<story><title>Obama Forgives Student Debt Of 400,000 Americans</title><url>http://www.marketwatch.com/story/why-obama-is-forgiving-the-student-loans-of-nearly-400000-people-2016-04-12</url></story><parent_chain><item><author>hardcandy</author><text>You&amp;#x27;re missing the forest for the trees.  What are &amp;#x27;&amp;#x27;the true costs of school&amp;#x27;&amp;#x27;?  Someone who loves to teach sitting in a classroom teaching.  It can be dirt cheap or it can be very expensive.  Supply and demand sorts out the details.  As more money flowed into the system, administration bloated and became its own entrenched interest group, with very little connection to actual education.[1]  Does the UC system need 500 administrators making &amp;gt;$500k year each?[2]  As it stands, college for most of my friends was a 4 year social safari interrupted by infrequent periods of intense cramming in between high school and joining the work force.  Do you think the average 18-21 year old at a state school is a scholar passionately indulging their love of learning?  Almost all education is self education at the end of the day.  As soon as we solve for the credentialing&amp;#x2F;pedigree&amp;#x2F;signaling problem, online education will destroy a huge amount of offline education and rightly so.&lt;p&gt;As for the mortgage interest deduction, how wouldn&amp;#x27;t it boost housing prices?  It effectively lowers the mortage rate by your marginal tax bracket which is close to 50% in California.  So instead of a 3.5% 30 year rate I&amp;#x27;m now below 2%.  Cheaper money stimulates borrowing.  It doesn&amp;#x27;t matter how low NIMBYism pushes supply in the face of overwhelming demand, each individual still has a maximum price they can pay, and subsidized interest rates raise that price point.&lt;p&gt;[1] &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;reclaimuc.blogspot.com&amp;#x2F;2011&amp;#x2F;09&amp;#x2F;senior-administrators-now-officially.html&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;reclaimuc.blogspot.com&amp;#x2F;2011&amp;#x2F;09&amp;#x2F;senior-administrators-...&lt;/a&gt;&lt;p&gt;[2] &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.latimes.com&amp;#x2F;local&amp;#x2F;education&amp;#x2F;la-me-uc-spending-20151011-story.html&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.latimes.com&amp;#x2F;local&amp;#x2F;education&amp;#x2F;la-me-uc-spending-201...&lt;/a&gt;</text></item><item><author>specialist</author><text>&lt;i&gt;The way student loans were before...&lt;/i&gt;&lt;p&gt;No.&lt;p&gt;Tuition went up to compensate for the removal of state subsidizing tuition. Almost 1:1. In fact, with the removal of state support, we&amp;#x27;re merely seeing the true costs of school for the first time.&lt;p&gt;Loans got nutty because of unnecessary privatization and deregulation. But rent seeking, so it was inevitable, right?&lt;p&gt;Once tuitions were nutty, parents demanded value for their dollar, begatting grade inflation and transmuting dorms into resort hotels, fueling continued rising costs.&lt;p&gt;Source: Worked in higher ed. This is common knowledge.&lt;p&gt;(I don&amp;#x27;t know enough to explain the textbook racket. Collusion?)&lt;p&gt;--&lt;p&gt;&lt;i&gt;mortgage interest deductions have a similarly terrible effect on housing...&lt;/i&gt;&lt;p&gt;No.&lt;p&gt;Scarcity caused by NIMBY land use policy is driving up housing costs. The fix is aggressive upzoning.&lt;p&gt;Source: Help friends who work on affordable housing policy. This is common knowledge.&lt;p&gt;--&lt;p&gt;In conclusion, yes, simplistic Freedom Markets (tm) explanations are seductive. But they&amp;#x27;re also mostly wrong. Tuition and loans went bonkers when government pulled out of the business, allowing the predators to take over.</text></item><item><author>readams</author><text>Government-guaranteed loans are a fantastic way to force prices to spiral out of control.  The way student loans were before income-based repayment, we&amp;#x27;d have expected college cost to rise until it meets the lifetime expected benefit of college discounted to the present.&lt;p&gt;With income-based repayment, where your loan balance is forgiven after 20 years, there is no limit to how high it can go.&lt;p&gt;Government-subsidized mortages and mortgage interest deductions have a similarly terrible effect on housing, a basic good that government policy should try to make as cheap as possible.  Instead, government policy is to make it as expensive as possible.</text></item></parent_chain><comment><author>greeneggs</author><text>&amp;gt; Does the UC system need 500 administrators making &amp;gt;$500k year each?&lt;p&gt;This statistic is incorrect.  In 2014, there were 445 UC employees making &amp;gt;$500K&amp;#x2F;year each.  This includes &lt;i&gt;everybody&lt;/i&gt;, not just administrators.&lt;p&gt;You can get a list of them all here [1].  I didn&amp;#x27;t go through the whole list, but from sampling a few random pages, I&amp;#x27;d guess that there are &amp;lt;20 administrators making &amp;gt;$500K.  They are mostly medical school professors, some athletic coaches, and, e.g., the Chief Investment Officer.  There are also some CFOs and Executive Deans, and maybe I missed something, so feel free to correct me.&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;ucannualwage.ucop.edu&amp;#x2F;wage&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;ucannualwage.ucop.edu&amp;#x2F;wage&amp;#x2F;&lt;/a&gt;</text></comment>
