 years of age and regardless of your (and your parents') poor choices for your future does not mean that you could not have chosen another path.

Re:"Free" money

[CRCulver]

If my cultural insight is of any value (I'm from norway) the travelling is usually done after high school, most people go to work fresh after finishing their college education.

FWIW, I'm a postgraduate student in Finland. I know a load of people who, once they finished studying, went WWOFing in Australia for a year, or now they are accustomed to work in Finland for the summer and then travel during the cold months. Even if it's a minority of people who decide to pursue leisure like that, at least they can. The average American university student doesn't get a chance to do fun things like that.

Re:"Free" money

[vlm]

There was a time when working part time over the summer would be enough to pay ALL college expenses

20 years ago I found sorta-full time (lets say, 30 hrs/wk average) minimum wage work, year around, easily paid for a nice live-by-myself apartment in a nice area, a cheap and rusty yet reliable car, and full to part time tuition while earning my associates degree. No benefits, no health insurance, no dental, nothing. That degree led to a "real job" that had benefits including full tuition reimbursement for my bachelors degree...

Since then, minimum wage has gone from 5 something to 7 something, gas has gone from 90 cents a gallon to $4, my old bachelor apartment rent has gone from $400/month to $575/month, and tuition at the local school has quadrupled due to federal student loans...

The other interesting issue is tuition reimbursement 20 years ago was typically unlimited, other than having to be accredited, C or better grade, and vaguely related my job and/or employer. Then it dropped to $5K/year which at that time was pretty generous, going to school part or quarter time 3 semesters per year, I was paying about $160/credit long term average including all books and fees, I usually spent less than $4K/yr, I had to be careful to submit each semester's expenses in the proper calendar year but it was no big deal.

Since then, reimbursement remains at $5K/yr, but full time tuition at the local engineering school a couple blocks from where I work has risen to ... $540/credit (I checked online while writing this), before endless fees and parking permits and $200 each textbooks. Let's round that up to $640/credit. So I would only be able to afford about two semesters per year were I to start another degree. Has the value of the education provided increased by a factor of 4 in the last 20 years?

Re:"Free" money

[MrCrassic]

Here in Minnesota you can go to college and complete your undergrad for very little money. You start as a PSEO student in HS and the state pays your way through many of your first two years of college undergraduate credit without your taking out any loans. They count towards your HS diploma AND your college degree.

If you don't choose to go that way (or even if you do) you can enter the state's community college system and live at home (working part time hopefully) while taking college courses at costs far lower than you'd spend elsewhere--especially out of state.

This is absolutely true. However, when you as a high school student see that Goldman Sachs, NASA, Google, Microsoft and tons of other colleges like go shopping at the "out-of-state or in-state private institutions" most others with "dreams of grandeur" flock to, can you blame them for taking up these huge loans?

To worsen matters, it's also super easy for students to get loans; you can even get pre-approved for them! It's also easy to keep taking out more loans without any restraints whatsoever. For someone taking up a degree that actually pays out after college, this isn't a terrible investment since those kids can actually pay it back and still live reasonably comfortably. Unfortunately, it's just as easy for kids taking up degrees that are ONLY useful for graduate school, a nice way to incur even more debt.

Why aren't loan applications also judged by school studies, performance and real-world expectations for paying them back?

Re:"Free" money

[RazorSharp]

You can preach personality responsibility all day long, but that doesn't change the fact that it's bad for society when we just let the vast majority fail. That's why prison populations are growing at outrageous rates. Why unemployment is skyrocketing. Why the United States is in decline.

What you consider 'very little money' is a whole lot to some people. And mentioning post-secondary options for high schoolers is just insulting. I wasn't able to attend post-secondary because I didn't have a car. All the kids who were in post-secondary classes when I was in high school were the ones with parents who could buy their education anyway. Also, a student has to be an above-average performer for post-secondary. How do you expect someone with uneducated parents to perform at that level in high school?

This attitude of, "it's your fault if you don't succeed, society has no business ensuring that you do" is the same attitude that has led to all the problems this country is facing. The college students who spend their time getting drunk and partying aren't the ones who cut their teeth just so they can attend. They're the rich fucks who have all their bills paid by mommy and daddy.

Re:"Free" money

[ohnocitizen]

Mod parent down. I went to a state school which saw budget cuts and associated tuition and fee raises. Even with loans and scholarships, my undergrad cost a lot. Why did I go to a state university and not the local state college? Because like it or not where you get your degree does matter - a lot. People look at the reputation of your school when it comes to jobs or graduate school. Different schools offer different majors, different classes, internship opportunities, and other "perks" that can change the course of your career. Higher quality professors tend to get recruited by the more expensive schools, even the public ones. If you want to get involved in research your best bet is at a University with a graduate school, not a community college. Those "dreams of grandeur" you speak of are simply the dreams of students looking to have a career - which in other countries they manage to do without crippling loans because higher education is subsidized more heavily than here. Those "ridiculous" student loans can take forever to pay back. Look at median income and average income, and then figure in a $40k loan. That's $10k a year. How long would it take someone at the median income to pay that back? How about average income? How about your income. Now keep in mind some of the crazier loans are not for undergraduate but for graduate school - especially medical and law. Not everyone who gets a law degree graduates into a 6 figure salary at a corporation. Some work for nonprofits or in law-enforcement pulling in far less, but with loans no less high. Now get the hell off your privileged high horse and stop telling Americans that the American Dream is still alive - just not for them. Tell anyone who cannot afford a decent college degree to go be a plumber, or to go to a community college that doesn't have the courses in any of the subjects they want because they cannot afford to go to University. Myself? I'm going to advocate for making college cheaper without shattering the backbone of US financial aid like Mr Ron Paul seems set on doing.

Re:"Free" money

[tibit]

That's pretty clever. It fixes the problem of out-of-work people being hassled for money. Alas, it does not fix the problem of people who don't need to be in college, nor does it fix the rolling education bubble: easy college money -> many people with college education -> devaluing of college education and requiring it for the most menial jobs. I personally think that even in the academic system itself there are plenty of teaching jobs that should require neither tenure nor being a career academician. As an engineer, I'd like it very much for most undergrad courses to be taught by career design engineers, perhaps with "only" B.Sc. to show for their formal education. A Ph.D.-holding teacher doesn't magically "enrich" a linear algebra course only by holding his degree. An engineer, OTOH, might well do because ultimately he/she would have plenty of real-life applications to show.

Re:"Free" money

[Overzeetop]

Part time is not necessarily true, unless your daddy could get you a good job. There were lots of folks in my Father's era (1960s) who would work all summer to pay tuition for the next year. I did a quick search for my state, and the most expensive state school is UVa.

In 1970, UVa was $330/semester plus $154 in required fees, or $968/yr.

Minimum wage in 1970 was $1.60/hr. So it would take just under 700 hours of a minimum wage, or a bit over 4 months, to make tuition (after taxes). Since school was only 7 months long, that meant you would have to work over semester break to pay tuition.

If you could get a job with any reasonable skill, about 50% over minimum wage, ($11/hr relative to today's min wage, which you can get as a day laborer or in retail) you would need to work less than 450 hours, or a full-time "summer" job, with a few days after class ended and again before classes started to pay tuition and fees.

It was a regular possibility to work a full time summer job and pay tuition and fees for the year. At less costly schools, you could work summer and breaks and come very close to tuition, fees, and room/board. It wasn't easy, but you could do it. There are no jobs you can (legally) get today as a college student that will cover the $16,000 ($27,000 with room and board) working 500-600 hours over summer break. You would have to make the equivalent of $70,000/yr before taxes - more than the average college graduate - to cover fees, and $120,000/yr equivalent to cover all basic expenses.

That's a far cry from being what it was in 1970, much less 1950.
           

Of course it does

[Elros]

In a lot of ways, they do inflate the cost of education. However, the quality is also going down. The bigger problem is that the demand is being artificially inflated at the same time. Nearly every job requires a BS or BA...even if they don't care which subject. A University should be a place of higher learning and research, not a factory for just the next step in education.

I agree that eliminating the student loan program will help. However, there need to be a lot more changes then that.

Re:Of course it does

[Corporate Drone]

Nearly every job requires a BS or BA...even if they don't care which subject. A University should be a place of higher learning and research, not a factory for just the next step in education.

