An Immodest Proposal for Higher Education
The American higher education system is not unlike our healthcare system: vast and world-leading in innovation, and often expensive out of all proportion to results. As such, my chief objection to Pres. Obama's plan for remaking the college loan system as we know it is that it is too dainty by half.
1. Income-based repayment: Under the President's proposal, student loan payments would be capped at 15% of pay, while those making less than 150% of the poverty level would be excused. What does this sound like? Why yes, Virginia, it's just like a flat tax, which as we all know is actually regressive and only benefits the well-off. Look, if Bain or Goldman want to offer 22-year-old associates an $80k salary, why shouldn't they be expected to pay, say, 39% of their income towards their loans?
2. Loan forgiveness: Income-based payment is a neat idea, since it matches payment to income, much like an interest-only or negative amortization mortgage allowed people to buy the house they always dreamed of. "But these loans trapped people in debt they could never pay off!" True, but the President thought of that. Since 15% of a shitty salary for 45 years may not amount to much, Obama's proposal forgives all debt remaining after 10 years. But this plan still guarantees that college graduates will spend their entire 20s in lifestyle-crippling debt.
3. So long as you do the right thing: Well, to be precise, not everybody can have their loans forgiven. You need to do something public-spirited, like working for the government. Of course, you can do that now--it's called joining the army--but this expands the idea to include a whole lotsa people who don't like wearing green clothes or sitting around on a boat all day looking for pirates. And just to be open-minded, well, this forgiveness will probably be extended to non-profits outside the government, as well. But let's be clear, this absolutely must apply to not just any old non-profit, since quite a few promote only fascist agendas or the interests of the wealthy elite.
4. Cost-containment: Something will be done to encourage colleges to control their costs. What exactly, well, nobody is too sure, we'll get to that a bit later.
As you can see, this is really a terribly convoluted mess that seems constructed only for political rather than rational, pragmatic reasons. Therefore, I suggest a radical simplification: let's just have a single-payer tuition reimbursement system.
Is it crazy? No crazier than most of the countries in Europe, where something along these lines is pretty much the norm. Having the government cover everyone's tuition would simply bring us in line with the rest of the advanced civilizations of the planet and guarantee a level playing field for all.
Of course, this could get expensive pretty fast. After all, people tend to have an unlimited appetite for education, and educational providers have no structural incentives to control costs. Now the immediate thought is to simply provide a set of fixed payments, say, $1,000 per class per student, max, with reasonable cost-of-living adjustments based on whether it's Hayseed Community College and Oil Change in Nebraska, or Suffolk University here in Boston. This is a good start, but as we've seen with Medicare, it would still provide an incentive for colleges to make students take unnecessary courses, to practice "revolving-door education" where they pack hundreds of students into giant lectures, or for students to stay in school long past the point of usefulness.
No, we need to think creatively about ways to "bend the cost curve." Instead of paying for services rendered, we should pay for educational outcomes instead. A school whose student comes from a single-parent family in a bad neighborhood and graduates in three years with a 4.0 GPA in peace and justice studies and goes on to be a community organizer in the perpetually Katrina-ravaged ninth ward of New Orleans? 100% tuition reimbursement for you! A four year econ major with a 3.2 who takes a job on Wall Street? 85%, and tell the greedy bastard he should donate to the alumni fund, ferchrissakes. What about an English major from the suburbs who joins a band and smokes a bit too much pot and flunks out? 0%, bitch, do we look like a friggin bank or something?
Of course, places like Harvard or Yale might object that it costs a lot more to provide their level of education than what you see at UMass-Lowell, but that's because they provide such a cushy overpaid lifestyle to their professors, not to mention the armies of administrative staff who add little value. After all, the entire bursar's and financial aid office staffs can be let go tomorrow. Likewise, you might hear places like Hamilton or Reed college that say that even if their graduates don't go on to become government czars or university presidents, that their graduates think it was worth it to them, personally, that it enriched their life. That's charming, 'cept you see, pal, this isn't about you, it's about us, as in the American Taxpayer, and she don't want to pay for no Art History classes taught by a nobody in your middle-of-bumfuck school.
Now you might go on to object that applying some sort of "comparative effectiveness" standards could cause us to become like China or India, where everyone goes to school for engineering or hard sciences and the humanities are considered costly luxuries only for the elite few tippy-top students. Well, that's easily resolved since we'll be the ones determining effectiveness, so we'll make sure there are precisely enough Marine Biology majors for what the country actually needs, and we'll make sure that resources are allocated only to the types of students who are likely to benefit. Naturally, these decisions will be completely free of personal biases, quirks, institutional favoritism, or flat-out political quid-pro-quo, since we're much better than that. No, really, take our word for it.
Likewise, it would not come as any surprise if, after all of this, certain schools would want to "opt out" of the system altogether and charge students directly for services rather than accepting government funds with several thousand completely individually defensible compliance rules attached. If this were to happen, such wonderful public-minded institutions would once again become islands of elite privilege, packed to the gills with WASPy C-students more interested in crew than First Peoples. Fortunately, we need look only to our friendly neighbor to the North, who solved these sorts of problems by banning service providers from opting out in this fashion, and they seem pretty peaceful. To those who think that this constitutes a grievous assault on personal liberty, of the kind that might incite people to armed insurrection, well, the Canadians have that figured that out, too.
