“Complacency and wasteful spending blight US higher education” (ft.com):
The push by American progressives to have Joe Biden’s incoming administration forgive $50,000 of student debt per borrower is deeply stupid, but at least clarifyingly so.
More polite language fails to capture the absurdity of singling out college attendees for an unprecedented $1tn transfer of wealth — equivalent to the total spent on cash welfare in the last 40 years. The top sources of US student debt are professional business and law degrees. [Brookings]
(The comparison to “cash welfare” is misleading because nearly all U.S. welfare spending is officially “not cash” and, for Democrats, “not welfare”. A person who gets a free “means-tested” house, a free “means-tested” health insurance policy, free food via SNAP/EBT, and free phone service via Obamaphone is not “on welfare” and is not receiving “cash welfare”.)
The article contains some other fun facts. College here costs 2X what it costs in Germany or France. Only one quarter of the folks who sign up at two-year community colleges earn a degree within six years. And the author points out that young people would be stupid not to take the opportunity to enjoy “sports and parties, sex and alcohol” for four years at taxpayer expense.
What the author doesn’t mention is that Black Americans will be paying for this while white Americans will be the ones primarily enjoying the sports, parties, sex, and alcohol.
If 2020 was the year that old white rich Americans stole a year of life from young healthy slender Black Americans (by locking them down to “protect” them from a disease from which they faced minimal risk), maybe 2021 will be the year that young white rich Americans steal massive quantities of cash from Black Americans via student loan forgiveness?
Related:
- “Who owes the most in student loans: New data from the Fed” (Brookings): The highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt … The lowest-income 40 percent of households hold just under 20 percent of the outstanding debt. … education debt is concentrated in households with high levels of educational attainment. In 2019, the new Fed data show, households with graduate degrees owed 56 percent of the outstanding education debt—an increase from 49 percent in 2016. The 3 percent of adults with professional and doctorate degrees hold 20 percent of the education debt. These households have median earnings more than twice as high as the overall median.
“From 2000 to 2016, total college enrollment rates increased for White (from 39 to 42 percent), Black (from 31 to 36 percent), and Hispanic young adults (from 22 to 39 percent).”
https://nces.ed.gov/programs/raceindicators/indicator_REA.asp
Presumably many of those outstanding student loans are from years past, when Hispanics in particular were enrolling at a lower rate.
The rates for black females and white males have been very close for some years, while white females are higher and black males significantly lower.
I wonder – if the stats were adjusted for parents income – whether the differences between race would be even smaller?
https://educationdata.org/student-loan-debt-by-race
“Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates.
Four years after graduation, 48% of Black students owe an average of 12.5% more than they borrowed.
Black and African American student borrowers are the most likely to struggle financially due to student loan debt, with 29% making monthly payments of $350 or more.”
As cited above from Brookings (Fed data): “The highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt … households with graduate degrees owed 56 percent of the outstanding education debt”
So if you want to believe that Black Americans are overrepresented among the rich and credentialed, we can just adjust the headline to “rich Black Americans steal from poor Black Americans”.
Let’s be real: taxpayers (and most taxes are paid by high earners) aren’t actually paying for any of this stuff. It’s all going straight on the national debt. Who’s going to pay that? I don’t know. (but this would seem to be a great time to be in debt, given that inflation is likely to take a huge chunk out of any dollar-denominated debt)
It is equivalent of printing $1 trillion without having producing anything of value: it increases inflation which is a tax on everyone (someone who bought education now does not have to pay for it and has extra now earned $50,000 to compete with single moms for bread/milk/eggs/luxury German vehicles and raise prices on them for everyone). It also adds to national debt to be paid by increased taxes on everyone promised by Biden. An what about much hipped social justice aspects of it: 60% or so of poorer Americans who behaved responsibly and took hard low skilled jobs or went to inexpensive community collages or sit home playing video games and not buying CO2 emitting or rare earth metal polluting vehicles and thus protective environment are deprived from extra $50,000? Why should they suffer? Why should anyone not get extra $50,000 for nothing?