Credentialist Privilege and Snobbery, and Student Loan ‘Forgiveness’

 

In late 2020, I wrote a post titled Living in the Hate of the Common People, and in early 2021, I wrote a sequel.  I think these posts, and the general pattern they describe, are very relevant to the current issues about student loans and the overall topic of education funding.  In summary:

Someone at a social media site, who I will not dignify with a link, wrote, “I think we need to find a way to stop the working class from voting altogether.”  An example of this attitude appeared on MSNBC back in August 2021, with anchor Chris Hayes and Washington Post writer Dave Weigel avidly agreeing about the characteristics of Trump supporters (of whom they don’t approve) … men without a college degree who have enough income to buy a boat (Hayes qualifies it as white men). Personally, I tend to admire people who have managed to do ok or very well for themselves without the benefit of a college credential. (And anyone believing that a college degree necessarily implies that an individual has acquired a broad base of knowledge and thinking skills hasn’t been paying much attention of late.)

As reported by Veritas, a lawyer employed by PBS had resigned after being caught saying things like it was “great” that coronavirus cases were spiking in red states because they might infect Trump voters and suggested that Republican voters should have their children put in re-education camps.

The DC-based lawyer also said “Americans are so f–king dumb. You know, most people are dumb,” and “It’s good to live in a place where people are educated and know stuff. Could you imagine if you lived in one of these other towns or states where everybody’s just stupid?”

The PBS network, of course, attempted to distance itself from these comments, saying that “There is no place for hateful rhetoric at PBS, and this individual’s views in no way reflect our values or opinions.” I’m not so sure about that.  I expect that such beliefs/attitudes are pretty common among employees of PBS and similar organizations, even if usually expressed a little more carefully and diplomatically.

Having a college degree, in today’s America, does not by any means guarantee that an individual has good thinking skills and a wide knowledge base.  Many studies, for example, have demonstrated the lack of historical knowledge among large numbers of college graduates.  And scientific and technical knowledge, among graduates who are not specialists in such fields, are at appallingly low levels.  In articles about energy storage, for example, very few writers appear to grasp the distinction between a Megawatt and a Megawatt-Hour and why that distinction is of the essence when talking about storage. (This is true of coverage in business media as well as in general media.)  Referring to the political reporters with whom the Obama administration interacted on a daily basis,  Obama’s Deputy National Security Advisor (Ben Rhodes) said, “They literally know nothing.”  I’m sure all these reporters went to college, and most of them to ‘elite’ colleges.

What college is all too often about, in addition to that piece of paper, is being able to conduct a conversation that will identify you as a member of Our Kind of People, and this includes terminology as well as political and social attitudes.  See my post Aerodynamics, Art History, and the Assignment of Names for discussion of the Terminology point.  (I believe this Terminology point is what David Mamet was referring when talking about ‘hieratic language’ and making the point that Trump was considered unacceptable to many because he didn’t speak in hieratic language.)

Criticism of the student loan bailout has focused on its expense (which may exceed $1 trillion), its questionable legality, its obvious vote-buying motivations, and its fundamental unfairness. These are all important points.  But there is also another very important point:

Canceling this debt sends a message to college administrators: Keep on doing what you’ve been doing…we’ve got your back.  It tends to undermine the pressures for reform that have been building up.  And it also tends to reinforce the belief among the degreed..and especially among the advanced-degreed…that We are the people who matter, we are the in-crowd.

Higher education in the US is a huge industry…US colleges have about 3.5 million employees.  (This compares with 1.4 million for farming, forestry, and fishing, 3.1 million for food & beverage stores, and only about 1.7 million for rail and truck transportation combined.)  Add the 8 million employees of primary and secondary schools to get an idea of just how huge the total US education industry is.  (And the overhead levels, as opposed to people actually doing teaching, have been increasing.)  I doubt that there is any other industry, from agriculture to semiconductors to steel, that has the raw political influence of education.

Of course, education is important.  But this doesn’t mean that anything that calls itself education is worthwhile, nor that educational institutions should have an unlimited call on the resources of the United States.  Just as the fact that national defense is important doesn’t mean that some badly-thought-out weapons system should be automatically approved, or that costs should be ignored in defense contracting.

