The relief policy has been terribly irresponsible:
* Those who sacrificed and paid off their student debt receive no reward. Those who put 10k in ink or vacations on the books get a 10K payday.
* People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not
* The policy smacks of "vote us back in or else 10K wont be yours"
In general I am strongly against policies which change the rules on and penalize people who sacrificed to better their life and better those who made relatively worse choices (or choices with known tradeoffs, but then the tradeoffs get mitigated at the expense of those who did something more taxing for a reward). You can tax the wealth out of those who chose to better their income, but you cannot tax the experiences (eg:travel) out of those who dissipated their resources today/in the past.
For example, bad news for those who never had a dream to be a Mech Eng, but did it anyways for the good of their family.
As a general observation being in America the past ~10 yrs I find America has a major problem with policies that pattern match this kind of subsidize the negative side of choices with tradeoffs to the detriment of someone else who made a sacrifice to receive a reward.
Bring back the ability to declare bankruptcy for student loans and then market can better price risk. The only stipulation I would think might be good is a waiting period of say 10 or 15 years. This would to prevent say a new dentist or lawyer student from immediately declaring bankruptcy after graduation. By 10-15years on, if the person can't afford student loan payments, then bankruptcy should be on the table.
I think this is a good policy, as long as the universities are made to bear the risk of non payment. They should stand behind the value of their product with their money on the line like every other business.
Sure. Why should anything cost anything? Why should anyone have to subsidize people getting useless degrees at expensive colleges? Why can't you go to CCs and then state schools for much less? For most people, the modern college experience is just extended high school with almost zero educational value. Most people are more suited to trade schools. The poor kids already have incredible access to scholarships. It's all just "I want it" thinking.
You'd probably be surprised at how many of the student loans in default came from trade schools. I know the narrative is that all the people in student loan trouble majored in Bulgarian folk singing or whatever, but that's not anything like an accurate picture.
The largest outright student loan cancellation in recent years was for former students of ITT Tech, which was a trade school.
What happened a lot of the time is people choose the easiest program and it produces a wild oversupply in that field. Meanwhile we will basically always have an under supply of plumbers and septic technicians cause most folks hate the idea of working with sewage.
> The largest outright student loan cancellation in recent years was for former students of ITT Tech, which was a trade school.
I don’t see how A massive fraud is even a relevant argument here. This isn’t a trade school like welders, plumbers, etc. and it certainly doesn’t justify the non-fraud subsidies
Ehh if "I want it" was all it was about then why is the US so hilariously expensive for college compared to other countries? Looking around at my fellow Americans it doesn't seem to be because it makes us smarter that's for sure.
It wouldn't if you get a good paying job. But sometimes the degree doesn't pay out that way and people are left struggling to pay rent, let alone debt.
I'm a bit conflicted on this. With regular bankruptcy the loaner can take possession of the item you bought. With education the bank can't take your degree, knowledge, network and whatever else you gained from university. I'm not saying this shouldn't be a thing, but it would encourage people with no real property to declare bankruptcy even if they could pay it off.
Not true for unsecured loans and even for secured loans there is no guarantee that the security provided will cover the loan. Which is why the probability of a default is a variable while giving loans. By removing bankruptcy option, government is encouraging subprime loans in education.
Student loans actually can be discharged in bankruptcy. There’s been this myth floating around for awhile. Yes it is harder and it’s a bit more work for your lawyer but is absolutely doable.
In theory, one can discharge student loans through bankruptcy. In practice, the bar demonstrating an undo hardship severe enough to have them discharged de facto impossible to cross.
Thus, people simply say that they aren't dischargeable.
If you talk to a lawyer on the subject, they will tell you exactly that. Even developing cancer that gives you a 20% chance of living for the next five years isn't a hardship undo enough for courts to discharge student loans.
I'm not disagreeing with any of your points, the 10k forgiveness policy is strictly a way to appeal to young voters. But you clearly didn't read the article.
The article is about changes to the income-based repayment program, which was a big change that was part of the same bill. And frankly it doesn't get enough attention for how much of a long-term impact that it'll have on future borrowers, as opposed to the (tentatively) one-time forgiveness that affects mostly college graduates.
That's not a "small nitpick" but a huge glaring gap in this entire process.
Not only can it be undone but it can be re-done or changed in any way imaginable short of a court stepping in and saying "no, you don't have the authority to do that" which is unlikely.
We should get VERY nervous when POTUS enacts sweeping changes to "rewrite" laws without actually changing the law.
The fact that the debate has remained on this topic is exactly the political division desired.
It’s correct that the relief will do nothing to solve the overall problem.
It’s also correct that it’s an unabashed vote buying scam that probably shouldn’t even be legal.
But it’s also correct that the student loan structure is truly predatory.
This entire conversation needs to shift from paid relief to “0% interest student loans” or fixed interest (borrow 100k and you will pay back 130k) and/or a pre-income tax option to pay back loans faster akin to a 401k.
The way that interest builds on deferrals for these unforgivable loans is truly nuts based on the people I’ve talked to. Unless there’s a permanent way to do that, it’s all political theater.
I'm not sure 0% interest really helps when (prospective) students still have the ability to borrow an unlimited amount of dollars. The current crisis is caused by colleges raising tuition to maximum amount that students are able to pay, which is essentially only limited by how much they are allowed borrow.
What I would like to see is:
1. Federal student loans capped at $XX,000 per semester, disbursed directly to school.
2. If the school accepts federal loans for any student, then tuition and fees are capped for all students at $YY,000 per semester (where YY is a small multiplier on XX, maybe 1.25).
3. Interest capped at a "reasonable" amount. This might mean simple (non-compounding) interest, or non-accrual of interest while loans are deferred, or something else.
4. Private loans should be dischargeable in bankruptcy after 10 to 15 years.
You are missing the worst part. There is no policy to actually fix the problem. Just paying off some debt now won't stop the next generation from taking out the same loans.
Nah, that was an opportunity that universities saw to make more money and they took it without thinking of the larger consequences (which is where we are today having to do loan forgiveness). Nothing about government underwriting forced schools to charge higher tuition. They chose self-enrichment (not even profit to shareholders except for scam schools) over easier access to education and a more educated population. Universities should not be behaving like capitalists.
Yes universities took advantage, but it seems clear that the government is who is to blame. They created a situation where a person who is going to be making $40,000 a year could take out massive student loans. It is hard to put as much blame as you are on an organization who has the opportunity to get government money.
There were consequences for taking that cash, as we see today with the need for loan forgiveness.
If universities had kept tuition low, you might still have had government backed loans, but would not have needed loan forgiveness.
I don't see how people can simultaneously be against government-backed loans existing, but also wanting universities to take as much from that system as possible to the detriment of society.
>but also wanting universities to take as much from that system as possible to the detriment of society.
