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Medved writes: "Does it make sense for the government to take taxes from the big majority of Americans who never managed to win college degrees in order to subsidize the pricey education of the fortunate few who get to attend top universities?"

Two-thirds of the total student-loan debt is held by people under 30. (illustration: EagleCartoons.com)
Two-thirds of the total student-loan debt is held by people under 30. (illustration: EagleCartoons.com)



The Student-Loan Scam

By Michael Medved, The Daily Beast

29 April 12

 

Why should cheaper loans for tomorrow's elites be subsidized by all taxpayers? A look at why President Obama's math doesn't add up.

oes it make sense for the government to take taxes from the big majority of Americans who never managed to win college degrees in order to subsidize the pricey education of the fortunate few who get to attend top universities?

Why is it fair to increase burdens on stressed-out working families so the feds can reduce future interest payments on student loans for members of the elite?

Isn't President Obama's current push to spend a $6 billion on college-loan relief precisely the sort of rob-from-the-poor-to-give-to-the-rich outrage that any conscientious progressive ought to oppose?

These are questions that even Mitt Romney and his fellow Republicans refuse to pose, as they retreat or temporize concerning the president's shameless student-loan scam. The big duel in Congress concerns the best way to pay for continuing the subsidized loans, with no real debate about the wisdom of the subsidy itself.

Republicans and Democrats alike feel so intimidated by the brute political power of college students and their families that no one will point out it's the beneficiaries themselves who ought to cough up the extra money. It's not unreasonable to suggest that they do so when interest rates revert to their normal, pre-2007 level on July 1st - especially since those students aren't obligated to begin making those interest payments or retiring their principal until they've completed their education or dropped out of school. In effect, our leaders suggest that future millionaire attorneys who graduate from Harvard Law School (as both Obama and Romney did) ought to get reduced payments on their student loans at the ultimate expense of all taxpayers - including janitors who toil away at the very Ivy League campus where the two presidential candidates once matriculated.

The lies surrounding this proposed ripoff ought to embarrass everyone who dutifully recycles them, but prominent reporters, perhaps recalling their own student-loan experiences, repeat the nonsense without blushing. For instance, the notion of crushing student-loan debt hobbling millions of U.S. families counts as an urban legend or deliberate distortion. According to figures from the New York Fed, a full two-thirds of the total student-loan debt is held by people under 30, suggesting that the great majority of borrowing is quickly repaid. President Obama's example of repaying his debts only at age 43 (when he was already a state senator) would count as atypical.

Moreover, borrowers owe a median of $12,800, a figure that the Associated Press describes as “an amount even advocates for student borrowers acknowledge is usually manageable and more than worthwhile factoring in the economic benefits of a college degree." Surely, borrowers who owe less than $12,800 don't need a massive federal rescue to save them from paying at most an extra $34 a month in interest.

Of course, the president prefers to talk about the average loan balance rather than the median, since that average is thoroughly distorted by a handful of big-time borrowers (like the Obamas themselves) who attended the nation's most expensive universities. As Josh Barro writes at Forbes.com: “A below-market interest rate for Stafford Loans is just another subsidy mechanism…. This pushes students, at the margin, to choose more expensive educational institutions than they otherwise would, and to finance more of their education with borrowing than they otherwise would. These incentives leave students more burdened with debt than they need to be, and they also make them less focused than they should be on price, allowing more tuition inflation."

The president cites his personal example as illustrating the need for federal help in keeping interest payments artificially low for those who borrowed hundreds of thousands to get blue-chip educations. “We only finished paying off our student loans about eight years ago," he told an adoring crowd at the University of North Carolina. "That wasn't that long ago. And that wasn't easy." But it shouldn't have been that hard, either - given the fact that the Obama tax returns (made public on the White House website) show that for at least five consecutive years before they finally retired their loans, the future president and his wife reported income in excess of $200,000 each year. In 2001 and 2002, the Obamas earned $272,759, and $259,394, respectively. What possible argument could they advance for the federal government to deploy taxpayer resources to reduce interest payments by a few hundred dollars for such a prosperous and privileged couple? As Jonathan Karl points out at abc.com, in those years the Obamas would fit the definition of “the rich" or of “millionaires and billionaires" that the president wants to tax at higher rates, not subsidize.

