Student Loan Forgiveness - US
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It's all tied together in a 3-part initiative.
Democrats just don't seem to understand - or don't care, as long as it keeps the masses voting their way - that when subsidies and entitlements and government spending cause inflation, YOU CAN'T FIX THAT WITH MORE SUBSIDIES AND ENTITLEMENTS AND SPENDING.
Here is a graph of Pell Grant spending per year:
Here is a graph of guaranteed and subsidized student loan availability:
Here is a graph of secondary educational costs in approximately the same time period:
Coincidence? I think not.
This is why I speak of cognitive dissonance when I talk about Democrats - and, frankly, Republicans too - that think you can spend your way out of inflation.
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What a load of crap. Just like the one with the trolley.
It depends entirely on context, not just on rich people being meanies.
People have to "go through" providing for themselves and taking responsibility for their choices. It is NOT PRODUCTIVE for people who are successful to work so others (capable of working) don't have to do those things. It's not a matter of "I had to, so you should too." It's a matter of "Each individual is responsible for their own life."
I could have afforded to pay 100% of my children's college costs, at least at the local (and good) state university where they chose to go (for largely economic reasons).
But I purposely didn't do that, so they would have some ownership of and responsibility for their own education. Some skin in the game, so to speak.
That was actually an important part OF their education.
Danoff
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That's a bit oversimplified.
The charts you're showing a very long. The last one is almost 60 years long. The others are similar. Inflation NEEDS to happen at a low rate. 1-2% inflation is good and healthy. Less than that is tricky, and deflation is fairly perverse in the marketplace. Given the sloppiness in inflation, you need some small positive amount to avoid deflation, and that's a good thing overall. If you have 2% inflation over a 60 year period, you will see price increases on the order of 3x. So if the cost is 5 at year one, 60 years later it should be 15. These charts also include one of the worst periods for inflation that we've seen, the 70s. So it will definitely be more than a 3x increase. These charts don't show the multi-faceted inflation we've seen in the last year. Universities can also increase their costs faster than inflation.
Pell Grants are not a mechanism for combating inflation. So to describe it as "spending your way out of inflation" is unfair, and probably an intentional mischaracterization of what they actually are. Pell Grants are a welfare policy aimed at getting poor students college educations to with the goal being to increase upward mobility. That's not a bad goal - regardless of what you think about the technique. We all want poor kids to be able to get a good education - at least probably you and I do, there are some people that probably don't.
So Pell Grants should be keeping up with the healthy level of inflation. Over a 60 year baseline you're looking at 3x or so. But if colleges raise their rates faster than that, you have a dilemma. Does the lending contribute to price increases beyond inflation? This is a reason to give a number of Pell Grants that will not drive prices on its own. That also doesn't mean that the number of Pell Grants needs to stay the same. If the overall student population is increasing rapidly, the number of Pell Grants can increase without contributing to a corresponding increase in tuition. That is to say, the amount of price increase due to Pell Grants would stay that same roughly if they track a particular percentage of the student body rather than a fixed number.
So if you take the welfare plan of Pell Grants at a given, and I know you don't but it's instructive to do so, you have an expected increase in the $ amount per Pell Grant and an expected increase in the number of Pell Grants even if those grants are not causing a runaway price increase.
To take this to the next level - determining how much of the tuition price increase over the last 60 years is due to Pell Grants, or particular changes in Pell Grants, is beyond my financial know-how, and I accept and recognize that. Specifically, I accept and recognize that I cannot draw conclusions about exactly how much of what price is caused by Pell Grants, and so I will not draw a conclusion about it. It could be that it drives tuition price, but I can't tell you how much. That would be a research topic and probably someone has done the math somewhere.
Now, turning to debt forgiveness.
A one-time student loan debt forgiveness at a fairly low level per student loan does not strike me as likely to lead to big tuition price increases. To do so, it would have to dramatically change the amount of money students felt they had to spend on tuition. And if it's a one-time adjustment, and made largely to individuals that are no longer customers of universities, it should not have that effect. The debt forgiveness here is also not fairly characterized as "spending your way out of inflation". It's also a welfare program aimed at decreasing the debt burden on students and former students in recognition of the fact that there is a big group of people that took on a lot of student loan and was met with a difficult market with which to pay those loans off. Again, the goal of the welfare program is not a bad one, regardless of what you think about the technique. Ultimately the money was given to universities and ended up coming from the federal government, and that's not particularly new or special.