I don't think anybody is saying universities should take as much as possible, only that it is to be expected. Because it is expected the government should not be enabling it. People have been asking the government to stop with these loans since the beginning saying this exact thing would happen.
They are not acting like capitalists because they don't have to. They offer a low value product for a high price, and the government foots the bill through guaranteed student loans. If they had to take risk on the loans, then they would act like capitalists, which means limiting expenses, and pricing the product where it provides economic value to the customers. If not, they cease to exist, like any other capitalist.
This is bucket-crab talk. Not getting a reward is not the same as getting penalized; those who paid everything off have an unchanged situation. You might say the action doesn't go far enough and should lift up more people, and there is an argument for that.
This, however, just smacks of "the train ran over me, so it's disrespectful if it doesnt also run over everyone else."
When you say those who paid everything off have an unchanged situation when compared to people who didn't and instead got the subsidy... What precisely do you mean? If money is fungible then the person who didn't pay their debt off and was given an extra $10,000 now has more money than the person who did spend their own money to pay off their debt? This is incontrovertible, right?
If you paid your loans off, you don't lose anything by someone else getting $10,000. That is, indeed, incontrovertible. Imagine I have an apple and you have an apple. If I get another apple, that doesn't mean you now have zero.
The government pays off my $10,000 and your situation is literally no different. I'm not sure how you're not getting this. If you were locked in a room and had no idea the government gave me that money you would have no idea and remain unaffected.
This is what I mean by bucket-crab mentality. The inability to discern someone else doing better from you doing worse.
> Except we do have an idea not just from the news/knowledge
This is the crux of it. You're not actually penalized, it just makes you upset. You can choose to not be upset. I'm happy that people who most need help are getting some.
> But also from the fact that taxes fund this scenario.
> One gets their tax money (plus some) back. Another pays taxes, but gets none back.
This is false. No taxes were levied on you to fund this scenario.
If you want to count the downstream effects, the deficit is drastically down under the Biden administration, so this is part of a package deal that helps you out (not that the this would raise your taxes anyway even if the deficit were to increase).
Not to mention the effects of stimulus from people who would otherwise be paying money on a loan but can now spend it on other things, which will trickle up to whatever corporation you work for, so from this action alone you may actually come out ahead.
But I contend that you're not interested a full accounting or the dollar amount people are receiving, because if you were, you would be much more interested in the pounds being given to interests that clearly don't need them (military, mega farms, oil) instead of the pennies given to those that do.
The short of it is no taxes are levied on you for this to happen, it really is a win for everyone, and it's ok for these people to get a little bit of help that you're not getting.
This is the crux of the point. We're discussing that two people with equal _capability_ to pay, but differing conscientiousness have outcomes that are inverted from a well ordered set of incentives. We're creating (additional) precedents for rewarding irresponsibility with finances in the face of marginal choices between paying back a loan and present day consumption. (not in the choice of degree)
> you would be much more interested in the pounds being given to interests that clearly don't need them (military, mega farms, oil) instead of the pennies given to those that do.
I actually am interested in these, and they're just not the specific topic today. For the record I am against most (all?) forms of market distortion by the government, except when they're breaking obviously distorted economic incentives[1] (and not creating worse ones as is the case here).
> of it is no taxes are levied
Taxes for the most part a general bucket and as such expenditures as such are from taxes paid. Even if it's not my money it's not right for whomever paid them
Biden isnt hopping in a time machine to take things away from you. Nothing is being taken from you. Someone else is getting something that you are not, that's all.
The central idea is that the person who payed off their debt will have to pay again to bail out the debtor.
Governments raise money through taxation. 10k of forgiven debt is 10k more than needs to be raised in taxes.
Someone payed their debt, and then will be taxed more to pay someone else's too.
You might say, "but governments don't have to balance their budget", yet the US still has taxes. If money spent (and debt incurred) is irrelevant, why collect taxes at all?
Suppose everyone else on the planet is given $10B and you get nothing. Why would you be concerned? How could it be unfair? They're just being given something that you are not.
Ok, so we're agreed that you're not affected at all but instead want to talk about an entirely different concern.
This concern is where does the money "come from?". No money is coming from anywhere, because no money is changing hands. It is debt that is owed that is no longer owed. No money is taken from any pool of money to pay is off, it is simply removed from the books. No government program is paying for this. No taxes are levied on you. You will not see your tax bill go up as a result of this. Levying taxes is a power of congress, no the executive, so Biden could not do this even if he wanted to.
Your next question is why are we helping these people who need it - we are helping them because they need it, because great countries take care of their own. You were able to pay off your loans - that's great! But many others did not fare as well, and it is in our collective interest that they not suffer so terribly for this financial burden. Less money being paid back to these programs (which have terribly high interest rates to begin with) means more money stimulating the economy. It means more money will trickle up to the corporation you work for, and you will see some measure of this benefit.
I would suggest that instead of spending so much time being upset about how some people at the bottom got some help you instead redirect that energy toward the programs benefiting those who do not need the help and are absorbing resources that utterly dwarf students having to pay $10k less - the military, oil subsidies, megafarm subsidies.
As long as we're punching, why not punch up instead of down?
EDIT: As for "why are we only giving to these people who need it" - great question! I would welcome giving more help out. I would agree this measure doesn't go far enough. We could be doing more, and we should demand that we do!
People who will be getting this benefit have paid or will pay far more than $10k in federal taxes over their lifetime. You can view it as them getting a tax refund of their own money if you're concerned about helping anyone else with your money.
Err.. did you just look at your taxes and think, "this must be that student loan forgiveness!!"?
Student loan forgiveness is not being "paid for", because no money is changing hands. It is debt that is being forgiven. The government is not paying money out for this, because it is already spent.
Your taxes keep going up because you are making more money. It's not a bad problem to have.
> My that measure, my bank shouldn't mind if I don't pay my mortgage. After all, new money isn't being spent.
That's silliness. Your bank is not going to forgive your debt, so that will not pan out for you. Biden is forgiving the $10,000 in loans, so that will pan out for the recipients.
But certainly if it is no cost to the federal budget, it should be no cost to my banks budget. Why don't they simply forgive me loan. After all, no money is changing hands, so it is of no cost to them?
The money had to come from somewhere. At the very worst case it's dilutive printing that is an invisible taxation (via inflation).
Keep in mind the hierarchy of the federal reserve, which is split into banks, which have at least some percent of private ownership. While the government can "forgive" the student debt, it must keep the debt owed to the federal reserve on it's balance sheets (deficits and debts). The Federal Reserve (afaik) is not forgiving that debt. Therefore some where, someday, someone is going to have to pay off the that government debt (and along the way the interest accruing)
If you loan me 10k, and then later forgive the loan, you are still 10k in the hole. I spent the 10k on goods and services, and you have 10k less that you can spend.
