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Financing College With a Tax On All Graduates
Hugh Pickens DOT Com writes "As the number of students attending colleges and universities has steadily increased and the cost for most students has climbed even faster, student debt figures (both total and per person) have continued to get bigger. Now Josh Freedman at Forbes Magazine proposes a graduate tax-funded system of higher education, under which students would pay nothing to attend college upfront. Instead, once they graduate and move out of their parents' basements, they would begin to pay an additional income tax (say, for example, three percent) on their earnings that would fund higher education. 'In other words, the current crop of college graduates funds the current crop of college students, and so on down the line. There is no debt taken on by students, which minimizes risk (good); repayment is tied to income, because only people who make income pay the tax (also good); and it is simpler and more easily administrable than plans to make loans easier to pay off (still good).' The main argument for a graduate tax comes from its progressivity. Supporters of a graduate tax point out that most college graduates, particularly those from elite universities that use a greater share of resources, are richer than people who have not graduated from college. The state of Oregon made headlines last year for an innovative proposal called 'Pay It Forward' to fund higher education without having students take on any debt. Pay It Forward amounts to a graduate tax: All of the graduates of public colleges in Oregon would pay nothing up front in tuition but would pay back a percentage of their income for a set number of years. These payments would build a fund that would cover the cost for future students to receive the same opportunity to attend college with no upfront costs. 'As pressure mounts for more students from all backgrounds to attend college, it will become increasingly difficult to try to stem the rapid tuition inflation under a loan system,' concludes Freedman. 'Our current student loan system has made college more expensive, turned higher education into an individual, rather than a communal, good, and generated serious negative economic and social risks.'"
So under this new system, why would I ever stop going to college? This is already a problem with some of the higher level institutions.
This is actually a really good idea. However, it does need some limits, particularly with regard to tuition prices. This proposal will give universities to raise tuition prices like mad. We need to place some serious restrictions on those.
-1 disagree is not a modifier for a reason. -1 troll, flaimbait, redundant, overrated are NOT acceptable substitutes.
called HECS.
http://studyassist.gov.au/site...
It began in the 1990's and was developed by the economist Bruce Chapman.
https://crawford.anu.edu.au/pe...
It is a great success in Australia. I graduated under the system. It was perfect for me, because I had no money to study but made some after and payed the loans through my taxes.
And because more money is made available, colleges can continue to inflate prices unchecked by normal market controls.
While debt sucks, it's gives a sense of RESPONSIBILITY and MOTIVATION TO SUCCEED.
If you know you are paying for college or at least going to have to pay back some of the cost, you tend to be more motivated to at least pass your classes.
Everyone I knew that got complete a free ride from grants did not feel motivated enough to pass their classes. What did it matter to them? It didn't cost them anything out of their pockets.
implement this will be very popular with college students and then everyone will move to the "traditionally funded college" state schools to avoid the tax. Also the STEM, medical and business students will end up subsidizing the fine art, journalism and french medieval poetry students and their professors. This already happens to a degree (no pun intended), but at least the penalty is more born by the student through loans that need to be repaid, rather than the people who studied a more rigorous and practical career. Also, we will probably end up with too many people who go through law school because there is really no penalty to attend (besides lost wages) and then they won't be able to find jobs and then become something else.
This is a new idea? This is what progressive countries already do. University is free and you pay higher taxes later. Duh!
1. People who go to college and graduate, only to become stay at home dads/moms would be a burden on the system.. Easy to fix for marriages, but harder for the unmarried.
2. People who dont graduate/stay in school forever.
3. Dwindling population, in general, or just of graduates, will destroy the system.
And that is just at a quick thought.
When you cant win, ad hominem.
I have to point out that this is program would remove all barrier to college entry. If there is no cost to start education, and not finish it, then there will be millions of people who do so. Think of the problem we have now of so many students not knowing what they want out of life just joining college. I do agree that the current system of student loans is badly broken. I have many friends who bear an unreasonable level of debt.
And over there we have the labyrinth guards. One always lies, one always tells the truth, and one stabs people who ask t
...whose principles actually seem pretty good to me. But I can imagine that people would start not-quite-graduating from college. Employers would realize that 7/8 of a college degree is almost as valuable as 8/8, and make accommodations for it. Of course there are ways around this (tax based on the number of classes you took?), but it detracts from the notion's superficial elegance. The ways around this could probably also be gamed.
The assumption is that most graduates get a job.
If the amount tax generated is less than what is required to support the number of people being educated, the system in unsupportable.
For example if 10 people graduate and only one gets a job which pays 100000, then only 3 percent (3000) is avaiable to educate the next 10.
I don't think 3000 per year is enough to educate 10 people.
When there is less jobs more people go into re-education.
This happens in Australia. Even with a country wide tax there's nothing stopping someone from emigrating after studying is finished and thus never repaying the student loan.
For fifty to sixty years now government on all levels, Feds in particular have tried over and over to "fix" education. And what has happened every single time? It has gotten worse and/or more expensive. GET THE FUCK OUT OF EDUCATION. That this suggestion comes from a nominal business magazine like Forbes is even more abhorent (Malcomn Sr must be rolling in his grave).
But what about those that already went through college and are now paying off their loan? Do they get to pay off twice or what?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I don't follow your logic. What has lowering the barriers to entry have to do with suddenly not wanting to go to university? It's not like the grades or the prestige changes. It just takes money out of the equation for studying, and why should a medical degree be reserved for the rich rather than for the intelligent?
It is called income tax. If your college stay helped increase your income, you should already be paying more taxes.
Unfortunately, this tax is currently quite broken for the rich.
This system is far far better than extra taxes for college graduates. Most college graduates did not go to college to make more money, so they cannot afford to pay extra taxes on their income which is already lower than their peers who did not go to college.
I lot of people go to college to get art degrees. And I do not see adding an extra tax on millions of minimum wage workers.
Troll is not a replacement for I disagree.
Removing the bar of it costs something will effectively open the schools up to a flood of freeloaders who will never graduate to repay the system.
No person who is willing to work for it should be denied a collegiate opportunity... and I doubt very many who are willing are denied it.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
It sounds like it works well, but I still want to be able to pay up front if I'm able. My parents (who are really on the far lower end of the income bracket) put a lot of money into my education fund and, with the help of scholarships, I managed to make it through school with zero debts. I'm fine with a system like this as it's proposed, but only if it's not a requirement. I should still be able to pay what I have available up front if I wish.
How about the federal government and higher education address the root causes that contributed to a 1000% increase in tuition and fees since 1980?
Low cost federally subsidized student loans are a major part of this problem. It's bad enough that this is a huge overstepping of federal authority. The availablility of billions of dollars of cheap money has fueled the fire of educational hyperinflation. Take away the cheap money - tuitions go down.
Maybe more people in Congress should go take EC101 again (for the first time).
The summary describes why this isn't necessary - college graduates make more money. This means they already pay more taxes.
I have to point out that this is program would remove all barrier to college entry.
You mean except for admissions tests, high school grades, admissions committees, and limited budgets? Just because someone else is paying up front doesn't mean that Harvard is going to let you in. Even big state schools like University of Michigan or University of Virginia have relatively high admissions standards and money doesn't really need to play a role in those. Either you're good enough to get in or you aren't. Nothing wrong with community college or trade schools if those are a better fit for someone.
If there is no cost to start education, and not finish it, then there will be millions of people who do so.
There already are millions who start and don't finish. That's nothing new. Furthermore even if someone doesn't get a degree, there is still probably some value in the education they received. Obviously there would have to be admissions standards and performance standards (minimum GPA, graduate within 4 years, etc) to continue to receive this up front subsidy.
I think the bigger question is how universities would reorganize themselves due to the new financial structure. Right now they have a certain funding model and a structure that flows out of that. Change the funding model and there will be unintended consequences in how universities organize themselves and provide education. The downstream consequences could be very, ummm... interesting.
Eventually they'll find something soft and squeeze and then they'll own me. That's terrific! Let's also further minimize risk, so I have no idea what is wise and what isn't. This way I get to make others pay for my prospect-less liberal arts degree. That's so nice of them! Now everybody will get into college, even the less scholarly types who would be better off in trade schools, and graduation rates will plummet, and this new super efficient government program will be paying for those who flunk out and will exempt them from paying anything since they didn't graduate because the over achievers oppressed them somehow and they are the ones who should pay for drop-outs anyways. That's so sustainable!
We should make everything "communal"! Just like they did in that union that isn't there anymore. Or that other country that's still there imprisoning its dissenters and running them over with tanks. I love my Brave New World!
"Now, I doubt any of you would prefer a rolled up newspaper as a weapon against a dictator or a criminal intruder."
