Editore"s Note
Tilting at Windmills

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January 18, 2007
By: Kevin Drum

STUDENT LOANS....In an uninspiring move, House Democrats have voted in favor of only a small reduction in interest rates for loans to college students. I wish they'd done more, but over at Tapped Janna Goodrich notes the inherent paradox of subsidizing a university education, even for the poor:

Education is one of the best engines for upward mobility and poor students cannot afford to pay for higher education on their own. Their families don't have the physical collateral to borrow money in the private financial markets nor the savings to pay for the tuition outright....But if we gave poorer students mostly grant-based aid we'd be asking for the rest of the society to subsidize those who are one day going to be wealthier than the average citizen. Two different concepts of fairness or equality are at play here and I'm not sure if both of them could be achieved at the same time.

There's no question that this contradiction is real, but I come down pretty firmly on the side of making college education more affordable for poor and middle class families. Not only do I find the social mobility argument overwhelmingly persuasive, but it makes sense for society as well. We need as many educated workers as we can get, and at all levels we should be trying to get as many qualified students as possible to start and finish a university education.

In fact, I'd combine this with something else to make it even better. A few years ago I read a Century Foundation study that made a very compelling case that we ought to replace all (or most) race-based affirmative action with income-based affirmative action. (Full report here.) The study found that if it's implemented well, (a) income-based affirmative action produces nearly as much racial diversity as race-based affirmative action, (b) it promotes economic diversity as well, and (c) it actually produces higher graduation rates than either a pure merit-based system (test scores and high school GPAs) or a traditional affirmative action program. What's more, it's an approach that most of the public finds inherently fair.

So: I'd favor increased financial aid to poor and middle-class students and income-based affirmative action to help them gain admission to the best university they're likely to do well at. It's good for the kids, it's good for the country, it would increase graduation rates, and if it's done right it might even allow us to make more sensible choices about just how many students ought to attempt a university degree vs. a community college degree. And it provides an effective substitute (i.e., one that genuinely helps minority students) for race-based affirmative action, a program that's overwhelmingly unpopular among the American public and therefore, in the long run, probably not sustainable. This would be a pretty good alternative.

Kevin Drum 12:29 PM Permalink | Trackbacks | Comments (75)

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Feingold!!

Posted by: Ghost of Tom Joad on January 18, 2007 at 1:37 PM | PERMALINK

But if we gave poorer students mostly grant-based aid we'd be asking for the rest of the society to subsidize those who are one day going to be wealthier than the average citizen.

And when they go on to be wealthier than the average citizen, they then pay more in taxes to help the next poor student make it. Seems pretty fair to me.

And, for the political side of things, every time another wealthy person gets there with the obvious help of the government, you have another wealthy person who's not going to piss and moan quite so much about the government taking away his hard-earned money.

Posted by: Chuck on January 18, 2007 at 1:41 PM | PERMALINK

you can add one more point: it would easily survive equal protection challenges.

Posted by: jk on January 18, 2007 at 1:41 PM | PERMALINK

Income based affirmative action not only makes more economic sense than race-based affirmative action, but also is a lot more logical as well.

Posted by: mfw13 on January 18, 2007 at 1:41 PM | PERMALINK

Running for President (and winning) is also one of the best ways for upward mobility, but the prohibitive costs are the reason why there aren't 200,000 candidates.

Sure it's a way of moving up but if you make the entry cost high enough, it will just act as another barrier for separating the haves from the have nots. Why should I borrow $100,000+ at prime rate when I could be working to put food on the family's table.

Posted by: Armen on January 18, 2007 at 1:42 PM | PERMALINK

"And when they go on to be wealthier than the average citizen, they then pay more in taxes to help the next poor student make it. Seems pretty fair to me."

Yep, as long as that were quite a bit more true problem solved.

Unfortunately the top 60% or so of the population (income-wise) has almost exactly the same total tax rate (eg federal, state, local, not excluding social security, etc).

Posted by: jefff on January 18, 2007 at 1:47 PM | PERMALINK

Unlike Kevin, I think the "contradiction" Janna points to is strained:

But if we gave poorer students mostly grant-based aid we'd be asking for the rest of the society to subsidize those who are one day going to be wealthier than the average citizen.

And, so what? They aren't wealthier now, and when they are earning more, they will likewise be paying more in the form of taxes, doing more to support the upward mobility of the then-poor because they will be contributing more to the general fund from which grant-based aid is drawn.

(Presuming, of course, a properly constructed, progressive federal tax system, which arguably we don't quite have, but that's a separate problem which is quite correctable.)

Posted by: cmdicely on January 18, 2007 at 1:50 PM | PERMALINK

Jeff, you are wrong about the tax rate.

According to a new CBO report, here are the effective federal tax rates for 2004 (the most recent year available in this report):

Lowest quintile, 4.5
Second quintile, 10.0
Middle quintile, 13.9
Fourth quintile, 17.2
Highest quintle, 25.1

Top 10 percent, 26.9
Top 5 percent, 28.5
Top 1 percent, 31.1

These numbers include all federal taxes (not just income taxes) and are expressed as a percentage of household income.

Posted by: jk on January 18, 2007 at 1:51 PM | PERMALINK

IIRC, Howard Dean had a pretty good plan. Limit the amount you would be required to repay per month to say 10% of your income, and the amount of time you would be liable for it to say 10-15 years.

