Wonkette
Eliot Spitzer has a great idea for making college more affordable! Ha, not really. But he has an idea about how we can make it possible for people to pay back their $160,000 loans from undergrad without ending up in debtor’s prison.
The basic idea is that instead of paying a fixed (and massive) amount every month, which is very hard when you’re just out of college and making $20,000 a year working for Clean Water Action, you would pay some percentage of your income. The more you make, the more you pay, until you’re done.
This all sounds great, except for this minor point: Who the fuck, in the middle of a deep global DEPRESSION, will continue to borrow six-figure sums to finance an undergraduate education which is not, it turns out, any guarantee of future employment anyway?
Your editor is not exactly an economist, so maybe the following theory is all complete hooey. But does it not strike anyone that the current (and likely short-lived) attitude about education, that it costs what it costs and if it is terrifyingly high well that is just the price of doing business these days, sounds a lot like what people were saying about real estate in a couple years ago? This whole, “Get in now and don’t worry about being fleeced because otherwise you’re completely doomed” attitude?
In addition, the notion that the educational market does not respond to basic laws of supply and demand, and that it can continue to command an endless supply of middle-class youngsters paying $40,000 a year tuition even as that amount threatens to supercede their parents’ annual incomes, just seems … wrongheaded.
To conclude: Thanks, Eliot Spitzer! You have successfully solved America’s college education dilemma from 2005.
Loan Ranger [Slate]
If students end up paying less overall in that plan then the colleges will get less money. Why would they offer arts degrees if they know they’ll never see the money?
SKS: You are correct and Spitzer is wrong. Education is a good like any other; it’s current price cannot stand. Especially when people can’t mortgage their houses anymore.
The Deal Professor has an amazing article on Harvard’s endowment hitting the wall in 5 years. There will be a painful adjustment.
The best way to make education affordable is to ban student loans, or at least regulate out of existence the most appalling terms. And make them subject to cramdowns on bankruptcy.
Or we could just take over a student center. That always works. Ask NYU.
Seriously though, Needs-Blind-Admission. That needs to come back.
Who would finance such a boondoggle? Um, I dunno, maybe the same idiots who let people buy houses with no money down and a balloon payment on the presumption the house value would double in five years?
I hate to be all serious and shit, but you’ve hit upon the crux of the biscuit. Who will go to college for no jobs? Who will buy products with no jobs?
I, personally, look forward to our new, serf led economy, and have already started many piles of mud in my front yard that I can move around.
…Has Spitz ever met a ‘ho that let him hit it on credit?
If anyone should espousing the benefits of a cash and assests-based society it should be this man….
“an endless supply of middle-class youngsters paying $40,000 a year tuition”
Not all universities cost $40K per year.
Lionel Hutz Esq.: We’ll be the best educated serfs in history!
Terry: Only the universities that matter (i.e., the ones Sara and Jim went to) cost $40,000/year. All others are glorified junior colleges, as everyone knows.
Not sure about Ken.
Well, as Mrs. Plainsight always says, education and health are the only investments that can’t be taken from you - FWIW
Let me rewrite this a bit…
Sara K. Smith: Wah! I went to Harvard and blog for a living! Wah!
Those of us that paid off our student loans by working part time at a record store don’t really get what you’re on about.
Solution? Go to your nearest state school and double-major in tent-city engineering and Mandarin Chinese.
NewAlgier: The trevails of the goddamn Harvard endowment chaps my ass no end. Not long ago the fucking thing was so big they were discussing not charging undergrad tuition. But guess what? Some genius decided to gamble the endowment on highly leveraged vehicles. What a braniac! Fight Harvard Fight!
So no free tuition. Suck it, equal opportunity.
ugh don’t make me think about this. I’m starting grad school in the fall. This was a plan pre economic meltdown and now I’m on the damn path. Plus, my current job is grant funded research and it doesn’t look pretty for our renewal. Woo. It looks like I’ll end up in Michigan, because they’re providing the most $$. I’m fucking grateful for getting ANYthing. I think paying $40k a year is STUPID, bachelors or masters. I nearly did, and thank god my parents forced some sense into me. These days a bachelors is as much of an edge as a damn GED. You just have to have one, it doesn’t really matter where it’s from. Go to state school and save yourself the debilitating debt. It’ll cost like 60,000 TOTAL.