There is also an enormous trend toward creating universities in towns and cities that are suffering economic collapse just for the sake of optics.
No one is looking at employment outcomes nor are they looking at job trends. Putting a tax on the lucky few employed graduates to subsidize fat-cat administrators, university contractors and their ilk does nothing to help the ones who need it most, the students.
Stop this lunacy before it starts.
*** Don't be dull.***
And who pays (and how?) for the initial students who will later pay the tax?
How about no tution at all? It works great for Germany. ... Just sayin' ...
(Cue "Nanny State!", "OMG SOCIALIZM!!", "Obviously won't work because of reasons a,b,c and d", etc. remarks below, thank you.)
Allthough we do have Semestergeühren. Something like 150€ per Semster (GASP!) of enrollment fees. ... This is outrage! I'm going to protest tomorrow. ... Oh, wait, you get the public transport flatrate for that ... and student benefits (cheaper access to public events, etc.) ... Scratch that, I guess I won't protest after all.
Seriously, you guys should move out of the middle ages allready. Healthcare, tution-free college and metric system. It works. Get with the programm. :-)
My 2 cents.
We suffer more in our imagination than in reality. - Seneca
That's a totally brilliant idea! That way, successful people are penalized for going to college, while slackers get a college education for free and then have to pay almost nothing back. What could possibly go wrong?
That basically happens now. I realize you are being sarcastic but the successful motivated people pretty much always end up subsidizing those who are less able and/or motivated. The only question is how.
I think more emphasis should be placed on giving tax breaks to those who finish college with good standing and obtaining a degree in areas America needs people.
We have far too many getting worthless business degree's who won't find good jobs. Students should focus on education and degree's that are in demand. Not those that are not worth the paper printed on.
So, the question is, how would this work? Would it go into effect and only those graduates who got a free education would be subject to the tax? Or would the tax apply to all college graduates, even those who graduated before it started (and thus had to take on a large student debt)?
Either way, I don't think it is a good idea, but others have touched on the reasons so I will not go into that.
The truth is that all men having power ought to be mistrusted. James Madison
Get the government out of the loan business and prices will drop like a rock.
I'm not from the US. I've been paying for students for pretty much all my working life, we already have a rather similar system. With the difference that EVERYONE gets to pay for students. Oddly, nobody complains. Why? Because we know that once these students graduate, they'll earn some decent money and pay a metric ton of tax (*sigh* believe me...) which will in turn pay for their pension, their kids' education and so on.
In turn it means that everyone, not just whoever can afford it, but EVERYONE can go and study at a university. Which in turn translates to a lot of students, which again means that universities can afford to simply weed out like crazy. The average field has dropout rates way above 90%. What sounds like very dim students is rather a very brutal selection system. They don't carry your ass around because they need your tuition money. Get organized, get your act together or get the fuck out.
In turn, our universities have a very good rep, nationally and internationally. What comes out of there with a degree is DAMN good. You not only get people who are among the top of their field, they are also experts in organization, information finding (or rather, scrounging), negotiations, project management and a few more things. Or else they'd simply never have graduated.
To answer your questions:
Who pays for the students who go to university and don't graduate?
Who cares if one more person sits in the course? Don't get a seat? Then come in earlier for the next lecture! It's not like you have any right to sleep in.
What happens with perpetual students?
If they can afford it, again, who cares? Either they are lazy bums, then they won't waste space in the lectures because they don't want to get up before 7am. Or they're not then they could as well have a job. Either way, get up early if you want a seat!
What is to stop someone from going to a university until they are one class shy of graduating, moving out of state or even out of the country, and then finishing their degree and never falling under the tax?
What keeps them from finishing and then moving? Nothing. What keeps you from paying back? Well, the "pay back in full if you bail" clause you have to sign if you want your degree.
It kinda helps if your country runs the universities, I have to admit that.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Or how about we fix the problem by cutting out all the bloat in our education costs?
http://articles.latimes.com/20...
http://online.wsj.com/news/art...
http://www.forbes.com/sites/pa...
How about we do this instead?
Students who merit having their college education paid for can get a scholarship, and students who don't merit having their college education paid for can pay out of pocket.
Why should the dumb ass who graduated HS with a 5th grade reading level due to being a pothead slacker have the same investment by society as the student who applied themselves in HS and worked their ass off for good grades?
1. Attend college in Oregon 2. Move to another state/country 3. Profit Since it's a tax, and not a debt, you don't legally owe anything back and you are free to move elsewhere.
Even if institutions are non-profit or not-for-profit, cost have been running amok. Schools are paying outrageous sums to executive staff (but -- surprise, surprise -- not to teachers) and spending money hand-over-fist on projects and buildings and anything else they can think of. As long as this spending remains unchecked the best financing plans in the world can't and won't fix the situation.
Who pays for the students who go to university and don't graduate?
How about those students. If they drop out due to bad grades or other non-hardship reasons then tax those students for costs incurred.
What happens with perpetual students? You know, the people who have been in school for the last ten to twenty years and haven't received a degree. What happens with them?
Easy. You get subsidized for 4 years (or 2 if for grad school) and then after that you start incurring debt if you need longer to graduate similar to how things happen now.
What is to stop someone from going to a university until they are one class shy of graduating, moving out of state or even out of the country, and then finishing their degree and never falling under the tax?
Probably not much but there are ways to mitigate the problem. First thing is that you incur the tax based on time enrolled, not degrees achieved. Second is that you make it like a contract with any other creditor. You don't pay it back and you get your wages garnished. Third, you provide incentives to keep them from leaving the state like waiving a portion of the cost if they remain local and economically productive for some number of years. Fourth, you can require a co-signer like a parent who is responsible for the cost if the student decides to flee the country. Etc. There are lots of ways to mitigate this problem.
Some modifications
can also lead to more schools to teach real skills and not years of fluff and filler
Do you REALLY want the IRS in charge of college funding? We have public school through HS. It has a load of failures, should it be expanded even more?
What you will get is higher taxes, and a greater separation between public and private schools. Do you want to hire someone whose ONLY qualification is a HS diploma from a public school? How about if they spent another 6 years there?
Will the IRS be able to tell someone that they do not qualify for college? How will that be decided?
making payments on current college loans should exempt one from paying the tax. The last thing someone needs who is already saddled with huge debt is an extra tax to save someone who was lucky enough to be born a little later from that same debt.
Actually, it would be nice if the tax only applied to the people who graduated through the program. Otherwise people who pre-dated it are getting charged twice! But.. that probably can't happen since it would require funding from somewhere else to pay for that first batch.
Maybe it could start as a lottery, at first only those x number of people that the state can afford to put through school get to use it. Then, those people pay the tax. Later their tax money is used to put a greater number through. Those peope are taxed too... repeat until everyone gets to go that wants to.
Let me get this straight.. I have to pay for my college education AND that of the next generation? Am I missing something here?
how about you pay for your own **** freeloaders. I worked 50hour weeks at a mail sorting facility to put myself through college. Through hard work and saving every penny I made, I paid off my loans in 3 years. Folks in this country.... always wanting someone else to pay for their crap
Govt isn't supposed to have any part in any of this http://www.constitution.org/jm...
Tomorrow free ponies, SUVs, and cheeseburgers!! YEAH!!!
What could possibly go wrong?
What an incredibly horrendous idea. Increases in student debt are the result of students making bad decisions about the schools they attend. Students are enabled by the federal government that created and supports student loan programs that allow these young kids to qualify for insane loan amounts.
A better solution would be to restructure the current student loan programs such that student debt load is capped at some reasonable level. The effect would be that students would be forced to make more rational choices about the schools they decide to attend and how they pay for their education. The education market would respond accordingly as more money flows into community colleges, state schools, and other lower cost education options. Costs would go down.
"Free" college education supported by general taxation or more targeted taxation would have the undesirable effect of disconnecting personal spending choices from personal spending consequences. The result: market distortion that pushes costs up at increasingly unsustainable rates and second order pressure for education rationing by the federal government.
Maybe for student athlete who make say over $1M year can be taxed to pay back for there college that they got cheap or in to a fund to lower costs for non student athletes.
Because having a degree from most universities gives assurances that you have a respectable amount of knowledge of a field. It is a good way of weeding out some applicants.
When you cant win, ad hominem.
Indirection just delays the anger and fear, and keeps it from being expressed. People ought to be seeing numbers-right-now in their faces, getting horrified, and yelling back. Just like with loans, this will make people think, "Oh, I pay later when I'm rich," and suppresses the sticker shock.
We NEED the sticker shock. And we all (not just students) need to get shocked by it. Because the problem of education isn't who pays and how they pay, but how much you pay for it. The price is totally unrealistic compared to the capital required to provide the service.
