The View from Right Field

Biden Is Forgiving Debt for Former Students. He Should Tell Colleges to Cut Tuition for Current Students.

President Biden gave former college students a $10,000 gift ($20,000 in certain cases) if they borrowed money for college and haven’t paid it back.  But he didn’t give anything to current college students, which doesn’t seem fair.  So here’s my idea: For current students, he should force colleges to cut their tuition by $2500/$5000 a year (which is $10,000/$20,000 over four years).  It wouldn’t be that hard for the colleges.  Purdue has kept its in-state tuition at $9,992 for ten years.¹  Colleges can cut their costs – if they want to.  They could reduce the number of administrators; they could get a few teachers to teach an extra class; they could figure out ways to reduce fees.  There’s lots of things they could do.

And if President Biden’s lawyers can come up with a way to claim he has the legal authority to forgive all that student debt, I am sure they can come up with a way he can force colleges, at least any college that gets money from the federal government, which is just about all of them (except, maybe Hillsdale College), to cut their tuition.  And that wouldn’t even cost the federal government $300 billion.
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Note: I hope readers understand this post is a bit of a joke – except for the idea that colleges could cut their tuition.  They could - if they wanted to.  That's not a joke
¹ See here and here.

Questions Re Joe Biden’s Student Loan Bribe

Obviously, President Biden’s student debt cancellation plan is a campaign bribe.  That’s not a question.  My question is: how is it supposed to work?  Is the idea that the people getting the bribe (i.e., getting some part of their student loan forgiven) will vote Democratic in November, as a thank you to the President, when they would have otherwise voted Republican/other?   Or is it that people will come out to vote, once again, as a thank you for the bribe, when they otherwise would not have voted?

Also, I wonder what the expected return is on the bribe.  In other words, what’s the cost of each additional vote, whether from somebody who would have otherwise voted Republican/other or somebody who wouldn’t have voted at all but for the bribe?  Given that the Penn Wharton Budget Model projects that the President’s plan could cost up to $300 billion, it would seem that these could be some pretty expensive votes.   

Do Kirkland & Ellis and the Biden Administration Have the Solution to Crime?

With Roe v. Wade getting overturned today, this post is probably a day late and a dollar short.  But here it is anyway:

Paul Clement and Erin Murphy, who won the case in the Supreme Court against New York state’s relatively strict handgun law,  New York State Rifle and Pistol Association v. Bruen, have announced that they are leaving the law firm they were at, Kirkland & Ellis.  According to them, Kirkland & Ellis told them that the firm would no longer take firearms cases and that they needed to stop representing clients such as the New York State Rifle and Pistol Association or leave the firm.  Not surprisingly, Clement and Murphy are leaving K&E.¹  In any case, the lesson is clear: K&E doesn’t want to provide legal representation to unpopular clients – or at least certain unpopular clients.

Gaming College Admissions – Part Two

Back in April, I suggested another way to “game” the college admission process.  Instead of paying bribes to college coaches to say they wanted a kid for their sport or to proctors to correct answers on SAT or ACT tests, I suggested, jokingly, hiring a genealogist to come up with some minority or other disadvantaged ancestor – so you could try to get admitted via some special program for those groups. 

While I was trying to be humorous, The Wall Street Journal reported today that people actually were falsifying their race or other ancestry to get favored treatment.  While I was suggesting doing real research, it is alleged that the person behind the big admissions scandal was just telling people to claim a race or ancestry they really didn’t have in order to get admitted:

“On some applications that Mr. Singer’s operation handled, applicants may have claimed to be underrepresented minorities based on a tenuous connection, such as a distant relative of Native American ancestry, said one of the people familiar with his business.”

I guess my humor wasn’t that far out.  Unfortunately.

A Better Way to Game the College Admission Game? Or Not.

The last few weeks the news has been full of articles, and pictures (because some of those involved are celebrities and good looking), of people who cheated in various ways to help get their kids into Ivy League and other colleges.  Bribes were paid to get coaches to say they wanted a kid or to get proctors to correct answers on SAT or ACT tests.  Amounts into six figures were paid.

Obviously, there are other ways this could have been done legally.  Seven- or eight-figure donations would work to get your kid admitted at some schools, but that might be beyond the means of some of these people.  Alternatively, if you start early enough, instead of bribing a coach, you could pay for lessons for some obscure sport and have your kid get good enough to make it that way.  (This might be particularly useful for a girl, what with Title IX requirements and all.)

Is “Free College for All” a Good Idea – Or Just More Welfare for the Rich?

A popular issue on the left these days is free college.  It was a big part of Bernie Sanders’ campaign in 2016.  Jeremy Corbyn pledged to abolish tuition fees in the UK during the campaign there earlier this year.  And in the campaign that just ended in New Zealand, the Labour leader, Jacinda Ardern, promised one year of free college in 2018, increasing to three years in 2024.

The usual reasons for this are college affordability and the high levels of debt so many college students are incurring.  With college costs seeming to be on a forever-upward trend, more and more students are incurring more and more debt.  Others don’t or can’t go at all.  And so, the promise of free college: To end the burden of debt and to make sure everybody can go to college.

