April 24, 2019

Free College

Editor's note: We couldn’t be more proud of one of our teammates, Isaac Rose-Berman, who penned his first op-ed this week in USA Today: “How college students can bridge American divides: 'Study abroad' in Alabama or New York.” Please give it a read, and share far and wide!

On Monday, Democratic presidential candidate Sen. Elizabeth Warren (D-MA) released a plan to forgive student loan debt and make public colleges free, paid for by a wealth tax. Medium

See past issues

From the Left

The left generally believes this is a strong start to trying to address the student loan debt problem, while some are critical of the plan's scale.

“Americans have long agreed that 12 years of education is a public good. But that number — 12 — is clearly outdated. For people to compete in today’s economy, they’ll need more schooling. We can and should argue about whether the right number is 14 or 16. But it’s not 12… The Warren plan expends resources on student debtors from upper-income families, but it is still broadly progressive… Among low and moderate-income families — those in the bottom 40 percent of the income distribution — close to 90 percent of borrowing households would have their student debt wiped out compared to just under 30 percent of those in the top 10 percent.”
Jared Bernstein, Washington Post

“Because it caps forgiveness at $50,000, it won’t hand giant windfalls to lawyers and doctors by forgiving their entire law or medical school debt… It’s the best, basic blueprint a politician has produced for how to design debt forgiveness without making it a straight giveaway to the upper middle class.”
Jordan Weissmann, Slate

“College tuition is rising, in large part, because state legislatures across the country have slowly been abandoning their commitment to fund public colleges and universities… According to one analysis, state funding for public colleges and universities in 2018 was $7 billion below its 2008 levels — and that is after adjusting for inflation. One way public four-year institutions have stayed in business is by raising tuition by an average of 36 percent during that decade… At the very least, it is worth renewing the commitment by state governments to subsidize their local colleges and universities.”
Joel Mathis, The Week

“I don’t buy the argument that debt forgiveness is some sort of moral hazard… Yes, my loans are paid off, so I wouldn’t get a direct benefit. But if all those millennials freed of debt start bidding up house prices, then I get my benefit in the form of property appreciation. These things are connected. And if the morally questionable behavior at hand is ‘going to college,’ then I’m not exactly panicking… I have no illusions that a plan of this scope will pass anytime soon, and there’s no shortage of devils in the details. But kudos to Senator Warren for raising the question.”
Matt Reed, Inside Higher Ed

Critics posit that Warren’s “premise seems to be that student debt is all burden and no benefit, but this is not true: It represents an investment in skill acquisition that pays substantial long-term benefits. President Barack Obama’s Council of Economic Advisers estimated this lifetime ‘earnings premium’ at about $1 million over a worker with only a high school education. It’s not unfair to expect people to pay back their loans out of that income. What might be unfair is debt relief to the exclusion of other priorities with wider benefits, including to people who did not go to college at all… [What’s needed is] a targeted approach that relieves the worst financial stress of those least able to handle it, not a sweeping bailout for the middle class and above.”
Editorial Board, Washington Post

“There are obvious benefits to society to motivate as many people as possible to get as much education as they can. I’m just not sure that free public college for everyone and debt cancellation for almost everyone is the most sensible way of getting there… My attitude is also partly driven by my twin obsessions with universal health care and climate change. If we’re going to spend large sums of money, I want to spend it there first. After we’ve done that it will be time to see how much appetite we collectively have for additional big-dollar programs.”
Kevin Drum, Mother Jones

Rep. Jim Jordan (R-OH) “insisted the president couldn’t possibly have done anything wrong because, in the end, Ukraine got its money without committing to any investigations. This point of view has radical implications for America’s system of justice and overcrowded prisons, if Mr. Jordan in fact truly believes that all inmates convicted of attempted crimes are innocent of wrongdoing… Perhaps the most telling remark was offered by a Republican staff lawyer, Stephen Castor, who suggested that while the president’s behavior may have been highly irregular, ‘it’s not as outlandish as it could be.’ Here’s a tip: When ‘not as outlandish as itcould be’ is your strongest defense, it’s time to rethink your position.”
Editorial Board, New York Times

From the Right

The right is critical of the plan, arguing that it would be unfair to those who chose not to attend college, and further exacerbate tuition inflation.

From the Right

The right is critical of the plan, arguing that it would be unfair to those who chose not to attend college, and further exacerbate tuition inflation.

