Friday, May 26, 2017

Trump and the Republicans Continue Their Attacks on Education

by Neil H. Buchanan

The release of the Trump Administration's proposed federal budget has been met with mockery and ridicule across the political spectrum.  All budgets are "dead on arrival," but Trump's budgets stands out for its dishonesty, incompetence, and inhumanity.

Even though most Republicans have been running away from Trump's budget (although they continue to support him in the face of evidence of impeachable offenses), this budget falls into the category of what Michael Dorf once described as "Trump as GOP on truth serum," where Trump is merely saying out loud what Republicans have not yet dared to say.

My initial reaction to Trump's budget, in fact, was that it fully explains why House Speaker Paul Ryan has continued to support a man whom Ryan so clearly despises.  Ryan has spent his career trying to look concerned while crafting reverse-Robin Hood policies.  Trump's budget proposal will allow Ryan to look comparatively humane while implementing a deeply inhumane series of cuts to crucial lifelines for the middle class and poor people, all in the name of shoveling money toward the rich.

One area that deserves special attention is the approach that Trump and the Republicans have taken to financing college and post-college education.  Their proposals are especially damaging at a time when higher education is more essential than ever for upward mobility -- and even simply to prevent downward mobility.

Long before Trump came along, the Republicans were slashing higher education spending and shifting costs onto students.  The predictable result is that colleges have become even more economically stratified, with fewer and fewer kids from non-rich families able to afford to go to college or earn professional degrees.

Trump's appointment of the patently unqualified ideologue Betsy DeVos as Secretary of Education verified the Republicans' willingness to put ideology first, with only two senators voting against her confirmation.  And Republicans are getting what they voted for.

At the pre-college level, DeVos's aggressive privatization agenda includes putting federal money into private schools without denying the funding to schools that discriminate on the basis of race or against students with disabilities or who are from lesbian, gay, bisexual or transgender families.

Trump's proposed budget would cut 13 percent of the Education Department's funding, including reductions and elimination of programs that provide essential support for low-income students.  And of course, this will all be set up in a way that allows investors and corporations to profiteer from the remaining public funds.

There is, moreover, another dangerous trial balloon that has received less attention.  The proposed education budget would cut all funding for the Public Service Loan Forgiveness Program, which allows students to pursue public-service (that is, low-paying) careers in return for cancellation of their student loans after ten years of service.

To understand why this is so potentially devastating, it is important to compare the ways in which higher education can be financed for students whose families cannot afford the up-front costs of this important investment.

And it is an investment.  Study after study has shown that the returns to higher education for the individual and society vastly outweigh the costs.  If we want to make those benefits available to people without ready cash, what can we do?

The classic model of public education has been to use tax revenues to fund universities, allowing any student who is qualified to do so to attend a state university.  The idea is that graduating from the university will enhance the future earnings of its students, who will then pay more in taxes from their increased incomes in the future.

Although there have been only rare and limited systems of completely free higher education in this country, the norm has been for states to fund and manage university systems with significant tuition discounts relative to private institutions.

The problem is that Republicans at the state level have slashed higher education budgets, supposedly in the name of saving taxpayers' money but in fact demonstrating the concept of being penny-wise but pound foolish.  The trend for the last decade or more has seen state universities losing public funding and having to act more and more like private institutions.

Which brings us to the second way to finance higher education: financial aid.  There, the idea is to set a "list price" that almost no one pays, with the institution determining discounts in light of the students' financial circumstances.  With state university tuitions rising so significantly in response to Republicans' budget cuts, there is more and more pressure to provide financial aid.

But of course the already-limited money for financial aid has also been a target of Republican budget-cutters, at both the federal and state levels.  With net tuition going up -- that is, with list prices rising and discounts (financial aid) falling -- anyone who wants to earn a post-high school degree has to come up with more money than ever before.

Which brings us to the third method of financing higher education: loans.  As a matter of personal financial management, borrowing money at interest rate x to finance an education that will provide returns in the future that exceed x is a very good plan.

As an aside, this is the same logic that explains why governments can and should run deficits.  They, especially the federal government, have access to funds at very low interest rates and have the ability to invest those funds in high-payoff ventures -- like, say, public education.  But I digress.

When people say that governments should act like a family with a budget or should be run more like a private business, therefore, it is utterly infuriating.  Families and businesses borrow money all the time.  We should prevent it from being spent poorly -- we would not want a family to borrow money to support a gambling addiction, for example -- but there is no doubt that borrowing money can be a very smart move.