Umm... that's exactly the idea! The subject, in some ways, shouldn't matter -- after all, it's higher education, not technical school! If you spend the time working on a degree, regardless in which department, you've ostensibly grown in knowledge, in a "Renaissance 'man'" kind of way! It's precisely in its mission as "not a technical school factory" that the university exists!

Re:Of course it does

[antifoidulus]

Yeah, it's always amazing reading biographies about people who grew up before around the 1980s, namely the huge # of opportunities they had without having to go through the whole corporate/educational grind. Look at how Hemingway lived and worked, he was far from independently wealthy, and yet he managed to maintain a pretty decent lifestyle working as a foreign correspondent, a gig he was just able to sort of pick up. Ditto for Steve Jobs, he was given opportunities in places like factories and engineering firms that would never even look twice at a kid with almost no experience and little formal education beyond high school. And it wasn't like Jobs was well connected or even incredibly good at engineering, pretty much anyone in those days could get a job like those that Jobs had just by showing up and showing that you weren't a complete dumbass.

Nowadays I doubt you could get a job at Apple doing anything besides retail or janitorial work without a degree.....

Re:Of course it does

[swillden]

On the other hand, why would employers be demanding a college education if they didn't see that it actually makes a significant difference in employee performance? They could hire people for less money if they didn't require a degree, so if less-educated employees could do the job, employers would be all over it.

The only reasonable conclusion, IMO, is that it does matter. Of course, it's entirely possible, perhaps even likely, that the education isn't so much the cause of good performance as the education and good job performance both result from the habits and character of the individual. By that I mean that the sort of industrious, intelligent person who will be a good employee is also the sort of person who will pursue and achieve a good education.

But I don't think so. My former employer, IBM, long had programs where they provided educational opportunities for factory workers so those people could advance within the company. I worked with a couple of gentlemen who had taken this route, starting on an assembly line, bolting computers together and ultimately achieving technical and managerial leadership positions in the company, getting the equivalent of a college education in the process. I noticed a couple of things about these people. The first was though they were given greater responsibilities at the same time they were getting their educations, those responsibilities were limited -- and even still they felt underqualified and somewhat overwhelmed by them. They, at least, felt that the education they received was essential in their ability to succeed.

The other was that I always felt they were less effective than they could have been if they'd had a "normal" college education. IBM didn't bother providing, or requiring, a liberal education curriculum and the result was people with deep knowledge and skill in a narrow focus. It was less problematic for the technical guy; he'd earned the equivalent of an MSCS, and within the context of software and hardware he knew his stuff -- but don't expect him to understand much about the social or historical context of his work. For the manager, he'd earned the equivalent of an MBA and again he knew business, negotiation and the economic theory of pricing, and again he lacked the broader education, but for him that lack really caused him to make some, IMO, poor decisions.

But the key point of my anecdotes is this: IBM is big enough and at one time had a large pool of low-skilled employees they could search for capable people to educate in job-specific skills and advance. And you know what? They more or less abandoned that approach. Partly because they shipped all manufacturing overseas and no longer had many unskilled positions from which to draw, but I think also because those trained-up people, however motivated, intelligent and hardworking, were actually less effective than their college-educated counterparts. Instead IBM disbanded its "IBM University" programs and shifted to the more common method of offering to subsidize a normal college education.

I'm convinced that they did this because they found that the sort of education offered by universities did a better job of preparing people to be effective technologists, businessmen and administrators.

Re:Of course it does

[tibit]

As for the job requirements: this is very true even outside of the U.S. I have a first hand experience in a tax-related govt job in Poland. If you get employed, they expect you to get a master's degree ASAP. Then, they'd like to you get a Ph.D. as well. All that cost for what is essentially a bureaucracy where if you know high-school maths and pick up some law along the way, you'll do fine until retirement. There's plenty of countries in Europe where bank clerks are expected to have BS degrees. The fuck?

Re:Of course it does

[tibit]

I don't think we need bank clerks or office paper pushers with undergrad degrees. It comes at a big cost to the society, and those jobs do not require that kind of education at all. We don't need renaissance people giving out change, you know. And you don't need to be a renaissance man to be ethical in doing your job either. As far as I can tell, all high-level crooks (anywhere in the world, in any "subject" -- whether politicians, bankers, etc) are educated quite well.

Re:Of course it does

[tibit]

You've just eloquently stated that the problem is with high schools. Fix those. Don't apply college as a band-aid. If, over time, undergrad education turns into a joke (as it seems to be so far anyway), will you propose graduate degrees to "fix" that? Sigh. All the money that gets thrown into undergrad degrees as a band aid should be thrown at improving high schools, that's all. I also think that there needs to be a reform of boards of education -- unfortunately, democracy seems not to work there, as it caters to the constituency. That means that impoverished areas will always offer poorer education, but not because of lack money, though, but simply because the boards of education have to cater to wishes of people who often don't give a fuck about quality education at all.

Re:Of course it does

[RatPh!nk]

I think this hits part of the nail right on the head:

Nearly every job requires a BS or BA...even if they don't care which subject.

This is just wrong, IMO. IMO college is not trade school (not that there is anything wrong with trade school), but it has been turned into one by this notion that pretty much any job that is not Jiffy Lube or the Quickie Mart requires a college degree. There was some research published recently about gains in knowledge and critical thinking skills, this was the conclusion:

Students majoring in business, education, social work and communications showed the least gains in learning. However, the authors note that their findings don't preclude the possibility that such students "are developing subject-specific or occupationally relevant skills."

In other words, there were learning "subject specific" or occupationally relevant skills", we have a name for a program like this -- trade school.

Students who majored in the traditional liberal arts — including the social sciences, humanities, natural sciences and mathematics — showed significantly greater gains over time than other students in critical thinking, complex reasoning and writing skills.

Free market fairy

[Anonymous Coward]

Free market theory is like Communism. Sounds good on paper, but when you apply it to the real world, it's a disaster.

Re:Free market fairy

[tmosley]

Yes, like the last time it was applied, from 1875-1913 in the USA. You know, the time where the US went from being a colonial backwater to an industrial superpower.

Oh, or did you mean to imply that the disaster that is today's economy was caused by the free market? Well, you can't have a free market when the government is intervening every five minutes to keep some company from collapsing. Can't even have one when you have a central bank that sets interest rates. What we have now is a MIXED market. The MIXED market has failed us.

Re:Free market fairy

[imric]

Nah it's the "No True Scotsman" of economic theory. The closer you get to it, the fewer regulations, the worse things get.

Apologists always have 'reasons for it though', and it starts with not considering voters to be part of the market, and believing that regulation comes from an entity independent of the people. That's why they are currently trying to make people believe that they aren't represented by our representative government. They are working very hard online to convince people of this, too.

In any case, it's always 'No TRUE free market has (X)' or 'a TRUE free market would need (Y)' as an excuse as to why things get so much worse when 'free market' principles are applied. It's really amusing to hear adherents claim that no matter how hard their 'solutions' fail, they would have worked if it was a TRUE 'free market'. Its a matter of dogma, of faith with most of them. Finger-pointing is a way of life for the free-marketeer.

Almost as funny as the current ifn-yer-aint-fer-us-yer-agin-us meme that anyone against deregulation or for common worker representation at contract negotiations is Socialist/Communist scum trying to destroy the economy - when deregulation is what did it this time, around, and lack of regulation is what did it last time. And the ridiculous notion that we should trust 'market forces' and some magic invisible hand to adjust the market (while ignoring the fact that the people are the market, and the voice of the people is the 'vote', so gov regulation IS their invisible hand) as the only answer? That depends on all things being interchangeable, and there being an infinite job market not subject to supply and demand...

The 'Free Market' would seem to be a frail thing indeed - so frail it could never exist or last, even if it worked...

Interesting...

[bradgoodman]

Extremely interesting...

I'm no republican, and at first I was thinking "here we go again - another GOPer trying to take money away from the little guy" - but I think he has a valid point.

People would only be willing to spend a hundred-grand on education if there was someone standing right there willing to easily loan them a hundred-grand to do so. I've always thought there was some odd market force that was allowing the cost of education rise in such a bizarre way - this is probably it.

If if were really up the the "free market" - i.e. there were no "special" loans, scholarships, or free-rides, people would be willing (and able) to spend a LOT less. Schools would have to come *WAY* down in price to get people in. It would be a very different landscape.

Re:Interesting...

[Phrogman]

A lot of those schools exist to process students and take their money. They are money making institutions that happen to award credits when you pay the exorbitant fees. A lot would shutdown if the loans system was removed.