This way graduates pay for their own upward mobility, but their risk is limited. The incentives line up nicely. Nobody is going to turn down a higher salary because it would increase their loan payments.

Meanwhile we should get rid of crooked arrangements like the current system. Laissez faire, in a pig's eye. We just have the finest gov't money can buy.

Posted by: alex on January 18, 2007 at 1:56 PM | PERMALINK

There is a difference between "practical application" and "theory" for Janna Goodrich's assertion. In practice, Janna and Kevin are probably correct. In theory, not so much; as the equalization of access to education would remove education as a discriminator between the relative success levels of different classes of people.

Far more significant, the pentagon has just announced that suspects and detainees may be tried, convicted and EXECUTED on hearsay and coerced testimony alone. This is exactly what I and many others opined would occur as a direct result of the shameless mendacity of the McCain enabled Bush produce Military Commisssions Act. This is a huge deal and goes directly to the core of what this country supposedly stands for and the concept (Habeas Corpus) that our entire rule of law rests on.

Posted by: bmaz on January 18, 2007 at 1:56 PM | PERMALINK

This is a BS move by House Democrats - if I'm not mistaken, they could take the rates to what they were a decade and a half ago - just simply restore the low rates that WERE there for student loans back when we HAD a democratic congress.

But no, decided to suck up to the money.

Watch this - this is what we will see a lot of, noble calls for change, followed up by incrementalist stuff that actually kowtows to the industries and lobbyists that the democratic congress is supposedly "standing up" to.

it's a triangulation game to keep happy the dem base, and the corporate backers, and all it does is make it easy for people to say there is no differences between the parties.

Posted by: JC on January 18, 2007 at 2:01 PM | PERMALINK

Income-based affirmative action is a GREAT idea. This is just the kind of thing that the Democrats should advocate. It appeals to the sense of fairness of a wide range of citizens, and it avoids many of the troubling questions about the long-term vision for race-based affirmative action. I think universities should pick up this idea in their admissions programs and run with it; it'd do a lot to repair the perceived disconnect between (liberal) campus politics and the rest of society, which has not been in a particularly liberal mood over the last few decades.

Posted by: Shag on January 18, 2007 at 2:05 PM | PERMALINK

Congress should cut out the middle man. Right now, government-backed student loans go through a bank, which extracts profit for doing a risk-free loan (since the government guarantees it); rates could be lowered at no cost to the taxpayer by cutting out the banks.

Free enterprise is great, but companies with sweet deals sucking on the government teat are not free enterprise; in some cases they are just parasites with a cost-plus contract.

Posted by: Joe Buck on January 18, 2007 at 2:06 PM | PERMALINK

There are various ways of looking at equality. Everyone can pay the same tax (a poll tax) or everyone can pay the same rate of income tax (a flat tax) or everyone can pay what they can reasonably afford (a progressive graduated tax). There is no paradox. There is a need to recognize what is right.

Posted by: Ross Best on January 18, 2007 at 2:09 PM | PERMALINK

If we gave poorer students mostly grant-based aid we'd be asking for the rest of the society to subsidize those who are one day going to be wealthier than the average citizen.

Society doesn't subsidize education for the poor so as to increase their wealth. It's for social, not economic reasons.

People with more education more actively participate in the creation of a peaceful and dynamic society, and those who had to earn their privileges are more likely to encourage similar behavior in others. In all domains, they will sympathize and enable the rise of those who merit it, rather than those who inherit it. That's good for all of us.

Posted by: Poéthique on January 18, 2007 at 2:10 PM | PERMALINK

Nice post.
Interesting info.

But nothing else matters so long as as Bush-Vampire keeps drowning more Americans in the Iraqi toilet.

The slime ball has got to go...

Impeach now.


Posted by: ROTFLMLiberalAO on January 18, 2007 at 2:11 PM | PERMALINK

Atrios points out why the government must provide, and subsidize, student loans. Students have no collateral. OTOH, completing college substantially raises lifetime earnings. These are not bad loans to make, but they are loans that the market would assess cripplingly high interest rates.

It doesn't make sense to charge students market rates. It does make sense for the government to subsidize these loans. This is a simple case of market failure, which is what we have governments for.

Posted by: jayackroyd on January 18, 2007 at 2:12 PM | PERMALINK

Instead of a loan based on paying back interest, how about an "investment" - we loan the money, and the student pays pack a percentage of income, with several variations possible on this. That way, if you do well, you give more back.

Posted by: Neil Bates on January 18, 2007 at 2:13 PM | PERMALINK

Chuck: every time another wealthy person gets there with the obvious help of the government, you have another wealthy person who's not going to piss and moan quite so much about the government taking away his hard-earned money.

Not so. Otherwise Phil Gramm and Newt Gingrich, for example, would be in favor of increased taxes for education.

Posted by: anandine on January 18, 2007 at 2:14 PM | PERMALINK

cmdicely wrote: when they are earning more, they will likewise be paying more in the form of taxes, doing more to support the upward mobility of the then-poor because they will be contributing more to the general fund from which grant-based aid is drawn.

Well, we do have to factor in the possibility of future Republican governments...

Posted by: Gregory on January 18, 2007 at 2:15 PM | PERMALINK

companies with sweet deals sucking on the government teat are not free enterprise; in some cases they are just parasites with a cost-plus contract.

Like I said: Republicans.