And, as we see in the comments of so many ‘progressives’, education is too often being used as a criterion to draw class boundaries and to keep people in their places.

The management and social thinker Peter Drucker, writing in 1969, said:

The most serious impact of the long years of schooling is, however, the “diploma curtain” between those with degrees and those without. It threatens to cut society in two for the first time in American history…By denying opportunity to those without higher education, we are denying access to contribution and performance to a large number of people of superior ability, intelligence, and capacity to achieve…I expect, within ten years or so, to see a proposal before one of our state legislatures or up for referendum to ban, on applications for employment, all questions related to educational status…I, for one, shall vote for this proposal if I can.

Drucker also said:

It is highly probable that the next great wave of popular criticism, indignation, and revolt in the United States will be provoked by the arrogance of the learned.

For ‘the learned’, I would substitute ‘the credentialed.’  Peter Drucker himself was learned; many of the people today asserting their education-based superiority are merely credentialed.

Drucker, himself a European,  also warned Americans of the dangers involved when ‘elite’ universities become excessively influential:

One thing it (modern society) cannot afford in education is the “elite institution” which has a monopoly on social standing, on prestige, and on the command positions in society and economy. Oxford and Cambridge are important reasons for the English brain drain. A main reason for the technology gap is the Grande Ecole such as the Ecole Polytechnique or the Ecole Normale. These elite institutions may do a magnificent job of education, but only their graduates normally get into the command positions. Only their faculties “matter.” This restricts and impoverishes the whole society…The Harvard Law School might like to be a Grande Ecole and to claim for its graduates a preferential position. But American society has never been willing to accept this claim…

American society today is a lot closer to accepting the claim of HLS as a Grande Ecole than it was when Drucker wrote.  Drucker also said:  “It is almost impossible to explain to a European that the strength of American higher education lies in this absence of schools for leaders and schools for followers”…well, there is far too much of a trend in this direction in America today.

There is also an increasing trend to demand not only a college degree, but some form of graduate degree as a requisite for a serious career. Like the original ‘diploma curtain’ of which Drucker wrote, this has resulted in the waste of human potential. I am confident that over the last week:

–there was an employee at a bank who would have made an excellent branch manager, but was not considered for the position because she did not have a degree.
–there was a branch manager who did have a degree, but was not considered for a regional executive position where she would have done an excellent job…because she didn’t have an MBA.
–there was a regional executive who would have liked to move into an Investment Banking job…and who did have an MBA…who wasn’t considered because his MBA wasn’t from an ‘elite’ school.

Obviously, there are fields in which credentials exist which are meaningful and important.  Airline Transport Pilot, for example.  Structural Engineer.  Certified Public Accountant.  But there are a lot more areas in which credentials are either over-emphasized or are demanded when not really relevant to the job.

Student debt cancellation, despite its cost, unfairness, and the voter anger that is provoked, may be, on balance, a Dem political win.  It contributes to keeping the education machine, with all its dysfunctionalities, running full-blast and even increasing its speed, thereby rewarding a major contribution bloc and also helping to perpetuate an information environment that is Dem-friendly.  And it reduces pressure for the development of educational alternatives which might be both less expensive and less debt-friendly.

More from Drucker:

Historically, the men of knowledge have not held power, at least not in the West. They were ornaments…But now knowledge has power. It controls access to opportunity and advancement. Scientists and scholars are no longer merely “on tap,” they are “on top.”…

But power and wealth impose responsibility. The learned may have more knowledge than the rest of us, but learning rarely confers wisdom. It is, therefore, not surprising that the men of knowledge do not realize that they have to acquire responsibility fast. They are no different from any other group that ever before entered into power..They too believe that anyone who questions their motives must be either fool or villain, either “anti-intellectual” or “McCarthyite.” But the men of knowledge, too, will find out that power can be justified only through responsibility…

Actions like the student loan cancellation delay the discovery of that sense of responsibility.

The Drucker quotes are from his book The Age of Discontinuity.  I excerpted more of his thoughts on education, in addition to the above points, here.