And there's scant justification for the government subsidizing decisions like those by Barack Obama to attend Columbia (as an undergraduate) and Harvard (for law school) rather than less-expensive schools. For instance, Mitt Romney managed to build a decent future for himself with an undergraduate degree from Brigham Young University, where even today tuition charges amount to less than one-tenth than those at Columbia, Obama's alma mater.

To the president (and to many others, no doubt) the value of an Ivy League education might justify any additional cost, but why not place those costs on the people who chose to incur them and who benefit most directly? While the value of my own Yale degree might be greater to me than the value of my wife's much-less-expensive UCLA degree is to her, there's no evidence at all that a costly Ivy League credential somehow provides more substantial benefits to the nation at large.

Of course, Yale and Harvard and Princeton might argue that they gain as institutions from enrolling students who need student loans to pay their exorbitant tuition, but those massively well-heeled universities could underwrite the costs themselves without taking any federal assistance whatsoever. Harvard, for instance, reported a 2011 endowment of $31.7 billion - up from $25.5 billion in 2005. This means that the endowment of the nation's richest university increased at an average rate of $1.04 billion per year even during the disastrous period of The Great Recession. Harvard could therefore allow every one of its 21,000 students to enroll tuition-free - and still see its endowment grow every year. Harvard reported that total student income, including all tuition fees, payments for continuing education, and even “board and lodging," amounted to $740,573,000 in 2011 - so even without collecting a penny in revenue from any of its students, the university still would have been $300 million richer at the end of the year.

Finally, there's an important point of reference for all those who say it's not worth worrying about a relatively trivial amount like the $6 billion a year that Obama wants to commit to continued interest-rate relief for recent university grads; after all, this sum amounts to less than 1 percent of an overall budget deficit of more than $1 trillion.

On another issue, however, the president treated an even less significant fiscal concern as worthy of a titanic political struggle. According to figures from the White House, the “Buffett Rule" to establish a new minimum tax for millionaires would bring the Treasury only $4.7 billion per year - considerably less than the cost of extending the student-interest subsidy.

Liberals would argue that the Buffett Rule merited a major fight despite its minor financial consequences because it illustrated an important issue of fairness. But they should then acknowledge that the proposal to continue the student loan scam deserves a comparable battle for much the same reason.

For an administration that claims it wants to help those who have been left behind by a crippled economy, it's hypocritical in the extreme to channel scarce federal funds to students who are moving ahead despite hard times. Rather than let university graduates pay off their loans on their own, the president wants to borrow more money from China to help them - and to court their votes. Conservatives oppose income redistribution from those who earned it to those who didn't, but even liberals should block income redistribution from the less fortunate to big winners in academia.

 

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+68 # PGreen 2012-04-29 19:58
I'm not sure whether this article is simplistic or a deliberate distortion.
As Frank Donahue wrote in the Chronicle of Higher Education, "The solution to the student-loan crisis will have to begin with the realization that if a college education is today’s equivalent of the high-school education of yesteryear, then it should also be free, as K-12 schooling is." At the very least, repayment plans could be means tested and linked to a percentage of income.
But to belittle student loan debt is short sighted and ignorant.
As Noam Chomsky points out, encumbering students with vast amounts of student loan debt subjugates them to private power. To free themselves from debt, students must find employment within corporations and continue their virtually bonded labor for many years. Though they have the freedom to change companies, this freedom could be likened to a slave moving between masters-- it is not always willingly. Undergraduate students are increasingly disillusioned with this "choice," as less than 60% graduate. These students who don't finish have debt, but no degree.
Education has developed into a means of recruiting and training the army of corporate America. "Teaching to the test" has replaced the liberal arts ideals.
 
 
+35 # cadan 2012-04-29 22:45
PGreen, i think every point you made is good.

I would just add that any aid for financially poor students to attend the Ivies (or any colleges) increases the diversity of our future leadership. It's good for the low-income students, and its good for the millionaires' children also to rub elbows with the low income.

