US Student loan debt should be blamed on Reagan, says Devin Fergus

[Roma_Victrix]

My students pay too much for college. Blame Reagan.

The most important bit from the article:

Today’s student aid crisis has its roots in the 1980s. In 1981, the Reagan administration, with a coalition of congressional Republicans and conservative Democrats, pushed through Congress a combination of tax- and budget-cutting measures.

No federal program suffered deeper cuts than student aid. Spending on higher education was slashed by some 25 percent between 1980 and 1985. In raw dollar figures, cuts totaled $594 million in student assistance and $338 million in Pell grants. Students eligible for grant assistance freshmen year had to take out student loans to cover their second year. For middle-class families, eligibility was changed as well. Low-cost, low-interest, subsidized federal loans were limited to families with household incomes of less than $32,000, regardless of family size.

Effectively, these changes shifted the federal government’s focus from providing students higher education grants to providing loans.

How did college students and their families find themselves in the budgetary crosshairs of the Reagan administration?

Some in the White House and the Office of Management and Budget argued cutting aid would reduce the deficit, while others averred that less money meant less federal intrusion in individuals’ lives. Still others insisted government support of students upset the natural order of the nuclear family, supplanting parents and their obligation to provide.

These various perspectives coalesced around a shared view: students were “tax eaters … [and] a drain and drag on the American economy.” Student aid “isn’t a proper obligation of the taxpayer,” Reagan’s OMB Director David Stockman told Congress.

Reagan administration Education Secretary Terrel Bell would later write in his memoir that students needing aid were part of the problem, not very different from other “undeserving” Americans, no different than the “welfare queen,” the out-of-work father drawing unemployment insurance, the poor families on Medicaid, the elderly in need of Medicare or even farmers relying on subsidies.

What do you guys think? Should Reagan share all the blame? It's not like Clinton, Bush, and Obama have done much of anything to stem the tide or reverse Reagan's policies on funding student aid programs.

[sumskilz]

Keep in mind $32,000 in 1981 is about $84,000 today.

In general, I don't see the problem though, as long as students can get the loans they need. I don't think we have to all pay for all their useless degrees.

[Phier]

I don't think we have to all pay for all their useless degrees.

Some days, its best to answer in comics.

[Heathen Hammer]

Keep in mind $32,000 in 1981 is about $84,000 today.

In general, I don't see the problem though, as long as students can get the loans they need. I don't think we have to all pay for all their useless degrees.

Implying that with a useful degree it is somehow easy to find a job in your field.

[mrmouth]

If I had a child tomorrow I would drill it into their brain, every single day, that there are jobs right now that they cannot fill because people push their kids into college, where you will be earning 100k by year three. Before your friends even graduate, you can start investing for your retirement and actually retire before 65.

[Modestus]

If I had a child tomorrow I would drill it into their brain, every single day, that there are jobs right now that they cannot fill because people push their kids into college, where you will be earning 100k by year three. Before your friends even graduate, you can start investing for your retirement and actually retire before 65.

I presume you will make sure they have some basic reading and writing skills and perhaps some maths before you throw them from the nest?

As a general rule the more educated you are the more money you will earn obviously your children will be exceptions to the general rule because they are your kids, it is a well known unscientific fact that your own kids are special.

[mrmouth]

I presume you will make sure they have some basic reading and writing skills and perhaps some maths before you throw them from the nest?

Cute.

As a general rule the more educated you are the more money you will earn obviously your children will be exceptions to the general rule because they are your kids, it is a well known unscientific fact that your own kids are special.

As a general rule that is the reason that the old industrialized nations have a backlog of graduates in the same fields. Not everyone has the smarts or dedication to be the engineer that our societies and economies sorely need.