Another problem is that until the prices lowered, superior education would only be the purview of the rich - RPs kids would do just fine, but the average person's ability to help get their children into a higher level of living would be removed. People say there are far too many university graduates, and far too many positions for which a degree is the expected minimum, and thats definitely true. I have no degree and many many jobs are closed to me, despite the fact that I could easily do many of those jobs. However no one wants to be amongst the first people who no longer get the benefit of a good education, when the other side of the equations (business/Government) is not going to change their standards any time soon. Why should they, they can ask whatever they want, at whatever rate of pay, and someone will come along and take the job, no matter how awful it is.

At my old Alma Mater the pressure seems to be on generating income, so the Engineering Department gets brand new buildings, while the Fine Arts department only got out of its WWII Quonset huts a few years ago - they had been there for 30 years at least. The university education system is focusing on things which can turn quick bucks (business degrees, Engineering degrees and people getting the school patents, new business development), all because the Government has stopped supporting the schools and they are expected to survive on their own. The problem is that the nature of education gets changed in the process.

Re:Interesting...

[tbannist]

Let's put in economic terms, Ron Paul is complaining that too many people are able to go the College, thus driving the price up (Increased demand). His solution is to make sure less people are able to go to College (Decrease demand).

Frankly, it's nearly impossible to predict accurately what would happen to tuition if no government intervention were present. It could go down because people are less willing to spend present money then future money, or it might go up because government run colleges were shut down or privatised thus lowering demand and removing a stable price alternative.

Maybe private loan organisations would just take over when the government stopped student loan programs. Maybe you'd make the debt burden a lot worse for the average student. It's far too complicated for me to accurately predict the result and frankly, I doubt if even the experts could predict entirely what would happen.

I suspect cancelling the student loan program will have no discernible effect on tuition prices. I think it may slightly slow the growth rate of prices, but it will not do so to such an extent that it could ever be conclusively proven.

Re:Interesting...

[at_slashdot]

People seem to assume that all that money result somehow in school profit, the fact is that schools can hire more professors and pay them better, I don't think that's "wasted" money (but I'm biased I work into a higher ed institution as a computer monkey). So actually these loans indirectly support teachers and schools, is that something really bad with that? Also, I personally wouldn't have had the chance to study otherwise, I an immigrant, came here with $600 in my pocket out of which $500 went for the rent deposit the next day, I don't know what I would have done without the student loan.

Re:Interesting...

[the eric conspiracy]

If you discontinue subsidized loans, loan costs will go up and education costs will go down. So you are transferring money from universities to banks.

I really don't think that's the way you want to go.

Re:Interesting...

[Inglix the Mad]

The problem isn't the loans in a practical sense. The real problem is companies driving degree inflation. Example: early Internet days, how many ISP technical personnel had 4 year degrees? I'm talking about the guys maintaining the lines / switches / routers. Not very many at all. The guys in charge often did, but even that wasn't guaranteed. I, personally and through company programs, trained many High School kids on the intricacies of R&S. Try getting in today without at least a 2 year degree. A 4 year degree will be preferred, if not required. Heck, even help desk which is entry level, often requires a 2 year.

Companies drove us here because a 4 year degree student is "better" even if it doesn't really matter.

Re:Interesting...

[chrb]

Yes, it is an interesting point but it relies on some assumptions that may not be valid:

Assumption: Loaning money to some students puts a significant enough amount of money into the system to cause the cost of education to rise for everyone.

Consequence: Take money out of the system. Money available to education institutes falls, but they manage to provide a similar level of education with lower costs. Costs fall for all students.

Alternative consequence #1: Money available to education institutes falls, and the level of education falls. People complain that U.S. educated scientists, doctors etc. are not as good as they were. U.S. competitiveness falls, imports more foreigners to keep up.

Alternative consequence #2: The reduction in federal loan money is not significant enough to cause a drop in education costs. The high cost is driven by wealthy students, families who have saved for many years, etc. and not by students on loans. No change.

Alternative consequence #3: Large numbers of intelligent young people can't get an education, and can't get a job, become disillusioned with the state, vote for political candidate who offers free education based on successful models in other places (e.g. Europe).

Re:Interesting...

[roman_mir]

yes, fewer people should go to universities, this is correct. All these people talking gov't guaranteed loans, which means constantly increasing prices and worsening quality, to study worthless shit that is absolutely useless IRL especially to pay the loans back, this stuff must stop.

All this "grading on the curve", all of this nonsense, where nobody fails, all of this must stop. It's only there because the gov't guarantees the loans, and the colleges know it. They won't fail anybody, because why? The money transfer continues, there is NO COMPETITION ON QUALITY between any of these universities and colleges, because WHY COMPETE? There is no point in competing at all, when the money is guaranteed so everybody keeps taking on more debt, there is no reason to compete.

It's not like if you compete, more people will come to you, because your degrees are worth more. No. It's like: all this money is flooding in, whether it will come here or will go somewhere else, this money will be allocated, guaranteed and spent on this so called 'education' that is worth less and less, so more and more of it is taken. This also has a nice side effect for the administration, that all these students are not coming out of the universities sooner, so the unemployment isn't growing as fast, as it would if they did come out.

Most of the people in these universities and colleges should never have had the ability to go there. They should have gone to maybe trade schools or become apprentices, but the real apprenticeships are also affected by the nonsense money and regulations, such as minimum wage for example and all the various 'non-discrimination' stuff, that brings in lawsuits.

No, the gravy train needs to be brought to an end.

The gov't will come out with a bail out plan for the students, I know it, but if they do so, if they actually bail out the students and let them not pay out the loans (which is wrong, if this is done, it should be discriminatory and debtors must be means tested), but if it's done, it can only be done if the gravy train stops, otherwise it's just another gov't moral hazard - an invitation for more loan taking, because why not? If gov't bails the students once, everybody will expect to be bailed out.

Same thing they did with the banks and are doing with all these home loans. It's all gov't nonsense, and it's economic illiteracy and it's destroying the economy.

Re:Interesting...

[roman_mir]

It IS only about the money, it's a bubble, like housing or Internet before it or the USD and bond bubble. You can't fail a student and keep him/her in college for too long, because you are forgetting that the GPA also 'matters' to get your degree, and even though in principle you could keep failing somebody to keep them 'studying' longer if they are guaranteed a loan, don't forget that some will quit if their GPA is low enough, they don't feel they can continue, because they won't make it into a program.

But it doesn't matter, they do not fail anybody because so many of the people who shouldn't be there are in programs that are near IMPOSSIBLE to fail. It's not all high math and astrophysics and brain doctors out there, it's sociology and humanities of all sorts, maybe literature, etc.

Of course

[TheSpoom]

Because deregulating financial matters always ends well.

Re:Of course

[goldspider]

Since when does "subsidy" == "regulation"?

I learned the value of money by paying as I went..

[teambpsi]

I don't want to be "that old guy" -- but I didn't qualify for student loans in the 80's & early 90's because my parents were in that bracket where they were supposed to be able to contribute, but just couldn't.

I had up to three part-time jobs while doing my undergrad, and I definitely wanted the education -- I found that as "consumer" I demanded more from my instructors for my hard earned cash.

In the end it made me who I am, and I subsequently went on to get both an MS in Software Engineering and an MBA recently -- both paid for with cash that I earned and saved.

Sure it took a little longer to finish the degree's and barring Alzheimer's, the lessons learned all around will be mine for life!

Re:Why is this a problem?

[CRCulver]

Where does it say that the Federal Government can give away my money to other people?

Taxation is a valid function of government and has been since 1787. And if the government was going to spend the money you pay in taxes solely on you, then it would hardly need to raise taxes to begin with.

Acquaint yourself with American history. Some degree of redistribution of wealth has always been part of the operation of the federal government. Now, you may disagree on particular spending, and you have a right to choose representatives who might push for change -- it's taxation with representation, a just way of doing things. But your rhetoric is out of touch with American democracy even as the Founding Fathers conceived it.

Re:FP

[tmosley]

Not having worldwide military bases is "isolationist"?

Then I guess it is time we join the rest of the world in being "isolationist".

Fixing Student Loans

[sanosuke001]

Student Loans should include two things:

1. Fixed low-rate loan (2-3% even for private loans)
2. Allowed to be paid with pre-tax income (like money put towards retirement etc)

If they want to remove the government's involvement and make it private only, these rules should still be added. We should be helping student's get through school to make this country a better place.

