7 thoughts on “The Shocking Truth About Student Debt”
Not all of this seems truthful, and most of it seems like libertarian propaganda. If his argument were true, then the so called subsidies would have risen in the same proportion as tuition, and they haven’t come close. Student loans for dependents are capped $5,500-7,500 (depending on year in school, $31,000 total for undergrad), the Pell grant covers a fraction of what it used to, and state grants (like MAP) have been drastically reduced, and I’m not about to advocate that veterans who basically make minimum wage to fight in wars aren’t entitled to their G.I. Bill. Yes, tuition rates are too high, yes the cause of this is much more complicated than can be shown in a 3:00 video, but what’s almost offensive is the fact that he blames the little bit of government help that students receive as the sole cause of the problem. Imagine if his same logic was applied to farm subsidies or tax-exempt status on churches? Students that end up $100k in debt don’t get there because of government subsidies, they get there with private loans, by not being a good consumer, by choosing to go to colleges they can’t afford, by making poor choices in majors that they can’t sustain after college, or by refusing to go to colleges that don’t offer first class living amenities. If a complete free market is what he is advocating, then it is that very market that is causing this problem.
Eric,
Thanks for your helpful thoughts and for advancing the discussion. I would agree that the video is reductionist (as 3 minute videos tend to be).
The issue of student debt is one that you can imagine is getting a great deal of discussion time in our home. We are profiting at our house from interacting with videos such as these. Certainly, we need to listen to them critically.
In reference to your points:
(1) I don’t see your logic that his argument depends on a proportional increase in subsidies and tuition.
(2) I agree that his argument is reductionistic and blames too much on subsidies.
(3) I don’t see your parallel between tax exempt status for churches and student debt: we do want to encourage non-profits. We don’t want to encourage unmanageable debt. People don’t typically run up debts to churches.
(4) I agree that the factors of poor consumer choices, poor choices in majors also play a part. It seems that the entire Western hemisphere is having a difficult time making decisions about debt! The unique part of things where student loans are concerned is that they can’t be avoided via bankruptcy.
You said:
“People don’t typically run up debts to churches.”
Actually, in a certain way people actually do run up debt to churches. Many people are in the habit of taking from the church on a regular basis. Unfortunately, many of those same people never give back – in either a tangible or an intangible way.
A very good point MTB!
1) if subsidies are driving up tuition and debt, then the more subsidies that were available the more consumers would consume (to us his language). However, in the last 40 years, but especially since the Bush administration, the relative amount of government aid has dramatically decreased as tuition dramatically increased. This leaves students to fund education by other means, usually expensive private loans. Additionally, direct government assistance to higher education institutions leaves institutions to balance budgets by raising tuition. In short, I fall more on the side that it’s the decrease in subsidies that has driven up cost. However, when an argument starts with the prima facia stance that all government involvement is bad, then accurate results can not be found.
2) yay
3) You are right in that we should encourage nonprofits, to an extent. I think the link between edu and ag is a little better-subsidies alone make a gallon of milk affordable and dairy farmers in business. Removal of these subsidies would be catastrophic. We should also encourage non-profits like churches who truly do not earn a profit (not all non-profits are created equal). Many churches would fold if they had to pay taxes on supposed “income.” However, tht relief that non profits receive is still a subsidy by the strict definition of the word- and I think that’s great. Subsidies are good. This type cooperation made this nation incredibly strong. My fear is that I the last 15 years we’ve changed our philosophy to “have a need? Good luck with that.”
4) And the debt that is really scary is the debt held by students who accumulate debt and don’t graduate. A college graduate with 30-40k of debt is fine. A student with more than 40k and no degree is at a severe disadvantage.
Okay, that makes more sense re #1.
You significantly helped my understanding in this area advance.
Again – – – we are really, really scrambling as a family to understand all of this. We are praying our children won’t start out with huge loans / debts.
The fact that you are having these conversations means that your kids are light years ahead of many. I wish more colleges did in depth counseling with students, especially first generation students. We started counseling at ECC a couple of years ago, and Sen. Durbin is actually using us a model school for the committee that is investigating student debt. There are many schools that are not as honest, especially for-profit schools, and the financial aid office can quickly become a place of predatory lending.
I also worry about the burden on students that wish to go into the ministry. One thing that mainline denominations did figure out years ago was how to compile resources so that church members had a better opportunity for higher education provided they went to a school affiliated with the denomination. I often wonder how Evangelical churches, while maintaining congregational independence, can better work together to provide opportunities for our young people.