Posted by: Gregory on January 18, 2007 at 2:17 PM | PERMALINK
Instead of a loan based on paying back interest, how about an "investment" - we loan the money, and the student pays pack a percentage of income, with several variations possible on this.

How about we give grants, and then have progressive taxes, which takes out the seperate collection procedure and bureaucracy, whether public (for government issued loans) or private (for government guaranteed loans).

Posted by: cmdicely on January 18, 2007 at 2:20 PM | PERMALINK

Fequency Kenneth wrote: (PowerLineBlog calls Pelosi's first 100 hours "picking the low-hanging fruit.")

Nothing wrong with that. "Picking the low-hanging fruit" by passing a number of pieces of legislation that the vast majority of Americans support, but which the Republicans have blocked for years, in the first one hundred legislative hours, is a good idea.

Fequency Kenneth wrote: On the other side, activist Dems are left wondering why Pelosi has attempted so little.

Of course you don't have any actual examples of actual "activist Dems" who are wondering that.

If the "low-hanging fruit" that Pelosi and the House Democrats have promised to "pick" in their first one hundred hours constituted their entire legislative agenda for the next two years, there would be reason to wonder that.

But that is clearly not going to be the case. The Democrats' "first one hundred hours" agenda is a good start, that's all.

As I commented on another thread, the Bush-bootlickers who comment here, such as yourself, are plunging into unprecedented depths of stupidity.

Posted by: SecularAnimist on January 18, 2007 at 2:28 PM | PERMALINK

Joe Buck: Free enterprise is great, but companies with sweet deals sucking on the government teat are not free enterprise

You have such a narrow view. Investing in politicians is part of the free market system.

An example of such an approach, with excellent ROI, is givenb here.

Posted by: alex on January 18, 2007 at 2:28 PM | PERMALINK

Anyone read the distasteful series of Charles Murray columns on education appearing in the Wall St journal? haven't read today's, but the theme so far has been that only really intelligent people benefit from higher ed; those with low IQs are wasting their time, and we actually encourage this by providing too much student assistance!

Posted by: Aidan on January 18, 2007 at 2:31 PM | PERMALINK

The problem with income-based affirmative action is threefold. First, it becomes much, much easier to game the system. Parents will start taking a year or two off just so their kids can be admitted to a better school. And ironically, the people who can game the system the best will be the wealthiest.


Second, it is geographically biased. It will effectively end up preferring middle class kids from economically depressed areas over truly needy children from more affluent areas (i.e., the middle class kid from Fargo will look "poor," and the poor kid from NYC will look "middle class" based on income.

And finally--and most fatally--it will act to give preferences to various "culturally advantaged" poor groups (mostly recent South and Southeastern Asian immigrants) at the expense of African-Americans and Latinos, and thus, it is a non-starter as a practical matter.

Posted by: Joe on January 18, 2007 at 2:32 PM | PERMALINK

I was talking about TOTAL taxes, not federal taxes. However good you stopped me, because I was had my fraction inverted. It's the top 40% where the tax rate is pretty much flat, not the top 60%.

It is true that federal taxation, even including social security is somewhat progressive, but most state and local taxation is regressive.

For example, in my state local taxe rates look roughly like this:

1st quintile 15%
2nd quintile 12%
3rd quintile 10%
4th quintile 9%
5th quintile 7%
top 1% 4%

So total taxation is more like
19
22
24
26
32

But my state is unusually regressive (no income tax at all), however almost all states (I beleive there are less than a handfull of exceptions) and the average state tax system are still regressive. This is because sales and property taxes are highly regressive.

Ahh, yeah here is a very detailed article.
http://rationalrevolution.net/articles/american_income_taxation.htm
About 3/4 through it is a chart of total taxation with the bottom 4 quintiles then some further breakdown of the top quintile.

1st Quintile 19.7%
2nd Quintile 23.3%
3rd Quintile 27.0%
4th Quintile 29.8%
Next 15% 31.6%
Next 4% 32.2%
Top 1% 32.8%

So you can see the top 4 categories there, meaning the top two quintiles are just barely progressive. Certainly nothing like the 17-25 jump you see in federal taxation alone and the other differences are similar. While federal taxation alone looks to be more than 5x progressive from bottom to top total taxation is is only 1.5x progressive.

And a more succinct one:
http://www.ctj.org/pdf/fsl2004.pdf

People tend to think that the tax system is highly progressive, a lot of effort is spent convincing them of this. The federal income tax alone, of course, is progressive, but all the rest of our taxes are regressive. Having learned this I try hard not to laugh at the "flat tax" people. We have a tax system flatter than those they think they are advocating, and the reality of the proposals they advocate would be a heavily regressive tax system.

Posted by: jefff on January 18, 2007 at 2:34 PM | PERMALINK

Lots of things in life are unfair. What cannot be disputed though, is that more education for more people benefits just about everyone in the long run. America pioneered universal compulsory education and it helped make it a great economic engine.

I do like the suggestion of providing low income households with more educational support.

Posted by: Brojo on January 18, 2007 at 2:37 PM | PERMALINK

Education is one of the best engines for upward mobility and poor students cannot afford to pay for higher education on their own. Their families don't have the physical collateral to borrow money in the private financial markets nor the savings to pay for the tuition outright....

