Warren’s Higher Education Plan: Cancel Student Debt and Eliminate Tuition | Hacker News Reader

Warren’s Higher Education Plan: Cancel Student Debt and Eliminate Tuition

nytimes.com

36 pointskensai90 comments

I fail to see how this solves the root cause of the problem such that we won't see another student debt bubble arise again in 20 years.

Students loans must be dischargeable via bankruptcy. Until that happens, student loans will continue to be an issue. I feel like Warren is just attempting to score political points here because her poll numbers are dwindling.

How will there be another bubble when there is no tuition?

Because people will still want to go to private universities, same as today.

To the extent that college serves as a signaling mechanism, people may want to go to private colleges even more than today.

Most of the levers available to eliminate public tuition can also be leveraged to restrain private tuition. It's not like expensive private schools don't lean heavily on the feds for funding, both student and research.

Besides private universities, public universities also charge fees for numerous things. In some states where tuition is controlled by the state, this is how universities get around tuition caps when they need more funds than tuition and taxpayer dollars can cover.

Tuition is only part of the costs of going to college. There's room & board, books, various course fees and charges that aren't actual tuition.

You know, it's not as if we can't do both.

> Students loans must be dischargeable via bankruptcy.

How many fresh graduates would not be bankrupt immediately upon graduation?

Assuming a traditional college student, declaring bankruptcy at 22, with no credit history to speak of, on the one significant debt you have ever been granted, will destroy your credit for at least a decade.

Also, many loans are co-signed, so it isn't just the student affected by bankruptcy.

> Also, many loans are co-signed

Which suggests an industry will simply pop up of lending to parents. Probably wealthy ones.

Anything that doesn't address the ticket price is simply squeezing around air in the balloon.

I never declared bankruptcy, but I did look into it. As I understand it, it's a legal proceeding and you can be denied the request if a judge concludes it's a frivolous claim.

> How many fresh graduates would not be bankrupt immediately upon graduation?

Student loans can be made more easily dischargeable in bankruptcy without being treated as general unsecured debt immediately.

Rather than discharging them in bankrupcy, why not just index the payback according to income?

> Students loans must be dischargeable via bankruptcy. Until that happens, student loans will continue to be an issue

Cancelling existing debt and stopping issuing new loans (redirecting federal aid from loan guarantees to eliminating tuition at public universities) would, I think, cure the problem without making loans dischargeable in bankruptcy.

I've often wondered why it is the school's brand that matters. That seems to be all signaling, as in "look I got into Harvard". Of course when you get there it's not like they teach you secret math that nobody else knows about.

What could be done relatively cheaply is to make an examination org. You recruit a bunch of people to make a math test. You get a bunch of people to certify that it's hard. You publish a syllabus.

Then you examine people who sign up for it, and give them a diploma if they pass.

No need to live somewhere for 4 years. No need to study things you don't like. Prodigies will pass the test at 16 and get on with their lives. People who've had a life beforehand can do it in their own time after the kids are gone.

There will have to be some marketing done to convince people these tests aren't easy and can't be gamed. But everyone will benefit once believable and cheap certification is common.

College attendance is not about learning specific topics in order to pass an exam, IMO. It's about learning to think critically, work in project teams, evaluate superfluous and incomplete data, learning how to learn, learning time and priority management, interpersonal relationships, etc.

I went to MIT. Most of what I value (personally and economically) that I learned at MIT could not be readily "tested" in a straightforward certification exam.

> College attendance is not about learning specific topics in order to pass an exam, IMO. It's about learning to think critically, work in project teams, evaluate superfluous and incomplete data, learning how to learn, learning time and priority management, interpersonal relationships, etc.

My take on that is that by having a bunch of different exam passes, that is what you demonstrate. You're not going to pass a bunch of math and physics or whatever classes without having at least some degree of personal organisation and commitment. And you'll certainly learn overarching things like critical thinking by learning a bunch of different topics.

I went to Oxford, where you ostensibly learn by sitting in tiny little classes of 1 or 2 kids with a prof three times a week. You discuss the topic at hand and they evaluate whether you understood anything. They'll probe whether you understood things properly or just recited what you read. And you get to ask the prof whatever you want.