Initially, I wrote something very serious here, then I realized this is a post about Eliot Spitzer and college kids. Hell, they can just become prostitutes and hook their way through! How many Ho’ Diamonds does a masters cost?
GHOPAC has always tried to ‘penetrate’ the student body, after all.
Now that I don’t have a job, I’m going to fake my own death (spontaneous combustion) to keep the Dept of Ed off my back, because they’ll even take yer unemployment checks if it came down to it.
As I liked to say when I was a college student at a small, liberal art$ college in Maine in the late 1990s, “There’s always CCCC!”
Wouldn’t it be great if “whores” were Spitzer’s answer to everything?
“How can we make college more affordable?”
Eliot Spitzer: “Whores!”
“Russia’s about to bomb us!!!!!1!!1!!!!”
Eliot Spitzer: “Whores!”
“There’s been a recall of peanut butter!”
Eliot Spitzer: “Whores!”
TGY: ah, thanks for the sanity check.
I especially like the middle part of his essay where he lists off a bunch of complicated questions and then says they can be resolved virtually for free by letting the IRS handle all that stuff. What? Throwing the administration of millions of student loans is suddenly free if we throw the task at a government agency? Maybe if by “free” he means it’ll disappear in a maze of number nobody’ll read, yeah.
And can’t graduates in low-income jobs already defer their student loan payments?
problemwithcaring: Damned assets!
Sometimes they pay you to go to college.
I just assumed he would suggest we “whore ourselves out” until our student loans are paid.
miss_emish: I finish my masters degree in May and I get vomity and dizzy every time I see the words student loans. In normal circumstances I would not be that screwed because I went to basketball schools and they are cheap, but since the Great Depression II hit I am thoroughly fucked.
Sara is spot on. Higher Education will be the next great scam/bubble to pop.
The new semester at Ditchdigger U is starting in a couple weeks. All it costs is a pile of UPC coupons from the cans of Alpo you’ve been eating. Once there, you can major in gender studies if you want, but you’ll still be digging ditches.
Suds McKenzie: I’m considering that, but they’re cracking down on the craigslists. I might have to move to Kentucky; they have all the good pervs.
Who only has $160,000? Lucky bastards.
DRAFT STUDENTS NOT BEER
You know what I think when I hear about a plan to make college more affordable? Socialism. And we here in ‘Merica hate socialism.
OffTheRecord: Yup, I started this process going “I’m going to the BEST damn school, MONEY be damned, I can handle debt!!” I have know aspirations of owning a home and my own obligations are to my cat and guinea pig. The way things are going now, I’m going the way of the realist. It’s looking like maybe I’ll have to borrow $20-30k. Which is chump change in terms of student loans. State schools for the win.
V572625694: Terry: Jonny Lieberman: What I’m “on about” is the rather large number of people who go into triple-digit debt for what are now worthless degrees, whether they’re from Harvard or from some tiny private college in the Midwest. You do not have to be a fancy Ivy League elitist to recognize that many, many colleges now cost upward of $100,000 to attend. Many do not, and I expect that their enrollment will go up in the future. Also, fuck all three of you.
jagorev: um,… it already is\was.
Hmm. How much does it cost to go to Bob Jones University?
Hyperinflation is my only hope. If a can of hobo beans costs $10,000 my six figure student loan seems pretty reasonable.
To any hot you college girls who want to whore yourselves out, I got an extra Jackson plus a Lincoln
Sara K. Smith: And of course by “triple-digit” I meant “six-figure”. That is the kind of math they teach elitist Harvard English majors.
miss_emish: Hahahahahahahah, Michigan! Welcome to the boomtown. Plus Michigan is full of kids from the East who couldn’t get into the Ivies. Hahahahaha. I turned down an Eastern school to go there, and it sucks! WTF, it was Gallaudet, but still!
