I burned my eyes reading the Wall Street Journal this morning
If you want to do yourself a favor, don’t read this editorial from the Wall Street Journal like I did. It’s an unsigned “Review & Outlook” piece which I’m guessing was written by Rupert Murdoch himself.
Entitled Telling Students to Earn Less: Obama now calls for reforming his bleeding college loan program, it’s a rant against Obama’s Pay As You Earn plan, and it’s vitriolic, illogical, and mean. It makes me honestly embarrassed for the remaining high-quality journalists working at the WSJ who have to put up with this. An excerpt:
Pay As You Earn allows students under certain circumstances to borrow an unlimited amount and then cap monthly payments at 10% of their discretionary income. If they choose productive work in the private economy, the loans are forgiven after 20 years. But if they choose to work in government or for a nonprofit, Uncle Sugar forgives their loans after 10 years.
Uncle Sugar? Is this intended to make us think about the Huckabee birth control debate?
Here’s the thing. I’m not someone who always wants people to talk about the President in hushed and solemn terms or anything. The president is fair game, as are his policies. And in Obama’s case, I am not a big fan. For that matter, I don’t think his education policy has any hope, even if it’s well-intentioned. But I just don’t understand how an article like this can be published in a respectable newspaper. It does not advance the debate.
For the record, college tuition has been going up for a while, way before Obama:
And it’s not just that tuition has been going up, at least at state school. It’s that state funding has been going down:
Next, it’s true that just supplying more loans to federal students doesn’t cut it: tuition rises to meet that ability to pay. In fact that’s part of what’s going on in the above picture.
What we have here is a feedback loop, and it’s hard to break. My personal approach would be to make state schools free to make the overall field competitive for college costs. And yes, that would mean the state pays the schools directly instead of handing out money to students in the form of loans. It’s called an investment in our future, and it also would help with the mobility problems we have. At some point I’m sure it seemed like a terrible idea to form a public elementary school system for free, but we don’t think so now (or do we, Rupert?).
The biggest gripe, if you can get through the article, is that Obama’s plan will allow students to pay off their loans with at most 10% of their salaries after college, and that certain people can stop paying after 10 years instead of 20. If you read from the excerpt above, this is an outrage and those unfairly entitled people are characterized as government and nonprofit workers, but the truth is the exemptions include people who work as police officers, as healthcare workers, in law, or in the military as well.
The ending of the article, which again I suggest you don’t read, is this:
The consequences for our economy are no less tragic than for the individual borrowers. They are being driven away from the path down which their natural ambition and talent might have taken them. President Obama keeps talking about reducing income equality. So why does he keep paying young people not to pursue higher incomes?
All I can say is, what? I get that Rupert or whoever wrote this likes private industry, but the claim that by encouraging a bunch of people to go into super high paying private jobs we will reduce income inequality is just weird. Has that person not understood the relationship between inequality and CEO pay?
I say if you are so gung-ho about private high-paying jobs, then you also need to embrace rising inequality. Do it in the name of free-market capitalism or something, but please stay logical.