Sorry, but this is myth, and one that makes me angry. I heard the same lies 35 years ago & while I made sure I got my BS (and BA), I never got a job based on them. I graduated to food stamps, bad employment & unemployment. The truth? If you don't get a job based on your college degree within six months of graduating, you've wasted the time & money.

At one point the default rate on student loans was over 20% but then the Department of Education (DOE) got nasty about it & the rate "magically" fell to around 10% where it's been stuck for years. In my case, DOE bill collectors (with my student loan ten years in default at that point) harrassed my father, threatening to seize his house & bank account. Didn't help them, since daddy was just as poor as I was. Scared him badly.

So if, without DOE bludgeoning, 20% of students default because they cannot pay, then how many more pay, even though it's a hardship? Another 20%? How many pay even though they saw no financial reward because of their education? Another 10 or 20%?

Add it up & which students, exactly, are financially better off as a result of their fancy educations? Half, or less than half?

You never hear from student loan deadbeats, like myself, because, aside from me, they are all ashamed of the fact that they went to school but are still poor. They're blaming themselves. They're blaming the victim, when the problem is the mythical belief that education makes you rich. There is no evidence whatsoever to support this.

There is evidence for class. If everyone in your social group goes to school, then you have to, too, regardless of expense. If not, you're no longer a member of your class & you won't get the good jobs everyone else got. (Why does GWB come to mind here?) Education is simply paying your dues in order to avoid unfortunate consequences.

If, on the other hand, you're working poor & few or none of your peers went to school, then go to school if you like, but, in my experince, and that of everyone whom I know personally, you will not profit financially from it. If you then fail to pay your loans, you are doubly cursed: Once, for the hubris of going to school, and second for not magically rising above your class to pay for it.

There is no statute of limitations on educational loans, the DOE never writes them off (mine are more than 30 years in default), and the DOE freely rewrites the original loan contracts to suit itself. For example, one of my two loans expired after ten years, the other after 15. They're both explicit that payments are to be made for a certain number of years. They're also explicit in not explicitly requiring the loan be paid in full.

If you're holding a note with this kind of loophole in it, the obvious thing to do, before the de facto expiration date, is to go to court & get a judgement that will stand forever. This the DOE never did. The reason they do not is because they don't go to court. They turn the notes over to the Department of Justice. DOJ pulls up IRS records & if there's no income, they don't sue. (Why should they waste their time?) DOE then bounces these back to their private collection agencies (who routinely go bust from handling hard core cases like mine) who browbeat everyone they can find. They are all bark & no bite. This happens annually.

In my case, I finally got settled in my late 40's. By then I had a lot of other debts to work through. Now, turing 55 next month, it might be that I can finally get around to paying student loans from the 1970's. Which are no longer such a very large sum of money. To help people like myself, the DOE now has a program, where if I can pay the outstanding principal in one single payment, there are no interest charges. So instead of $10,000, I would pay only $5,000.

In my case, I refused to starve to pay my student loans, since I was starving anyway. Sure, for the duration of the credit reporting cycle (no more than three or four years), I had no credit, but then, I had no income & so did not have any credit anyway. Stone broke, I had no females, so had no family to support. So my advice for those who can't pay their loans is to stop trying. Once your initial default cycles through the system, it will never be on your credit report again. Not unless you do something stupid like start making payments only to default again.

Let time pass. After 30 years (presuming the **REVOLUTION** never comes) the amounts you owe will look a lot less & you may be able to pay them in one lump.

A suggestion for a fair system? Compare pre-college to post-college income. Some people, like me, are so stupid they went to school for the education. These folks are as likely to make money as they are to break their arm or leg. Educational expense to them is sheer impoverishment. The DOE should review IRS or Social Security records every five years & adjust outstanding loan balances accordingly. Because if you went to school & five years later you're still not making any money, then, sweetheart, you ain't never gonna. At least, not from that fancy education.

No tide lifts all boats. No program is perfect. The DOE needs to adjust its loan programs accordingly.

Posted by: Dave of Maryland on January 18, 2007 at 2:38 PM | PERMALINK

The wealthier individuals of society today, who have the money to subsidize education for those who have trouble financing it, will create a new generation of people who are relatively better off. These individuals will eventually do the same thing to a new generation to the poorer individuals of the next generation. It's essentially forcing people to give something back and help people in the same way they were once helped. What's wrong with that?

Posted by: Brian on January 18, 2007 at 2:39 PM | PERMALINK

How about we give grants, and then have progressive taxes, which takes out the seperate collection procedure and bureaucracy, whether public (for government issued loans) or private (for government guaranteed loans).

Economically that makes more sense. Psychologically, not so much. Student perform much better when they are using their own money (whether out-of-pocket or loans) to pay for school.

Posted by: Disputo on January 18, 2007 at 2:44 PM | PERMALINK
Student perform much better when they are using their own money (whether out-of-pocket or loans) to pay for school.

I've seen, I think, one study that claimed to show a difference like that (though not, as I recall, "much" better, though statistically significantly better), though it didn't, IIRC again, control for the factors that really differentiate between students likely to pay by grants and those likely to pay by loans, which make me think that its likely that its something other than the source of money that is fundamentally underlying the effect.

Posted by: cmdicely on January 18, 2007 at 2:51 PM | PERMALINK

Joe writes: "The problem with income-based affirmative action is threefold. First, it becomes much, much easier to game the system. Parents will start taking a year or two off just so their kids can be admitted to a better school. And ironically, the people who can game the system the best will be the wealthiest.

