The solution though, isn't to stop providing money to students for college. If you don't have Pell Grants, Stafford loans and the like, lower income bracket individuals would never be able to afford college. There is a simple fact: I could not pay my way through my Midwest university education without these things. I will graduate and be in debt, but I'll be better off having done it. Certainly the experience is worthwhile.
The solution though, as some people propose, is not to end subsidies for lower income individuals. I see several people putting forth the argument that people are the most efficient at allocating money for themselves. That is not true except in an Ayn Rand novel. If people were so rational, everyone would go to college because the expected value of college still dwarfs the cost of college. Even for those individuals who would graduate with a significant amount of debt, it is far more worth it to have a degree than not.
So, how would a society reduce the cost of college education without removing the supports that enable low income individuals to enroll? Instead of giving colleges free money, we need to re-orient our structure of providing support for students that need it so that the college has the right incentives. For example, tying the cost of college to graduate's earnings.
Right now, a university gets money merely for pursuing higher levels of enrollment. There is no financial incentive for the university to involve students in student organizations, in leadership roles in their community, in politics or in networking. There is a tenuous link between those activities and pursuing alumni programs, but from what I've seen, alumni programs are a post-hoc solution to funding. A university sees an alumnus has done very well, and seeks to share in their wealth.
Let's simplify: the cost of a college education is 3-5% of aggregate gross income for the rest of your life. People who go on to be tremendously successful will benefit their university, and the university will have an incentive to churn out more tremendously successful people. This tax could be enforced by the IRS, automatically deducted in most cases, and manually reported elsewhere.
Now no one has to worry about the stress of student loans, and universities have every incentive to provide the highest quality education possible to maximize the value of their students. No more flooding the rosters of the university with under- and unqualified adjuncts in order to support higher enrollment numbers at lower costs to pad the pockets of administration. No more cutting student involvement to pad the athletics program.
> I see several people putting forth the argument that people are the most efficient at allocating money for themselves. That is not true except in an Ayn Rand novel.
I've never read an Ayn Rand novel, yet I still agree with that statement. I guess if you call someone an Ayn Rand supporter, that is supposed to discredit them? It's a pretty basic economic principle. If you take $10000 from your bank account, you are less likely to impulsively purchase a new car than if someone walked up to your house and gave you $10000. Seriously, it's super simple, and has nothing to do with Ayn Rand.
> If people were so rational, everyone would go to college because the expected value of college still dwarfs the cost of college.
Many people get off fine without college. You are touting your preferences as the only "rational" set of preferences. There is more to life than the "expected value of college."
I thought the idea that people were better at allocating money from themselves is more like:
are you better off if I give you $1k no string attached or $1k specifying down to the cent how you are to use it?
Generally speaking people know what their needs are and how to balance them more than complete strangers or even, often, friends. Yes, people have weaknesses, but to try to rule over their weaknesses is highly paternalistic and demeaning. Moreover because of the fungibility of money, in the end often the person will find a way to spend an equivalent batch of the same money in the way they would have anyways.
Not exactly. Food stamps can only be spent on food, but you can determine what food you buy. Financial Aid must have tuition(and often books) deducted before the remainder is deposited into your account. Your company may pay for your hotel room and meal, but only a room at a 3-star hotel or lower and a $20 meal at a casual dining establishment.
It's not as black and white as you guys put it. Strings can exist, but how much they control you can vary greatly.
I agree his statement appeared to be making a black and white argument. Your reply seemed to be further defining the concept behind his statement. Perhaps you were redefining it and I misinterpreted it.
Much like how slave owners worked the cotton fields themselves, with the superficial detail of the work having passed through the body of a slave first.
> If people were so rational, everyone would go to college because the expected value of college still dwarfs the cost of college.
No, the expected value of a college degree is a result of a labour supply/demand curve and it wouldn't remain the same if you drastically shifted the supply curve. If everyone went to college, the additional earning power of a college graduate relative to the mean would be zero.
This is true within a fixed labor market, but it gets more complex with globalization. If a country's educational mix changes, its position vis-a-vis the world labor market can also change. How to manage that in a way that produces a net-positive outcome is more complex, though.
The Danish educational strategy is more or less betting on "going upmarket" via levels of education that are much higher than the global norm. Denmark can't compete on price, so the idea is to get everyone a high level of education and position the entire country as essentially a high-end consulting/services firm. Hence a goal to have 50% of people have bachelor's degrees by 20xx (I don't remember the target date). Part of hitting those numbers is maintaining the structure where not only is there no tuition, but students are paid to attend university (about $900/month if in good standing and studying full-time).
> Hence a goal to have 50% of people have bachelor's degrees by 20xx
Interestingly, the college enrolment rate is 66% in the USA with around 30% of the population completing. Similarly, in Canada, the university enrolment rate is 50% with 25% of the population completing.