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  1. TBA Coolidge
    TBA
    @RobtGilsdorf

    David Foster: Republican voters should have their children put in re-education camps.

    Thank goodness that’ll never happen. btw, can anyone give me a clue how to help my kid with xir gender studies unit? 

    • #1
  2. CACrabtree Coolidge
    CACrabtree
    @CACrabtree

    Fantastic post. People from flyover country (minus our magnificent institutions of higher learning) have been seeing this snobbery for decades. 

    And it has only gotten worse.

    Move this to the Main Feed as soon as possible.

    Now, I’m going to help my neighbor work on his bass boat.  Screw you East and West coast elites.

    • #2
  3. CarolJoy, Not So Easy To Kill Coolidge
    CarolJoy, Not So Easy To Kill
    @CarolJoy

    When every “Republican” here who happily took the emergency approval only mRNA vaccines agrees to voluntarily cough  up the $ 435 plus for each jab they got, when they accept that the COVID CARE Act “loans” offered to top Congressional critters and business tycoons, and then were all mysteriously “forgiven” certainly dwarf by comparison   the 10K in forgiveness for student loan debtors, when they take a moment to reflect that it was not at all “poor people demanding bankers give them zero rate adjustable rate mortgages that took apart the economy from its collapse in 2008 to 2011,” but rather the Wall Street tycoons gambling on whether or not these adjustable rate mortgages would be paid off, then I will no longer feel that so many Republicans are myopic to the real problems of the real games being played.

    The real activity  that is delaying a Great Awakening as to the realities of contemporary society going down the proverbial toilet is occurring in the way we politically dialogue. There are never any grey areas. It is all black and white, with one side promoting allegiance to “Black Live Matter” as well as “No Lives Matter Until Black Lives Matter” so the voices attempting to explain that “All Lives Matter” are shouted down and then attacked for having come from White Supremacists.

    It is pretty much the same along “the methods of dialogue” for all issues.

    It is easy to be angry at the fool in front of you at the grocery line who is using his food stamp EBT card to pay for three dozen Snickers candy bars and 14 packages of Doritos.

    But in the nine minutes a petty person fumes over that, our military defense contractors have just spent record amounts of money on some high tech fighter jet whose cost overruns already are 40 times what the annual FED food stamp budget happen to be.

    Oh and BTW – people here should also reflect on how Gov Newsom has wiped out tuition costs for any immigrants who have arrived in Calif since 2018. Not for community colleges – but for the pricey tuition amounts charged for Univ of Calif students.

    • #3
  4. Stina Member
    Stina
    @CM

    TBA (View Comment):

    David Foster: Republican voters should have their children put in re-education camps.

    Thank goodness that’ll never happen. btw, can anyone give me a clue how to help my kid with xir gender studies unit?

    Yeah… the guy seems to forget they already are in re-education camps :p

    • #4
  5. Retail Lawyer Member
    Retail Lawyer
    @RetailLawyer

    I went to UC Berkeley back in the 70s.  Everything associated with the school was tattered, shabby, creaky and old, and the students reveled in it, as I recall.  The toilet paper was terrible.  The food was terrible.   The tuition was astoundingly cheap, as I recall.  Nowadays, college is a luxury experience, and the colleges compete on who is the most luxurious.  In the 90s the Jesuit University of San Francisco opened a new gym complex that the Chronicle called the most luxurious in San Francisco.  Why does a college have the most luxurious gym in a luxury city?  To attract high paying students with borrowed money is the correct answer.

    I wouldn’t mind more assistance for college students if the students could be a bit more humble in their non-educational facilities and programs, but living in luxury is not something we should subsidize.

    • #5
  6. TBA Coolidge
    TBA
    @RobtGilsdorf

    Retail Lawyer (View Comment):

    I went to UC Berkeley back in the 70s. Everything associated with the school was tattered, shabby, creaky and old, and the students reveled in it, as I recall. The toilet paper was terrible. The food was terrible. The tuition was astoundingly cheap, as I recall. Nowadays, college is a luxury experience, and the colleges compete on who is the most luxurious. In the 90s the Jesuit University of San Francisco opened a new gym complex that the Chronicle called the most luxurious in San Francisco. Why does a college have the most luxurious gym in a luxury city? To attract high paying students with borrowed money is the correct answer.

