The student loan crisis: How middle-class kids get hammered

<p>I don’t live in the world of rainbows and unicorns that some occupy here. Tax dollars are not a salve for what ails this country. Kluge, you are an offensive bleeding heart. You have no idea about me, yet you accuse me of being selfish, “me me me”, etc. You have no idea how many kids have come through my basement for standardized test tutoring, which I do for free. You have no idea how many hundreds of application essays I have edited for kids, for free. You can insult me all you want; unfortunately, there’s no tax on ignorance.</p>

<p>Unfortunately if you are not for endless giveaways on these forums you are selfish. There seems to be no understanding that it is possible to feel that all of these programs are well-intentioned failures that take money from the middle and lower middle class and basically flush it down the toilet… Despite plenty of evidence.</p>

<p>Whether anyone agrees or disagrees with kluge’s post, everyone must admit that was grammatically well-written (even though you don’t observe the oxford comma). Hats off, kluge. The California taxpayers invested well. ;)</p>

<p>My personal definition of selfishness is to give less than you’ve received. I have benefitted immensely from state and federal programs and I feel I have yet to repay my fair share. I do so with a higher tax bracket and donations to charitable organizations. If asked to share the burden with even higher taxes, I am willing to do so if society is willing to share that burden too. However, my willingness has conditions. I am ok with well intentioned government programs to solve our problems. However, when they are failing, the leaders must quickly implement corrections. This is where I think we all share frustrations. Now we may come up with different ideas, but watching budgets expand without meaningful results can be infuriating. Watching tuition rise beyond inflation and young adults burdened for years with debts their parents and grandparents did not have to endure is selfish.</p>

<p>I don’t see any resolution to the high cost of college tuition until we change the economics of higher education. The supply and demand imbalance is driving the cost of tuition. More transparency would help students and parents evaluate colleges for outcomes and not just promises. Restrictions on student loans can be tied to the default rates of certain universities’ graduates. Lastly, we have to consider funding the state schools back to their levels in the past or accredit cheaper online options to bring some competition to the market place. Just my two cents.</p>

<p>Niquii, apparently some would disagree. Evidently the world I grew up in was a fantasy land of rainbows, unicorns and “endless giveaways.” Oddly, it didn’t seem that way at the time. </p>

<p>Parent 1337, you’re right, I don’t know you. The only basis I have for forming opinions about you are the words you write. That’s the nature of a forum like this. And this is what you wrote:

</p>

<p>I don’t know what state you’re from, so I can’t comment on that. I do know that the State of California spends half as much per student for higher education as it did 40 years ago. Looking to the federal side, I see that the Department of Education now accounts for 1.3% of federal budget spending, as opposed to 2.1% 40 years ago. Social security and debt service have fluctuated over the years, but interestingly the 2013 numbers are both within 0.2% of the 1974 figures at about 13.2% and 20.6%. Department of Defense (on-budget, at least) has decreased from about 29% of the budget at the end of the Viet Nam war to about 17% now (not counting Homeland Security or veterans affairs.) Health and human services shows the only increase of that group, from 11% to 24%. </p>

<p>I am aware that the lifeline phone service that was initiated during the 1980’s has evolved along with technology to the point where the free landline phones which were made available 30 years ago are now being replaced with cheap cell phones. I am also aware the at the use of prepaid “burner” phones is common among criminals, but the only evidence I could find that “we” are buying cell phones for drug dealers are unverified (and unverifiable) anecdotes repeated on right wing websites. (The despicable and shameless con artist James O’Keefe, the guy who edited his tapes of ACORN workers to make it appear as though they were doing the exact opposite of what they were actually doing, is hard at work at trying to fabricate a phony “scandal” with this as well. He apparently makes a good living pandering to the fears and resentment of the easily fooled.) I haven’t found a single verified instance of “us” buying cell phones for drug dealers, let alone a significant enough pattern to suggest it as a general fact. Prepaid “burner” phones are anonymous and pretty cheap in relation to the cash flow of the drug trade, while government subsidized phones can be tracked to the account owners with potentially awkward consequences for the miscreant. So I’m not sure where you got this concept.</p>

