Should taxpayers fund any and every choice in school and/or major?

[sanantone]

I'm of the opinion that, if you are receiving a subsidized loan and grants, or you're pressuring politicians for loan forgiveness, your business is no longer your business. It's every taxpayer's business. You're not entitled to other people's money, especially for things that are luxuries. For the most part, the federal and state governments have decided that it's in society's best interest to offer forgiveness for certain occupations or sectors that provide much needed public services i.e. healthcare, public safety, and teaching. I don't think there will ever be long-term or permanent forgiveness programs for other types of occupations. 

I'm not against one-time, broad student loan forgiveness, but it needs to come with reforms, or the problem is just going to happen again. Some have proposed that we end government-backed loans because it'll force colleges to lower their tuition. LBJ proposed these financial aid programs because he knew that it was nearly impossible for poor and working class families to afford tuition in his day even though college was much cheaper back then. 

I don't think everyone should be punished for other people's poor choices, so I would suggest limiting aid to schools that offer tuition rates below a certain limit. That limit can vary by major since some majors are more expensive to offer, and some majors pay more than others. If you want to spend $100k for a degree in music, then that is fine as long as you pay for it. Otherwise, taxpayers will fund a much cheaper music degree elsewhere. This way, everyone who meets the income criteria still has access to financial aid to major in what they want, and schools will be forced to lower their tuition if they want to qualify for Title IV funds.

[Alpha]

Different people will solve this problem differently but I think that anyone who has taken even a cursory look at the system by which higher education is funded will agree that it is broken.  I'd look forward to this issue being debated in Congress but I'm skeptical about their willingness to negotiate in good faith.

[dfrecore]

Not that anything will happen, but I certainly think that an overhaul is desperately needed. I agree that we could put degrees in Tiers, and Tier 1 could be funded at a certain rate, Tier 2 at a lower rate, Tier 3 lower still, etc.

I also don't think there should be ANY loans available for master's degrees. If you want that, then figure out how to pay for it - get a job with your bachelor's and work for it, find a company with tuition reimbursement, etc.

I think if fewer options were available for loans, people would have to think things through more clearly, and become more creative. There ARE people who figure out how to get through college without loans - more people need to do this.

[SteveFoerster]

Some have proposed that we end government-backed loans because it'll force colleges to lower their tuition.

I'm one of them. Plus I'd replace Pell grants with a dollar for dollar refundable tax credit, killing Title IV altogether and ending the feds' incentive to subvert accreditors into being financial aid gatekeepers.

[sanantone]

Some have proposed that we end government-backed loans because it'll force colleges to lower their tuition.

I'm one of them. Plus I'd replace Pell grants with a dollar for dollar refundable tax credit, killing Title IV altogether and ending the feds' incentive to subvert accreditors into being financial aid gatekeepers.

A few things that come to mind.

1. Poor, young students wouldn't have money upfront. Sure, Walmart and Target will pay for your tuition, but we can't expect millions of college students to work at a handful of companies. Not to mention that getting a job at these companies isn't guaranteed. Walmart and Target wouldn't even give me an interview. LOL. 

2. Who would be the gatekeepers for the tax credit? Would students get a refund for attending unaccredited schools? Wouldn't that incentivize more companies to create diploma mills and questionable bootcamps? 

3. If tuition becomes tied to employment like health insurance is, what would happen during periods of high unemployment?

[SteveFoerster]

Some have proposed that we end government-backed loans because it'll force colleges to lower their tuition.

I'm one of them. Plus I'd replace Pell grants with a dollar for dollar refundable tax credit, killing Title IV altogether and ending the feds' incentive to subvert accreditors into being financial aid gatekeepers.

A few things that come to mind.

1. Poor, young students wouldn't have money upfront. Sure, Walmart and Target will pay for your tuition, but we can't expect millions of college students to work at a handful of companies. Not to mention that getting a job at these companies isn't guaranteed. Walmart and Target wouldn't even give me an interview. LOL. 

2. Who would be the gatekeepers for the tax credit? Would students get a refund for attending unaccredited schools? Wouldn't that incentivize more companies to create diploma mills and questionable bootcamps? 

3. If tuition becomes tied to employment like health insurance is, what would happen during periods of high unemployment?

1. Schools that serve low income populations and are financially stable can make arrangements to get paid in arrears. Schools that aren't finally stable are circling the drain anyway. Note that this isn't a hypothetical, as Hillsdale and Grove City College actually have a system for this because they don't participate in Title IV on principle. A number of non-participating DEAC schools have figured this out too.

