So BS cancels all the debts.
Who exactly is paying back the money that was borrowed?
Do lenders and colleges simply absorb the costs?
So BS cancels all the debts.
Not at all. That’s on the taxpayers.
This sentence says it all…
this is usually what happens but there are exceptions. Currently there is a student loan forgiveness for people working in certain professions (non for profits, and any govt job) whereby after 120 payments on whichever payment plan you are on, the debt is erased and is not counted as taxable income. Now, this may go away in the future but I’m assuming that those who qualify now will be grandfathered in…at least I hope so b/c that’s what my husband is doing.
However for all other ways student loan is “forgiven”, yes it is taxable. The IBR and ICR plans are forgiven after 25 yrs of paying.
Perhaps. But I think a big part of it is self-concept. I always considered myself a person who had to “root hog or die”. I always thought opportunity existed, but I expected nothing beyond the variations in opportunity. I think a lot of young people now consider themselves on a life track that includes the college experience of a particular sort, at a particular point in their lives, no matter what.
That is really a massive difference in thinking, and the “no matter what” part includes requiring others to pay for it so it’s guaranteed.
Nice article! I didn’t know…
After getting rid of entrance exams, getting rid of attendance requirements, and all that stuff— it just sounds like a certain number of taxpayer-subsidized years spent goofing off. It’s my understanding that it’s almost impossible to get fired from your job in France… is it easier to get kicked out of school if you don’t leave voluntarily?
In the year 2015 my own French faculty made lecture attendance optional, not because they believed students to be self-motivated enough to learn the material on their own, but because there simply weren’t enough seats for all the students.
If you subsidize something, you get more of it. These subsidies have effectively created a generation of young people who attend college because it is free, even if an apprenticeship might suit them better. Their education costs their neighbors large amounts of money and costs them several years of their lives that could have been spent learning more relevant skills.
But free college wasn’t enough; France also wanted it to be fair. To that end, France got rid of the ‘elitist’ system of getting accepted to a university. For many years, admission to a university required an entry exam or good grades: the numerus clausus. The French government got rid of that, opening the floodgates for thousands of students who otherwise would have been rejected. The effects of this have been especially pronounced in social sciences, law, international relations, history, and medicine. Since that time, only medical schools have successfully lobbied to get the restrictions reintroduced.
2014 data show that only 30% of French students get their bachelor degree without resetting a year, only 43.8% make it from first to second year, and a solid 19% leave university with no diploma whatsoever. Why is that? Some of it obviously has to do with the decline in the quality of public secondary education, but degrees are also more difficult to acquire than they were before. New law students are told:
“Only 10% of you will actually make it to the next year. At least we hope so. We have no idea where to put you if more of you make it.”
Instead of making the system free and fair, higher education becomes increasingly expensive for taxpayers and increasingly difficult for students.
I’m strongly in favor of reform, but I’m not in favor of blanket solutions that don’t address the underlying problems.
First, make the loans dischargeable in bankruptcy as they used to be. This is probably the best form of means testing.
Second, remove all government guarantees from the loans.
That will force the lenders to actually evaluate the credit worthiness of the student borrower. Of course the colleges will howl like banshees, well they need to bear some of the costs of their policies of increasing their prices beyond the rate of inflation.
Finally, need to address the issue of credentialism that drove the need for college enrollment much higher than it used to be. But that is a separate and very highly charged discussion for another day.
If we did that, though, I’d still be concerned about abuse.
When they used to be dischargeable in bankruptcy, people would get their loans discharged right after graduation, then go on to high-paying careers.
In fact, when I was approaching college age, one of the guidance counselors suggested that I consider doing exactly that as a way of paying for college.
The system in England is if the loans are not repaid after thirty years then they are written off. In Scotland university education is free as it once was in England.
Why should I have to pay of someone else’s student loans when I worked hard to pay off all mine? No thank you, don’t think so!
Anyone who thinks “free college” will actually be “free” is wrong.
The plan will never pass Congress, not as a stand-alone anyway.
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