    I wouldn’t mind more assistance for college students if the students could be a bit more humble in their non-educational facilities and programs, but living in luxury is not something we should subsidize.

    Imagine how bitter these students are upon leaving the institution for jobs that won’t support any of these comforts, among people who don’t automatically agree with their politics or the New Thing. 

    • #6
  7. CarolJoy, Not So Easy To Kill Coolidge
    CarolJoy, Not So Easy To Kill
    @CarolJoy

    Retail Lawyer (View Comment):

    I went to UC Berkeley back in the 70s. Everything associated with the school was tattered, shabby, creaky and old, and the students reveled in it, as I recall. The toilet paper was terrible. The food was terrible. The tuition was astoundingly cheap, as I recall. Nowadays, college is a luxury experience, and the colleges compete on who is the most luxurious. In the 90s the Jesuit University of San Francisco opened a new gym complex that the Chronicle called the most luxurious in San Francisco. Why does a college have the most luxurious gym in a luxury city? To attract high paying students with borrowed money is the correct answer.

    I wouldn’t mind more assistance for college students if the students could be a bit more humble in their non-educational facilities and programs, but living in luxury is not something we should subsidize.

    The students didn’t vote on what the gym complex would look like.

    And it seems that most universities have gone the luxury gym route.

    Are there kickbacks involved in the gym situation? Or exactly what? Or is the luxury gym the needed enticement  to get wealthy alumni to put a couple of extra zeroes on the checks they write to their alma mater?

    I had a friend who spent ten years trying to go from the VP spot that she held inside a MidWestern university to her  being a university president somewhere else. She finally came to the conclusion that she simply did not have the necessary inner circle of extremely wealthy associates to help her get the job. She had awfully nice references on her CV – but none of them were the requisite millionaires or billionaires.

    ####

    • #7
  8. David Foster Member
    David Foster
    @DavidFoster

    TBA (View Comment):
    Imagine how bitter these students are upon leaving the institution for jobs that won’t support any of these comforts, among people who don’t automatically agree with their politics or the New Thing. 

    The term ‘overproduction of elites’ has been used to describe the production of graduates who believe their education..or at least the credential..entitles them to a more elevated role than they are actually likely to get, and the resulting resentments.

    • #8
  9. TBA Coolidge
    TBA
    @RobtGilsdorf

    David Foster: Of course, education is important. 

    I wonder about this sometimes. 

    I would say that being productive is important and education is important where it aids being productive. 

    But education for its own sake – just the learning part – isn’t that important. It’s just cool. We have created a system where the trappings of productivity, the presumed advantages in production of something of value, are mistaken for that value. 

    Education is fine. It’s aces. Good for all involved. 

    But if you’re just about finding a spot to get paid through other people’s taxes and don’t move the country ‘forward’; richer, wiser, stronger, etc., then you are a net drain. And that’s before we factor in the cancelled debt. 

    • #9
  10. TBA Coolidge
    TBA
    @RobtGilsdorf

    David Foster (View Comment):

    TBA (View Comment):
    Imagine how bitter these students are upon leaving the institution for jobs that won’t support any of these comforts, among people who don’t automatically agree with their politics or the New Thing.

    The term ‘overproduction of elites’ has been used to describe the production of graduates who believe their education..or at least the credential..entitles them to a more elevated role than they are actually likely to get, and the resulting resentments.

    America boasts the most highly-educated and comfortable victims in the world. 

    • #10
  11. Chris O Coolidge
    Chris O
    @ChrisO

    Retail Lawyer (View Comment):
    I wouldn’t mind more assistance for college students if the students could be a bit more humble in their non-educational facilities and programs, but living in luxury is not something we should subsidize.

    What I was told, as a concerned alum (small liberal arts college in a small town), is these things are necessary to compete in the university market. And so, another capital campaign was justified, because the debt is piling up. 

    If we created an elite through the diploma, then I guess this is what follows. It’s the elite expecting elite treatment.