A good education benefits both the recipients and the society they contribute to, so we should do what we can to help make it possible. (And surely money for education should come ahead of multi-trillion dollar wars which benefit nobody.)

The leaders in China realize this (i wish our leaders were as smart and as devoted to their people as the Chinese leaders are).
 
 
+5 # RLF 2012-04-30 05:30
It allows the children of the rich to pass as middle class so that we don't put them to the guillotine! But seriously, perhaps the power of the student loan program should be used to help slow the pace of tuition rise in this country which is right up there with medical costs. Don't loan money to anyone going to colleges with tuition over a certain amount...
 
 
+7 # Valleyboy 2012-04-30 09:45
Hi Cadan,

I agree with your post, except your opinion that Chinese leaders are devoted to their people.

The leaders in China are essentially at war with their workers and the environment. It is a police state! Unfortunately it looks like America is headed that way too, so you may in fact get your wish.
 
 
+41 # hans 2012-04-29 22:58
Two serious problems with this piece of 'analysis': One, the assertion that a reduced interest rate on student loans is a 'scam.' What is scamy about trying to create as many educated people as possible, to encourage as many to push their education as far as they desire, independent of a burden of debt? Many countries are far more liberal, even providing essentially free education, through university, graduate, or professional school. (I knew a couple from Sweden who were subsidized by their government to pursue an M.A. in California. They're now back home in Sweden, using their skills for the benefit of their society.) Two, why the hell does Medved think the loans are all benefitting Ivy League students? I teach high school, and I sure am aware of students who fight their way through j.c., then go on to UC, (or the CSUs), and then leave school with $20,000 or $30,000 in debt. There is no 'protestant ethic,' or ethical stance at all, that can justify the distortions imposed on educational dreams, on a sense of security, on a willingness or ability to be self-defining, rather than to be defined by an absolute need to earn a paycheck; to be defined by bank loans. Medved's piece is reverse snobbism a la Santorum, pretending to value 'janitors' and working class families, when what he's really defending is the 'right' of banks and the wealthy to earn interest on loans that are building the future of this country.
 
 
-10 # NOMINAE 2012-04-30 02:07
@hans

I have one honest question. If these loans are such an insurmountable burden, why are people willingly signing them when it's time to *get* the money, and then acting as if they were somehow surreptitiously robbed and blindsided when it's time to pay the money back ?

If recipients of these loans are bright enough to be in college, one hopes that they would be sufficiently savvy to know what they were signing when they inked the contracts in the first place.

They signed the contract. Unless somebody *forced* that signature, there are no "victims" here. If the loan is a rip-off, wisdom dictates that one doesn't sign it.

I understand the "yawing" back and forth over the interest rates, but I cannot comprehend the number of graduates acting as if they were "robbed" simply by the fact that they were allowed to have student loans in the first place.

True, a college education is neither of the quality or the more reasonable expense that it once was. But, for bright young people to sign these loans when they know full well the U.S. economy has been in the dumper since 2008, is nothing more than gambling that the economy will improve before they graduate. If your gamble doesn't win in the real world, you are stuck with the tab, not the U.S. Taxpayer.

The only exception to that is when you are a huge investment bank and not a private citizen.
 
 
+2 # PGreen 2012-04-30 09:30
In a sense it doesn't matter why, just that people do it. In an economy based on consumerism, someone will always take advantage of another person's lack of foresight, and even encourage potential pitfalls to be overlooked. Every marketer knows this, and does exactly that-- it is why we developed regulations to begin with-- to prevent such exploitation. It is individuals who have less systemic power that especially need such protection.
Given what you say, it is even more reasonable to ask why banks and other private loaners aren't made to eat the cost of defaults. They, much more than HS graduates, know exactly what they are getting into. They also know that the government will cover their potential losses. Its called socializing risk and privatizing profit. There is no reason to run the system this way, as the government could simply make the loans directly-- though banks don't want it, as it would eliminate a lucrative, safe source of profit. Certainly private industry is not doing the superior job that self-described "free-marketers " claim, in this respect.
To answer your question, it is hard to blame people for wanting find a way to survive economically. Higher education is now pretty basic. Like K-12, free public higher education should probably be available.
 
