This essay is full of sloppy generalizations and far below your best, Noah. It sounds like you’re addressing your friend group as your rhetorical “we,” not Millennials, writ large.
Because how could this “we” be the generation you’re ostensibly talking about and for? Most Millennials didn’t go to college at all, much less overpay for it. Only 38% has a four-year degree! This is part of the general tendency of the (highly-educated) media class to project their own experience too much.
Most Millennials didn’t flirt with Bernie or Socialism or whatever. Only a very modest majority of Millennials even voted in that election--still a much lower rate than for older generations. The boring truth is that most Millennials were like most Americans: relatively politically apathetic and disengaged from the process beyond (maybe) voting.
So what about all the other generalizations and revisionist counter-generalizations here? Are most Millennials living in a house with a two-car garage that they own? This is clearly incorrect since only barely over half of Millennials owns a house, and many of those houses, presumably, look a little different than the TV family homes you’re imagining. This also elides the fact that 49% of Millennials doesn’t own a home at all!
This isn’t a matter of nitpicking or nuance. You’ve totally obscured the reality for Millennials, not to mention the American population as a whole, adding to the general tendency of American media to assume that upper middle class Americans are normative, instead of a minority.
On one hand, you're absolutely right that the student loan discourse only applies to part of the Millennial generation.
But remember that the statistics about Millennial income, wealth, and homeownership that I cited, as well as other data, apply to the entire generation. So when I show that Millennials are doing OK as a group, this applies to the average (or median) of ALL Millennials, not just those who went to college.
In other words, the narrative I want to debunk overgeneralizes from part of the generation to the whole. But the narrative I endorse is based on statistics that cover the whole generation, including those with no college.
Directionally, your point is correct: That the worst doomsday thinking about Milennials is overstated. And that there’s even room for triumphalism. Millennials go to college a lot more than Gen X and Boomers did. And they’re set to do at least about as well, by the markers of conventional middle class success. Or at least a plurality of them are, so that the average is similar. I haven’t looked into the median numbers between generations, so I would be curious to see how a “regular” Millennial is doing, relative to their elders at the same stage in life? Maybe it’s the same, and your directional point stands, even when adjusting for the widening inequality in socioeconomic outcomes *within* generations?
The bigger background omission, which isn’t your fault, is the general discourse tendency in America to very much overstate the normativeness of the college-educated (upper-)middle class in generational contrasts and otherwise. Two-thirds of Americans don’t fit into this bucket, but you wouldn’t know that by the way we talk. And the way we talk affects how we see the world and what’s “normal” and even what’s good policy, since that majority group is too invisible to politicians, too.
So then you don’t need to overstate your own case and also contribute to this regrettable erasure of the actual median American, Millennial or otherwise. The American Dream has always been a minority thing--even in the heyday of New Deal America--and it still is.
Thank you! I don't know anything about economics, so I'm just thinking from a data analysis point of view. It seems very possible that the distribution of education debt is bimodal, or multimodal, by factors like race, sex, etc. The overall "average" of a bimodal distribution could apply to very few people, and certainly would have a different meaning to different subgroups. The "average" height of a group of men and women would apply to a taller than average woman and a shorter than average man. Then to present the averages of 2 different non-normal distributions and draw some conclusions from that comparison, but not as a bivariate analysis, I dunno.
Are you totally ignoring the chart showing Millenials doing better at the same age as Gen X and Baby Boomers? Your anecdotal take doesn't jibe with the numbers.
If student debt can’t be cancelled, how about improving it so that it’s terms are not so rigid and - I think - unfair to borrowers. Just make it more like conventional debt. When interest falls, let borrowers refinance. If borrower is overwhelmed, let chapter 11 address the challenge. Etc
I just look at prime age employment and labor force participation and it never returned to late 1990s levels…so millennials were waiting out a suboptimal economy thinking the 1990s would return and it never did. Student loan debt is like Afghanistan in that it is a mess left to us by Bush/Cheney that we must clean up. We screwed up 2001-2009 when boomers hadn’t even started turning 65 yet!?!
My memory is a med student from Yale declared bankruptcy in like 1976 to wipe out his debt and live the good life debt free after society paid for his medical degree. Society said 'Fuck Off'. Noah says 'Right On". I think I know how this debate its going to end.
That doesn’t mean the rest of us should get fucked. It means loans are a shitty model for financing education, because duh there’s no way to secure them. You can’t repossess knowledge.
The correct way to move forward is no students loans for undergraduate students with private colleges using endowment for at least no tuition for middle class in state students accepted to their college. And with respect to graduate degrees people need to be laser focused on ROI which wasn’t the case at the beginning of this century because the economy was suboptimal and young people were making decisions based on the 1990s economy returning which it never did.
No, that's insane. The endowments wouldn't last forever in that situation. And most schools don't even HAVE endowments worth mentioning. You're probably going off of the famous example of Harvard, where something like 90% of their opex is paid by the endowment, but they're an EXTREME outlier. The joke goes that Harvard is a large hedge fund with a small educational nonprofit attached.
And no, we shouldn't create a system where people have to be "laser focused on ROI", because people are SHIT at estimating ROI, despite all the craptastic transparency regulations we've heaped onto colleges. They already manipulate the stats, and any further regulations would lead us on a wild goose chase of a perpetual arms race with them on that.
We should create a system of universal IBR instead. Whether you have investors fronting tuition as middlemen, or the colleges fronting it themselves, it's a near-instantaneous market signal of a college's performance. It would probably need to be backstopped against recessions with some sort of automatic stabilizers and/or insurance scheme, but it would get government out of the business of funding and regulating what colleges choose to teach.
If some college can help its graduates to make bank off of "grievance studies", then I say more power to them. If another can do it off STEM, I really don't give a shit either way, and neither should the market. If a college wants to use its STEM revenue to subsidize the "grievance studies" departments, well, that's none of my business, none of yours, none of that hater Windbourne here's, and none of the government's either. Let the market and the customers decide if that's a workable business model. You never know, maybe some engineers might LIKE taking a "grievance studies" class or two, and I say they should be perfectly free to go to that sort of college if they want.
If there are market distortions that end up forming on top of that, then we can fix them with direct government subsidies targeted to certain types of academic specialties that are deemed socially useful but not rewarded by the market.
But universal IBR is the only reasonable model going forward. Debt peonage for society's most ambitious, hardworking, and smartest workers during their prime freaking reproductive years isn't freaking working, and is eventually going to give us more of an idiocracy than we already have.
Quite a few colleges do need-blind admissions that essentially act as a progressive form of taxation. I personally wouldn’t attend a private college that wasn’t need-blind because it just means kids with wealthy parents attend the college. Both universities I have degrees from are now need-blind for in state students.
You pay five percent (ten percent for grad school loans) of your discretionary income (total income minus 225% of federal poverty line); after ten, twenty, or twenty-five years, the remaining balance is cancelled.
No more people scraping by on thirty grand a year getting socked with hundreds a month in repayment costs. (A person making $35k a year pays $9 a month.) I don't see this talked about much, which is kind of infuriating. Student loan cancellation kind of happened, it was just much quieter!
At some point in the past you could definitely consolidate your loan to a different product and freeze your interest rate. I took the 30 year repayment period and consolidated at less than 3%. Because I did this and consolidated to a non-government lender, I was never eligible for public service loan forgiveness despite my employment qualifying until the one year waiver that was given for COVID allowed anyone making consistent payments to any lender to qualify for PSLF, which is not the program that was invalidated by the Supreme Court.