"Second, it is geographically biased. It will effectively end up preferring middle class kids from economically depressed areas over truly needy children from more affluent areas (i.e., the middle class kid from Fargo will look "poor," and the poor kid from NYC will look "middle class" based on income.

"And finally--and most fatally--it will act to give preferences to various "culturally advantaged" poor groups (mostly recent South and Southeastern Asian immigrants) at the expense of African-Americans and Latinos, and thus, it is a non-starter as a practical matter."

Wrong, wrong and WTF?

Solution to "problem" one: make the income requirement the average of the family's income over the last 5 years.

Solution to "problem" two: base income requirements on percentage of COUNTY median family income. These are published annually by HUD and used for many HUD and other federal programs.

Solution to "problem" three: What does "cultural advantage" have to do with income? Either they qualify under income requirements or they dont, regardless of "cultural advantage."

Posted by: Yellow Dog on January 18, 2007 at 2:52 PM | PERMALINK

I think income-based affirmative action is an excellent idea. This isn't a new idea, and New York currently has a program very similar to what Kevin describes. A national version of the NYS HEOP program would achieve many of the same goals as affirmative action. My undergraduate university, a prestigous liberal arts college in upstate New York, participated in HEOP. I obtained from my contact with HEOP students an excellent impression of the program and its goals. As Kevin speculates, such a program does primarily select poorer minority students (who are overrepresented in samples of socio-economic disadvantaged students), but also included many poor white students as well.

Posted by: Matilde on January 18, 2007 at 2:56 PM | PERMALINK

Interesting set of comments--I wonder why Dave of Maryland, who writes lucidly, if angrily, had such a hard time finding a good job.

But this is not really an argument about what the government SHOULD do--it's an argument about what the country feels it NEEDS to do. In New England, where I live, much of what became the public school system was started by mill owners because they needed a more educated work force. For instance--the field of Art Education here got its start because the Slaters and others were tired of paying for fabric designs done in Europe. Not really an example of altruism, just enlightened self interest. Eventually, we decided that we needed universal education. If we, as a nation(and for the record, I support this)decide we should make it much easier for people to go to college, we'll have to make it more affordable. But bear in mind that while the government DOES pay for high school, it also by and large directs what you study. That's a trade off I wonder if we want to make.

Posted by: RPC1833 on January 18, 2007 at 2:57 PM | PERMALINK

I'm totally with you on this, Kevin.

Given that minorities whose parents are middle class or above are likely to be more "connected" to minority-based aid, an income-based system would be more equitable for poor minorities as well as poor whites.

Posted by: SocraticGadfly on January 18, 2007 at 3:00 PM | PERMALINK

stupid reason not to help with tuition

Why not create another successful rich professional who will have to pay retail for his kids' college educations. What is the problem?????

Posted by: lilybart on January 18, 2007 at 3:01 PM | PERMALINK

Drum: ..if it's implemented well..and if it's done right it..

Good idea...when little_grape is old enough for college, I'll cut any visible means of financial support and she'll qualify for all sorts of public money and get into a school that she's may not be ready for.

Just telling you the arguments against in advance, Kev.

Posted by: grape_crush on January 18, 2007 at 3:05 PM | PERMALINK

Excuse me. Kevin and a lot of the posters on this thread seem to consider educational subsidies for the poor a form of welfare. In fact Janna Goodrich talks of the "fairness" of giving educational benefits to people who someday will be wealthy. Apparently she wouldn't mind if the poor but now educated people, remained poor, but able to appreciate Dada.

I know this might sound novel, but education is a positive good for the society. An educated workforce generates a lot more money than an uneducated workforce. Don't believe talk to the Indians. Visit with the Chinese. Better yet talk to thoughtful Mexicans about the grinding poverty gripping their uneducated which drains Mexico of any economic gains made in the rest of the society.

The idea of giving subsidies to people wanting to improve their education is that they will be far more productive in the long run. The idea is that the money invested now in an education will be repaid to the society many times over. Individual outcomes are up to the individual, but subsidies that encourage poor but motivated people to become better educated have to be viewed as a societal investment, not as welfare.

Posted by: Ron Byers on January 18, 2007 at 3:13 PM | PERMALINK
Good idea...when little_grape is old enough for college, I'll cut any visible means of financial support and she'll qualify for all sorts of public money and get into a school that she's may not be ready for.

First of all, filtering for readiness should be a function of admissions, not pricing.

Second of all, need-based financial aid systems now generally don't give effect to parents cutting "visible means of financial support", so I don't think that suggestion that an income-based aid program would necessarily be susceptible to that is supportable.

Posted by: cmdicely on January 18, 2007 at 3:17 PM | PERMALINK

More state support for state universities would be nice. State colleges have seen their tuitions go up precipitously because of parcimonious and short-sided budget cutting. All this loaned money just drives up the cost of education, including books and rent.

Posted by: CT on January 18, 2007 at 3:25 PM | PERMALINK

I like the idea of income-based affirmative action, too, but in tandem with, not in place of, race- and sex-based affirmative action. For those who buy into the reactionary idea that the latter was a terrible mistake or is no longer relevant, look first at the stats on race and sex linked to income, then read Ira Katznelson's "When Affirmative Action Was White".

