Student debt is a barrier to American economic and scientific success.

An article in THE WEEK Magazine serves as the basis for this post. It decries the rising cost of college education, tries to assign blame, and offers solutions.

Today’s American economy relies on people who have attended college.

Nearly all, large companies are managed by college-educated people.

They are the ones creating jobs for Americans.

Today’s scientific advances come from those who have attended college. Our political leaders attended college.

Our information leaders have been college-educated. Our military leaders are college-educated.

College education is beneficial to all Americans, even to those who never attend college or even attend any school at all.

America without college would be a backwater, 3rd world country.

Yet today, millions of young Americans, potentially great leaders, either cannot afford college or have been punished financially for attending.

We are hamstringing our future.

THE WEEK Magazine
College: No easy fix as costs keep climbing
Columbia University: Headed toward six-figure costs

Prepare yourself for a $400,000 price tag for college, said Alia Wong in TheAtlantic.com.

A new analysis found that the sticker price to attend the University of Chicago will pass the $100,000-per-year mark by 2025, and “at least a handful of other U.S. colleges”—Harvey Mudd College, Columbia University, and Southern Methodist University—“will follow suit soon after.”

While only 42 percent of Chicago’s undergraduates paid the full tuition cost in the 2016-17 school year, those sticker prices keep growing.

Colleges have turned to “complex financial math” to balance high tuition with discounts and financial aid, said Pete D’Amato in The Hechinger Report.

College costs have rocketed up. Millions of people are unable to afford advanced education. Colleges are forced to give some people free or discounted education. The others languish.

And these discounts are financed by the people who don’t receive discounts, which sends regular tuition costs even higher.

If this cost of education story sounds eerily familiar, it’s because exactly the same story exists for the cost of medical care.

Hospital costs rocketed up. Millions of people are unable to afford proper health care. Hospitals are forced to give some people free or discounted care.

And these discounts are paid for by the people who don’t receive discounts, which makes regular hospitalization costs even higher.

Two situations — education and healthcare — both vital for all of America, and both becoming less and less affordable.

Out-of-control college costs have become a central issue in the Democratic campaign, said Danielle Kurtzleben in NPR.org. Last week, a rift opened up over how to fix them—and especially over “who should get to go to college for free?”

Bernie Sanders and Elizabeth Warren “have pitched plans making free public college available to all.”

By contrast, Pete Buttigieg launched an ad ripping plans that make college “free even for the kids of millionaires.” Buttigieg’s own proposal would offer tuition-free college to most students at public four-year colleges, but it would taper off those benefits for people from higher-earning families.

The weaknesses of Sanders’s, Warren’s and Buttigieg’s education proposals is the same as the weaknesses of their healthcare proposals:

All three candidates make the false assumption that any federal expenditures somehow must be “paid for” by taxes or by spending reductions.

Yet, a Monetarily Sovereign government neither needs nor uses tax dollars or any other form of income. The U.S. government creates brand new dollars, ad hoc, every time it pays a bill.

In fact, paying bills is the method by which the federal government creates dollars.

One proposal, from Warren, would wipe out up to $50,000 of college debt.

Good idea. There is absolutely not one reason why the federal government needs or should receive a payback from students.

The Department of Education may soon offer income-sharing agreements that would let students delay repayment until they get a job following graduation, with the borrower “on the hook for a certain percentage of income” after that.

Bad idea. There is no purpose for a “delay” in payment rather than simply eliminating the repayment. There is no reason to keep borrowers “on the hook.”

House members also want to reduce the number of federal repayment plans from 14 to two. Currently, it is “a complicated system critics say leads to needless defaults.”

It’s not the system that leads to defaults. It’s the entire repayment concept. Why fiddle with a bad concept, when it easily could be, and should be, eliminated?

Not every proposal has been well received, said Aarthi Swaminathan in Yahoo.com. Sen. Rand Paul last week unveiled “a plan to fix the student debt crisis” by letting borrowers withdraw up to $5,250 from their 401(k) or IRA account tax- and penalty-free for tuition or student loans.

Critics, however, say Rand just kicks the can down the road with a plan that’s “detrimental to Americans’ future security.”

The critics are right. Sadly, Rand Paul never has demonstrated any understanding of federal financial reality.

And then there are  excerpts from is this article:

While candidates posture, Midwestern universities take action on student debt
At Indiana University, nearly half of all bachelor’s degree graduates leave without student loan debt.
By Michael McRobbie, Chicago Tribune

At Indiana University, which awarded more than 21,000 degrees last year, nearly half of all bachelor’s degree graduates leave the institution with zero student loan debt, and 82% have less than $30,000.

Many public Midwestern institutions are hard at work implementing a variety of aggressive but sensible policy measures that are proving successful.

These include minimizing tuition increases; reducing operating costs; increasing student financial assistance; promoting on-time graduation; expanding online education; greatly reducing the costs of digital textbooks for students; and introducing comprehensive financial literacy and wellness programs.

Three of the “measures” — minimizing tuition increases, increasing student financial assistance, and greatly reducing the costs of digital textbooks — merely mean that some students will have to pay more, in order for other students to pay less.

Two of the “measures” — reducing operation costs, and promoting on-time graduation — leave one to wonder: Haven’t you been doing that all the time, and if not, why not.

One “measure” — introducing comprehensive financial literacy and wellness programs — seems to be something a distraction from the problem of school costs.

Regarding the latter, we are just one of a number of Midwestern institutions, including Ohio State University, the University of Oklahoma and the University of Wisconsin-Madison, that have recently launched innovative financial advising, money management and peer-coaching practices to help students make wise borrowing decisions.

Would a “wise borrowing decision be: Don’t borrow to attend college, or don’t attend college.”

Furthermore, bipartisan legislation in Congress would require colleges and universities that accept federal aid to send an annual “debt letter” to every student — a practice that we pioneered in 2012 — estimating their total loan debt and future monthly payments.

Issuing that letter to each loan recipient is now the law in Indiana and required of all colleges.

And upon receiving that letter, what is a student supposed to do? Leave college. Stop buying lunch?

On the policy front, a number of Midwestern and other institutions are deeply engaged at the national level in serious and thoughtful conversations among key stakeholders regarding the future of federal student financial aid.

These institutions are talking about ensuring greater accessibility to the high-quality education they provide, increasing the transparency of financial aid information and designing effective strategies to improve student success and help build the knowledgeable and well-trained workforce that our nation needs.

“Deeply engaged,” “thoughtful conversations, “effective strategies” — it sounds like a bunch of academic blah, blah, blah to me.

Obviously, there is still a lot of work to be done to prevent the specter of major debt from looming over our best and brightest graduates.

What we need to address the student debt issue — less posturing and more practical solutions.

Michael McRobbie is president of Indiana University and chair of the Association of American Universities Board of Directors.

There is one practical solution, and it is the same practical solution for healthcare: Single-payer.

The federal government is the one entity that, being Monetarily Sovereign, has the ability and the mandate to fund anything that benefits America and its people:

Federally funded Medicare — parts A, B & D, plus long-term care for everyone;
Free education (including post-grad) for everyone;
Salary for attending school.

In short, Steps #2, 4, and 5 of the “Ten Steps to Prosperity,” not only would accomplish the mission but stimulate the overall economy.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY