WaPo Editorial Board : Elizabeth Warren has the wrong answer to America's student debt problem

[Celerity]

https://www.washingtonpost.com/opinions/elizabeth-warren-has-the-wrong-answer-to-americas-student-debt-problem/2019/04/23/a67f78e8-65e1-11e9-a1b6-b29b90efa879_story.html

TRAILING IN the polls, Sen. Elizabeth Warren (D-Mass.) is running ahead of the Democratic presidential pack in terms of policy specifics. We hope other candidates will emulate her willingness to lay out an agenda. Alas, her latest big idea — to eliminate vast quantities of student debt and make public universities tuition-free — is not a sound idea.

The nation’s households owe almost $1.5 trillion in student loans, according to the Federal Reserve Bank of New York. This represents a burden on many families, which, under Ms. Warren’s plan, would disappear completely for 75 percent of them, and at least partially for 95 percent. That’s because she would forgive debts up to $50,000 — just over twice the average federal student loan balance, $23,000. And she would do so for borrowers with a household income under $100,000 — some 80 percent of the population. Even borrowers earning up to $250,000 would be eligible for some relief, which would total $640 billion overall. Free college would add $600 billion or so more, for a total price tag over 10 years of $1.25 trillion.

No one can accuse Ms. Warren of thinking small. What she really needs is a better sense of proportion. Her premise seems to be that student debt is all burden and no benefit, but this is not true: It represents an investment in skill acquisition that pays substantial long-term benefits. President Barack Obama’s Council of Economic Advisers estimated this lifetime “earnings premium” at about $1 million over a worker with only a high school education. It’s not unfair to expect people to pay back their loans out of that income. What might be unfair is debt relief to the exclusion of other priorities with wider benefits, including to people who did not go to college at all. Ms. Warren proposes a wealth tax to cover the cost, the proceeds of which would then not be available for alternative, possibly more progressive uses. In any case, default rates are actually falling slightly, according to the latest Education Department figures; 84.7 percent of borrowers were current on their obligations as of the end of 2017, according to the New York Fed.

As for tuition-free college, why should children of families in the upper reaches of the income distribution scale receive an income-enhancing state-university education for nothing, when their parents are perfectly capable of helping defray the cost?

Other Democrats have, quite properly, raised feasibility concerns about Ms. Warren’s plan. “I have to be straight with you and tell you the truth,” Sen. Amy Klobuchar (D-Minn.) told a group of New Hampshire students recently, in explaining why she wouldn’t match Ms. Warren’s offer. For us, though, policy priority is the essential concern. Student-loan defaults are concentrated among students who attended for-profit institutions, or who accumulated low loan balances but then dropped out and were stuck paying the money back out of lower-than-anticipated earnings. Such issues are hardest for students and families of color, as Ms. Warren correctly emphasized. This calls for a targeted approach that relieves the worst financial stress of those least able to handle it, not a sweeping bailout for the middle class and above.




I do have to laugh at this (such a RW trope)

why should children of families in the upper reaches of the income distribution scale receive an income-enhancing state-university education for nothing

obviously it would not be 'for nothing' as they would pay a lot more in taxes

shoddy, slanted framing, I sorta expected more from WaPo, but not shocked they fell back to misleading canards

[radical noodle]

1. I'm not a fan of free college

for a couple of reasons, but I think there's some merit to helping pay off student loans, especially for those who are in some sort of public service like teaching, nursing, etc.

I like Pete's idea of a year of public service of some sort to pay off some of the debt, although he admits it would take some time and work to set it up.

[Celerity]

3. the college thing is the one huge disagreement I have with Pete, BUT I need to see more of what he's

proposing. My fellow (meaning the ones I am close with on a social basis in real life) American post-grad students are overall positively DROWNING in debt. 100K, 150K, 200K is so so common, 2 are above 300K en toto. That is just insanity.

[radical noodle]

4. You are preaching to the choir

I agree. I know what my daughter's student debt is. No matter how much she pays (in accordance with her salary as a teacher) the principal never decreases.

[yaesu]

5. Free community college is actually much better then giving the rich a 2 trillion dollar tax break

don't you agree?

[radical noodle]

12. I do agree

and community college is a bit different. I want to help students who are serious about college, not those that end up spending their time partying and then dropping out or flunking out. I say this having seen a few of my own family end up in that situation.

Those who attend community colleges are not there to party.

[PeeJ52]

2. Gee, why should children of families in the upper reaches of the income distribution scale ...

receive an income-enhancing public k - 12 education for nothing? Maybe because we should expand our goal as a nation to educate everyone beyond just the bare minimum. For those not interested or suited for a college education, a vocational or skilled trade path should be made available.

[yaesu]

6. yep, the more I see the elite crying about this the more i'm focusing on our true progressive

candidates for my primary vote. I already know who is not getting my vote.

[corbettkroehler]

9. Relating It To K-12 Public Education Is The Winning Argument

A large majority of Americans, except the most radical right wingers, agree that K-12 public education should be free. In a global workforce, we need to modernize that to trade school or at least 4 years of post-secondary education.

This is similar to the idea of raising the minimum wage: it is broadly popular across the political spectrum.

[Hortensis]

11. THIS. Notably, taxpayer dollars would be funneled

to public education at the continuing education level and, I'd hope, to both bringing public college costs back down to the ethical levels of my youth and to making more of our state colleges and universities top-drawer schools.

A lot of the reaction against free education for students of wealthy families is the notion that we'd be paying for Harvard legacies. We would for those who chose to attend Indiana State or U of Indiana.

And as you say, it has popularity. Support from upper income levels is very important to successful programs. They donate. They vote. They pay taxes. They have power. It has to be about them also.

[crazytown]

7. Mr Bezos does not like wealth taxes.

[aidbo]

8. Glad they think the 2% wealth tax is 'nothing'.

I’m not shocked about WaPo publishing something like this. It’s owned by the richest man in the world. In 2016, they published 16 hit pieces on Bernie in the span of 16 hours.
https://fair.org/home/washington-post-ran-16-negative-stories-on-bernie-sanders-in-16-hours/


WaPo is not your friend.

[Politicub]

10. If a wealthy person wants to send their kid to a state college, I think that's fantastic.

I'm pro. Instead of being exposed to only the upper echelon, they will get to know people from across the economic and social spectrum. And they will be better citizens because of it. Isn't that the reason we fund public education in the first place?

Everyone in America should have the right to a four-year college degree if they so choose. Just as they have the right for a public education. A high school diploma is an arbitrary cutoff.