 
+7 # pbbrodie 2012-04-30 09:55
Here's an honest answer. Of course they knew what they were signing but these are 17 and 18 year old kids who have very little awareness of how the world functions. It doesn't matter how bright one is when your knowledge and experience is very limited. When faced with a choice between going through life with the handicap of no college education or taking a chance on a student loan, there is no choice.

Your other statement about "graduates acting as if they were robbed" is simply wrong. It isn't large numbers of graduates in general acting as if they were robbed, it's large numbers of graduates who are unable to find jobs or decent jobs commensurate with their degree, who are complaining. It's also graduates who have become disabled or can't repay for any other reasons outside of their control, who then discover that the debt is permanent and can not be discharged through bankruptcy or any other means. By the way, this was only recently passed into law by the same culprits who always do anything and everything in their power to protect the banks.
Finally, your statement that these kids are gambling on the future leaves out the fact that they are simply doing what we all do in this regard. What do you expect them to do, put their lives on hold and tread water while life passes them by? Regardless of what's coming, the only prudent thing to do is prepare yourself the best you can for whatever is coming and what better way to do this than with a college education?
 
 
+7 # Todd Williams 2012-04-30 10:27
Guess why they are bitching now? There's no f**king jobs to pay back their loans. Pretty damn simple, isn't it? Nobody that I know is acting as if they were robbed. That is a fallacy. The grads just want a good paying job to cover their debt, buy a meal, rent an apartment and get an old car.
 
 
+4 # hans 2012-04-30 10:37
For most people, it's really not complicated: they take out loans because it's the only way they can continue their education. It's not some calculated hyper-rational choice (oh the myth of rational economic behavior!) Loan, or don't pursue the degree. Those are the options for many. And, of course, it's incremental, this debt; it's not like a mortgage.
I find your 'honest question' revealing. Take a step back and look at the larger perspective: overall private debt in America exploded, absolutely EXPLODED, starting in the 1970s, with the pushing of credit cards, the encouragement of consumer debt. It's called the 'financializati on of capitalism.' Students aren't alone in this phenomenon, and these 18 or 19 year olds are guided by their families, and the culture at large. And, given that education costs have risen sharply, and other forms of support have fallen, you're surprised that people fall in debt? Are you surprised, then, that millions of Americans are holding on to their standard of living largely through incurring debt? In my opinion, it's the domestic version of the North-South relationship of the world; it's an amazing system for transferring wealth from lower classes to upper classes.
Final point: there are irrational responses to the student debt, but most response is dismay, distress, etc, especially in the face of 'no jobs,' not what you characterize as being 'robbed.'
 
 
+13 # davidr 2012-04-29 23:05
Mr Medved, you blow pretty hard with your Yale degree, but you should have paid more attention in 7th grade math class.

The Census Bureau reports that a BA is worth $900 K more than a HS diploma during a working career, an MA $1.3 MM more, a PhD $2.2 MM more and a professional degree $3.2 MM more. Even at the historically low tax rates that currently obtain, any proposed federal subsidy for student loan interest is dwarfed by incremental tax revenues in the future.

More significantly, there is nothing -- not oil subsidies, not tax cuts, not deregulation or any corporate preference -- that can even begin to approach education as a boon to the economy. Except for buying a legislator, education is the single best investment anyone could make in themselves, their offspring or their country. And it's the single best investment the country can make in itself. This doesn't mean only college education, but apprenticeships and technical training.

Didn't you get the right wing memo about the innovators, risk-takers, job creators? Don't they need an education of some kind? The more job-creators we want, the more educational subsidy we should offer, no?

The Ryan budget preserves $11 B in tax savings on interest paid for yachts and vacation homes. Obama wants $6 B to help pay for education. Which does a Yale man think is the better investment?
 
 
+9 # bubbiesue 2012-04-29 23:13
Mostly I agree with PGreen, respectfully and thoroughly disagree with Medved.