Posted by: Riggsveda on January 18, 2007 at 3:28 PM | PERMALINK

And not a word of John Rawls. We should be talking about universal access to free higher education.

Posted by: Ross Best on January 18, 2007 at 3:37 PM | PERMALINK

Instead of income-based affirmative action, why not put the resources into ensuring that poor people have excellent primary and secondary education?

The payoff from putting money into early education is far higher than putting money into college education.

Posted by: Foobar on January 18, 2007 at 3:38 PM | PERMALINK

First of all, filtering for readiness should be a function of admissions, not pricing. Second of all, need-based financial aid systems now generally don't give effect to parents cutting "visible means of financial support", so I don't think that suggestion that an income-based aid program would necessarily be susceptible to that is supportable.

Drum is talking about using income level affirmative action for admissions decisions, not to determine aid (which is already done), so grape_crush's comment is on point.

Posted by: Disputo on January 18, 2007 at 3:43 PM | PERMALINK

Instead of income-based affirmative action, why not put the resources into ensuring that poor people have excellent primary and secondary education?

That is indeed the root problem. Income based AA will fail as universities realize that they have to create remedial ed programs in order to get the income based AA recipients up to speed.

Posted by: Disputo on January 18, 2007 at 3:45 PM | PERMALINK

Chuck and jefff are both right way up above. Most of the upwardly mobile both pay more taxes and used the deduction system to avoid the progressivity of the tax system.

I'd favor increased financial aid to poor and middle-class students and income-based affirmative action to help them gain admission to the best university they're likely to do well at.

I agree also, and I would include aid for trade schools.

Two more points about reducing the interest on the loans. The biggest loans are from upper middle class children who attend really expensive schools. Such children become the biggest beneficiaries of the loan rate reduction. If I had a child in college, I would surely prefer him or her to attend Cornell University insteady of SUNY Binghamton, but I don't see how reducing the loan burden for Cornell graduates compared to Binghamton is in the public interest, or promotes any kind of equity. Second, many people who attend Cornell have tuition reduced below the nominal amount, and the changing interest rate simply reduces the amount of reduction Cornell is willing to provide. It has very little effect on who is able to attend Cornell.

Posted by: calibantwo on January 18, 2007 at 3:49 PM | PERMALINK

Yellow dog: The idea that we can accept everybody of low income into limited spaces available for higher education in places of their choice at the same time is not correct. You're going to see acts of preferential treatments and prejudices come into play. Let me set this up for you; say you have two students both poor but one white and the other black and both are vying for the same one spot in a specific institution. Under the income-based system, they'll both get the loan (which is a good thing) but preferences would still determine who gets to have the desired spot.

Affirmative action is not just about creating opportunities, but also for dealing with some of these more subtle issues. I think rather than saying it should be abolished, we can think of a hybrid that combines the best of both worlds.

Finally, the notion that we should just do away with something that may be morally right just because the majority is against it, is ridiculous.

Posted by: GOD on January 18, 2007 at 3:50 PM | PERMALINK

Which of the poor receive the subsidy? All? or some (20%)? If so which 20%? Who is the gate-keeper? DoE? Local school administrators?

Nice theory based on unlimited resources. Good luck with implementation.

Posted by: TJM on January 18, 2007 at 4:05 PM | PERMALINK
Drum is talking about using income level affirmative action for admissions decisions, not to determine aid (which is already done), so grape_crush's comment is on point.

I'll agree that my "first of all" comment was off point.

Posted by: cmdicely on January 18, 2007 at 4:28 PM | PERMALINK
Which of the poor receive the subsidy? All?

Exactly.

Nice theory based on unlimited resources.

Its not based on "unlimited" resources.

Posted by: cmdicely on January 18, 2007 at 4:29 PM | PERMALINK
Instead of income-based affirmative action, why not put the resources into ensuring that poor people have excellent primary and secondary education?

I don't see why it should be "instead of". One addresses, to the extent possible, the situation of poor people who have already gone through the primary and secondary system, the other addresses the problems facing those who have yet to do so. And the second is likely to take time to get fully functional, and once it does another dozen years to eliminate the need for corrective action of the first kind. Do both.

Posted by: cmdicely on January 18, 2007 at 4:32 PM | PERMALINK

The money would probably be better spent on programs to inform the poor and middle class that the federal government will loan them tons of money for college.

Posted by: RM on January 18, 2007 at 5:04 PM | PERMALINK

Not everyone goes to (nor should they go to) college. My question went to how to determine who qualifies for free college? Just as bad money drives out good,a free for all program will not result in a general improvement in economic circumstance.

Posted by: TJM on January 18, 2007 at 5:09 PM | PERMALINK

Many education observers believe the reason for the resurgence of The Celtic Tiger is because of Irish education policy. Third level education in Ireland is free for students who are first-time undergraduates or are E.U. nationals and have been ordinarily resident in an E.U. Member State for at least three of the five years preceding their entry to an approved third-level course.

Race or economic status don't matter -- all qualified students' college fees are subsidized by the Irish government.

Posted by: pj in jesusland on January 18, 2007 at 5:12 PM | PERMALINK

RM: The money would probably be better spent on programs to inform the poor and middle class that the federal government will loan them tons of money for college.

And that they're subject to collections practices that would shame Louie the Loanshark.

Posted by: alex on January 18, 2007 at 5:25 PM | PERMALINK

pj in jesusland: Many education observers believe the reason for the resurgence of The Celtic Tiger is because of Irish education policy.