"Believe me!" -- Donald Trump
No it wouldn't, which you'd know if you read the slightest bit of detail about the proposal in question. But I guess that would require engaging your brain instead of your default biases which is too difficult for someone of your mental stature.
"Fluff and filler"? I hope you're not talking about GDRs. I hated my general classes ever since middle schools, but they were taught differently at my Uni. Every class and subject became a topic for critical thinking. What I got out of GDRs was a better ability to critically think in topics that I was less interested or knowledgeable in. This is a different type of skill than critically thinking on topics in which you are already well versed; but this skill applies to all topics.
Traditional college is vastly overrated and a waste of huge amounts of resources. Most grads don't end up having jobs related to their major.
It's just a matter of time before most classrooms will be replaced by remote learning . Leaving only the lab-work to be completed in some rented facility.
Instead of trying to find new ways(taxes) to prop up a overpriced, obsolete, low ROI, educational system, we should go forward and cost reduce the whole Enchilada. Deploy a national fibre network to every occupied structure within reason, similar to the old rural electrification act brought electricity to most farms.
Besides educational aspects of a national fibre network. I will bet their will be large number of societal fringe benefits, reduced travel needs, lower levels of communicable diseases, reduced crime, reduced infrastructure requirements, etc. Remember the benefits that occurred when President Clinton removed SA from GPS sats, that act spawned entirely new industries overnight.
So don't look at patching up our backwards educational system, go forward into the future.
He was talking about the fact that only the unveristy educated pay the tax. Those able will simply avoid traditional universities for another form of education that is not taxed.
Except mine was a pk-12. Call it "The Institute" and charge 1% of future income (over a given threshold).
Well, dan_in_dublin, why don't you look around and see how well it's working in Ireland where the government pays for most of the tuition costs.
Does it work as badly as you claim?
SJW n. One who posts facts.
It's why the government taxes cigarettes, alcohol, and machine guns: because they want less of those things.
If you start taxing college, you'll get fewer people going to college, and fewer people who went will work as hard as they would have otherwise. If you want to fix college tuition problems, then stop underwriting loans with tax dollars. Let private investors determine the proper risk of each student based on GPA, SAT, and the field they want to study.
It's such a daftly basic concept of economics, that it's depressing to see so many smart people trip over their own feet trying to explain why it shouldn't apply. You can rationalize to yourself why this is different all you want, but as Feynman said, "Nature cannot be fooled."
Every student who created a loan account with the government would have to repay that account through their taxes. There's no reason for student's who don't receive the Income Contingent Loan to have to repay the loan, that doesn't make any sense.
This is one of the best higher education financing systems in the world and has been operating in various places for 25 years. It gives an excellent balance between fairness, efficiency, social utility... basically every measure you'd want an education financing scheme to do well in.
I am having a hard time with the fact people can't see this for what it really is. This is a pyramid scheme. Any given college graduate is going to need funding from many other workers (drag on economy). If they really want to make getting a degree cheap they need to provide a way for students to test out as proof that they have the knowledge. Of course any type of testing system also creates it's own inherent problems. Either way - going to college is a scam where a majority of students are just passed through with no real challenge or usable knowledge.
when they go pro is when the pay back happens
That's easy to fix, If you don't graduate you have to pay it back.
I wouldn't put a 4 year limit on it though. Some students will have more or less parental support than others. Those not being supported by parents will still need money for books, rent, food, medicine and all that life stuff. To stay out of debt they will still have to work, not just be full-time students.
Besides, if you really want people to get something out of their classes they shouldn't be rushing things. Most full time students I have known that had good grades didn't really learn much of what was taught in class. Instead they were good at filling their short-term memories with enough facts to do well on the test and immediately forgetting it all in order to do it again with new facts for the next test. Truly learning the material associated with a 4-year degree will take much more than 4 years! I graduated in 4 years + 1 semester myself. I regret that. I wish I had taken fewer classes at a time, studied each class harder, learned while at the same time doing more to enjoy my pre-career life. Remember, once you start working you probably aren't going to stop until you are old and suffering age-related illness.
But then I am assuming this isn't paying room and board, just tuition and only for the credits necessary for a 4 year degree. I would attach some rules to this:
Degree must be chosen by sophmore year. Alternatively, only common electives that everyone has to fill plus classes that count towards a declared major count. Declare your major when you chose (up until you run out of electives) but if you do all your electives first it's going to be some very difficult later years! People that can't make up their mind pay their own way. Sorry, the tax payers don't need to pay for half a dozen half-degrees just so you can finally settle on underwater basket weaving.
Student must be enrolled for at least one class in each of two semesters each year. This way there has to be some end to it, someone can't just take a few classes then quit going claiming 'it is only a break' forever and thus get out of re-paying. Going back to the previous part about not forcing them to graduate in 4 years I wouldn't care if they go greater than full-time every semester or only 1 class a semster with summers off. So long as the taxpayers are only paying for the classes themselves and the student does eventually finish the cost to benefit ratio for the taxpayers is about the same.
Shades of Fred Cassidy in "Doorways in the Sand"!
Oh, and my thanks for reminding me of that novel - I need to dig out a copy and reread it now....
"I do not agree with what you say, but I will defend to the death your right to say it"
Here's the deal, there was hay made that the DoEd was making profits off of student loans, yet that isn't quite the problem that it seems to be. For a long time SS made a "profit" (income was greater than expenses). A DoEd that makes a "profit" means it doesn't have to borrow as much to lend to future students (theoretically). As long as it is saved and used to fund future students that is. The real issue is that is not what we are doing, and even for STEM degrees, many people in this country are paying a much larger percentage of their income to repay their education than the rest of the world.
The real issue is how they make these profits. Giant fees on default and late payments, no checks on degree mills that charge the maximum DoEd borrowing limit, and no way for students to "start over". It is unconscionable for these institutions (for profit or not) to be price gouging like they are and delivering so little in value in many cases. I honestly think that the current generation of students need & deserve debt relief; if for anything because of all of the deception that was played out by the education and education financing industry in the last 20 years.
Additionally, at the rate of change in most fields these days, the standard degree does not prepare you for a full career; eventually you are going to have to learn new things; possibly meaning more school. Lifetime learning models need to be developed, some kind of "advanced associates", bachelors+, or "advanced bachelors certificate" to allow prior graduates to add additional skills at their current level and demonstrate achievement. The education industry currently has few products that employees can put on a resume to demonstrate additional learning, and that is a problem for us.
What this really demonstrates is that America clearly lacks the policy innovation that the rest of the world has. We are stuck with old policies and constructs for no good reason other than the current crop of leaders have so little imagination that they can't come up with ways that both their big donation backers and the people can win. That's what previous generations had. Sure, there was always corruption, but they played the role of giving us something for it. Now it is just blatant, naked fleecing of the people. We need a better class of corrupt politicians really, these people aren't even fit for third world politics.
Oddly, nobody complains. Why? Because we know that once these students graduate, they'll earn some decent money and pay a metric ton of tax (*sigh* believe me...)
You just complained.
That sounds so easy! It kind of reminds me of those conservative types who think that every Walmart employee could go and get a better job if they just chose to apply themselves.
Most businesses fail. To have any chance of success a new business will almost always require an immense amount of work on the part of the founder before employees take over the bulk of the workload. If employees ever take over the bulk of the workload. Even this hard work however is nowhere near a guarantee of success.
A more common version of your steps is more like this:
1. Do or don't go to college
2. Start a business
3. Work really really hard for a year or two
4. Close the business
5. Because your specialty was in the subject of your business and your business wasn't accounting you weren't smart about keeping business and personal finances completely separate. You now either declare bankruptcy or spend the rest of your life paying off the debt.
In the rare case where a business succedes the founder has most likely earned their success wether they payed a tuition tax or not. (I'm not talking about big mega-corps here where the founder has been dead for a couple generations and everything is run by parasite executives who have never produced anything)
The "pay it forward" theme in this article is just window dressing. Declining enrollments should be telling schools that they have priced themselves out of the market. If this proposal passes, schools would just assume, like their counterparts in medicine, that every-increasing prices are here to stay because now the legal system will force students to pay whatever price they name.
This happens in Australia. Even with a country wide tax there's nothing stopping someone from emigrating after studying is finished and thus never repaying the student loan.
So refuse to issue passports to citizens with outstanding student loans. Problem solved.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
This is based on the fact that graduates "might" work out more able to afford it.
Why not cut out the if-clause and actually tax the people who are able to afford it because they are rich? Like, you know, income tax.