The private refi market was scammy AF up until 2008, when Bush signed one of his last laws to clean up the industry.
The market locked up for several years after that, and I suspect the private loan market did as well (though I don't remember specifically), because the feds ended up expanding federal loans to fill the gap in the private market. Most providers cherrypicked the best refis and just left everyone else out there to dry.
Eventually a handful of new players came into the refi market, SoFi among the biggest. But the rates are still pretty high, and as Seneca points out, you can't get PSLF or even whatever Biden is cooking up to replace the loan forgiveness that just got struck down.
My feeling exactly! I wasn’t expecting most comments to express anger and frustration. Noah just makes a couple of pretty sensible points.
Then again, I can understand the frustration -- if one truly believed the US government would cancel thousands of dollars of their loans, the Supreme Court decision feels like a financial loss.
Teenagers don't understand the decades long implications of borrowing and debt.
Millennials do not understand constitutional restraints on the powers of the President.
One could say that recent presidents have done their best to destroy any understanding of American constitutional government (civics) that may have been presented to American youth in high school.
A SCOTUS that is controlled by judges nominated by a president who lost the popular vote, confirmed by Senators representing far less than half the population. Maybe those frustrated millennials just believed their teachers when they were told we're a democracy
Funny. We talk all about every one of those issues in my HS civics class: bicameral legislature, the state representation of the Senate, Electoral College, that there is no national popular vote and never has been, Senate confirmation of judges, judicial review, and the increasingly imperial judiciary. And I'm always careful to remind my students that they live in a republic, not a democracy, and we read the founders views on Democracy to reinforce that point.
I'm sorry you got stuck with a lousy civics teacher, because America is the longest standing republic since ancient Rome, and our political story is fascinating if you know how to teach it.
I'm aware that this was all by deliberate design. This was all covered well in the relatively weak modern civics education I received in school, and quite well when I took a minor in PoliSci in college. That doesn't make it right.
The founders were smart dudes. And made some of the ballsiest moves in history....lives, fortunes and sacred honor is an 18th century mic drop moment. They were not political Jesus. The system they built is flawed and must be changed by any means necessary.
They were "smart dudes" and setup an amazingly resilient system, but I agree with Patrick Deneen that Enlightenment liberal philosophy seeded its own destruction. It crowned "individual autonomy" as his highest good, which leaves no room for "the common good". If maximal individual autonomy is your society's highest good, all institutions, norms, customs, and unchosen constraints must fall. J.S. Mill is pretty explicit about this. Unfortunately, without those mediating institutions, an ever larger state is needed to police an ever growing number of conflicts between rights and noses. That's what you're living through right now.
But that dooms the less populated parts of the country to utter political irrelevance, which is exactly what the Founding Fathers agreed to avoid. Our present system guarantees that every issue must be agreed to by a super majority of Americans, which I am exactly in favor of.
If a civics teacher taught a class that our Constitution sets up a pure democracy, that was disinformation. The issue of state representation was fought long and hard at the constitutional puncture. And the Connecticut plan was adopted, not the Virginia plan.
Yes, but the American system as it currently exists is entirely lacking in democratic legitimacy. There is no legitimate system where someone from Wyoming's vote counts for 77 times as much as someone from California's vote does.
You might as well argue that the people are represented by the party and the party elects the central committee and that's the way it was designed.
This is actually not a critique of Noah, but of Tyler Cower, who is always saying "on balance" and then coming down on the side of his priors - without citing any data.
Noah does cite data. I agree that we want more than averages in crafting loan relief policy, and I hope we will geet the deep dive. Hard to do though.
The boring but radical answer is that all loans should be converted to IBR. Period.
It’s a crime against millennials that loans were even the model in the first place. We were warned IN THE FUCKING 60s by Milton Friedman that loans were a terrible idea, but society did nothing. Instead, they had a bunch of babies and told them all they HAD to go to college. It’s fucking sickening.
Noah, you might want to avoid taking rhetorical responsibility for anything in the political/economic sphere. It attracts resentment and it makes you seem you have cryptic superpowers, which is either a creepy or welcome thought. I'm not sure which.
Going forward, income based repayment is great, but I want the schools to have a financial stake in whether their graduates pay off their loans. The students did take out the loans, but they're 19 years old. Their brains aren't even fully formed yet. The university is staffed by 50 year olds who ought to know better. If you graduate someone who's so useless they can't make their loan payments for years, there needs to be a clawback provision against the schools. Nothing we can do about the existing loans (there is legislatively, but ti will never happen), but new loans need this clause.
This is just more evidence why loans are an utterly inappropriate model.
Clawback provisions are fraught and overly complicated, both to legislate and enforce.
IBR provides real-time feedback. Graduates who don’t make any income don’t pay IBR.
Moreover, a higher ed finance industry based on IBR would have the financial leverage to keep schools accountable. Investors would hold portfolios and watch them like hawks. Underperforming schools would see their IBR rates go up - making them less competitive and less affordable - and investors would steer their student signees away from those schools.
I get your point about IBR incentivizing the lenders to care about student outcomes, but I never really considered that it would also make them care about what school the students went too. It's a good point, but I think you're counting on a feedback loop that is probably too minor to be consequential.
For example, UCLA engineering department has great income levels for graduates; UCLA school of education or of grievance studies likely doesn't. In your example, IBR rates are university specific not major specific -- the latter would be almost impossible to implement as many people change majors -- so where does that place UCLA, and is the feedback level of increasing IBR rates sufficient to cause them to be wary of putting loan-dependent students into underperforming majors? I'm honestly not sure.
To be clear, whether the major is “grievance studies” or STEM doesn’t really affect whether the universal IBR model actually works. It just affects the IBR rate. I never said that the same rate had to be applied to every school, nor to every student or major.
What is IBR? My Google search says he's a Swedish footballer. Could you please stop talking in acronyms only the cognisenti understand. More broadly, this should be a discussion about the purpose of American universities, how it should be paid for by society at large and who should benefit from the opportunity society makes available. It isn't self-evident college admissions offices should have the finger on the scale for one group over another, but if you Google who's on the admissions staff and who gets admitted, the evidence of bias is pretty clear.
As Chris says, it’s “income based repayment”. IE you pay a fixed percentage of your income for a duration until either you’ve reached some limit or the loan is paid off.
The Dems could have voted to “cancel” student loan debt in any of the years they controlled Congress, including 2021-2022. They did not. They didn’t have the votes for it, and anyway rewarding donors with new spending plans was judged more important. The whole “cancellation” by fiat gambit was merely the creation of a wedge issue to get votes from the sort of gullible people who take out too much student loan debt. It worked so well that Biden will try it again.
Every article I read about it said that Biden is starting a plan under another bill, and the articles seemed to suggest that this other bill was more clearly going to work but would take time. Was this just wishful thinking on the part of the journalists?
No, not the journalists. The White House put out a website describing the new plans. I've heard differing arguments about the legal merits of the new plan, but I think it's safe to say that HEROES was plan A...
Moreover, the current Congress *did* pass a law to block Biden's forgiveness plan, and he vetoed it! There were even Democrats that voted with Republicans. This episode didn't get a lot of coverage..
I think for me there’s a real frustration that we don’t really have a system to pay for useful education except for skills that are highly profitable.
So like I’m a teacher, and like it would be really good for me to have Spanish teachers available and socially reinforced like in college because just a ton of my families don’t speak English. It would be useful to have better training in a wide range of disciplines that really will never pencil out for me the way my wife just got her mba and then it resulted in a huge opportunity increase.