I suspect that "education observers" may have a stake in that pie.

When was this policy instituted? How does it differ from other countries (many countries have free or heavily subsidzed college)?

Posted by: alex on January 18, 2007 at 5:30 PM | PERMALINK
Not everyone goes to (nor should they go to) college. My question went to how to determine who qualifies for free college?

1. They're poor*.
2. They are admitted to college.
3. They choose to go.

The "not everyone should go to college" aspect is handled by points 2 and 3.

*clearly, a formula for determining a threshold at which to provide a full subsidy, and then a sliding scale from their up to a higher threshold above which there is no subsidy will need determined. And perhaps you limit the maximum federal subsidy based on, e.g., median cost of a college education, requiring the student to find additional assistance for more expensive choices (top flight private schools often provide extensive need-based grants already, its the lower cost schools that are often less able to do this, so this would deal with where the problems are.)


Posted by: cmdicely on January 18, 2007 at 5:42 PM | PERMALINK

I'm getting in here late, so I hope someone reads this. I'm not too keen on penalizing students because their parents happen to make too much money. The child does not have a say in this, and a qualified, bright student should not face more hurdles just because their parents have more money. It is inherently unfair to the student, who is simply doing his or her best regardless of their circumstances.

Admission should be based on the student's gifts and talents alone. Then, you would look at income and find ways to subsidize those who certainly earned a chance, but do not have the means to pay for that opportunity. Of course, if that student is in a poor primary and secondary school system, they are at an inherent disadvantage. But, giving them an admissions slot that they are not qualified for only ends in disaster. I've personally seen it time and time again--students who were unqualified (through no fault of their own--just living in a bad school system) admitted to college, only to drop out a semester later because they couldn't hack it (even with help and tutoring). They simply were not prepared, and giving them admissions preference did nothing to help that situation.

Affirmative action on the college level (regardless of how you want to administer it) cannot succed without an adequate primary and secondary educational infrastructure in place to prepare them for the rigors of college life.

Thanks,

Mike

Posted by: lord_mike on January 18, 2007 at 5:43 PM | PERMALINK

Alex:

The policy of free secondary education in Ireland began in 1967. Education is not the only reason for Ireland's transformation from farm to technology. From http://www.issues.org/21.4/p_harris.html:

Four sources of growth

First among these attributes is Ireland’s excellent educational system. Though it is not perfect, and passionate debates continue about how the system can best serve Ireland’s changed society, it is in some respects a model. Today, 48 percent of the Irish population has attained college-level education, compared with less than 40 percent in countries such as the United Kingdom, United States, Spain, Belgium, and France, and less than 25 percent in Germany.

Ireland’s success in the 1990s, in fact, would not have been possible if the country had not taken a crucial step 40 years ago, when it began a concerted effort to increase educational participation rates and introduce programs that would match the abilities of students to the needs of a global economy and advanced, even high-tech, enterprises. At the same time, the country started making its already demanding K-16 education system more rigorous, creating links between industry and education and formalizing and supporting workplace education.

What happened thereafter is no coincidence. In the mid-1960s, fewer than 20,000 students were attending college in Ireland. By 1999, the number had risen sixfold, to 112,000. In 1984-1985, only 40 percent of 18-year-olds in Ireland were engaged in full-time education. Ten years later, the figure was 64 percent. During the first 5 years of the 1990s, the total number of students engaged in college-level programs grew by 51 percent. By 1995, Ireland had more students as a percentage of population with science-related qualifications than any of the other 30 countries in the Organization for Economic Cooperation and Development (OECD). A long-term commitment to education provided the foundation for the boom that followed.

Second, Ireland was ready to prosper when the knowledge-based economy emerged because of a combination of benefits it enjoyed as one of 15 members (the total is now 25) of the EU and as a nation with a historically strong cultural and political connection to the United States, where 40 million people trace some part of their heritage to Ireland. The EU made massive investments in Ireland, as the single-market system followed its plan of shifting a portion of EU contributions from richer members to those in need of development, on the principle that growing markets would benefit all members. This investment transformed infrastructure, including roads, ports, and communications, and gave overseas investors reason to look to Ireland as a haven of opportunity. Meanwhile, as an English-speaking country with a unique bond to the United States, Ireland was already an enticing marketplace for U.S. enterprises. When the technology age of the 1990s arrived in the United States, great opportunities existed for it to arrive in Ireland as well, especially given the country’s other advantages.

Third, a consistent political and public commitment to investment has existed in Ireland for decades. The country’s investment agency, IDA Ireland, for example, was established in 1969 and has played an important role in recruiting U.S. corporations. Today, there is hardly a leading U.S. manufacturer of computer software or hardware, pharmaceuticals, electronics, or medical equipment, among other knowledge-based businesses, without thriving operations in Ireland. IDA Ireland has meanwhile been able to develop relationships with overseas companies across the globe and has established offices in the United States and several other countries to serve clients and attract further investment.

Fourth, Ireland was shrewd enough to capitalize on these strengths by lowering corporate taxes. By 2003, Ireland’s corporate tax rate was 12.5 percent, covering both manufacturing and services (with a rate of 25 percent applying to passive income, such as that from dividends). This change, along with sustained efforts to reduce payroll and other business taxes, gave U.S. manufacturers operating in Ireland a financially competitive platform from which to serve the EU single market of 470 million people. In 1990, about 11,000 companies were exporting from Ireland. By 2002, the number had risen to 70,000.