Given that, it seems that the only way we might even be able to come close to a 50% degree attainment rate, in North America at least, is to force everyone into college or make it so easy that anyone can do it. Neither solution is one I would feel comfortable getting behind just to meet artificial targets.
Can you shed some more light on how the Danes hope to be able to achieve this beyond the financial aspect? What makes their population more successful in academic pursuits?
That's a big point of discussion, yes. And there is some worry that there might be some hamfisted pressure to shove everyone through university as fast as possible and hand out degrees, which would be counterproductive. I don't think that's going to be the main push, but it's something to watch out for, given as you say artificial targets.
But, I somewhat misspoke: the goal is not to have 50% have specifically bachelor's degrees, but 50% complete some form of accredited tertiary education, which includes vocationally oriented degrees (currently a pretty small proportion, but makes the gap to 50% less than it would be if they weren't included).
The current numbers (for young people, typically age 25-34) are approximately: ~65% of people enter university, and 1/2 of those graduate (~32% of the population). Also, 25% (some the same people) enter tertiary vocational education, and 1/3 of those graduate (~8% of the population). Some people complete both, so the total is a bit less than 32+8, but overall ~38% of young people are attaining some kind of tertiary education.
Current trends are that vocational education is roughly flat (in both enrollment and completion rates), but university education is massively increasing (also, in both enrollment and completion rates). It used to be very common to attend university a few years and then do something else, with very low completion rates (only 1/4 of enrolled students eventually graduated as of 1995), perhaps partly because it's free to try it out for a year or two. This seems to be becoming less common, with completion rates now on par with the U.S. and Canada (1/2 completing as of 2010).
I haven't read too much on the current policy, but I believe further increasing university enrollment rates, to maybe closer to 80% rather than 65%, is one part of it. There are also some efforts to improve completion rates of vocational degrees to be closer to the university rates (1/2) rather than the current ones (1/3). Possibly also to get more people into vocational programs, especially people from the category of "young people not currently in work or education".
> If everyone went to college, the additional earning power of a college graduate relative to the mean would be zero
That's a pretty tautological conclusion- if everyone went to college and their absolute circumstances were that of the upper middle class today, wouldn't we all be happy?
If people were so rational, everyone would go to college because the expected value of college still dwarfs the cost of college. Even for those individuals who would graduate with a significant amount of debt, it is far more worth it to have a degree than not.
Those calculations are by necessity based on estimates based on earlier generations of college graduates. Moreover, those results have a selection bias of people applying to college.
Finally, the reason why you can't implement your plan in the US is because it totally violates the 13th amendment. Do you really think it's a good idea to give colleges fractional ownership of a person?
> the expected value of college still dwarfs the cost of college
When compared to people who are selected to not have the ability to complete (or even enter) college. It seems highly improbable to me that someone who struggles to pass classes in high school has the same average earning potential as a straight-A student, even if they both end their education at the same point.
If you're interested in this idea you may like The Unincorporated Man, a book partially about a future where people buy and sell stocks of each other. Taxes, for example, are replaced with the government receiving 5% of a person's stock at birth.
http://en.wikipedia.org/wiki/The_Unincorporated_Man
Your colleges will only produce successful people in the sense that success can be directly correlated with income. There would be no point in doing anything else. Do you think that income-generating activities are the only purpose of education?
The solution though, as some people propose, is not to end subsidies for lower income individuals. I see several people putting forth the argument that people are the most efficient at allocating money for themselves. That is not true except in an Ayn Rand novel. If people were so rational, everyone would go to college because the expected value of college still dwarfs the cost of college. Even for those individuals who would graduate with a significant amount of debt, it is far more worth it to have a degree than not.
So, how would a society reduce the cost of college education without removing the supports that enable low income individuals to enroll? Instead of giving colleges free money, we need to re-orient our structure of providing support for students that need it so that the college has the right incentives. For example, tying the cost of college to graduate's earnings.
Right now, a university gets money merely for pursuing higher levels of enrollment. There is no financial incentive for the university to involve students in student organizations, in leadership roles in their community, in politics or in networking. There is a tenuous link between those activities and pursuing alumni programs, but from what I've seen, alumni programs are a post-hoc solution to funding. A university sees an alumnus has done very well, and seeks to share in their wealth.
Let's simplify: the cost of a college education is 3-5% of aggregate gross income for the rest of your life. People who go on to be tremendously successful will benefit their university, and the university will have an incentive to churn out more tremendously successful people. This tax could be enforced by the IRS, automatically deducted in most cases, and manually reported elsewhere.
Now no one has to worry about the stress of student loans, and universities have every incentive to provide the highest quality education possible to maximize the value of their students. No more flooding the rosters of the university with under- and unqualified adjuncts in order to support higher enrollment numbers at lower costs to pad the pockets of administration. No more cutting student involvement to pad the athletics program.