More bad Pay It Forward arguments

American Federation of Teachers has a bad track record of throwing out contradictory arguments about Pay It Forward. In fact, a lot of the left literally has no idea what to do with it. It is a policy idea that they can’t really put into their usual scripts. Some try, but it is elusive.

I am not going to go through all the Pay It Forward stuff again, but I thought I’d just go through some of the hilarious arguments AFT is now trotting out. Before I get started, I am going to assume (for simplicity sake) that AFT supports tax-funded tuition subsidies of a non-PIF type. So I am going to engage their arguments as if they are arguing for general taxes to subsidize tuition, and are mad about using PIF (a system that taxes just college graduates). Here we go.

One of the biggest concerns about Pay It Forward is that it might end up costing students more in the end. Initial analyses by education experts Sara Goldrick-Rab and Mark Kantrowitz, have projected Pay It Forward would cost most students thousands more over their lifetime versus other alternative payment structures.

If I recall correctly, Sara actually walked this argument back on twitter after she published. I wrote about it soon after she published it, calling it The Worst Argument So Far Against Oregon’s Higher Education Proposal.

Here is how the argument is supposed to work. Right now, some high-debt students will wind up on the federal Income-Based Repayment program. Those people will pay a specific percentage of their income for a specific amount of years, and then the rest will be forgiven (though they’ll have to pay taxes on the forgiven amount as if it is income). So the argument is that there is a theoretically possible class of people who — despite free tuition — will wind up with so much debt that they’ll still wind up on the federal IBR. Right now, they just go on the IBR and pay that. But under PIF, they’ll have to go onto IBR and pay the PIF tax. So you see, they pay more.

Ha clever right? You got me. No. This argument is literally an argument against all tax-funded tuition subsidies, all of them. Why? Well the reason it “works” is because students that go in federal IBR get no benefit whatsoever from any tuition subsidies (except less tax after discharge perhaps). After all, they are not really paying for their tuition; they are just going onto federal IBR. But that means all tax-funded tuition subsidies harm these kinds of students. Why? Because they have to pay into the taxes that go to fund them once they graduate and get a job.

Imagine Oregon said we want to raise a general tax to cover all tuition in Oregon. By AFT’s logic, this is something that will make college more expensive for some students. Why? Because those students that wind up on federal IBR will have to pay both their IBR and contribute to this new general Oregon tax. So unless AFT is literally advocating for the end of all state tuition subsidies (on the theory that financing them technically costs those who wind up on federal IRB more since they pay taxes), they have run themselves into a hilarious contradiction.

Pay It Forward does not address the long-term trend of state disinvestment from higher education, which has accelerated rapidly over the last five years. Instead, this legislation puts an additional burden on individual students, reinforcing the concept of higher education as an individual transaction separate from the community, not as a public good that develops economic and civic engagement within it.

False. It rapidly ramps up state investment in higher education. It taxes people to publicly fund all college tuition. That is the economic reality of what it is doing. AFT seems to have a little confused-head going on due to what I imagine are metaphysical efforts to define what PIF is. That’s ok. Much of the left is suffering from confused-head here. Is it a debt contract? Is it equity? Is it a graduate tax? Here I’ll solve it for you: it’s a flat, term-limited, income tax on graduates. So hooray, tax-financed investment in higher education is increasing!

Does this legislation put additional burden on individual students? No. It puts the tax burden on all students as a class of people. Now in the alternative world where you tax non-students as well, it is true that students will end up paying less lifetime taxes overall to finance the free tuition. But that just means you are transferring money from non-students (disproportionately poor) to students (disproportionately rich). It is class war against the poor to opt for taxing the general public instead of just students. But I guess AFT wants to squeeze a little more money out of those poor high school drop outs. Then we’ll have justice.

The Pay It Forward structure does nothing to address tuition levels or college costs for students

Pay It Forward does nothing to solve the Israel-Palestine crisis. Thus reject it. In competent debate land, pointing out that something doesn’t solve some things while solving others is not an argument against it. General tax-funded tuition subsidies doesn’t solve this either. So what’s the point?

But actually wait a minute, maybe PIF does solve this. If you mandate that colleges keep tuition free and require them to run only off of the PIF money, you have just created a cost cap! You have just created a cost control! Hooray team.

The full scope of the cost of attending college is not addressed.

If you want to give people more than tuition, including their cost of living and books, go for it. It will just mean upping the PIF interest rate or extending the length of the PIF tax period. That’s fine. If you taxed it with general taxes, it would also mean just upping the general tax rate. So it’s whatever. This argument does nothing unique in the debate at all.

Also note however that according to this argument, AFT is against all free tuition schemes. This is an argument against all of them. If Oregon tomorrow said we are going to make tuition free by levying a general tax on the public, AFT would come out against it with a document that said this. Right? Lol no of course not. This is purely motivated argument that AFT would never apply to other relevant contexts, e.g. a policy of general taxes used to subsidize free tuition.

Despite assurances that Pay It Forward would not impact federal and state financial aid, evidence suggests otherwise. As a result of Pay It Forward, the poorest students who currently receive grant aid for tuition and fees would likely end up paying thousands more than they otherwise would have.

What evidence suggests otherwise? And does that evidence suggest free tuition financed by general taxes wouldn’t have the same problem? I highly doubt free tuition financed by a tax on graduated students affects aid any differently than free tuition financed by a tax on everyone. If it does, we have some pretty goofy laws somewhere.

What I find most amusing about it is that AFT actually managed to curate the worst arguments. If you asked me to come up with arguments against PIF, I could have come up with a much better set of them than this. Truly amazing.