Terry: That’s right. Mine cost $50,000 per year. Suck on that.
(Thankfully, I qualified for finaid and got away with only a low-five-figure student loan, but I know kids with around 100k debt for a liberal arts undergrad degree.)
Colander: But they don’t have any money. Unless you would like to be paid in meth.
BadMFer: I’ll see that and raise you a U.S. Grant!
Tommy Says Soooo, Jugdish!: I hear that!
I guess you don’t, though.
I think you make an interesting point, but it’s ultimately flawed. While it doesn’t make any sense to spend loads of money for a degree that won’t guarantee jobs in the current economy, a)this doesn’t make sense under normal conditions and b)time passes between going to college and graduating from college. When you get a degree, you’re really planning for how the economy will be when you graduate, not when you enter. Furthermore, this is an argument not that you shouldn’t go to college, but maybe you shouldn’t get a useless degree.
Also, there’s opportunity cost. If you’re employed but have no degree, it’s a pretty big leap to take out loans, (presumably) quit your job, and go to university. If you’re already unemployed, you don’t have to give up as much. That’s why in the short run University applications increase when there’s a recession. Over very long terms, of course, these drop as fewer people are able to apply and afford college, due to the factors you’ve listed.
Sara K. Smith: this is true. Maybe ya’ll live in a place where the state gov. actually gives a shit about education, but in PA the flagship “public” universities cost almost as much as private school, even if you’re in-state.
Sara K. Smith: Take em downnnnnnnnnnn! I agree, it’s absurd we’re just expected to swallow these exorbitant sums of money, and that just can’t continue if they want to continue. I suppose they could be like Brandise and try to fuckin sell off their art gallery full of O’Keefs and Wharhols, because that totally went well. I was told over and over again that this was a bad time to be applying to school because in economic lean times everyone flocks to school. But this time is so different. Who will borrow that much money right now? Who will LEND that much money right now? It’s a very *special* crisis.
They already have ’smart loans’. You run out of deferments,then the gubment garnishes 10% of your wages from your $12 hr. job (which was the only work you could get) forever and ever and takes your tax refunds. So it becomes ’smarter’ not to work, amiright?
You know, I love you people (sniff). You really (sniff, shiff) cheer me up.
Tommy Says Soooo, Jugdish!: nooooooooooooooooooooooooooo! I always thought it was a bad sign Michigan was in Eastern standard time, I always think “who the fuck do you think you are?”
loquaciousmusic: Don’t say it was St. Joes…Bates or Bowdoin?
Watchreader: thank you so much for mentioning Fucking “Opportunity Cost”. The redheaded stepchild of college financing.
Our editor may not be an economist but SKS and the gang continue to provide the best short form analysis of the economic collapse/meltdown/apocalypse/disintegration available on the web. Some of the MSM are beginning to jump on the Wonkette economic reporting bandwagon but they are pale copies of the real thing which has warned us of chaos, destruction and blood in the gutters.
Sara K. Smith: Larry Summers would explain it differently.
Mama: Go into the living room and listen to the blues wit’ your Aunt Sara.
Me: Oh, Ma! There’s something about that music - it just depresses me.
My husband constantly hassles me about why I’m making so little with a Masters degree. I did NOT go to a super expensive school, but debt is debt, and at this rate I’ll retire before I pay it off. My opinion, however, is that to really tackle the problem, we need to focus on REWARDING education, perhaps even above and beyond all the tuition worries (because, as many here say, you can always go to a cheaper school). So, how about some NIH funding, ya’ll? The Stimulus Bill was a start, but we need some SERIOUS influx of grant money to prevent people like me from getting fed up and leaving the country for a better paying job elsewhere, where they value science more.
miss_emish: well, isn’t there some sort of warfare with Ohio? Is that over?
