The college tuition problem

01.27.12 - 5:33 pm | Tim Redmond |

(18)

President Obama wants to solve the horrible problem of college tuition costs and student loans by offering tax breaks and telling schools to keep their costs down. Memo to the prez: Holding the line on tuition increases won't do it. Tuition is already way to high. Student loan requirements are already way too crippling.

It would be nice if governments would just raise the tax money necessary to subsidize costs at public universities again. But until that happens, there's another interesting idea I heard on KPFA the other day: Why not do a federal bailout for students?

The Federal Reserve bought up trillions in toxic bank debt. Why not use the same principle to buy up the debt of a generation of college students, reduce the payments to an affordable level and do what other countries do, which is to waive all payments until the students get a job? What a great investment in the future -- and what a great way to stimulate the economy. Put money in the pockets of young college graduates and guess what? They'll spend it. Trust me on this.

I wonder if anyone in Washington is even thinking about this. If so, it's awfully quiet.

Comments

Yeah, right.

"Why not do a federal bailout for students?"

Only if you make colleges and universities pay for a big chunk of the bailout. After all, they were the institutions pocketing the money.

Posted by Guest on Jan. 28, 2012 @ 6:57 am

Europe had free college education for decades and yet they

are now rolling that back because of the excessive costs. Back when education was free, graduates were less than 105 of the population. Now that the figure is more like 40%, the costs of free colelge would be astronomical.

And all that at a time when deficits are out of control anyway.

Meanwhile, graduates typically earn considerably more than non-graduates, and so can far more easily repay the loans.

Your idea is a non starter, which is why even a liberal president rejects it, and rightly so.

Posted by Guest on Jan. 29, 2012 @ 12:53 am

That was before the technocrats seized power

That was before the technocrats seized power and forced austerity measures down the throats of Europe's poorer nations (the so-called "PIIGS"). Deficits have less to do with it than income inequality, corruption and tax evasion by the financial elites. The same story that's going on here.

Posted by Guest on Jan. 29, 2012 @ 5:15 pm

There's not a shred of evidence for that contention and

it's significant that even the prosperous nations of northern europe are cutting back on "free" education.

The reasons are demographic, and not a vast right-wing conspiracy. Sorry.

Posted by Guest on Jan. 29, 2012 @ 6:09 pm

Excuse me, were you sleeping through 2008?

You want evidence? Meet the global financial elites...

http://readersupportednews.org/off-site-opinion-section/83-83/7011-wrapp...

Posted by Guest on Jan. 29, 2012 @ 6:49 pm

Or try this link... Vampire Hedge Funds Are Sucking Greece Dry

"If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like piranhas or sharks, eager to strip the financial carcass to the bone."

http://www.alternet.org/story/153795/vampire_hedge_funds_are_sucking_gre...

Posted by Guest on Jan. 29, 2012 @ 6:55 pm

As always, it's about priorities

The government spends on many exorbitant things. We always seem to have the money to bail out the rich, to pay for wars we can't afford, etc. The same "we can't afford it" arguments can be used there too. And yet we can, and we do. If only we did have a liberal president!

That said, the president did toss us a crumb, which is more than anyone else has. There's a new program that went online this year which allows for income-based repayment. Your student loan payments are limited to 15% of your gross income, and after 20 years the balance is forgiven. After a typical consolidation, the bank's usual repayment plan can last 30 years, at usurious interest rates that you can never refinance. So the forgiven balance can be substantial. And yes, you read it right. Once you consolidate, you can never re-consolidate. So if you were forced into a lousy rate initially, and rates later go down, the banks tell you tough shit. It's the only loan I know of that you can't refinance. So I went to the program's website and did their calculations... turns out I make too much to qualify. But I can see where this could be a lifesaver for many students.

No, it's not as good of a deal as the banksters got. The rich always get a better deal. This is just a crumb by comparison, but it's an important crumb for those who have large debts and not so much income to repay it.

Posted by Greg on Jan. 29, 2012 @ 8:49 am

Bad idea

One reason college tuition keeps rising is because of the easy accessibility of loans.

Grant an amnesity on loan payments and guess what?...Schools will raise tuition ever faster.

Leland Yee merits praise for drawing attention to the lucrative pay packages given Cal State and UC CEOs.

Posted by Guest on Jan. 29, 2012 @ 5:02 pm

There is an element of truth to this

I was reading an opinion piece in Al Jazeera not long ago about how one of the main differences between social democrats and neoliberals is their approach to funding public services (like education). Social democrats prefer to pay for services through taxes and reduce the costs to the user. Neoliberals say that their goals are the same, but they prefer to give a credit to the end user, which will then be spent on privately provided services.

In a perfect market system, the theory says it shouldn't matter, but of course we don't have a perfect market. In reality, when more money is available, private service providers (like universities) will raise prices. OTOH, when more students are given access to public education, private universities will tend to lower tuition to compete and provide as good of a value as the public schools. Thus every $1 provided to public universities translates to more than $1 net benefit to society. But every $1 provided for use in private universities in the form of financial aid, translates to something LESS than $1 in benefit.

