Should Colleges Charge Engineers More Than English Majors?

[cosmicfish]

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Well, he is saying that it is good for tax-payers to incur a loss that they otherwise wouldn’t (higher taxes) in order for the government to experience a gain in the form of higher tax revenues. In this case the loss is not a broken window but a hit to their bank accounts, and the glazier’s paycheck is instead the occupational training provided to some student.

If taxes are flowing into a fund that then invests in something (education, in this case) which pays a profit, then there is no fallacy such as you suggest. That money can be used to either pay back (potentially with a profit!) through tax rate reductions, or can be used to fund other services. Regardless, this is a separate political issue, the investment remains an investment.</p>

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Thing is, if it makes business sense for somebody to invest in an education now to reap a bigger payoff later, why wouldn’t a bank or other private lender do that? Why would they leave money on the table? It’s much more likely that lenders would already loan money to credit-worthy students, and that the government will wind up extending credit to students for whom it doesn’t make economic sense to provide an education, i.e. the basket weavers and poetry majors.

There are a number of private companies offering private student loans, and to the best of my knowledge they care about major no more than the government does. The issue is that while the government issues loans without regard to much of anything, the private companies (as they would continue to do) issue loans based not on the student’s ability to repay (as this is largely unknown) but on the guarantor’s (i.e. parents) ability to repay… meaning those from poor or low-income families better have another plan. Shifting student loans from public to private serves to make college more expensive for the rich and unattainable for the poor.</p>

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Anyway, if things worked as he said, then the government has solved its revenue problems once and for all: simply spend money on occupational training and let the big bucks roll in. The track record of governments making investments in the private sector should give him something to think about.

Actually, worldwide, I believe government investment in education has paid off so well that when the topic comes up on the global stage we are considered the backwater hicks for the way we operate. We have had federal loans for more than half a century, and while some tweaking may be in order, I see no evidence that the system has not greatly improved us socially and economically.</p>