But at the end of it all, everything simply depended on taking a bunch of sit-for-three-hours exams.

Graduating may have depended on sitting for those exams, but did all of your learning depend only (or even primarily) on those exams?

I'll bet you learned more from the years you spent outside the classroom interacting with your fellow students in the residences, dining halls, student activities, etc.

Depends on what you mean by learning. I don't think I learned anything about thermodynamics, control theory, or algorithms anywhere other than while reading and doing exercises. Even the tutorials are of limited use for that, mainly providing a shortcut to the answer when needed.

The larger learning of "how do you you get stuff done in your life, what kind of stuff do you want to do?" is one of those things you get once you look back. It's actually hard to do while cramming for exams.

I really do think a lot of exam prep is a waste of time, but then we're looking for a replacement for a 4-year degree costing $250K or something like that. Surely if you just do the exams at a cost of $1K you can find communities of like minded people for a lot less than what remains?

> [surely] you can find communities of like minded people for a lot less than what remains?

I'm not so sure. The amount of free time available to discuss the topics of life with other like-minded people who also have that same amount of free time I have not been able to replicate (nor come close to) since graduating.

If I understand correctly, Western Governors University does this now.

I paid my student loan off in July 2017. That September, I got back into housing.

When I was mostly bedridden for 3.5 months, I had trouble getting doctors to take me seriously. When I was reacting anaphylacticly to the polluted air in the LA basin while pursuing my certificate in GIS, I explained to a doctor that I had taken out a student loan and really needed to complete the program that I was already halfway through. He loaded me up with the most drugs any doctor has ever given me.

Twenty-two months of withdrawal followed. I failed to get the internship at a National Lab that I had applied to. It took me forever to finally get a job.

A lot needs to go right for someone to complete their program and turn it into an adequate income for converting those loans.

We need to admit something went systemically wrong and stop acting like a whole bunch of individual young people just made bad decisions.

I don't think letting some current student loan holders off the hook and moving to try to make sure this can't happen again is a bad idea. Though it's certainly possible that this will turn out to be the first iteration, so to speak, and can be improved upon.

This sounds like we need insurance, not subsidy. Some higher education is risky bet; we have good solution to that, insurance. But some higher education is just bad bet.

This could be pitched as a stimulus program. Freeing up this much debt would allow young people to spend a lot more.

I think this actually is pitched as a stimulus program.

How about instead holding schools to account for their shoddy product? Universities routinely sell shoddy degree programs to unsophisticated consumers (18 year olds). They have even enticed the government to guarantee unsecured loans for the products. As a result, the purveyors of these shoddy products have proliferated. Who would have thunk?

Subsidizing tulip is not the right solution to tulip bubble.

Education is not a tulip, though.

How is it not?

Higher education may well be a tulip. Or, it may be for many people.

Let me put it this way: Out of a year's worth of high school graduates, how many should go to college? I'm pretty sure that the answer is considerably less than 100% - not all high school graduates are capable of doing college-level work. If college is free, how do you keep those who aren't qualified from going? Yeah, the admissions process - but it's run by the school, which is going to get more money if it admits more students.

I paid off my student loans around 6 years after college because I:

- Chose a degree that would lead to a profitable career ( Computer Science )

- Worked during the day and went to school at night, paying for my books and other expenses as I went through school. ( I was a manual QA worker at a tech company. )

- Lived below my means. Always took public transit, never owned a car, always had multiple roommates.

- Avoided large purchases or expensive trips

- threw a large part of my paycheck at the problem. I wanted to get ahead of that compound interest.

I support student loan cancellation. Over a trillion in debt. SOMETHING needs to happen. I understand why it needs to happen. But as someone who "did the right thing", it stings to get left out in the cold on this one.

And either way: Even people still IN debt paid a LOT of money towards our student loans. What happens to the money people have already paid off? There will still be a 10-year wealth gap for people around my age. I will be outbid for homes by people a decade younger than me.

I delayed retirement contributions, home purchases, and having a family to pay off my student loans.