Luckily our Barry is doing two things that COULD actually bring down the price of a college education, or at least mean lower increases. Two of the big reasons colleges cost so much: health care costs (especially for ancient professors and administrators) and the fact that colleges can charge a lot because if you can’t get a federal loan you can get a really shitty private loan. Even if you just take care of the shitty private loans, it’ll be a lot harder to keep up high demand for ten times what you can borrow from our broke government. But bringing down health care costs even a little would mean big savings for “supposedly” non-profit universities, so they can bring down their costs.
miss_emish: Feed the guinea pig to the cat, then eat the cat. With the money you save on food, you’ll be able to make a down payment on one book, for one class, for one semester.
Kind of like an adjustable rate mortgage. And that turned out great.
Obviously the way to pay back college debt is to have bareback sex with Eliot Spitzer. Really Wonkette, stay on target.
Sara K. Smith: Okay, have a nice day!
In Italy, all education is pretty much free (you have to buy books and pay nominal fees, and room and board wherever the school is) from daycare right up through medical or law school. As a result, there are only a few prestigious private schools, and everybody is a goddam engineer or doctor or lawyer, even the store clerks. Socialism at its best!
Sara K. Smith: I understood you perfectly. I just assumed at Harvard they taught you not to care about anything below a thousand, as that was piddling small change.
user-of-owls: guinea pigs are edible, they sometimes serve them at this restaurant in Minneapolis, I can eat BOTH!
so if Jenna, Not Jenna, and Meghan McC wanted to go to grad school, would they qualify for financial aid? ;-OP
Sara K. Smith: Hmmm. Much as I love my Wonkette eds, I can’t imagine any economy where it makes a lot of sense to take out $100K loans to get an English degree. Harvard Law or Medical, sure yeah, whatever. But with an English degree, you’re never gonna be making doctor/lawyer wages ’til you’re at least Prof. Emeritus or Dean or some damn thing.
So my sympathies to you and others in your place, but I’ve always wondered about expensive-tuition lib arts students, what the hell were you thinking?
Everybody knows you don’t blow your entire load on your undergrad degree. Well, clearly not everybody, but still….
Forget $100K in loans, it doesn’t make sense to get an English degree if someone is paying you to do it. And I majored in journalism, so I know all about worthless degrees.
Spitzer’s “idea” is the system that is currently in place in Australia. It’s called “HECS” and was introduced in the late ’80s (before that university was free). The universities are provided with money by the government for every student they take and the students pay the money back as described.
If they never get a job that pays more than about $41K then they’ll never have to pay the debt. PS. we also have universal free healthcare. The answer? Our defence forces consist of a few blokes armed with slingshots.
Lascauxcaveman: Dude, I am not talking about myself when I talk about people with crippling undergraduate debt. Harvard is not the problem. They and other Ivy League schools have been very progressive and generous in helping kids from less well-off families (cough, cough) and even regular old middle-class families afford college. The problem is universities and colleges without huge endowments that rely much more heavily on tuition to finance their operating costs.
Sara K. Smith: Fine, then. Substitute the name “Harvard” for any less-well-endowed school. My point is, an English degree only has so much cash value after it has been earned. It doesn’t make a lot of sense to pay too much for one.
As a holder of a perfectly good English degree myself (which served me passably well in getting some OK but not great jobs in journalism, advertising and teevee, I’m still glad I only dropped about 20Gs for it, cash up front. (Yeah, it was a while ago…)
Dang, y’all mean I’m gonna run out of deferments? I was so hoping “hey guys, I wanna pay, I just don’t have any money,” would work indefinitely.
Lascauxcaveman: I have a degree in Homeopathic Medicine!
Sara K. Smith: Yes, Sara, but it is more fun if we laugh at you and your snooty Harvard ways. Didn’t you read David Denby’s book?
Lascauxcaveman: Meh. Depending on the job market, any degree could be very valuable or very worthless. Given how few people end up in the fields that their majors supposedly prepared them for, it seems reasonable to conclude that the value in a BA or BS is not in the field itself but in the fact that you can put on your resume that you have a BA or BS. This, sadly, is a requirement for pretty much any admin-level job and above these days, which I think is stupid, but there you have it. The point is, I don’t think anybody should regret being an English major. Reading is fun, right?
