Erase Your Student Loans the Howard Dean Way

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The "College Commitment," as the policy is called, promises that all students will have access to $10,000 annually for college, provided in a mix of grants and loans, depending on family earnings. After school, students would make regular payments on the full debt, but they’d receive a tax credit at the end of each year for any amount they’d paid over 10 percent of their income. That way, the campaign argues, no one would ever pay out more than 10 percent of their earnings, or have to make payments for more than a decade.

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In return for the public support, Dean plans to ask students, beginning in the eighth grade, to "work hard in high school" and to commit to college. His vision also calls for a large expansion of the Clinton-era Americorps program, from 50,000 positions to 250,000. Finally, it pledges that graduates who enter public service—becoming police officers or teachers, for example--will pay no more than 7 percent of their annual income toward school loans.

"This has the potential to revolutionize financial aid in this country," said Bob Shireman, a policy analyst at the Aspen Institute who consulted with the Dean campaign. And while he concedes that the plan is ambitious, Shireman says the Dean proposal strikes at the "fear" that accompanies the now complicated financial aid process.

According to a new study by the College Board, the annual costs for a year at a public university are $10,636. The fees for private schools are more than double that amount. Last year, American students received an average of $9,100 in financial aid, much of it loans. While Dean campaign staffers emphasize that the policy is intended to appeal to voters under 30, analysts point out that it stands to draw support from a much larger pool, that of poor and middle-income parents whose kids aren’t yet in college. That group includes the families of nearly 2 million Latino children expected to start college in the next decade.

http://www.villagevoice.com/issues/0347/fahim.php

profit maker for banks.

Something needs to be done to reduce the amount of students' education that needs to be financed in the first place. That's part of the reason I like Edward's plan where, if you work for 10 hours a week, you get a year free. The gov't pays the school, I believe, thus reducing the amount you have to finance by 1/4, and reducing the expensive subsidy to bank profits by 1/4.

Plans (like the one we have now) where you get a tax credit for your loan interest might mean that student's have a wash -- they pay the interest, but don't pay as much in taxes -- are basically a transfer in wealth from all taxpayers to banks financing loans. It's great for the banks, because they get their money and profits, but it' sucks for society, because tax revenues are reduced (I thought Dean wanted to balance the budget?). It's a short term wash for the student. But, long term, you're just contributing to the hegemony of the banks, and your gov't is getting less money to do the things it needs to do.

The student pays less money for less time. That is, by any reasonable mathematical standard, less not a wash. College loans generally are paid back over 20 to 30 years (Dean is proposing 10) and generally take up well more than 10% of income for at least the first years of that payback. Again less money for less time is less total money not a wash.

'feel good' campaign proposal. If we do that, it'll become clear who's keeping the money flowing into elite pockets and who isn't.

I've never heard of a college loan that long. Perhaps I'm revealing my ingnorance, but I strongly suspect that 99% of college loans people have today are 10 year terms.

I'll admit that if Dean's going to give people grants, it reduces the the amount you finance. However, this paragraphy doesn't suggest a committment to giving very much in grants. And if it's going to poor people, it might be the case that those people would have just gone to a cheaper college if not for the grant, thus having no net effect on how much of the cost of tuition is financed.

Like I said, college education is a huge, guaranteed profit-maker for banks, and that isn't right. We need solutions that don't force people to have to finance their own economic development in a way that guarantees profits for such a narrow segment of the economy.

That's why Edwards's program is much sweeter.

Paid off about 2 years ago.

though I paid them sooner. 15 is still more than 10 and thus my point is still valid.

I missed that part.

The "College Commitment," as the policy is called, promises that all students will have access to $10,000 annually for college, provided in a mix of grants and loans, depending on family earnings. After school, students would make regular payments on the full debt, but they’d receive a tax credit at the end of each year for any amount they’d paid over 10 percent of their income. That way, the campaign argues, no one would ever pay out more than 10 percent of their earnings, or have to make payments for more than a decade.

to supplement other loans, it's probably not going to compete much with longer term loans (those people will still choose the lower payment-higher interest component loans that they'd get with the longer terms). No?

I'm on the federal graduated plan.

I knew I had a point here.

with, from what I've read, the Dean exception, want to increase that tax credit.

However, there has to be a bigger solution that reduces the amount of the cost of education that is financed in the first place. (Which is what Edwards's one year free is all about.)

another solution is encouraging savings plans which go towards tuition so that you're financing less (which, I believe, Edwards wants to do).

But there's alwasy the problem that if you make it easier to pay for college, colleges will rais the prices to the level of hurt students and parents are willing to endure, so you need more, better funded universities, so that they supply matches the demand, and prices are kept low (which, I believe, Edwards is committed to as well).

for school. How's he going to reduce my debt? He isn't. And since I am not going into public service I get shit.

Lieberman's, Gephardt's, Edward's, and Kerry's plan all help me. Dean's doesn't.

to have so much federal assistance already. That's a private U?

law school don't come cheap

What are the interest rates on federal loans? Do they work the same as unsecured bank loans?