Like trades yes, but also just the wide range of areas to improve. Not umpteen online sessions about something that seems more aimed at covering butts but working on self improvement in a social context with expert guidance. You know school available to everyone for whatever they feel they need.
It’s weird that we offer this to 18 year olds financed by debt they don’t really understand but we don’t just offer this like we do 9th grade to anyone who wants to improve themselves. It’s also there for tbr tremendously successful like how my wife made a ton of money after getting an mba. But there’s just a huge gap of adult education opportunities for a better world.
I would suggest that probably at least half of your occupation could do without a college degree at all though. High school subjects? Probably. At least some of them. Elementary? Heck no! And my wife is a 3rd grade teacher. It's worth noting that (at least in CA) it takes 3 college classes to get a license to teach 3-5 year olds, but 5 years to get a license to teach 6-11 year olds. That makes no sense at all. We're spending tens of thousands of dollars are "schools of education" that at best have no effect and may actually be a net negative in some cases.
Get people that are passionate (about their subject, about young children), give them a year of real internship ("student-teaching" today isn't done well) so they learn how to manage large groups of kids, and then turn them loose to infect a classroom with the passion they have.
I imagine there are lots of professions that fall into this category (overly-credentialed), but teaching just happens to be the one I'm most familiar with.
I tend to agree even if it’s not something I want to spend my time screaming about that regular education teachers are pushed into a lot of extraneous coursework and that it’s not really applicable to the real world.
But when I see coursework that would be good and engaging it’s priced in a way that it’s like buy a new car.
“Young Black women are the most likely to have student debt, and their average loan balance is the highest at $11,000. Women are more likely than men to hold debt, and men’s higher incomes allow them to pay down their debt faster than women. Black men and Black women both start out with more student debt than their white counterparts, and because of their lower earnings, they pay it down more slowly. Gender and racial disparities in student debt thus grow over time.”
Combining the above statistics with the analysis below of the impact of the student loan ruling contradicts your rosy scenario:
“I’m really concerned about a wave of delinquencies and defaults once payments resume,” Yannelis told me. “Policymakers should be treating this as a five-alarm fire.”
Taking fields like African-American studies, really does not find many jobs out there.
Ideally, CONgress will do the right thing and pass a different bill in which going forward students that go into fields/trades that America needs, will pay for them.
In addition, we SHOULD pay for studying trades, not just for recently graduated, but those that ran up the massive 'educational' debt.
Why do you assume that most Black kids are majoring in African-American studies? According to datausa.io, the total number of degrees awarded for that major in 2020, latest data available, is 1,267 for the entire country! (And many of those were at elite colleges where such grads wouldn’t have much trouble pursuing their post college options no matter what their majors.)
Indentured Students: How Government-Guaranteed Loans Left Generations Drowning in College Debt
Why do 45 million Americans owe more than $1.7 trillion in student debt? Many assume the student debt crisis is the unintended consequences of federal loan programs crafted with the best of intentions. But speaker Elizabeth Tandy Shermer shows that Democrats and Republicans intentionally wanted to create a student loan industry instead of generously funding colleges and universities, which eventually left millions of Americans drowning in student debt.
1) taxing the bottom 70% to pay off the student loans of the top 30%
2) explicitly discriminating in favor of particular races in law
These are your issues, Democrats! Your people demand that you be on the right side of history and against oppression, and when you've got history and Karl Marx on your side, nothing can stop you! Don't worry about those polls that say 2/3rds of the country and half your own voters are against these things -- that's far-right disinformation, probably from Putin. You stand boldly for progress -- fear not! Go all in on these issues and you'll take 60 seats in the Senate in 2024.
(As a conservative, I really hope they take my advice.) :-)
A truer line has never been spoken, Noah: "honestly, there are worse fates." Yes, a great many of them. Having traveled and lived in 3rd world countries on and off, I've had a chance to see some of those "worse fates". Americans of all stripes and all ages would do well to remember that, for all it's faults and political fights, you live in the most amazing country the world has ever seen.
Student loan forgiveness is actually pretty popular, according to polls.
I believe that single-issue polls on spendy handouts tend to find support. It's when you put different items on the wishlist in contention with each other that the consensus withers.
Like most polls, what matters is the phrasing of the question. The first of those says most Americans (especially those who never went to college) do not support "Biden's loan forgiveness plan". The second says 60% of Americans "support forgiving all or some student loans". The first is very specific and uses Biden's name which makes it partisan. The second's very nebulous "all or some" phrasing makes you feel like an ogre if you say "no".
Great balanced article. Noah explains why at some point he favored student debt cancellation and now doesn’t do so. Compared to all the hyperventilation about this topic, this is refreshing.
"In an inflationary environment, budget constraints start to matter"
This exactly states my beef with the average progressive— they just can't wrap their minds around filthy lucre. I am a progressive in my heart, but fortunately/unfortunately, I have a calculator in my hand.
What about the millennials with working/lower-middle class parents? Not everyone stands to inherit their parents house in Orinda or whatever, and I would guess that at least some of the millennials with student loan debt are the same ones whose parents don't have the assets to bail them out.
There seem to be basically two sides to the student loan debate:
1. We have a student loan crisis because capitalism is bad.
2. We have a student loan crisis because government subsidies are bad.
But it seems to me that the data pretty clearly point to a third option that nobody really wants to acknowledge: We don't have a student loan crisis.
The situation with college tuition is even better than the chart you showed: There's another chart in the same report (Trends in College Pricing and Student Aid) that shows net tuition (i.e. tuition net of scholarships and need-based discounts), and it's much lower.
Nearly half of recent 4-year graduates of public and private non-profit schools are graduating debt-free, and the other half are graduating with debt averaging $30k. This is a totally reasonable and manageable debt to take on for a bachelor's degree. It only takes like $4k per year to pay this off in ten years, and the college wage premium (median earnings for bachelor minus median earnings for high school) is about $30k per year. For most people, student loans pay for themselves many times over.
Furthermore, the main places where college graduates are struggling to pay the bills are cities where housing is overpriced because of supply constraints. In these cities, it seems likely to me that debt cancellation would just result in the price of the limited supply of housing being bid up further, essentially making it a transfer from taxpayers to landlords and homeowners.
Yeah, I also commented that actual effective cost of college is wildly overstated by most media, which looks at the full tuition (that no one pays) only.
RE: your pointing to the college wage premium. That reminds me of an aspect of the White House's sales pitch on the progressiveness of their forgiveness order. They arrived at their conclusions by looking at where the money was going with respect to last years incomes, and comparing to national percentiles. Student debt holders are younger and have higher expected wage growth than the nation as a whole though. The White House argument was a sleight of hand that, sadly, media hasn't critiqued much.
The question about tuition debt often neglects to look at the disconnect between tuition and what students can earn in part time and summer jobs. I graduated from Northwestern University in 1973. I worked a summer warehouse job that paid $2.75/hour though we often worked 60 hour weeks. The income from this job typically covered a bit more than 2/3 of my tuition and living expenses. After graduation I had around $4,000 in loans and my first job out of college paid $10,600/year. So my debt was less than 50% of my annual salary. I suspect that not very many college students could fund their education in a similar fashion.
Canceling student debt was a HORRIBLE idea and a HORRIBLE waste of money (and time).
The adults that took these classes choose to go into fun and easy fields that paid little to nothing.
Many of these ppl never even completed the degree and are now working minimum wage jobs.
Worse, a number DID compete their degree and are now working minimum wage jobs.