It's a potent argument. Personally, I think higher education is a public good. Once upon a time, not everybody even went to primary school. Now, university education is arguably essential. We should start thinking about how we can provide it free to students through progressive taxation. To those who argue that it's too expensive because more people are going to college now, I would say that the same arguments could have been made about primary school as more people were entering school at the turn of the last century.

Quite simply, whether or not you go to college shouldn't be based on ability to pay. That said, until we gather the political will to make college free for everyone, student loan relief and forgiveness is a very crucial first step to allow struggling people to survive in the immediate term.

Posted by Greg on Jan. 29, 2012 @ 5:36 pm

Oh yeah...

The piece is called "Pepper Spray Nation." It's a good read:
http://www.aljazeera.com/indepth/opinion/2011/11/20111124103714508499.html

Posted by Greg on Jan. 29, 2012 @ 6:02 pm

Great comments, Greg

Great comments, Greg. As a CAL alum, I found this excerpt from the Al Jazeera piece rather telling~

"The UC system is part of a three-tiered college system - universities, state colleges and community colleges - that according to California's 1960 Education Master Plan is supposed to provide affordable higher education to every high school graduate in the state who wants a public college education. Indeed, technically, it's supposed to be tuition-free. But student "fees" now make a mockery of that. The 32 per cent fee increase mentioned above was just a tiny fraction of the enormous fee increases since 1992 - roughly 1/16 of the 534 per cent total increase in dollars through 2009 - or 1/10 of the total when adjusted for inflation. It's now even higher, and current plans would jack that increase up to more than 1,200 per cent over 1992 levels in just the next few years."

And if you're wondering where all the money goes, read it and weep~

"UC feels free to use Educational Fees however it pleases without accountability. That’s why it can pledge “ed fees” as collateral for construction bonds and use them to pay debt service. In the past week, I have discovered another, equally disturbing, consequence of UC’s refusal to be accountable for its use of “ed fees:” It has allowed (or perhaps more accurately used) the rapid growth in “ed fees” to dramatically increase the disparities in the per student funds it provides to each campus. As tuition rises, students are not getting what they think they are paying for on their own campuses, and the entity they are paying has not been transparent about where the money goes."

http://keepcaliforniaspromise.org/482/where-does-uc-tuition-go

Posted by Lisa on Jan. 29, 2012 @ 6:40 pm

the students were screwed when the bankruptcy laws changed

If banks could fail, any bank, then underwriting would be much stronger and costs would have to stay in line with what people can pay. The financial rape of the young is shameful, particularly since it is being done by people who benefited from very reasonably priced educations in the 50's, 60's, 70's and 80's. Dick Blum is a disgrace, but he is probably having a blast at Davos with the hot Ukrainian protesters.

Posted by Guest on Jan. 29, 2012 @ 5:03 pm

comments on Mirkarimi: 800

comments on education: 6
tells me all I really need to know about priorities

Posted by Guest on Jan. 29, 2012 @ 5:05 pm

as vexing as the cost

is the lack of classes needed for the most useful skills: if 800 students need anatomy: then 800 spots need to be available. One recent State grad told me his frustration was with big money spent on nice dorms/pools and such, and campus buildings-more to sell the school than anything else-and not enough on progams/curriculum.

Posted by Guest on Jan. 29, 2012 @ 7:44 pm

I walk by the new city college Chinatown campus

that takes up much of the block on Kearny and Pacific everyday.

There's a downtown campus that is a twenty minute walk at 4th and Mission, that building offers few classes and is easier to get to for most people in the city, yet offers few classes. I have to wonder what they are going to do with the new one.

A lot of this expansion into colleges and school districts seems to be about getting matching state and federal funding, and they will figure out the classes and long term budgeting after that.

Posted by matlock on Jan. 30, 2012 @ 2:34 pm

Senior housing w family housing

would have served a greater need on that land- but St Marys gets a beautiful new private Catholic girls school

Posted by Guest on Jan. 30, 2012 @ 7:02 pm

pell grants

Unfortunately the price of higher education at a good university is becoming an impossibility for the average middle class family. But there are
steps you can take to obtain financial assistance, for students who show potential, but are financially challenged to enroll in college.
Go to http://www.grantedu.info to get the assistance and information you need to succeed.

Posted by Guest on Feb. 04, 2012 @ 4:18 pm

The first question I'd ask is

The first question I'd ask is where is all that money going? A sub-set question to that is - what is required to teach. Well, of course teachers. Did you know that less than 35% of college tuition actually goes to teachers? All the rest goes to IMAGE. Why? Because of the standards set by the department of education. Ever notice how non-accredited schools tuition is only a 10th of what accredited education is? Kill the governmental regulation on a free-market and you fix all the problems over night. Keep regulating everything and you kill it all once piece at a time.

Posted by Guest on Feb. 28, 2012 @ 2:07 pm