Of course, the govt only gives me 18000- that doesn't cover my tuition. I get a fixed interest rate of around 6.25%. Then, I have to take out private loans, I use MEFA, also at a fixed rate.

I don't qualify for grants because I actually had a job. I have a scholarship- but it doesn't cover living expenses. Sucks ass. By the time I'm done I will have over 100,000 dollars in loans to repay- and that's before interest in accumulated. Law students have been know to take 30 years to repay their loans.

That's a boatload of money. The other plans pay to cover law school costs?

Here's a bit more detail on Dean's plan. Hard to tell, but it reads like there would be a break with the tax credit for payments over 10% of income.

http://images.deanforamerica.com/docs/highered.pdf

College for Everyone:
"Providing a free year of college tuition will eliminate the sticker shock that scares off so many kids. It will simplify a financial aid process now so complex that getting a student loan can be tougher than getting a small business loan. After students get through that first year, which is the toughest, they'll know financial aid is available, they'll know education is an investment worth making, and they'll have access to people who can help them pursue both. Maybe more important, if they work hard, they'll know they can succeed in college."

http://www.johnedwards2004.com/education.asp

This is the plan Wall St big banks and the student loan industry doesn't want to see. They'd probably be happy with Dean's plan.

Last I checked we still had government loans and it is possilbe that those are what he is referring to. But you are so anti Dean that he could propose free college and you would still find a problem.

you would have paid otherwise. If you're able to afford it because the government is giving you a tax credit, the banks still get all their money, and the tax revenues are reduced (by 7.1 billion, according to the article).

Why does Dean want to guarantee the banks this portion of their 7.1 billion annual profits which the taxpayer underwrites? (By the way, these are the same big businesses Dean's family and Dean worked for, and their the same people he invited up to VT to help make profits off energy, etc.)

Well, primarily, because education is very valuable. However, the other candidates realize that it's wrong to use higher education as a guaranteed profit maker for big Wall St banks. That's why Edwards wants to reduce the principle. He's saying it's more cost effective for the government to pay the schools directly for 1/4 the cost of an education, rather than to gurantee the interest on a 10 year loan (and to give the tax credit on that interest).

I don't know that and neither do you. It talks of government grants and loans. Yes those could be guarenteed instead of direct but you don't know that and neither do I. BTW if they are direct loans that means there are no banks.

that it's going to work within the same system that student loans are operated now...ie, as a moneymaker for banks.

Does it say that he proposes a new system where the government gives out loans that aren't managed by banks? Nope. If he were proposing something that radical, he probably would have mentioned it.

unless they have been eliminated since I went to school. I had several direct loans which I paid back to the government. No banks at all were ever involved. Not at the beginning, not in the middle, not at the end. Direct loans are direct loans. I did also have some bank loans and they were indeed invovling banks.

any student loan that did not go through a bank - even what the called "direct" ones.

the checks were written to the US Govt. My bank ones were written to a bank or to a consortium who had bought the loan.

largely privatized in a way that makes every interest payment largely a profit-padder for huge banks.

For my govt loan I pay to Sallie Mae. I guess it is like Freddie Mac or any other govt loan organization. I don't really know how it works. The interes rate is about 6%. The payments have been approximately the same amount for the entire loan, going on 10 years now with maybe 3 more to go. It is relatively easy to get deferments or forebearance if you go back to school or lose a job. THe private loans I have variable interest rates. 10 years ago it was nearly 12%! My payments were ridiculous considering I was making very little money at the time- they took up nearly 40% of my income at the time. I think fewere people would default if you paid back loans starting with ssmaller amounts at the beginning when presumably you have less income and gradually increasing the payments as you earn more.

The banks right now make a small fortune by processing a large portion of the total student loans and those loand are guaranteed for them by the federal government. Under Edwards plan, all the loans are lent directly by the federal government, and the banks no longer will be making big money with no risk. And Edwards uses that savings to help pay for his College for Everyone program.

having too much power in America is a dumb ass if they prefer Dean's plan over Edwards's.

Dean can't hind behind the tag line "fiscal conservativism" with this one. This is just straight up Republican -- it's a transfer of public money to the banks through the back door (ie, taxpayers subsidizing interest payments to banks). And don't forget how this will drive graduates into low wage jobs (because employers will discount the value of the tax credit).

With Dean, the devilish libertarianism and coservativism is in the details.

So that's no help, I'm surprised Howard doesn't know that. Is this refundable, if not, again, no help.

I like Edwards' plan to just make the first year free. That's a nice simple thing that a kid in first grade can get a hold of and offers clear hope which creates the initiative for a kid to do well in school. It's also why I like Kerry's plan to give two years, get four years. Kerry's plan also offers refundable tax credits to anyone, which is also better than this plan. I don't know what the other guys are presenting, but I'd venture a guess they're better than this.

I am sure you have a link for that well known fact.

although now they are on deferment since I went back to school

that is the only instance in which I have heard of that being offered.

