What the “other” side is arguing is that if you’re using these income taxes as justification for the government backed loans because those loans allow the attendance of college, then it matters whether or not those same people going directly into the workforce, starting working 4 years earlier, and using their talent and ambition would end up paying a similar or greater amount of income tax. In short, you’re saying only the outcome matters and they’re saying the outcome might not be caused by college attendance.
I’m not saying that only the outcome matters, I’m saying that the government’s financial investment on the student loan program is seeing high positive returns right now, despite the default rate on those loans.
Because you’re calculating that the income levels attained (and income taxes paid) by the specific cohort who attended college are caused by their attendance, rather than merely correlated with it. If they’re caused, the program should take credit for the returns on that investment.
If that cohort of people (generally more ambitious, societal/educational rule following, and possibly more intelligent [at least more “book smart”] than the national median of college non-attendees) would have earned enough to pay the same income tax anyway, those gains cannot be ascribed to the government student lending.
I’m not arguing causation, and I’d be happy rephrasing to say that the investment sees returns precisely because higher income taxes are strongly correlated with degrees. What causes attendance is important to the question of whether investment in college is a return from the point of view of the student, but it’s not particularly important from the point of view of the government and whether the student loan program is paying off today. Whether the government is seeing returns is not a causation vs correlation issue, it’s just a fact.
I’m looking at the raw data, not through the lens of a model that discounts absolute income & savings differences to try to answer a hypothetical question about what college is worth to the individual.
In the case of income & taxes, it’s important in this particular case (that of student loans and income taxes) to look at the raw unadjusted income, because that is what the government sees. It doesn’t matter if tuition is cutting into graduates’ savings, because the government gets it’s income taxes before people get a chance to save (or even spend!).
Your second point is hypothetical, since studies trying to control for IQ and parents’ education and all the other factors we can think of are still showing positive economic returns for college graduates. This paper is asking the question, ‘how can we calculate the return on investment in college’ from the point of view of a student, and trying to rule out factors that give you more income without going to college. However, that is not the same thing as asking ‘what would happen if everyone stopped going to college?’.