Sorry, but English, Art History, Business, Political science, underwater basket weaving sound like fun things, but plain and simple, the fields are OVER LOADED.
OTOH, we have an extreme shortage of ppl in various fields AND TRADES.
For the last 5+ years, I have been trying to get CONgress to actually FUND students that seek bachelors/Associates in fields that we need, or trades such as construction, plumbing, electrician, CNC operator, manufacturing, welding, etc.
Hopefully now that SCOTUS has stopped this insanity, CONgress will do something right.
THIS is what we need to do to address a number of issues in our higher education.
>>The adults that took these classes choose to go into fun and easy fields that paid little to nothing.
>>Many of these ppl never even completed the degree and are now working minimum wage jobs.
>>Worse, a number DID compete their degree and are now working minimum wage jobs.
You must prove that (1) a majority of students went into "fun and easy field that paid little to nothing". So, okay, let's just simplify that as "STEM + Architecture + Law" -- and please note, that's a generous simplification.
For (2), let's assume that "many never... completed the degree and are now working minimum wage" means "more college dropouts work for minimum wage than those who never went to college". If the degrees were truly useless, even incomplete, then we'd expect to see zero wage premium being earned by college dropouts. Moreover, it would behoove you to show that *within* the dropout cohort, STEM+A+L majors outperformed the "useless degrees" (all others).
For (3), you must show that a statistically significantly smaller proportion of STEM+A+L majors are working minimum wage than the "useless degrees".
Otherwise... just admit that you're making shit up.
Or are you trying to claim that the majority of all of the other students took their degrees in just these 3?
And why do you lump Architecture, which is a relatively easy/fun degree, however, is flooded so few get jobs?
Likewise, why add in law, which I assume you mean law school, which is an Advanced schooling and has little to nothing to do with dropping out, or earning simple associates/bachelors?
And lawyers is another flooded field in which ppl have to work to get ahead. Once ahead, lawyers are way overpaid, but the starting lawyers and/or lazy/bad lawyers typically only make so-so living.
And most STEM jobs pay VERY WELL and these are the jobs that Americans did not take.
SO, what possible twisted logic are you using to put these 3 together based on what I said?
Or, are you trying to claim that YOU have taken multiple bachelors and that there is a bachelors degree in law?
"If the degrees were truly useless, even incomplete, then we'd expect to see zero wage premium being earned by college dropouts
Moreover, it would behoove you to show that *within* the dropout cohort, STEM+A+L majors outperformed the "useless degrees" (all others).
"
Again, what twisted logic are you using to get that from what I said?
Why would you even THINK that? It is not what I said.
The only one making up shit is you.
The fact is, that if a NUMBER of Americans had taken up fields/trades that America needed, then several things would have happened:
1) these ppl would have been PAID a great deal more and would not be gripping about their GD debt.
2) the fun/easy fields would not be flooded, which only pushed down their pay.
3) had you taken up something like STEM which is based on logic, math and philosophy, you would realize how foolish you really sound right now.
Civilization has flourished for all of human history without generations of people paying $60,000 a year for four year degrees in these fields. Your narrow definition of what constitutes education is not and has never been a necessary part of it. The expense and ubiquity of these soft degrees are recent phenomena, are products of a rent seeking university system and are not inherently useful.
Studying mathematics is not the same thing as studying art, and nowhere did John Adams suggest that anyone, anywhere, should pay $60,000 a year for four years to study philosophy (and to anticipate the next comment: if the government pays the $60,000 instead of the student it still “counts” and is still a terrible investment). Most importantly, Adams never meant that a philosophy degree or the like should become a necessary credential to participate in the economy.
Studying art and philosophy is a wonderful idea. But until we’ve developed to the point where most people don’t have to work 8 hours a day it’s going to a leisure pursuit for the aristocracy, just like in Adams’s day.
Philosophy is likely one of the most career-relevant majors most people could have though during a period of rapid economic change. You want to learn how to think clearly about arguments and new ideas, not about some specific set of facts that are going to be obsolete in ten years anyway.
You missed JFK's far more appropriate comment since it applies to even John Adam's quote:
“Ask not what your country can do for you – ask what you can do for your country”.
He did what the nation needed.
Yes, we need ALL of these degrees. The problem is that most of the younger generations went into the fun and easy degrees, and so few are in the earlier ones mentioned that are necessary to support the later ones.
America NEEDS special fields which all have critical thinking (probably more so than any other set of fields), general ed, liberal arts, including art, but, young generation CHOOSE to go into the easy and fun stuff in which they hardly learn even simply math, let alone any real science.
In addition, there are other ways to pay for the fun/easy stuff:
serve in military;
Work, get scholarships and grants;
have mommy/daddy continue to pay for ppl like you.
Of course, not everybody needs to have a degree.
Fact is, most of the ppl that have lots of debt never finished their degree. So now, they are working minimum wage jobs. Instead, by learning a trade that pays $30-100/hr, they can then have plenty of time to chase what they want.
Civilization is what it is, because we advanced in such things as Math, Sciences, Medicines, etc
Trades give us nations.
Sadly, you missed out on all the critical thinking and continue to think like a Gen Z; Have the nation give me what I want and do not worry about helping the nation.
Washington, Lincoln, Teddy, FDR, IKE, and JFK would be wasted on ppl like you.
Thinking about it like that makes it clear why this would have been a good policy in 2018 but an awful policy now. A big stimulus payment is good when the economy is suffering from lack of demand, not when there’s high inflation!
This essay is full of sloppy generalizations and far below your best, Noah. It sounds like you’re addressing your friend group as your rhetorical “we,” not Millennials, writ large.
Because how could this “we” be the generation you’re ostensibly talking about and for? Most Millennials didn’t go to college at all, much less overpay for it. Only 38% has a four-year degree! This is part of the general tendency of the (highly-educated) media class to project their own experience too much.
Most Millennials didn’t flirt with Bernie or Socialism or whatever. Only a very modest majority of Millennials even voted in that election--still a much lower rate than for older generations. The boring truth is that most Millennials were like most Americans: relatively politically apathetic and disengaged from the process beyond (maybe) voting.
So what about all the other generalizations and revisionist counter-generalizations here? Are most Millennials living in a house with a two-car garage that they own? This is clearly incorrect since only barely over half of Millennials owns a house, and many of those houses, presumably, look a little different than the TV family homes you’re imagining. This also elides the fact that 49% of Millennials doesn’t own a home at all!
This isn’t a matter of nitpicking or nuance. You’ve totally obscured the reality for Millennials, not to mention the American population as a whole, adding to the general tendency of American media to assume that upper middle class Americans are normative, instead of a minority.
On one hand, you're absolutely right that the student loan discourse only applies to part of the Millennial generation.
But remember that the statistics about Millennial income, wealth, and homeownership that I cited, as well as other data, apply to the entire generation. So when I show that Millennials are doing OK as a group, this applies to the average (or median) of ALL Millennials, not just those who went to college.
In other words, the narrative I want to debunk overgeneralizes from part of the generation to the whole. But the narrative I endorse is based on statistics that cover the whole generation, including those with no college.
Does that make sense?
Directionally, your point is correct: That the worst doomsday thinking about Milennials is overstated. And that there’s even room for triumphalism. Millennials go to college a lot more than Gen X and Boomers did. And they’re set to do at least about as well, by the markers of conventional middle class success. Or at least a plurality of them are, so that the average is similar. I haven’t looked into the median numbers between generations, so I would be curious to see how a “regular” Millennial is doing, relative to their elders at the same stage in life? Maybe it’s the same, and your directional point stands, even when adjusting for the widening inequality in socioeconomic outcomes *within* generations?