And even if I supported the debt forgiveness, I would still think it's crazy that the president can just unilaterally spend $500 billion like that without any checks and balances.
> * Those who sacrificed and paid off their student debt receive no reward.
Everyone is sacrificing. This statement seems to imply that people who haven't paid of their debt only haven't done so because they haven't sacrificed anything and are instead taking vacations.
Moreover, the general concept of taxes is that you put money into a government pot, and it goes to things that maybe won't better you in a direct way. I've paid much more than $20k in taxes, why can't I get something out of that which will benefit me directly for once, even if it doesn't benefit someone else directly? My sacrifice is that I don't have kids, and yet I'm paying for the schooling of other people's kids. That's not something I complain about because I know it will help society as a whole.
> * People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not
The whole point of the policy is that people aren't paying off that loan one way or another. It's not as if many people have $10k-$20k sitting around they could put toward a student loan but have decided not to because of the announced policy.
> * The policy smacks of "vote us back in or else 10K wont be yours"
It's the other way around: the policy is the fulfilment of a campaign promise from the last election; student loan debt relief was one of the things Biden campaigned on. Last time we elected a billionaire real-estate developer and got tax breaks for the rich and corporations. This time we voted the other way and are getting student loan debt relief. That's just the way it works. Anyway, Biden isn't up for reelection this year and is implementing this action through the executive branch, so control of Congress doesn't matter so much as to whether this policy is implemented or not.
It's not as if many people have $10k-$20k sitting around they could put toward a student loan but have decided not to because of the announced policy.
That is exactly what is happening. Sitting around could be defined as parents with $10,000 ready to help but deciding to let general tax payers pay up.
Payments have also been paused for 2 years with no interest. I can say personally I have left the money “sitting around”, because there is literally no reason to pay the loans when you can just invest (or otherwise let inflation devalue the debt) and pay later
If that were the case, there wouldn't be such a clamoring for debt relief. Fact is that student loan calculations already take into account the assets of parents. Schools routinely factor in the help they could give into the total cost, and offer a package of grants and loans to make up the difference. If parents are withholding support it likely means the student can't meet tuition with their aid package.
> Those who sacrificed and paid off their student debt receive no reward
"I suffered, so everyone else should suffer the same way I did!"
Seriously, this is such a self centered and short sighted point of view; it's the "back in my day people worked hard and gave their loyalty to their company" mantra of the previous generation being recycled.
It's not a reward, it's a relief for predatory student loans applied to people at a time where society yelled "get a college degree or you'll never get a good job" into their ears day after day.
If your knee jerk reaction is to feel sorry for yourself, or mad at them, perhaps you should take a step back and instead be happy for them, that they are not being shoved through the same pain you were (a pain which is is being amplified by the rise in the cost of living and stagnated wages).
We should be lifting people up; not saying "grab your bootstraps and pull."
> Seriously, this is such a self centered and short sighted point of view
No, this is exactly the opposite.
The world would be a better place if everyone acted responsibly. People are willing to act responsibly in the form of paying back the money that they borrowed and said they would pay back. Even when in the environment of
> predatory student loans applied to people at a time where society yelled "get a college degree or you'll never get a good job
People still decided to respect the words onto which they signed their name.
And now, those same people see that others get benefits from not acting with the same responsibility.
It's a bug. Incentives should be aligned with the societally-beneficial behavior.
(I'm not an American, BTW. I'm not benefitting from this debt cancellation happening or not happening.)
> People still decided to respect the words onto which they signed their name.
18 year olds. We don't consider them responsible enough to drink alcohol, yet we expect them to take on crippling amounts of life-long debt? We shouldn't. It's setting them, and society at large, for failure just to make a few quick bucks.
> And now, those same people see that others get benefits from not acting with the same responsibility.
For very different amounts of money. People who went to college 20 years ago paid less than half than folks who just graduated. 10 years ago was 75% of today. A lot of people are ignoring this fact.
Society is about helping everyone, not just a few individuals who an individual deems as "responsible".
Yeah I think a lot of people are acting like the system is static and not dynamic. Tuition increases over year in unexpected amounts. Interest rates do too. Student loan costs are similar to a 30 year mortgage cost. If you're expecting 18 year olds to accurately know what 30 years (or even 10 years) is, then you're fooling yourself. They just don't have that experience. They're just relying on what their parents and society told them: "go to college". But this is exacerbated by everyone acting like what worked in the past works today. You can't go in thinking that school can be paid off by working over the summer (like my dad did) as that just isn't going to happen. Schooling is also more difficult now because intelligence has progressed and what students need to learn to stay up to date is a higher bar. This makes working during schooling harder too. The ecosystem is moving at a rapid pace and ignoring this just increases the problems.
Just to add a bit of context here, a vast majority of those who have "crippling amounts of life-long debt" used their money for grad school, and so certainly were not merely 18 when they made this decision.
$40,000, the 2020 average cost of tuition (not including living expenses, books, etc), at up to 14% compounding interest... You'll have to pay over $450 a month just to cover interest.
It doesn't take that much debt at student loan interest rates to be "crushing" in this economy.
The current system has existed for long enough that we can observe the results of its incentive structures. We can see that people continue to suffer from heavy student loan burdens which limit their ability to fully (and productively) participate in society, even well after they graduate (or don't) university. The incentives you allude to clearly haven't aligned social behavior away from this outcome, so why should we expect that to change?
Given this apparent reality, what we're considering isn't whether or not to risk negatively impacting the existing incentive structure - which isn't producing an optimal outcome to begin with, but whether or not to assuage the suffering of a significant number of student loan holders. Would you prefer taking a purely moral stand for "personal responsibility" if it meant preventing a measure that could help lots of people live fuller lives and contribute to society at a higher level?
> Incentives should be aligned with the societally-beneficial behavior.
Interestingly you've ignored all of the societal benefits of subsidizing education for all of society's participants.
> The world would be a better place if everyone acted responsibly.
This is way too reductionist. Of course the world would be better if people would just all be personally more responsible. Most developed nations don't have the concept of crippling debt due to education cost. Are those nations being irresponsible too?
The fact that the people arguing against this spend less time arguing against the massive spending increases for the american military is a pretty big hint that the central point is "I want to punish my fellow american, I want them to hurt." and not the actual money amount. They don't care if it's $10,000 or $1. "Personal responsibility" is largely a dog-whistle for "if your situation is bad, it's your fault and you deserve it. FYGM."
>> predatory student loans applied to people at a time where society yelled "get a college degree or you'll never get a good job
> People still decided to respect the words onto which they signed their name.