Unless you want to turn it into a whole social experiment to work out whether universities themselves are actually a good idea or not. Yeah, let's call that into question. Let's put humanity back a few generations because we're super selfish. We get out of having to pay a few measly dimes in taxes and our grandchildren grow up not knowing what an atom is. Good job.
Good luck collecting on that clause when the student is in another country.
In all fairness, the same can apply to a loan. If you are in a country whose laws do not recognize your liability to your previous government, they likely don't recognize your liability for the loan. I think that the list of nations where that would work is pretty short and many of which are not exactly places you'd want to be.
While I am not sure how I feel about such a thought, he does present an interesting perspective. University in many cases presents a conflict of interest. An aspect of university is to prove to other people how capable a person is, but said person is the source of income to the university, so they have to walk a fine line between pandering too much to paying students and diluting the value of issued degrees and driving away sources of funding. If the University is instead funded based on the aggregate success of their graduates, it presents a very different motivation scheme.
Of course, that scheme might not pan out so well for liberal arts, where financially the result is likely not to be favorable.
XML is like violence. If it doesn't solve the problem, use more.
What happens when those folks dont graduate, and thus dont pay the tax?
You make the tax contingent on time spent in school rather than whether they graduation. You're subsidizing their education, not their degree.
What happens when they dont get a job-- does that mean that the people who succeed are in effect subsidizing those who failed?
You give them a reasonable grace period of a few years (5 maybe?) and if they don't find or seek employment, the subsidy converts to conventional debt which they have to repay similar to the current system. If someone wants to become a stay-at-home parent, that is fine but then they can pay for it like any other loan for the education they are not using.
These are problems with relatively easy solutions if you give it more than about 2 seconds thought.
I like the idea of universal education. As others here have noted, the problem in the U.S. is the positive feedback loop between a government guaranteed loan, which cannot be discharged through bankruptcy, and college pricing. The makes the incentives all wrong, similar to the housing crisis where mortgage brokers got paid getting people into loans - they didn't care if they were unaffordable, that was "somebody else's" problem. Colleges admit warm bodies in order to saddle them with prices that grow faster than the market can bear, because this market is underwritten by a government loan.
What is needed is a multi pronged change in the system:
Colleges currently charge the same per credit hour for all majors. Not throwing any field of study under the bus, but some majors enable more job prospects than others. Therefore, to better reflect actual earning potential, colleges should start charging different amounts depending on the field of study. Basically, a business major should pay more for their classes than a medieval literature scholar.
On the loan side, the government should only allow a student to borrow an amount of money based on their planned field of study. This amount should vary only by field of study, not college they were admitted to. So Harvard can keep charging its high rates, but average student X who has a choice between them and a good public school in their state, will either need to supplement with scholarships, work, private loans, family money, or by taking the more affordable option. Also in this scheme, the amount the government will loan will be tied to the average starting salary of students with that particular degree.
Don't like it? Well, free market folks, corporate America has already decided on the value of every single degree a university can grant. It's called the starting salary offered to student with that major. Across the entire country, the IRS can supply an average every year of what the actual, real salaries of new grads is, and the system can be readjusted every year.
It's a harsh reality, but somebody wanting to major in art history isn't, on average, going to earn as much as somebody studying computer science. That difference should be reflected in the cost of their classes and the amount they can borrow. Don't like that? Fine, locate a funding source for your desires outside the public trough.
This would force colleges to alter their current pricing model, and also help put a lid on the runaway inflation in tuition. Somebody that just wants a general college degree in something they find interesting can major in what they want to for less money. Colleges can't jack their rates up 15% a year knowing that money is guaranteed, regardless of the ability for the student to repay it, regardless of the value of the degree (again, in this context value means "what corporate America will pay someone with that degree as a starting salary").
Right now colleges get paid for shoveling people into anything they want to major in, and increase costs at will. This needs to be stopped.
I hope they are careful. Here is another way to scam the system: Arrange your classes so that at the end of your senior year, you are one credit hour shy of the requirement for graduation. Now you have the education, and the transcripts to prove it to prospective employers, but no actual taxable degree.
So tax them based on the amount of education received, not the degree. I should think that would be obvious. The point is to better fund their education, not their degree.
Plus would you hire someone who did that? Me neither. Such a person would raise all kinds of red flags about how they would game the system at my company.
I'll just leave this here....
http://en.wikipedia.org/wiki/P...
Between undergrad and graduate school I am still paying it off and I'm pushing 40. So now I'm supposed to pay my own way (plus interest) and pay a tax so that everyone after me goes for free and without any real appreciation of the cost of doing so?? Screw that. The last thing we need is thousands more comparative literature BA graduates working at Starbucks with my tax dollars paving the way.
Who is collecting these taxes? Last I knew there aren't any Federally run colleges, so how is it getting distributed? Most people can easily afford their state college and university tuitions which are already subsidized by state taxes. The people with crazy loans are those who have decided to go to a private school. In which case that was their choice. Completely unworkable with our current education system.
It does nothing to connect what colleges and universities charge for an education and the value of that education. It merely makes those who receive a more valuable education pay for the education of those who receive an education of no or little value at whatever rate the college or university chose to charge for it.
This program might be a good idea if colleges and universities ONLY received whatever funds those who graduated from those schools paid in this tax.
The truth is that all men having power ought to be mistrusted. James Madison
Great idea, but you can't get it started without a big pile of cash. Nobody will be willing to pay full price for college and then have to pay the taxes too, so you're going to have to subsidize college until you've got enough tax-paying graduates. Social Security had the same startup problem, but that was back when the government was flush with cash.
There's an old Tom Stoppard play called Albert's Bridge, in which a couple of guys constantly work to repaint a bridge. It takes four years to paint it, and the paint lasts four years, so all is well. But then they come out with a new 8-year paint, so the managers fire one of the painters and let the other guy do it alone on an 8-year cycle. After 4 years, the bridge is only half painted, and it eventually collapses.
can also lead to more schools to teach real skills and not years of fluff and filler
Actually, college is supposed to be a breadth oriented experience. It is not supposed to be job training. If you want job training, that's what technical school is for.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
So just as I'm about to get done paying for my college education, I get to pay for everyone else's now too?
The work which [a man educated at the expense of much labor and time] learns to perform, it must be expected, will replace to him the whole expense of his education, with at least the ordinary profits of an equally valuable capital.
And then goes on to talk about how this is an important component of a society with liberty.
So apparently it's important to have the price of one's education be proportional to ones likelihood of repaying the cost for that education. Have others subsidies it for you fights against a Liberty.
If the market clearing price for a college education is $10,000 dollars per year (that is the price where the number of students willing to pay it equals the number of open slots at colleges), giving people a $5,000 subsidy doesn't lead to them paying $5,000 per year, it leads to the colleges charging $15,000 per year.
So refuse to issue passports to citizens with outstanding student loans. Problem solved.
It's not a student loan; it's a surtax. You'd have to refuse to issue passports to any college-educated people for life.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
Are grammar & punctuation real skills?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
So refuse to issue passports to citizens with outstanding student loans. Problem solved.
It's not a student loan; it's a surtax. You'd have to refuse to issue passports to any college-educated people for life.
... but it solves the problem, right?
I never said it was a good solution.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
There is so much wrong with this.
If rising tuition is the problem, subsidies don't fix it.
If financing tuition is the problem, where is the pressure to reduce tuition?
If taxation is the solution, why not a generall tax again?
My libertarian friends are nearly combusting over this, and I understand why. I'm not convinced that a degree is necessary to find a good job, and perpetuating that belief aids the institutions primarily, not the students.
deleting the extra space after periods so i can stay relevant, yeah.
My gut reaction is that those that do not achieve higher education should pay for those that do. I realise that my gut reaction could not work out well at all. But those that do poorly in high school or drop out should pay part of the load for educating their betters. There is merit in the notion of rewarding excellence while punishing sloth.
This is just another redistribution system without the push and pull of a free market to keep prices in check.
Why would universities continue to offer degrees in disciplines that won't lead to higher incomes?
Schools would be incentivized to offer highly-compensated degrees at the cost of liberal arts, etc.
Ken
The French system is good in this regard that everyone can go to university for one year with almost no restrictions. They have to pass to continue. The costs increase after the first year, but probably less than US schools.
Couldn't we do this with a 1% tax on the whole population? Those who earn less will pay less.
And it shouldn't just be for college. It should be for vocational and technical training too.
My God can beat up your God. Just kidding...don't take offense. I know there's no God.
I graduated in 2000. College was $3,500/yr full time (although it was free for me via scholarship)
Now it's around $13,000/yr.
WTF.
My God can beat up your God. Just kidding...don't take offense. I know there's no God.