> Lived below my means. Always took public transit, never owned a car.

I worked >10 years in the industry and am quite well-to-do, but I always take public transit and never owned a car. I never thought that was living below my means. Maybe it's different in US...

This doesn’t sound like a solution at all.

Some of these $50k loans have over an additional $100k in interest and penalties. So, this would not help.

Make the debt dischargeable under bankruptcy, and the market will correct itself.

Let the borrower’s credit take the hit, not the taxpayers.

There's no penalties unless they're not paying in which case this is a different problem than student loan debt in general.

Another issue with this is that the vast majority of students hold way less than $50k in debt. This would help out people who either will be earning substantial incomes, e.g. physicians, or who used student loans to subsidize their lifestyle well beyond their school expenses (this might include living in New York City/San Francisco for four years without having any income.)

Making student debt dischargeable via bankruptcy would eliminate student loans all together.

There are a significant number of instances where the loan payer has been making payments, but not to the proper entity. The amount paid cannot be recovered and does not apply to the loan.

And, eliminating loans all together would bring tuition prices back to earth.

The reporting on this plan so far seems to be very light on the details of how the federal government is going to eliminate something it doesn't control (public university tuition).

I am rather ignorant of US system, but do you mean the federal government doesn't control tuition, or can't? Can't the federal government just pass law to start to control it? I seem to recall it can regulate interstate commerce?

It's not clear to me that on-premises state university education is interstate commerce. (Not that that would necessarily stop it from being tried, but we have, at least in theory per the Tenth Amendment, state supremacy for areas not granted the Feds by the Constitution nor reserved for the people.)

Many of these state schools operate international or online programs, and charge some students ‘out-of-state’ tuition, and take federal subsidies.

> It's not clear to me that on-premises state university education is interstate commerce.

It's already heavily federally subsidized, and challenging changes to the subsidy conditions on the grounds that the feds have no right to be involved at all would be suicidal for state universities since it wouldn't just kill the new conditions if it succeeded but the subsidies themselves.

So treat it like the federal highway funding being conditioned on the states "behaving" with respect to speed limit, DUI laws, and other items.

I don't love but accept the feds exerting economic power based on economic grants they decide to give or withhold. I do have a problem with them asserting regulatory power reserved to the states/people by the 10th.

> So treat it like the federal highway funding being conditioned on the states "behaving" with respect to speed limit, DUI laws, and other items.

That's already the case on a per-institution basis for federal funding, all that a policy goal of eliminating tuition requires is changing the conditions.

After Wickard v Filburn, and more recently Gonzales v Raich, everything effects interstate commerce.

In the US, most public universities are run by state governments (some larger cities also have university systems), and most of the students come from within the state. So it's not something they own, and there's no interestate commerce to regulate. As another commented out, at the end of the day the federal government can pass whatever law it wants - some of us argue that the federal government should generally let states pass laws running themselves with things like this, since different states run things differently depending on a bunch of factors.

They could pass laws that enact federally funded institutions that compete against state/private schools. Not sure how they could get employers to not discriminate against the "cheap" degrees though. Although in theory there would be no discrimination if the end product is ensured via appropriate testing, similar to state bar exams.

Of course, there is already the community college act, so this could be extended to having community colleges offer 4-year degrees.

Not directly. Public universities in the US are chartered and controlled by the states they are in (with a few exceptions for city universities). The feds can try to use carrot-and-stick measures by playing with federal funding for higher education, but that may well backfire.

Also, US states subsidize (heavily, in the case of smarter states like California and Florida) tuition at their public universities for state residents. It's unclear how residency would play in to this plan.

> The reporting on this plan so far seems to be very light on the details of how the federal government is going to eliminate something it doesn't control (public university tuition).

Public (and private, for that matter) universities rely on federal funding for lots of things; make public research funding available only to non-tuition universities, eliminate federal grants and loans to students that help pay tuition and replace them with, say, enrollment based grants directly to tuition-free institutions, and you'll be left with tuition-free institutions and not much else.