<p>So, yeah - I do know where the tax money went, and where it’s going now. What I don’t see is your point. We don’t spend more tax dollars on higher education (at least not in California) - we spend less. We haven’t suddenly started to “buy cell phones for drug dealers” - we continue to implement the same limited free phone plan now that we have for the past 30 years. </p>

<p>It’s true that money alone can’t solve every problem, but solving them without money is generally even harder. That’s been my experience, at least. And the people who preach the loudest about the inefficacy of money to solve problems seem to be only too willing to keep as much of it as they can. The quasi-religious incantation that “tax dollars are not a salve for what ails this country” is awfully convenient when expressed by a taxpayer who seems to feel that all of the money sent to the government is going to drug dealers and similarly unworthy folks. That’s how your words strike me.</p>

<p>And I’m neither “ignorant” nor a “bleeding heart.” (I’ll grant you that “offensive” is in the eye of the beholder.) I’m a sexagenarian who has paid his own way for over 40 years, raised a family, paid my taxes, saved for retirement, and spent a lot of time observing what works and doesn’t work in the real world. I’m a pragmatist, not an ideologue. I’m interested in data, not theories. And the data I see doesn’t square with what you wrote.</p>

<p>No wonder CA is almost if not bankrupt!!!</p>

<p>Actually, California has a budget surplus this year and has started to pay down the debt incurred over the past decade. But we still have a long way to go to return to the level of support for higher education that prevailed before Prop. 13, the Gipper and the Governator.</p>

<p>Care to enlighten us as to how the budget surplus magically appeared? The answer, in part, is related to the many CA municipalities that have gone bankrupt, or are in danger of going bankrupt. The rosy picture that Kluge paints (and blames in part on a governor who left office nearly 40 years ago) isn’t all that rosy in reality, but it makes a great headline.</p>

<p><a href=“These California cities could be next in bankruptcy”>http://www.usatoday.com/story/news/nation/2013/05/15/ten-california-cities-in-distress/2076217/&lt;/a&gt;&lt;/p&gt;

<p>Sorry Kluge…you are just wrong…</p>

<p><a href=“http://reason.org/files/a2ec7caccc5d660e870c4a21526ef5f8.pdf”>http://reason.org/files/a2ec7caccc5d660e870c4a21526ef5f8.pdf&lt;/a&gt;&lt;/p&gt;

<p>Check out the details for CA’s spending on education in the past decades. Normalized for population growth and inflation…guess what it has gone UP UP UP UP. It is not now nor has it been a revenue issue, it is a reckless spending issue.</p>

<p>The general fund (which funds education both K-12 and Higher ed) is encumbered…meaning certain percentages of the fund are GUARANTEED to go toward education. In 1990 the fund was 40 Billion, in 2009 it was 105 Billion. The same percentages were dedicated toward education (about 11% toward higher ed and 50% toward K-12). Even in the most advanced new math 11% of 105 billion is MORE than 11% of 40 billion. And, CA population has NOT increased by a comparable percentage. In 1990 it was approximately 30 Million, in 2009 it was approximately 36 million.</p>

<p><a href=“california population - Google Search”>california population - Google Search;

<p><a href=“Gov. Andrew Cuomo Proposes Turning Prisons Into College Campuses - CBS New York”>http://newyork.cbslocal.com/2014/02/16/gov-andrew-cuomo-proposes-turning-prisons-into-college-campuses/&lt;/a&gt; </p>

<p>The program will offer associate and bachelor degree education at 10 prisons, one in each region of the state.</p>

<p>Wonderful. Why do we even try?</p>

<p>There exists no wrong that cannot be righted by more government spending (of funds that don’t exist). All it takes is a little trust… and pixie dust (and robust grammatical constructs)…</p>

<p>What’s wrong with offering education to prisoners?
Those who participate are 43% less likely to return, & I daresay prison is more expensive than education, in more ways than money.
<a href=“http://m.rand.org/news/press/2013/08/22.html”>http://m.rand.org/news/press/2013/08/22.html&lt;/a&gt;&lt;/p&gt;