    If campuses want to delay reform, they only speed their demise. The perception of value is in jeopardy where it has not already disappeared. Skills and certifications are plentiful online, and even offline a two-week course in real estate can give you the keys to a career where you determine your success, not some middle manager with a degree from the right place.

    David Foster: Of course, education is important.  But this doesn’t mean that anything that calls itself education is worthwhile

    Indeed. Excellent piece, David, thank you.

    • #11
  12. David Foster Member
    David Foster
    @DavidFoster

    Chris O (View Comment):
    The perception of value is in jeopardy where it has not already disappeared.

    Much of the preception of value these days lies in contacts and ‘brand’…and it is true, these things do have some value.

    But their importance can be overrated.  Several years ago, a startup CEO told me he was confident of being able to establish a strategic relationship with a certain prominent company because he had gone to Harvard and some of their key executives had graduated from the same place.

    Didn’t happen, though.

    • #12
  13. genferei Member
    genferei
    @genferei

    David Foster (View Comment):

    Chris O (View Comment):
    The perception of value is in jeopardy where it has not already disappeared.

    Much of the perception of value these days lies in contacts and ‘brand’…and it is true, these things do have some value.

    Middle class social climbing and snobbery. And, being a middle class obsession, a vast portion of the economy has been warped meet it, including giant transfers – which is to say robbery.

    • #13
  14. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    We could have a grand time listing all the words that were at the top of our list for success, and are not ignored or denigrated. Words like responsibility, discipline, obligations, humility have gone out of fashion. The elite are far too busy making sure they get their demands met. Great post, David.

    • #14
  15. The Reticulator Member
    The Reticulator
    @TheReticulator

    David Foster: [quoting Drucker] I expect, within ten years or so, to see a proposal before one of our state legislatures or up for referendum to ban, on applications for employment, all questions related to educational status…I, for one, shall vote for this proposal if I can.

    I hadn’t heard this idea before. I like it! 

    I also am aware of cases where those doing the hiring purposely left college education requirements out of a job posting that would typically attract college graduates, in order not to rule out job applicants who don’t have a degree who could do the job just as well.  In fact, I am aware of this happening at a major university. 

    • #15
  16. David Foster Member
    David Foster
    @DavidFoster

    The Reticulator (View Comment):
    I also am aware of cases where those doing the hiring purposely left college education requirements out of a job posting that would typically attract college graduates, in order not to rule out job applicants who don’t have a degree who could do the job just as well. 

    There’s an interesting startup company called Hadrian, focused on high-precision machining for the aerospace industry.  Funded by some leading VCs, including Andreessen-Horowitz, and they are hiring quite a few people.  I took a look at their careers page.  Out of 4 jobs I looked at that seem to be currently open..

    –Lead Software Engineer, Front-End
    –People Ops Lead (apparently the local term for ‘HR’)
    –5-Axis CAM programmer
    –Director, Sales/Business Development

    …none of them, unless I missed it, require a college degree.

    (They do all require US citizenship–security clearance issue)

     

    • #16
  17. The Reticulator Member
    The Reticulator
    @TheReticulator

    David Foster (View Comment):

    The Reticulator (View Comment):
    I also am aware of cases where those doing the hiring purposely left college education requirements out of a job posting that would typically attract college graduates, in order not to rule out job applicants who don’t have a degree who could do the job just as well.

    There’s an interesting startup company called Hadrian, focused on high-precision machining for the aerospace industry. Funded by some leading VCs, including Andreessen-Horowitz, and they are hiring quite a few people. I took a look at their careers page. Out of 4 jobs I looked at that seem to be currently open..

    –Lead Software Engineer, Front-End
    –People Ops Lead (apparently the local term for ‘HR’)
    –5-Axis CAM programmer
    –Director, Sales/Business Development

    …none of them, unless I missed it, require a college degree.

    (They do all require US citizenship–security clearance issue)

     

    In one of the cases I know of, the people involved admitted they used to include the college degree requirement out of habit.  (My words, not theirs.) I no longer have the paperwork to check, but I probably did it myself when I was hiring. But when they became aware that there might be qualified persons who might be interested in applying for an open position but who didn’t have a degree, they took care to leave the requirement out and to make sure that HR didn’t put it back in.  

