Obama to propose two free years of community college (1 Viewer)

[Rich Conway]

Not true at all. Spending on those things that generate a return on investment (i.e. more dollars are added to the economy than are taken out) is a positive. Period.

That's true in the free market, but not in government.

Governments do not make investments. Instead, they tax (take by force from the productive class) and spend (what you wrongly call investment).

How can you say this theft and redistribution adds dollars to the economy? The dollars are taken FROM the economy before they are spent.

And what about those dollars that are stolen from the productive class to fund the community college scam? What productive purpose could those dollars been invested in had they not been stolen by the state?

Bastiat refers to it as what is seen and what is not seen.

It's not even true in the free market, much less in government. Because available investment dollars are finite rather than infinite, we have to take into account opportunity cost. If the benefits are less than the opportunity cost, then the investment isn't a positive.

 

[Clifford]

The estimated price tag is in....

Obama's free-tuition plan to cost taxpayers $80 billion over 10 years

President Obama’s plan to offer tuition-free community college would cost taxpayers $80 billion over the next decade, the White House said in advance of Obama rolling out his program Friday. The federal government would pay $60 billion, while the states would pay $20 billion.

Isn't $8bn a year pretty low in terms of Government entitlement programs?

 

[cstu]

Not true at all. Spending on those things that generate a return on investment (i.e. more dollars are added to the economy than are taken out) is a positive. Period.

That's true in the free market, but not in government.

Governments do not make investments. Instead, they tax (take by force from the productive class) and spend (what you wrongly call investment).

How can you say this theft and redistribution adds dollars to the economy? The dollars are taken FROM the economy before they are spent.

And what about those dollars that are stolen from the productive class to fund the community college scam? What productive purpose could those dollars been invested in had they not been stolen by the state?

Bastiat refers to it as what is seen and what is not seen.

Educating 9 million people > extra sales of luxury goods

 

[cstu]

Not sure why you couldn't follow a structure similar to college where the first year or two of high school, you take general ed courses which are just good for anyone to learn regardless of your career and then the final two years you branch out into either some type of votech or more college appropriate classes. No point in someone that wants to go into the trades to take typing while its not essential that someone going the college route to take woodshop. So the last few years, have more like electives that are in line with the path you intend to take.

Makes too much sense to happen.

I think there needs to be more education for trades at earlier ages but what is described above is what happens at every HS I have ever seen.

They start splitting them after 4th grade here. They go to Mittelschule, Realschule, or Gymnasium. Lot of stress inour house this year as my son is a little behind in German as it was his second language, although he should have the math scores to balance it.

So no room for late bloomers in Germany?

 

[cstu]

Community college is not where student loan debt is being created. It is already affordable, so I do not really understand why we would make it free. As others have said we do not need more people with AAs, we need more vocational training. I firmly believe the entire education system needs an overhaul. It's not that we do not have good schools/teachers, but that we have a bulk of the student base disinterested in the curriculum. We dump all of our resources into getting the failing students up to a passing level instead of improving our top students into the leading innovators of the future. If I were in charge I would filter the students after middle school, with high school strictly being college prep, and take the rest and move them to vocational school. Give the college-bound kids the resources to be successful and give the rest the opportunity to gain employable skills

This is correct. But if more people, who belong in CC or not in college at all to be honest, decide to skip that wasteful year at state college there will be less student loan debt. If more people made the sensible choice to get those stupid gened courses out of the way at the local CC @ $150/credit vs $500/credit at local state school, that'd be a big savings. Plus those gened courses are sometimes taught by the SAME PROF as you'd get at the state school if they are close enough.

I dunno how the proposal is going to work, but I'd rather there be a "reimbursement for passing" system vs a "it's just free for anyone who signs up" system.

Anything that encourages people to get more education is a good thing.

Maybe people will go to CC and fail but will be more likely to go back later.

 

[Short Corner]

Not sure why you couldn't follow a structure similar to college where the first year or two of high school, you take general ed courses which are just good for anyone to learn regardless of your career and then the final two years you branch out into either some type of votech or more college appropriate classes. No point in someone that wants to go into the trades to take typing while its not essential that someone going the college route to take woodshop. So the last few years, have more like electives that are in line with the path you intend to take.

Makes too much sense to happen.

I think there needs to be more education for trades at earlier ages but what is described above is what happens at every HS I have ever seen.