After all, they knew better than to get rid of a perfectly serviceable king.
1. Income-based repayment: Under the President's proposal, student loan payments would be capped at 15% of pay, while those making less than 150% of the poverty level would be excused. What does this sound like? Why yes, Virginia, it's just like a flat tax, which as we all know is actually regressive and only benefits the well-off. Look, if Bain or Goldman want to offer 22-year-old associates an $80k salary, why shouldn't they be expected to pay, say, 39% of their income towards their loans?
2. Loan forgiveness: Income-based payment is a neat idea, since it matches payment to income, much like an interest-only or negative amortization mortgage allowed people to buy the house they always dreamed of. "But these loans trapped people in debt they could never pay off!" True, but the President thought of that. Since 15% of a shitty salary for 45 years may not amount to much, Obama's proposal forgives all debt remaining after 10 years. But this plan still guarantees that college graduates will spend their entire 20s in lifestyle-crippling debt.
3. So long as you do the right thing: Well, to be precise, not everybody can have their loans forgiven. You need to do something public-spirited, like working for the government. Of course, you can do that now--it's called joining the army--but this expands the idea to include a whole lotsa people who don't like wearing green clothes or sitting around on a boat all day looking for pirates. And just to be open-minded, well, this forgiveness will probably be extended to non-profits outside the government, as well. But let's be clear, this absolutely must apply to not just any old non-profit, since quite a few promote only fascist agendas or the interests of the wealthy elite.
4. Cost-containment: Something will be done to encourage colleges to control their costs. What exactly, well, nobody is too sure, we'll get to that a bit later.
As you can see, this is really a terribly convoluted mess that seems constructed only for political rather than rational, pragmatic reasons. Therefore, I suggest a radical simplification: let's just have a single-payer tuition reimbursement system.
Is it crazy? No crazier than most of the countries in Europe, where something along these lines is pretty much the norm. Having the government cover everyone's tuition would simply bring us in line with the rest of the advanced civilizations of the planet and guarantee a level playing field for all.
Of course, this could get expensive pretty fast. After all, people tend to have an unlimited appetite for education, and educational providers have no structural incentives to control costs. Now the immediate thought is to simply provide a set of fixed payments, say, $1,000 per class per student, max, with reasonable cost-of-living adjustments based on whether it's Hayseed Community College and Oil Change in Nebraska, or Suffolk University here in Boston. This is a good start, but as we've seen with Medicare, it would still provide an incentive for colleges to make students take unnecessary courses, to practice "revolving-door education" where they pack hundreds of students into giant lectures, or for students to stay in school long past the point of usefulness.
No, we need to think creatively about ways to "bend the cost curve." Instead of paying for services rendered, we should pay for educational outcomes instead. A school whose student comes from a single-parent family in a bad neighborhood and graduates in three years with a 4.0 GPA in peace and justice studies and goes on to be a community organizer in the perpetually Katrina-ravaged ninth ward of New Orleans? 100% tuition reimbursement for you! A four year econ major with a 3.2 who takes a job on Wall Street? 85%, and tell the greedy bastard he should donate to the alumni fund, ferchrissakes. What about an English major from the suburbs who joins a band and smokes a bit too much pot and flunks out? 0%, bitch, do we look like a friggin bank or something?
Of course, places like Harvard or Yale might object that it costs a lot more to provide their level of education than what you see at UMass-Lowell, but that's because they provide such a cushy overpaid lifestyle to their professors, not to mention the armies of administrative staff who add little value. After all, the entire bursar's and financial aid office staffs can be let go tomorrow. Likewise, you might hear places like Hamilton or Reed college that say that even if their graduates don't go on to become government czars or university presidents, that their graduates think it was worth it to them, personally, that it enriched their life. That's charming, 'cept you see, pal, this isn't about you, it's about us, as in the American Taxpayer, and she don't want to pay for no Art History classes taught by a nobody in your middle-of-bumfuck school.
Now you might go on to object that applying some sort of "comparative effectiveness" standards could cause us to become like China or India, where everyone goes to school for engineering or hard sciences and the humanities are considered costly luxuries only for the elite few tippy-top students. Well, that's easily resolved since we'll be the ones determining effectiveness, so we'll make sure there are precisely enough Marine Biology majors for what the country actually needs, and we'll make sure that resources are allocated only to the types of students who are likely to benefit. Naturally, these decisions will be completely free of personal biases, quirks, institutional favoritism, or flat-out political quid-pro-quo, since we're much better than that. No, really, take our word for it.
Likewise, it would not come as any surprise if, after all of this, certain schools would want to "opt out" of the system altogether and charge students directly for services rather than accepting government funds with several thousand completely individually defensible compliance rules attached. If this were to happen, such wonderful public-minded institutions would once again become islands of elite privilege, packed to the gills with WASPy C-students more interested in crew than First Peoples. Fortunately, we need look only to our friendly neighbor to the North, who solved these sorts of problems by banning service providers from opting out in this fashion, and they seem pretty peaceful. To those who think that this constitutes a grievous assault on personal liberty, of the kind that might incite people to armed insurrection, well, the Canadians have that figured that out, too.
After all, they knew better than to get rid of a perfectly serviceable king.
posted by The Snob at
9:32 AM
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