:shrug:

This particular page deals with ways to repay your loan and #4 is the Income Contingent Repayment Plan. There's other programs to help too, but this link refers to the specific question. And I don't think any of the plans are as onerous as the 10% of AGI Dean is proposing. That's a step backwards, not forwards.

http://studentaid.ed.gov/students/publications/repaying_loans/2003_2004/english/repayment-plans-available.htm

basically are not asking Wall St to forego much of their easy profits.

yet I don't see any rates. So the obvious question is just how do you know?

. Income Contingent Repayment Plan
The Income Contingent Repayment (ICR) Plan is designed to give you the flexibility to pay your loan without causing undue financial hardship. Each year, your monthly payment will be based on your adjusted gross income (AGI)—as reported on your U.S. income tax return—your family size, the interest rate, and the total amount of your Direct Loan debt.

To participate in the ICR plan, you must authorize the IRS to inform ED of your income amount. This information will be used to calculate your repayment amount, which will be adjusted annually to reflect changes in your AGI and in the interest rate on your loan.

People I know who are paying off student loans and the amount of their monthly payments. But my point was that we already have income-based payments so Dean isn't offering anything to help. And he really should have known we already have them.

First, I don't recall seeing anywhere that Dean was claiming his program was the only income based one. He is claiming it saves people money.

Second, unless you know how many payments your friends have to make you still don't know whose program is more onerous. Heavily implied on that site is that using the income sensitive plan would lower payments at the price of their being more payments. No where did it say one could pay interest only for 10 years and be done with the whole thing, as the Dean plan would allow low income people to do.

your income to pay for your education, up to 10,000 bucks a year of tuition costs (which is the median cost of a public education in America). Over that, it throws you to the marketplace, and the other loans out there. It doesn't do anything more than that.

Perhaps there needs to be a recognition that we don't just need financing alternatives. We need something to address the principle part of the problem. Or, we need to address how fiancing education has gotten a little out of hand.

People should be able to reduce their student loans in bankruptcy, I think. If you can't get a job and are bankrupt, it sort of suggests that the whole reason you tried to get an education didn't come to fruition, and that, perhaps, you overpaid for that education.

Perhaps the government shouldn't be guaranteeing student loans for banks, or solely using tax breaks for interest payments. Maybe gov't money would be better used to reduce tuitions (like Pell Grants).

the 10k thing, but it is a good start. It should be noted that Edwards' plan would do the same thing with the last three years of college. I fail to see how that is a huge amount different.

I tend to agree with much of the rest of what you said. I got into some pretty serious financial trouble in the early 90's and student loans were one of the few places that wouldn't work with me. But some of what you said won't work. If we don't guarentee the loans students won't get them. And some amount of loans will be necessary for just about any moderate meaned student.

is the interest part of paying for education.

Edward's plan reduces the principle, and therefore the interest, and therefore the profit for banks that just want to get people into debt that they can't shake off in bankruptcy, even if their education didn't get them a job.

It's so cool, it's the best, it's the greatest ever. Drink the kool-aid and get on with it. Bye!

ask someone to actually back things up and they get pissy. And it is supposedly we Dean people who are irrational. Funny how that works.

You claimed that Dean's plan was more onerous. I asked you, yes shame on me, to back that up. You can't so you have a Cartman style hissy fit and we are the irrational ones. Yep I get it.

And recognize that education is for the common good, and subsidize undergraduate degrees 100%. :)

No matter where you go, Oxford or a polytechnic, you pay about 3000 bucks a year for your education.

The crap part of this is that Oxford and Cambridge get half the state funding that goes to all universities in the country, and the education, without a doubt is much better there, and you have way more opportunities when you graduate from those schools. However, if you're the Duke of Whatever or the son of a Yorkshire cab driver, you'd have to pay the same tuitioin.

What that means is that taxpayers, and poor kids pay for the great educations of a few rich kids (and whichever poor and working class kids who get lucky enough to get into Oxford and Cambridge). It's a subsidy that gives rich kids a benefit they didn't need anyway.

Another thing that low tuition rates guarantee is low starting salaries. Lawyers and doctors get paid high salaries because of the investment you make in your education. And they don't compensate you at the level a person who was on financial paid for their education. They compensate you for the most expensive education you might have had. So A poor kid who went to state schools gets a starting salary equivalent to the investment made by a doctor who went to Choate, Yale and Harvard (presuming those you do well enough, state school education or private school education, to compete for the same job).

In the UK the starting salary for doctors and lawyers are shockingly low, and it's because education is so cheap. Spreading wealth through high incomes for middle class people for jobs everyone has an equal opportunity of getting is great. Cheap higher educations work at cross purposes with this goal.

Another problem with cheap educations is that people tend not to take their educations seriously if they have nothing at stake. This is a hard balance to strike. However, how seriously do you think college students would take their educations if nothing financial were at stake? People would take longer to graduate from college, and they would try to get the best, most productive job possible after graduation. (And you want to have a society which encourages people to reach to the full extent of their capabilities.)