    Way back, the lead IT guy at the College of Engineering at my university was someone who didn’t have a college degree. He was good at his job, but at his annual performance reviews his boss (the dean, if I remember correctly) would bug him about it.  Not a big deal, but the dean kept bringing it up once a year.  So finally my colleague decided to get a degree in sociology, to get a degree in something as far removed from his profession as he could think of.  And it wasn’t long after that that he left to take a job at a different university (one that thinks it is more prestigious than ours).  

    • #17
  18. David Foster Member
    David Foster
    @DavidFoster

    Often, I think, people add a degree (or an advanced degree) to job requirements in an effort to somewhat reduce the absolute flood of resumes that often greet any job posting.

    Too often, requirements are too specific in many areas…see my post about The 5-Pound Butterfly…partly motivated by the above problem but partly by not thinking things through very well.

    • #18
  19. The Reticulator Member
    The Reticulator
    @TheReticulator

    David Foster (View Comment):

    Often, I think, people add a degree (or an advanced degree) to job requirements in an effort to somewhat reduce the absolute flood of resumes that often greet any job posting.

    Too often, requirements are too specific in many areas…see my post about The 5-Pound Butterfly…partly motivated by the above problem but partly by not thinking things through very well.

    Reminds me of the C. Northcote Parkinson essay on how to write a job ad to get only one applicant, the right applicant, for the job opening. But I can’t find my copy of Parkinson’s Law right now in order to get the details. It’s a much worn and dogeared book that I’ve read several times since I bought it when I was in high school. 

    • #19
  20. RushBabe49 Thatcher
    RushBabe49
    @RushBabe49

    In my field of purchasing, many buyers start out in departments like accounting, stores, or shipping.  A junior buyer job opens up, they apply for it, and move departments.  A lot of my colleagues over the years had this career path, without any college at all, just learning on the job.  Many of them took the NAPM exams to get their CPM (Certified Purchasing Manager) certification.  A few years ago, the new Institute for Supply Management (ISM) made a 4-year degree a requirement for the CPSM (Certified Professional in Supply Management).  So now, no one without a degree can get certified.  That move didn’t make many friends for ISM, and their other initiatives, like making it illegal for chapters to coordinate with adjacent groups (now seen as competitors) caused attrition, including myself.  Then, they went woke, too.  If I were just starting out in Purchasing, I wouldn’t even join the local chapter.

    • #20
  21. Retail Lawyer Member
    Retail Lawyer
    @RetailLawyer

    My brother was a car mechanic who went back to college and got a degree in Geology.  He immediately got a job as a technician (mechanic) at Intel because of what he learned about German air conditioning systems as the car mechanic. (They offered him the job 2 hours after 1 phone interview, and relocation expenses, because he was the only person ever to be able to correctly answer a “hypothetical” interview question.) And the “STEM” degree.  He would not have been considered without it, but it adds nothing to his skill set.

    He does love working with fellow STEM people, though.  That’s all he wants to talk about – the sociology of the work environments.

    • #21
  22. Dunstaple Coolidge
    Dunstaple
    @Dunstaple

    Really great post. Thank you. 

    But I’m curious about this:

    Student debt cancellation…contributes to keeping the education machine, with all its dysfunctionalities, running full-blast…

    This debt cancellation, I believe, does not involve the schools themselves. They have already been paid. What is the mechanism here? Does debt cancellation increase expectations that future debt will be cancelled, too, leading to more willingness to incur debt on the part of future students?

    • #22
  23. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Dunstaple (View Comment):

    Really great post. Thank you.

    But I’m curious about this:

    Student debt cancellation…contributes to keeping the education machine, with all its dysfunctionalities, running full-blast…

    This debt cancellation, I believe, does not involve the schools themselves. They have already been paid. What is the mechanism here? Does debt cancellation increase expectations that future debt will be cancelled, too, leading to more willingness to incur debt on the part of future students?

    I think it does involved the schools, since we, the taxpayers, will be paying up. I’m sure that future students see this as an invitation to cash in, too.

    • #23
  24. Dunstaple Coolidge
    Dunstaple
    @Dunstaple

    Susan Quinn (View Comment):

    Dunstaple (View Comment):

    Really great post. Thank you.