Sorry, are you defending predatory practices? Most government regulation that are almost universally agreed upon, even by stout libertarians, are making predatory practices illegal. In absolutely no world is a singular person, of any intelligence and experience, a match for a team of lawyers at multi-million or multi-billion dollar institutions. It is the same reason many dark patterns are illegal. Because if trickery is used then informed consent is not actually given. It is a situation that is near universally agreed upon as unfair. I'm sorry, you can't just hand wave predatory practices away. They are not okay. Talk about incentives. If you allow predatory practices to flourish you get Robber Barons. That's not healthy for an economy or a country's citizens either.
The point is that they suffered, and now are being told to suffer again, to subsidize others.
This is a classic example of the ant and the grasshopper. However, This policy codifies that grasshoppers will always be subsidized. Free education for music and drama majors, and no subsidy for engineers.
This directly encourages people to select majors that are not in demand.
That's part of being a member of a society. Your tax dollars also pay for roads you may never use, corn you may never eat, healthcare you may never use, schools you never attended, and so forth. The benefit is that you also gain things from being in the society, like roads you do use. Food you do eat. A healthcare net which will catch you if you're permanently disabled. Schools you did attend.
Being part of a society does not mean socializing the cost of every person's mistakes and desires.
Society is just a tool to offer anywhere from 0 to Total wealth transfers. You are just saying that the society you want has more transfers and claiming it to be the only definition of the concept
By being a part of US society (i.e. being a citizen), you're automatically expected to contribute monetarily to the well being of the citizens of the US (and your state/country/city) as a whole, whether you agree with it or not. It's why you have access to things like safe drinking water. Regulated quality food. Cars that don't explode as a standard. And so forth.
And it's the same for every country in this world.
There is no comparing the building of roads to the subsidizing of education for humanity and drama majors. They are not even in the same realm of usefulness to society.
How would you react if the government announced tomorrow that they were going to pay all expenses in perpetuity for a selection of people, ~40% of the population forever. Would you still argue that the people complaining and who have to work for to support the governments handouts are self centered if you had to continue working. Or would you think that something was not right.
'It's not a reward, it's a relief for predatory student loans applied to people at a time where society yelled "get a college degree or you'll never get a good job" into their ears day after day.'
I got the same loans but get no relief. I am not mad at the people getting the relief, I am angry at the government for choosing favorites from people that all suffered in the same way and making me and others pay for it; In what is clearly a political stunt. I say this as one that votes democrat.
While i am for government services that help the poorest among us; especially kids, People pulling themselves up by their bootstraps is what makes a capitalist society work. It's what has lifted more people out of poverty than any economic system in the history of the world.
Knocking off 25% of a loan with compounding interest is vastly different than "pay all expenses in perpetuity for a selection of people, ~40% of the population forever".
Conflating one with another is not arguing in good faith, IMO.
And frankly, that would be awesome. Did you know that about 40% of the population in the US is unemployed, voluntarily or involuntarily? The proposal is basically UBI, and that's perfectly fine by me.
EDIT: And why is it fine by me? Because I will eventually be one of those unemployed. Either intentionally or unintentionally, depending on how the die rolls. I'd love to know I won't be forced to panhandle or take up a menial job with a body destroyed by time just to put a roof over my head and food in my body.
Why is it not comparable? Why is there a difference, in both cases certain people are getting selected for free money and the rest are being accused of being self centered and complaining while being forced to pay for it.
A Ubi would be the death of capitalism and in turn the United States into a pauper nation.
People are discussing same graduation year, same school, same loan scenarios here.
It's more about someone who forgoes something so that they pay off the loan, vs someone who does not forgo said thing, but ends up getting both (the loan and the thing).
Eg: imagine one has an extra $1000 today and 10k of student loan. Could make 10 fun choices at $1000 each or I could pay off my student loan. If I choose to take the fun, I get both the fun and the load paid off. If I do the former, I do not get the fun. It actually becomes more exacerbated if someone did something with a net profit such as putting $10k down on a house for example. Now they have the equity in the asset _and_ the debt forgiveness. Whereas the person who paid off the loan themselves does not have the equity.
Everyone suffering is everyone hitting the same pothole on the road. This on the other hand is people behind you chosen at a random time getting 10k dole and being able to out spend you by that amount which is not a fair outcome.
They did not patch the pothole, they created a second lane and only allowed selected people to use it. Everyone else still has to drive over the pothole. They also have to pay for the construction of the lane they are not allowed to use.
If I paid off my student loans, I've hit that pothole. It's done and past; I'm not continuously driving over it. There is no second lane; the pothole was just filled in a bit (not fully, of course).
You are still paying to build the second lane though. In addition many people have not paid off their student loans but make to much money to qualify, they are being forced over the pothole
I think you could slightly argue that there is a second lane because private student loans don't get a repayment. But even as someone in that "second lane" I'm not upset that the pothole got fixed in the other lane. I'm just happy that less people are hitting potholes. I'd be happier if we fixed all of them, but fixing one is better than fixing none.
The efforts to discredit this policy are truly fascinating - that's how you know how effective it is, it truly is a threat. But this article is correct, that this is not sustainable and a longer term policy is needed.
Plenty of people are benefitting dramatically from this, and for once it's not the mega rich getting tax breaks or the fraud rife PPP loan fiasco.
As an outsider to the US and a person that leans more into "socialism", I find these type of threads really interesting. It's so different (from my principles) where most American commenters that are against this policy are coming from.
I would not have a problem in providing relief to the poorer through social policies. My take is that at the end of the day is part of the social contract I "accept" when living in the society. Some people had it harder, some made poor choices (including drug addicts, people studying philosophy, people choosing not to study, etc), but in my (socialist maybe) view, it is in MY interest for them to be good-standing members of society. Otherwise, we risk them becoming criminals.
I think that the underlying emotional state against such "subsidies" is a feeling of unfairness. That someone is being allowed to "cheat" and violate the rules of the game you have obeyed. There are probably many factors behind this framing, and different blends among the population.
But, I think one big factor is that our modern consumer advertising and pop-culture environment has nurtured a kind of jealous relativism. Insecurity and desire are programmed in. The pervasive "Keeping up with the Joneses" turns everything into a zero-sum competition. There is _no_ place for contentment and satisfaction, no place of security from which to offer relief. There is no such thing as the tide raising all boats, when you are all treading water and those splashing around you threaten your next breath...
I'm providing insight on American reactionism
to socialized costs. If you choose to be disgusted, that is one you.
If you are just looking to depate, I can steel man the point you thought I was making. There are a number of ways in which drunk and loan holders are similar, and some in which they are not.
They both made poor choices which have future consequences. They both often have regrets. They both are not providing much economic value to society. They both externalize the costs of their life choices on society at large. They both are very real humans, and may be nice people, deserving of compassion.