In much of the rest of the civilized world money is no obstacle to a college education. Where did the fee idea come from? Education is an equalizer in our society and we lose that without making it available to all at the lowest possible cost. That's why Land Grant Universities were established. And one of the things we still prize is that "..all...are created equal..." in the eyes of the law.

There is new knowledge in the world every day. Without students exploring science, math, the boundaries of philosophy, engineering, law and medicine and more it's doubtful whether we would have a new invention or the next medical miracle. We need what today is called "higher" education. It is society's investment in its future. Don't trash it. One less bomber, for example, would pay for an awful lot of education.

Mr. Medved, I think your math is faulty, in many ways, including the eventual cost to society.
 
 
+3 # medusa 2012-04-29 23:17
It seems strange to say that the worth of college degrees, specifically those from the great universities--c ould I say that--our Oxford and Cambridge--hasn 't been demonstrated. Farewell Einstein Oppenheimer Chomsky Cornell West . . ..
 
 
+9 # Texas Aggie 2012-04-29 23:22
I am not that familiar with Mr. Medved's work, but what I have heard is not favorable. That may explain why his argument is fallacious.

1. The basic fault lies in the very first statement, "feds can reduce future interest payments on student loans for members of the elite?" It isn't the elite that is getting those loans. It's the working classes that otherwise can't afford higher education.

2. The second fault lies in that no one, especially Obama, is planning to "increase burdens on stressed-out working families."

3. The third fault lies in the statement that these loans are subsidized. If there were a job economy, then people graduating with college or even technical degrees would be able to pay back their loans so these are loans that pay for themselves. That the republicans have distorted the system so that fly by night "schools" for profit have been able to glom onto the majority of the money when they have no intent whatsoever of educating the students concerned is not the fault of the loans, but rather the way they are apportioned.

He repeats fallacy #1 several times during the course of his sloppily thought out mess.
 
 
+7 # pbbrodie 2012-04-30 10:01
The statement that ANY of these loans are subsidized is a complete and utter lie.
When they say subsidized, the mean that the interest rate is lowered. How in the world can lowering the amount of profit they make on the loan subsidize the loan???
Subsidizing the loan would mean reducing it in some way, not reducing the amount of interest you have to pay on the money you borrow!
Finally, a college education should be free to all citizens, just like K to 12.
 
 
+12 # Art947 2012-04-29 23:32
1. The author neglects to mention that the Federal Reserve is currently providing "loans" to the banking community at almost zero percent interest rates! Why aren't these rates also available to the Federal Government to use in the provision of student loans? And at the current rate of approximately 3% for student loans, the U.S. Treasury would earn money on the loans that it makes to students.

2. An educated populace is an asset to our society. Ever report that I have seen indicates that individuals who complete a college education (or a Master's program, doctorate, etc.) earn a considerably larger income during their working lives. This also provides the Treasury with additional revenue as the tax burden on these individuals increases as well.

I can only assume that the author of this piece is simply trying to stir up a controversy where none really exists.
 
 
+6 # Regina 2012-04-29 23:33
Medved, like Romney, lives in a la-la land of his own weird imagination, rooted in free-flowing wealth. It's formerly zero-tuition public colleges and universities that have been so squeezed by their states that they are compelled to charge tuition at an ivy-campus rate. They also have trimmed course offerings to such paltry schedules that students must take more than four years -- with extra money encumbered for extra terms. They're our national future -- why should the "1%" be empowered to consign these students to such a huge unending debt? That's not in the national interest -- but then, neither is the Republican/Tea Party or any of its mouthpieces.
 
 
+9 # Texas Aggie 2012-04-29 23:37
4. To say that loans are quickly paid back because most of them are held by people under 30 deliberately avoids mentioning that most of the loans have been taken out in the last ten years so you wouldn't expect many to be held by older people. In addition, Mr. Medved conveniently forgets to mention that until the Bush's lack of job creation starting 12 years ago, it was a lot easier to find a job that would pay back your loan.

5. Focusing on the half of students who owe less than $12,800 ignores the other half that owes considerably more. That the mean is much more than the median doesn't mean that there are a few high outliers. It means the opposite. Draw the curve yourself and see what happens. Mr. Medved is either dishonest or ignorant.