This policy isn't meant to address the cost of tuition, it's meant to address the financing and payment of fees. Those are separate issues that need separate policies.
In Australia, universities are allowed to charge higher fees for courses like engineering, medicine etc that have higher supply costs than courses like law or economics. If you think a different method is better, fine, but that's not related to the financing of student loans.
Also, I'd disagree that "It merely makes those who receive a more valuable education pay for the education of those who receive an education of no or little value". You're conflating value of education with lifetime earnings. It's clearly a false assumption.
No, they are not separate issues. If cost of tuition was not exorbitant, the expense of financing would not be an issue. The reason that the cost of student loans is an issue is because such a large number of students get a degree that does not provide them with a means of paying off the cost. Separating the cost of tuition from the cost of actually paying for tuition (by delaying that payment) is how we ended up in the situation we are in.
The truth is that all men having power ought to be mistrusted. James Madison
I'm not going to pay my hard-earned money so some broseph can get trashed and try to get laid. they can take on their own debt for that.
Meh. I doubt the people would go for it...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
I worked in my field (EE) part time all the way through school*. How many people could 'intern' in their field, drop out or just drag the last few credits needed to graduate out to infinity and just ease into their profession?
*In my case, a degree and professional license are mandatory, so this scheme wouldn't work.
Have gnu, will travel.
It's paying a lifetime tax of 3% that makes it unattractive.
Ah, well, you put your finger on it: education really has become all about prestige, instead of learning stuff.
And where is that currently the case? On Mars? In a distant galaxy? Because that sure as hell isn't the case in the US.
Just because two issues are related doesn't mean they're not separate.
The cost of tuition and the means of financing tuition are clearly related but distinct issues that have separate causes, implications and appropriate policy responses. The policy proposed here addresses financing. It's not less good for not being a policy to address cost.
Cost of higher education is naturally high, it isn't possible to bring the cost so low that the issues surrounding financing vanish.
It sounds like you think education should all be paid upfront by the student. If that's what you think is good policy then I don't think there's much to gain from further discussion.
I'd also add that the "perpetual student" is a total myth. If you're continuously at university and university has no fees, sure, you don't have to pay that. That means you only have to pay the rent, food, heating, whatever. University won't magically make money for you. If you don't perform well (which implies getting a degree after a relatively short while), you won't get govt aid for long, if at all.
The proportion of people who can actually afford to stay at university for a very very long time (either rich or living with parents) AND who actually desire to do such a thing is so small it's almost zero.
It would be cheaper than my student loan repayment. Are you kidding me. Sign me up! You are getting screwed over on the student loan interest. This would be a great deal.
Why is no one trying to put a check on the source of the problem and stop the endless prices hikes from universities? They have no incentive to be price competitive as students don't really understand what they are signing up for with loans and will pay whatever the university asks.
I see this as the bigger problem. It's not that I don't think these degrees should exist, but there is low demand for these degrees so we should be discouraging too many people from pursuing them if we're going to make efficient use of these tax dollars. The problem is as soon as you start favoring some degrees over others, you'll have the anti-gov't folks yelling about how the gov't is trying to decide peoples' careers for them.
No, we ended her because Colleges think they can charge whatever they want. There's no competition in higher education to keep costs low. Look at the cost of text books. No justifications for them to be that expensive nor to require students buy new text books when old text books would suffice, e.g. Calculus.
Cost and financing have always been separate issues. That's not the students fault. But unfortunately, you need a degree to get a job and you need to be able to pay for college. So students are stuck. This plan would at least provide a means for paying for college.
The next step would be addressing what colleges charge, making them accountable. Forcing them to control costs. Most college courses haven't changed in decades and yet tuition has exploded. Time to review where that money goes.
This is just another flawed redistribution of wealth scheme that will ultimately fail.
It takes away the incentive to progress up the ranks because the tax progressively reduces any gain in income.
When does this tax "expire"? After the New York State Thruway was opened in the 1950s they put a toll on vehicles to pay for its construction. The construction costs have long been paid for yet the toll remains. This "tax" is just another revenue generator for the state treasury to fund projects with no relevance to the Thruway.
After the tax, the take home income will be driven down to the income level of uneducated workers. Why put all that effort going through college when you don't gain a better income? Students will see this disparity and turn down higher education. This starts a cycle of collapse in the system. Fewer graduates, loss of tax revenue, loss of distribution to colleges, reduction of professors and staff, reduction of tuition enrollment, reduced opportunities to citizens, followed by even fewer graduates...
Government has already raided Social Security and other social programs. What is to stop them from raiding my tax dollars targetted for college tuition to prop up increasing welfare rolls when more able-bodied workers drop out of the labor market?
The tax punishes a self-sustained independent lifestyle and marriage. You can only live with your parents long enough to evade the tax, but if you marry or have to move away to find a job you have to get your own dwelling. Then your income drops due to the tax. Need to apply for a mortgage for a house? Your drop in income lowers your credit score which means higher interest rate. Home sales will drop because college graduates will have trouble getting approved for a mortgage.
Political abuse. Obama has already used government to punish political enemies and has proposed education reform that is vulnerable to institutions being refused federal assistance if they oppose or criticize the agenda of the POTUS. This is a very good reason why government should stay out of higher education.
Ultimately the long term problems will outweigh the short term gains. "Share my work ethic not my wealth" rings so true.
Eternity: will that be smoking, or non-smoking? I Corinthians 6:9-10
And you know this how? You do realize you need to a college degree to get a job. So it's a necessity. The fact that you don't know that means you do not know what you are talking about.
Not too mention, we don't know the details of the plan. It was a general outline. But you could easily put in place safe guards. Like, you need to go for a bachelors degree at an accredited institution. Need to graduate in a certain time period. You could even say funding limited to professions/fields that have high demand for workers. So there are alot of ways to prevent people from gaming the system.
So much for you years spent in education....
The cost of higher education is not "naturally high". It is high because we have lumped degrees in music studies in with degrees in engineering. This program will exacerbate that problem by making it so that those who get degrees in engineering will end up paying for the education of those who get degrees in music studies. The fact of the matter is that while there is value in a degree in music studies, there are only a very limited number of positions where such a degree will add value to the person employed. As a result, there is a surplus of people with degrees in music studies because those who get the degree do not spend any time considering whether it will add sufficient value to cover the cost. This program will make that worse because the person who receives the degree will not need to cover the cost if the degree does not provide sufficient monetary value.
The truth is that all men having power ought to be mistrusted. James Madison
You mean the United Kingdom? It's still there and seems pretty strong to me. The citizens, for the most part, seem to love their nationalized secondary education system. They tried moving back to a private system for a few years but hated it and switched back again.
Just as with healthcare, this solution gets it backwards. First you need to address the skyrocketing costs, then you address the financing. The reason that this is the proper order to do things is because once you address the costs, you may discover that there is no reason to address the financing.
The truth is that all men having power ought to be mistrusted. James Madison
Suddenly, study abroad begins to sound ever more attractive :)
Indentured servitude was a form of debt bondage, established in the early years of the American colonies and elsewhere. It was sometimes used as a way for poor youth in Britain and the German states to get passage to the American colonies. They would work for a fixed number of years, then be free to work on their own.
Also the STEM, medical and business students will end up subsidizing the fine art, journalism and french medieval poetry students and their professors. This already happens to a degree.
The proposed change would improve this dramatically. Colleges now make money on anyone they can admit, so they have no incentive to limit the number of liberal arts students they can attract. But once they only make money on successful students, they will have a strong incentive to produce only successful students. Or they could charge higher tax rates to students in lower paying majors or who had poor high school grades / SAT scores / etc.
This is a wonderful way to let market forces improve our schools with very little outside effort. Once a student sees they are paying 10% tax to go into journalism but a 2% tax to go into mechanical engineering, they may start making some better decisions. It still has the flaw of expecting students to think about the future, but it takes away some of the uncertainty of exactly what a fine arts degree is costing them in future opportunity.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Depends on the position. If we are talking engineers probably not but that may be "just the right kind of out of the box thinking" needed for the standard MBA types.
Oh yes, engineers are just paragons of virtue. I'm reading a whole bunch of engineers posting in this thread about how they would scam the system and you think someone with a business degree is somehow worse? Seriously, I have both engineering and business degrees. Are you claiming that I am a criminal because I went to school to learn how to run a business? Or are you just interested in scapegoating a bunch of people you don't actually know much about because it is convenient and you don't actually understand what they do?