To me, the bottom line is that you make sure everyone gets free education up to highschool. You make sure that there a cheap opportunities for a great university education. However, you don't subsidize the rich by giving them a guarnateed free higher education. You have to do some means testing for the cost of higher education, or nobody will take it seriously and you'll just be subsidizing the educations for rich people who are going to have all the advantages to begin with. The best way to do this is high tuitions with a great deal of means-tested financial aid.

Kucinich's heart is in the right place. However, I think his plan leaves a lot to be desired.

-Thomas Jefferson said that in a more eloguent manner to be sure. Having money in the education only serves to maintain the financial class architecture. And I think the attitude that lawyers and doctors deserve to be rich betrays the working class. By keeping money in education (and analogously in healthcare), society gives the financial elite yet another advantage over the poor. See, the there is just as much talent in the poor as in the rich. Poor people have a difficult time becoming doctors or lawyers because of the money systems that keep them in their place. The college at which I am an alumnus didn't have a pre-Med program, they had biology, nor pre-law, they had paralegal studies. See colleges for the poor don't encourage advancement in society like those rich schools.

And the argument that free college education subsidizes the rich and therefore shouldn't be allowed does so at the expense of the poor people who need the help. You're sort of saying that we can't justly help the poor because the rich will get that help too. Capisce?

And as far as I've heard, people (everyday people, people with jobs not in the media) in the UK are pretty pissed that the government is now making people pay for college (according to http://www.wsws.org). College should be free, and admission standards not in any way based on financial standing in society. That system only insures that children of wealthy families get the opportunity that should go to low class, more talented children. It depresses social value. Sounds like the UK educational system is being mismanaged.

My comment on the British complaining about the way Labour wants to change the way education is financed is because they're so caught up in tradition and they don't have enough perspective to see what's going on.

Cambridge and Oxford are rapidly diminishing in importance (most of their best faculty members went to UT Austin during the Thatcher years).

Nothing worth anything is totally free. It's fine when it's high school, because you don't need a huge capital investment to give people a good educational foundation.

Once you go to college and graduate school, if you want to prepare people to make a real impact on the world, you need to give them nuclear accelarators, and great computers, and professors who need to have the financial incentive to chose working for a university over working for Chevron.

This is a no brainer. The British University system is holding on by a thread, and it's merely tradition that's keeping them going. Once people see through that last facade, the whole things going to crumble unless Labour changes the whole system properly financed. They're going to get it properly financed if the Duke of Whatever's son is paying 20,000 bucks for an Oxford education and the cab driver's daughter is paying 500 bucks for a Cambridge education. They're not going to get it by charging everyone 1000-3000 bucks and then giving all the coutnries resources to Oxbridge, while strangling the rest of the universities of badly needed funds, just to finance the charade.

the post-secondary education program is also a wreck-- just like their National Health system and the newly "privitised" rail system. You can thank over a decade of Thatcherism for that.

A government that truly values education will make it a priority for EVERYONE, regardless of their ability to pay. More educated people in the work force leads to more people with high-paying jobs, which leads to greater tax revenues and more funds to get this country back on its feet.

Public education is what built this nation. Extending it to the post-secondary level will help us rebuild it. Most of the rest of the industrial world does this already, just like universal healthcare.

Like healthcare, education needs to be a RIGHT, not a priviledge.

What that means is that taxpayers, and poor kids pay for the great educations of a few rich kids (and whichever poor and working class kids who get lucky enough to get into Oxford and Cambridge). It's a subsidy that gives rich kids a benefit they didn't need anyway.

It's certainly true that a posh public school education gives one a greater chance at Oxbridge admission...but it doesn't begin to be a lock. And, just as people go on to fine careers from schools other than Harvard/Yale and MIT/CalTech, so do people go on to fine careers from schools other than Oxford and Cambridge.

Another thing that low tuition rates guarantee is low starting salaries. Lawyers and doctors get paid high salaries because of the investment you make in your education.

Think about that for a bit, would you? Why should lawyers and physicians make a packet? What's wrong with the idea that we pay for their educations and then pay less for their services? Certainly some would choose to go into other work if they couldn't make enormous salaries, but I hardly think they'd be a loss to their professions. I don't want someone treating me who's in it for the money any more than I want my wellbeing to be in the hands of cops who are in it for the power or graft. Would you?

Another problem with cheap educations is that people tend not to take their educations seriously if they have nothing at stake.

Sorry, that's handwaving, and a canard. A uni education is taken very seriously in Britain. Ask anyone with experience of one.

Dennis's plan is just the ticket: do all that we can from gestation to adulthood to see that everyone has an equal chance to bring to fruition all their natural abilities. We can't afford to waste any talents, if we truly want the best tomorrow.

...with.

It's a very big subject and we're not going to cover it all here. But, trust me, I know what I'm talking about. And I know that it's very hard for British to see that anything but a supper cheap education is liberal.