2. State licensure. And I get why you're focusing on the potential downsides to a more open marketplace, but the potential upsides are schools and programs that do things in new ways that actually work better and cost less. When we're approaching $2 trillion of total student loan debt, it's tough to argue that's not needed. But I could see how schools that use a religious exemption to licensure shouldn't qualify, for example.

3. I never said it should be. And if you mean ties in the tax code the way there are for health insurance I would strongly oppose that as I believe you would. But if fronting tuition as an employment benefit is one way that employers compete in what's turning out to be a seller's market even for lower skilled labor, I don't have a problem with that.

[freeloader]

The problem with citing Hillsdale and Grove City is that, BECAUSE they reject federal financial aid and because of their political positioning, they attract massive donations and corporate support. Hillsdale, for instance, has an endowment of $330,000/student. It’s not Princeton or Yale (both over $2 million/student), but it’s still a massive amount. It’s in the same company as Johns Hopkins and Wesleyan and ahead of institutions such as Cornell, Boston College, Wake Forest, Southern Cal and a whole host of other “rich” and “elite” colleges. The endowments and donation-driven budgets of these institutions allow the schools to do things like not receiving financial aid.

Hillsdale and Grove City are not market disrupters, they are hyper-niche marketers. They have found a niche that allows them to operate outside the norm for American colleges and universities. There are approx 3,400 non-profit colleges and universities in the United States. At least 3,300 are worse endowed than Hillsdale and Grove City. If federal student aid was eliminated, where would the trillions of dollars come from to allow all colleges and universities to operate like Hillsdale and Grove City? Even if half of those colleges and universities failed/were merged into others and the institutions became dramatically more efficient, it would still take hundreds of billions of dollars to allow all colleges to operate like Hillsdale and Grove City.  Conservative political organizations and mega donors (like the Koch brothers) will happily give to a few schools like Hillsdale and Grove City, but they give as much to prove a point about how “broken” the system is as to actually help higher education in this country.  Don’t take their bait, don’t fall into their trap. Be smart enough to look beyond the alternate reality they are trying to create to manipulate you.

[sanantone]

Some have proposed that we end government-backed loans because it'll force colleges to lower their tuition.

I'm one of them. Plus I'd replace Pell grants with a dollar for dollar refundable tax credit, killing Title IV altogether and ending the feds' incentive to subvert accreditors into being financial aid gatekeepers.

A few things that come to mind.

1. Poor, young students wouldn't have money upfront. Sure, Walmart and Target will pay for your tuition, but we can't expect millions of college students to work at a handful of companies. Not to mention that getting a job at these companies isn't guaranteed. Walmart and Target wouldn't even give me an interview. LOL. 

2. Who would be the gatekeepers for the tax credit? Would students get a refund for attending unaccredited schools? Wouldn't that incentivize more companies to create diploma mills and questionable bootcamps? 

3. If tuition becomes tied to employment like health insurance is, what would happen during periods of high unemployment?

1. Schools that serve low income populations and are financially stable can make arrangements to get paid in arrears. Schools that aren't finally stable are circling the drain anyway. Note that this isn't a hypothetical, as Hillsdale and Grove City College actually have a system for this because they don't participate in Title IV on principle. A number of non-participating DEAC schools have figured this out too.

2. State licensure. And I get why you're focusing on the potential downsides to a more open marketplace, but the potential upsides are schools and programs that do things in new ways that actually work better and cost less. When we're approaching $2 trillion of total student loan debt, it's tough to argue that's not needed. But I could see how schools that use a religious exemption to licensure shouldn't qualify, for example.

3. I never said it should be. And if you mean ties in the tax code the way there are for health insurance I would strongly oppose that as I believe you would. But if fronting tuition as an employment benefit is one way that employers compete in what's turning out to be a seller's market even for lower skilled labor, I don't have a problem with that.

Freeloader couldn't have said it better. Realistically, we cannot expect every or even most schools to rely on endowments. Hillsdale uses its donations to replace government grants with institutional grants. They also offer loans directly to students. The schools with huge endowments tend to be prestigious, and their wealthy alumni donate a lot back to those schools. They also receive donations from parents who want to get their kids into those schools and wealthy people who want buildings named after them. Essentially, you will be shutting down colleges and universities that serve poor and middle class students and mid-tier students who can't get into Johns Hopkins or Yale. Schools like Hillsdale will attract donations for political reasons. 