“It is extraordinarily unjust to the working class. Many blue collar people are living on lower wages because they couldn't afford to go to college. They chose the responsible route, stayed within their means, avoided buying something they couldn't pay for, and accepted a humbler lifestyle as a result. Warren and her Democratic cohorts plan to make fools of these people. It turns out they could have just gone to college, taken out the loan, and never paid it back…

Whatever possible argument could be made for loan forgiveness would clearly apply just as much to any other form of debt -- mortgage, car, credit card, etc. If you're struggling with student debt and you're handed a get-out-of-jail-free card, and I didn’t go to college but I’m struggling to pay my mortgage, should I not be offered the same deal? If your debt is a public emergency, why isn't my debt also an emergency?”
Matt Walsh, The Daily Wire

“People who go to college typically earn higher incomes than those who don’t… Warren estimates that debt forgiveness would cost $640 billion. To put that in perspective, it would cost about $6 billion per year to double the earned-income tax credit — a federal program that subsidizes wages for low-income households — for childless workers. I’d rather spend the marginal taxpayer dollar expanding economic opportunity for the working poor than giving a subsidy to relatively well-off households

“The U.S. already has a safety net in place to deal with those [unable to pay off their loans]. For example, income-based repayment plans adjust monthly student loan payments based on income and family size, and any outstanding balance is forgiven after two decades of payments have been made. Warren should explain why these programs are inadequate.”
Michael R. Strain, Bloomberg

“There are those who may have taken higher-paying jobs they didn't necessarily want to pay off loans. And there are those who have cut expenses to the bare bones to pay off loans while watching their friends with similar salaries eat out and travel and deprioritize paying off loans. Those who were more responsible will feel justifiably enraged at the idea that those who may have been more profligate will now get a bailout from the government.”
Philip Klein, Washington Examiner

Warren’s proposal would likely expedite the rise in college tuition. It comes down to simply math: When colleges know the federal government is financing ‘free’ tuition in perpetuity, they’ll have all the more reason to raise tuition and fees, which taxpayers will then absorb… researchers Grey Gordon and Aaron Hedlund found that raising subsidized loan limits led to a 102% increase in tuition from 1987 to 2010. Absent that additional federal money, the authors estimate tuition would have only gone up by 16% on net.”
Lindsey Burke, Daily Signal

“Colleges hike their tuition ­every year because they can. The feds have been willing to increase loan amounts to match whatever colleges charge. The result? Every dollar lent ­inflates tuition by another 60 cents, according to Federal Reserve ­research. In this heartless scheme, students are mules, carrying dollars from Washington to campuses nationwide. Never mind if they ever graduate or land jobs to pay back their loans…

“It would be fairer to require colleges to ­refund a portion of the loan money to Uncle Sam when a student doesn’t make it to graduation. Colleges need to have skin in the game, so they’ll try harder to get students through the course of study and into the working world.”
Betsy McCaughey, New York Post

“If a dozen drones or missiles can do the kind of damage to the world economy as did those fired on Saturday—shutting down about 6 percent of world oil production—imagine what a U.S.-Iran-Saudi war would do to the world economy. In recent decades, the U.S. has sold the Saudis hundreds of billions of dollars of military equipment. Did our weapons sales carry a guarantee that we will also come and fight alongside the kingdom if it gets into a war with its neighbors?… the nation does not want another war. How we avoid it, however, is becoming difficult to see. John Bolton may be gone from the West Wing, but his soul is marching on.”
Patrick Buchanan, The American Conservative

Others note, “I’d hate to be a Democratic member of Congress trying to convince Joe Sixpack that this is a whole new ballgame. The transcript shows Trump being Trump and Ukrainian president Volodymyr Zelensky trying to ingratiate himself with the big dog by, for instance, mentioning that he stays at Trump hotels. Trump’s conversation is typically scattershot, wandering all over the field, leaving a reasonable listener puzzled about what the takeaways are supposed to be…

“I think Joe Sixpack’s response is going to be a hearty shrug. After all that has emerged about Trump so far, his approval rating is closely tracking Obama’s approval at the same point in his presidency. To get Mr. Sixpack’s attention you are going to have to do better than this.”
Kyle Smith, National Review

President Trump should be happy. As much as Warren is articulate, obviously intelligent, and energetically supported by Democrats, she would also be far easier to defeat than Joe Biden… Considering Trump's economy, the president is well placed to defeat Warren.”
Tom Rogan, Washington Examiner

A libertarian's take

“After adding in the ultra-millionaire’s tax and factoring in the other capital taxes Warren wants to levy — on financial transactions, on unrealized capital gains, on corporations — we’d be asking every billionaire to hand over more than two-thirds of their total wealth over a 10-year period. If the government actually managed to collect it, their fortunes would rapidly erode — and so would tax collections. The plan might be a good way to smash wealth, but it’s a terrible way to fund the nation’s health-care system…

“If Warren makes it to the White House, and tries to pass a plan, the Congressional Budget Office will eventually attach more reasonable numbers, with more defensible assumptions, sparking an even more spectacular political blowback than the one that greeted Friday’s announcement. Outside of the progressive Twitterati, there isn’t necessarily an enormous constituency for spending $20.5 trillion to herd every American into a national health insurance program; there would be even less support for spending what Warren’s plan would actually cost.”
Megan McArdle, Washington Post

On the bright side...

Have hen will travel: the man who sailed round the world with a chicken.
The Guardian

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