They start splitting them after 4th grade here. They go to Mittelschule, Realschule, or Gymnasium. Lot of stress inour house this year as my son is a little behind in German as it was his second language, although he should have the math scores to balance it.

So no room for late bloomers in Germany?

They can test back in after 8th grade but you are really going upstream at that point.

 

[Jayrod]

Not sure why you couldn't follow a structure similar to college where the first year or two of high school, you take general ed courses which are just good for anyone to learn regardless of your career and then the final two years you branch out into either some type of votech or more college appropriate classes. No point in someone that wants to go into the trades to take typing while its not essential that someone going the college route to take woodshop. So the last few years, have more like electives that are in line with the path you intend to take.

Makes too much sense to happen.

I think there needs to be more education for trades at earlier ages but what is described above is what happens at every HS I have ever seen.

They start splitting them after 4th grade here. They go to Mittelschule, Realschule, or Gymnasium. Lot of stress inour house this year as my son is a little behind in German as it was his second language, although he should have the math scores to balance it.

So no room for late bloomers in Germany?

They can test back in after 8th grade but you are really going upstream at that point.

How did you end up in Munich?

My wife told me long ago that she would be willing to do this. My dad is a 3rd generation American, but his entire lineage is traced back to Germany. We visited there once with a church group and just loved it. I'm sure living there is quite an adjustment, though.

BTW, I may have grilled you about this once before. I seem to recollect doing that once with someone in the FFA before.

 

[Jayrod]

Not sure why you couldn't follow a structure similar to college where the first year or two of high school, you take general ed courses which are just good for anyone to learn regardless of your career and then the final two years you branch out into either some type of votech or more college appropriate classes. No point in someone that wants to go into the trades to take typing while its not essential that someone going the college route to take woodshop. So the last few years, have more like electives that are in line with the path you intend to take.

Makes too much sense to happen.

I think there needs to be more education for trades at earlier ages but what is described above is what happens at every HS I have ever seen.

They start splitting them after 4th grade here. They go to Mittelschule, Realschule, or Gymnasium. Lot of stress inour house this year as my son is a little behind in German as it was his second language, although he should have the math scores to balance it.

So no room for late bloomers in Germany?

They can test back in after 8th grade but you are really going upstream at that point.

I remember reading up on this when I was in college. Seemed there was some real stress around that test for some families.

 

[Short Corner]

Not sure why you couldn't follow a structure similar to college where the first year or two of high school, you take general ed courses which are just good for anyone to learn regardless of your career and then the final two years you branch out into either some type of votech or more college appropriate classes. No point in someone that wants to go into the trades to take typing while its not essential that someone going the college route to take woodshop. So the last few years, have more like electives that are in line with the path you intend to take.

Makes too much sense to happen.

I think there needs to be more education for trades at earlier ages but what is described above is what happens at every HS I have ever seen.

They start splitting them after 4th grade here. They go to Mittelschule, Realschule, or Gymnasium. Lot of stress inour house this year as my son is a little behind in German as it was his second language, although he should have the math scores to balance it.

So no room for late bloomers in Germany?

They can test back in after 8th grade but you are really going upstream at that point.

How did you end up in Munich?

My wife told me long ago that she would be willing to do this. My dad is a 3rd generation American, but his entire lineage is traced back to Germany. We visited there once with a church group and just loved it. I'm sure living there is quite an adjustment, though.

BTW, I may have grilled you about this once before. I seem to recollect doing that once with someone in the FFA before.

Wife was born in Germany. Her company asked if we would move out here for a few years. They shipped all our stuff and went insolvent a year later. Once the kid started school we pretty much planned on staying until he finishes. Most of his friends are already pretty much locked in to the bottom rung school which will make it tough.

 

[Gary Coal Man]

New York Times Op-Ed

I Owe It All to Community CollegeBy TOM HANKS

January 14, 2015
IN 1974, I graduated from Skyline High School in Oakland, Calif., an underachieving student with lousy SAT scores. Allowed to send my results to three colleges, I chose M.I.T. and Villanova, knowing such fine schools would never accept a student like me but hoping they’d toss some car stickers my way for taking a shot. I couldn’t afford tuition for college anyway. I sent my final set of stats to Chabot, a community college in nearby Hayward, Calif., which, because it accepted everyone and was free, would be my alma mater.

For thousands of commuting students, Chabot was our Columbia, Annapolis, even our Sorbonne, offering courses in physics, stenography, auto mechanics, certified public accounting, foreign languages, journalism — name the art or science, the subject or trade, and it was probably in the catalog. The college had a nursing program that churned out graduates, sports teams that funneled athletes to big-time programs, and parking for a few thousand cars — all free but for the effort and the cost of used textbooks.

