![\"Elizabeth](\"https:\/\/i0.wp.com\/www.dougsbriefcase.com\/blog\/wp-content\/uploads\/2014\/04\/credit-npr.jpg\")
<\/a>Eliz\u00ada\u00adbeth War\u00adren (D\u2011MA<\/span>) preach\u00ades pro\u00adgres\u00adsivism but is her stu\u00addent loan pro\u00adpos\u00adal anti-pro\u00adgres\u00adsive? [Cred\u00adit: NPR<\/span>]<\/p><\/div>\u201cThis coun\u00adtry should not be run for the biggest cor\u00adpo\u00adra\u00adtions and largest finan\u00adcial insti\u00adtu\u00adtions.\u201d<\/em> Sen\u00ada\u00adtor Eliz\u00ada\u00adbeth War\u00adren<\/a> (D\u2011MA<\/span>)\n To judge from Warren\u2019s record so far, she would be pre\u00adfer that the coun\u00adtry be run for the ben\u00ade\u00adfit of its biggest universities.<\/p>\n War\u00adren comes by her spe\u00adcial inter\u00adest pan\u00adder\u00ading hon\u00adest\u00adly. She joined the US<\/span> Sen\u00adate after a 20-year stint on the fac\u00adul\u00adty of Har\u00advard Law School<\/p>\n Uni\u00adver\u00adsi\u00adties ben\u00ade\u00adfit from gov\u00adern\u00adment-backed stu\u00addent loans the way that real\u00adtors once ben\u00ade\u00adfit\u00aded from the gov\u00adern\u00admen\u00adt\u2019s mas\u00adsive sub\u00adsi\u00addies of the mort\u00adgage indus\u00adtry: they can charge more for their prod\u00aduct. Col\u00adlege tuitions have risen by 538 per\u00adcent<\/a> since 1985, far in excess of health care spend\u00ading (286 per\u00adcent), hous\u00ading costs, and the gen\u00ader\u00adal rate of inflation.<\/p>\n Col\u00adlege costs more in part because stu\u00addents can bor\u00adrow more, amor\u00adtiz\u00ading the costs over time. Stu\u00addents and their fam\u00adi\u00adlies bor\u00adrow against the increased future earn\u00adings that a col\u00adlege degree sup\u00adpos\u00aded\u00adly makes pos\u00adsi\u00adble. This the\u00ado\u00adry works, up to a point. We seem to be in dan\u00adger of mov\u00ading beyond that point. Col\u00adlege grad\u00adu\u00adates earned $3,200<\/a> less in 2013 than in 2000.<\/p>\n To be fair, Warren\u2019s views may be skewed by her long asso\u00adci\u00ada\u00adtion with Har\u00advard. Grad\u00adu\u00adates of that insti\u00adtu\u00adtion and oth\u00ader elite uni\u00adver\u00adsi\u00adties are dis\u00adpro\u00adpor\u00adtion\u00adate\u00adly rep\u00adre\u00adsent\u00aded among the 1 per\u00adcent that War\u00adren resents. As Har\u00advard alum\u00adnus Charles Mur\u00adray<\/a> has exhaus\u00adtive\u00adly doc\u00adu\u00adment\u00aded, his fel\u00adlow Ivy Lea\u00adguers and grad\u00adu\u00adates of oth\u00ader top-tier insti\u00adtu\u00adtions pop\u00adu\u00adlate super-ZIPS \u2013 neigh\u00adbor\u00adhoods where the rich\u00adest and most influ\u00aden\u00adtial Amer\u00adi\u00adcans live \u2013 and dom\u00adi\u00adnate gov\u00adern\u00adment, Hol\u00adly\u00adwood, acad\u00ade\u00admia and (pace<\/em> Pro\u00adfes\u00adsor War\u00adren) Wall Street. They are the titans who gov\u00adern us, define our val\u00adues and prof\u00adit dis\u00adpro\u00adpor\u00adtion\u00adate\u00adly from gov\u00adern\u00adment inter\u00adven\u00adtions on behalf of the invest\u00adment class that War\u00adren pro\u00adfess\u00ades to despise.<\/p>\n Those who grad\u00adu\u00adate from less pres\u00adti\u00adgious col\u00adleges, by con\u00adtrast, tend to find them\u00adselves among the 99 per\u00adcent. Many strug\u00adgle to find work. Oth\u00aders are forced to accept posi\u00adtions for which they are under\u00adpaid and overqual\u00adi\u00adfied. Many bend beneath the weight of the debt they incurred to obtain a uni\u00adver\u00adsi\u00adty degree. Out\u00adstand\u00ading stu\u00addent loan debt sur\u00adpassed $1 tril\u00adlion<\/a> in 2011, more than total out\u00adstand\u00ading cred\u00adit card debt ($798 bil\u00adlion). Aver\u00adage per capi\u00adta debt stood at $27,253<\/a> in 2012, 58 per\u00adcent high\u00ader than in 2005.