Young people tax rebillion

[Rossoneri]

Don't even get me started on what's happening in the UK regarding university tuition fees and taxes....

[Lobowolf]

What, if any, is an reasonable percentage of the cost of their own higher education to expect students to pay?

[kenberg]

What, if any, is an reasonable percentage of the cost of their own higher education to expect students to pay?

A good question. I have a way of looking at it that suits me. When I started college, in 1956, tuition at the University of Minnesota was something on the order of $250 a year, a bit less I think. Minimum wage was in the neighborhood of a dollar an hour, typically I could get a job for maybe $1.25 or $1.50. With luck, I sometimes got as much as $2.00. So we are speaking of 200 or so, fewer with some luck, working hours to pay a year's tuition. OK, there was tax (real tax) on the wages but leave that be, both here and in the modern update coming next.

 

Assuming that a student can now get a job for around $7.50 an hour, then keeping things comparable would mean that tuition at a main campus of a good state university would be around $1,500 per year. At least here in Maryland, it's not even close. Even if the student can get $10 an hour, still 200 hours nets him $2,000, not nearly enough.

 

 

Of course it's not that simple. There are scholarships, reduced tuition, Pell grants, and so on. I benefited greatly from a scholarship myself. But the quality education at Minnesota for a very reasonable price was truly a wonderful thing. I believe such opportunity is worth preserving, and I think that society benefits as well as the individual. Many young people attended college who simply could not have done so with higher tuition rates.

 

Some things really were easier at one time.

[awm]

What, if any, is an reasonable percentage of the cost of their own higher education to expect students to pay?

I believe that anyone who's willing and able should be able to get a college education, and without being forced to work substantial hours during their schooling in order to do so (doing this tends to disrupt their classwork). However, I think it's reasonable to ask students doing this to take on a reasonable amount of debt provided it is negotiated at favorable rates and they will not need to pay it off until their college education is over.

 

So I guess my answer is, college costs should be completely covered by a combination of direct government subsidies and low-interest loans. Currently UCLA costs $8,851 per year in fees, plus $885 in required health insurance coverage and an estimated $1599 in books and supplies. This is on top of living expenses, which a full-time student presumably has to cover out of pocket as well. The total cost is estimated at roughly $25000/year. Ignoring the food and housing expenses, the total is a bit below $11,500 per year, for a four-year total of $46,000. The average salary for a college graduate right out of school (assuming they can find a job right away, which is extremely tough in today's economy) is roughly $46,000 a year. One should be able to get completely out of educational debt in less than ten years (this is about the time when people buy a house, which is another huge load of debt) and that seems tough given these numbers.

 

My view is that UCLA is thus slightly too expensive, even if we assume free availability of very low interest loans. The exact tradeoff depends on interest rates (which are often lower for educational loans than other types of loan), to what degree (if any) we factor in the living expenses, and what percentage of income is deemed "reasonable" expenditure per year for paying off a college loan.

[helene_t]

in this case young people protest education taxes..but bread has many

 

taxes...sigh....

Right, any transaction could be seen as a tax in some generalized sense. So what the universities have to pay to get the teachers to work for them is a "tax", too.

 

Without "taxes", universities would be able to provide teaching for free.

 

I used to believe in the money-free society when I was young and left-winged. But maybe tax-free sounds cooler.

[y66]

At the University of Virginia, in-state students pay just under $10,000 per year for tuition and fees; out-of-state students pay $32,000. So, in-state students are probably paying about 1/3 of their tuition cost. After adding living expenses, in-state students pay about half the total cost of their undergraduate education. That split seems about right to me. If that's more than students can reasonably afford to finance at similarly subsidized interest rates over, say, 8 years, then I agree something is out of whack, but that's not something I as a taxpayer am willing to cover.

[kenberg]

As a college student, I strongly preferred working to debt. After undergraduate and graduate school I had accumulated debt that took a year or so to pay off. Ten years of debt re-payment would have been very depressing.

 

During my college days, at least at the early part, I had no clearly defined plan for my life. I liked college, I liked it a lot, but I did not view this time as an investment in the future. I just liked what I was doing. Taking on large debt should be done only by those who are far more mature than I was at the time (and then only if necessary).

 

The rise of the community colleges is a partial solution. The tuition is lower, the student can live at home. Not ideal perhaps. The community college mentality would not have suited me at all, and I was more than ready to leave home anytime after the age of fifteen if I could just figure out the economics, but life is not always perfect and we can't expect taxpayers to support all of our preferences.

 

It's not clear that this problem is entirely solvable. Far fewer students went to college in the fifties so it was easier to subsidize those who did. Not for the first time, I see life of a young person as being much easier when I was young. My granddaughter starts college this fall. Looking at all that is involved, I might have just said the hell with it.