I am sorry for dragging this out for so long instead of WRITING MORE POSTS. Yay, Friday!
I figured Governor Spitzer was a retro kind of guy, but that piece in Slate is from the Way-Back Machine. Since 1994, borrowers in the Federal Direct Student Loan Program have been able to elect Income Contingent Repayment (ICR). The amount you pay is based on your income.
After 25 years, if your payments have been so low that you still owe money on the loan (looking more likely even for those who don’t join the priesthood or teach), the remaining balance is written off. But you have to claim the amount of the writeoff as income that year, so you might end up owing the IRS.
Some private lenders offer this option, but not all. If your lender doesn’t, you can consolidate your loans into Direct Lending: loanconsolidation.ed.gov/
President Obama has proposed phasing out the guaranteed loans and replacing them with Direct Loans in order to save money.
http://www.reuters.com/article/GCA-BarackObama/idUSTRE51P5YE20090226
If this happened, ICR would theoretically be available for everyone who borrowed a Federally funded student loan. Call your Congressman and say “amen”! Or just vote with your dollars by consolidating your loans with Direct Lending.
You could be like me & just not pay back student loans (education should be free!) because you don’t have the money. They started taking 10% from my paycheck which was far less than my monthly payments would’ve been. Then I quit working altogether 9 years ago (thank you, beautiful, hard-working wife) and now I bet they’re wishing they’d done bit more due diligence before handing gobs of money to me before I dropped out of grad school (history.)
Being an armchair lefty and strongly believing that education is an investment (in most cases) in the country’s future, I will always advocate, from my armchair, for free public higher education. If you wanna blow money at a private school, have at it.
When I started at my state’s big university in 1983, tuition was $4/hour. Now it’s somewhere near 100x that when you throw in the various fees they make up so they can pretend “tuition” is still affordable. Higher education is a fucking racket. It should be free. And scrap No Child’s Behind Left so freshman don’t have to spend their whole first year learning how to read & write.
Sara K. Smith: I love you.
Thank god that Memphrica U will probably leave me with just 12-18k in loans. Not exactly a fucking disaster. The challenge is getting a job after. I’m glad I got out of English, but I’m worried about my Int’l Bizniss and Japanese dual major, because Japan has just SUCH a fucking good record on recessions. Word is that Taro Aso is handling their issues about as well as Bush is.
Zadig: I mean, as well as Bush *did*.
I had an English degree. Now I’m a hairdresser. (I prefer beautician as the word looks prettier on paper.) I can cut a lot of hair in Hoboland. What would I have done with my degree, read sonnets to the hobos as they snuggle together in their tents? Seriously, I rake in some cash with cheap haircuts to my friends and former co-workers who are unemployed and can’t shell out a hundred bucks a cut now. “The times they are a-changin’”.
hobospacejungle: Being an armchair lefty and strongly believing that education is an investment (in most cases)
But not yours!
(Sorry)
Lascauxcaveman: Fair play to you! Though my wife may claim otherwise as she is quite satisfied with my work as her personal (unpaid) assistant. I make sure all she has to do is eat, sleep and watch a little TV with me each night…and work (up to 80 hours/week.) I am my mom 30 years ago, minus the kids (but plus the 5 cats.)
SlouchingTowardsWasilla: With lots of time to write poetry.
Actually, what is happening in S.A. is more students flocking to community college for the first two years and then transferring to a four-year institution. Which is fine, because community college is damn fine bargain and the instructors (at least at my school) are top-notch.
“Scott, things aren’t as happy as they used to be down here at the unemployment office. Joblessness is no longer just for philosophy majors - useful people are starting to feel the pinch.” –Kent Brockman, on The Simpsons
History degree here…….well, the plan was to get an MS in Library Science, but I couldn’t figure out a way to pay for it when my eldest was a baby.