Classmates included veterans back from Vietnam, women of every marital and maternal status returning to school, middle-aged men wanting to improve their employment prospects and paychecks. We could get our general education requirements out of the way at Chabot — credits we could transfer to a university — which made those two years an invaluable head start. I was able to go on to the State University in Sacramento (at $95 a semester, just barely affordable) and study no other subject but my major, theater arts. (After a year there I moved on, enrolling in a little thing called the School of Hard Knocks, a.k.a. Life.)

By some fluke of the punch-card computer era, I made Chabot’s dean’s list taking classes I loved (oral interpretation), classes I loathed (health, a requirement), classes I aced (film as art — like Jean Renoir’s “Golden Coach” and Luis Buñuel’s “Simon of the Desert”), and classes I dropped after the first hour (astronomy, because it was all math). I nearly failed zoology, killing my fruit flies by neglect, but got lucky in an English course, “The College Reading Experience.” The books of Carlos Castaneda were incomprehensible to me (and still are), but my assigned presentation on the analytic process called structural dynamics was hailed as clear and concise, though I did nothing more than embellish the definition I had looked up in the dictionary.

A public speaking class was unforgettable for a couple of reasons. First, the assignments forced us to get over our self-consciousness. Second, another student was a stewardess, as flight attendants called themselves in the ’70s. She was studying communications and was gorgeous. She lived not far from me, and when my VW threw a rod and was in the shop for a week, she offered me a lift to class. I rode shotgun that Monday-Wednesday-Friday totally tongue-tied. Communicating with her one on one was the antithesis of public speaking.

Classes I took at Chabot have rippled through my professional pond. I produced the HBO mini-series “John Adams” with an outline format I learned from a pipe-smoking historian, James Coovelis, whose lectures were riveting. Mary Lou Fitzgerald’s Studies in Shakespeare taught me how the five-act structures of “Richard III,” “The Tempest” and “Othello” focused their themes.

In Herb Kennedy’s Drama in Performance, I read plays like “The Hot L Baltimore” and “Desire Under the Elms,” then saw their productions. I got to see the plays he taught, through student rush tickets at the American Conservatory Theater in San Francisco and the Berkeley Repertory Theater. Those plays filled my head with expanded dreams. I got an A.

Of course, I goofed off between classes eating French fries and looking at girls; such are the pleasures, too, of schools that cost thousands of bucks a semester. Some hours I idled away in the huge library that anchored Chabot’s oval quad. It’s where I first read The New York Times, frustrated by its lack of comics.

If Chabot’s library still has its collection of vinyl records, you will find my name repeatedly on the takeout slip of Jason Robards’s performance of the monologues of Eugene O’Neill. On Side B he was Hickey, from “The Iceman Cometh,” a recording I listened to 20 times at least. When I worked with Mr. Robards on the 1993 film “Philadelphia,” he confessed to recording those monologues at 10 in the morning after lots and lots of coffee.

President Obama hopes to make two years of free community college accessible for up to nine million Americans. I’m guessing the new Congress will squawk at the $60 billion price tag, but I hope the idea sticks, because more veterans, from Iraq and Afghanistan this time, as well as another generation of mothers, single parents and workers who have been out of the job market, need lower obstacles between now and the next chapter of their lives. High school graduates without the finances for a higher education can postpone taking on big loans and maybe luck into the class that will redefine their life’s work. Many lives will be changed.

Chabot College is still in Hayward, though Mr. Coovelis, Ms. Fitzgerald and Mr. Kennedy are no longer there. I drove past the campus a few years ago with one of my kids and summed up my two years there this way: “That place made me what I am today.”

Tom Hanks is an actor, producer and director. His 2011 film “Larry Crowne” was inspired by his years at Chabot College.

 

[Gary Coal Man]

America would be much better off if there was a crackdown on "For-Profit Colleges" that add debt to unsuspecting students and little value.

There is.