[blackshoe]

My parents divorced when I was in high school. Part of their divorce agreement was that my father would pay for (undergraduate) college education for each of the four of us. He got off lightly. He paid for my first two years, for my younger sister's two years of community college, and for my brother's one semester. My siblings didn't continue beyond that. My last two years, and two years of graduate school, I paid for myself. It took me five years to pay off the loans.Given the huge increase in tuition alone since then (about forty years ago) I'm sure today it would take longer.

 

I went to an Ivy League school. Tuition has always been relatively high there, but if state supported schools still charge as little as I've seen in this thread, the gap is even larger now than it was then.

 

I note that the student population is down about 50% from when I was a student there.

[jdonn]

It's going to take me 30 years total to pay off my loans and I didn't even go to graduate school (well one semester that I paid up front). Along the way I had 2 small scholarship and 2 grants so it could have been even worse (well presumably the same with higher payments) and I had 1 or 2 jobs at all points in college as well, which is pretty amazing for anyone who knows how much OKBridge I played back then.

 

Actually I could pay them off much sooner if I wanted to but they are locked in at such a low interest rate it would be like throwing money away.

[hrothgar]

What, if any, is an reasonable percentage of the cost of their own higher education to expect students to pay?

Personally, I don't think that it makes sense to differentiate between "higher education" and primary / secondary education.

 

Take a look at the following chart from the Bureau of Labor Statistics.

 

http://www.bls.gov/news.release/empsit.t04.htm

 

The unemployment rate for individuals hold a college degree is roughly

 

1/3 of that for individuals without a high school diploma.

About half that for individuals with just a high school diploma.

 

The unemployment rate dips even more if you look at post graduate degrees of various types.

 

A college degree, in and of itself, is no pancea. (I would hate to be a brand new college graduate with a liberal arts degree, and I would be equally unhappy to be 10 years older and looking for work). However, things are a hell of a lot worse for individuals looking for traditional "Blue Collar" work. Some of this is a factor of increased competition with low wage countries over seas, however, "productivity" gains in North American manufacturing are every bit as much to blame.

 

Most of the wealth creation in the North American economy is shifting over to occupations that require significant investment in education. I think that public spending in education needs to increase in a commensurate fashion.

 

I'm not suggesting that the government should subsidize four years of drinking binges down at the Delta House. At the same time, I do think that its reasonable to provide anyone qualified the opportunity to attend college.

 

I do think that we might want to reconsider how we choose to finance college degrees. Lets assume that I am a recent High School grad. (I need to get a comprehensive scholarship from the government for whatever reason). I think there might be some real value in requiring the high school grad to spend a couple years doing some form of civil service before heading off to school (could be military, could be peace coprs, could be road construction)

 

I think that a couple years more maturity would help a lot once the students got to college and two years doing roofing provides a great illustration why it might be useful to crack down and hit the books.

[hrothgar]

Coincidentally, I just ran across the following chart

 

http://www.calculatedriskblog.com/2010/03/...t=Google+Reader

[Winstonm]

Personally, I would rather have my taxes go to pay for subsidizing 4 years of drinking at the Delta House than 4 years of more Iraq war.

[phil_20686]

Principle reasons to subsidise education:

 

1) Heavily subsided educationi insures that you draw on the biggest possible pool of talent. Ie if some people are essentially excluded because of cost then your economy is not allocating its talent efficiently. This is important on a marco economic level because it seems intuitively clear that the more highly skilled your job is the bigger gain there is to the economy if you can do your job better. EG, if i can manage microsoft 1% better then that gains us more than if i can lay bricks 1% faster.

 

2) If education leads to better jobs, and education costs a lot, then very soon only the educated can afford to educate their children, which gives rise to a class society. This has a high social cost.

 

3) The governement (by which i mean it is in the national interest of the country) to maximise the gdp per capita. Then via tax and redistribution you can help the largest number of people who need it. Thus government subsidy is more like an investment in its citizens, which from a purely mercenary perspective, will increase the pool of talent who are competing for places, which will raise the quality of graduates, which will lead to higher revenue, so the government should at least pay for as much as is profitable.

[phil_20686]

Take a look at the following chart from the Bureau of Labor Statistics.

 

http://www.bls.gov/news.release/empsit.t04.htm

 

The unemployment rate for individuals hold a college degree is roughly

 

1/3 of that for individuals without a high school diploma.

About half that for individuals with just a high school diploma.

 

The unemployment rate dips even more if you look at post graduate degrees of various types.

If you are claiming that having a degree improves your employability, i think thats pretty uncontreversial.