Paywalled, but the original post from the Warren campaign is here:

https://medium.com/@teamwarren/im-calling-for-something-trul...

Warren lays out the main cause of the student debt problem here:

> The enormous student debt burden weighing down our economy isn’t the result of laziness or irresponsibility. It’s the result of a government that has consistently put the interests of the wealthy and well-connected over the interests of working families.

Although this may be true, it avoids another important part of the problem:

Federal student loan guarantees have flooded the higher education market with easy money for decades. Families who have no business being in this market (either on academic or economic grounds) have been lured in by artificially low rates. This problem is not unlike the one created by the federal guarantee on mortgages.

In both cases, the outcome was similar: skyrocketing prices, decreasing affordability, massive debt burden, and systemic risk.

In the case of higher education, there's another factor - college has moved from being an option for some kids to a mandatory thing every kid must do. This, despite the proliferation of high-quality information sources on every topic imaginable. Many universities publish their lectures in full.

Higher ed has become an expensive, seemingly mandatory credential as a result. An unnecessary four-year detour that hobbles many young people for decades afterwards.

Maybe it's time to think differently about the problem. Maybe it's time for the federal government to step away, completely, and let the price of a college credential collapse under its own weight.

I went to university in Sweden, where there is no tuition for citizens (EU citizens, actually.) I think this is one of the reasons the Scandinavian countries have such high social mobility.

Now, that doesn't mean going to university is free, since you still have to be able to pay room, board, textbooks, etc, but the student loans I have are structured such that the payback is indexed to my income. Not being able to pay your student loans because you don't make enough money is not a thing, so there's much less risk in taking out these loans that there is in the US.

I would happily fund other people's education if that means a citizenry that doesn't believe the Earth is flat, that vaccinates their children, and whose world view in general is based on critically assessing sources of information...

Now, the Swedish universities are also mostly state-run. In the US, I'm not sure how the system would be sustainable if the private institutions of higher education can just charge what they want and then have the state pay the students for it. Seems like a recipe for runaway costs. I guess her proposal is only for public universities though?

Why doesn't she propose a plan to subsidize home buying or raise salaries? This seems like another doomed trickle down economics plan. I somehow also feel this penalizes those who have exercised healthy financial planning and made the conscious decision not to get into crippling student loan debt.

> Why doesn't she propose a plan to subsidize home buying or raise salaries?

She has. The latter, at least, as that's one of the things behind her corporate governance reform proposal.

Hmmmm. So there's a great gap between the Haves and the Have-nots.

I don't think forgiving college debt is going to help.

Let's not let HN become a political shit hole like Reddit please

It's a bit late for that.

Eh, it's still better than most places, even if we do get a little echo-chambery at times.

> Please don't submit comments saying that HN is turning into Reddit.

https://news.ycombinator.com/newsguidelines.html

> Please don't complain that a submission is inappropriate. If a story is spam or off-topic, flag it.

https://news.ycombinator.com/newsguidelines.html

Free stuff for middle class people in America? Someone else is going to pay for it?

I'm sure this will be very popular.

Education that doesn't cost is a class-flattener.

It's a benefit of being a member of a wealthy society, as are other non-free things like public education, libraries and clean water. Societies strive to benefit citizens more over time, not less. That's how societies work, and early humans formed tribes because of the mutual benefits.

Government != Society

All societies have governments, even if it's as simple as a tribal leader or elder.

"She would eliminate up to $50,000 in student loan debt for every person with a household income of less than $100,000;"

So she plans to reward the people who made the worst decisions. As someone who made responsible decisions: nope. Just no. I will not support tax dollars going to bail out people who paid upwards of 50k for worthless degrees.

> I will not support tax dollars going to bail out people who paid upwards of 50k for worthless degrees.

For many for profit college loans or predatory liberal arts colleges, there is a level where this seems like the tax payer paying the banks; otherwise they would have to write the money off as a loss.

I don't think its fair to judge the worth of someone's degree simply based on how much they earn.

If I'm expected to pay for it with tax dollars, that's the only possible way to view it. I'm not going to subsidize someone "finding themselves".

