The Republican candidates for president debated at Oakland University just north of Detroit a few days ago, and several students expressed concerns about the current student loan crisis. Apparently only two candidates had the chance to answer their concerns – Ron Paul, whose opinion I have already blogged about, and Newt Gingrich, who had this to say:
Calling the current student loan program an “absurdity,” Gingrich said he supports forcing more students to take part in work-study programs. It would be a “culture shock for the students of America to learn we actually expect them to go to class, study, get out quickly, charge as little as possible, and emerge debt free by doing the right things for four years,” he said.
Having held a few work study positions back when I was in college, I decided to check Newt’s math. Many work study positions, including those I held, are paid at the federal minimum wage, and they also have limitations on the number of hours a student can work. During the school year I was limited to 10 hrs per week so, for example, when I worked in my school’s foreign language lab in Spring of 1998, I made $5.15 per hour (minimum wage in that year – and for many years after) or a grand total of $51.50 per week before taxes. Tuition at my university at that time? Approximately $17000 per year.
But let’s pretend those pesky limits on hours hadn’t been there. To earn my tuition, in an imaginary utopia where there were no taxes, I would have had to work 3300 hours per year, or 63 hours per week – with no time off and while going to school full-time. And remember, this is if work study wasn’t taxed, which, of course, it is. Yes, Newt, that seems realistic. Read more…
Ron Paul wants to get rid of your student loans! Well, no, not your student loans, per se. He has no plan for assisting those of us already drowning in debt. In spite of asserting that it’s a failed system that has basically screwed an entire generation, Paul still wants us – the screwees – to pay up. The change he wants is to eventually nix the program completely.
Part of Paul’s reasoning is that the federal student aid program, by ensuring that nearly anyone can go to college, increased the cost of education astronomically:
“Like housing and medicine, education costs went through the roof when government became involved. In the last three decades, the overall inflation rate has increased more than 100%, which means we basically pay double now for everything we buy. This price inflation is an inevitable consequence of printing money out of thin air and devaluing our dollar. But compare this inflation to the rise in the cost of college tuition, which has increased almost 500% in the same amount of time.”
Paul has a point here – it seems clear that access to student loans has, over time, created an education “bubble” of sorts. Colleges and universities responded to increased funding by hiking the costs of education, just as the housing market responded to increased access to mortgage loans with higher housing prices. Read more…