Ron Paul Wants To End the Federal Student Loan Program 1797
On the heels of declaring his intent to axe a few departments from the federal government, Ron Paul has revealed more plans should he become President. The_THOMAS writes "Ron Paul wants to end Federal student loans stating that the Government involvement artificially inflates the cost of a college education and that once the government is out of the situation, students will be able to work their way to a college degree. What do you think?"
I learned the value of money by paying as I went.. (Score:4, Interesting)
I don't want to be "that old guy" -- but I didn't qualify for student loans in the 80's & early 90's because my parents were in that bracket where they were supposed to be able to contribute, but just couldn't.
I had up to three part-time jobs while doing my undergrad, and I definitely wanted the education -- I found that as "consumer" I demanded more from my instructors for my hard earned cash.
In the end it made me who I am, and I subsequently went on to get both an MS in Software Engineering and an MBA recently -- both paid for with cash that I earned and saved.
Sure it took a little longer to finish the degree's and barring Alzheimer's, the lessons learned all around will be mine for life!
Fixing Student Loans (Score:5, Interesting)
1. Fixed low-rate loan (2-3% even for private loans)
2. Allowed to be paid with pre-tax income (like money put towards retirement etc)
If they want to remove the government's involvement and make it private only, these rules should still be added. We should be helping student's get through school to make this country a better place.
Same goes for healthcare (Score:3, Interesting)
The reason a broken leg costs so much to fix is that the doctor, nurse, and hospital administration are all paying student loans. On top of that doctors are having to pay for insane insurance coverage.
If getting an MD wasn't so expensive then healthcare wouldn't be so expensive. I hate that we're always talking about how we pay for healthcare instead of how to make it cheaper.
So why hasn't UC Berkeley been getting cheaper? (Score:5, Interesting)
In California, since the 1970's, the state has subsidized less and less of the tuition for students, while student loan amounts have not been increased substantially, and yet the state universities have not gotten less expensive in the process.
Sometimes Ron Paul says things that are correct, but silly (like how we could lower health care costs by removing the requirement medical providers be licensed. Probably true, but....) Mostly though, he just says things that are incorrect and silly. His supporters piece together some sort of reality from this that makes sense to them, I guess.
Re:Subsidies inflate pricing. (Score:5, Interesting)
And what of the flip side? The people who really achieve in the field they studies at University, but wouldn't have been able to go were it not for student loans. Are they a price worth paying for libertarian ideology?
Can America afford to be less educated?
Re:Subsidies inflate pricing. (Score:5, Interesting)
A loan isn't a subsidy. But if student loans were indeed the cause of the high price of college, what makes you think stopping them would make the price go down?
I went to school on the GI bill, and the state of Illinois paid my tuition. That's s subsidy. But I still had to work and was still dirt poor. That was in 1975; when did the school cost inflation begin?
Without student loans, only children of the wealthy will be able to go to college. The price keeps it out of reach of the working class, and always has. Education never was inexpensive.
Comment removed (Score:4, Interesting)
Re:Subsidies inflate pricing. (Score:4, Interesting)
I actually advocated this to a coworker friday. Do we have a half-intelligent politician or a lucky retard? Even a broken clock is right once in a while, whether it's stopped or spinning backwards...
Student debt spins out of control because there's no accountability. The Federal Loan Program is an automatic bank bail-out, but for the universities. Without a student loan program, the universities have three choices:
In the second case, the university must take on risk itself; in the first and last, they offload the risk to the student or a bank (the student can pay out of pocket or find a bank and get their own loan in the third case). In any case involving a loan, someone takes a risk of a default and a bankruptcy declaration, meaning student loan offerings will become more stringent. Tuition may decrease due to lack of liquidity--no access to free money means you can't sell as much crap.
The current situation leaves a case where universities have their greatest interest in getting students spending money freely. If those students default, who cares? There's no bank that cares, and the university doesn't care. This means they're best off encouraging students to get into debt they can't handle, and that they can charge ungodly high tuition levels and people will just pay it because the money is there.