Posted by: pj in jesusland on January 18, 2007 at 5:48 PM | PERMALINK
Admission should be based on the student's gifts and talents alone.

Since, "gift and talents" being equal, lack of financial resources — both personally and in the community you are from — is, generally speaking, a barrier to results of the type usually used as "merit" factors, that suggestion is an argument for, not against, income- and geographic-community-based affirmative action.

Posted by: cmdicely on January 18, 2007 at 5:49 PM | PERMALINK

"Solution to 'problem' three: What does 'cultural advantage' have to do with income? Either they qualify under income requirements or they dont, regardless of 'cultural advantage.'"

I'm being descriptive, not normative. Any affirmative action program that has the end result of reducing the number of African-American and Latino beneficiaries and increasing the number of South/Southeastern Asian beneficiaries is dead on arrival.

Posted by: Joe on January 18, 2007 at 5:51 PM | PERMALINK

Dontcha know there are already too many dumb people going to college? The simple folk should know their place, and learn a trade to service the well-to-do. Or so says Charles Murray in an Op-Ed in the 1/17 WSJ.

Posted by: BB in DC on January 18, 2007 at 6:03 PM | PERMALINK

Not everyone goes to (nor should they go to) college. My question went to how to determine who qualifies for free college? Just as bad money drives out good,a free for all program will not result in a general improvement in economic circumstance.

Posted by: TJM on January 18, 2007 at 5:09 PM

I take it you are not in favor of free universal primary or secondary education. Clearly, as any student of American history will tell you, America really didn't start humming until free primary and secondary education were made universal.

No State in the Union would even think of doing away with free and universal primary and secondary education. It would be economic suicide.

Posted by: Ron Byers on January 18, 2007 at 6:05 PM | PERMALINK

I'm all for reducing the interest rates for student loans. They helped me out hugely 20 years ago, and I repaid them and have contributed to the economy as a result.

Harvard recently decided to simply give everyone whose parents make less than, I think, $40K a 100% free ride. Makes sense.

Posted by: rcc on January 18, 2007 at 6:47 PM | PERMALINK

"Yep, as long as that were quite a bit more true problem solved."

You cats can do quintiles and %s, but you can't fucking punctuate a sentence so it makes sense?

Posted by: buddy66 on January 18, 2007 at 7:37 PM | PERMALINK

Harvard recently decided to simply give everyone whose parents make less than, I think, $40K a 100% free ride. Makes sense.

Give every college Harvard's obscenely huge endowment, and they could do it too. What's the point?

Posted by: Vincent on January 18, 2007 at 10:21 PM | PERMALINK

It's politically impossible, but students who can't meet a baseline standard of competency ought not to qualify for any college funding, regardless of their income. Students who meet that basic competency should get all the funding they need. Right now, we're wasting tons of money on students who aren't qualified, most of whom drop out. I'd much rather give more of a break to students who are worth the investment.

The problem is that any competency test we set would have politically unacceptable results. It would have to be a test, since grades are a joke. So make it an average of 500 on each section of the SAT, 21 ACT composite, 500 or more on two Subject tests, or a minimum score of 3 on two AP tests (in something other than a foreign language the kid already speaks).

That's a laughably low level for college, and yet the URM qualification rate would be abysmal. The low income kids who would qualify would be predominantly white and Asian.

What does it tell you, though, about who we're sending to college? All we're doing without standards is devaluing the college degree. So why give people more money to buy something that's getting less valuable by the day?

Posted by: Cal on January 19, 2007 at 1:06 AM | PERMALINK

Vincent -- $60,000 I believe.

Posted by: notthere on January 19, 2007 at 1:42 AM | PERMALINK

dcwdwdicwi

White House Tries to Sell Iraq Plan to Skeptical Republicans

Posted by: wdcwed on January 19, 2007 at 1:46 AM | PERMALINK

Dave of MD had a really good point.

I know many people who took out student loans to attend community college. I never saw any of them get a better job because of it.

Posted by: DR on January 19, 2007 at 10:18 AM | PERMALINK

Vincent -- $60,000 I believe.

By "What's the point?", I meant that citing something that will help a few thousand low-income students who've been admitted to Harvard isn't going to help the millions of others facing problems paying for their college educations. Perhaps your point is that since they aren't going to hallowed Harvard, they aren't important; I sincerely hope that's not the case.

Posted by: Vincent on January 19, 2007 at 10:34 AM | PERMALINK

"All we're doing without standards is devaluing the college degree. So why give people more money to buy something that's getting less valuable by the day?"

It's getting so hard to maintain a good class system these days.

Posted by: Ross Best on January 19, 2007 at 3:35 PM | PERMALINK

A few of the Ivies (Harvard, Princeton and I believe Yale) have taken the step of replacing loans with grants for students from families who make under something like 40K per year. Reducing the interest rate for loans will have little effect on low income students attending those universities.

Posted by: Cornell sucks on January 20, 2007 at 12:44 AM | PERMALINK

Vincent - The point is 'make sure your child gets accepted at Harvard.' The Ivies are also moving away from early decision/admission which should also boost the acceptance rates for low income students.

Posted by: Crimson on January 20, 2007 at 12:48 AM | PERMALINK




 

 

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