What is your opinion on student loan forgiveness?

[marshwiggle]

If there was a scam, shouldn't there be a class action law suit?

Civil cases seek compensation. This cannot be achieved if the bad guy has no resources, has gone bankrupt.

A criminal case can punish the wrongdoer but that does the victim no good.

I would say this is indeed a case for the government to compensate because the government [State government, I suppose] messed up its oversight.

For the future, one could envision offering and purchasing insurance against these sorts of malfeasance.

Who would offer it, and who should buy it? Should every student buy it just in case their institution goes belly up?

Insurance companies would offer it, and they'd watch the edcuational institutions hawk-like, guaranteed! Various institutions would have different premia attached to them, another piece of information for students. Purchase could be voluntary, too.

Insurance is heavily regulated at the State level. States would have to let it happen.

In that case the state should provide the insurance, or regulate the institutions so that doesn't happen. Otherwise it's just a money-grab where the state government basically licenses the insurance companies to take money from students. It's a regulatory creation of an unnecessary industry, rather than the government just cutting to the chase.

Upthread marsh wiggle stated that being a mechanic does not require a degree. Actually noT quite accurate as far as the current expectations to be a diesel mechanic (an AS for most), and they are in short supply. Of course, that shortage will be alleviated when we have all the autonomous electric long haul semis. Wait, won't that mean a different need? Also for people who have likely need at least an AS?

Huh. Who knew?

By "degree", are you talking about an "Associate's degree"? I think that's a US-specific thing; most places vocational programs have diplomas, and degrees are only for 4 year programs. In places with diplomas, that's what a mechanic needs.

[dismalist]

In that case the state should provide the insurance, or regulate the institutions so that doesn't happen. Otherwise it's just a money-grab where the state government basically licenses the insurance companies to take money from students. It's a regulatory creation of an unnecessary industry, rather than the government just cutting to the chase.

That is so unamerican!

Insurance regulation typically sees to it that there is no money grab, just enough profit to keep the insurance companies in business. Or do you think there is regulatory capture? What an evil thought. :-)

Regulate so that doesn't happen? No, mistakes get made. That's why we want insurance.

If the government is financially responsible for its regulatory mess ups, the cost is shared by all taxpayers, including those who didn't go to college. An  insurance scheme places the financial risk on perhaps all students or perhaps individual students.

[marshwiggle]

In that case the state should provide the insurance, or regulate the institutions so that doesn't happen. Otherwise it's just a money-grab where the state government basically licenses the insurance companies to take money from students. It's a regulatory creation of an unnecessary industry, rather than the government just cutting to the chase.

That is so unamerican!

Absolutely! :)

Insurance regulation typically sees to it that there is no money grab, just enough profit to keep the insurance companies in business. Or do you think there is regulatory capture? What an evil thought. :-)

But presumably it's ultimately some branch of the government (e.g. the courts) deciding what is a scam. Why do people essentially have to pay a private company to cover for the government not doing its job?

Regulate so that doesn't happen? No, mistakes get made. That's why we want insurance.

Again, why should individuals have to pay a private company to cover government screw-ups?

If the government is financially responsible for its regulatory mess ups, the cost is shared by all taxpayers, including those who didn't go to college. An  insurance scheme places the financial risk on perhaps all students or perhaps individual students.

But that means that the lowest income students are going to bear the greatest burden since they'll find the insurance most onerous. (And the richest students won't need to buy it since Mommy and Daddy will cover them anyway.)

The government should be responsible for preventing the poorest from getting preyed on by scammy institutions or scammy insurers. (For insurers, the best way to make money is to weasel out of covering as often as possible. Or, more correctly, to weasel out as much as possible when the payouts are going to be big.)

[downer]

If there was a scam, shouldn't there be a class action law suit?

Civil cases seek compensation. This cannot be achieved if the bad guy has no resources, has gone bankrupt.

A criminal case can punish the wrongdoer but that does the victim no good.

I would say this is indeed a case for the government to compensate because the government [State government, I suppose] messed up its oversight.

For the future, one could envision offering and purchasing insurance against these sorts of malfeasance.

Maybe someone could point me to an article describing this scam. Pres Biden didn't mention it as part of a justification for the loan forgiveness as far as I know. What proportion of the total does scam compensation represent? Who was at fault? Local governemtn, federal loan givers, and colleges that have now gone bust?

It seems that higher ed is, for all the accreditation agencies and government oversight, reminiscent of the wild west. There is great variation in what a degree means from place to place. A lot of places, despite being nominally not-for-profit, are still run on the basis of maximizing income.