Yes, a $500 billion bribe right before a midterm election is absolutely an effective policy. No one is arguing against that. At least the PPP was approved by congress, and the people unfairly enriching themselves from it are doing so through crime, and not the intended purpose of the policy.
An executive order that Biden has no legal right to enact. This is what we get from the party that values "democracy." Bypass all legislation if you can't get what you want and if a law is passed democratically that you don't like then tie it up by using the legal system and activist judges forever. There is very little "democracy" happening in our system currently.
Instead of income based repayment, I would rather see very low interest rates on student loans (like 1.5%). That way everyone pays the full amount they borrow, there is still incentive to repay promptly, borrow less, earn a higher wage, and those with low income can at least pay off the loan interest so their loan does not balloon. And it's simpler.
Another thought I had (not completely fleshed out)... Federal student loans could help cap tuition costs somewhat like medicaid/medicare. The fed offers a fixed amount per semester (say $4k) to each student. The catch is that a uni can only accept fed loans if their tuition is fixed at the cap. (i believe this is how medicare negotiates reasonable prices for meds - "if you want to accept medicare here is what we will pay for Rx, and it's all or nothing").
In an environment where inflation is running well over 5% and 1 Year Treasuries are yielding 4%, there is no [economic] incentive to pay off a loan at a 1.5% interest rate. You would literally be better off to buy 1 Year Treasuries than pay off that loan (and consequently, to borrow as much as you could).
That’s not how loans work, if it was credit card debt yeah you could pay a minimum forever, but education loans have terms attached with fixed payments.
Yet people have loans outstanding 20, 30, or more years after taking them out, so obviously there's some amount of flexibility in the system. In any event, on its face, this system would not encourage prompt repayment but rather the opposite: the slowest possible repayment.
So the U.S. is on track to create a half-free university system, very convoluted and with extra steps and gate-keepers, tax funded? (It can of course never be completely free like some other rich western countries, because communism would ensue.)
Superficially it sounds like the U.S. health system. Please, enlightened people, write something insightful, I'm here for the comments and would like to get a vibe for if the article is a hit piece or has good points. :)
Similar thoughts here - just make public universities (almost) free and stop giving out loans, and you'd be where most European countries are.
I guess the thing is that once you've added all those extra layers it's hard to roll them back because so many jobs indirectly depend on them now (administrators, bankers, collectors,...), and some of them have quite strong lobbies (cough, bankers, cough).
My understanding is that the trade off in European systems is a much more stringent entrance requirement.
So, university is free, but a smaller percentage of people have the scores to get in. Only about 30% of German students go to university, vs 40+% of Americans.
This isn't the worst idea. College in the US is overly fetishized and trade schools and/or going directly to work or starting a business is snubbed. The result seems to be a deeply overeducated, but under employable population and an aging trade class that is entering retirement without having fully passed the torch to the next generation.
No, afaik that's not the case everywhere. Switzerland, which has the best unis on the continent, is pretty open registration for all nationals, in others it's sort of a mix. Selection happens during the degrees, exams aren't curved.
I never understood why children should be able to give a consent to such loans. There is a young and naive person, that can not legally drink, but somehow is able to understand complicated legal contracts!
Make student loans part of personal bankruptcy, and see what happens!
As a child I was coerced to join the military by adults who told me I would run into incredible debt otherwise.
Coming from a poor family it felt like my only option, even with excellent performance in school (I lived in a small town).
Fortunately, my time in the military ended up becoming one of the most productive parts of my life but I still shudder at the thought of it happening to kids every day.
Good! They will not get 40 years into unpaidable loans! If university education is such a goldmine, any bank will loan them, it must be like 20% per annum profit!!!
It's got nothing to do with that correlation. My point is that it closes off opportunities for smart-and-poor people. (Today's system also has drawbacks, but let's not forget that it does afford opportunities to people who wouldn't otherwise have them.)
Educational attainment for intellectual gratification is good.
Educational attainment for career and financial condition improvement is also, but independently, good.
It would suck to have a world where only the rich (or perhaps "only the rich plus people for whom their parents are willing to pledge a house they own") can afford to attend high-end colleges. That shuts out some intellectual development [and economic and social mobility], but I'm focused on the "hey, it's great that you're smart and did well in school, but because you're poor, here's a broom..."
New loan issuances will fall overnight and university fee will fall probably by next year. They will end up discontinuing a lot of useless courses due to lack of students.
Make loans dischargeable in bankruptcy after some fixed amount of time. Say 10 years. Offer subsidies to loans that are older than this. Emminent domain all existing student loans. Ignore the resulting inflation.
You can’t do that without also allowing lenders to not give loans. The entire mess is because we passed laws that require lenders to give loans out for school.
Pre these laws, they were passed for “equality”, lenders would laugh you out of the office if you tried to take a 10k lone out on a degree with a low likelihood of being paired back.
As a result we now have a bunch of crazy degrees people can get that have zero viability to make money, and even worse doctoral programs that just hand out Dr. Like it was candy.
Look, it's obvious when it's an aged degree and you can easily see that the granting of that degree has little chance to a highly paid job. What do you do when it isn't obvious? When I got my student loans for my comp sci degree, it was right at the bottom of the dot-com bust. Everyone was convinced all tech was going to be outsourced and that it was a dead end degree, foolish to pursue.
If the banks had any say in if I would have gotten loans that year, it would have been no. And I wouldn't have gone on to a lucrative career in tech.
I'm not convinced that letting loan underwriters pick the future labor force allocation is the solution.
I don’t think the government should be involved in student loans at all. If people could file for bankruptcy and banks had to do their job it seems like many of these issues would be solved. If a bank was going to provide a student loan that they wanted paid back they would look at:
* what the graduation rate of your major is and what the average annual income is for your major
* your GPA, test scores, and other factors that can be used to predict graduation rate
* the cost of the university and how likely your are to be able to repay that amount given the above
I don’t think the free market is perfect, but it seems apt to handle most of these issues without resulting in all of the issues people currently have with student loans.
I'm not sure how things will look by the time my daughter might be ready to go to college in 18 years-
Would it be best for us to sock away money in a 529 plan, or to just let her take out loans to the greatest extent possible and pay them back after the fact?
Consider the many amazing institutions in other countries that either have no tuition or very reasonable tuition as an alternative if she doesn’t get into the best of the best in US. Even with crazy costs, Stanford/Harvard/MIT/etc are generally worth it for the right degree.
That’s not what I was saying at all - if you get the chance to study there, you should, otherwise there are amazing institutions that don’t require going into debt that one may not be able to pay off.
If you can afford to sock away the money then you should. You may ultimately pay more than other people, or you may not, but you will have the comfort of knowing that she can afford to go to college without taking on a lot of debt.
This is one of the worst results. No one is sure what will happen in 10 years time. Take out debt and hope for another writeoff? Its like Reagan's immigration amnesty.