6. Any thoughtful person realizes that Barro's "analysis" is just wrong. Students don't overspend because of low rates. Right now they go to the best school they can afford. If the rates were raised, they just wouldn't be able to go to school at all, which may be the goal of Medved and the rest of the right wing elite.

7. When he holds Romney up as an example of someone who pulled himself up by the bootstraps even though going to a BYU instead of an Ivy League school, I about choked. Romney didn't become rich through his own accomplishments . He got that way because of the head start his dad gave him, just like Bush.

Did I mention that he repeats fallacy #1 several times?
 
 
+1 # bluepilgrim 2012-05-01 00:21
Mean, mode, median...

You are correct. It's like saying, if most customers are kids stopping in after school to buy only a candy bar, that the median grocery bill at the food store on any given day is 89 cents.

I don't think it's ignorance; I think one definition of a medved is a species of poisonous snake.
 
 
+10 # Texas Aggie 2012-04-29 23:42
He keeps trying to make people believe that these loans are subsidized by the government when in fact they are paid back except for reasons given above. And that isn't a problem of the loans, but a problem of how they were alloted and the present economic climate that the republicans have put us in and are fostering in order to make Obama a one term president.

Frankly, this article looks like something Glenn Beck or Sean Hannity would write. Was it really written by someone who claims to be a reasonable thinker?
 
 
+2 # Holmes 2012-04-29 23:42
What a load of manure - well I would send a sample down to the soil testing lab to see if it has any useful content at all, before using. I also checked the date - it was not April 1 so what's the excuse for this nonsense or is it a spoof?

So community does not matter, so future investment in skills, is worthless.

Higher education is a future investment for the community, from the mundane general practitioner to the most exotic astronomer or to your skilled plant breeder for the next crop when your wheat has failed due to the new stem rust strain.

Picking winners is difficult, so plant breeders make many crosses and then grow them, test them and select the best ones - say 1 in 15000 or so are what is needed. So if we limit the pool to educate to those who are wealthy /privileged to start with, the range of variation is not great, so the future does not look good.

Surely free education is financed by the community tax system. If it is not progressive, ie those with more pay more, it could be suggested that it is a burden on the poor. But it could also be considered that it is merely a community investment in future superannuation. For example the contemplation of the square root of -1 lead to the ability to compress a whole movie onto a DVD, not bad for thoughts originally confined just an arcane academic curiosity.

Thinkers suggesting the above are merely self seeking, short term exploiters who do not invest.
 
 
+8 # Carbonman1950 2012-04-30 00:28
Without precisely disagreeing with much of what Mr. Medved asserts, I find a small voice in my head saying... "They're loans, not grants. How is providing loans at near market rates a subsidy?"
 
 
+9 # labman57 2012-04-30 00:50
It's a curious position being taken by the tea party/conservat ive movement -- the idea that only kids from wealthy families are deserving of a college education, and that the economically-di sadvantaged yet intellectually- gifted potential students are "elitists" and should be scorned and denied higher educational opportunities.

Mr. Medved should stick to the movies -- he knows nothing about real life.
 
 
+7 # neddycat 2012-04-30 03:54
Besides the points made above, we are currently loaning banks money at less than the interest amount on student loans are NOW - before the scheduled increase. I think we can agree that taxpayers contributing to the education of our citizens is a much more worthy goal for our society than working to loan the banks money at next to nothing.
 
 
+5 # DikBala 2012-04-30 05:33
This author's rant is almost incomprehensibl e to me. Apart from the obvious point that we do live in a society and there is a clear social value to having our youth educated, his main complaints don't even really hold water.

The wealthy will not have any problem financing their children's education. The middle class would indeed be taxed for this, but the benefits for their children and our next generation far outweigh the distributed cost (unlike the case of, say, endless wars in the Middle East). The poor are not paying taxes because they are not making enough to do so, but making our educational system more and more expensive merely adds additional obstacles to their aspirations of giving their own offspring a better chance than they had to be part of the American mainstream.