For a long time I've been thinking whether we should be proud to be college professors. We have personal control over our actions, but we operate in a system that inspires plenty of mixed feelings.

[dismalist]

But presumably it's ultimately some branch of the government (e.g. the courts) deciding what is a scam. Why do people essentially have to pay a private company to cover for the government not doing its job?

That's the wrong framing. We have auto accidents. They could be ascribed to the government, I suppose. Then we'd have regulation making sure no one drives, or if not no one, the public would pay, not the class of drivers. It's more efficient for a competitive market to provide this.

But that means that the lowest income students are going to bear the greatest burden since they'll find the insurance most onerous. (And the richest students won't need to buy it since Mommy and Daddy will cover them anyway.)

I think you and I worry more about the distributional consequences of higher ed finance than many people on the board. Again, I think wrong framing. Always ask: Compared to what?

--If the evil profits had been confronted with the need to have students insure, and the insurance companies monitored these places, I doubt many would have opened. Then, the graduates of the remaining would have earned more money, justifying the insurance premium.

--Nice if this also applied to non-profits, too. There is some not so innocent stuff on our Colleges in Dire Financial Straits thread.


More generally, what is amazing about discussion of higher ed finance is that while there is certainly a college wage premium, for whatever reason, which justifies private financing, more and more public support is requested. We are just another interest group. This time, the interest group won, big time.

[marshwiggle]

But presumably it's ultimately some branch of the government (e.g. the courts) deciding what is a scam. Why do people essentially have to pay a private company to cover for the government not doing its job?

That's the wrong framing. We have auto accidents. They could be ascribed to the government, I suppose. Then we'd have regulation making sure no one drives, or if not no one, the public would pay, not the class of drivers. It's more efficient for a competitive market to provide this.

But the government does decide who can drive; driving without a license is a crime. I don't have to buy insurance so that if I get on a bus, or in a taxi, and the driver happens to not be licensed I'll be compensated if we're in an accident.  If the driver is scamming, it's the government's problem. Period.

But that means that the lowest income students are going to bear the greatest burden since they'll find the insurance most onerous. (And the richest students won't need to buy it since Mommy and Daddy will cover them anyway.)

I think you and I worry more about the distributional consequences of higher ed finance than many people on the board. Again, I think wrong framing. Always ask: Compared to what?

--If the evil profits had been confronted with the need to have students insure, and the insurance companies monitored these places, I doubt many would have opened. Then, the graduates of the remaining would have earned more money, justifying the insurance premium.

Can anyone just open "Bob's University" and start granting degrees? If there's any point where the government regulates who can grant degrees, then that should be the point at which insurance becomes unnecessary. By the government granting a license to give degrees, the government it has assumed the responsibility to ensure that the institution is legitimate, and any problem with that will be the government's, (and will presumably involve fines and/or jail time for the criminals in charge of the institution).

(As an aside, how does a person protect themself from the possibility of paying a fraudulent insurer? Should they buy "anti-insurance-fraud" insurance? And how do they ensure the vendor of that insurance isn't a fraud? Ad nauseum. At some point, individuals must be able to count on the government  to certify organizations or businesses, where there are criminal penalties for any organization or business faking the certification.)

[dismalist]

By granting me a driver's license the government certifies what? Not that I won't kill anybody. Thus, I must be insured.

By granting a license to a school, the government certifies what? Not that it will succeed. Thus, it behooves students to insure.

Mistakes happen, actually, especially when government does something, but never mind.

[jimbogumbo]

If there was a scam, shouldn't there be a class action law suit?

Civil cases seek compensation. This cannot be achieved if the bad guy has no resources, has gone bankrupt.

A criminal case can punish the wrongdoer but that does the victim no good.

I would say this is indeed a case for the government to compensate because the government [State government, I suppose] messed up its oversight.

For the future, one could envision offering and purchasing insurance against these sorts of malfeasance.

Who would offer it, and who should buy it? Should every student buy it just in case their institution goes belly up?

Insurance companies would offer it, and they'd watch the edcuational institutions hawk-like, guaranteed! Various institutions would have different premia attached to them, another piece of information for students. Purchase could be voluntary, too.

Insurance is heavily regulated at the State level. States would have to let it happen.

In that case the state should provide the insurance, or regulate the institutions so that doesn't happen. Otherwise it's just a money-grab where the state government basically licenses the insurance companies to take money from students. It's a regulatory creation of an unnecessary industry, rather than the government just cutting to the chase.