Shove all that shit on the bankers and suddenly there will be some explaining to do if you want money handed to you. Another recession caused by excess borrowing WILL put a stop to this shit, and when the banks cry and the students complain they just can't afford college because bank loans aren't easy to get for $250,000 when you're a jobless starving artist, tuition will come down.
Re:Of course it does (Score:4, Interesting)
As for the job requirements: this is very true even outside of the U.S. I have a first hand experience in a tax-related govt job in Poland. If you get employed, they expect you to get a master's degree ASAP. Then, they'd like to you get a Ph.D. as well. All that cost for what is essentially a bureaucracy where if you know high-school maths and pick up some law along the way, you'll do fine until retirement. There's plenty of countries in Europe where bank clerks are expected to have BS degrees. The fuck?
Re:"Free" money (Score:5, Interesting)
There was a time when working part time over the summer would be enough to pay ALL college expenses
20 years ago I found sorta-full time (lets say, 30 hrs/wk average) minimum wage work, year around, easily paid for a nice live-by-myself apartment in a nice area, a cheap and rusty yet reliable car, and full to part time tuition while earning my associates degree. No benefits, no health insurance, no dental, nothing. That degree led to a "real job" that had benefits including full tuition reimbursement for my bachelors degree...
Since then, minimum wage has gone from 5 something to 7 something, gas has gone from 90 cents a gallon to $4, my old bachelor apartment rent has gone from $400/month to $575/month, and tuition at the local school has quadrupled due to federal student loans...
The other interesting issue is tuition reimbursement 20 years ago was typically unlimited, other than having to be accredited, C or better grade, and vaguely related my job and/or employer. Then it dropped to $5K/year which at that time was pretty generous, going to school part or quarter time 3 semesters per year, I was paying about $160/credit long term average including all books and fees, I usually spent less than $4K/yr, I had to be careful to submit each semester's expenses in the proper calendar year but it was no big deal.
Since then, reimbursement remains at $5K/yr, but full time tuition at the local engineering school a couple blocks from where I work has risen to ... $540/credit (I checked online while writing this), before endless fees and parking permits and $200 each textbooks. Let's round that up to $640/credit. So I would only be able to afford about two semesters per year were I to start another degree. Has the value of the education provided increased by a factor of 4 in the last 20 years?
Re:Subsidies inflate pricing. (Score:5, Interesting)
Speaking as a successful software developer who needed student loans to attend college. Bullshit. Student loans SUCK, but they are the only thing that allows a large number of low to middle income people get into the career they want and need.
There are alternatives to student loans:
Ron Pauls solution: only the wealthy may attend college. Tuitions will skyrocket even farther because there are so few new students. Hundreds of universities are forced to close their doors and all we are left with are a lot of trade schools and the Ivy Leagues.
Something rational: Recognize that state universities are state universities and have no profit obligation and should not be run like corporations. Cut administrative costs (tuition increases go almost 100% to higher administrative wages and more administrative positions instead of to professors and facilities) and offer low or free tuition subsidized by the state.
Re:In a perfect world (Score:2, Interesting)
Actually, in the Meet The Press interview, he speculated exactly how the free market would solve it:
- Colleges have ginormous endowments.
- They could run their OWN loan programs, loaning out their OWN money
- If their students get a good enough education to pay their loans back, they'll make an appropriate ROI. If their graduates are completely unsuited for the marketplace and can't get jobs and can't pay them back. They won't.
It puts the incentive on the schools to provide a quality education, and it forces them to really think about their cost-structure (how many loans can we give out each year? Could we give out more if we knocked our tuition price down a bit? etc. etc.)
Re:A trillion dollars in student loan debts (Score:4, Interesting)
You're absolutely right. Originally, the overhaul was supposed to get rid of the non-performing for-profit colleges. Turns out that well over 90% would have been disqualified for making student loans, so ... rather than push through the reform, they watered down the criteria.
Yet another example of government regulatory capture.
Re:Subsidies inflate pricing. (Score:4, Interesting)
because we oversaturated the market with college educated people, who dont really need that degree for what they do for a living.