Every other developed country in the world recognizes the great value of subsidizing the education of the next generation to keep society strong and vital. We used to as well. We abandon this practical notion at our peril.
 
 
+4 # RMDC 2012-04-30 05:34
Most college students are not rich. I have a college degree and I worked my ass off to get it. Most college students work while going to school. It is a fact, that college tuition is out of control.

If the FED can give loans to banks at 0 percent interest, then the USG can make student loans interest free.

The nation also needs unions or organized labor to bring up the wages of citizens without college degrees. The fact that the USG has conspired with corporations to bust unions and drive wages down is not an argument against those who go to college and graduate school. Our whole society needs national policies that favor better education and better wages. This is what the OWS movement is saying.

The real problem is not the average borrower who has $12K in loans. The loans are themselves debt traps for many. The real interest rate for many borrowers is over 12% and those loans double or triple over time when penalties are imposed for late payments. People trapped in a loan simply have a tap on their incomes for life.

Medved is a radical christian fundamentalist. He is a shill for the 1%. He does not want a successful middle class.
 
 
+4 # opinionaire 2012-04-30 06:12
It was my good fortune, though having to pay for my own education, and having done so through a Ph.D., to have done so many years ago, when it was possible to do so without crushing debt. Society-but not necessarily political parties-consist ently benefits from an educated populace capable of thought, of weighing ideas, and of judging data with some accuracy. Where does this author imagine the next generation required to serve specialized needs of the continually aging population will come from? This would include caring professionals, as well as inventors with innovations?
 
 
+7 # Progressive Patriot 2012-04-30 06:32
There's one MAJOR false premise in this article ... the majority of people who are buried under college loan debt are NOT part of the "elite". Most of them are from the Middle Class, or even have poor parents. There are many older adults that are still struggling to try to pay off college debt from years ago.
 
 
+5 # Todd Williams 2012-04-30 06:33
Let me point out that Brigham Young is subsidized by the Mormon Church. Also, how about most of the kids who borrow money
for community colleges or other public universities? Why should they pay high interest rates? We should encourage more college education, not less.
 
 
+3 # MidwestTom 2012-04-30 06:55
In America taxes are based on ones income, not ones education. There are many 'uneducated' people who are very successful. This article is way off of the mark. Many fear that if our economy fails to recover soon, accepting the fact tat neither Republicans or Democrats are willing to end military spending, we may soon be faced with choosing between education or heath care in our government budgets.
 
 
+1 # xflowers 2012-04-30 07:37
Medvev is cherry picking to argue a point of view, much as the right has done over the years to denigrate the poor as "welfare queens." Obama and Romney are far from the typical student who gets and needs student aid. (It's hard for me to believe Romney ever needed it or got it. And God bless the opportunity that allowed Obama and Michelle to get it!) Most students don't go to ivy league schools, and most don't land high paying jobs making the loans easy to pay back in a few years. I know of what I speak since I would not have been able to finish university without the availability of student loans; and even at the much lower debt I accumulated at a time when tuition at state universities was cheap, it took quite awhile to pay it back on my college lecturer's salary. With today's much higher tuition even at state schools, many would be students probably feel they can't afford college even with the availability of student loans because the amount they would have to borrow is daunting. The US is faced with many decisions on this one. Do we educate our young or not? What is the cost to them and to us as a nation if we do not? And if we believe that cost to not educate is too high, how do we pay for it?
 
 
+7 # pbbrodie 2012-04-30 08:03
When I began reading this, I thought it was satire. This can't possibly be taken seriously by anyone with college age children, especially ones who are relying upon student loans to pay for their college education. Actually, upon further reflection, the article is so flawed that I don't believe anyone should take it seriously.
My son attends a public university, Clemson University in South Carolina. This is hardly attending an elitist Ivy League college. In only 3 years, he has accumulated an enormous debt of nearly $40,000. By the time he graduates, this will be more than $50,000. This is hardly the sort of debt anyone needs to have burdening them as they start out life. On top of this, there are very few jobs for current graduates and paying these debts with no income will be crippling.
I could go on and on for several pages writing the reasons why this article is complete rubish. The author of this article is completely out of touch with almost everything related to the costs and benefits of attending college financed by student loans.
 