Let me give you a tip. No matter what your job is, people think you are an incompetent idiot in some way and few people will ever really understand what you do. People (wrongly) think engineers are arrogant nerds with limited social skills and bad hygiene who don't understand anything that isn't a machine and who don't understand money at all. People (wrongly) think all finance people are criminals who are only interested in making a quick buck. People (wrongly) think all marketing people are a bunch of impractical imbeciles who don't understand anything technical. People (wrongly) think that people who manage others are incompetent greedy asshole who can't actually do anything useful and who never make correct decisions. In ANY profession you will find some people who are good, a lot of people who are mediocre and some people who are genuinely incompetent. Just because you've run into some of the later doesn't mean everyone is just like them.
You mean the United Kingdom? It's still there and seems pretty strong to me. The citizens, for the most part, seem to love their nationalized secondary education system. They tried moving back to a private system for a few years but hated it and switched back again.
"Seems" being a very appropriate term. Every "progressive" system is easy to get used to while ignoring the fiscal realities behind it. The U.S.'s $90 Trillion in unfunded liabilities come to mind. That's the conservative estimate; $120T according to more aggressive figures.
"Now, I doubt any of you would prefer a rolled up newspaper as a weapon against a dictator or a criminal intruder."
How about broadening the humanities with just one college level math or science course?
Funny how the 'well rounded ones' are the 'one sided ones' in real life.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
obso1337 skillz
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Who pays for the four to six years of the first crop of graduates?
Easy. Colleges would take out the loans instead. They would probably have to be initially subsidized by the government, but eventually colleges would obtain a form of credit rating that shows how lucrative their graduates are.
Who pays for the students who go to university and don't graduate?
The student. Colleges would probably charge by the credit hour completed. Someone who completed only 12 credit hours would pay 0.25%, but someone who completed 120 credit hours (and got a degree) would pay 2.5%.
What happens with perpetual students? You know, the people who have been in school for the last ten to twenty years and haven't received a degree. What happens with them?
College loans already have the same "problem". I didn't have to start paying them until after I graduated, so I could have just stayed in college forever. There are safeguards such as limiting the total amount you can get in Stafford loans, and we could put similar safeguards on new programs like this as well.
What is to stop someone from going to a university until they are one class shy of graduating, moving out of state or even out of the country, and then finishing their degree and never falling under the tax?
What stops someone from doing the same thing with student loans? I am sure if you are willing to be a fugitive for the rest of your life and live in a non-extradition country, you could avoid paying for college too.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
How about broadening the humanities with just one college level math or science course?
I was an econ major and I had to take a few science courses, one of which had to be a lab science course. I don't remember if there was a math breadth requirement because econ requires calculus and statistics, so I would have met a basic math breadth requirement, anyway.
I enjoyed my science courses, by the way. One was on weather and climate, and the other was a food chemistry class. I forget if I had any others, but those were the most memorable.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
I think that the whole thing is a solution searching for a problem. If you go to college, supposedly you make more money, no? And if you make more money, you pay more tax. Just like it's always been. Yippee.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
> Actually, college is supposed to be a breadth oriented experience. It is not supposed to be job training. If you want job training, that's what technical school is for.
Actually, this is exactly how the original Universities started out. It was all about the Benjamins. It was only later that academic pretense developed.
"Fluff" courses can be dangerous in the wrong hands...
A Pirate and a Puritan look the same on a balance sheet.
The only problem I have with the current method of student loan repayment is that the government is wholly unreasonable in how they determine how much you should be paying back per month; to wit, my wife's loan payments are more than our friggin' mortgage. I'm happy to pay back the loan, but shit, man, shelter's kinda more important.
Or at least, were, until she enrolled in a Master's program. Hooray for deferments!
An enigma, wrapped in a riddle, shrouded in bacon and cheese
My daughter and son-in-law are both graduating this year, at the age of 28, with zero debt except for a $500/month house payment. They also have a 1 year old child, and they own a house. He will receive his PhD in engineering, she will receive a BA in molecular biology. Both already have job prospects. Well paying job prospects. They will be able to go to just about any part of the US to work that they want to because their skills are in demand. But, to be fair, they don't need high paying jobs because they don't have any debt and already own part of a home. It's amazing how little money one needs when one doesn't have car payments, credit card payments, expensive internet bills, and a host of other luxury items.
No .. their parents aren't rich, although family members did contribute when they could. They did this thing called 'saving' and used things called 'scholarships'. They went to a state school instead of spending money they didn't have to go out of state. Then they did this thing called 'living with their parents' before they got married, and waited until they could afford a house to get married. During this time, they did this thing called 'only going to school when I have the money to go to school, even if it's part time'. They also did this thing called 'work', my daughter worked part-time at PetSmart for a year until she got into their dog grooming programing where THEY trained her in exchange for 2 years of work. She made pretty good money and continued grooming part-time on her own after she left there. All while going to college part time.
The problem isn't with finding funding for school. The problem is with a society that has brain-washed us into thinking that one has to go to college right out of high school, one has to live on campus for the 'experience', and one has to go full time. Sorry .. that's all just bull shit. My ex works as an RN (2 year vocational training) and only has to work 4 days a week because her home is paid off, I am a systems engineer with a 6 figure salary and never took more than a handful of post-high school classes, My wife is a book keeper with only one semester under her belt. Yet all of us seem to make a pretty darn good living. I'm not jetting off to Europe every summer, but we manage to enjoy our lives and not live paycheck to paycheck.
My daughter was convinced she wanted to be a vet. Fortunately, because she was working at PetSmart, she got a chance to see what all that was like and changed to something more to her liking.
I'm not against college, colleges are one source of knowledge. Some people can't learn without someone standing in front of them making them do homework and study for tests. I'm not against spending large sums of money to go to a private college if one can afford it. I am against going into debt for things that aren't worth it (i.e. living on campus) or because some self-righteous high school councilor is convinced that people can't possible succeed in life unless they go to college right out of high school.
If someone wants to go to college, they should be smart enough to figure out how to do it without going into debt. Or figure out if they go into debt, how they are going to pay for it. If they can't figure either of those things out, maybe they just aren't smart enough to go to college.
And one thing I've noticed is the smarter and more self-motivated someone is, the less they need a college education to succeed.
I rarely read replies, it's my opinion and if you thought about your opinion a little more, I'm OK with that.
By making money readily available to the universities via grants and loans over the last 40 years, the universities have greatly expanded their ability to spend money on marble and mahogany. The efficiency of education delivered to students as measured proportionate to the minimum wage has declined by around 4X factor since 1981 here in Texas. In 1981 a year of college cost around 716 minimum wage hours (based on my actual expenses). Today a year at UT costs around 3,000 minimum wage hours according to UT's estimates. What has changed? All of the facilities are much nicer and the square footage of facilities per student is at least 2X what it was in 1981. In other words all that tuition and fee money is going to construction companies, not to educating students.
In this light, I am afraid that providing money to the universities via taxes will just perpetuate the current insanity when what we really need is for universities to once again become efficient at providing education.
The real problem is the whole student loan system. Since most people are paying for college with unlimited-balance, government-guaranteed loans, colleges can charge whatever the hell they want and they know that everyone can afford it and they always get paid. Why does the cost of tuition rise so much faster than inflation? Because colleges suffer no consequences for raising tuition.
If you took away the unlimited aspect or the government-guarantee aspect, you'd see tuitions stabilize right quick. If Uncle Sam (or I guess Aunt Sallie, in this case) said, "Colleges, go ahead and charge whatever the hell you want, but we're only giving each student $15k/yr in loans, indexed to inflation," you'd see colleges implementing some cost controls. Likewise, if Sallie Mae said, "Colleges, we pay you when the student pays us, so better make things affordable, hmm?" same thing would happen.
But no, we have a bubble like the real estate bubble because everybody's buying with other people's money, so nobody cares what it costs.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
Econ and math minor behind EE and CompE.
Econ majors at my school only took 'Calc for business majors' and non-calculus based stats. Made econ classes 'easy A's as you do need calc to understand the subject.
Barely college level IMHO, and that's one of the most rigorous humanities. Sociology/psych majors got way with math 6+6 and 'science' courses with no math beyond arithmetic.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
there will be more students than graduates, both per year and as numbers grow. So you need to charge graduates more money than their education was worth. Interesting.
never need to graduate. can stay in school forever for free.
don't need to get a job after graduating. can stay unemployed until the "set number of years" expires.
this discussed "communal benefit" of advanced education existed twenty years ago. I don't believe it does today. It really won't ten year from now. I refer you to the case of too-many-chiefs-not-enough-indians. This modern concept of not entering the work-force until age 25 isn't sustainable without poverty-stricken and war-torn immigrants. And we're running out of those globally.
We get loans for Tuition and Living and then the repayments are 9% of what we earn over £22000. If you earn less than that, or haven't paid off the total by the time we're 65 the rest is written off.