Re:Fixing Student Loans

[nedlohs]

So basically allow such loans to be even larger than they are now and hence college prices to be even higher. That doesn't seem like such a great plan.

Here's a slightly different idea:

1. Ditch the private lenders entirely. The government directly loans the money (of course given the state of the government's finances they'll borrow is from another lender anyway).
2. Have it be paid via the IRS - if you have such a debt and you get 1% (or some other small number) added to your tax rate in each bracket except the 0% one. That money pays off your loan debt.
3. Optionally have some early payment incentives so paying more than the IRS enforced amount sees each dollar paid remove $1.10 of debt (or whatever, maybe add a minimum payment, and a time limit - only while still as college, etc).
4. Leverage the large purchaser status the government could be at by making the students not receive a loan but a place at college.
5. The government buys places at colleges around the country offering them what it thinks is a reasonable price (after some negotiation). Colleges are free to take it or leave it, they are not forced to sell the government any places and can sell the government X places and sell another Y places themselves at whatever price they want.
6. The government could then assign a debt equal to the cost to the student or subsidize the by charging the student a lower amount.
7. There are now limited places the government managed to purchase, so rank students via test results/etc and hand out places to the better performing students first. Tweak the allocations to further whatever crazy social policy you want this week.
8. Collect underpants.
9. ???
10. Profit?

Of course Ron Paul would hate such a plan. And he's probably right, implementing at the state level would likely work just as well.

Comment removed

[account_deleted]

Comment removed based on user account deletion

If you can get a $60,000 loan for school

[assemblerex]

All of the sudden all the schools cost $60,000.

Mind the gap, Mr. Paul

[technomom]

He'd better have a plan for the huge bubble he's about to create in between the time when federal loans are cut off and colleges/universities actually lower their prices. It's easy to say these things on paper, but there's always a lag and that's where the problems start. See the Medicare "Donut Hole" for an example of that.

Re:Ron Paul is an idiot

[ahow628]

Tadaa!!! http://www.time.com/time/magazine/article/0,9171,2071147,00.html

Re:I wonder who he blames when his car doesn't sta

[tmosley]

I guess the fact that higher education costs are spiraling out of control even as the jobs these degrees are supposed to help you to get have all but disappeared means nothing to you?

If you like indentured servitude so much, why don't you use your useless advanced degree to build a time machine and go back to 1720?

Screw the poor and lower middle class!

[RazzleFrog]

Of course, the best solution to the shrinking middle class is to not educate the poor and lower middle class. Let them be happy with their barely literate high school education and mind-numbing menial labor jobs (which by the way are in other countries now).

Do the Republicans have any sane candidates? It makes being and independent really tough.

Same goes for healthcare

[Anonymous Coward]

The reason a broken leg costs so much to fix is that the doctor, nurse, and hospital administration are all paying student loans. On top of that doctors are having to pay for insane insurance coverage.

If getting an MD wasn't so expensive then healthcare wouldn't be so expensive. I hate that we're always talking about how we pay for healthcare instead of how to make it cheaper.

Re:Same goes for healthcare

[bennomatic]

That's right. My poor doctor is living hand-to-mouth! His auto leases alone amount to half of what I take home a month! And that 16-room house isn't paying for itself! And lord almighty, there's no way that his four kids are going to a public school where they may have to sit next to someone with brown skin! Thank goodness for the generosity of pharmaceutical companies, or he would never get that fourth, fifth and sixth golf vacation per year!

And I'm sure that administrative and profit overhead for private insurance providers have NOTHING to do with general costs in the industry, either!

Re:I learned the value of money by paying as I wen

[maxwell demon]

Sure it took a little longer to finish the degree's and barring Alzheimer's, the lessons learned all around will be mine for life!

The lessons obviously didn't include the correct plural of "degree". :-)

A trillion dollars in student loan debts

[tomhudson]

The education bubble

"students are borrowing twice what they did a decade ago after adjusting for inflation" and in the past five years total outstanding debt has doubled. That compares with falling debt on loans for houses and credit cards.

Remember, that's a trillion dollars of debt that can't even be wiped out by bankruptcy, unlike the previous bubbles of the dot-bombs and real estate.

Re:A trillion dollars in student loan debts

[Kryptonian Jor-El]

Take out credit cards, pay the loans with them, file bankruptcy. Profit?

Re:A trillion dollars in student loan debts

[Rockoon]

Sure, so then those of us that did not benefit from the schooling that the loans garnered will also have to pay for them. Thats such an awesome idea that I have come up with a similar idea.. I think I might mug you in the dark of night and take your cash and valuables.

Re:A trillion dollars in student loan debts

[JoeMerchant]

I got one of the earlier student loans in 1984-88. During those four years, tuition at my U cost $60K, $10K in 1984-5, then 13K, 17K, and finally 20K in 1987-8. We didn't have anything else to protest, so some (not me) marched on the president's office to protest tuition hikes. Me, personally, the U and the state were giving me scholarships that meant my out of pocket tuition costs dropped from $3K in 1984-5 down to 0 by 1988.

College costs will drop when employers start hiring people who didn't go to expensive colleges and giving them the same compensation as those who did. It doesn't matter if the Feds, or your church, or your great aunt Tillie is financing it, if there is a cost-benefit advantage, the cost will rise until there isn't.

The opposite side of Ron Paul's thinking would be to inject government cost controls on a select number of highly regarded universities (State schools?) and make a respectable, employable college education affordable as competition for the endowment based institutions that are fattening up their war chests with inflated tuition.

Re:A trillion dollars in student loan debts

[tomhudson]

You're absolutely right. Originally, the overhaul was supposed to get rid of the non-performing for-profit colleges. Turns out that well over 90% would have been disqualified for making student loans, so ... rather than push through the reform, they watered down the criteria.

Yet another example of government regulatory capture.

Re:A trillion dollars in student loan debts

[tomhudson]

You're still going to end up paying for it one way or another no matter what. People laboring under a huge debt that was secured by crappy for-profit institutions pushing bogus courses that go nowhere (which is what the majority of student loans are for nowadays - the educational equivalent of "rat farming") are not going to be contributing to the GNP.

Ending most subsidies would fix this problem fast and get rid of the leaches ("leaches" in this case being the educational institutions milking the subsidy system).

Re:FP

[Anonymous Coward]

Problem is, the rest of the world kind of sucks. America must be different. We do not suck, and thanks to being so awesome that we can't keep all the awesome on our own soil, we need to annex additional territory now and then to spread it out. What's wrong with that? If you want to live in an isolationist regime like, say, Finland, no one is stopping you. There are dozens to choose from, suit yourself!

Yes, they do. But wrong solution.

[eepok]

The Federal Student Loan program definitely increases the total cost of education... well... in a way. What it does is guarantee private (and public) businesses and departments revenue in the case of price increases.

Corporately-controlled housing is very aware of this and that's why rent is constantly and significantly going up around universities. When housing prices go up, the financial aid office figures it out, and financial aid awards are adjusted accordingly. Same with the general price of books, fuel, staff, administration, and faculty. But all that means is that when costs go up (either by choice or not), more loans are pulled out for each student and the students have to pay off even more in the future.

So yes, it's a problem. But the elimination of the Federal student loan program would only open up the field to private banks... and we already tell our students to do everything possible before getting a private bank loan. They're ruthless with their interest and pay schedules.

What's the solution? Here's a start. It just MAY be based on my experiences...

Step 1: Each public university (or uni. system) should have a salary cap on all administrators. The highest anyone should be paid for helping to run a public university should be $250,000 (at the system level. Local administrators should be capped at $150,000. Faculty should be capped at $125,000. Staff should be capped at $75,000.

Step 2: Universities should be directly involved with negotiating rent controlling the area around the university so that staff and students don't NEED so much money.

Step 3: For those universities with sufficient land, focus on on-campus housing and DO NOT make "luxury student housing". Nor luxury staff housing. Go utilitarian. Civil engineers know what people want and need. Students do not need brick portico entrances to their dorms.

Yes and no...

[fuzzyfuzzyfungus]

On the one hand, it is not at all difficult to see the unintended consequences(or, in some cases, quietly intended consequences) of federal student loans being so widely available.