It's true that you don't have to go to Oxbridge to get a great job anymore, but it's also true that the polytechnics could be a lot better if half the education budget didn't go to Oxbridge and if Oxbridge students paid for what their education was worth and polytechnic kids got to pay for what their educations were worth.

You want laywers and doctors to make money that matches the time investment so that smart students go into those fields. You want peolpe to be paid what they're worth too, because that's a great way to distribute wealth productively. If a poor kid works his ass off in school and goes into one of the few professions which allows you to earn for your labor, it helps if the ring you're reaching for is gold and not brass.

The same reason progressive income tax makes sense is the reason progressively priced education makes sense.

You can do way more if you make sure the people who can afford it are paying what it's worth, and education should be a subsidy for big business so they can pay low wages. Your employer should be forced to compensate you for the cost of your education.

Kucinich's heart is in the right place, but the results of his plan would be terrible.

Tell us why it's better for us to have to pay lots of money to doctors and lawyers. Tell us why other countries that seem to be very successful doing it a different way are really not successful.

Tell us why allowing physicians and lawyers to make enormous amounts of money doesn't select for people interested in enormous amounts of money rather than for people interested in helping other people. In every other case, a given reward selects for people interested in such a reward, so why not in these cases?

Tell us why interest x grades isn't a better predictor of success and happiness in some profession than the amount of money to be made.


(edit) And as far as progression in paying, the place to take care of that is in taxation. Rather than having a thousand different places where someone wealthy can prospectively scam the system, and a thousand different bureaucracies dedicated to preventing it, keep it simple.

Why do you want to pay doctors and lawyers and other professionals who come out of the middle class? Well, what do you want to reward the most in society? Do you want to reward the person who can figure out how to make money on collapsing equities? Or do you want to reward people who ensure that justice is served and people who keep others healthy?

If you don't pay these people high salaries, where does the money go? It goes to making corporate insiders richer.

High salaries for people willing to work hard and create value are good. High salaries for people in careers that anyone can get if they're willing to work hard are good.

When law firms don't pay new associates decent salaries, that money goes first to a few very rich partners, and, after that, it goes towards keeping costs down which make corporate profits go up up up. It's OK to spread the value created by knowledgeable, hard working people among the hard working people who create it, rather than among a few people who already have a bunch of money.

I'm not arguing that Doctors and lawyers should be entitled to exhorbitant salaries. I'm saying that NEW graduates should be entitled to a bigger slice of the wealth they create. Nothing exhorbitant. Just a reasonable slice. When they aren't paid a reasonable income, it's so somebody else can get richer. If employers don't have to compensate you for your investment in your education, then, basically taxpayers (who pay largely regressive taxes) are subsidizing the educations of lots of people so that private hospitals and other companies can increase their profits.

I tell you, if a good education cost rich smart kids in the UK closer to what it was worth, you'd see law firms and private hospitals share a little more of their wealth with their new hirees. And with the money the government would save (and raise from income tax revenues) public hospitals would have more money to spend on their doctors.

It's never a bad thing when young people who work hard for a living get higher incomes.

I'm not saying this is the only reason salaries are low in the UK, but I promise you, it plays a substantial part. Furthermore, like I said, it's not fair that taxpayers subsidize people's educations so that employers don't have to.

Don't you agree that it makes sense to make the direct beneficiaries of a person's education -- the employer -- bear some of this burden.

There is a balance with this issue, but in the UK the balance is way way off.

Let me repeat for emphasis: Oxbridge education is about 3000 bucks a year. Oxbridge gets HALF the annual education budget for about 1000 students. The whole university system is underfunded, and it's doing a disservice to the nation. Starting salaries for ALL young professionals (not just lawyers and doctors) are really low.

Who's zooming whom?

"Or do you want to reward people who ensure that justice is served and people who keep others healthy?"

I see your point, but there are rewards and then there are rewards. I think flattening the wealth spectrum would be a good thing for society as a whole, but maybe that's just me.

"If you don't pay these people high salaries, where does the money go? It goes to making corporate insiders richer."

Seems to me you're assuming that regulations can't force more reasonable fees, so that no longer will RICH people be the only ones who can afford decent lawyers. With Kucinich in charge of healthcare system, it means that lower doctors fees save the taxpayers money. Where's the downside?

"High salaries for people willing to work hard and create value are good. High salaries for people in careers that anyone can get if they're willing to work hard are good."

See, maybe it's just my borderline socialist upbringing ( ;) ), but I don't see how a lawyer is really working that much harder than someone in a day care center. Sure they need to know more detailed, specialized information, and they work more hours and should be compensated for that, but to quantify everyone's abilities... I think of that as somehow unfair.

The reason I think that this is the case is looking at the situation from the perspective of any society's future: the children. Children of lawyers and doctors will tend to have much less stressful lives in general. I'm not saying that everyone should receive a fixed amount, but that the vast difference between what a CEO earns and what the factory worker earns is a bad thing for society in general.