The bigger background omission, which isn’t your fault, is the general discourse tendency in America to very much overstate the normativeness of the college-educated (upper-)middle class in generational contrasts and otherwise. Two-thirds of Americans don’t fit into this bucket, but you wouldn’t know that by the way we talk. And the way we talk affects how we see the world and what’s “normal” and even what’s good policy, since that majority group is too invisible to politicians, too.
So then you don’t need to overstate your own case and also contribute to this regrettable erasure of the actual median American, Millennial or otherwise. The American Dream has always been a minority thing--even in the heyday of New Deal America--and it still is.
Not really, when you’re talking about such skewed distributions.
Thank you! I don't know anything about economics, so I'm just thinking from a data analysis point of view. It seems very possible that the distribution of education debt is bimodal, or multimodal, by factors like race, sex, etc. The overall "average" of a bimodal distribution could apply to very few people, and certainly would have a different meaning to different subgroups. The "average" height of a group of men and women would apply to a taller than average woman and a shorter than average man. Then to present the averages of 2 different non-normal distributions and draw some conclusions from that comparison, but not as a bivariate analysis, I dunno.
Are you totally ignoring the chart showing Millenials doing better at the same age as Gen X and Baby Boomers? Your anecdotal take doesn't jibe with the numbers.
Very true. Many people are engaging in generational warfare that should be too smart to do so.
If student debt can’t be cancelled, how about improving it so that it’s terms are not so rigid and - I think - unfair to borrowers. Just make it more like conventional debt. When interest falls, let borrowers refinance. If borrower is overwhelmed, let chapter 11 address the challenge. Etc
Yes, this would be good.
I just look at prime age employment and labor force participation and it never returned to late 1990s levels…so millennials were waiting out a suboptimal economy thinking the 1990s would return and it never did. Student loan debt is like Afghanistan in that it is a mess left to us by Bush/Cheney that we must clean up. We screwed up 2001-2009 when boomers hadn’t even started turning 65 yet!?!
My memory is a med student from Yale declared bankruptcy in like 1976 to wipe out his debt and live the good life debt free after society paid for his medical degree. Society said 'Fuck Off'. Noah says 'Right On". I think I know how this debate its going to end.
That doesn’t mean the rest of us should get fucked. It means loans are a shitty model for financing education, because duh there’s no way to secure them. You can’t repossess knowledge.
The correct way to move forward is no students loans for undergraduate students with private colleges using endowment for at least no tuition for middle class in state students accepted to their college. And with respect to graduate degrees people need to be laser focused on ROI which wasn’t the case at the beginning of this century because the economy was suboptimal and young people were making decisions based on the 1990s economy returning which it never did.
No, that's insane. The endowments wouldn't last forever in that situation. And most schools don't even HAVE endowments worth mentioning. You're probably going off of the famous example of Harvard, where something like 90% of their opex is paid by the endowment, but they're an EXTREME outlier. The joke goes that Harvard is a large hedge fund with a small educational nonprofit attached.
And no, we shouldn't create a system where people have to be "laser focused on ROI", because people are SHIT at estimating ROI, despite all the craptastic transparency regulations we've heaped onto colleges. They already manipulate the stats, and any further regulations would lead us on a wild goose chase of a perpetual arms race with them on that.
We should create a system of universal IBR instead. Whether you have investors fronting tuition as middlemen, or the colleges fronting it themselves, it's a near-instantaneous market signal of a college's performance. It would probably need to be backstopped against recessions with some sort of automatic stabilizers and/or insurance scheme, but it would get government out of the business of funding and regulating what colleges choose to teach.
If some college can help its graduates to make bank off of "grievance studies", then I say more power to them. If another can do it off STEM, I really don't give a shit either way, and neither should the market. If a college wants to use its STEM revenue to subsidize the "grievance studies" departments, well, that's none of my business, none of yours, none of that hater Windbourne here's, and none of the government's either. Let the market and the customers decide if that's a workable business model. You never know, maybe some engineers might LIKE taking a "grievance studies" class or two, and I say they should be perfectly free to go to that sort of college if they want.
If there are market distortions that end up forming on top of that, then we can fix them with direct government subsidies targeted to certain types of academic specialties that are deemed socially useful but not rewarded by the market.
But universal IBR is the only reasonable model going forward. Debt peonage for society's most ambitious, hardworking, and smartest workers during their prime freaking reproductive years isn't freaking working, and is eventually going to give us more of an idiocracy than we already have.
Quite a few colleges do need-blind admissions that essentially act as a progressive form of taxation. I personally wouldn’t attend a private college that wasn’t need-blind because it just means kids with wealthy parents attend the college. Both universities I have degrees from are now need-blind for in state students.
I think you’re grossly overestimating the impact of need-blindness.
It’s not remotely a substitute for abolishing the crappy student loan model in favor of IBR or something else.
IDR plans seem to make things much, much, much better, especially on lower-income borrowers.
https://www.nerdwallet.com/article/loans/student-loans/the-new-idr-plan
You pay five percent (ten percent for grad school loans) of your discretionary income (total income minus 225% of federal poverty line); after ten, twenty, or twenty-five years, the remaining balance is cancelled.
No more people scraping by on thirty grand a year getting socked with hundreds a month in repayment costs. (A person making $35k a year pays $9 a month.) I don't see this talked about much, which is kind of infuriating. Student loan cancellation kind of happened, it was just much quieter!
Interesting. I didn’t know borrowers couldn’t refi. Does this mean the interest rate is fixed once and for all when a student loan is taken?
At some point in the past you could definitely consolidate your loan to a different product and freeze your interest rate. I took the 30 year repayment period and consolidated at less than 3%. Because I did this and consolidated to a non-government lender, I was never eligible for public service loan forgiveness despite my employment qualifying until the one year waiver that was given for COVID allowed anyone making consistent payments to any lender to qualify for PSLF, which is not the program that was invalidated by the Supreme Court.
The private refi market was scammy AF up until 2008, when Bush signed one of his last laws to clean up the industry.
The market locked up for several years after that, and I suspect the private loan market did as well (though I don't remember specifically), because the feds ended up expanding federal loans to fill the gap in the private market. Most providers cherrypicked the best refis and just left everyone else out there to dry.
Eventually a handful of new players came into the refi market, SoFi among the biggest. But the rates are still pretty high, and as Seneca points out, you can't get PSLF or even whatever Biden is cooking up to replace the loan forgiveness that just got struck down.
“The private refi market was scammy AF up until 2008” Interesting. Scammy in which way? Lenders taking advantage of borrowers or the other way around?
Lenders charging exorbitant origination fees and ridiculous rates, predatory advertisement and lending practices, the usual.
Lots of salty Millennials down here in the comments, but I think you nailed it!
My feeling exactly! I wasn’t expecting most comments to express anger and frustration. Noah just makes a couple of pretty sensible points.
Then again, I can understand the frustration -- if one truly believed the US government would cancel thousands of dollars of their loans, the Supreme Court decision feels like a financial loss.
Two pockets of ignorance have been revealed:
Teenagers don't understand the decades long implications of borrowing and debt.
Millennials do not understand constitutional restraints on the powers of the President.
One could say that recent presidents have done their best to destroy any understanding of American constitutional government (civics) that may have been presented to American youth in high school.