The overtly scammy private colleges(you see ads for them plastered on subway cars, among other places) that make grandiose and generally overblown claims about their "career placement" abilities and rates, are one major beneficiary of this unintended(for them) subsidy. The rate at which first-gen-to-college easy marks get played for a few semesters and then dumped without measureable increase in anything other than debt is alaring. The more traditionally respectable colleges are less overtly evil(since they can, if you play your cards right, actually offer an excellent education, and they generally avoid stooping to any explicit claims about economic advancement, in favor of letting broad cultural messages about how people without college degrees are all kinds of fucked do the job for them); but federal loan system gives them a downright beautiful price-discrimination mechanism: Just set the "price" to $$$$$, and then Oh-so-kindly reduce it to more or less exactly what they think you are capable of paying(as proven by the various documents-upon-which-perjury-is-a-bad-plan that your FAFSA will refer to). Clever, that. One also cannot refrain from speculation as to the role of our oh-so-saintly financial services sector in the creation of yet another class of debt(conveniently government backed, and non-dischargeable in bankrupcy!) to play their games with...

On the other, though, I think that he is out to lunch. The real wages to relatively unskilled workers(ie. the sort of job you are likely to be working while shooting for a college degree, not the sorts of jobs that you can get after you have one, or the sorts of jobs that require reasonably prolonged job experience('upper-blue-collar' apprentice-track stuff, say, whic can actually pay pretty well; but is not clearly compatible with the trajectory of people working themselves through college) have been treading water, or worse, for something like four decades now. The real wages and job prospects of college graduates also haven't been doing so hot(though better than those of non-graduates). Unless the magic invisible hand fairy has a plan for dealing with the unimpressive and declining availability and financial returns on basically all middle class activity, We Have A Broader Problem. Never mind, of course, that some of the purported economic gains to a college education are likely artefacts produced by the signalling function of graduating(ie, Person X can follow instructions, Person X is not a total fuckup, Person X can work with others if necessary, Person X has an IQ higher than his shoe size), rather than by intrinsic improvements provided by education.

Federal loans have certainly increased the speed at which college is able to get expensive(just as the real-estate bubble increased the speed at which McMansionites were able to pretend that their tenuous grip on affluence wasn't slipping away before their eyes); but it isn't as though that occurred in isolation. Even with the cash available, taking on a huge stack of debt and cracking books for 4 years would be a lot less popular if there weren't such a strong impression that not doing so was a one-way ticket to ditch-digger class...

In a perfect world

[milimetric]

I love Ron Paul. He's the most idealistic person I've ever known. He's basically lying to everyone though. Most of the things he says go like this:

1. Cut funding
2. ??? Allow free market to do it's thing ???
3. Problem solved

He doesn't mention two crucial things. One is that step 2. may take a very long time. The other is that for 2 to happen effectively, we have to equalize any unfair and corruption-driven advantages that others have gained in a crooked system over two hundred years. Once highly paid yuppies get busted for illegally claiming "expenses" as tax free money and corporations get busted for gambling with pension funds at the same rate that people get busted for stealing a piece of bread or robbing a grocery store, then we'll have a truly fair environment for the free market to do its thing. In the meantime, Ron Paul is selling pipe dreams. Awesome pipe dreams, but ultimately dreams without good plans to back them up.

Re:In a perfect world

[DrXym]

Actually step 2 is watch as states hike their taxes to recreate 52 different state level equivalents of what used to exist at federal level with even greater bureaucracy, loopholes and abuses that would be entailed. It's a stupid idea basically, one that appeals to libertarians but makes little sense in reality.

Re:In a perfect world

[dcornewell]

You're not understanding his stance on things. It goes like this.

1. Cut government funding
2. Let Citizens keep their money rather than paying taxes
3. Solve your own problems. It is the government, not your mommy.

He isn't selling any dreams to you. He wants everyone to understand that the government has NOTHING to do with your dreams. It should be there to serve few purposes. Everything else in your life should be up to you.

Re:In a perfect world

[Plastic Pencil]

I still don't understand what motivation the "free market" has to ensure a chance at a better a life for everyone. A large class of cheap, desperate, un-educated labor, sounds better to a lot of businesses, than educated, aware of rights, and demands a living wage. We've tried Ron Paul's way before, whether they were Kings and Monarchs, or Robber-Barons. Sure, our current system is warped and broken, and needs a fix, but to throw away everything, even the regulations and safe-guards, that do work, will only bring us further backwards.

Re:In a perfect world

[Anonymous Coward]

Actually, in the Meet The Press interview, he speculated exactly how the free market would solve it:

- Colleges have ginormous endowments.
- They could run their OWN loan programs, loaning out their OWN money
- If their students get a good enough education to pay their loans back, they'll make an appropriate ROI. If their graduates are completely unsuited for the marketplace and can't get jobs and can't pay them back. They won't.

It puts the incentive on the schools to provide a quality education, and it forces them to really think about their cost-structure (how many loans can we give out each year? Could we give out more if we knocked our tuition price down a bit? etc. etc.)

Re:In a perfect world

[AdamJS]

The problem is that "getting started now" would mean several decades of failures in many areas and is likely to ultimately kill the entire system before ever reaching that tenuous and unpredictable "perfect state" for the free market experiment to begin.

Re:In a perfect world

[King_TJ]

So in other words, you don't believe in the "free market" whatsoever? It's all just a "pipe dream" that can't work, right?

I guess I view things differently than you do. For starters, we've really never had a president who was able to make decisions alone. If we did, we'd call it a dictatorship instead. You can put the most idealistic guy possible in power as president, and I guarantee his beliefs will get whittled away at and watered down/compromised to the point where they're FAR less potent than his original plans. That's one reason I'd welcome a guy like Ron Paul as our next president. It's abundantly clear that Federal govt. is too big and all-encompassing, but reducing its size and scope is a herculean task. Everyone receiving some kind of paycheck to sit in a govt. position, in even the most useless of offices, wants to protect their position in the system. I have yet to meet anyone working for our govt. who openly says "What I do is a useless waste to the taxpayers, and they really should terminate me!" Compounding matters is the fact we've got many special interests (typically big businesses) funneling loads of money INTO the political system to retain portions of the status quo that happen to benefit them. If Ron Paul became president and asked to eliminate 5 big govt. agencies, I'd imagine the end result would wind up a medicore group of cut-backs in perhaps 3 or 4 of those 5, at most. But imagine how much LESS gets accomplished when you start out with a guy who isn't really all that opposed to those 5 agencies to start with?

Re:Why is this a problem?

[CRCulver]

Traffic cops are not supposed to fill the gas tanks of poor people.

Traffic cops are already an example of redistribution of wealth. Your taxes go to ensure that everyone else (rich, poor, employed, unemployed) are safe on the roads.

So why hasn't UC Berkeley been getting cheaper?

[spinninggears]

In California, since the 1970's, the state has subsidized less and less of the tuition for students, while student loan amounts have not been increased substantially, and yet the state universities have not gotten less expensive in the process.

Sometimes Ron Paul says things that are correct, but silly (like how we could lower health care costs by removing the requirement medical providers be licensed. Probably true, but....) Mostly though, he just says things that are incorrect and silly. His supporters piece together some sort of reality from this that makes sense to them, I guess.

Starve the beast?

[Moof123]

As usual the symptoms are blamed, not the cause. Colleges have had a breakdown in funding models (used to be heavily subsidized by state government), so now they are forced into passing the costs to the students. High tuition at state colleges has resulted in there being no low cost options, necessitating very large loans be offered.

Now, in general I'd argue our colleges are broken in many other fundamental ways (same price for a much needed engineering degree and an unneeded philosophy degree? WTF?), but that is a whole different rant.

the difference

[Charliemopps]

The difference between federal student loans and private loans is rather simple. Federal loans are given to people even if they can not afford to pay them back... and you are required to pay them off. The government will get their money back, period. The result is people that are already impoverished, becoming even more impoverished. Now, not only are they poor, the odds are they didn't graduate (most, irrelevant of income, do not) and now they are saddled with huge amounts of debt that they have no legal way out of.

I paid my way through college via a part time job. I didn't go to the best school, but I didn't need to. I think that needs to be the focus of everyones attention. A $200k education isn't 10x the quality of a $20k education.

Loans not Handouts

[pburghdoom]

I would never be where I am now without Federal student loans. And they are loans not handouts. I am now pay them back with interest, so the government is making money off the loans and with my better paying job I am paying more in taxes than I would ever had previously. I don't think the problem is the loan program but the fact that an education can cost over a hundred thousand dollars.

