Yesterday’s announcement from Joe Biden that, with a flick of his pen, he was canceling $10,000 in student loan debt ($20,000 for Pell grant recipients, actually) — thus piling an additional hundreds of billions of dollars to the deficit — had quite a lot of people seeing red. Understandably so, since it effectively amounts to stealing money from responsible adults and handing it to irresponsible children. And it does that without actually doing anything meaningful to address the very real problem of insanely high — and still climbing — college tuition costs and devaluation of college degrees.
We could seriously spend the coming days, weeks, months, and even years doing posts highlighting hardworking Americans’ extremely righteous indignation over President Biden’s unlawful — and wholly unjustifiable — power play.
Or, we could turn the mic over to Iowahawk and let him shred the people and the institutions responsible for so many of us getting screwed without recourse. Yeah, let’s do that.
Strap in, folks. It’s a long, bumpy ride, but we promise it’s a ride worth taking. And it all begins with Laurence Tribe’s asinine and tone-deaf tweet about being grateful that thousands of his Harvard Law students will be getting taxpayers’ hard-earned money to help pay off their debt:
Good news for thousands of my former students. I’m grateful on their behalf, Mr. President. https://t.co/FzmvcQNkli
— Laurence Tribe (@tribelaw) August 24, 2022
That lit a fire under Iowahawk, who took it and made a veritable inferno:
Thank god we're finally addressing the plight of America's most disadvantaged community, Harvard Law graduateshttps://t.co/zAeC0wgXyh
— David Burge (@iowahawkblog) August 24, 2022
I mean, it's kind of surprising to learn there's that many Harvard Law alumni living paycheck to paycheck in a doublewide, working double shifts at Waffle House to pay their crushing student loan payments, but I guess Professor Tribe is the expert here
— David Burge (@iowahawkblog) August 24, 2022
Iowahawk’s being facetious, but the idea that Laurence Tribe’s former students would be struggling is actually pretty fitting when you consider what his expertise is truly worth.
Before we post the rest of the thread, we’d like to take a moment to thank Iowahawk not just for speaking for us so eloquently and intelligently, but also for reminding us that there are, in fact, some students out there who took out loans in order to further their education and were arguably victimized by bad people. To just blame every student who ever took out a hefty loan for college is to oversimplify the problem.
Anyway, let’s get back to it:
Fact of the matter is, grads of elite colleges like Harvard aren't the beneficiaries of loan forgiveness. Harvard has a negligible (1.1%) fed student loan default rate. And I do have sympathy for people who took out a loan, at 18-22, for the magic beans of a college diploma.
— David Burge (@iowahawkblog) August 24, 2022
Like I said yesterday, the rogue's gallery of "colleges" with insane fed loan default rates are proprietary for-profit places, particularly barber & cosmetology schools, some approaching 70%. They prey on naive young people and should be blackballed from more fed student loans.
— David Burge (@iowahawkblog) August 24, 2022
Here's bottom of the barrel, a list of "colleges" with fed student loan default rates of 40% and higher. They are less colleges than they are long cons to use naive 18 year olds to scam federal money. pic.twitter.com/TRNIfBsLyi
— David Burge (@iowahawkblog) August 24, 2022
The next group of colleges that have high loan default rates tend to be public community and vo-tech schools, many in economically depressed areas. Again, I have sympathy for those saddle with student loans for these schools. pic.twitter.com/PwcNecLMll
— David Burge (@iowahawkblog) August 24, 2022
IMO such places should have free tuition, but as a practical matter they *are* very inexpensive. Their high default rates stem from a number of underlying issues. First, many of their students need remediation and aren't well prepared for college, and end up dropping out.
— David Burge (@iowahawkblog) August 24, 2022
A second issue is that while the school may have low cost, the fed student loan program doesn't quite track with student expenses. Possible to get a $10k student loan to attend a $5k/year community college.
— David Burge (@iowahawkblog) August 24, 2022
It's not atypical for 18-year old community college students to rack up five figure debt, drop out in the first year, and have that debt hanging over their head without the benefit of even an AA diploma. A reasonable solution is to provide free tuition for CCs w/ oversight.
— David Burge (@iowahawkblog) August 25, 2022
And how about four-year colleges and universities?
When we get to 4-year institutions the picture is sort of a two-by-two matrix. Ivys (which everybody on pundit Twitter seems to think are the only colleges in existence) have minimal default rates, as do highly selective public universities.
— David Burge (@iowahawkblog) August 25, 2022
The default rates tend to climb as you get into 2nd and 3rd tier colleges. For instance UCLA, UC Berkeley, Stanford all have default rates <2%; Fresno State 4.7%; CSU-Bakersfield 5.3%.