To the extent that debt forgiveness results in upward mobility, or increased spending, or further economic activity, it can actually have an offset in terms of tax revenue, so it's also not fair to treat it as a total loss in the budget.
Debt forgiveness could end up continuing to contribute to inflation, but given the particular demographic it's aimed at, the effect is probably not going to be huge. $300 billion, or whatever it ends up being, is a splash, but it's not a massive splash.
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Scaff
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It's not actually meant to be a 100% accurate reductive tool.
It's a MEME, a humorous tool used in jest, nothing more, as such I'm not sure why you're using as more.
And it's certainly not advocating that either, but you know, humour. The human race is also a social species, as such I disagree with "Each individual is responsible for their own life" as overly simplistic and in reality damaging to the whole (and no that doesn't then allow the assumption that I'm saying everyone should get everything for free).
Which is great, and for those families that are not in the same situation? As an aside, did you give them nothing, or assist them in order to teach ownership, etc.
What about countries with an entirely free higher education system, do they not have students who have ownership and responsibility for their own education? Given that Finland is on a par with the US for higher education it would seem they do.
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- 7,578
- Exorcet
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I had to contribute to my education bills when I was going for my degree, but I don't think it really had any positive influence on my commitment to learning. I was in school because I wanted to be, and I didn't really need any kind of motivation outside gaining knowledge on subjects that I had been interested in for years already. I think I got much more value out of being a part of my school's FSAE team and designing a car than I would have by working part time trying to pay for school.
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I'm sure glad I slow-rolled paying off my loans. This will cover the remaining balance almost exactly. I don't think its particularly fair to people who did pay off their loans early though. You could argue that by paying them off early they didn't need debt relief...but I don't exactly need it either. That said, I'm absolutely going to take it.
CodeRedR51
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Mine will never be paid off. 🤣
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@Danoff -
1) Those charts are all normalized for overall inflation.
2) Both children had already determined they wanted to go to college. Both had already gotten into multiple schools. We told them we could contribute X amount per year towards costs, purposely setting that about 15% below the local state university costs (which as I said is a solidly good school). They both opted for the school that resulted in the lowest financial burden to themselves. We could have paid 100% of that cost. We could not have paid 100% of any of the more expensive options.
Given that both had already decided to go to college in the first place, your point is not particularly valid. Though I don't really understand how just giving them the money without relating it to anything would have taught them the same lesson. I would have been effectively subsidizing 4 free years of not needing to support or invest in themselves. That was not particularly the lesson I wanted them to learn.
Had either one opted for skilled trade training in lieu of college, I would have done the same thing. I probably would have had to convince my wife, but I wouldn't have hesitated.
1) Those charts are all normalized for overall inflation.
2) Both children had already determined they wanted to go to college. Both had already gotten into multiple schools. We told them we could contribute X amount per year towards costs, purposely setting that about 15% below the local state university costs (which as I said is a solidly good school). They both opted for the school that resulted in the lowest financial burden to themselves. We could have paid 100% of that cost. We could not have paid 100% of any of the more expensive options.
Given that both had already decided to go to college in the first place, your point is not particularly valid. Though I don't really understand how just giving them the money without relating it to anything would have taught them the same lesson. I would have been effectively subsidizing 4 free years of not needing to support or invest in themselves. That was not particularly the lesson I wanted them to learn.
Had either one opted for skilled trade training in lieu of college, I would have done the same thing. I probably would have had to convince my wife, but I wouldn't have hesitated.
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Racer294
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I can't fault anyone that takes advantage of what the government gives them. But to be clear, you still pay for it, along with everyone else. I won't ever accept the excuse that the government should have.
Dementia Joe is using national emergency authority to spend $300B under COVID-19. A gigantic hole in a law meant strictly for war and national disasters. He's signed off on almost $1T in new spending in one month.
Dementia Joe is using national emergency authority to spend $300B under COVID-19. A gigantic hole in a law meant strictly for war and national disasters. He's signed off on almost $1T in new spending in one month.