    But I’m curious about this:

    Student debt cancellation…contributes to keeping the education machine, with all its dysfunctionalities, running full-blast…

    This debt cancellation, I believe, does not involve the schools themselves. They have already been paid. What is the mechanism here? Does debt cancellation increase expectations that future debt will be cancelled, too, leading to more willingness to incur debt on the part of future students?

    I think it does involved the schools, since we, the taxpayers, will be paying up. I’m sure that future students see this as an invitation to cash in, too.

    What I mean is that none of this money will be going to the schools. They don’t directly benefit, and they already have their cut.

    And I’m not so sure that the promise of future “forgiveness” will be such a strong factor. I know I wouldn’t count on it, if I were looking to go to school now.

    • #24
  25. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Dunstaple (View Comment):

    What I mean is that none of this money will be going to the schools. They don’t directly benefit, and they already have their cut.

    And I’m not so sure that the promise of future “forgiveness” will be such a strong factor. I know I wouldn’t count on it, if I were looking to go to school now.

    So who is the money owed to? Banks? The government? So we are using our tax money to pay off the government? Good grief. Also, you might not count on the future money, but the original borrowers probably didn’t think they’d be in for a windfall either. People will choose to believe whatever they wish; they don’t all have good judgment the way you do!

    • #25
  26. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    This paragraph came out of an article from our financial manager:

    And here’s what might be the worst part: colleges would
    have an incentive to enroll students even if they have horrible
    future job and earning prospects. By enrolling people no matter
    how poorly prepared they are, a college can charge whatever they
    want and get huge checks from the federal government. And the
    unprepared students won’t care because they really don’t have to
    pay it back. In effect, colleges could create massive and perfectly
    legal money-laundering schemes.

    • #26
  27. Flicker Coolidge
    Flicker
    @Flicker

    Dunstaple (View Comment):

    This debt cancellation, I believe, does not involve the schools themselves. They have already been paid. What is the mechanism here? Does debt cancellation increase expectations that future debt will be cancelled, too, leading to more willingness to incur debt on the part of future students?

    From what I understand, the only debt that will be forgiven is government issued student loans; private government-guaranteed loans are not affected.  It looks like the government is only wiping debt off it’s own books.

    • #27
  28. Dunstaple Coolidge
    Dunstaple
    @Dunstaple

    Susan Quinn (View Comment):

    This paragraph came out of an article from our financial manager:

    And here’s what might be the worst part: colleges would
    have an incentive to enroll students even if they have horrible
    future job and earning prospects. By enrolling people no matter
    how poorly prepared they are, a college can charge whatever they
    want and get huge checks from the federal government. And the
    unprepared students won’t care because they really don’t have to
    pay it back. In effect, colleges could create massive and perfectly
    legal money-laundering schemes.

    That’s a really good point.

    • #28
  29. David Foster Member
    David Foster
    @DavidFoster

    When someone is selling an investment, they are generally required to provide documentation on Risks.  If you look at the 10-K for a publicly-traded corporation, or the private placement memorandum for an investment in a nonpublic company, you will find a section labeled Risks, which is often pretty extensive.

    A college education…with or without students loans…will be for many people one of the largest ‘investments’ they will ever make in their lives.  But no statement of risks is required.

     

     

    • #29
  30. TBA Coolidge
    TBA
    @RobtGilsdorf

    As with the housing bubble, our government decided that people needed something they couldn’t afford and used their power to push lenders to loan money to people who were unlikely to be able to pay it back. 

    It’s not a surprise that people who are buying their first house or are taking out the first loan in their lives just after they have graduated high school aren’t especially knowledgeable on the risk they are assuming. 

    Lawmakers have no such excuse. 

    These students owe that money. And their loan cannot be defaulted on (this was smart, as college trains people to live in tiny rooms and eat ramen, so what’s another seven years being bankrupt?). 

    To my way of thinking, the students must pay some of it. 

    And the colleges that helped them get the loans must pay some of it as well. 

    The pain must be shared or no one will learn the economic lessons that would have prevented these loans from being made in the first place. 

    • #30
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