I’m contributing to my niece’s 529—worst case scenario being she doesn’t need as much as her family has saved, and any excess can be transferred to another family member or taken out for a relatively modest penalty. And, I assume if there’s a major restructuring of college costs over the next 20 years, more flexibility will be introduced for getting money out as well.
Interesting to see "BA Biology" in the "most subsidized" list. Is that because it's a popular default major at many schools, and unlike a BS it is less rigorous? I went to a school that only granted BAs, except for Engineering, so all of our Bio majors were BAs. I don't know how common or uncommon this is, or if there are schools that offer both BAs and BSs in Bio.
No idea how it is in the US, but here in Germany even ~20y it was said that a plain degree in biology is kinda useless, you kind have to tuck on a PhD (I'm deliberately not calling the first one undergraduate degree, because our system used to be Diploma (~10 semesters) + Dr. after that, and not BSc+MSc+PhD.)
I had a lot of BA in Biology friends who were pre-meds. They got the BA so they could fit the other required pre-med classes in that didn't count towards BS requirements. It would also make sense that we subsidize a medicine related degrees.
$10k is a trivial amount when compared to the amount of loans current students end up with. At many public universities, it amounts to a single semester.
Community colleges used to be free - fully subsidized by taxpayers. Until Reagan. As California stopped funding vocational education and community colleges, other states followed along.
Making student loans exempt from discharge in bankruptcy has been a massive subsidy to the financial markets. With a guaranteed source of income (from loans to students), universities have raised rates far faster than inflation. Even the textbook companies don't care about prices - pricing for American textbooks is outrageously high.
No one cares. Until Biden advocates for some tiny relief for students - then everyone complains. It is like some parody of the Trolley Problem: "debt relief is a betrayal of all the people who the trolly has already run over!"
i think this is one area where price caps actually make sense: college text books and college tuitions. Just make it illegal for public colleges to charge more than a certain amount.
as for text books, we need to encourage professors to reuse the same text book for at least 5 or 10 years. that will increase the resale value of the books. or better yet, have universities rent out books at some minor fee that they can recoup over 10 years.
That kind of policy around textbook reuse doesn’t work well. Information is changing and teaching from 10 year old textbooks is the same situation public schools have (though, their challenges come from underfunding).
For some fields, use open source resources would likely work better and embrace the living nature of that particular field. For others, I think setting price ceilings or allowing schools/governments to negotiate pricing (similar to the new Medicare drug negotiation) would work better in keeping the price of textbooks down.
Calculus (and even calculus pedagogy) hasn't meaningfully changed in the past decade. You can still teach students the basics of chemistry or art history with an older book. Yes, some classes like genetics, epidemiology, and c++ teach content that's been completely reinvented in that time, but the majority of 100-200 level classes could easily use older books rather than requiring Pearson's latest edition.
CCs are still free or nearly free in almost every state. In CA, 50% of CC students pay 0 while the rest pay around $550 per semester which is nearly free.
California CC tuition is not representative of the rest of the country.
In-state tuition for a full-time (15 credits) student at Salt Lake Community College is currently ~2100 per semester. At Denver Community College, ~3000 per semester.
That seems "nearly free" from our perspective in the tech industry, but when I was a young adult making $13/hr it was a challenge.
It's populist, inefficient, unfair and counter productive. None of this is tyranny, just bad economics. When you throw terms like "tyranny" around it obfuscates just how bad living under a tyranny really is. Cut the hyperbole and save terms like "tyranny" for actual tyrannical regimes, of which there are enough actual examples to go around.
I find myself agreeing with about 10-20% of what he says. His basic argument is that it's not the government's place to take from one group and give to another.
The fallacy in his argument is that the government's primary job is specifically to gather funds through taxation and allocate those funds to certain groups, governed by the public's intentions as determined through the electoral process. Our elected officials are our proxy within our democratic republic, making those kinds of decisions on our behalf every single day.
In other words, his argument isn't supported by fact. It's ideological.
IMHO, rather than deciding if we send $40 billion to Ukraine or fix the lead pipes in many of our cities, the government can and should do both.
Given the choice between reducing the student loan burden, or reducing the national debt, the government can and should do both!
You see what I'm saying? This notion of choice in who will be helped and who will be hindered is a fallacy. The government is bigger than us, we need to stop thinking of it in terms of an individual struggling with their microeconomic finances, and realize that it can be more like a superhero and help many people simultaneously through the emergent behavior and opportunities created by macroeconomic policy. I think what's missing in our government today is this sort of visionary consideration of human potential, and the political will to enact policies that materially help people in need, rather than wealthy and powerful people in the status quo who don't need our help in the first place.
If we follow his argument to its logical conclusion - the reduction or elimination of government spending with the private sector left to its own devices - then only one form of government fits that: autocracy. That's where we came from before the American Revolutionary War, and we've been headed back there again under 40 years of trickle-down economics and the rise of wealth inequality the likes of which the world has never seen. Billionaires are the new aristocracy. We're in a positive feedback loop where every time things get worse, people vote for the same people who caused it, making things worse still. Then that side blames the other and the process repeats itself.
That's the seduction of seemingly rational-sounding arguments like the one against student loan forgiveness, which always align with the status quo. We can use that as the signal to know that the argument is disingenuous.
>The fallacy in his argument is that the government's primary job is specifically to gather funds through taxation and allocate those funds to certain groups, governed by the public's intentions as determined through the electoral process. Our elected officials are our proxy within our democratic republic, making those kinds of decisions on our behalf every single day.
In other words, his argument isn't supported by fact. It's ideological.
Both positions are ideological. Different people have opinions on what the purpose of the government is. If you told Americans for most of the counties history that the purpose of the government is to redistribute funds to the needy via taxation they would look at you like you are crazy.
We weren't supposed to have a standing army either, much less one like we have today with an inflation-adjusted budget as high as during WWII, but here we are. Madison would be appalled, Washington would be ok with something but not that.
Conveniently, the far-right in the US omits the military from balanced budget debates, since any reduction in military spending would disrupt the status quo.
I feel that we haven't had civic discourse around this stuff since Newt Gingrich started his Contract with America. Or maybe before that with Paul Weyrich's New Right religious conservative movement with Reagan:
The fallout of that ideology today is gerrymandering and various other forms of disenfranchisement to maintain minority rule by the religious right and moneyed corporate interests. Which doesn't align with the separation of church and state, but again, here we are.
So you're correct that our history of denying aid to people in need goes way back. But we should also remember that women lived under subjugation until their right to vote was recognized in 1920, and people of color lived under segregation until the Civil Rights Act of 1964. We probably shouldn't use the term "aid", because reparations to repair the theft of those peoples' livelihoods would be an astronomical number, easily into the tens of trillions of dollars. The same people who thought those progressive movements were crazy continue to call aid to those in need "redistribution" today.