<story><title>Obama Forgives Student Debt Of 400,000 Americans</title><url>http://www.marketwatch.com/story/why-obama-is-forgiving-the-student-loans-of-nearly-400000-people-2016-04-12</url></story><parent_chain><item><author>hardcandy</author><text>You&amp;#x27;re missing the forest for the trees.  What are &amp;#x27;&amp;#x27;the true costs of school&amp;#x27;&amp;#x27;?  Someone who loves to teach sitting in a classroom teaching.  It can be dirt cheap or it can be very expensive.  Supply and demand sorts out the details.  As more money flowed into the system, administration bloated and became its own entrenched interest group, with very little connection to actual education.[1]  Does the UC system need 500 administrators making &amp;gt;$500k year each?[2]  As it stands, college for most of my friends was a 4 year social safari interrupted by infrequent periods of intense cramming in between high school and joining the work force.  Do you think the average 18-21 year old at a state school is a scholar passionately indulging their love of learning?  Almost all education is self education at the end of the day.  As soon as we solve for the credentialing&amp;#x2F;pedigree&amp;#x2F;signaling problem, online education will destroy a huge amount of offline education and rightly so.&lt;p&gt;As for the mortgage interest deduction, how wouldn&amp;#x27;t it boost housing prices?  It effectively lowers the mortage rate by your marginal tax bracket which is close to 50% in California.  So instead of a 3.5% 30 year rate I&amp;#x27;m now below 2%.  Cheaper money stimulates borrowing.  It doesn&amp;#x27;t matter how low NIMBYism pushes supply in the face of overwhelming demand, each individual still has a maximum price they can pay, and subsidized interest rates raise that price point.&lt;p&gt;[1] &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;reclaimuc.blogspot.com&amp;#x2F;2011&amp;#x2F;09&amp;#x2F;senior-administrators-now-officially.html&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;reclaimuc.blogspot.com&amp;#x2F;2011&amp;#x2F;09&amp;#x2F;senior-administrators-...&lt;/a&gt;&lt;p&gt;[2] &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.latimes.com&amp;#x2F;local&amp;#x2F;education&amp;#x2F;la-me-uc-spending-20151011-story.html&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.latimes.com&amp;#x2F;local&amp;#x2F;education&amp;#x2F;la-me-uc-spending-201...&lt;/a&gt;</text></item><item><author>specialist</author><text>&lt;i&gt;The way student loans were before...&lt;/i&gt;&lt;p&gt;No.&lt;p&gt;Tuition went up to compensate for the removal of state subsidizing tuition. Almost 1:1. In fact, with the removal of state support, we&amp;#x27;re merely seeing the true costs of school for the first time.&lt;p&gt;Loans got nutty because of unnecessary privatization and deregulation. But rent seeking, so it was inevitable, right?&lt;p&gt;Once tuitions were nutty, parents demanded value for their dollar, begatting grade inflation and transmuting dorms into resort hotels, fueling continued rising costs.&lt;p&gt;Source: Worked in higher ed. This is common knowledge.&lt;p&gt;(I don&amp;#x27;t know enough to explain the textbook racket. Collusion?)&lt;p&gt;--&lt;p&gt;&lt;i&gt;mortgage interest deductions have a similarly terrible effect on housing...&lt;/i&gt;&lt;p&gt;No.&lt;p&gt;Scarcity caused by NIMBY land use policy is driving up housing costs. The fix is aggressive upzoning.&lt;p&gt;Source: Help friends who work on affordable housing policy. This is common knowledge.&lt;p&gt;--&lt;p&gt;In conclusion, yes, simplistic Freedom Markets (tm) explanations are seductive. But they&amp;#x27;re also mostly wrong. Tuition and loans went bonkers when government pulled out of the business, allowing the predators to take over.</text></item><item><author>readams</author><text>Government-guaranteed loans are a fantastic way to force prices to spiral out of control.  The way student loans were before income-based repayment, we&amp;#x27;d have expected college cost to rise until it meets the lifetime expected benefit of college discounted to the present.&lt;p&gt;With income-based repayment, where your loan balance is forgiven after 20 years, there is no limit to how high it can go.&lt;p&gt;Government-subsidized mortages and mortgage interest deductions have a similarly terrible effect on housing, a basic good that government policy should try to make as cheap as possible.  Instead, government policy is to make it as expensive as possible.</text></item></parent_chain><comment><author>slg</author><text>According to you second link, the UC system has a budget of $27 billion.  You could fire all those administrators making over $500k and you wouldn&amp;#x27;t even save 1% of the annual budget.  Is administrative bloat a problem?  Sure.  But blaming it for the tuition increases we have seen is like blaming the national debt on inefficiencies in the EPA.</text></comment>