Re:Loans not Handouts

[vlm]

I would never be where I am now without Federal student loans. And they are loans not handouts. I am now pay them back with interest

They are handouts, to the educational-financial complex. Without the loans, they would not have been able to charge you as much as they did. Basically its a stealth tax from you to the university with the bankers and other miscreants making some transaction fees along the way.

I would agree that without the loans, you would not be where you are now, you'd be ahead of where you are by the amount of money you've "paid back".

Re:I'll Hold My Breath

[mewshi_nya]

The thing is, schools "need" to have multi-million-dollar sports facilities and useless crap like that, and they can't do that if they can't charge people 20k/year or more. Now that the price is up, it sure as hell isn't going to come back down any time soon.

Re:FP

[TangoMargarine]

Cthulhu will flay you for your inability to even remotely accurately spell his name.

Re:Uh... no.

[sribe]

I'm pretty sure that if student loans went away, the actual costs of going to school would stay about the same. The net result would be that only the rich would get higher education, thus creating an enduring class system.

Really? So if 90% of students could suddenly no longer afford college, then colleges would choose to go out of business rather than get their outrageous administrative costs under control? I doubt that.

Administrative/bureaucracy costs at colleges have been going up wildly, while costs related to actual teaching have not. You can argue about cause vs effect, but this stupidity did start about the same time as, and has accelerated with expansion of, student loan programs. Of course the problem now is "how to get there from here"... You can't just end the program abruptly, forcing students to drop out with 1-3 years of loans to pay but no degree. And yet I don't see a gradual phase out motivating the desired behavior in colleges until they are at an absolute crisis point, at which time countless students would already have been greatly harmed by bearing the squeeze resulting from a reduced loan program against not-yet-reduced tuition.

Re:It's the fees, old fool!

[gfxguy]

What It Costs to Go to College; your statement is only true if you go to ivy league schools. For the vast majority, though, it's simply not true.

Moreover, being forced to view different options, I went to a local community college for my first two years and then went on to a university for bachelor's degree. After that, I was research assistant to get a master's, which paid for my tuition. My overall college costs were quite modest, and I did, in fact, work a summer job to pay my community college tuition (and most of my university tuition). Yes, I worked the whole time I went to college/university - but not full time. Never full time except over the summer, and even then not always. Yes, I lived on peanut butter and jelly sandwiches and ramen noodles. I don't see that as being a problem for a college student.

Paying exorbitant fees for Ivy League and private schools has always been the case, it's not something new.

University 'market' is a con

[openfrog]

See what is happening in the UK. They are on the route to a 'market' experiment in higher education. This has been launched by no other than lord Browne, the CEO of BP who had to resigned in 2007, and then named at the head of a commission to review higher education finances.

Academics are waking up to the meaning of a law that has been passed without the preliminary white paper, that is, without sufficient public discussion.
They are going to cut 90% of public financing to the universities, and harnessing the student with the resulting debt. They call that: "putting the student at the center of the reform".

Stefan Collini is the foremost critic of this idea and has just published a book about this. Read this article in The Guardian (free access) to get an idea of how the UK is on the path to destroying one of the finest higher education system: http://www.guardian.co.uk/commentisfree/2011/aug/19/university-market-white-paper

An experiment of this sort has been carried on in New Zealand in the 90's. The result has been catastrophic. Proposals of this kind, all with a libertarian/market flavor, are being proposed in legislatures all over the world at the moment. It is as if the right had found its next target.

Re:I learned the value of money by paying as I wen

[Oswald McWeany]

I had it easier than you- 90% of my schooling was paid through scholarship and grants- of the remainder my parents paid some towards my school- and I worked 35hrs a week (just one job... but year round) for the rest of it. I emerged from University with no loans.

I HAD to complete it in 4 years because of scholarships- I didn't have the option of spreading it out over more time to spread the burden. So despite major scholarships I still worked full time in order that I could live a meagre existence of 50cent microwavable mini-pizzas and TJ Maxx clearance clothes- I hit the jackpot on super cheap rent- paying only $250 a month- a great place with free cockroaches and lead paint.

Had I not had the scholarships- I couldn't have done it. Had I not had support from my parents- I couldn't have done it.

This was over a decade ago- since when costs have skyrocketed.

College now costs more than what an uneducated full-time worker makes.

You might have been able to get by in the 80s working jobs to pay your way- nowadays kids don't have that option.

Re:Interesting

[mattcsn]

Forgiveness of debts was feasible when AIG was in trouble, and I didn't hear much argument from conservatives to the contrary at the time.

$1 trillion of student debt

[Chuck Messenger]

Some points to consider:

Total outstanding student loan debt recently topped $1 trillion (e.g. see link).

Student loan debt now exceeds household credit card debt (see link).

It isn't possible to escape student loans via bankruptcy - they will follow you your whole life, no matter what. This puts them in a class by themselves.

Obviously, the current system is badly broken. Why should the federal govt be in the business of hooking young adults on these onerous loans? If the goal is social leveling (a goal I can get behind), then we should be talking about grants, not loans. What we're doing is creating a new class of indentured servants.

It's entirely disheartening...

[IDarkISwordI]

to hear someone speak of taking away a chance to have a better educated population. While it is almost a certainty that student loans have lead to some inflation of institutional costs, he completely neglects to inform (if he even knows) that the largest cause is the consistently reduced state funding in more recent years. Most private universities are increasing tuition at a yearly rate of 4.5% while public facilities average closer to 7%. Public universities have to pick up the slack somewhere. Unfotunate for students these days, they're the ones who have to shoulder much of the burden upfront. These are the people who should be innovating, opening business partnerships, getting well paying jobs to buy consumer items so the economy can continue to operate and function.

Meanwhile, many of less-taxes-less-revenue-less-government bunch that are advocating reductions to financial aid and university funding, are the same ones who suggest businesses take their factories and offices overseas, leaving them much at the helm of the problem with the lack of jobs and absence of regulations for businesses to operate ethically in the US. No jobs in the US means less people to buy all the stuff being produced which in turn means less demand from a factory which can mean either lesser wages to factory workers or less positions in factories, which means even less people to buy items. Somewhere, someone has to be willing to inject money into the system by investing in the future, that means education.

Except loans aren't subsidies?

[JSBiff]

In general, loans aren't subsidies. You might argue that, because the loans are guaranteed by the DOE, and interest rates are kept low, that qualifies as a subsidy. Well, it might be subsidizing the *loans*, but it's not subsidizing the Universities.

Re:Except loans aren't subsidies?

[JSBiff]

If the government gets paid back (or in the case of DOE loans, they don't even lend the money, private lenders do. . . or, well, did when I was taking out student loans; I think that might've changed a couple years ago, not sure), then how is it a subsidy?

If I borrow money from the government, to get a degree or build a house, then over the next 20 years I pay back the principle plus interest, how is that a subsidy? I'm paying $250/mo on my "subsidy" right now and have been for several years now. Sure doesn't feel like a subsidy to me. I also sure the hell don't view student loans as free money and never have. Signing my master promissory note was one of the most terrifying and "weighty" days for me as a young adult.

Re:You are a thief and parasite

[nysus]

Confiscate? WTF? The constitution gives Congress the power to levy taxes.

Image a life without taxes. You'd be schooling your own children, fixing your own potholes, defending your home from intruders, taking out your own stinky garbage to the dump (oh wait, there is no dump).

Life was great in the 1820s, wasn't it?

Re:You are a thief and parasite

[betterunixthanunix]

Your education, ... [is] your responsibility, not mine.

Except that democracy cannot function if people do not understand the issues they are expected to vote on. Our public education system is supposed to ensure that all citizens have at least enough education to responsible citizens.

Ron Paul merely endorses the proper way things should be, including a very limited government and individual responsibility

Except that teachers need to be paid, and if the education system were privatized then only the wealthy would be able to afford an education. Preventing people from receiving an education is one way to prevent them from obtaining power. This is not a society where only the ruling class is allowed to be educated.

The US will fail if it continues to act on the lies of socialism, "state capitalism", and oligarchy.

No, the US will fail because the voters have no clue about what their government is up to, and just vote for whatever candidate looks best on TV. The best solution to the problem cannot be implemented if nobody understands that there is a problem to be solved.

A very good idea...