These are heated enough debates, with people's beliefs informed by trauma and shame, that I feel rational discourse around them may be impossible. We'd have to go back 40+ years and prevent the undermining of our public education system, which is exactly what student loan forgiveness is attempting to do. In the meantime, all we can really do is vote out our opposition, and not buy into propaganda such as the recent movement to discredit institutions like the FBI and democracy itself.
For a refreshing look at the real history of the US and more info like this, I highly recommend Thom Hartmann's show on FSTV (no affiliation):
Yes, these topics are often heated, but they are important and central to our national politics.
You may disagree, but I don't think the government's primary job is to gather funds through taxation and allocate those funds to certain groups.
The government should provide basic services in a non-discriminatory manner and maintain laws free of bias. I reject the idea that the citizenry are simply a resource to be exploited and used to carry out the good work of the government.
Due to the gross power imbalance between the individual and the state, the state should be limited in it's ability to coerce, even if it is for noble and utilitarian purposes. It is not just to enslave someone in pursuit of a higher good. If the objective is noble, support should be voluntarily given.
It is a lot easier to tell someone to support your charity or you will put them in jail than to convince them to voluntarily do so, but doesn't make it ethical in my mind.
Ya fair enough, I don't entirely disagree, and admittedly have a blind spot around government overreach. We may not be able to have liberty with excessive taxation, but it's important to remember that we also can't have justice when we fail to tax the wealthy and dump that tax burden onto the working poor.
There was only a short period of time of about 50 years between FDR and Reagan when we did tax the wealthy, and it created the middle class and made the US the top economy in the world. I'm concerned that the relentless call to cut government spending that we hear on mainstream corporate news obfuscates the full equation. If we were to do what they propose, we would be all but guaranteed to fall into maximum wealth inequality and the government would be at the whim of corporations, if it isn't already. It would bring the end of the American dream by turning the US into a nation-state of company towns where workers are at the mercy of their employers, paid pennies on the dollar for their labor, with no help coming from the government. We'd have to trust the benevolence of the wealthy, which breaks trust-but-verify, as we've seen decades of corruption like the savings and loan scandal, Enron, the housing bubble bailouts, insurance bailouts, embezzlement (is that the word?) of TPP loans, many more that I couldn't list here.
After writing that out, I suspect that you don't disagree, and that maybe I'm dancing around the issue of taking money from one group to give to another. I would propose that we won't be able to see eye to eye on that until these other injustices have been addressed. Basically that the wealthy have already taken monies equivalent to our $20 trillion dollar national debt by lobbying so hard that they set their own taxes to 1/2 or 1/3 what they would have otherwise been. Not to mention that the Pentagon can't account for $20+ trillion, which conveniently matches the national debt too. If we were to look into where the money went, we'd find that (edit: each of) the 150 million US taxpayers have already had something like $250,000 skimmed into the pockets of the wealthy since trickle-down economics began under the pretense of bankrupting the USSR. Now that the main global threat is the collapse of the natural world and displacement terrorism resulting from that, I'd like our taxes to be collected from the groups responsible. The $10,000 student loan forgiveness is small potatoes, just a rounding error compared to that. Which is why I feel that it's a distraction, even if I can't challenge your concerns around redistribution.
IF you look at the common denominator for every exploitation you mentioned, it is that the government facilitated the extraction of funds from the citizenry and payouts to corporations. You also left off probably the biggest grift of the century: US government protected healthcare complex which rakes in 4+ trillion per year.
I don't blame the wealthy or corporations for wanting handouts. I blame the corrupt government for ruthlessly extracting the money from workers and handing it over.
I expect corporations to act in their own interest, but I expect the government to act in the people's interests, and as a protector and good steward of their property and freedom.
I think the best way to avoid government corruption is limitation of scope. As I mentioned in my last post, this is because of the one sided power dynamic between citizen and state. I can withdraw my support from a social benefit charity I think is corrupt. I can not do so with the state.
Student debt and loan policy is indeed small potatoes, but another precedent in the same progression. Who ends up with the money? revenue maximizing universities, corporate in everything but name. The new Income-Driven Repayment (IDR) plans will make sure that the universities can keep increasing prices and have a steady supply of applicants for degrees with no economic prospects.
The best strategy for any corporation is to use the government extract money from unwilling customers.
Consider that 40% of US GDP now is collected in some form of taxation.[1] 40 cents of every dollar earned by workers is taxed and spent as the government chooses. This is more than between FDR and Regan, and much more than the 20s (~15% of GDP)
Also consider that size of the pie has also increased! US real GDP per capita (accounting for inflation) has grown ~4x since the 1940s, and total GDP has grown ~20x! [2]
Every way you look at it, more and more economic transactions are shifting from individual discretion to flow through the government.
I think we see eye to eye on the symptoms of the disease, but disagree on the cause. I don't think increasing the scope, power, and funding of the government is the medicine we need.
I think we see eye to eye on the symptoms of the disease, but disagree on the cause.
Ya me too. For me, the answer is as simple as progressive taxation. We basically wouldn't tax people making under about $50k per year, since they're living hand to mouth. But we'd set the top marginal tax rate of people like billionaires at somewhere between 50% (my preference) and 90% (the rate that worked best after WWII). That creates a situation where the wealthy can choose to pay their employees or pay the tax. Most employers would choose to pay their employees. We've lost that since the 80s, resulting in stagnant wages. That's the best root cause analysis I've come up with.
I feel that the right is opposed to what I'm saying on ideological grounds, because they don't want higher taxes, period. And they don't want to "punish" success. And they might be wealthy someday too.
Which is all fine and good, but those reasons aren't good enough anymore. The US is falling apart. We're all working far too hard for too little. So I appreciate what you're saying about (if I read it right) regulatory capture. There's some common ground there where the whole country could unify around limiting government overreach. I think that will begin once the right reaches such a pain level that even it organizes around a common cause like higher wages, instead of wedge issues like abortion/immigration/flag-burning/whatever to own the left (which does its own chest-thumping).
This is a long comment, but the summary is that this article tries to talk about externalities, but doesn't look at a big enough picture.
Like complete lack of economic regulation (markets cannot accurately price all externalities), or universal basic income, the article makes good points about the market distortions introduced by this policy. It offers a concrete example of the cost of a graduate student at Columbia University[1].
The article asserts that most of the cost of student loans is actually to cover living expenses. For the Columbia graduate student, the article estimates about $30k annually, which agrees with Columbia’s estimate. Using their estimates at the link [1], I computed the annual cost of non-tuition elements, including rent, as $37,522. Columbia estimates rent at $23k, with other living expenses pegged at $7k. Fees account for roughly 20% of non-tuition. The tuition is about $52k annually for a doctoral program and is more expensive for Master’s students.
