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Miscellaneous fees can easily be over 50% of your tuition/fees bill

Any reasonable proposal to make college "tuition free" would have to consider tuition and fees as the same thing. Otherwise, the game is rigged. Declare more and more of your expenses as fees instead of tuition. Not cool.

The big problem is that the gummint will not want to allow expenses to grow, which would necessitate higher public subsidies. So they'll either control spending directly or forbid spending to grow more than X% per year, where X will be picked to satisfy political desires and have little or nothing to do with the true costs of maintaining existing quality.

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Originally posted by Piano*Dad:

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You get the point.

And those are all good points about fairness.

All this "forgiveness" stuff essentially rewards adverse selection. That's a horrible way to make policy.

Can you explain adverse selection?

Here’s my plan.

If you have a bunch of debt, you can get loan forgiveness by working for charity or military or teaching in a disadvantaged area or the public sector. My colleagues in the civil rights division get their debt forgiven if they stay for ten years.

Even those of us whose kids weren’t saddled with debt have problems with Warren style debt relief. I could have done so many things with that money I spent on tuition and just borrowed and waited for a bailout.

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Can you explain adverse selection?

I'm healthy, so I take my chances uninsured. You're sick, so you seek out insurance. Adverse selection is the tendency for people who know that they'll benefit more than the cost to grab the policy, while people who know they will not benefit try to avoid the policy. It's about information asymmetry. This is one reason insurance markets can fail, and is why we had the mandate.

As Cindy notes in the post above, if you know that a policy change in the future may reward over-borrowing if your income is low, then people who know their future income is not likely to justify huge borrowing will see a greater incentive to borrow. The people who are the worst social risks are the ones who will borrow more.

Warren's proposal rewards people for past bad behavior and punishes people who behaved well (their taxes are used to bail out the others who behaved badly). Worse, if future forgiveness is tied to low income, it will encourage those who want to earn low income (save the world, in their view) to borrow like crazy and ask people who don't behave that way to pay off their borrowing. That's adverse selection. What prevents the "market" from failing in this case is that there is a deep pocket that can just raise taxes or print bonds to cover the cost of the private over borrowing.

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Originally posted by kluurs:

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Originally posted by Piano*Dad:

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You get the point.

All this "forgiveness" stuff essentially rewards adverse selection. That's a horrible way to make policy.

+1
There's room for fixing things moving forward. As for debt forgiveness, this must be considered in conjunction with all other priorities. As has been pointed out by others, our nation has chosen to spend an amazing amount of our resources on the defense of other nations which has permitted them to spend money on things like healthcare for their citizens. We need to spend some time really considering how we wish to prioritize our spending - things like forgiving debt and free tuition are lovely ideas; however, other things being tossed around include Medicare for all, reparations, infrastructure, developing technologies, funding Social Security, etc. We can't have it all. What's sad is how dysfunctional our government is - such that a heas lthy discussion can't occur - only a continuation of the theater of the absurd as it is currently being played out.

I don't know if you vote Democratic, Republican, or Independent, but seriously... "reparations" and "paying for Social Security" are not competing priorities.

But they are competing for the same rapidly dwindling federal dollar.

Thanks to Donny boy and his ridiculous tax cut and the budget needed to support it.

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Originally posted by Nina:
But they are competing for the same rapidly dwindling federal dollar.

Thanks to Donny boy and his ridiculous tax cut and the budget needed to support it.

Exactly.

And, even if we increase taxes, there’s still only so much to go around.

So of course they are competing. All spending is competing. We cannot do everything we’d like to do. We have to make choices and priorities.

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And, even if increase taxes, there’s still only so much to go around.

Sorry, that just means you're not progressive enough.

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Originally posted by Piano*Dad:

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And, even if increase taxes, there’s still only so much to go around.

Sorry, that just means you're not progressive enough.

You noticed!

I read somewhat selectively, so I’d like to know who is demanding reparations and why I should care.

The entire idea is ridiculous on its face.

Social Security and Medicare have a funding mechanism, i.e. dedicated taxes. We all know it.

As to the topic of reparations: I would like to learn anything more about it.

Would it change your calculus on whether or not this proposal would be "fair" if you consider it just from a standpoint of freeing up more consumer spending for a whole generation of folks?

It seems to me that if our economy is largely driven by consumer spending, removing a large swath of people due to a heavy debt load is a drain on the rest of the economy.

I fould this article at The Intercept.

https://theintercept.com/2019/...-sanders/?comments=1

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Originally posted by Piano*Dad:

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And, even if increase taxes, there’s still only so much to go around.

Sorry, that just means you're not progressive enough.

MMT to the rescue!

MMT - Magic Money Tree