Short responses to arguments regarding income-based repayment

I support making college free at the point of delivery and funding that by imposing an income tax on those that attend college. A lot of people don’t like doing that. I think they have pretty bad arguments for opposing it. I address some of those arguments, as detailed by Jordan Weissman in The Atlantic, here.

Before making arguments on this topic people really need to make clear what their philosophy of justice is. I have been clear from the beginning: I favor egalitarian distributive justice. No one else that I have read has bothered to explain what their philosophical framework is. I don’t usually demand such a thing, but it happens to matter a ton in this discussion. I am not trying to pursue a policy that’s “best for students” whatever the hell that even means. I am trying to design a funding mechanism for college education that promotes egalitarianism.

Here we go.

The Randian Objection

it could drive the most talented young people out of the state college system altogether.

Make income-based repayment universal for all colleges in the country. Problem solved. Even short of that, this is an odd bit of unsubstantiated Ayn Rand speculation. I doubt Oregon teenagers are going to go Galt. I doubt Oregon will have a problem finding students for its schools. I can’t say for sure, but I can wildly speculate on it as well as others.

The Room & Board Objection
This objection notes that college students pay both tuition and living expenses, and that making tuition free does not make living expenses free.

First, cover living expenses as well if you want. This is not an argument against the tax policy we use to fund higher education. It equally applies to any other state tuition subsidies. The next time a leftist says we should raise general taxes to subsidize tuition, I better see this argument made against it. I wont of course.

Second, there is no math in the world that will ever show how covering some part of college expenses through IBR (even without covering all expenses) would, on average, make students worse off. It can’t be done. The only argument coming from Goldrick-Rab is that in some narrow cases, you could imagine someone loading down with debt and then doing federal IBR and getting it forgiven after 10 or 20 years. This is better for the student in question, but not for distributive justice as a whole. Some other group of people must account for the amount forgiven somewhere and somehow. Forgiveness doesn’t eliminate actual costs being incurred somewhere and by somebody.

It Hurts the Rich Objection

Of course, those students who wouldn’t have needed to borrow may have it even worse. After all, there’s a good chance they’ll be paying more for their education over time than if they had simply been allowed to pay up front.

Counterargument: I don’t care about the rich. Counterargument two: this argument applies to all taxation-based methods of funding higher education.

Trickle-Down Economics Objection

The next big issue is what I call the engineer problem. If you’re a student who plans to make a lot of money after college, say as an engineer or a computer programmer, Pay as You Go is a terrible deal. The average student is already asked to pay more than the value of their tuition over time. Students who make higher than average salaries will be asked to pay vastly more. If you’re a student contemplating grad school, say to become a doctor or a lawyer, the problem may be even worse, since chances are you’ll be relying on an income-based repayment program to handle your federal loans down the line anyway.

Counterargument: universalize it. This is an argument for making it bigger and universal. Comment: supply-side economics is back! This time it’s the left that thinks increasing the taxes on the rich will wreak economic havoc, interestingly enough.