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<p>Not everyone has kids; not everyone goes to college; if college were “free”, there wouldn’t be enough college seats to accommodate them all (if my state got rid of OOS/intl admissions, and devoted all the seats, at all the colleges to in-state-only, we’d still only be able to accommodate, perhaps, 1 in 3 graduating seniors.)</p>

<p>Point being, those who’ll <em>never</em> benefit from this pay taxes, and vote, too. Trust me, the single guy who commutes through two hours of congestion every morning isn’t thinking “Gee, we should make college more affordable”, he’s thinking “We need better roads / mass transit - I pay taxes, where does my money go?” I’m sure you can imagine any number of similar demands for funds. </p>

<p>And while I’m no big fan of corporate welfare, I think the magnitude of these “give-aways” are usually far overstated - and don’t forget, those “big companies” employ large amounts of people, who earn large amounts of money, and pay large amounts of taxes, to subsidize / pay for the schools you attend and other benefits you receive. </p>

<p>kluge, I agree with what you say, except that personally I don’t take “bleeding heart” as an insult. After all, Jesus had one.</p>

<p>If you truly want to get a clear picture of taxes and spending may I recommend the following? Stop listening to pundits and go to your school district office, check out a budget, sit down and read through it, line by line. Then get online and read a copy of your state’s education budget. </p>

<p>I covered education for several years in California following Prop. 13. It was not a pretty picture. Your property taxes are directly responsible for police, fire and yes, education. The state legislature also determines how much funding from income tax and sales tax will be given to schools based on student enrollment. </p>

<p>As in any business, labor is the biggest expense. Some districts ( and I can’t remember if it was the entire state) in California chose to only have 20 per class in the lower grades, this meant hiring more teachers. Also cost of living and contract negotiations will increase a budget. </p>

<p>And here in Oregon and IIRC California, too, the pension funds were mishandled and millions of dollars were lost, resulting in more money outlay for the districts. For example, in Oregon, teachers pensions are funded at 6% of their income. However districts must pay 13% to make up for the loss. </p>

<p>Please stop listening to rhetoric and investigate these issues for yourself.</p>

<p>Again, it is not a revenue issue in CA it is a spending issue…</p>

<p>Very simply put:</p>

<p>1990: General fund = 38B;
K-12 spending = 15 B Higher Ed = 5 B population = 30 Million</p>

<p>2009: General fund = 105 B (this is a MASSIVE revenue increase despite "prop 13 is destroying us’ rally cry)
K-12 spending = 41B Higher Ed = 15B population = 36 Million</p>

<p><a href=“http://reason.org/files/a2ec7caccc5d660e870c4a21526ef5f8.pdf”>http://reason.org/files/a2ec7caccc5d660e870c4a21526ef5f8.pdf&lt;/a&gt;&lt;/p&gt;

<p>More and more money going into the system and yet the cry to arms is Education is Underfunded. If less $$$$ are going to the actual school and student then it is not due to decreasing $$$$ input but rather a faulty internal distribution system. </p>

<p>

I think a part of the reason that folks really, really take exception to a lot of the opinions I express here is that when a statement like this is made I’ll take 5 minutes to track down the primary data source and see if the facts asserted are accurate or if the numbers have been “massaged” - or even flat out misrepresented - by an author with an ideological agenda - as, indeed, is the case here.</p>

<p>I went to the data source cited by the libertarian author of the “Reason” article cited by Dietz: <a href=“http://www.dof.ca.gov/budgeting/budget_faqs/information/documents/CHART-C.pdf”>http://www.dof.ca.gov/budgeting/budget_faqs/information/documents/CHART-C.pdf&lt;/a&gt;&lt;br&gt;
Guess what I found?</p>

