There are two separate “premiums” calculated in the paper. One of them is income, and one of them is wealth (accumulated savings).
Only the wealth premium is going to zero, the income premium is currently still quite high and is stable.
Only the income premium matters to income taxes, the wealth premium that is going to zero does not affect income taxes directly in the short term.
The only premium that the student loan program cares about in the short term is the income premium, and the income premium has not gone down.
The question of why this all happens is indeed interesting and important, however not relevant to what I’ve been talking about here, that student loans are on balance repaid by the college income premium.
In short, the college premium from the point of view of the government’s income is not the same as the college premium to the student. It’s possible for the government to see a favorable financial return on student loans at the same time the student sees negative value in their degree.
Only the wealth premium is going to zero, the income premium is currently still quite high and is stable.
Only the income premium matters to income taxes, the wealth premium that is going to zero does not affect income taxes directly in the short term.
The only premium that the student loan program cares about in the short term is the income premium, and the income premium has not gone down.
The question of why this all happens is indeed interesting and important, however not relevant to what I’ve been talking about here, that student loans are on balance repaid by the college income premium.
In short, the college premium from the point of view of the government’s income is not the same as the college premium to the student. It’s possible for the government to see a favorable financial return on student loans at the same time the student sees negative value in their degree.