Online Universities: Government Cracks Down on For-Profit Schools

 

[Gary Coal Man]

Washington Post

Unintended consequences of President Obama’s proposal to make community college free, and one key chart

Two economics professors at the College of William & Mary, Robert B. Archibald and David H. Feldman, experts in college costs, question the idea of “free” community college tuition as proposed by President Obama — and crunched the numbers to find the potential fiscal impact on each state:

A week has passed since President Obama released his “free” community college proposal, and the broad outlines of the pro- and anti-positions are now discernible. Unemployment rates for people with more education than a high school degree are indeed lower, and their incomes are substantially higher. The job market of the future will undoubtedly shift toward jobs that require more than high school level skills. Free community college will indeed shift some students out of for-profit schools with low graduation rates that saddle graduates and non-graduates alike with very high levels of student debt. On the other side, we hear that students should have some skin in the game, for-profit schools are the innovative future, some college grads seem to be working in low-level jobs that don’t require fancy degrees, and more federal subsidy will just push up tuition. In addition, the proposal is supposedly dead on arrival anyway because it adds to the federal deficit and federalizes what should be a state decision. Anyone who is minimally aware should be able to see the left-right divide in this list of reactions.

In a short essay, we cannot separate the wheat arguments from the chaff. Instead, we offer two arguments and one bit of evidence to show the true complexity of this issue.

One of the program’s goals is to break down the financial barriers that keep many students from pursuing a useful certificate or degree. Two free years at a community college supposedly will make a four-year bachelor’s degree more affordable. Yet four-year colleges and universities depend on larger classes taught to first and second year students to keep cost down. These larger introductory classes are the flip side of the smaller and more teacher-intensive upper level classes of the final two years. The upper division courses are the ones that truly prepare students for a job market that prizes advanced training in technical and non-technical fields alike. If the proportion of freshmen and sophomores at four-year universities falls, this could push up the cost of a four-year degree for students who go directly to places like Ohio State or Oregon. Welcome to the “law of unintended consequences.”

In a similar vein, recent research shows that students who could do well at a four-year school but who choose to begin at a community college are less likely to graduate than their peers who go directly to a four-year school. Inducing students to go to college is a good thing, especially if their alternative is a low-paying dead-end job. But inducing students to switch from a four-year program to a “free” community college is a more nuanced outcome.

Lastly, the politics of this program are far from obvious. The chart below shows an estimate of the initial fiscal cost of making community college “free” in each state, measured as dollars per thousand of that state’s personal income. We say “initial” and “estimated” because we have no way to know precisely how many current students would qualify for aid (those in the appropriate programs with the requisite GPA) and how many more students will move into the system. Even without that extra knowledge, it’s clear that there is a lot of variation nationally. In Florida, for instance, the cost is 33 cents per thousand. In Kentucky, it’s three dollars and a penny.

Since the federal government is picking up ¾ of the tab, states like Iowa, South Carolina, and Arizona (the latter two quite red), would be clear net recipients of federal money even though they would have to kick in some extra cash themselves (the other ¼). How would South Carolina’s leadership react? Not sure.

Feldman added this note about the chart:

“Fiscal cost” is the listed tuition times the number of students enrolled. That’s the cost that will have to be split between the feds (3/4) and the state (1/4) if you make CC free. This “fiscal cost” measure is really an “initial” cost, since it could grow if the number of enrolled students rises as a consequence of the price cut. But it’s a good starting place for the discussion. And this “fiscal cost” is based on an assumption that every student qualifies, which clearly is an overestimate. Some students wouldn’t qualify, either because their grades are too low or because they are not enrolled at least half-time. But we don’t think that students in Iowa, for instance, routinely get lower (or higher) grades than students in Florida. What we’re trying to show is the fact that there is a lot of variability among states, which comes out pretty clearly in that picture. The fiscal effects vary substantially.

 

[Sand]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

 

[tommyGunZ]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

In this scenario, Peter does not = Paul.

 

[humpback]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

In this scenario, Peter does not = Paul.

So you're fine with this?

 

[jonessed]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

Taxing 529 profits used for college would be a really ####ty thing to do.

 

[tommyGunZ]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

In this scenario, Peter does not = Paul.

So you're fine with this?

I'm not sure. I'd need to see a broader analysis and explanation as to why ending this benefit while extending others makes sense from a policy standpoint.

I'll likely be negatively impacted by this change, so I'm definitely interested in understanding the merits. But if it's better policy to tax 529's in order to provide support elsewhere, I'm happy to pay my fair share. Good policy > NIMBY.

 

[cstu]

I'm not sure. I'd need to see a broader analysis and explanation as to why ending this benefit while extending others makes sense from a policy standpoint.

I'll likely be negatively impacted by this change, so I'm definitely interested in understanding the merits. But if it's better policy to tax 529's in order to provide support elsewhere, I'm happy to pay my fair share. Good policy > NIMBY.