A university education isn't for a particular job, it's for life. People aren't commodities in a market. People are more than worker bees.
maybe, just maybe the prices will drop because they will need to admit more people to their schools instead of costs going up. i mean thats simple supply and demand right there
Supply and demand is just one aspect of pricing. At the end of the day, without subsidy, you can't price lower than cost. 3 or 4 years of tuition at university level, with all the buildings, staff, equipment and other things that come into that isn't ever going to be cheap enough for a young person with minimum wage earning parent(s).
I'm all for removing student loans, as long as they are replaced with grants or other ways by which everyone who is willing and capable of being educated at university level is enabled to do so.
Re:Ron Paul should give away his money (Score:5, Interesting)
He is an ignorant blowhard who thinks his medical degree makes him an expert on economics. Any problem that is too complicated for Ruin Paul to understand, he simply proposes destroying all affected institutions.
This isn't statesmanship. It's demagoguery. But you as many Glibertarian fanbois are so entranced by the simplicity of Ruin Paul's message that you apparently fail to actually think any of his ideas through to their conclusions.
Which are disastrous. Ruin Paul's political philosophy seems to be that since government has been unable to completely solve every problem perfectly, we should just stop using it. Of course, he forgets that all of these solutions, including the government itself, came into being because the original problems were real and in need of a solution that the so-called "free market" had failed to provide.
As it will fail to solve this problem as well. Doing nothing about a problem is not a solution.
I can tell you what happens to people who do nothing while living in some lotus-dream that it's all going to fix itself -- they end up HOMELESS, HOPELESS, JOBLESS, and DEAD. Your philosophy proposes treating all of our urgent social needs like a drug addict treats his personal needs -- by ignoring them.
Unfortunately, after we've paid the price by doing it your stupid way, YOU will not be around to help us clean up the mess. I'm pretty sure of that one. Lazy is as lazy does. And your philosophy is in a nutshell, LAZY. I have zero respect for it.
Re:Subsidies inflate pricing. (Score:4, Interesting)
Not at all, it would just trend back towards where it was prior to the creation of the federal student loan program, and with the colapsing of the middle class, back to what it was prior to WWII.
Which is to say, we would have a 2 education system solution: Ivy League schools where the children of the rich go, and trade skill schools/apprentiships/OJT for everyone who won't ever have the opportunity to be rich.
It's just another way for the plutocracy to further strengthen its own position and isolate themselves from everyone else.
-Rick
Re:Subsidies inflate pricing. (Score:4, Interesting)
Maybe there is some other way we could go about doing this.
This is a great thing to do, if you also make sure that the low cost educational avenues are met. To do so, would be trivial. Even by "government program stupidity, which ensures at least 200% overhead.
95% of classes, involve sitting in lectures. There is no reason to be paying thousands of professors in a field, to be teaching the same overall subject matter, but in thousands of slightly different and unique ways. The subject matter itself, is uniform.
khanacademy.org style: you record ONE person, doing a lecture series, and share with everyone. for miniscule incremental cost.
The only "must be fresh every time" required action, is verified testing of the individual in the class. 2-5 hours per class, per semester. Shove 20 people in a room, hire a person for a reasonable hourly rate... $20 an hour? that's $1 per person per hour. Add another $1 for room rental costs, etc. $2x5 hours == $10 per class per semester. There is NO REASON that base line college should cost more than this.
You want more handholding? fine, pay more. but for those who can handle the above scenario, there's no need to make them pay more than the above, to get their "piece of paper" enabling them to get a job.
They are not only accessible to the rich. (Score:4, Interesting)
They are not only accessible to the rich. They are also accessible to the intelligent, thanks to scholarships.
Most people are getting college degrees for the wrong reason in any case; one of my faculty advisors put it best: diplomas are the modern version of a union card.
I see lots of people getting degrees in things they have no interest in, and no passion for, in order to follow the money (or where they think the money is, which is often not the same thing). Historically, this has resulted in a lot of bad doctors; around 2000, it resulted in a lot of bad programmers, and it's currently tilted toward resulting in a lot of bad lawyers. Whatever ends up being the next big ticket field, expect that 4 years later there will be a lot of bad whatevers, waving their shiny new union cards and giving the people who actually have a passion for the field a bad name.
-- Terry