Upthread marsh wiggle stated that being a mechanic does not require a degree. Actually noT quite accurate as far as the current expectations to be a diesel mechanic (an AS for most), and they are in short supply. Of course, that shortage will be alleviated when we have all the autonomous electric long haul semis. Wait, won't that mean a different need? Also for people who have likely need at least an AS?

Huh. Who knew?

By "degree", are you talking about an "Associate's degree"? I think that's a US-specific thing; most places vocational programs have diplomas, and degrees are only for 4 year programs. In places with diplomas, that's what a mechanic needs.

I do indeed mean an Associates. In the US, that is a two year degree attained post high school; the vast majority of these are from community colleges, vocational ccs and regional public bachelors/masters degree institutions.

[Parasaurolophus]

By "degree", are you talking about an "Associate's degree"? I think that's a US-specific thing; most places vocational programs have diplomas, and degrees are only for 4 year programs. In places with diplomas, that's what a mechanic needs.

We have them in Canada, although they're more common on the west coast than elsewhere (doubtless because "colleges" proliferate here, whereas elsewhere it's almost all universities). I think they only cover traditional (i.e. non-vocational) areas, however; vocational stuff is diplomas.

[jimbogumbo]

Take a look at the graph about half way in. Old news (in the sense we already know it), but still descriptive. Puget pointed out at some of these schools you can get total relief, but that is still not very many of them. Several really bad offenders (scamming veterans, for example) are now owned by large public research universities.

https://www.chicagobooth.edu/review/whos-fault-student-loan-defaults

[downer]

There's an interesting piece in the NYT, apparently aimed at people like myself, who are not particularly convinced that loan forgiveness is a great idea in itself. Much of it is quite strong about the good the program of forgiveness will do.
https://www.nytimes.com/2022/08/30/opinion/student-loan-debt-relief-biden.html
But I'm struck by this passage:

Students who couldn't get into oversubscribed classes at community colleges turned to expensive for-profit colleges, where they earned credentials that had little value in the labor market. Many exited into a historically bad labor market during the Great Recession.

There's no mention of numbers here. How many students went to these expensive for-profit colleges? And what about caveat emptor? My recollection is that there was plenty of warning that those for-profit colleges were terrible.

[jimbogumbo]

Just this week: https://www.insidehighered.com/quicktakes/2022/08/31/education-department-approves-15b-debt-relief

[Anselm]

https://jacobin.com/2021/12/michael-hudson-interview-debt-forgiveness-cancellation-ancient-rome-christianity

[dismalist]

https://jacobin.com/2021/12/michael-hudson-interview-debt-forgiveness-cancellation-ancient-rome-christianity

That's why we have bankruptcy -- except for student loans!

What morons came up with this?

[mahagonny]

Quiet in the sense that he is not tweeting or publicizing himself constantly like a carnival barker.

I'm old enough to remember when Joe was clear-headed enough to get out on the Senate floor and hold court. He was quite the orator at one time.

Certainly showing his age, but he was always a gaffe machine. Still, he's lucid and has even had some very good moments on the stage (post Jan 6 press conference was excellent, for example).

I feel like apologizing. Apparently my sarcasm did not come through in the text. I did not mean it as a compliment.

My observation of Joe Biden over many years tells me this: he gets called 'a gaffe machine' which strikes me as a forgiving term. I would think of a gaffe machine as someone who phrases sane, measured thoughts poorly and unflatteringly to himself. He may be that, but he's something much more and much more concerning. In the days when he didn't have difficulty  putting his words into a complete sentence or keeping his mind on the topic, he could be quite forceful, but he was prone to bombast. And worst of all, he has shown a habit of making up stories that grossly amplify his achievements and over dramatize his life (even his family's on occasion) and repeating them on multiple occasions in pretty much the same version. These are not gaffes.  They are lies coming from a nutty egotist.
I also find the legacy press' lack of interest in this pretty astonishing. (Of course I'm old enough to remember George Romney being driven out of public life for a gaffe that apparently scared people to death, one which pretty closely matches the assessment of the Vietnam War that we eventually adopted.)
It's time for a new term: "Bidenism." The belief that any tactic that might help keep republicans out of office is justified. And with it, the realization that even when Biden is gone, it will continue.

TLDR: I hate Joe Biden for solid reasons. You don't have to agree, or you can dislike hearing it, but hey...too darn bad.

Hello Wahoo: 'Breitbart!!!'