The DEAC schools that don't participate in Title IV funding generally have abysmal graduation rates, and they receive government funds from various military assistance programs. With these payment plans, you are going into debt. If your balance is not paid by the time you finish your program, they will withhold your transcripts. While these payments plans technically don't come with interest, students who are on payment plans usually pay a higher tuition price. Granted, these types of DEAC schools tend to be cheap, but their extremely low graduation rates paired with limited transferability of credits doesn't make them an appealing model for other schools. If you're going to go to a dirt cheap school with a low graduation rate, you might as well go to a community college. At least you can transfer those credits. 

State licensure is often awarded with the stipulation that the institution eventually earn accreditation. If the federal government were to stop regulating accreditors and offering financial aid that is tied to accreditation, I would expect states to follow CHEA's recognition of accreditors or to create their own accreditation bodies. Some states already use CHEA, and more states used to have their own accreditation bodies.

[SteveFoerster]

It's true that Hillsdale in particular has done an exceptional job with fundraising for their endowment, but the schools I mentioned do not manage financial aid for their students by dipping into their endowments. I heard the President of Grove City College give a presentation about their financial aid model a few months before the pandemic, and it's more like they have a rolling financial aid fund where students who have graduated pay back what they used so that money is available to the next cohort of students. One of the major financial companies oversees it and handles all the bureaucracy. He explained that the model is replicable.

As for Charles Koch, I'm not particularly interested in having a conversation about him, especially when his activities in higher education aren't relevant to the argument I'm making. I'm not talking about the market-based ideology that drove those schools to find a non-federal financial aid model, I'm talking about the non-federal financial aid model. Moreover, I'm not only talking about that specific model. It's merely an example that there are ways of doing this other than the current one.

---

Freeloader couldn't have said it better.

As you probably saw, I just responded to that objection.

The DEAC schools that don't participate in Title IV funding generally have abysmal graduation rates, and they receive government funds from various military assistance programs. With these payment plans, you are going into debt. If your balance is not paid by the time you finish your program, they will withhold your transcripts. While these payments plans technically don't come with interest, students who are on payment plans usually pay a higher tuition price. Granted, these types of DEAC schools tend to be cheap, but their extremely low graduation rates paired with limited transferability of credits doesn't make them an appealing model for other schools. If you're going to go to a dirt cheap school with a low graduation rate, you might as well go to a community college. At least you can transfer those credits.

 
I actually do expect that if things happened the way I describe that a lot more people would go to community colleges, and that more states would do what Tennessee has done and make tuition publicly financed, at least for a lot of people.

I also wasn't making an argument against military tuition assistance, which I don't believe is part of Title IV.

State licensure is often awarded with the stipulation that the institution eventually earn accreditation. If the federal government were to stop regulating accreditors and offering financial aid that is tied to accreditation, I would expect states to follow CHEA's recognition of accreditors or to create their own accreditation bodies. Some states already use CHEA, and more states used to have their own accreditation bodies.

They might. I expect if they were going to do that they'd just develop tiered systems like California used to have. Considering that we still talk about how innovative some of the schools that arose under that system were, on balance that seems like a plus.

[sanantone]

It's true that Hillsdale in particular has done an exceptional job with fundraising for their endowment, but the schools I mentioned do not manage financial aid for their students by dipping into their endowments. I heard the President of Grove City College give a presentation about their financial aid model a few months before the pandemic, and it's more like they have a rolling financial aid fund where students who have graduated pay back what they used so that money is available to the next cohort of students. One of the major financial companies oversees it and handles all the bureaucracy. He explained that the model is replicable.

As for Charles Koch, I'm not particularly interested in having a conversation about him, especially when his activities in higher education aren't relevant to the argument I'm making. I'm not talking about the market-based ideology that drove those schools to find a non-federal financial aid model, I'm talking about the non-federal financial aid model. Moreover, I'm not only talking about that specific model. It's merely an example that there are ways of doing this other than the current one.

Unlike Hillsdale, Grove City College accepts state grants and even tells students to fill out the FAFSA if they want a state grant. They offer loans through PNC Bank, and the cap is $58,000. On average, Grove City College students have $40,600 in private loan debt upon graduation. That's more than the national average for all student loan debt. Over half of their students take out private loans. After the average amount of non-loan aid is applied, students have to pay around $17,740 per year for tuition and room and board. 

https://www.usnews.com/best-colleges/gro...269/paying
https://www.gcc.edu/Home/Admissions-Fina...Attendance

The colleges I've seen make the no debt thing work, such as Berea College, accept federal grants.