A SCOTUS that is controlled by judges nominated by a president who lost the popular vote, confirmed by Senators representing far less than half the population. Maybe those frustrated millennials just believed their teachers when they were told we're a democracy
Funny. We talk all about every one of those issues in my HS civics class: bicameral legislature, the state representation of the Senate, Electoral College, that there is no national popular vote and never has been, Senate confirmation of judges, judicial review, and the increasingly imperial judiciary. And I'm always careful to remind my students that they live in a republic, not a democracy, and we read the founders views on Democracy to reinforce that point.
I'm sorry you got stuck with a lousy civics teacher, because America is the longest standing republic since ancient Rome, and our political story is fascinating if you know how to teach it.
I'm aware that this was all by deliberate design. This was all covered well in the relatively weak modern civics education I received in school, and quite well when I took a minor in PoliSci in college. That doesn't make it right.
The founders were smart dudes. And made some of the ballsiest moves in history....lives, fortunes and sacred honor is an 18th century mic drop moment. They were not political Jesus. The system they built is flawed and must be changed by any means necessary.
They were "smart dudes" and setup an amazingly resilient system, but I agree with Patrick Deneen that Enlightenment liberal philosophy seeded its own destruction. It crowned "individual autonomy" as his highest good, which leaves no room for "the common good". If maximal individual autonomy is your society's highest good, all institutions, norms, customs, and unchosen constraints must fall. J.S. Mill is pretty explicit about this. Unfortunately, without those mediating institutions, an ever larger state is needed to police an ever growing number of conflicts between rights and noses. That's what you're living through right now.
But that dooms the less populated parts of the country to utter political irrelevance, which is exactly what the Founding Fathers agreed to avoid. Our present system guarantees that every issue must be agreed to by a super majority of Americans, which I am exactly in favor of.
If a civics teacher taught a class that our Constitution sets up a pure democracy, that was disinformation. The issue of state representation was fought long and hard at the constitutional puncture. And the Connecticut plan was adopted, not the Virginia plan.
You might as well argue that the people are represented by the party, and the party elects the central committee, and that's the way it was designed.
Yes, but the American system as it currently exists is entirely lacking in democratic legitimacy. There is no legitimate system where someone from Wyoming's vote counts for 77 times as much as someone from California's vote does.
You might as well argue that the people are represented by the party and the party elects the central committee and that's the way it was designed.
Thanks!
If you put Noah in charge of managing Disneyland, he would argue that "on average, most people never go there", and then close the park.
I guess I did write this post for the majority of people who would appreciate it, failing to take into account the few who would get mad at it. 😉
We get it, you want a free trip to Disneyland!
This is actually not a critique of Noah, but of Tyler Cower, who is always saying "on balance" and then coming down on the side of his priors - without citing any data.
Noah does cite data. I agree that we want more than averages in crafting loan relief policy, and I hope we will geet the deep dive. Hard to do though.
Someone here is a fool, but I don’t think it is Noah. Why do you read him if you hate data?
"Noah is a fool!"
Easy to say, hard to support. Do you care to support it?
The boring but radical answer is that all loans should be converted to IBR. Period.
It’s a crime against millennials that loans were even the model in the first place. We were warned IN THE FUCKING 60s by Milton Friedman that loans were a terrible idea, but society did nothing. Instead, they had a bunch of babies and told them all they HAD to go to college. It’s fucking sickening.
Well, we are converting many loans to IBR, going forward.
"we are converting"
Noah, you might want to avoid taking rhetorical responsibility for anything in the political/economic sphere. It attracts resentment and it makes you seem you have cryptic superpowers, which is either a creepy or welcome thought. I'm not sure which.
But not all. That’s the sticking point for me.
Going forward, income based repayment is great, but I want the schools to have a financial stake in whether their graduates pay off their loans. The students did take out the loans, but they're 19 years old. Their brains aren't even fully formed yet. The university is staffed by 50 year olds who ought to know better. If you graduate someone who's so useless they can't make their loan payments for years, there needs to be a clawback provision against the schools. Nothing we can do about the existing loans (there is legislatively, but ti will never happen), but new loans need this clause.
This is just more evidence why loans are an utterly inappropriate model.
Clawback provisions are fraught and overly complicated, both to legislate and enforce.
IBR provides real-time feedback. Graduates who don’t make any income don’t pay IBR.
Moreover, a higher ed finance industry based on IBR would have the financial leverage to keep schools accountable. Investors would hold portfolios and watch them like hawks. Underperforming schools would see their IBR rates go up - making them less competitive and less affordable - and investors would steer their student signees away from those schools.
I get your point about IBR incentivizing the lenders to care about student outcomes, but I never really considered that it would also make them care about what school the students went too. It's a good point, but I think you're counting on a feedback loop that is probably too minor to be consequential.
For example, UCLA engineering department has great income levels for graduates; UCLA school of education or of grievance studies likely doesn't. In your example, IBR rates are university specific not major specific -- the latter would be almost impossible to implement as many people change majors -- so where does that place UCLA, and is the feedback level of increasing IBR rates sufficient to cause them to be wary of putting loan-dependent students into underperforming majors? I'm honestly not sure.
To be clear, whether the major is “grievance studies” or STEM doesn’t really affect whether the universal IBR model actually works. It just affects the IBR rate. I never said that the same rate had to be applied to every school, nor to every student or major.
What is IBR? My Google search says he's a Swedish footballer. Could you please stop talking in acronyms only the cognisenti understand. More broadly, this should be a discussion about the purpose of American universities, how it should be paid for by society at large and who should benefit from the opportunity society makes available. It isn't self-evident college admissions offices should have the finger on the scale for one group over another, but if you Google who's on the admissions staff and who gets admitted, the evidence of bias is pretty clear.
Income Based Repayments.
As Chris says, it’s “income based repayment”. IE you pay a fixed percentage of your income for a duration until either you’ve reached some limit or the loan is paid off.
Also, not to be a dick, but it’s “cognoscenti”.
The Dems could have voted to “cancel” student loan debt in any of the years they controlled Congress, including 2021-2022. They did not. They didn’t have the votes for it, and anyway rewarding donors with new spending plans was judged more important. The whole “cancellation” by fiat gambit was merely the creation of a wedge issue to get votes from the sort of gullible people who take out too much student loan debt. It worked so well that Biden will try it again.
Yes, this is why I think the SCOTUS decision is likely the final word.
Every article I read about it said that Biden is starting a plan under another bill, and the articles seemed to suggest that this other bill was more clearly going to work but would take time. Was this just wishful thinking on the part of the journalists?
The whole issue is an example of wishful thinking.
No, not the journalists. The White House put out a website describing the new plans. I've heard differing arguments about the legal merits of the new plan, but I think it's safe to say that HEROES was plan A...
Moreover, the current Congress *did* pass a law to block Biden's forgiveness plan, and he vetoed it! There were even Democrats that voted with Republicans. This episode didn't get a lot of coverage..
I think for me there’s a real frustration that we don’t really have a system to pay for useful education except for skills that are highly profitable.
So like I’m a teacher, and like it would be really good for me to have Spanish teachers available and socially reinforced like in college because just a ton of my families don’t speak English. It would be useful to have better training in a wide range of disciplines that really will never pencil out for me the way my wife just got her mba and then it resulted in a huge opportunity increase.
Like trades yes, but also just the wide range of areas to improve. Not umpteen online sessions about something that seems more aimed at covering butts but working on self improvement in a social context with expert guidance. You know school available to everyone for whatever they feel they need.