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Perhaps there wouldn't be quite so many school graduates choosing to go to university, and therefore taking out student loans, if blue collar wages weren't so stagnant compared to the cost of living (they've pretty much tracked inflation rates since the 80's, but actual living costs have risen). Wave the threat of potentially having to live off minimum wage, and you can see why younger people see taking further education as the only way to safeguard against a future of poverty.
Racer294
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I think that counseling in our high schools is a little messed up. Some people really should go to college. But, some average students get talked into it by the same counselors. Not all but some. The old saying " the world need ditch diggers too" does apply to some. Trade schools are a great way to get a good job that will make more than minimum wage. Community college is another option. Some students don't have any idea what they want to do at 18 years old. But, they come around to higher education later in life. Tuition is just too out of control! By the time my wife graduated, tuition had doubled for the same 4 year nursing degree.
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Scaff
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@Scaff -
1) I'm taking exception to those memes because I have seen both of them being used to rationalize this kind of initiative many many times, particularly in response to this particular proposal. There are plenty of other interpretations that don't require me to be a villain for thinking this is a bad idea.
2) Of course humans are a social species. Of course I don't expect to have to do everything personally to provide for myself. If I thought that was required of me I would be have to be a subsistence farmer who built my own log cabin on land I cleared myself. Clearly that is a model that civilization has outgrown in the last 200 years (largely due to technology, not due to any particular social awakening).
But I work in my trade for wages which I spend buying products and services that are much more efficiently produced by others working in their trades. I am still 100% responsible for my own livelihood even though I do not create 100% of everything I consume or use myself. I fail to see how that model is "damaging" to society.
3) There are lower-cost alternatives in education and training. One is a trade program or apprenticeship that leads to a marketable skill. Another is 2-year college, which can be parlayed into a 4-year degree at overall lower cost, or combined with full-time employment and part-time education (which may in fact be paid, in whole or part, by your employer).
4) I do not know enough about Finland's culture, educational system, or economy to answer that question. I will point out (as I often do in these cases) that what works in a relatively homogenous society approximately the size and population of one of the US's smaller states may not work as effectively here.
5) It is possible to be against both student loan forgiveness AND corporate welfare or bail outs. It's not an either/or proposition.
1) I'm taking exception to those memes because I have seen both of them being used to rationalize this kind of initiative many many times, particularly in response to this particular proposal. There are plenty of other interpretations that don't require me to be a villain for thinking this is a bad idea.
2) Of course humans are a social species. Of course I don't expect to have to do everything personally to provide for myself. If I thought that was required of me I would be have to be a subsistence farmer who built my own log cabin on land I cleared myself. Clearly that is a model that civilization has outgrown in the last 200 years (largely due to technology, not due to any particular social awakening).
But I work in my trade for wages which I spend buying products and services that are much more efficiently produced by others working in their trades. I am still 100% responsible for my own livelihood even though I do not create 100% of everything I consume or use myself. I fail to see how that model is "damaging" to society.
3) There are lower-cost alternatives in education and training. One is a trade program or apprenticeship that leads to a marketable skill. Another is 2-year college, which can be parlayed into a 4-year degree at overall lower cost, or combined with full-time employment and part-time education (which may in fact be paid, in whole or part, by your employer).
4) I do not know enough about Finland's culture, educational system, or economy to answer that question. I will point out (as I often do in these cases) that what works in a relatively homogenous society approximately the size and population of one of the US's smaller states may not work as effectively here.
5) It is possible to be against both student loan forgiveness AND corporate welfare or bail outs. It's not an either/or proposition.
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Actually, in most of the skilled trades (at least in the US construction industry), employment opportunities and wages are quite strong relative to inflation.
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Starting immediately after the beginnings of these programs, over the last 50-60 years, secondary education costs have risen almost in lockstep with the widespread advent of the Pell and subsidized GSL programs - except at 4-year private institutions, which have far outpaced them. I don't see how you can pretend that this is due entirely to outside factors.
I also don't see how you can pretend that doing even more of exactly the same thing will have any different result.
If you are tipsy and drink more alcohol, do you get sober? If you are fat and eat more cheese fries, do you get skinnier?
If prices are high due to an easy supply of money, how on earth is increasing the supply of easy money supposed to make things less expensive?
