> I got back into housing a few weeks after I made my last student loan payment.
I graduated undergrad with $4k in student loans. The fact that there are people becoming homeless due to student loan debt is insane.
[1] https://streetlifesolutions.blogspot.com/2020/07/independent...
Just mentioning because I was very surprised when I discovered it, and it offers an interesting alternative on how student loans could work.
[0] https://en.wikipedia.org/wiki/Student_loans_in_Norway
[1] https://www.collegefinancinggroup.com/student-loan-repayment...
Thanks to this system, I got the opportunity to do what I wanted, and society gets another well-paid software engineer that can pay lots of taxes. Win-win!
(Edit: corrected debt from 300 000 SEK to 250 000 after checking)
In countries like the Netherlands, there is tuition, but heavily subsidised. Fees are about 2k per year, and low (and partially to middle-income) households get a government stipend that is more than double that fee per year.
In short, people in these countries have to pay living expenses, tuition is pretty much covered. And a lot of these countries are quite small and have people living near the university, with decent public transportation, which is often free for students as well. As such lots of students live at home instead of on-campus, moving out for lifestyle reasons as soon as they can (often taking out loans to supplement a parttime job), rather than for the logistics of having to move to a place near the university.
In the US there's a lot of subsidies, state programs, scholarships etc as well. But many people still end up paying way more, especially if they're going out of state. And there's lots of people who end up having to move city to study somewhere, which means paying for room and board are very much a requisite part of their studies.
As such the loan amounts are nowhere near as large. Second, loans tend to be government issued, the cost-of-capital essentially tracking the interest on state bonds (e.g. treasury bills in the US) with a cap of 0%. This means in the Netherlands for example interest rates for student loans have been 0% for years and will likely remain at 0% for many years. This presents a wildly different outlook for students because borrowing $30k today isn't going to turn into having to pay back $100k over the course of the loan the coming decades, but just $30k, which is depreciating due to inflation in real terms over time.
This works this way for most social programs in most countries. E.g. to can't migrate to a country and then claim unemployment benefits. That doesn't mean the statement "the country has an unemployment program" is false.
There are dozens (maybe hundreds) of thousands of people paying for universities in the European countries with public schools (most of paying students are of second/third-world background in a country that is acting passively aggressively to them because of their non-resident/non-citizen status [that causes issues e. g. with banking services], btw), and many of them in Sweden, that's why I feel the statement is false. Also note that I'm not judging, merely stating a fact; I don't see anything wrong with both funding approaches, and think they should be combined (like in Czechia).
I know a lot of working class/blue-collar families here, and talking with them, it really becomes clear how incredibly selfish and unreasonable it is to expect their taxes to buy someone wealthier than them an education that they themselves are denied by virtue of being raised in harsher circumstances.
But. The repayment thresholds and the loan forgiveness period do massively reduce the onerousness, especially on those in lower paid roles who would otherwise never repay. My main complaint about the system is really how it drags on the middle.
The successful graduates pay off their loans in 6-7 years, or less. If you're earning 40-50k, you'll take more like 20 years to pay off the loan which feels like a long hard slog. I still think graduate tax would have been the right call.
On £40k you'd end up with them cancelled and likely repay less than you borrowed (45k typical borrowing, £38k repaid over 30 years).
2. Your salary will (is expected to) inflate; the repayment threshold currently does not, so the "time value of money" has something to say about how much you repay. Someone whose salary remains constant on the equivalent of £40k will find their repayments an increasing burden.
The amount you borrow is not a fake number, whether it is related to the course cost or not, just as the price of a car is not a fake number even if it was cheaper to produce. It also includes literal cash payments to you.
Meanwhile, I know plenty of working class/blue-collar families who believe that debt is an unmanageable risk that they should reject if at all possible.
Their children take that to mean that they absolutely shouldn't go to university, no matter how capable they are.
Back of envelope calculation is definitely wrong.
I'm not necessarily disagreeing with you, I'm just saying that £50 figure is definitely not right, without doing any calculation. (OK sure - 50/0.2 = £250 taxed at basic rate above personal allowance. Which this year I think is £12k5, and median household income is surely above £12k75.)
“ What £ of tax would the working class family contribute towards university education”
Is not really fair to the issue. It’s not a cost for university education, because it’s not open to all - there are gatekeepers - and those from underprivileged backgrounds have very little chance of being accepted to the most prestigious institutions, so it’s unfair to expect them to pay for it, is essentially my point.
To repeat myself: "Their children take [accruing debt] to mean that they absolutely shouldn't go to university, no matter how capable they are."
Tax pays for plenty of things that working class people don't use; it also pays for plenty of things that working class people do use, that other people are paying for - and the latter category should include university education. Tax is an agreement that we find these things valuable to pay for, as a society. Not everything paid for in taxes has a direct benefit to everybody.
But we don't agree. A lot of people are affronted that as they see it they're being asked to, in essence, fund a high quality education for wealthier people's kids that their own kids can never have access to.
Whether they're right or wrong (and I've yet to see evidence that they're wrong), that's their view. And there are a lot of them. Which is why Clegg could never sell it to the electorate back in the coalition days.
I think this is an issue of right-wing media spin, rather than beliefs that working-class families innately hold. (Also since my experience of working-class families' views is generally the opposite of your claim.)
There is a lot more egregious government spending distribution problems than this one, which get ignored. In general, government spending benefits the middle classes (and upper classes) far more than it does the working class, and that's true in other areas more than it is in education.
From https://www.tutor2u.net/economics/blog/does-uk-government-sp... e.g. "The wealthy also drive three times as many miles as the poor. This makes them big beneficiaries of spending on roads, worth £8 billion a year. Poor people make up ground elsewhere: they use buses twice as much. But bus subsidies are smaller."
* You only pay it when you are in employment and earning money (with a minimum salary for repayments to be taken);
* The repayments are calculated as a function of your taxable income;
* The balance isn't discharged by bankruptcy;
* The balance isn't considered by lenders when assessing your suitability to take on "real" debt.
As far as I can tell, it's a graduate tax (on those who took a loan) for all intents and purposes.
I see comments from students talking about being "crushed by debt" as a result of taking an SLC loan, and I just can't work out where this perception comes from: yes, it decreases your take-home pay, but since there's a minimum salary threshold for payments to be taken, it's never going to leave you destitute.
With reasonable preparation, college is very affordable. Scholarships are easily obtained with a good ACT or SAT score. Both of these are well documented, a few months of self-study practically guarantees a good score.
My experience has been that good preparation puts out of pocket costs below $10k per year. (I think that's actually on the high side.)
For the children of people that read Hacker News, I could see that. For normal American kids? No way. Not even close.
The average american kid is not going to be able to get an SAT or ACT score good enough to get a scholarship. It's just not going to happen. You're vastly overestimating how smart and committed they are.
How much effort do you expect a kid to put into something that has no immediate benefit and no guarantee it'll ever pay off? To get to that level of delayed gratification requires a very special sort of upbringing.
It's a form of privilege, but I don't feel guilty about it. We take part in programs that help other kids outside the family (including after-school homework help for ELS kids). IMHO, we all should become 'privilege factories', helping first our own kids and then other kids. It advances quality of life for everyone involved.
Ha ha ha. Having gone to college and recalling some folks I met, and listening to some stories from a friend who is a high school teacher at a public school, I laughed hard at that