It’s weird that we offer this to 18 year olds financed by debt they don’t really understand but we don’t just offer this like we do 9th grade to anyone who wants to improve themselves. It’s also there for tbr tremendously successful like how my wife made a ton of money after getting an mba. But there’s just a huge gap of adult education opportunities for a better world.
I would suggest that probably at least half of your occupation could do without a college degree at all though. High school subjects? Probably. At least some of them. Elementary? Heck no! And my wife is a 3rd grade teacher. It's worth noting that (at least in CA) it takes 3 college classes to get a license to teach 3-5 year olds, but 5 years to get a license to teach 6-11 year olds. That makes no sense at all. We're spending tens of thousands of dollars are "schools of education" that at best have no effect and may actually be a net negative in some cases.
Get people that are passionate (about their subject, about young children), give them a year of real internship ("student-teaching" today isn't done well) so they learn how to manage large groups of kids, and then turn them loose to infect a classroom with the passion they have.
I imagine there are lots of professions that fall into this category (overly-credentialed), but teaching just happens to be the one I'm most familiar with.
I tend to agree even if it’s not something I want to spend my time screaming about that regular education teachers are pushed into a lot of extraneous coursework and that it’s not really applicable to the real world.
But when I see coursework that would be good and engaging it’s priced in a way that it’s like buy a new car.
Your analysis doesn’t take this into account:
“Young Black women are the most likely to have student debt, and their average loan balance is the highest at $11,000. Women are more likely than men to hold debt, and men’s higher incomes allow them to pay down their debt faster than women. Black men and Black women both start out with more student debt than their white counterparts, and because of their lower earnings, they pay it down more slowly. Gender and racial disparities in student debt thus grow over time.”
https://www.stlouisfed.org/publications/economic-equity-insights/gender-racial-disparities-student-loan-debt
Combining the above statistics with the analysis below of the impact of the student loan ruling contradicts your rosy scenario:
“I’m really concerned about a wave of delinquencies and defaults once payments resume,” Yannelis told me. “Policymakers should be treating this as a five-alarm fire.”
https://www.nytimes.com/2023/06/30/opinion/student-loans-supreme-court.html?smid=nytcore-ios-share&referringSource=articleShare
Taking fields like African-American studies, really does not find many jobs out there.
Ideally, CONgress will do the right thing and pass a different bill in which going forward students that go into fields/trades that America needs, will pay for them.
In addition, we SHOULD pay for studying trades, not just for recently graduated, but those that ran up the massive 'educational' debt.
Why do you assume that most Black kids are majoring in African-American studies? According to datausa.io, the total number of degrees awarded for that major in 2020, latest data available, is 1,267 for the entire country! (And many of those were at elite colleges where such grads wouldn’t have much trouble pursuing their post college options no matter what their majors.)
More data from same website:
872 of the 1267 Black studies degrees were awarded were to Black students
196,835 Blacks received bachelor’s degrees
<.5% of Blacks majored in Black studies
A major in Black studies is not relevant to a discussion of why Black students have more education debt.
First off, the ONLY one that assumed that, was you;
As I wrote:
"Taking fields like African-American studies,"
makes absolutely NO ASSUMPTIONS.
I DO assume that MOST OF THE KIDS took easy/fun degrees that pay little once they are out there.
I am guessing that you are one of those.
Indentured Students: How Government-Guaranteed Loans Left Generations Drowning in College Debt
Why do 45 million Americans owe more than $1.7 trillion in student debt? Many assume the student debt crisis is the unintended consequences of federal loan programs crafted with the best of intentions. But speaker Elizabeth Tandy Shermer shows that Democrats and Republicans intentionally wanted to create a student loan industry instead of generously funding colleges and universities, which eventually left millions of Americans drowning in student debt.
https://www.wilsoncenter.org/event/indentured-students-how-government-guaranteed-loans-left-generations-drowning-college-debt
Please, Democrats, please, go all in on:
1) taxing the bottom 70% to pay off the student loans of the top 30%
2) explicitly discriminating in favor of particular races in law
These are your issues, Democrats! Your people demand that you be on the right side of history and against oppression, and when you've got history and Karl Marx on your side, nothing can stop you! Don't worry about those polls that say 2/3rds of the country and half your own voters are against these things -- that's far-right disinformation, probably from Putin. You stand boldly for progress -- fear not! Go all in on these issues and you'll take 60 seats in the Senate in 2024.
(As a conservative, I really hope they take my advice.) :-)
A truer line has never been spoken, Noah: "honestly, there are worse fates." Yes, a great many of them. Having traveled and lived in 3rd world countries on and off, I've had a chance to see some of those "worse fates". Americans of all stripes and all ages would do well to remember that, for all it's faults and political fights, you live in the most amazing country the world has ever seen.
Student loan forgiveness is actually pretty popular, according to polls.
I believe that single-issue polls on spendy handouts tend to find support. It's when you put different items on the wishlist in contention with each other that the consensus withers.
https://www.nbcnews.com/meet-the-press/meetthepressblog/voters-split-student-loan-forgiveness-new-poll-shows-rcna48490
https://thehill.com/changing-america/enrichment/education/3614404-most-americans-support-student-loan-forgiveness-poll-finds/
Like most polls, what matters is the phrasing of the question. The first of those says most Americans (especially those who never went to college) do not support "Biden's loan forgiveness plan". The second says 60% of Americans "support forgiving all or some student loans". The first is very specific and uses Biden's name which makes it partisan. The second's very nebulous "all or some" phrasing makes you feel like an ogre if you say "no".
Great balanced article. Noah explains why at some point he favored student debt cancellation and now doesn’t do so. Compared to all the hyperventilation about this topic, this is refreshing.
"In an inflationary environment, budget constraints start to matter"
This exactly states my beef with the average progressive— they just can't wrap their minds around filthy lucre. I am a progressive in my heart, but fortunately/unfortunately, I have a calculator in my hand.
Same
What about the millennials with working/lower-middle class parents? Not everyone stands to inherit their parents house in Orinda or whatever, and I would guess that at least some of the millennials with student loan debt are the same ones whose parents don't have the assets to bail them out.
Very true!
There seem to be basically two sides to the student loan debate:
1. We have a student loan crisis because capitalism is bad.
2. We have a student loan crisis because government subsidies are bad.
But it seems to me that the data pretty clearly point to a third option that nobody really wants to acknowledge: We don't have a student loan crisis.
The situation with college tuition is even better than the chart you showed: There's another chart in the same report (Trends in College Pricing and Student Aid) that shows net tuition (i.e. tuition net of scholarships and need-based discounts), and it's much lower.
Nearly half of recent 4-year graduates of public and private non-profit schools are graduating debt-free, and the other half are graduating with debt averaging $30k. This is a totally reasonable and manageable debt to take on for a bachelor's degree. It only takes like $4k per year to pay this off in ten years, and the college wage premium (median earnings for bachelor minus median earnings for high school) is about $30k per year. For most people, student loans pay for themselves many times over.
Furthermore, the main places where college graduates are struggling to pay the bills are cities where housing is overpriced because of supply constraints. In these cities, it seems likely to me that debt cancellation would just result in the price of the limited supply of housing being bid up further, essentially making it a transfer from taxpayers to landlords and homeowners.
Yeah, I also commented that actual effective cost of college is wildly overstated by most media, which looks at the full tuition (that no one pays) only.
RE: your pointing to the college wage premium. That reminds me of an aspect of the White House's sales pitch on the progressiveness of their forgiveness order. They arrived at their conclusions by looking at where the money was going with respect to last years incomes, and comparing to national percentiles. Student debt holders are younger and have higher expected wage growth than the nation as a whole though. The White House argument was a sleight of hand that, sadly, media hasn't critiqued much.