In any case, a person who is faced with a high net tuition bill needs to decide whether to borrow money to pursue her education.  Because students represent so much financial uncertainty for lenders, the federal government has tried to guarantee student loans in order to reduce interest rates, with only limited success.  (Naturally, Republicans want to cut funding for that, too.)

The problem with the study-now-pay-later approach, however, is that it pushes all students toward careers that will pay enough to cover student loan payments along with their living expenses (including starting families, given the age profile of the people we are describing here).

Why is that a problem?  Because we know that there are plenty of socially valuable career paths that simply do not pay what is necessary to support a decent standard of living while paying back loans.  By cutting public funding and shifting the risk onto each student, we push students out of jobs at nonprofit organizations, relatively low-paying civil service jobs, and so on.

This is especially infuriating because one of the Republicans' standard answers to those who oppose budget cuts is to say that the vulnerable people in society can be taken care of through private charities.  But those charities pay shockingly low salaries to their workers, and increasing numbers of those workers are starting their jobs with larger-than-ever debt burdens.

The brilliant answer to this problem was the loan forgiveness program.  It is not as good as direct public funding of universities to reduce tuition levels, but it has the advantage of determining the amount of a subsidy not by the student's income upon entering college but after leaving it.

That is, classic financial aid and loan guarantee programs use the student's family's financial situation to determine aid levels.  But a poor kid who uses his university education to become an investment banker is not truly needy in the overall sense that should matter, whereas someone from an upper-middle-class family who ends up running a soup kitchen is not as rich as he initially seems.

Loan forgiveness programs thus allow us to say that students who are willing to work for ten years in one of a clearly defined set of public service jobs can be given a retroactive tuition discount.  "You used your education in a way that helps society but that does not pay a lot of money, so we are giving you a break on your expenses."

This is an especially important idea for some professional schools, especially law schools.  Many law students, who often arrive at law school already carrying high debt loads from college, have responded positively to the idea that they can earn a law degree and use it for something other than serving corporate clients in multi-billion-dollar deals and litigation.

Even putting aside the fact that such high-paying jobs are more difficult to find than ever, we should want to give students who are inclined toward public service a way to pursue those careers without drowning in debt.

The Trump plan to cut funding for the Public Service Loan Forgiveness Program is, as with all things Trump, vague but somehow also clearly pernicious.  Most significantly, it is not clear from current reports whether the cuts would apply immediately or would instead eliminate funding for future students.

This is crucial, of course, because so many current and former students have made irreversible career and borrowing choices based on the prospect of having their remaining student loan balances forgiven at some point.  If their reliance on these programs is met with a Trump version of the famous line from "Animal House" -- "You f_cked up.  You trusted us!" -- then we will as a society have reached a new low.

Not that this means that the Republicans would not do something so ugly.  They are hostile to higher education, and they (along with far too many Democrats) are especially eager to attack law schools and lawyers.  If Republicans do not already know that cutting off loan forgiveness would harm some public-spirited lawyers, telling them about it might make them more eager to do so, not less.

But even if the cuts are imposed only in a way that eliminates funding for people who can still change their career paths, this is a terrible idea.  The point is that we do not want people to avoid those low-paying career paths.  Only the most simple-minded economic conservatives think that salary and social value are perfectly correlated.  Everyone else understands that some jobs are worth more than the compensation that they offer.

The larger issue is that the Republicans are systematically shutting down access to higher education.  Direct financing of universities and colleges: Cut!  Subsidies to student loans: Cut!  After-the-fact loan forgiveness for people who are willing to live modestly to work in the public interest: Cut?

As the old line goes: If you think education is expensive, try ignorance.  Republicans have tried it, and they like it.  Now, they want to impose it on everyone else.

2 comments:

el roam said...


Thanks for that interesting post , everything can be solved , with functional , punctual , smart regulation :

So , the best solution , even from the point of view of the respectable author of the post , would be , to grant full financial aid , to low social groups ,only to those specific domains , that have the highest return and benefit for the state and for those individuals . Typically , it would be : Science , technology ( advantage in international arena and in business and military anyway ) .

This is , the perfect " all around deal " ( maybe not the sole one , but per se the perfect ) .

Thanks

el roam said...


One may read here , very good illustration , for the concept presented in my comment above , although has to do , not with aiding in education , but rather in research and business . Anyway , what counts , is the interest of public and the state , combined with benefiting poor individuals ( in the US ) here :

https://www.ft.com/content/babcfd3e-98b0-11e3-a32f-00144feab7de

Thanks