I guess what I'm getting at is that we need to stop being so money-oriented altogether.

"When they aren't paid a reasonable income, it's so somebody else can get richer. If employers don't have to compensate you for your investment in your education, then, basically taxpayers (who pay largely regressive taxes) are subsidizing the educations of lots of people so that private hospitals and other companies can increase their profits."

Again this disregards even the possibility of attempting to flatten out fees. There is no reason we should allow the wealthy to continue to bleed the country dry. Do we have a right to espouse unbridled greed? In the 80's we were told we did. I think the time has come to start working on changing that.

"I tell you, if a good education cost rich smart kids in the UK closer to what it was worth, you'd see law firms and private hospitals share a little more of their wealth with their new hirees. And with the money the government would save (and raise from income tax revenues) public hospitals would have more money to spend on their doctors."

You assume that for some reason the hospitals and law firms wouldn't just increase fees more in the case they had to pay more to entry level employees. Also you seem to be saying that it's better to fund higher healthcare costs in general (higher salaries) as well as public hospital coffers by taxing the incomes of people, rather than by forcing down fees across the board. Both will have the affect of saving the government, us taxpayers, money. I am just winging it here so apologies if I'm not thinking this through thoroughly.

"When law firms don't pay new associates decent salaries, that money goes first to a few very rich partners, and, after that, it goes towards keeping costs down which make corporate profits go up up up."

Rich partners, Boards / Sr. Executives, whoever is in control of the money -- it's nearly universal that these groups will arrange things so that they get the biggest slice of the wealth created. A larger slice of the wealth is warranted, but I'm sure I don't need to look up the gross inflation of the CEO's salary vs. average Americans for anyone on this board. Greed is out of control. Wealth growth and creation is necessary for a healthy economy, but I think the adage 'moderation in everything, nothing to excess' might just reveal a deeper truth, which is that systems with lopsided wealth distribution aren't sustainable in general.

I really don't see why you assert higher salaries should be directly linked to a higher investment in an education. Maybe I'm missing something really basic here. (?)

But other factors are involved which make much more sense, actually, such as the time away from family required by such work-intensive professions; or in the case of HVAC maintenance personnel (for higher risk); or for plumbers (unpleasant work environment / hard manual work).

And since the higher cost of education is directly linked to how much banks get in interest fees, I'm immediately suspect of the reasoning behind rationalizing bigger loans for something as basic and necessary as education.

And everyone should be entitled to reap the rewards of their labour.

You may want to be less money-oriented in your life, but don't tell the guy who's trying to take care of his family that he should be less money oriented.

By the way, my point about who should pay for education...let me repharase it this way. Society is better off when costs are allocated to those who benefit. When a person gets an education, it confers a benefit on (1) society, (2) the student, (3) the student's future employer, (4) the student's parents.

So you want to allocate the cost of educating someone to all those parties.

In the UK, say it costs 20K to educate someone. The state charges the student 2K, and gets the rest from regressive taxes (ie, society pays most of the costs). Becuase students don't graduate with much debt, employers don't have to pay higher salaries which go to paying loans. Furthermore, when society pays for education, half the money they give the state goes to educating only 1000 or so students at Oxbridge.

That's a very bad balance, and it's a big reason American universities are better than british universities today.

The UK needs to shift some of the costs off society and/or get corporations, the students and the student's parents to bear more of the burden, and they have to progressively price education too.

Its what our party does. Plans will differ, but the only argument is which do we like the most.

and at least one has a plan which is going to reduce the amount that many students will have to finance.

and actually help people. Those wing-nuts aren't going to vote for "the la-gest piece o welfare this natiun evah prahposed."

...peers to do the right thing, you just might get a Edwards's one year of college free plan.

It's not like it's single payer health care. It's moderate, and strikes right at the heart of the problem -- that people pay too much for college, and it's the banks making all the money.

you know that you can't get rid of your student loans in bankruptcy, don't you.

Remember: he thought it would be easier to get a for-profit healthcare scheme passed. Wrong-o.

believe me I do. I wish that somehow I could get relief on my loans.

if you want to become a teacher you can go for free as long as you work your first 5 years at a school that has trouble getting good teachers. That way you get your education for free but you're giving something back to future generations. I'm not sure about the rest of the plan. I guess that's something I'll have to look up. He talks about the teacher corp plan because he has a daughter who is a teacher and only making $17K a year, so he's paying her loans. Not everyone has parents that can do that so he made this plan. It doesn't go by income. Anyone who wants to use it can as long as they put in the time after graduation. It solves two problems in one.

After graduation, borrowers will pay back their loans as usual, but all borrowers (including those
who do not owe income taxes) will be eligible to receive a refundable tax credit for any amount
that exceeds 10 percent of their income. For married couples, the tax credit would be available if
combined loan payments exceed 10% of combined income. Borrowers must be working to be
eligible for the tax credit.

well actually a quote from it. I will hand type the link in a minute. In any case this answers the refundable question which is important. Link.

http://images.deanforamerica.com/docs/highered.pdf

...are ten year loans. If you take a longer term loan, you benefit from the tax credit too. So, as far as I can tell, there's no forgiving of the principle in this plan. However, slap the strap line "pay for ten years and your done" on the plan and people with longer term loans think, hey, this plan has a forgiveness component. It doesn't.