Do They Ever Learn Anything in Washington?

Donald Trump.  Bernie Sanders.  Occupy Everywhere.  The Cubs winning the World Series.  So many things have happened that nobody ever expected that the Tea Party has become a distant memory.  An even more distant memory is what started the Tea Party.  It wasn’t Obamacare or the bailout of the Wall Street bankers, though both of those added to the Tea Party’s fury.  Rather, the Tea Party started on February 19, 2009 on the floor of the Chicago Mercantile Exchange when CNBC reporter Rick Santelli unleashed a rant, on air, against an Obama administration plan to bailout homeowners facing foreclosure and help them refinance their mortgages”:

“Do we really want to subsidize the losers' mortgages?  This is America!  How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?” 

Colleges Come Up With Another Way to Get More Money Out of Students

Last week The Wall Street Journal reported on a new idea some colleges are promoting to reduce the amount of debt students have to incur for college: parent loans.  Instead of getting students to take on more debt, colleges are pushing parents to take out loans.  And the nifty thing about these “parent loans” is that they aren’t included in the scorecard that the Education Department created in 2013 to help students figure out how much debt they would incur at various colleges.¹

Obviously, if the problem is the affordability of college, more loans isn’t the answer.  The answer is better run colleges that charge lower tuition.  I have talked about this before.  (See “The High Cost of College Tuition” – Part 1, Part 2, and Part 3.)  I am not going to repeat all of what I said there.  However, in Part 3, which was the longest, I suggested one solution to the rising tuition/debt problem:

The High Cost of College Tuition – Part 1*

Last summer, even though limits were put on government spending as part of the agreement to increase the national debt limit (and there may have even been some cuts in spending), one thing that did not get cut or limited was spending on Pell grants.**  In fact, it is my understanding that spending for Pell grants was even increased.  And recently, President Obama announced changes in federal college loan programs that are supposed to make college loans a little cheaper for some students.

All of this is in the name of making college “more affordable”.  Which got me to thinking about what I paid for tuition to Yale Law School 40 years ago (ouch, I’m old) and wondering what the tuition there is now.  I remember that, at the time, I thought the tuition was pretty high – and it was given the money we had and the value of money back then.  For the three years I went to Yale, from 1971 to 1974, the annual tuition was $2800, $3100 and $3300, respectively.  It was a total of $9200 for three years, which was a lot of money.

Then I checked to see what Yale’s tuition is now.  The tuition for the 2011-12 school year is $50,275.***  In other words, what I paid for three years would cover 37% of just one semester now.  But that’s unfair.  There has been a lot of inflation since 1971-74.  You can’t compare prices now with prices then without factoring in inflation.

So I went to the U.S. Department of Labor records to see how much inflation there has been since the early 1970s.  I used the Consumer Price Index-All Urban Consumers because the DOL has numbers for this index all the way back to 1913.  For ease of calculation I decided to compare the CPI number for January 1973 (midway through my time in law school) with the CPI number for September 2011, the start of the school year.  The January 1973 number was 42.6.  The number for September 2011 was 226.889.  Doing a quick calculation tells us that $9200 in January 1973 is equal to $49,000 in today’s money.  (See, algebra does come in handy in the real world.)

My first reaction was that $49,000 is about the same as today’s tuition of $50,275 – until I remembered that $49,000 represented three years of tuition, not just one.  In other words, while the cost of living went up 430% from January 1973 to today, Yale Law School tuition went up over 1500%.  In “real” terms, tuition more than tripled.  The tuition I paid for three years wouldn’t cover even one year of tuition today.  Which is, of course, ridiculous.

[ End of Part 1]

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* I have been wanting to write about increases in college tuition for quite a while.  I have come to the realization that I am not going to be able to do one long post, which is what I wanted to do.  So, I have decided to write several shorter posts that will hopefully tie together.  This is the first.

**  Laura Meckler, "College Grants Spared From Spending Cuts," The Wall Street Journal, August 4, 2011. Pell grants are grants (not loans) given by the federal government to college students, mostly to undergraduates, with financial need.  For the 2011-2012 school year, the maximum Pell grant is $5,550 per year.

*** For 2011-2012 there are also administrative and activities fees of an additional $2,250, but I don’t know what those were back when I was there, so I will just look at “tuition”.

How Government Makes College Even More Expensive

During the presidential campaign last year, Barack Obama said the rising cost of college tuition meant the federal government needed to make more loans available for college students because that would make college more affordable. This is standard Democratic policy, and a lot of Republicans favor it, too. Except it won’t work – and may actually make things worse. This article in Thursday’s Wall Street Journal explains why:

"Also, the rising levels of borrowing may ironically be contributing to the accelerating cost of college, say some college-finance experts. Loans can give colleges an artificial sense of a family's ability to pay tuition. … Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, says this phenomenon is playing a role in why tuition grows at about twice the rate of inflation. ‘Instead of imposing tougher choices’ on college costs, he says, it's ‘easier to raise prices … because this additional loan amount is made available.’"

It’s very logical. If students, and their families, have more money available to pay tuition, colleges will increase the tuition they charge. College won’t get cheaper until people refuse to pay constantly increasing tuition.