— David Burge (@iowahawkblog) August 25, 2022
The other dimension to the student loan default rate matrix is the *field of study*. I can't find default rates by specific majors within specific colleges, but it's reasonable to assume arts & humanities majors account for a disproportionate % regardless of the college. pic.twitter.com/Qj95V2AXoC
— David Burge (@iowahawkblog) August 25, 2022
As much as I'm for people following their artistic bliss, it's not unreasonable to question why we should extend student loans on a no-questions-about-major basis.
— David Burge (@iowahawkblog) August 25, 2022
It’s not only not unreasonable, but it’s entirely reasonable.
*Not to say there aren't art schools that do pretty well, student loan default-wise; Art Center College Of Design
in Pasadena for example has only a 1.1% default rate, which is as low as Harvard.— David Burge (@iowahawkblog) August 25, 2022
Anyway I'm late for dinner, I have a few other thoughts on this I will get to tomorrow
— David Burge (@iowahawkblog) August 25, 2022
He did, and he picked up right where he left off:
To continue: yes, student loan relief helps out poor people who were lured at young age into taking student loan debt to attend a shitty for-profit college, on the premise it was a ticket to a lucrative career in makeup and hair styling. In a way, that's good.
— David Burge (@iowahawkblog) August 25, 2022
Don’t be sorry, sir. You’re exactly right.
As I said the other day, the entire raison d'etre for these places is insane state occupational licensing requirements, like Texas's 1500 minimum hours to be a barber. And… surprise! The biggest lobbyists for these requirements are the barber colleges themselves.
— David Burge (@iowahawkblog) August 25, 2022
Student debt relief also helps those who drop out of college due to lack of preparation, leaving them with no degree, a lost year of wages, and plenty of debt. Again good. But the follow up should be the college refunding the student's subsidized tuition to the loan program.
— David Burge (@iowahawkblog) August 25, 2022
Now there’s an idea.
The lender (our) attitude should be: we subsidized this student's education at your school, on the premise they were prepared and the experience would benefit them enough that they would be able to pay it back. Clearly that didn't happen, so fork over the refund.
— David Burge (@iowahawkblog) August 25, 2022
Sounds fair to us!
But the relief also benefits recent graduates of selective colleges of dubious need — 2018 theater graduates of NYU for instance. Many selective colleges, like Harvard, have negligible default rates and experience suggests their grads would've paid loans without relief.
— David Burge (@iowahawkblog) August 25, 2022
Even at expensive, highly selective colleges, there are study programs within it with unacceptable default rates. If there is an obvious glut of artists and actors unable to repay student loans, it's fair to ask why we should be further subsidizing more of them.
— David Burge (@iowahawkblog) August 25, 2022
The student loan relief makes no such distinctions. Do you make less than $125k? Here's $10k off your principle. Did you have Pell Grants? Double it.
Worse, it doesn't make even the slightest nod toward reforms that would address the root of the repayment problem.
— David Burge (@iowahawkblog) August 25, 2022
Worse yet, it pretty much incentivizes current and future student debt holder to default at even hire rates. Why pay back your loan, when eventually there'll be another relief package coming in a couple years?
— David Burge (@iowahawkblog) August 25, 2022
Yep.
The answer, in large part, is the student loan program itself. Offering $10k in tuition assistance at a $20k college just encourages the college to hike tuition to $25k. And use the proceeds to add layer upon layer of administrative bloat and overhead.
— David Burge (@iowahawkblog) August 25, 2022
At many (if not most) top universities in the US, administrative staff outnumbers teaching staff, with vast fiefdoms of admin departments with no apparent function other than useless busywork.
— David Burge (@iowahawkblog) August 25, 2022
As the lenders underwriting all this, it may be time for us to bring in the Bobs. pic.twitter.com/GiDB7mgpeZ
— David Burge (@iowahawkblog) August 25, 2022
Unleash the efficiency experts ASAP!
After the dust clears on all this, in my mind the simplest and most effective way to reform the student loan system is to require colleges to co-sign the loan contract. The students have skin in the game, taxpayers have skin in the game, now it's time for colleges to ante.
— David Burge (@iowahawkblog) August 25, 2022
just my 2c. End of rant.
— David Burge (@iowahawkblog) August 25, 2022
That rant’s worth a hell of a lot more than $0.02. It’s arguably worth more than a college degree these days, actually, because people could actually take what it taught them and run with it.
Can’t say that for a college education so much anymore.
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