On the flip side, since most all of us have the opposable thumb, most everyone has the ability to work on machinery while making upwards of 300k/year. They cant fill those kinds of insanely high pay/benefit jobs because parents keep pushing their 'special' kids into four year schools. A vast majority of those kids take the path of least resistance, with the highest possible return. When everyone does that it creates the situation I've been witnessing for 15 years with people I know who went to college. People who will still be paying their loans off after they raise a family and are currently working entry-level management for $18/hour. Apple stores live off these people.

[Modestus]

On the flip side, since most all of us have the opposable thumb, most everyone has the ability to work on machinery while making upwards of 300k/year. They cant fill those kinds of insanely high pay/benefit jobs because parents keep pushing their 'special' kids into four year schools. A vast majority of those kids take the path of least resistance, with the highest possible return. When everyone does that it creates the situation I've been witnessing for 15 years with people I know who went to college. People who will still be paying their loans off after they raise a family and are currently working entry-level management for $18/hour. Apple stores live off these people.

300,000 for operating machinery? What is it a particle accelerator? On Mars?

[conon394]

OP yes I would blame Regan not so much for the actual policies on education but for the larger culture of Tax cuts all the time and lack of rational economic policy. Education cuts were certainly a result of that but it also bounced down to the states as well. In mid 90s Michigan had amassed a relatively good rainy day fund (before the dot compost bubble). But rather than retain it Gov Engler (R) followed republican mantra and cut taxes - ultimately to little avail since larger macro economic shocks outweighed any small impact such a move might have had. So reduced to struggle by first by tech bubble crash and then the housing crash and forced by law to produce a balanced budget - state education had to be slashed (and every other state service) bluntly. Rather than using what would have been a 1.2+ surplus to ameliorate the effects economic downturns and what would certainly drops in local taxs as well.

If I had a child tomorrow I would drill it into their brain, every single day, that there are jobs right now that they cannot fill because people push their kids into college, where you will be earning 100k by year three. Before your friends even graduate, you can start investing for your retirement and actually retire before 65.

Not a bad ideal but it all depends really on what you like doing. I would say its sufficient get them to know that college is not only route obviously trades are lots of Trades to go into and even starting a business etc. As for college I think all too many people get sucked into thinking somehow CALC 1 or Econ 101 will be better at Yale than a community college. A lot of young people are likely better off living in their parents basement for a year - getting basic courses and at times that allow to have job, before hopping on to a University even they absolutely have a goal in mind.

Also I would add we fall flat here in the US compared to say Germany in funding and running effective technical trades and regulating them well to make sure that both the community colleges that are part of the typically 2 year program of 'college education' are well funded and well run but also that the follow work experience portion is also appropriate to industry standards and produces a journeyman's card or equivalent that is worth the paper is is made of.

[Phier]

OP yes I would blame Regan not so much for the actual policies on education but for the larger culture of Tax cuts all the time and lack of rational economic policy. Education cuts were certainly a result of that but it also bounced down to the states as well. In mid 90s Michigan had amassed a relatively good rainy day fund (before the dot compost bubble). But rather than retain it Gov Engler (R) followed republican mantra and cut taxes - ultimately to little avail since larger macro economic shocks outweighed any small impact such a move might have had. So reduced to struggle by first by tech bubble crash and then the housing crash and forced by law to produce a balanced budget - state education had to be slashed (and every other state service) bluntly. Rather than using what would have been a 1.2+ surplus to ameliorate the effects economic downturns and what would certainly drops in local taxs as well.

Shame he never had the house too...



Those horrible tax "cuts" and the expanded revenue.

Really what do tax cuts have to do with anything here? LOOK AT THAT GRAPH, look at it.

Implying that with a useful degree it is somehow easy to find a job in your field.

If your field was say "Womens Studies" or "18th Century art" you have only yourself to blame.

[Condottiere 40K]

It's short-sighted not to ensure that you maintain or increase the next generation's intellectual capital, because these will be the foundation of your tax base. And hopefully ensure technological relevance, if not dominance.

A balanced distribution of funds biased towards more of science, technical, and math degrees.