The government, via the tax credit which is refundable, pays the entire difference. Did you even read the link? If you did and posted what you did then I frankly don't know what to say.

"10 years and You're Done

Those who make the payments on the standard 10-year schedule will pay off their loans in full.

So the plan is a ten year loan. "10 years and your done" doesn't means anything still left after 10 years is forgiven. It says, with this loan, the period is ten years. If it were 25 years, it'd say "25 years and you're done."

Most current "income-contingent" loan repayment plans strethy out payments for up to 25 years. Borrowers would still have the option of taking advantage of those repatment plans to lower their annual payments, and would still be eligible for the tax credit when their payments exceed 10% of income."

And, since 10K is the median tuition for a public education in America, more than half of all students would have to take out more loans on top of this one if they don't have the money to pay for college.

Also, note, in answer to a question that was asked above, there are other income contingent loan programs.

...although you don't need to owe income taxes, you need to be working to get the tax break. If you're unemployed, you get nothing.

That's another reason why Edwards's plan is better. Not only does it reduce the amount of principal (ie, the amount of your tuition you have to finance) it gives you an immediate benefit which isn't contingent on whether you're employed in the future.

so there is only one other option. The plan clearly, unambiguously states that the government will refund with a refundable credit any amount over 10% of your income that you pay. Thus your loan is gone because the government paid it. Again you are not stupid.

As to the income thing. You only can do that by greatly extending the term of your loan. If your income is low enough you only pay interest which makes the term infinate. It is not a forgiveness plan.

This plan is a ten year loan. In the event that your payments exceed 10% of your income in any year over ten years, you get a tax credit regardless of whether you own income tax (but you have to have earned income to get it).

If your payments never exceed 10% of your income, you don't get anything. For lots of people this might not happen at all. For others it might encourage them to take on more debt than they can afford (because of the psychological effect of knowing the government will jump in and cut you check if you manage to stay out of default).

If your payments exceed 10% of your income, and you weren't unemployed, you get your money back over the 10% of your income which you paid.

The banks get ALL their money, thanks to the taxpayers. They get their money if you're unemployed too because you can't get rid of your student loans in bankruptcy.

Your loan doesn't disappear ever. If you don't pay it, you go into default, and you don't get your money until weeks after file your income tax return (which could be as late as May following the year you made the payments on the loan).

This plan is just a tax credit, and the banks richer and get more powerful, thanks to Dean's government removing the risk for them, and thanks to the fact that Dean encourages you to take out more loans than you might be able to afford.

I'll grant you that it's LIKE the government paying your loan. But it isn't really.

I bet it would be cheaper for the government just to give you grant to pay for your education upfront rather than subsidize the banks for 10, 25 or 30 years of tax credits that are triggered by high principle+interest payments on student loans.

people to take on extra debt. It says, don't worry about the loan, if it gets too big the government will cover it.

That's great for students. But it's even better for the banks.

I think Dean is really betraying his Wall St roots.

Banks have got to LOVE this plan.

Many students today might chose to go on unemployment for a few months rather than accept a very low paying job.

But, with Dean's plan, you have to work to get the credit. So lots of recent college graudates will have to take jobs to get the money back on the student loans. It could create a real buyer's maket for employers which drives down wage rates. If an entry level job currently pays 30K, an employer will think, hmm, this job is actually worth, say, a 2000 buck tax credit for an indebted college grad. That employer is going to lower the salary to 28,005. Income tax receipts drop off, and taxpayers are subsidizing the whole mess.

The banks, however, will be doing great. And they'll get some back end scratch too, because these impoverished students, getting paid less and less money, will continue to leverage their future by purchasing everything on credit cards, which, again, you won't be able to get rid off in bankruptcy if Congress completes their work on the MBNA bill Bush wants to get passed.

Quote

This plan is a ten year loan. In the event that your payments exceed 10% of your income in any year over ten years, you get a tax credit regardless of whether you own income tax (but you have to have earned income to get it).

If your payments never exceed 10% of your income, you don't get anything. For lots of people this might not happen at all. For others it might encourage them to take on more debt than they can afford (because of the psychological effect of knowing the government will jump in and cut you check if you manage to stay out of default).

Response

Well, duh. Aren't you the one who continuously talks about means testing things? Or is that a differnt AP who bitched about Dean endlessly for not doing this in other areas? Here he does so and you complain about that. Your blind hatred of Dean gets in the way of the things you believe in. Incidently that is one of the chief problems I have with Edward's program in that he appears to have no income test.

As to the idea that this wouldn't happen for lots of people. Here are the current charges on a Perkins loan.

