New bill to bar wealthy colleges in the US from accepting federal student loans

This makes absolutely no sense from any angle. US politics is so messed up right now. The entire right is lost in a personality cult and is driven more by triggering the libs than actually effecting change for their fellow citizens or the country as a whole. And the entire left is on a rampage to make sure they alienate as many people and supporters as possible and would much rather focus on symbolic protesting on issues they have no impact over as opposed to real issues they can help. The center is sensible and fairly effective but was small to begin with and is rapidly getting squeezed from both sides.

Re: this specific issue, it’s very obvious that universal programs are always more successful. They build a strong political and support base across the spectrum of voters without creating any losers who are deliberately excluded that would be motivated to end them. Further, more often than not any sort of means discrimination costs way more than the money saved through the means discrimination. And that’s even before the hoops the means discrimination adds to the lives of the poorest to prove their eligibility.

The means discrimination should be done once on the income tax side. There’s an extremely well established process for that and will be done anyways. Setting up ad hoc processes for each program on the benefit side simply doesn’t make sense.

And yet contra all the information we have the people proposing these policies will go out of their way to make their own policies less effective and more expensive as we’re seeing with these unnecessary riders.

The wealthiest schools would absolutely love this.

There’s absolutely no pressure anymore on them to accept anyone but the wealthiest candidates anymore from across the world.

Not only will they make more money the exclusivity means they will be more desirable as well.

What a backwards idea from both the right and left perspective.

Is there some reason these institutions could not make direct student loans themselves to their students? That would give them some real ‘skin in the game’ ensuring a good education with good job prospects.

It would be telling if they ended up lending to students in some majors but not others.

I have read this article twice now and I am failing to understand what they are trying to solve with this. They want to essentially punish students who that opt to attend a wealthy university? So they are expanding pell-grants and banning students from getting federal financial aid? What is the overall purpose or problem they are trying to solve?

Story time, to bring another perspective.

When I was in high school, and it was time to choose colleges, I had a particular challenge. As an immigrant to the US, I had a legal immigrant status that was unconventional. Additionally, my family has come to the country just 5 years prior, and it was tough to pay for brand name cereal, let alone college tuition.

Federal financial aid, including loans, is not available to everyone. It was unclear whether my family met those criteria. Our immigrant status was rarely encountered. I was told that likely I would not be able to get any financial aid. The prospect of paying $20k-$30k per year worried my head hunched over a bowl of no-name ringo-o’s.

I chose not to apply to any top schools because of my financial situation. Without federal assistance the cost would be even higher. I felt that I needed to balance my ability to pay with all other choices that go into a life plan.

Who knows if I would have been accepted. I did not even try because I was told that federal financial aid would not be available to me.

This ended up being not true and I got federal financial aid after all. I learned this after I already sent in my applications. But not to MIT and Stanford, my dream schools.

I ended up going to RIT. It was cold and I found a new appreciation for brick architecture. My life is fine. I do occasionally think about what would have been had I heard “You have access to federal student loans” when I was choosing where to apply.

Would such a proposed bill cause more kids who are not well off to not even apply if they knew federal financial aid would not help them pay for certain schools? My situation was odd and rare, but this would place many more kids in a similar dilemma.

On the bright side, if such a law passes, less wealthy colleges will get access to more top-tier applicants, and that is what equality is all about, right?

Per recent episode of Bill Maher, Stanford university has over 10000 administrators. Why is higher education so expensive in the US… bloated bureaucracy and fancy buildings which would not happen if the federal government was backing student loans.

It's unfair that these colleges that have legacy admissions can take any federal loans/grants at all. I think the colleges' enthusiasm for race based admissions was to ensure that social class never becomes an issue - thus protecting their true clients, the children of rich alumni.

Max Pell grant: $7,395

Duke School of Nursing (article ex) Tuition: BSN: $14,525/yr (or ABSN $25,258/yr).

Housing: $11k/yr. Fees,Food,etc: $7k/yr. I'm likely low.

sources: https://nursing.duke.edu/academic-programs/absn-accelerated-...

https://nursing.duke.edu/academic-programs/msn-master-scienc...

housing:internet said $1100/mo for student housing in Durham NC (do students rent all 12mo?), food:guess

This is to measure the issue, not advance an argument either way.

I would expect that students most of the named schools would be more likely than average to pay back their loans. Wouldn’t the government be making money, in interest, off these students?

Link to bill: https://www.govinfo.gov/content/pkg/BILLS-118hr6585ih/pdf/BI...

Section 7 is the amendment under discussion here.

Definition of an "applicable institution" from 26 USC § 4968(b): https://www.law.cornell.edu/definitions/uscode.php?width=840...

Takeaways: This modification basically removes federal Stanford and direct plus loan eligibility for schools whose average family net worth (assets held) exceeds $500k. (This isn't just HYP/Ivy's either! Small private schools like Reed and William and Mary might pass this eligibility test, as they have very wealthy student bodies.). However, the actual impact this will have on students coming from poorer backgrounds remains to be seen, for three reasons:

1. These loans tend to not be very large. Anything helps, of course, but a $6k Stafford loan is a drop in the bucket against a $78k/year tuition.

2. These schools tend to issue grants and scholarships to students from disadvantaged backgrounds. These are better than federal loans, of course. Check out what Harvard is doing for the class of 2026: https://news.harvard.edu/gazette/story/2022/03/harvard-to-ex.... You pay nothing if your family makes less than $75k/year. That's pretty neat!

3. These schools are stupidly insanely selective and everyone applies to them, I.e., it's like Google's hiring problem. Students from wealthier families with always have more resources to help their kids get noticed, and students from poorer backgrounds will have to claw their way in. Same as it ever was.

Very disappointing that The Atlantic couldn't cite the source of the actual bill and the section in question.

Seems like this would only bar working-class and lower-class applicants with high ambitions and impeccable high school records from the ability to attend top universities. True, they could attend Honors programs from state schools instead. But it still doesn't feel right.

> It would ban students who attend Harvard, Yale, Princeton, or any of the roughly 50 other wealthy, private colleges subject to a tax on their endowment from taking out federal student loans.

> America’s reliance on student loans is imperfect, but this move would hurt students far more than the colleges they attend.

Reaction: Yeah - from the PoV of folks who've drunk too much of the "We are the uppermost crust of the New Meritocracy, born to lord over lesser humans..." Kool-Aid that many elite colleges serve up, this sounds pretty bad.

But between the staggering administrative bloat of those institutions, the sort of culture wars Bizarro-world they seem determined to keep pushing into, and other major problems - maybe it would be better if the brighter & harder-working young people were steered away from them? Back about 1900, Americans were obsessed with the high status and long history of British nobility, and quite a few of America's richest families forced their daughters to marry British nobles - with huge dowries - in crass "pay for social status" trades. A few decades later, when the decline & fall of the British noble class was d*mned obvious, that fad faded.

If all your friends aren't making "take mommy's private jet, or daddy's?" decisions as they head to Harvard, this might be a good time to look further ahead, and make a long-term better decision.

> “America’s reliance on student loans is imperfect, but this move would hurt students far more than the colleges they attend.”

I’m not so sure that this would hurt students more. Taking debt without income or profit to service said debt is a highly risky move and this may mitigate the number of risks taken thereafter.

That said I do understand at the surface it would appear to prevent poor kids from attending these schools.

We should probably analyze the entire cohort and make a determination if it’s a good or bad move.

Non-paywalled link: https://archive.is/jm3pE

Maybe we can bar them them from accepting Qatari pro-Islamic money next

https://www.calcalistech.com/ctechnews/article/jwhsqhrat