The only major issues are that not everyone is entitled to the same amount of loan, it depends on your household income which if you live at home includes your parent (or parent). I've seen quite a few people be screwed by this because their family have a high income on paper but also large outgoings and can't make up the almost £3500 you don't get over a certain income.
It shouldn't really be called a loan, a tax is a far more accurate representation and I feel that calling it a loan puts people off even looking at going to University. It doesn't affect your credit here, doesn't make it harder to get credit cards of mortgages and no one will ever be chasing you down for it as the payments are automatically calculating when your taxes are worked out by your employer.
I was referring to your second problem, which I thought was clear because the first problem has nothing to do with the proposal in question and hence reading the slightest bit of detail wouldn't have helped with that.
These proposals are based on the wildly optimistic assumption that there are jobs (commensurate with their degrees) waiting for all college graduates. That's not even true in STEM fields, thanks to corporations in love with the idea of lower-wage indentured H1B servants mainly from the Indian sub-continent.
They also completely ignore *why* there are such massive cost increases in Higher Ed (I've never heard a valid explanation; you?). In any other industry, there would be congressional hearings about usurious price gouging, but I guess Ivy is like Kryptonite to the Alum communities on the Hill.
Oh not "your" sorry, and now that I actually read the problem I didn't care about before I see that your response doesn't apply to that either so I'm not sure what subsidies resulting in higher prices has to do with any of them.
Econ majors at my school only took 'Calc for business majors' and non-calculus based stats.
I took AP calc in high school, so I got credit for regular calc, but really, business calc+econ stats is plenty of math to still considered be a functioning adult, no? We'd be in a lot better shape right now if most of the country actually understood their mortgage and credit card statements.
Sociology/psych majors got way with math 6+6 and 'science' courses with no math beyond arithmetic.
That's not necessarily all bad. There ought to be a minimum amount of science and math that we expect a college graduate to understand, and I agree with you that our current state is that it's probably not enough, but I also don't think that non-majors should have to take the same courses that majors take.
I saw a lot of non-econ majors get slaughtered by econ 101/102, and really, that's a shame, because more people ought to understand basic economics. Why can't the econ department offer a good personal finance/small entrepreneurship course? I bet it'd be popular, and that's a good thing. I took a few music courses for non-majors in college, and I learned a lot. Would I get creamed by an intro music theory course? Yup. But better that I should have a basic knowledge than no knowledge.
Short story long, I think that there is a middle ground in there somewhere between Rocks for Jocks and Geology 101, and that we haven't quite found yet.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
One of the issues that I have seen cited as a problem with the high cost of education is the inability of graduates to take lower paying but socially beneficial jobs. For example, an attorney becoming a public defender vs. going to work for a big firm, or someone deciding to start a business or work for herself rather than take a corporate grind job, because she can't just live cheaply until the business makes it, having lots of debt with a deadline attached.
It sounds like this scheme has the same flaw, it just moves the issue from the person to the group, tragedy of the commons style. People who do take advantage of things and take lower paying jobs pay less into the system. This is a potential social benefit (more creativity and innovation, fewer corporate drones, better public defenders, better health care availability in underserved markets, etc.), but there's still that bill to be paid. What happens when the clock runs out on your "college tax" before you hit your stride professionally? What happens when that's even a significant fraction of students?
The proportion of people who can actually afford to stay at university for a very very long time (either rich or living with parents) AND who actually desire to do such a thing is so small it's almost zero.
I thought the word to describe those individuals was "post-docs". ;-)
The real problem is the whole student loan system. Since most people are paying for college with unlimited-balance, government-guaranteed loans, colleges can charge whatever the hell they want and they know that everyone can afford it and they always get paid. Why does the cost of tuition rise so much faster than inflation? Because colleges suffer no consequences for raising tuition.
If you took away the unlimited aspect or the government-guarantee aspect, you'd see tuitions stabilize right quick. If Uncle Sam (or I guess Aunt Sallie, in this case) said, "Colleges, go ahead and charge whatever the hell you want, but we're only giving each student $15k/yr in loans, indexed to inflation," you'd see colleges implementing some cost controls. Likewise, if Sallie Mae said, "Colleges, we pay you when the student pays us, so better make things affordable, hmm?" same thing would happen.
But no, we have a bubble like the real estate bubble because everybody's buying with other people's money, so nobody cares what it costs.
Mod parent up. US higher education debt now totals more than a trillion dollars. And it's becoming more obvious with each passing semester that students are reliving the history of the dot com and property bubbles. Take something of value, build a story around it that exaggerates its fiscal value, find some sucker to finance it (US taxpayers are born every minute.) This proposed fix won't help. There are too many ways to game the system. We've already turned our state-funded universities into glorified trade schools, funneling most students into accounting, MBA or whatever students counselors perceive to have the shortest term ROI. Basic research suffers and paradoxically unemployable degrees are on the rise. Universities win as long as there is a warm body in a classroom seat. The proposed system might help in the short term by forcing the burden of unraveling this mess onto the most educated population, but in the long term it will punish higher education, reward those horribly narrow certificate factories, give further advantage to PhDs in India and China and force even more of our best and brightest to leave the country.
Who would decide which Universities and Colleges get more money? Would Yale get more money per student due to perceived "quality" over some small community college?
It would turn into a special interest nightmare with a TON of lobbyists being hired by schools all over the country to get more money for them.
As a real-world example, there are STEM and IT programs that offer a full-ride PLUS a stipend. The Information Assurance is one where they pay for your tution plus a $17k/year stipend. Your obligation is two years of government service. You also get internships and the GS service is a 7/9/11 path going up a level every 6.5 months. If you get a MS in IA then it is a $22k stipend and a 9/11/13 path. A good deal all-around for everyone. Also, if you drop out you have to pay it all back. So, the simplify, you can have two options: the one above or the "payback via tax". I like the first option as it also gets someone a job. Have a short grace period of 6 months and after which point they fall into option 1. If they land a job elsewhere they then pay via taxes. You will still have to qualify for the program like any other but you'd let the school and it's associated state handle that.
As long as it's done on the state level. The federal government has no constitutional authority to fund education or to loan or grant money for it.
STEM subsidizes the fine arts eh?
George Lucas net worth $7.3 billion Degree? Film
Steven Speilberg net worth $3.1 billion Degree? Film
J.K. Rowling net worth $1 billion Degree? Classics
John Williams net worth $100 million Degree? Music
Carl Icahn net worth $20 billion Degree? Philosophy
Non-dot-com STEM billionaires? Zero.
after they have had some classes on how to handle money, should be given $2M to do with as they choose, but at age 30 they will have to start repaying it, and will work to repay it as long as it takes. Think of the impact on the economy! Smarter kids will use a little to experience life and invest to minimize their burdens later, dummies will buy Lamborghinis, hookers, and blow. Corporations will have a never ending supply of 30YO slaves to do whatever they order. Everyone's a winner!
How about eliminating current institutions and switching to apprenticeships?
That way money doesn't enter into the equation for education, the student earns a living while going to school.
You actually come out with assets at the end of your apprenticeship, fully educated and asset rich.
Institutionalized learning is a dinosaur, and large colleges need to be liquidated, especially in the age of the internet.
There are too many problems in the world for a system that forces people to wait 4 years or more doing nothing, we need problems solved now.
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
Good on you. I still think you need at least DiffEq, linear algebra and perhaps some control systems theory to be mathematically equipped to take on econ.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Sounds like a Ponzi or chain letter. All it would take would be a large cohort to break the bank. Or a smaller than usual cohort to reduce the taxation collected below the required amount. If they're going to go the government-funded post-secondary route, it should be based on general tax revenue, not on a specific tax. ALSO: wouldn't this be a disincentive for some people to go to university (i.e. if I know I'm going to incur additional taxes as a result, will I not go overseas, or pay for private college, or just skip post-secondary education entirely - particularly in light of things like MOOCs)?
Seriously, how is this ANY different than student loans? At all? I see zero difference.
This sounds like a really great way to encourage students to pursue STEM majors and take higher paying jobs in the technology sector... Did we give up on that already?
And why not tax the hell out of people who actually make something of their lives so that everyone else doesn't have to?
Well said, no argument here.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
That's just ridiculously unfair that $1m earners should fund education for 10 or 20 student-years. It's another anti-rich tax.
They'd all be running at 'floating break-even' for tax purposes.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Consider engineering. Any engineer could probably learn the techniques on the job, but the university degree is good for weeding out the folks who probably can't learn the techniques on the job.