 
+5 # brianf 2012-04-30 08:14
Most interest rates are at historic lows right now. My bank pays my savings account about 0.2% interest. That's one fifth of 1%. And the banks have been getting huge loans at 0% interest. There should be no need for anyone to have to pay for student loan rate reductions with taxes. The private student loan rates are way too high and we need laws that reduce them to only a little higher than the banks are paying us in interest, just enough to make a modest profit. If banks refuse to give loans at these low rates, then the law should forbid them from getting cheap loans or bailouts from the Fed or the government.
 
 
+1 # jwb110 2012-04-30 10:33
I had student loans come due during a previous period of recession. One week out of every month there was no money for food. I didn't qualify for unemployment and there were no food stamps. Staying underemployed until the recession passed kept me underemployed until this recession where I was not employed at all. Payback is more than a bitch.
As for Mitts education at Brigham Young. Try getting in if you're not a Mormon. If your father is George Romney you do not need an Ivy League education to gain access to the "
insiders club."
As for China buying more of this debt. They don't hold the majority of the debt. The 1% Americans hold the lions share. Russia, China, Germany and the Middle East account for less than 5 % of the debt.
This whole thing is a question of employment. If you're employed you can pay the money back. As for the wealthy waiting to pay it back? Take it up with their accountants.
 
 
+1 # bluepilgrim 2012-04-30 10:33
There is no reason why any civilized society can't have free education to whatever level students are capable and interested -- and many reasons to do so. Anything less is the country shooting itself and its future in the foot.

The author of this article is some kind of prankster, clown, is insane, or is a right wing propagandist for the plutocracy.

I don't know why RSN keeps running lousy articles from the Daily Beast, and from people like this. Waste of time and electrons! There is so much better around that the space could be used for, written by people who actually know things and can think, and would be informative. (Stuff from the NY Times is bad enough.)

Yeah -- I think we already know that we are in the middle of class warfare and the destruction of the country. Now, what can we do about it?
 
 
0 # MylesJ 2012-04-30 11:00
If schools ran by competitive exam it would be good for the country to educate those with academic potential. It would also be good to provide serious technical traning for those who don't win admission to univesities. None of this "the kid is 200 points below average on the SAT but he will pay list price so he goes to the top of the list"
 
 
-1 # ojkelly 2012-04-30 13:10
I think many of you miss the point. The $6 billion subsidy just permits colleges to charge more and professors to work less. Education is priced at the maximum that hard working parents can pay plus the maximum debt burden that the kids are allowed to sign on for, and the government subsidy just allows the kids to sign a bigger note and still permit Sallie Mae to sell the note to Wall St. Demand is inflexible, we all will work to support our kids and pay the max we can.Harvard can give bigger scholarships rather than take money from working parents, and it sure doesn't need taxpayer money. Would you be against requireing Harvard to rebate the federal subsidy? I mean, how much tax do they pay on their income?And anyone who donates to Harvard gets a tax break, so Uncle Sam (you) has a "matching gift to Harvard" program.If not against a rebate, then why do you insist on Uncle Sam paying the subsidy in the first place? Tuitions go up and up and up...and there is a line to pay them.Eurpean education is quite cheap, excellent, and open only to a few by competitive exam.
 
 
+1 # Buddha 2012-04-30 16:27
Top reason, and the same reason I gave to my hyper-conservat ive parents who screamed "why should their taxes go to Pell grants for people to get free education?": because the future scientist or doctor who cures cancer or AIDs might not be the child of a Plutarch who can "pay their own way" through college. Without investments in education and keeping it cheap, we are turning away the very intelligent and qualified candidates that our economy and society is going to need in the future, to provide cures, to figure out new energy technologies, etc. Intelligence has no correlation with the financial assets of one's family.
 
 
0 # The Voice of Reason 2012-04-30 18:19
"Moreover, borrowers owe a median of $12,800,"


Where does he get this figure, if not from thin air?
 

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