I don't see the need to take away tax exemption for 529's in order to give people free CC. Both of these are helping middle class kids go to college and it appears to be promoting CC's over going straight to 4 year schools.

 

[Sand]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

In this scenario, Peter does not = Paul.

Of course it does.

And, to be honest, I am not feeling much NIMBY. The chances of this being passed with the current congress are at 0. No doubt, though, it is terrible policy - putting even more unprepared people into a system that already has a huge amount of dropout using the lure of free money, using monies that are part government confiscation and part unfunded mandate, and putting out there the idea that you needn't save for college (so we'll take your 529 accounts away for you) and that the government will furnish this for you. Just horrible on a practical and theoretical basis.

 

[TheAristocrat]

I'm opposed to Obama's Eminence Subsidy.

 

[tommyGunZ]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

In this scenario, Peter does not = Paul.

Of course it does.

And, to be honest, I am not feeling much NIMBY. The chances of this being passed with the current congress are at 0. No doubt, though, it is terrible policy - putting even more unprepared people into a system that already has a huge amount of dropout using the lure of free money, using monies that are part government confiscation and part unfunded mandate, and putting out there the idea that you needn't save for college (so we'll take your 529 accounts away for you) and that the government will furnish this for you. Just horrible on a practical and theoretical basis.

I haven't seen the data, but I have a feeling that most of the Peters (those receiving the 529 tax benefits) are sitting in one of the two highest tax brackets, while the Pauls (those who would benefit significantly from free community college) aren't.

No 529s are being "taken away", the tax break is simply being reverted to pre-2001 levels. Folks can (and will) still contribute to 529 plans.

 

[SacramentoBob]

Well clearly a conservative in academia is of little to no value to society at large, but maybe we should look beyond you as the example. But to keep things simple as I disappear from this thread for work, would the multiplier of such a program be below 1? (Such as the .6 or so for paying that soldier that conservative like to fraudulently use as a proxy for all spending.)

"Multiplier" analysis only makes sense if you're advocating this program as short-run stimulus spending. I can't imagine that any of its supporters would make that argument. These sorts of proposals are nearly always put forward for their long-run benefits, not for short-run issues.

Not true at all. Spending on those things that generate a return on investment (i.e. more dollars are added to the economy than are taken out) is a positive. Period.

It's not clear at all that this program will generate any kind of significant positive return. A huge majority of the beneficiaries will be people who were going to college anyway, meaning that society gets literally zero benefit from from this program. Society was always getting the lower crime rates, higher incomes, higher taxes, more creative juices, etc. -- all the spillovers people like to claim for education. The only thing that changes is who is paying the bill.

Also, none of this has to do with multipliers.

But can you please cut out the "means testing" nonsense? I thought you were an economist?

In its current iteration, this is just another entitlement program for the middle class, not much different than the home mortgage deduction. It's indefensible on any sort of economic grounds.

I can get on board with something like this as a program to help the poor improve their lot in life. But my kids -- and the kids of 95% of FBGs -- don't need the government picking up their college bills. That's why I'm for means-testing this. If you want to do this to help the poor, fine. Don't just hand money to the middle class.

It is a societal good for our brightest and best new entries to the economy are loaded with an average $30K in debt? And I'm guessing that those that would benefit the most from this have that number quite a bit higher. Along with other forms of personal credit run up while in school.

The "student loan debt" argument works in my favor, not yours. The reason why people go into debt to pay for college is because they believe (correctly) that they're making a good private investment with a positive rate of return. If that's the case, and it is, then this is an activity that doesn't need any further subsidies. The people who reap the benefits of college are the ones who mostly pay the cost. That's how things are supposed to be from the standpoint of economic efficiency.

Again, if your argument is that this is a welfare / transfer program, that changes things and that's fine. But it's time to drop the argument that this program somehow benefits society overall. This is going to have an extremely low social rate of return because in 99% of cases, all it's doing is changing the name of the entity who signs the check.

(On a side note, the student loan issue is grossly exaggerated and community colleges are the institutions least responsible for this non-problem. Those are side points that I don't want to worry about too much, but you have a tendency to cram a lot of wrong into a very small number of words, and it's important that people understand that the median student graduates with an amount of debt equal to that of a modest car loan. That's not a problem).

IK for the win here.

I always enjoy when people end a statement/opinion with "Period." as if it carries some mythical finality, or is a trump card over logic.