<p>The earliest data in that file is from 1976-1977 (not referenced in the “Reason” article.) Higher education funding that fiscal year was $1.863B. Adjust that for standard inflation* for 35 years to the last complete fiscal year, 2012-2013, and you get $7,365B. Adjust that by the 72% increase in population of the state during that time and you get $12.721B. What was the actual higher education budget for 2012-2013? $10.041B. That’s 27% lower than the population/inflation adjusted spending for 1976. From 2001 to 2011 spending was dead flat in current dollars - forget adjusting for inflation and population growth. (Spending has been partially restored in the last two years.) In fact, when I spot-checked the numbers from the 80’s and 90’s against the primary data source, the results were really pretty consistent - about a 30% decrease in spending from any point. I figured he just “cherry-picked” the best data points to get the answer he wanted.</p>

<p>But no. It appears he just misstated the facts. The author of that article writes:

</p>

<p>But that’s not what the numbers on the primary source cited actually say. </p>

<p>The figure listed for higher education for FY1990-91 is $5.833B. For FY 2008-09 it’s $10.099B. That’s not a “107.7%” increase; it’s a 73% increase. Adjusting for inflation and population growth what I found was, again - funding had declined, not increased. </p>

<p>If there are people with money to spend who would benefit from having people adopt a particular opinion you can be sure that scholarly-looking articles like that one will be generated to reassure them that that opinion is valid. My opinion is: check the primary data sources. </p>

<p>If you want a very different view of California’s funding of higher education, read this: <a href=“http://www.ppic.org/content/pubs/report/R_512HJR.pdf”>http://www.ppic.org/content/pubs/report/R_512HJR.pdf&lt;/a&gt;&lt;/p&gt;

<p>*Of course, the CPI underestimates actual inflation relative to actual increases in costs relative to education nationwide over this period,</p>

<p>Squiddy, the most wonderful thing about corporate welfare is that some of it ends up funding lobbyists and politicians who are then able to secure even more of it in an endless positive feedback loop. If the ratio of corporate welfare to social safety net welfare does not bother you now, just wait.</p>

<p>All of it bothers me. But, the problem with the social safety net is that is has expanded well beyond a safety net. It’s nearly half the country. OMG! Also, public pensions are behind most of the growing list of municipality bankruptcies are state budget deficits. That problem is just getting bigger as well. </p>

<p>My hat is off to the parents like GA2012mom and 2016Bmom who have personally sacrificed (financial and otherwise) so their children can have the higher ed opportunities.</p>

<p>My DH and I have done our best with raising our two DDs to respect the work ethic and also have good personal relationships and strong faith (Catholic). Living in AL, there is a great external acceptance of religious expression in the ‘Bible Belt’. Both of their campuses (UAB and UA) have student religious opportunities (Catholic and other).</p>

<p>The key thing is if your student(s) appreciate your sacrifices and involvement, they will do their best with the educational opportunities and also keep in line with their social situations if living away for college.</p>

<p>Consumer and Kluge had many good points.</p>

<p>I like hearing the success stories.</p>

<p>Wealthy parents do have better choices, and some may bother (or not bother) with concern for the majority of college students with less options. These parents though may have more problems with D or S ‘entitlement attitude’ - student not doing their best, expecting the best to fall into their laps, expecting parent to pay for what they think is the best; maybe not applying themselves fully in school. </p>

<p>Sometimes our society sends many selfish attitudes to our very influenced young people.</p>

<p>Many of us are frustrated with some of the state and federal tax money being ‘wasted’ - spent inefficiently and ineffectively. The U.S. is still IMHO the best place for all our citizens in regard to opportunities and standard of living (I am also a Swiss citizen - dual, born in U.S.) - smaller countries like Switzerland do not have the global business and government influence like the U.S. has. The tax structure in Switzerland has been structured to be financially better to rent instead of own, and the hurdle for home ownership is very steep there. The financial markets in Switzerland constantly watch what is going on with US financial markets.</p>

<p>Parents in many areas recognize the shortcomings of their student pre-college academic preparation, and fill in the gaps as much as they are able to, and as much as their student will absorb.</p>

<p>We all should be concerned about the next generation, in part because we personally will be impacted in our old age, but more importantly for the next generation. My DH and I have had it better than his parents, while my parents did well in business but had health issues that cut retirement pleasures short.</p>