No, you subsidize people doing poorly paid but highly educated work in fields like public health work, education, and non-profits. You also subsidize people getting the basic education required for many jobs.

Many jobs do not require the "basic education" that a college degree provides - a HS education is entirely sufficient, and was widely regarded as such even as late as a few decades ago. It's a wasteful credential-chasing arms race, and the more we keep subsidizing it the worse it will get for everyone involved.

Much like welfare and food subsidies in my view its morally unacceptable when you start judging an individual's worthiness rather than their need.

In an economic context, why would it not be fair to judge the economic worth of someone’s degree on the basis of that degree’s ability to influence their earnings?

Because there are a litany of counterexamples to the myth that earnings equate to economic value. Teachers, police officers, and social workers immediately come to mind.

The obvious solution is to subsidize teacher pay etc, not to subsidize education to be teacher! If teachers are well paid, you wouldn't need to subsidize teacher education.

Subsidizing teacher pay is subsidizing education.

That sounds like a great argument for subsidizing teacher and social worker education instead of the wholesale forgiveness of student debt which includes people with degrees in poetry and pottery. Poetry and pottery are both valuable to society, but honestly a lot of the people who are good at those things don’t have matching degrees. Also, forgiving loans for pottery degrees competes with our ability to subsidize education for teachers.

Yes but having an educated citizenry pays dividends in a multitude of non-economic contexts.

Unfortunately, degree != educated.

For most intents and purposes, pursuing a degree entails attempts to become educated.

Some works of art may have value beyond their auction price, but you probably shouldn't buy them if you can't afford them.

Do the universities that sold these worthless degrees deserve to be paid upwards of 50k for them?

That was a decision for the people who agreed to pay them 50k to make. They did and now it's on the purchaser, not the people who made informed decisions and didn't get themselves in debt they can't afford.

Put it this way, if you're tight on money and you max out your credit card for a vacation across the world, is it worth it? Obviously not but you can't expect tax payers to bail out poor financial decisions.

well if you go to a school like NYU or USC and pay 80k a year for tuition and room and board, you're paying more for the lifestyle than the degree.

Arguably it's worth it to some people. At NYU you can get a room right on Union Square or Washington Square Park for instance.

They deserve to be paid whatever people are willing to pay. Just as if people rack up debt in order to go on a "useless", those people should be responsible for repaying their debt.

> They deserve to be paid whatever people are willing to pay.

Not if the government is doing the paying, they don't. How much am I willing to have the government pay for me? Quite a bit more than I'm willing to pay on my own account.

https://www.naceweb.org/uploadedfiles/files/2018/publication...

The median first salary for every discipline after undergrad is sub-$100k (fig 7).

I guess you just think college as a whole is worthless.

I think one would need to look at salary over the course of the time to pay off a loan, and also the overall distribution of salary and not just median. I'm sure there are many out there with more than $50k in loans, now making $110k per year. I'm sure there are many out there who started off making $80k, now making $100k or more a few years later.

So instead of me directly paying just for my own education I would have to pay for everyone else's education in the form of taxes? Freeing up what I am currently paying for student loans would be nice, but if you take more money from me to subsidize ALL public colleges am I really gaining anything? Sure this is a good talking point for her and the progressive left, but realistically it isn't a feasible plan.

Seems to work well enough in most OECD countries

>"She would pay for it with revenue generated by her proposed increase in taxes for America’s most wealthy families and corporations, which the campaign estimates to be $2.75 trillion over 10 years"

Unless your household is making over $50 Million year, or you are a billionaire, your taxes wouldn't change for this particular plan.

When have you seen taxes on the wealthy actually work or even pass the House or Senate? Again good in theory, but not good in practice. All that is going to do is get the ultra wealthy and corporations to use more loopholes than they already do. Again it is a great talking point, but not something that is realistic. But it'll get all of the people hampered by tuition and student debt to say "yeah stick it to them". I personally still have loads of debt and would be nice to get rid of. Would be nice to see my son be able to go to a public university for free. However, the logistics of it will make it never happen. In fact it would probably affect public universities, and the quality would decline more than it is now.

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