'The sun rises in the West. Period.'

You should end sentences with a period.

 

[SacramentoBob]

Washington Post

One of the program’s goals is to break down the financial barriers that keep many students from pursuing a useful certificate or degree. Two free years at a community college supposedly will make a four-year bachelor’s degree more affordable. Yet four-year colleges and universities depend on larger classes taught to first and second year students to keep cost down.\

So the entire higher-ed model is to convince unworthy people to come to their school and overpay for gened classes to make it more afforable for the "real students" who actually get four-year degrees. Yeah, I'd feel terrible about dismantling that system.

 

[Sand]

Haven't been paying attention to this, but saw this tidbit this morning:

Tax Increase on Families Saving for College

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

Hmmm. So we're taxing college savings for free college, and the most ineffective college education type, to boot. Those who have diligently saved (I have put a small amount away every month for 14 years now), if this comes to pass, would have been a lot better off just using a taxable account as the choices are so much better there. I kind of feel like Charlie Brown about to kick the ball now that my kid is in striking distance of college.

Why punish vocational and 4 year colleges?

Why do this when most low income students have their CC ride almost completely covered with Pell grants?

Why rob Peter to pay Paul? And, as a side note, I had no idea CCs had such a powerful lobby. What a huge subsidy coming straight to them.

In this scenario, Peter does not = Paul.

Of course it does.

And, to be honest, I am not feeling much NIMBY. The chances of this being passed with the current congress are at 0. No doubt, though, it is terrible policy - putting even more unprepared people into a system that already has a huge amount of dropout using the lure of free money, using monies that are part government confiscation and part unfunded mandate, and putting out there the idea that you needn't save for college (so we'll take your 529 accounts away for you) and that the government will furnish this for you. Just horrible on a practical and theoretical basis.

I haven't seen the data, but I have a feeling that most of the Peters (those receiving the 529 tax benefits) are sitting in one of the two highest tax brackets, while the Pauls (those who would benefit significantly from free community college) aren't.

No 529s are being "taken away", the tax break is simply being reverted to pre-2001 levels. Folks can (and will) still contribute to 529 plans.

You're fundamentally misunderstanding the tax system we currently have. The 529 plans go away because this change is punitive. It isn't just a reversion.

Current capital gains taxes are 0% until you hit about 74k in income, then they are 15% until you hit ~200k and they go to 20% + a 3.8% ACA surcharge up there somewhere. There are going to be a lot of middle class folks in the 74-200 range who are paying 15% long term cap gains. Now we have the current 529 system where funds go in after tax and come out tax free if for education (just like the Roth IRA). Now, if this proposal is accepted those folks with 529s will pay taxes on these 529s as if the profits are now ordinary income, so 15-39%. And the 529 withdrawals add to the AGI, so double whammy in getting you into these tax brackets.

See this now? In a large number of cases the middle class will be paying more on this money "sheltered" in a 529 plan than if they just stuck in a regular taxable brokerage account and paid long term capital gains. This will cause 529s to stagnate - people will stop contributing almost instantly. Why contribute when a taxable account will have significantly higher after tax performance? (Not to mention these plans typically have fewer options and are higher cost than a brokerage account).

I guess I shouldn't be surprised, but I am a bit. These are punitive actions against those middle class folks who were prudent, practiced a bit of delayed gratification, and saved money.

 

[SaintsInDome2006]

WHHOOOPS!

Looks like Obama was caught trying to drop 529 account college saving programs.

http://www.washingtonpost.com/business/economy/obama-drops-proposal-to-cut-tax-benefits-of-529-college-savings-plans/2015/01/27/5f3f429a-a675-11e4-a2b2-776095f393b2_story.html

NEVER mind.

Obama drops proposal to cut tax benefits of 529 college savings plansPresident Obama on Tuesday abandoned a proposal to end a major tax benefit of popular college savings accounts used by millions of American families after the White House faced mounting criticism from lawmakers and parents.

White House officials said the backlash against the president’s plan became “such a distraction” that it was best to drop the proposal, which would have removed the ability of families to withdraw money tax-free from the savings plans, known as 529s.

The administration had tried to frame the elimination of the tax break as a way to redirect more money to middle-class families, arguing that the savings plans were being used disproportionately by wealthy families.

Sometime he reminds me of a weasely used car salesman.

"Oh yeah, that rust proof coating comes with the car... for another $500, I just knew you had to have it..."