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Bloomberg, WSJ: Student Aid Increases Tuition
retroworks writes "Bloomberg News makes the case that when the federal government offers tuition assistance, students apply to more expensive colleges, giving the institutions an incentive to raise tuition and a disincentive to lower it. (The Wall Street Journal has a similar article, but it's paywalled.) This reminds me of the debate over President Reagan's cuts to the Pell Grant program in the 1980s. MIT's Campus Paper 'The Tech' quoted the MIT administration as saying it had 'no idea what really will occur' when Reagan's proposal to cut Pell came to Washington. So the question is, 25 years later, do we know now? Did cuts to federal tuition assistance hurt the education of the lower income students? Did increases to Pell grants create more opportunity? Or is federal money the milkshake, and students are just the straw?"
A) Minimum wage in the US is NOT hovering around $10, it's $7.25. The difference between $10 and $7.25 with regards to pay is huge, not a rounding error.
B) You cannot live on minimum wage in the US anymore.
I would not calling living on minimum wage in the US as surviving, at least in major cities. Take for example Chicago, since I am most familiar with it. For simplicity, lets assume you work 4*40 hrs/ month. this equates to 160 / month. Minimum wage in Illinois is $8.25/hr (which is more than the national minimum btw). this is a net of $1320/month. Looks good, but Illinois now take 5% leaving $1254. The feds will take 15%, leaving $1056. I don't know the exact rates for Medicare and SS, but lets assume that it will put you under $1k.
/month leaves you with about $300-$400/ month. Transportation is going to be about another $100/month for a monthly CTA pass. Taking you down to $200-$300 month. Oh, you want to eat too? ~$200/month (granted, you probably qualify for food stamps, but you still need to pay some money out of pocket). An viola, you are out of money. I didn't even mention utilities or other living expenses.
So you pretty much need a place to live. The rent for a studio apartment, assuming you don't get a roommate, is going to run about $600 - $700
tl;dr version:
Living on minimum wage is hardly a living wage. It is hardly enough to cover the bare necessities in the US. Most likely you will need to get a second job to make ends meet.