The question about tuition debt often neglects to look at the disconnect between tuition and what students can earn in part time and summer jobs. I graduated from Northwestern University in 1973. I worked a summer warehouse job that paid $2.75/hour though we often worked 60 hour weeks. The income from this job typically covered a bit more than 2/3 of my tuition and living expenses. After graduation I had around $4,000 in loans and my first job out of college paid $10,600/year. So my debt was less than 50% of my annual salary. I suspect that not very many college students could fund their education in a similar fashion.
Canceling student debt was a HORRIBLE idea and a HORRIBLE waste of money (and time).
The adults that took these classes choose to go into fun and easy fields that paid little to nothing.
Many of these ppl never even completed the degree and are now working minimum wage jobs.
Worse, a number DID compete their degree and are now working minimum wage jobs.
Sorry, but English, Art History, Business, Political science, underwater basket weaving sound like fun things, but plain and simple, the fields are OVER LOADED.
OTOH, we have an extreme shortage of ppl in various fields AND TRADES.
For the last 5+ years, I have been trying to get CONgress to actually FUND students that seek bachelors/Associates in fields that we need, or trades such as construction, plumbing, electrician, CNC operator, manufacturing, welding, etc.
Hopefully now that SCOTUS has stopped this insanity, CONgress will do something right.
THIS is what we need to do to address a number of issues in our higher education.
https://windbourne.substack.com/p/how-to-fix-americas-higher-education
This is an utter bullshit strawman that you’ve invented in your head. Most people don’t do “useless” degrees.
Reported.
Yes, they DO easy/fun degrees that are useless in the working world.
Reported? For what?
Telling the truth and not pushing Political Correctness?
Please.
Where’s your data, then? This oughtta be good.
Data for what? The degrees that do not pay ppl?
Sure, let's start with that.
You originally said:
>>The adults that took these classes choose to go into fun and easy fields that paid little to nothing.
>>Many of these ppl never even completed the degree and are now working minimum wage jobs.
>>Worse, a number DID compete their degree and are now working minimum wage jobs.
You must prove that (1) a majority of students went into "fun and easy field that paid little to nothing". So, okay, let's just simplify that as "STEM + Architecture + Law" -- and please note, that's a generous simplification.
For (2), let's assume that "many never... completed the degree and are now working minimum wage" means "more college dropouts work for minimum wage than those who never went to college". If the degrees were truly useless, even incomplete, then we'd expect to see zero wage premium being earned by college dropouts. Moreover, it would behoove you to show that *within* the dropout cohort, STEM+A+L majors outperformed the "useless degrees" (all others).
For (3), you must show that a statistically significantly smaller proportion of STEM+A+L majors are working minimum wage than the "useless degrees".
Otherwise... just admit that you're making shit up.
"STEM + Architecture + Law"
Or are you trying to claim that the majority of all of the other students took their degrees in just these 3?
And why do you lump Architecture, which is a relatively easy/fun degree, however, is flooded so few get jobs?
Likewise, why add in law, which I assume you mean law school, which is an Advanced schooling and has little to nothing to do with dropping out, or earning simple associates/bachelors?
And lawyers is another flooded field in which ppl have to work to get ahead. Once ahead, lawyers are way overpaid, but the starting lawyers and/or lazy/bad lawyers typically only make so-so living.
And most STEM jobs pay VERY WELL and these are the jobs that Americans did not take.
SO, what possible twisted logic are you using to put these 3 together based on what I said?
Or, are you trying to claim that YOU have taken multiple bachelors and that there is a bachelors degree in law?
"If the degrees were truly useless, even incomplete, then we'd expect to see zero wage premium being earned by college dropouts
Moreover, it would behoove you to show that *within* the dropout cohort, STEM+A+L majors outperformed the "useless degrees" (all others).
"
Again, what twisted logic are you using to get that from what I said?
Why would you even THINK that? It is not what I said.
The only one making up shit is you.
The fact is, that if a NUMBER of Americans had taken up fields/trades that America needed, then several things would have happened:
1) these ppl would have been PAID a great deal more and would not be gripping about their GD debt.
2) the fun/easy fields would not be flooded, which only pushed down their pay.
3) had you taken up something like STEM which is based on logic, math and philosophy, you would realize how foolish you really sound right now.
Civilization has flourished for all of human history without generations of people paying $60,000 a year for four year degrees in these fields. Your narrow definition of what constitutes education is not and has never been a necessary part of it. The expense and ubiquity of these soft degrees are recent phenomena, are products of a rent seeking university system and are not inherently useful.
Actually, they are useful. Make no mistake. The difference is that those fields are OVERLOADED because they were so easy and so much fun.
The others pay well, and will help the nation, as well as families, but they ARE hard work.
Studying mathematics is not the same thing as studying art, and nowhere did John Adams suggest that anyone, anywhere, should pay $60,000 a year for four years to study philosophy (and to anticipate the next comment: if the government pays the $60,000 instead of the student it still “counts” and is still a terrible investment). Most importantly, Adams never meant that a philosophy degree or the like should become a necessary credential to participate in the economy.
Studying art and philosophy is a wonderful idea. But until we’ve developed to the point where most people don’t have to work 8 hours a day it’s going to a leisure pursuit for the aristocracy, just like in Adams’s day.
Philosophy is likely one of the most career-relevant majors most people could have though during a period of rapid economic change. You want to learn how to think clearly about arguments and new ideas, not about some specific set of facts that are going to be obsolete in ten years anyway.
It's also empirically the most profitable humanities degree.
(But other such degrees like English are also profitable; it's not true early millennials all went and got underwater basket weaving degrees.)
Science is a branch of Philosophy combined with math and science REINFORCES both.
Much more so than Business, liberal arts, political science, etc.
Look we need all of these degrees, BUT, too many have gone into the fun/easy degrees, not the degrees that America needs ppl in.
You missed JFK's far more appropriate comment since it applies to even John Adam's quote:
“Ask not what your country can do for you – ask what you can do for your country”.
He did what the nation needed.
Yes, we need ALL of these degrees. The problem is that most of the younger generations went into the fun and easy degrees, and so few are in the earlier ones mentioned that are necessary to support the later ones.
Look again.
America NEEDS special fields which all have critical thinking (probably more so than any other set of fields), general ed, liberal arts, including art, but, young generation CHOOSE to go into the easy and fun stuff in which they hardly learn even simply math, let alone any real science.
In addition, there are other ways to pay for the fun/easy stuff:
serve in military;
Work, get scholarships and grants;
have mommy/daddy continue to pay for ppl like you.
Of course, not everybody needs to have a degree.
Fact is, most of the ppl that have lots of debt never finished their degree. So now, they are working minimum wage jobs. Instead, by learning a trade that pays $30-100/hr, they can then have plenty of time to chase what they want.
Civilization is what it is, because we advanced in such things as Math, Sciences, Medicines, etc
Trades give us nations.
Sadly, you missed out on all the critical thinking and continue to think like a Gen Z; Have the nation give me what I want and do not worry about helping the nation.
Washington, Lincoln, Teddy, FDR, IKE, and JFK would be wasted on ppl like you.
The government should give *everyone* $10,000 and let anyone pay off their debt but this is not about debt repayment.
Thinking about it like that makes it clear why this would have been a good policy in 2018 but an awful policy now. A big stimulus payment is good when the economy is suffering from lack of demand, not when there’s high inflation!