[PortHaven]

Let's look at the consequences of the present system:

1. Tuition has sky-rocketed at a rate far exceeding inflation and the value of a degree.

2. A flood of degrees has essentially made a BA/BS equivalent to a high school diploma.

3. A huge portion of those with BA/BS degrees are not even working in their respective fields.

4. Numerous individuals graduating with that oh so sacred degree are unemployed.

5. Many who have earned degrees have had to take out tens of thousands in loans. And which the recent economic changes, these are near impossible to repay. Current student debt in the U.S. now exceeds $1 trillion.

6. Student loans often tend to be bad loans. They are often high interest 7%-9% with today's rates are ridiculous. They are unique in that one cannot get rid of these loans via bankruptcy. And they are very low risk for the bank's loaning the money as government pays if the student defaults. Essentially, the sole benefit is that the student gets to defer loan payments by 4 years.

7. We could offer nearly every American a degree at a fraction of the cost by having a national online university that offered you basic degrees (biology, chemistry, engineering, etc, etc). Students could pursue their degree online. And would take their exams and labs at local community colleges. While not everyone has internet access. Most areas have libraries that offer such service. And a fraction of the $$$ that .gov spends on subsidizing loans could greatly expand public/library terminals. Furthermore, you can get a laptop for about $300-$400. And now most full-size grocery stores offer WiFi cafes.

So yes, this present model which is a few decades old is no longer viable in today's society. Nor is it efficient.

Granted, the above plan of a national university would not go over well with the tenured professors who suddenly would have to get off their arses and offer a better education to justify the extra expenditure of funds - or go out of business. But heck, Yale University has a trust fund that should keep them around for another 100 years. And universities could stay in business by offering more specialized degrees. Marine science instead of biology, aeronautical engineering, etc, etc.

But anyone wanting a basic degree could get it for a mere $1K-$2K.

- Biology
- Chemistry
- Engineering
- Computer Science
- Business/Management
- Psychology/Social Science

Maybe one or two other basic BA/BS degrees. All could be done at a fraction of our present expenditure.

Hmm....yes, I think Ron Paul is right.

Re:A very good idea...

[RobinEggs]

...exams and labs at local community colleges

You're kidding, right? The labs are the most important part and you want to save money by making kids take them at a community college? Unless your plan involves giving every community college an NMR, a cyclotron, a GCMS, a clean room, etc. it's worse than not offering those kids a degree at all. The laboratory work is where you discover whether you actually like or have any talent in your field. That's the place in which schools legitimately need even more money, not a place to save.

Online class and whatever, fine, but we don't put enough money into labs as it is.

SHHHHH! No Factual Examples!

[SlippyToad]

You are disturbing the Glibertarian Om. Only in a fact-free plane of existence where no real-world examples of their horribly misanthropic ideas can be found will Glibertarianism succeed.

You're FUCKING UP HIS GROOOVE! Finland isn't a real country anyway! Quiet!

Re:Worse than that. The subsidies are debt based

[Rockoon]

even if that means taking social security checks when the borrower is retired.

Without new legislation, only taxes may be withheld from social security checks.

Welcome to Australia

[Alicat1194]

Student Loans should include two things: 1. Fixed low-rate loan (2-3% even for private loans) 2. Allowed to be paid with pre-tax income (like money put towards retirement etc)

That's exactly the system we have in Australia - if you request it, the Government pays for your tuition (to a set life-time limit, to stop abuse of the system), and you pay it back as part of your tax once you earn above the designated threshold. The interest rate is set at CPI, and you get a 10% discount if you pay back extra money (extra info here if anyone's interested).

It's a system that works fairly well - you end up with a highly-educated populace (good for the economy), and no-one goes broke trying to get there.

Well duh...Economics 101.

[Panaflex]

Anytime a government subsidizes a product or service - the price will increase to match the subsidy. Period. The producers know how much the subsidy is(A), and how much a consumer can spend(B). They will always add a+b in the end because the elasticity of price can be known to support that level.

There isn't even an unknown pricing curve here - the University already knows your finances when you apply for financial aid. They can simply and easily price an education to target the population of students they want.

How many (fiscally) bankrupt universities have you seen lately? I only know of Huron University in South Dakota in 2005.

http://en.wikipedia.org/wiki/Category:Defunct_universities_and_colleges_in_the_United_States

Skewed /. response

[roman_mir]

The /. crowd is mostly so over their head when dealing with economics, that it actually is surprising.

Ron Paul is absolutely correct - government shouldn't be allowed in any financial matters in economy. Gov't shouldn't be allowed to regulate businesses and skew the market, distort the money allocation, set interest rates (price of money), counterfeit currency (Federal reserve), create imbalance in every single sector, from education and health care to energy and agriculture. Starting wars that cannot be paid for. Passing regulations that make labor too expensive and thus pushing production to other countries.

Ron Paul has been predicting this financial disaster ever since Nixon took the world (the world by proxy of USD being 'reserve currency') off the gold standard. US main exports include weapons and entertainment, but the real main export is of-course US DOLLAR.

The main export of US economy is inflation. This pushes the production out of USA and this causes a massive loss of jobs in USA. To keep the bubble of credit going, the bubble has to be inflated everywhere, from housing to medical insurance and care and to education and to money markets and wars. Nothing can be left untouched by inflation in an economy as unproductive as US economy.

Ron Paul is right of-course, never mind what economic illiterates are saying on this site.

Supporting Ron Paul feels cool, is stupid

[ansak]

Disclaimer: I am a Canadian, so I do not have a dog in this race; except we are your nearest neighbours (nearer than México in two minor ways only: longer border, no local outcries for a fence) so if you systematically self-destruct, it'll be bad for us, too.

Support for Ron Paul by the young and sometimes geeky has intrigued me for some time. Is it a result of reading Ayn Rand? Is it because his ideas seem so much more sensible than so many others? Is it because he does not appear beholden to any lobbyists? Is it primarily because he wants to end drug Prohibition? Possibly all of the above.

But it's also confused me because a number of the things Ron Paul wants to do away with are things that help the young find their first footholds -- things like student loans (or even grants). When I read this headline, I thought for just a second that perhaps Dr. Paul wants to throw open the universities for all, call a full education a civil right that you get to take advantage of based on merit. But I dismissed that thought before I saw the rest of the post, and I was right to do so. My response: his analysis may have some truth in it but it's so simple as to be suspect, in my view. On balance, like much of what Ron Paul says, it's too simple to be right.

Whoever thinks Ron Paul is cool, whatever lobby groups he is not beholden to, make no mistake: the über-rich and powerful wish his ideas well because their adoption would entrench and deepen the growing class divisions in America and put an end to the American dream as anything but that: a wistful dream of what expectations used to be.

Something is rotten in the way the US is going these days. For instance, in my lifetime, before 2008, I had never heard a leading politician in the US say of their president from the opposing party that they wanted him to fail. Whether you agree with Mr. Obama or not, that attitude on the part of any member of your government is pernicious. I'll stop there because the list of things going wrong is so long (most of them decades in the making) as to make this too-long post ridiculously so.

But Ron Paul is not the answer to those problems: his ideas (and incidentally those of the Tea Party) are only going to help the rich get richer and inherit the meek (and the not so meek). Do yourselves a favour, folks, and elect leaders that remember what they learned in Kindergarten (without forgetting all the things they learned since) and value their neighbours over hard lines -- internal neighbours, of course! I wouldn't advocate that you would elect the people I, your Canadian neighbour, want you to elect. I'm just confident that if, overall, you voted in line with your interests (and that may take a lot of thinking to figure out who's going to serve those best) and do well, then you won't become neighbours that we have to fear from across that longest unarmed border in the world.

be good to each other, folks...ank

Re:Supporting Ron Paul feels cool, is stupid

[TheSync]

"Support for Ron Paul by the young and sometimes geeky has intrigued me for some time. Is it a result of reading Ayn Rand?"

Maybe they are inspired by the austerity plan of Jean Chrétien and Paul Martin in the 1990's when Canada reduced federal spending by 20%, fired 23% of public sector workers, slashed defense expenditures 15%, cut certain subsidies by 40-60%, and eliminated some ministries entirely (thus cutting Canadian sovereign debt and regaining an AAA rating on it).

Someone needs to take his medicine...

[mangu]

Chill, dude. The market isn't so bad as that.

What you guys don't realize is that there are no activities that aren't regulated today. Everything any company does is subject to regulations at all levels of government.

When you say "activity X should be regulated" what you really mean is that "current regulations for activity X aren't working".

Re:I learned the value of money by paying as I wen

[dkleinsc]

Congratulations for working your way up. You worked hard to get where you are today, and I salute you.