 

If you are claiming that *therefore* giving out more degrees will lead to lower unemployment. I think thats an open question. For example, its clear that if 100% of people had degrees, gaining a degree would not give you an advantage in employability. The advantage derives partly from the skills you aquire at university, but largely from the fact that having a degree is self selecting - students compete to get into uni's so the unis pick the best students. Thus if your education system is selecting effectively, then your chart only shows that companyies are more likely to employ more able people, and your degree serves as a shortcut by which companies can discriminate between the suitablitiy of various canditates.

 

If you give out too many degrees, then their value as a discriminator drops, and consequently so does its value in terms of increased wages.

 

I think as well that normally joining a company teaches you the skills needed in that company far more effectively than a general purpose degree, thus the arguments that degres are crucial to the economy at large is somewhat flawed. On the other hands, there are a huge number of jobs for which further education is critical. Thus i surmise that there must be an optimal level to educate your population.

 

I have heard it said that the british economy is 17% graduate jobs. Thus i would guess that 20-25% is the optimum fraction of your population to go into university. This gives some room to grow, and accounts for the fact that not everyone who gets a degree will necessarily work in a graduate job. I do think in the future that this number will go up, but i seriously doubt whether there will ever be enough graduate jobs for the 50% of british youngsters who currently go to university.

[luke warm]

For example, its clear that if 100% of people had degrees, gaining a degree would not give you an advantage in employability.

i guess it depends... we could choose our plumbers then by post grad work... why hire a plumber with a bs when you can have a phd?

[jjbrr]

It's going to take me 30 years total to pay off my loans and I didn't even go to graduate school (well one semester that I paid up front). Along the way I had 2 small scholarship and 2 grants so it could have been even worse (well presumably the same with higher payments) and I had 1 or 2 jobs at all points in college as well, which is pretty amazing for anyone who knows how much OKBridge I played back then.

 

Actually I could pay them off much sooner if I wanted to but they are locked in at such a low interest rate it would be like throwing money away.

Sorry, I'm grunching this whole thread but I saw this post and had to brag that I made a profit from going to college. Full ride+ excess financial aid yielded $2500 a year in profit.

[kenberg]

I was uncertain whether I should grunch a bit myself. It is an issue worth looking at although I wouldn't, myself, go nuts over it.

 

I can understand Josh's slowness in paying off the debt. Why should he rush? Presumably we can also understand that a taxpayer might look at this and say "Hmm, my tax dollars are supporting a forty year subsidized below market loan? Maybe I need to rethink my support of this program." And of course the jjbrr post adds to this. How extensive is this, we might ask. Definitely more than we would like it to be.

 

My outlook would be more toward trying to learn what real needs are and how they might be met, Not everything needs to cost a lot of money, here is an example:

 

The next door neighbor girl graduated from high school last spring, wants to study psychology, and is attending the local community college. This is just right for her. She had to start with non-credit math, we are friends with the neighbors so my wife volunteered to tutor her, she has now moved on to a credit class and is doing well, probably A work. I expect, after two years, she will finish at the CC and transfer to a four year school. The comfort of home and a helpful neighbor is just what she needs. Giving her some money to go off to Bryn Mawr or some such would be not only a waste but a mistake. I think this is replicated in great numbers throughout the land.

 

At the risk of sounding a little corny, I would like young people to develop their talents as they see them (exceptions to be made for hit men and drug dealers). For many, two years of community college followed by two years at a four year campus is not only adequate it is ideal.

 

Of course there are other cases, very strong students are out there. A kid who is ready for MIT should go to MIT. Or Cal Tech. But before we fork over a lot of tax payer cash for this we should be pretty clear that it is where he really belongs. We should be clear that he needs our help. And we don't need to give him a forty year loan.

[PassedOut]

Sorry, I'm grunching this whole thread but I saw this post and had to brag that I made a profit from going to college. Full ride+ excess financial aid yielded $2500 a year in profit.

Is this the same jjbrr who posted in the "simple conversational question" thread?

[jjbrr]

I completely agree with kenberg. For many students, 2-year CC is such a perfect situation. They can work a job in addition to taking classes, which gives them valuable work experience while teaching them independence and money management and all the important life skills they need to be good at. I hope we all agree here that many 18 and 19 year olds aren't at a point in their life to make important decisions about the direction the rest of their life will take. I went to a school where first year dropout and failure rates were amazingly high. Many of the students who flunked out for no reason other than irresponsibility and immaturity were eligible for and received thousands of dollars in scholarships. These scholarships are funded by the state lottery, but I don't know if that's the source of all the money.

 

Anyway, I think we can all agree that there is some waste that occurs regarding taxpayer money. Some of that, as far as education goes, is wasted because of poor choices by students themselves.