All of which is to say: this article's example doesn't understand true student costs. To bring the cost of attendance down, often universities with large endowments (like Columbia’s $14.35 billion) will privately subsidize tuition for some students, sometimes by half or more. Let’s say half for the typical student. This doesn’t change fees or COL. So now annual rent is on-par with tuition. So then the student is on the hook for "only" $60k per year, or $300k over the course of 5 years (remember, doctoral program). If the student is good, then the university will pay a stipend of $40k annually, bringing the shortfall to a more reasonable $20k per year. But you cannot have another job if you accept the stipend. So $20k in loans per year, or $100k once they graduate. Compared to the average US mortgage of $460k in 2022, it's the size of a home downpayment.
For this lucky student, the article computes the government's additional cost to support this student as twice to house someone on Section 8. Most US students will not attend a private selective institution with a large endowment, but the sticker price is still very high, sometimes comparable to Yale or Columbia [2]. This is because the price is a signal for value. The actual price that a student, whether mechanical engineer or not, will pay for college is NOT what it says on the tin. The article is correct in that it can be abused since it is technically forcing the government to pay for loans after a certain amount of time for those students who haven't found a well-paying job.
So this legislation that the article complains about is a possible way out of this mess, at least in the short term. This is indeed more generous than the state money that it is replacing (since most students are educated by public universities).
I think the real question is whether we want to encumber long-term those who didn't figure out a way to use their degree to earn a lot of money, and whether money is the right way to measure their contribution to society. Entertainers (including athletes) will typically earn much less over their lives than a ML researcher, but well, they're more fun to observe for a lot of people. Most US teachers and professors will struggle to earn enough money that they aren't subsidized by this program, but hopefully the pandemic has taught people about their value.
You could argue that this is really a public-works program because isn't it better that people follow their passions instead of maximizing their individual profit? Specifically, isn't the drama major more likely to substantially contribute to the public sphere instead of a quant? Not saying quants don't help, but public money should help the public sphere. And for those who might quibble about where their taxes go: I sure am glad that I live in a country that other global would-be superpowers think very carefully about attacking (the majority of the US annual budget is military). Not a perfect place by a long shot, but my taxes definitely go to the public good, if not always efficiently.
> isn't it better that people follow their passions instead of maximizing their individual profit?
That’s a false dichotomy. We should balance our passions with our need to earn, support ourselves and contribute to society. Most people do this by adopting their passion as a hobby.
A society can only support so many professional musicians, artists, historians and the like. There are infinitely more people passionate about these things than society can support. Supply and demand dictates that salaries for such jobs be low.
Finally, it’s a mistake to think that people are studying subjects simply because they are passionate about them - the social science college students I knew all chose it because it was “easy”. Many of these people would have been far better served by learning a vocation - I’m sure they could even find one they’re passionate about if they were actually exposed to them.
This article is bad to the point of laughter. While it starts out talking about economics, the real point is to rail against other programs that aren't engineering, calling them worthless. Innovation doesn't just come from engineers. That point is laughable. On top of that, calling other degrees worthless just because their field doesn't pay well is also indicative of other problems in the system. For example, my wife is a stage manager for multiple ballet companies. She's quite successful in the field. It doesn't pay well, but she's needed to do the productions. Or think about an editor who went to school for english. They can get a job out of college, but only around 30k and can barely make ends meet. But saying they aren't innovative or pushing their fields because they don't scam VC's for money for their crypto app is silly and diminishing the impact and importance of the arts on our lives. And maybe if more people changes their view and saw how impactful the arts are, my wife might be paid a bit more and can more easily pay off her degree.
These things might have value to you, which is nice, but they may or may not have any value to other people. Maybe ballet is a dead art. How much "value" does a mime artist or a lute player add to society? Your idea of value is totally subjective and driven by your personal circumstances. That is fine, but don't force others to subsidize your choices.
University used to be a place where you had to perform at an exceptional intellectual level across a balanced set of topics. Now, most schools have removed most/all of the STEM requirements for non-STEM students (or have dumbed them down to STEM for babies courses) and they are grinding out extremely mediocre task-followers with valueless degrees.
What about teachers? Should they not go to college because they don't get paid well? Or journalists? Should everyone who can't do math well just go a be a business major? Should they not go and study to start a career in their field that they are good and passionate about? If we are looking at value, we need to look at how much value we put on these other areas as well, where you can get a decent job but still not make enough to continue forward.
On the last part, we as an industry need to be a bit more introspective. How many CS programs produce someone who is a mediocre task follower?
People are quite willing. The entertainment industry is huge, between TV, concerts, theatre productions, etc. However, does that money come down to the artist or the people doing the work? The issue is that this idea also applies to other people areas as well, such as teacher or journalists. These are services that are valuable, but they are not paid well.
They're paid based on supply and demand through their employers. Meaning the organization favours paying someone in a management position a higher salary, rather than the rank and file. The same industry pays certain actors or musicians outsized fees.
This is not a question of ethics or fairness, it is supply and demand. You can only pay X people Y amount when starting with K dollars.
I am not trying to be pedantic here but simple rules at large scale produce complex results that may sometimes seem counter intuitive or unfair. Evolution is simple rules applied at scale and it produces results that don't seem quite right but are obviously effective because they survive.
Again, the real issue I have isn't "fairness". It's the simple notation that just because a major doesn't make as much money as another makes it "worthless" and not innovative. It's the notion that we're more innovative because we can work with CSS divs. It's the notion that if you can't do math or STEM, you should just become a business major because everything else you do is veritably worthless. That is what I'm pushing back against.
I see what you mean. I agree with you that it is incorrect to say that it is not innovative, or new, or useful. Those don't always correlate with monetary value.
The author however is talking about value in monetary terms, as in what other people are willing to pay you for it therefore something innovative or cool can indeed be "worthless" in the same way that a beautiful painting is worthless to a thirsty man in the desert.
* Those who sacrificed and paid off their student debt receive no reward. Those who put 10k in ink or vacations on the books get a 10K payday.
* People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not
* The policy smacks of "vote us back in or else 10K wont be yours"
In general I am strongly against policies which change the rules on and penalize people who sacrificed to better their life and better those who made relatively worse choices (or choices with known tradeoffs, but then the tradeoffs get mitigated at the expense of those who did something more taxing for a reward). You can tax the wealth out of those who chose to better their income, but you cannot tax the experiences (eg:travel) out of those who dissipated their resources today/in the past.
For example, bad news for those who never had a dream to be a Mech Eng, but did it anyways for the good of their family.
As a general observation being in America the past ~10 yrs I find America has a major problem with policies that pattern match this kind of subsidize the negative side of choices with tradeoffs to the detriment of someone else who made a sacrifice to receive a reward.