You make two absurd assumptions. First, why would I put years toward something I don't like and has no prospect of buying me food afterwards? I think the average person would put time towards something they enjoy, and possibly be gainfully employed afterwards. Second, there are plenty of places with publicly funded education, to one degree or another. Not all of those places are crawling in debt, either. In fact, some of them have less national debt per capita than the US.
That said, it's generally not useful to plug in single elements of social reform without looking at the related factors. Yes, guaranteed money from the government without some control on what is allowed in changing fees can lead to unwanted profit-seeking. But then, you already have this with government guaranteed student loans, all the fun with your ISPs, health care, "too big to fail", and others. So why would you not want the benefits of socialized services? What you have now is like the worst of both worlds.
Sure I'm paranoid, but am I paranoid enough?
Except if you don't pay tax in that country. In Australia this currently represents a $23bn tax hole of people who have been educated on government money and need to have this reclaimed via taxation but are unable to do so due to emigration, no income tax (90 year olds go to uni here because they are bored), or death.
It sounds trivial until all the small numbers get totalled up.
And where is that currently the case? On Mars? In a distant galaxy? Because that sure as hell isn't the case in the US.
There's more on this planet than just the USA. A lot of countries have tax / government funded education schemes. What is proposed here is similar to something Australia has had since the 1960s. We go to uni with no up-front fees. Our entry into the uni is solely judged by our abilities (according to high-school overall position marks which is a problem for another thread). We pick the courses / university we want to study at in order of preference, i.e. Engineering at UQ, Engineering at QUT, Engineering at USQ etc working our way down the preferences (typically the first preference will likely be the most popular because of the aforementioned prestige).
Universities then get their lists of of all people who applied and work their way down the high school grades pecking order. If you had top marks you were pretty much guaranteed your first choice. Anyway they fill the positions based on school results so the ONLY thing that matters for getting into the best University in Australia (or your other preference) is your academic achievement.
Going to uni then incurs a HECS-HELP debt. When you start working and you hit the HECS threshold of $51000 gross income, you get hit with a 4% tax to start repaying your HECS-HELP debt. If you're so inclined you can pay it off early and every contribution above $200 gives you a 10% discount on your debt, and if you can afford to pay for uni upfront you also get the same 10% discount off the fees.
I'd hate to live in a country where studying depended on a) money, b) anything other than academic merit, c) acceptance by some board who is interested in what kind of a citizen I am, or if I volunteer for the homeless, of if I'm a great football player, or if my dad can add an extra building to the university.
Other countries the scheme is even easier. Austria has a fully socialised university system. You apply, if you meet the academic criteria then you get in, that's it. The admission fees are fully socialised through taxes.
The Mormons have something similar, and it has been very successful. They call it the Perpetual Education Fund. Patterned after the Perpetual Emigration Fund back in the 1800's, but they have learned some lessons from it. They have arranged to eliminate a lot of the possible ways to game the system, although not all of them. There is no way their system would work with the general public, or in the United States, but it has blessed a lot of lives.
The original fund came from donations. They announced the idea in General Conference back in 2001, and hundreds of thousands of people got excited about it and donated money. Twelve years later almost 60,000 people had gone through the program.
The loans are made from interest only. The capital of the fund is never touched. So it won't run out. It may decrease in value as inflation makes education more expensive, but the capital is protected. Even if the recipients slack and never repay. If they DO pay it back (which seems to be the norm), the payments go to the capital, increasing the fund.
Loans are made to people in very poor countries who otherwise would never have the opportunity to get advanced education. In those places the education doesn't cost very much. Relatively. The average loan is $800 and the average training program lasts about 2.5 years. To college students in the United States, that wouldn't even make a dent. But to them, it's huge.
German university Witten-Herdecke http://uni-wh.de/ has this form of "inverted contract between generations" for many years already: http://sg.blog.uni-wh.de/?lang=en.
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So you should throw out a good financing policy because it doesn't address costs? What's the problem with accepting that someone solved a relatively easy problem for us, even though we haven't solved the relatively harder problem yet.
(I'm accepting the rest your argument for the sake of the argument, not because I think it's anything other than moronic)
Except that this "good financing policy" will make the cost problem worse, so it is NOT a good financing policy.
The truth is that all men having power ought to be mistrusted. James Madison
So? This scheme is being proposed for the US.
So?
In different words, you have a highly centralized, centrally controlled system in which the government determines merit and picks winners and losers. How nice for you. Do not want.
You say that as if it were a good thing.
Yes, and it suffers the consequences too.
Well, your education, such as it was, seems to have inculcated you with bigotry, prejudice, and ignorance.
Wow you seem to have read the exact opposite of what actually occurs.
Free university education based on academic merit alone is bigoted? Well I guess that does go against the common USA thinking of if you can't afford it you shouldn't have it.
I still wonder how you think the government determines winners and losers when the scheme is available to every citizen unconditionally. Oh and the Austrian system has consequences? Yeah I can tell by the number of highly educated scientists they've churned out this century.
Oh well I think I'll happily stay "bigoted" (not sure you actually know what that word means) then live with whatever retarded system you think is a good idea.
It is your beliefs about how US education works, and US society, that are prejudiced, bigoted, and uninformed.
And you just can't stop yourself, can you. Are you really that stupid and misinformed, or are you just making that up in order to troll?
As you said:
I.e., the nomenklatura of your country determines secondary school curricula and determines your merit and abilities according to its needs and ideological preferences. That's what you are ranked by, and if you don't conform, you have to go to a shitty university way down that list. Since there don't seem to be many good private universities in Australia, if you haven't been found worthy, you're screwed. Judging by the nonsense you spout, a good deal of those criteria are traditional left-wing anti-Americanism and a common progressive attempt at rewriting of history and economics.
Really? If there is evidence that Austria has been doing particularly well on the scientific front this century, I'd love to see it.
They did well at the beginning of the 20th century, when progressivism sort of worked for a while (under very different conditions). But then great Austrian scientists like Karplus, Kandel, Kohn, Hayek, and von Mises all came to the US.
You should read some Hayek and von Mises; they explain to you in detail why you're full of it.
Graduate from college, become a subject for the rest of your life. How stupid. Instead, how about reign in the colleges and get them to understand there isn't an unlimited pot of gold to steal from. I know I've gone back with my son to University of Maryland. It's nothing like when I was there. They've gone hog wild with spending. Just go after the parents assets or student loans. Stop the crazy liberals from stealing us into a crash, then it's feudalism/slavery. History shows us this.
If college is free and you don't have to pay back much if you don't make much, what prevents us from wasting our resources on degrees that aren't economically useful? Sure, it is great to pay for an engineering degree and most likely that will be repaid, but if somebody wants to spend 4 years (or maybe even a PhD) on 18th Century French Art, then work at McDonalds the rest of their lives, we don't want to pay for that, do we?
When do we cut people off? Do we only pay for undergrad? When do they need to start providing value to society based on their education?
Finally, if you don't have to pay for school, wouldn't it likely encourage some people to pursue high-paying jobs they might not be really that good at? I would love to make the salary of a heart surgeon, and perhaps I could have become one, but it would have cost a lot of money and I know I never would be a great one. But if college was free, why not try?
Actually there are many ways into university. You just need to show you're capable. A friend of mine suffered from Mono in his final school year and ended up with an overalposition score of 16, way below what was needed to get into engineering. So he got into the university via a different degree and then picked engineering electives and when he showed good scores in those electives he asked the uni to change degree based on academic performance.
Quite common, and as I said, university here is based on academic merit, not on the size of your wallet. If you're not smart enough to get into an engineering degree there's a very good chance you won't actually make it through your degree, and if you get screwed by our system then there's usually a very good reason for it.
As for being mis-informed or prejudiced, yes watching an American friend painfully attempt to justify their existence via large essays detailing every detail of their life in order to get into an institution which should be solely basing their opinion on his ability to excel in academia, yes that can create prejudice. Hearing how Americans here on exchange / tourist visas complain about the process of moving from secondary to tertiary education makes me wince, and makes them quite jealous too.
In a world of good government funded education I don't understand why a private university exists at all if not to print a degree on a piece of paper for an underperforming student with a big wallet. You don't seem to quite understand how easy it is to get into university here. To actually not get your chance you pretty much need to put the wrong name and address on your application.
You have to be judged by someone's criteria. In Australia, these are obviously uniform criteria established by the government. You seem to think that's a good thing. I know it isn't.
Yes: uniform, national standards of academic merit defined by your government.
Yes, just like there was in East Germany too.
Of course, it's a lot easier if everything is provided for by the government. Your point being?
Yes, you don't understand, that's clear. You are bigoted and prejudiced, we already established that.
I understand quite well. I just don't think it's a good thing.