Not all of this seems truthful, and most of it seems like libertarian propaganda. If his argument were true, then the so called subsidies would have risen in the same proportion as tuition, and they haven’t come close. Student loans for dependents are capped $5,500-7,500 (depending on year in school, $31,000 total for undergrad), the Pell grant covers a fraction of what it used to, and state grants (like MAP) have been drastically reduced, and I’m not about to advocate that veterans who basically make minimum wage to fight in wars aren’t entitled to their G.I. Bill. Yes, tuition rates are too high, yes the cause of this is much more complicated than can be shown in a 3:00 video, but what’s almost offensive is the fact that he blames the little bit of government help that students receive as the sole cause of the problem. Imagine if his same logic was applied to farm subsidies or tax-exempt status on churches? Students that end up $100k in debt don’t get there because of government subsidies, they get there with private loans, by not being a good consumer, by choosing to go to colleges they can’t afford, by making poor choices in majors that they can’t sustain after college, or by refusing to go to colleges that don’t offer first class living amenities. If a complete free market is what he is advocating, then it is that very market that is causing this problem.
Eric,
Thanks for your helpful thoughts and for advancing the discussion. I would agree that the video is reductionist (as 3 minute videos tend to be).
The issue of student debt is one that you can imagine is getting a great deal of discussion time in our home. We are profiting at our house from interacting with videos such as these. Certainly, we need to listen to them critically.
In reference to your points:
(1) I don’t see your logic that his argument depends on a proportional increase in subsidies and tuition.
(2) I agree that his argument is reductionistic and blames too much on subsidies.
(3) I don’t see your parallel between tax exempt status for churches and student debt: we do want to encourage non-profits. We don’t want to encourage unmanageable debt. People don’t typically run up debts to churches.
(4) I agree that the factors of poor consumer choices, poor choices in majors also play a part. It seems that the entire Western hemisphere is having a difficult time making decisions about debt! The unique part of things where student loans are concerned is that they can’t be avoided via bankruptcy.
You said:
“People don’t typically run up debts to churches.”
Actually, in a certain way people actually do run up debt to churches. Many people are in the habit of taking from the church on a regular basis. Unfortunately, many of those same people never give back – in either a tangible or an intangible way.
A very good point MTB!
1) if subsidies are driving up tuition and debt, then the more subsidies that were available the more consumers would consume (to us his language). However, in the last 40 years, but especially since the Bush administration, the relative amount of government aid has dramatically decreased as tuition dramatically increased. This leaves students to fund education by other means, usually expensive private loans. Additionally, direct government assistance to higher education institutions leaves institutions to balance budgets by raising tuition. In short, I fall more on the side that it’s the decrease in subsidies that has driven up cost. However, when an argument starts with the prima facia stance that all government involvement is bad, then accurate results can not be found.
2) yay
3) You are right in that we should encourage nonprofits, to an extent. I think the link between edu and ag is a little better-subsidies alone make a gallon of milk affordable and dairy farmers in business. Removal of these subsidies would be catastrophic. We should also encourage non-profits like churches who truly do not earn a profit (not all non-profits are created equal). Many churches would fold if they had to pay taxes on supposed “income.” However, tht relief that non profits receive is still a subsidy by the strict definition of the word- and I think that’s great. Subsidies are good. This type cooperation made this nation incredibly strong. My fear is that I the last 15 years we’ve changed our philosophy to “have a need? Good luck with that.”
4) And the debt that is really scary is the debt held by students who accumulate debt and don’t graduate. A college graduate with 30-40k of debt is fine. A student with more than 40k and no degree is at a severe disadvantage.
Okay, that makes more sense re #1.
You significantly helped my understanding in this area advance.
Again – – – we are really, really scrambling as a family to understand all of this. We are praying our children won’t start out with huge loans / debts.
The fact that you are having these conversations means that your kids are light years ahead of many. I wish more colleges did in depth counseling with students, especially first generation students. We started counseling at ECC a couple of years ago, and Sen. Durbin is actually using us a model school for the committee that is investigating student debt. There are many schools that are not as honest, especially for-profit schools, and the financial aid office can quickly become a place of predatory lending.
I also worry about the burden on students that wish to go into the ministry. One thing that mainline denominations did figure out years ago was how to compile resources so that church members had a better opportunity for higher education provided they went to a school affiliated with the denomination. I often wonder how Evangelical churches, while maintaining congregational independence, can better work together to provide opportunities for our young people.