How Government Broke the Higher Education Model

BASED, Episode 2 is now live!

Join libertarian-conservative writer, commentator, and activist, Hannah Cox, as she walks listeners through the public policy decisions and economic infringements that led to skyrocketing tuition and the student loan bubble crisis.

[brandymariee]

This is a great overview. I think trade schools are a great example of what happens when the government is less involved. They’re a fraction of the cost and they provide excellent on the job training and education.

[TomYoungSoup]

"If you don't understand the base cause of problems you're going to prescribe the wrong solutions." Love this.

[StevenGrogan]

Great video! Love all of your content on FB/Twitter. Happy to see you posting here too!

[revolutiononarecliner]

what a coincidence. i was discussing this same topic yesterday on a podcast. so important to get this message to the general public.

[collinoliva]

These are great ideas for future graduates, and they're not difficult things to implement. I've wondered for awhile about the idea of dropping the federal income tax for college grads. Let's say for up to 5 years after graduation, cut the income tax rate to 0. For college grads, that's likely $10k-20k per year that can go directly to paying back loans if that's what they choose to do. This approach would keep the borrowers responsible for paying the loans back, and doesn't require those who didn't go to college to subsidize those who did.

[Ungovernablepod]

We allowed secondary education funding to be turned into a cartel with the help of the elected officials that signed off on subsidizing this lending (recklessly) and removing any risk from the lenders in the form of bankruptcy exemption. The road to hell is paved with good intentions (or at least we assume the intentions were good).

[nag]

Hannah! Great video! I wish this video was available when I was in high school or even in college. It would have saved me so much headache and tears. But after a master degree, home and husband (he was smart and got an associates and worked is butt off and making 6 figures in a company now) later I am one of the few millennials (i think) that is able to manage their finances properly and pay off my student loans without sacrificing certain aspects of my life ( i.e., vacations, clothes, retirement, healthcare, etc.). I think its about taking personal responsibility and addressing the elephant in the room. Easier said than done. Well I'm done with my rant. Great video again ! :)

[norsemd]

The last thing people in student loan debt need to do is buy a home, ie, take on more debt. Screw forgiveness of debt, there is no such thing. That simply shifts the repayment costs to people who didn't take on the debt, including poor non-college attending workers. They are the greatest victims because they get NOTHING for their cost, unlike the former college student.

[dmjole]

The propaganda line about college degree holders making an average of XX dollars more than those without a degree is trotted out gleefully by people who are invested in the education business (rather than education itself). But this obscures the idea of the AVERAGE-- that's not the MEDIAN. The high end of earners with college degrees inflates the average quite a bit. Your average Humanities major is never going to see that average, assuming that he/she can actually ever find a job that requires those credentials.
Instead of looking at the average lifetime wages, as if all college degrees are the same, what is much more valuable is looking at the average return FOR DIFFERENT DEGREES. In other words, we should compare what a degree in Sociology, or Aztec Studies, or Renaissance Art, or Early Childhood Educations, or Piano Performance, or Chemistry, or Physics, can lead to in lifetime earnings, as well as the percentage of those holding the degrees who actually get jobs for which their degrees are needed qualifications.
Once we have those numbers, we can see how the rush to push ALL KIDS into higher ed, into ANY DEGREE, because (ostensibly) they can make good money, broke higher ed. An oversupply of degree holders is only going to benefit one group of people: professional education and its government money.

[revoltiz]

Don obviously forgot how high the interest rate was when we went to college. We were thrilled to get a 6% and had to apply thru a lender just like every other loans. These days they are pretty much govt owned.

[gordonpettus]

Excellent research and analysis. The presentation was also excellent in many ways, but could be improved substantially with graphics. For example, the supply and demand curves could help people understand the concepts with a simple chart with a couple examples. Also, graphs showing the increases in costs as one line and the increases in inflation, as another line and additional lines for each other concept that is associated with the increases in costs. Similarly for other costs and for making additional principal payments on loans, and for
the effects of reducing loan interest rates. Lots of opportunities to make it easier for viewers to learn. A further issue is the unintended consequences of cancelling loans.

[heresyhunters]

While many on the left probably do have good intentions, it's important to realize that those at the top absolutely know what the effects of their policies will be and are, in fact, the intended ends.

[kaionthekeys]

Question on loans with interest: wouldn't eradicating, forgiving or lowering interest just incentivize more people to pursue govt loans? Isn't this what you spoke against, referring back to your supply and demand model?

Note: I think having high interest is crooked and takes advantage of these young 18 y/o investors.

[petercarroll]

Look, I agree with all this and have been saying the same things for a few years (just not in a podcast). But even you seem to be making the same mistake of assuming that the higher earnings of college graduates, when compared with the earnings of people who either fail to graduate or never go to college in the first place, is CAUSED by the education that constituted the degree. There aren't many natural experiments in which you take 1, 000 people who are about to go off to college and, instead, persuade 500 not to go - - and then track them all for life to see how their earnings turn out. But people who have tried to tease out such data as are available suggest that the majority of the higher earnings of college graduates come from their native abilities, not from their college education. There are related studies that show the cognitive abilities and capabilities in critical thinking are not improved by 4-year degree programs. Take away the argument that "At least you will earn more if you get this crappy, over-priced college degree" and the attractiveness of (most) higher education fades even further.

[Mroka]

"Do you think the free market would lend to people who couldn't pay back the loan" yes thats literally what banks did in the housing bubble of the 2000s and thats what caused the worst recession since the 1930s and millions to go unemployed.
Irony is dead.

[ClintOlsen]

This is a great topic! I know this adds complexity for you, but since you're unleashing a firehose of information on the audience, maybe a split-screen with slides? This would obviously not be of great help to the podcast-only audience.

[scarletpimpernel]

18:55: "I don't understand how one can keep doubling down on these failed ideas..."

I agree intellectually, but politically it's not stupid because here's the Democrat rationale (as you partly outlined):

a) make education (whether intentionally or not) MUCH more expensive than it need be (college I would say conservatively is 2x or even 3x what it would be, for the same quality), in a purely free society (with no public education or financial aid of any kind).

b) keep the younger and even older generations largely ignorant about the extent to which exactly that government subsidization is the main cause for the price increase,

c) then dangle a bribe in front of people by offering them free tuition, which actually starts looking like a quasi-rational alternative to all the Generations Zers who are contemplating paying huge sums just to get their Podunk U diploma so they can get a normal job and start their adult life

[joezanches]

The sound ends right at the beginning when she says, "Hi, then nothing. Probably the goons at YouTube and Google want it censored.

[shphatyahyasharalah]

U cute Hannah u did good against Dr Richey

[Mroka]

"Cut intererest rates"... literally the only way you can do this is with government subsidy. The free market isn't going to give cheap loans to students lol