Perkins Loans

The Federal Perkins Loan Program doesn’t have a variety of repayment plans. Your monthly payment amount will depend on the size of your debt and the length of your repayment period. The minimum monthly payment is generally $40, however.

Loan Payments amt of payments
$3,000 90 $40

$5,000 119 $53.06

$15,000 119 $159.16

Assuming a 20k loan that would be a payment of 212.22 for essentially 10 years. That would mean if your income was below 2122.20 per month or around 25k per year, you would get some of that back. As we both know 20k is a pretty low loan burden (I owed close to that back in the early 90's). For a loan burden of 40k those figures rise to 4244.40 and 50k. And remember these are salaries in years 1 through 10 of a person's career. 50k seems to be a very decent salary in that case.

start of quote two

If your payments exceed 10% of your income, and you weren't unemployed, you get your money back over the 10% of your income which you paid.

The banks get ALL their money, thanks to the taxpayers. They get their money if you're unemployed too because you can't get rid of your student loans in bankruptcy.

Your loan doesn't disappear ever. If you don't pay it, you go into default, and you don't get your money until weeks after file your income tax return (which could be as late as May following the year you made the payments on the loan).

end of quote

I will give you the unemployed thing. Though I think those loans tend to be deferred when that happens. I would like to know what happens in the case of someone who is unemployed part of the time and employed the rest.

Yes, he does require, that people actually pay the loans back. I fail to see a problem with that. I also fail to see the problem with the tax credit. Yes, you may have to wait, though if you wait to May you need to look in the mirror as there is no excuse for that. But that is the case with any such program.

Yes, banks will get their money. They will under Edwards too. My guess is that colleges will increase charges for years 2 through 4 to make up for the free year Edwards gives you.

You don't get the credit if you're unemployed. It says that. If you didn't have to pay it at all, you think it would have said so.

Under Edwards's plan, the banks get interest on 75% of the principle they'd pay under Dean's plan, and possibly less if students use the money they earn working paying tution up front. This means they finance even less. That's the difference in these programs. Dean's guarantees that the banks make a lot of money off of people trying to educate themselves (appropriate for a deregulator with ties to Wall St). Edwards makes sure that more of the education dollar goes to universities up front and stays in the student's pocket long term, rather than go to big banks as taxpayer subsidized profits.

I'm not sure that schools would need to increase tuition under this plan becuase they get paid no matter what. And they still have to worry pricing out students who won't chose to work. (And the choice to work is its own means test).

Dean's plan seems to encourage people to take on more loans than they might otherwise becuase of the psyhological safety net subsidized by taxpayers.

By the way, according to dean's plan 17K is the avergage debt burden. I'm suspect that's for all students. I bet the average debt burden for students who take out loans is much higher. It also might not include grad school debt.

As for your first criticism, nice way to change the subject. Means testing? How is that relevant to my criticism? My criticism is that the loan doesn't ever disappear, that the bank makes their profit no matter what (insured by the taxpayer), and that this program encourages people to take on MORE debt because, psychologically, they think the gov't will step in and give them the credit if their payments get to high (although they might not plan for unemployment, which would totally fuck them up).

Address the other stuff, and then we can talk about means testing.

But I'll tell you this about the 10% being a means test; It some ways it isnt', becuase you commit yourself to the obligation long before you know what your means will be. It isn't like fiancial aid (althought there apparently is a financial aid component). In some ways it is a means test because you pay based on what you earn. However, when your means are the lowest -- when you're unemployed -- you get nothing. So what kinds of means test is that?

the loans disappear. What part of paid off eludes you? You seriously are not that stupid so you are being willfully ignorant here. It crystal clear, unambiguous language the plan directly says the loans are paid off in ten years. That is regardless of the amount of earned income you actually have.

As to the unemployment deferement I am referring to the fact there is a current deferment for that. It is fair to assume he isn't changing that.

Means testing referred to your complaint that some people wouldn't benefit at all due to having higher incomes.

When I say "disappear" what I mean is that they don't disappear before the last scheduled payment.

They don't disapppear. The TERM OF THE LOAN IS TEN YEARS. There is no added benefit. Damn! If you don't make your payments, you default. You get a refund if you were lucky enought to be underemployed. The refund you get (only on the amount you pay over 10%) you get from 13 to 18 months after you made the Jan pyt, 5 months after you made the december pyt. You have to make the payments.

The plan says that you only get the credit if you have an income. It doesn't say anything about THIS NEW KIND OF LOAN being deferred if you're unemployed.

I didn't complain that people who didn't need it would benefit. I was just saying this isn't a benefit for everyone who takes out the loan. But's it's always a benefit for the bank.

dsc, just admit it. There are five people who benefit from a kid getting educated in America: kids, parents, society, the government and banks. Dean's plan helps the banks the most and in EVERY situation. It hurts the government the most because the government is underwriting the banks' profits. It helps the kids some of the time. They'd be helped the most if the principle were reduced on these loans.

well maybe i forgot to put his food dish out, but im sure my student loans had something to do with it!!!!!!!!