<\/p>\n And while stu\u00addents are bor\u00adrow\u00ading more and earn\u00ading less, the pace of bor\u00adrow\u00ading, fueled by fed\u00ader\u00adal loan pro\u00adgrams, is pick\u00ading up. New debt incurred in aca\u00add\u00ade\u00adm\u00adic year 2011\u20132012 exceed\u00aded $100 bil\u00adlion<\/a>,<\/span> com\u00adpared to around $60 bil\u00adlion just five years before.<\/p>\n That accel\u00ader\u00ada\u00adtion in bor\u00adrow\u00ading is help\u00ading to fuel increas\u00ades in col\u00adlege tuitions even as the eco\u00adnom\u00adic val\u00adue of the degrees they con\u00adfer declines. The Amer\u00adi\u00adcan Dream of a col\u00adlege edu\u00adca\u00adtion, like the Amer\u00adi\u00adcan Dream of home\u00adown\u00ader\u00adship, may be over\u00adrat\u00aded. If a diplo\u00adma no longer con\u00adfers the earn\u00ading pow\u00ader it once did, per\u00adhaps col\u00adleges should reduce their tuitions.<\/p>\n But Amer\u00adi\u00adcan uni\u00adver\u00adsi\u00adties, like the largest banks that War\u00adren detests, are too big to fail. And too well-con\u00adnect\u00aded. Over the past decade or so, their lob\u00adby\u00adists suc\u00adceed\u00aded in elim\u00adi\u00adnat\u00ading banks from the stu\u00addent lend\u00ading pro\u00adgrams. By hav\u00ading the gov\u00adern\u00adment lend direct\u00adly to stu\u00addents (i.e., cut checks direct\u00adly to uni\u00adver\u00adsi\u00adties) with\u00adout the inter\u00adme\u00addi\u00ada\u00adtion of lend\u00ading insti\u00adtu\u00adtions with some, albeit imper\u00adfect, expe\u00adri\u00adence in man\u00adag\u00ading the risks asso\u00adci\u00adat\u00aded with long-term lend\u00ading, uni\u00adver\u00adsi\u00adties put the gov\u00adern\u00adment direct\u00adly on the hook for their own well-being.<\/p>\n The result is that much of the more than $1 tril\u00adlion in out\u00adstand\u00ading stu\u00addent loan debt will nev\u00ader be repaid. That is by design. The gov\u00adern\u00adment oper\u00adates pro\u00adgrams that make default a virtue, delib\u00ader\u00adate\u00adly entic\u00ading stu\u00addents to stick the tax\u00adpay\u00aders with their unpaid debt. The gov\u00adern\u00adment oper\u00adates the \u201cPay As You Earn\u201d pro\u00adgram (which could more accu\u00adrate\u00adly be named Don\u2019t<\/em> Pay As You Don\u2019t<\/em> Earn), which allows qual\u00adi\u00adfied bor\u00adrow\u00aders to make month\u00adly pay\u00adments amount\u00ading to 10 per\u00adcent of their dis\u00adcre\u00adtionary income<\/a>,<\/span> even if that amount doesn\u2019t cov\u00ader their inter\u00adest due.<\/p>\n It also for\u00adgives any debt that remains after 20 years. Those who take gov\u00adern\u00adment jobs or work for non-prof\u00adits are eli\u00adgi\u00adble for debt for\u00adgive\u00adness after just 10 years. Pres\u00adi\u00addent Oba\u00adma wants to expand this to all bor\u00adrow\u00aders<\/a>,<\/span> not just those who bor\u00adrowed begin\u00adning in 2011, and make the loan for\u00adgive\u00adness (default) exempt from taxation.<\/p>\n So how have uni\u00adver\u00adsi\u00adties respond\u00aded? One elite uni\u00adver\u00adsi\u00adty \u2013 George\u00adtown Law School \u2013 has invit\u00aded new enrollees to enjoy the plea\u00adsures of legal loop\u00adholes by bor\u00adrow\u00ading the total cost of their edu\u00adca\u00adtion (around $75,000 annu\u00adal\u00adly for George\u00adtown stu\u00addents, includ\u00ading tuition, fees, books, and hous\u00ading expenses).<\/p>\n Georgetown\u2019s web\u00adsite boast\u00aded that such enter\u00adpris\u00ading bor\u00adrow\u00aders \u201c<\/span>might not pay a sin\u00adgle pen\u00adny on their loans\u2014ever!\u201d<\/a> Such a deal. And all you have to do, George\u00adtown advis\u00ades its aspir\u00ading legal bea\u00adgles, is take a job with the gov\u00adern\u00adment or a non-prof\u00adit agency and stay there for 10 years. George\u00adtown will make the loan pay\u00adments over that peri\u00adod, after which the remain\u00ading debt is forgiven.