But now, doing what you did is essentially impossible:
* Average annual in-state tuition, room and board at a state university, books and basic supplies - $7600+$1100+$2000=$10,700 (numbers from the College Board. Private schools are about 3 times that cost.
* US minimum wage: $7.25 per hour. After taxes, about $6.00.
* So weekly hours worked to earn your way through school: $10,700 / $6 / 52 (weeks per year) = about 35 hours per week.
* Being a student requires basically full-time hours, so schoolwork takes up about 35-40 hours per week.
That leaves, of your 168 hours in a week, 94 hours for everything that isn't working or studying. If you assume 8 hours of sleep a night, you have a total of 5 hours a day to do everything else: eating, dressing, laundry, cleaning, bathing, traveling to and from work and class, etc. Your only chance of relief would be the summer, where you might be able to live with your parents. I've worked those kind of hours for short bursts, but the human body simply can't handle that over long periods.

And of course this all assumes that minimum wage jobs are available in your area, which is probably not true at the moment.

Re:The problem with Ron Paul's solution

[bluefoxlucid]

The way to introduce accountability is to push the loans onto the commercial space, where people are in it to make money, and for one person to make money another loses. Another who can't just jack up taxes and doesn't live on politics.

The universities only win if they get money. The banks only win if the students pay. And the students only win if they can afford the loan. Currently, the banks can't lose; thus, the banks and the universities both win if the student takes loans, and the student is naive and easily manipulated.

In reality, when it becomes impossible for students to afford college, and too damn risky to give them loans, the universities will collapse. Don't want to collapse? Lower your prices.

It has to hurt if it's to heal.

Ron Paul in Five Words

[gjh]

There's a lot of clap trap in these comments trying to sum out Ron Paul by his financial policies. It completely misses the point.

Ron Paul is a constitutionalist.

He believes that the federal govt overreaches. Financially, yes, but also militarily, socially, and almost every other sphere of influence. I'm sure he'd be fine about individual states offering loans - or transport systems, or healthcare, or abortions, or ID cards, or gay marriage or whatever. But these are not the job of the federal government. It's not rocket science - he is simply the only prominent politician who takes the limitation to legislate only over "commerce among the several states" seriously.

In practise, this all means that he has the only plan that can save the USA, being as the first step to solving the financial hole is to stop digging. And that means cuts to spending. I personally hope that he would do it in such a way that individual states can take over whichever programs they want in a clean and managed way. But this man is your only hope. Vote for him.

Re:FP

[mcspoo]

In what perfect world do you live?

1.) end federal guaranteed student loans.
2. college enrollment goes down.
3. Universities blame Ron Paul. Ron Paul blames universities.
4. catch 22 persists for 250 years as the world rolls on towards "Idiocracy"...
5. In 2261, no one goes to koledge or spels*)or properly use pro-nunk-u-ay-shun.
6. Ron Paul's utopia is reality!
7. Profit?

Federal vs State Government

[jasenj1]

I see many posts in this thread referring to "government"; like "the government" should or shouldn't do this or that.

The USA is set up with multiple levels of government: Local, State, and Federal. The Federal government has certain powers enumerated by the Constitution of the United States. Ron Paul - and many others - are of the opinion that the Federal government has far exceeded the powers granted to it by our country's founding document. State governments are granted far more leeway in what they can do.

So, student loans may be a GREAT idea. Public health care may be a GREAT idea. Lots of other publicly funded programs may be super awesome. BUT, they are not (unless a Constitutional Amendment is passed) the role of the Federal government. The Federal government has seized powers that it should not have. It needs to relinquish those powers back to the States.

A strong, dominant Federal government (such as we currently have) concentrates power into fewer hands. This concentration of power eases corruption, and the repercussions of that corruption affect the entire country. /rant

- Jasen.

Re:Paul has a point, but he also misses a larger o

[LF11]

How about this one; we make subsidies available to people who care enough to deserve them.

I attend a local community college, and I have to say, if you start with unmotivated dinks, you end up with unmotivated college-educated dinks. A college degree is nothing in the hands of someone who just doesn't give a shit. Most people don't give a shit.

Subsidize the people who care; i.e., if you work hard or get excellent grades, you get to go to school. If you don't work hard and don't get good grades, no money for you.

cej

They are not only accessible to the rich.

[tlambert]

They are not only accessible to the rich. They are also accessible to the intelligent, thanks to scholarships.

Most people are getting college degrees for the wrong reason in any case; one of my faculty advisors put it best: diplomas are the modern version of a union card.

I see lots of people getting degrees in things they have no interest in, and no passion for, in order to follow the money (or where they think the money is, which is often not the same thing). Historically, this has resulted in a lot of bad doctors; around 2000, it resulted in a lot of bad programmers, and it's currently tilted toward resulting in a lot of bad lawyers. Whatever ends up being the next big ticket field, expect that 4 years later there will be a lot of bad whatevers, waving their shiny new union cards and giving the people who actually have a passion for the field a bad name.

-- Terry

Re:History or psychology?

[MightyYar]

LOL, you are really diverging from my main point! I agree that you need a strong middle class. I agree that our education system isn't really matching up skill sets with demand. I'm not in any way trying to hold up the US as an example of an educated populace.

The main thrust is that if you are a rich guy, and you find yourself complaining that the ignorant rabble keep screwing up your country, then you probably should direct your resources toward making them less ignorant instead of trying to suppress them. Similarly, if you are a libertarian, you have to know that there is no way a bunch of ignorant poor people are going to go along with your high-minded ideology. You have two choices - force it down their throats, thus completely betraying your ideology, or get them educated. You can try some kind of charitable ideologically pure education scheme, or you can suck it up and pay for their education through the state. That's where I'm at :)

If we could just get rid of all those regulations

[sean.peters]

We could return to the land of milk and honey that was the Gilded Age. Geez, I can hardly wait to return to horrific labor conditions, tainted food, and rampant criminality! Who could possibly be opposed? (I mean, except for child laborers, people who eat, etc).

tl;dr: Government intervening in society is a good thing.

the real answer:

[sean.peters]

Make the loans dischargeable in bankruptcy, and have the government only guarantee a portion of the loan. Then there would be some incentive from the lenders and the government to vet loan recipients and college programs a little more thorougly, rather than just showering money on anyone who shows up.

Re:45 replies?!

[roman_mir]

Eventually libertarian ideals will win simply because there will be no money for your ideology of spreading poverty by pretending to spread some form of 'goodness', which is nothing else but an attempt at controlling the people by violence. You can't hold the water in your fist by tightening it, and you can't hold the economic production that way either, it moves and you are left poor. Unfortunately for the people who are poor but do not share your bankrupt ideology, it is still dominant exactly because of the education process, that relies on the gov't money and perpetuates itself by using the students as collateral to transfer the funds to the colleges, loyal to the political system. This is going to change once the real money runs out and nobody trades with USA for fake money anymore.

Poor are only lifted out of poverty by the enterprising people, who may become rich (or may fail), but they are never lifted out of poverty by your failed ideology of theft from the productive part of the population, supposedly to share the fruits of their labor with the poor part, but in reality stealing that wealth and distributing it to those, closest to the gov't trough. You will fail. Your system will fail. You thinking will fail and your way of life will fail. I am looking at it and I am glad to be part of it on the opposite of you, setting my bets.

Re:45 replies?!

[roman_mir]

I set my bets, and your insults are not on the other side of these bets. On the other side of these bets is your failed ideology. It is your failed system, and it coming to another comic end. Will there be blood on the streets? Ha! There is always blood on the streets. Didn't they just execute another good "life long" friend of USA government in Lybia?

What makes you stupid, not me, is the fact that you are still in the middle of the incoming storm, but as all storms, this one will pass too, and there will be a need for real credit again, and those who will be on the right side of that demand/supply curve, will come out on top.

The jeopardy is not coming from the poor, it is coming from the governments directing the poor, and the governments are dictatorial systems and the richest people are on top of them, and I think you underestimate the power that they hold in today's world and how well they are protected, literally and figuratively, much better than kings and queens of the past.

If the poor allow themselves to be pushed into yet another 'French' revolution, then the joke is on them, as they will be left even more poor, since nobody will want to deal with them and give them real credit, that would restore their real production capacity for a much longer timer period, than if they simply allowed the system to crash without any blood letting. But as I say, you are the one still stuck in the middle of that problem, maybe you should analyze again who is a 'blind fool' as per an objective definition of those words.