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Racer294
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Pretty good rant
Actually no. It's original concept was national defense and infrastructure. Some necessary social programs have created a voluminous current federal budget. I mean those programs have gotten way out of hand. Under both parties.
Scaff
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The issue is, that's not what they are being used for.
It becomes damaging to society when its used to limit services that are required by all, for the common good.
Indeed, or we treat it as something that will benefit society (civil and business) as a whole and fund people through education to the right level for the skills and talent they have (which most certainly would include trade programmes and apprenticeships). The (arguably) artificial value and appeal that is put on Higher Education over Trade Schools and Apprenticeships, is in part due to the higher cost of attending Higher Education Institutes, a problem both the UK and US share (and has increased in the UK since we most to a US style model for Higher Education). The approach countries using centrally funded models (either fully or partly) sees a much lower issue with this view. While of course still not perfect, the value for example that Vocational education has is seen as being far, far closer to that of Higher Education than in the likes of the UK or US.
Nor does it mean it wouldn't, but that wasn't the point.
I've not said otherwise in regard to your posts, I have in regard to other members who do not bat an eyelid at corporate bailouts (that are often not required) while decrying those for people who do need them. However I'm sure you see why eyes get raised when the Ayn Rand Institute claimed $700k in PPP forgiveness.
No-one has claimed it is, however the act gives powers to the Education secretary to do just that during a national emergency, Trump declared one in 2020 for Covid that remains in force.
I've not said he hadn't, and it might come as a shock to you to hear that I 100% call out any time he's done so. Cite them here and watch me do so! However, what you haven't done, despite repeated chances to do so, is call out Trump for doing so.
Still a big fat no on that, projection again!
Go read the constitution again...
"lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States."
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Keef
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Boomers are the ones who brainwashed young people into believing college was necessary for a decent life. We followed their advice because they're old and deserve respect simply because they're old, right? Now look where we are. I would've been in such a better place if I followed republican boomer advice and...worked for the government.
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I think what makes sense on a micro level - the virtues of personal responsibility and self sufficiency - is a little less applicable on the macro level when it comes to a huge, complex behemoth like the United States. The US is full of questionable and inequitable tax policies and expenditures of money. Massive subsidies to the oil and gas industry, agriculture and the "defence" sector. Does anyone believe that the vast sums spent on the US military are actually cost effective when in comes to "defending Americans"? This student debt forgiveness is a drop in the bucket compared to those boondoggles.
CodeRedR51
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Racer294
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When did I sign off on corporate bail outs? I guess you refer to me there.
When Trump used the War powers it was at the beginning of covid. Again, student debt is NOT a national emergency or disaster.
And you did misquote me. Although I can let it slide.
America is not a Socialist country. I know,.news to you. Common good is a socialist term in relation to your use of it.
Thanks for the quote of the Constitution. It says basically what I said. SMH
A standing military and roads, ports, bridges, and other things that a growing nation would need.
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Scaff
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At every opportunity to condemn them you have failed to do so, if it walks like a duck and quacks like a duck...
And the national emergency is still in place. Had it ended you would have a point, it's not.
Again, no-one has said it is (well apart from conservatives engaged in strawman arguments).
You do know that the US has socialist elements to it's governance and has since the first days of it's existence?
What do you think "lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States." amounts to? A common defense (i.e. Army) is for the 'common good', the general welfare of the united states is for the common good, it's literally in the damn document.
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Racer294
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You are in such a rage, you're not even reading what I type. Hilarious. My statements are fairly clear.
Covid, as a national emergency is basically over. No masks, no mandates unless in a medical facility. Again, what does that have to do with student debt? Really? Be honest. Strawman. 😂
Taxes were for defense and infrastructure (general welfare).
All government has a hint of socialism in them. Duh.
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Danoff
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Hmmm... I don't think I said any of that. I think at this point you're way off of your conclusion that this is somehow spending our way out of inflation. Now you're arguing about something that you characterize as not inflation is being affected by something which is not intended to stop inflation.
I think maybe you've shifted to arguing that Pell Grants increase costs (not inflation) and that increasing Pell Grants will make costs worse. That might be true (I think you could go further to show it), but it's also not "spending our way out of inflation". Pell Grants aren't an attempt to keep prices low.
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