<\/p>\n George\u00adtown being a Jesuit uni\u00adver\u00adsi\u00adty, you might expect that it has an angle in all this (apolo\u00adgies to Pope Fran\u00adcis). You would be right. George\u00adtown includes the cost of the loan repay\u00adment in its tuition. So, essen\u00adtial\u00adly, the uni\u00adver\u00adsi\u00adty pays noth\u00ading, the stu\u00addent pays noth\u00ading and the tax\u00adpay\u00ader eats the $225,000 in law school tuition and expenses.<\/p>\n Lest this sound like a con\u00adser\u00adv\u00ada\u00adtive screed, the loan for\u00adgive\u00adness pro\u00adgram has recent\u00adly come under crit\u00adi\u00adcism in two sep\u00ada\u00adrate papers from the left-of-cen\u00adter Brook\u00adings Insti\u00adtu\u00adtion. The first paper<\/a> found:<\/p>\n \u201c<\/span>Not only is loan for\u00adgive\u00adness unnec\u00ades\u00adsary for ensur\u00ading that month\u00adly pay\u00adments are afford\u00adable for bor\u00adrow\u00aders, loan for\u00adgive\u00adness cre\u00adates incen\u00adtives for stu\u00addents to bor\u00adrow too much to attend col\u00adlege, poten\u00adtial\u00adly con\u00adtribut\u00ading to ris\u00ading col\u00adlege prices for every\u00adone. This is high\u00adlight\u00aded by our find\u00ading that grad\u00adu\u00adates of expen\u00adsive col\u00adleges receive the largest ben\u00ade\u00adfits of income-based repayment.\u201d<\/p><\/blockquote>\n Expen\u00adsive col\u00adleges like Har\u00advard perhaps?<\/p>\n The sec\u00adond paper<\/a> ana\u00adlyzed Sen\u00ada\u00adtor Warren\u2019s bill to slash inter\u00adest rates on stu\u00addent loans to infin\u00adi\u00adtes\u00adi\u00admal lev\u00adels. In the unkind\u00adest cut of all, Brook\u00adings says that the War\u00adren plan \u201cfails to redis\u00adtrib\u00adute wealth in a pro\u00adgres\u00adsive man\u00adner\u201d and that it \u201cflies in the face of pro\u00adgres\u00adsive val\u00adues by ben\u00ade\u00adfit\u00ading the afflu\u00adent at the expense of the disadvantaged.\u201d<\/p>\n Still, Brook\u00adings miss\u00ades the real anti-pro\u00adgres\u00adsive ele\u00adment of Warren\u2019s pro\u00adpos\u00adal: it\u2019s not just afflu\u00adent stu\u00addents at elite uni\u00adver\u00adsi\u00adties who ben\u00ade\u00adfit from these \u201canti-pro\u00adgres\u00adsive\u201d sub\u00adsi\u00addies, but the uni\u00adver\u00adsi\u00adties them\u00adselves. Har\u00advard may be a non-prof\u00adit, but it holds an endow\u00adment recent\u00adly val\u00adued at $32.7 bil\u00adlion<\/a>. In part because it attracts a large pro\u00adpor\u00adtion of stu\u00addents from wealthy fam\u00adi\u00adlies and in part because the gov\u00adern\u00adment does so much to sub\u00adsi\u00addize the rest, Harvard\u2019s endow\u00adment can con\u00adtin\u00adue to grow as it rais\u00ades tuitions and fees and pock\u00adets bil\u00adlions in gov\u00adern\u00adment grants and contracts.<\/p>\n War\u00adren no doubt objects to hav\u00ading her pro\u00adpos\u00adal labeled \u201canti-pro\u00adgres\u00adsive,\u201d par\u00adtic\u00adu\u00adlar\u00adly by the Brook\u00adings Insti\u00adtu\u00adtion. She sees her\u00adself as an intre\u00adpid class war\u00adrior, embrac\u00ading the cause of the down\u00adtrod\u00adden against elites like her and her for\u00admer stu\u00addents. But if she could take a cold, hard look at her posi\u00adtion, she might see that she is advo\u00adcat\u00ading the very sort of crony\u00adism that she often cor\u00adrect\u00adly condemns.<\/p>\n","protected":false},"excerpt":{"rendered":" \u201c<\/span>This coun\u00adtry should not be run for the biggest cor\u00adpo\u00adra\u00adtions and largest finan\u00adcial insti\u00adtu\u00adtions.\u201d Sen\u00ada\u00adtor Eliz\u00ada\u00adbeth War\u00adren (D\u2011MA<\/span>) To judge from Warren\u2019s record so far, she would be pre\u00adfer that the coun\u00adtry be run for the ben\u00ade\u00adfit of its biggest \u2026 Con\u00adtin\u00adue read\u00ading