A few more notes on student debt

I left some things out of my previous post on the politics of student debt. First, there are a variety of other ways to use means-testing to help poor kids afford college. One way to do so is through price discrimination, something many private schools already do. Private schools have very high sticker prices for their tuition, but very few students actually pay the full price. Instead, the schools discount the tuition of students based on the financial means of their parents. This process (in a sense) redistributes the cost of tuition internally: rich kids pay for some of the tuition of poor kids.

Second, some educational institutions do seriously exploit students. I encourage people to watch the PBS documentary College Inc., which details the shady practices of for-profit colleges in the United States. The short of it is that these colleges use high pressure tactics to get people to enroll as students, promising them a grand future that never comes. The students pay ridiculously high levels of debt-financed tuition and then often graduate with a degree that leaves them no better off than they were before. This is the shady underside of the US education system, and something is being done about it on the regulatory level. However, this sort of exploitation is not a student debt issue really: it is an issue of fraud and deception.

With those two points out of the way, I will just emphasize once again my basic concern about treating student debt as a class or social justice issue. As a group, college students are in superior economic positions than the 70% of the population who do not go to college. College students disproportionately come from high-income households and stand to make, at the median, around $1 million more in their lifetime than those with only high school educations. Using tax revenues to subsidize college is effectively a form of redistribution to the well-off and the soon-to-be well-off. Every public dollar spent paying for students’ tuition is a dollar that could be spent on other things, any number of which would be better for reducing overall inequality, hardship, and economic injustice.