Part II
5a) Dramatically reduce the cost of public college. A trend that started in the 1970s and accelerated in the '90s and 2000s was the cutting of state-level public assistance to major public universities which, when combined with federally-backed private (and later fully public) loans, created a spiral where colleges could charge virtually whatever they wanted and lose relatively few applicants because of it, with the bulk of the bearers of the debt being students. While the average student loan debt is relatively modest at $25-50,000, it balloons substantially for graduate school debt (I remember trying to buy a car and the guy came back saying they initially thought I had bought a house with my $190k in student loan debt). Capping tuition and room and board costs to a much lower rate and increasing state and federal funding to compensate would greatly diminish future debt burdens, giving more flexibility and spending power to future generations.
5b) Student Loan Reform. Simultaneously, you also have an issue with student loan repayment and forgiveness. The tax deduction for a student loan debt interest payment is $2,500.00. To give you an idea of what that looks like when applied, my student loan monthly payment (pre COVID-19 interest waiver) is approximately $1,250.00, which means a little more than 82% of my loan is paid out of pocket with no offset. Loan forgiveness, either in the partial model proposed by Warren or the complete model proposed by Sanders, ironically, would actually screw me over more in taxes because loan forgiveness is considered income (i.e. you gain the de facto benefits of the cash value of the remainder of your loan, so you gain the income on paper, which is immediately spent on that specific item of your loan balance). Loan forgiveness being treated as income for most items such as vehicles, houses, and most unsecured loans makes sense in that there is often a cash value that was directly received at the time of the loan, whether that be in the value of the good or a literal deposit in a bank. Education's value, on the other hand, is often more abstract and ethereal (though economists have quantified it in income terms) and not everyone benefits in the same way nor has necessarily the same income potential or goals as a result. Teachers are the prime example, where most need a graduate level of education but often can only get positions that do not pay adequately for their monthly loan payments. Similarly, lawyers and doctors are effectively forced to go where they can be afforded to be paid enough to cover their needs, which results in shortages of new professionals in rural areas that often have lower incomes and more urgent needs, as well as fewer slots for organizations trying to hire said professionals due to the salary needs in order to effectively recruit.
A long explanation to cover the complexities of the situation aside, the ideal situation would be to forgive most if not all student loans with an explicit provision that such forgiveness was not taxable income. Following that, any remaining loans should be available as fully tax deductible (interest and principle), which would encourage faster repayment and emphasize the government's interest in an educated populous.
5c) Federalize k12 public education and limit subsidies for private schools. The incredibly fractured public school system in the US has created serious inconsistencies in school's quality and resources, largely because the funding is often tied to property taxes, which means wealthier districts have more resources than poorer ones. More resources means more teachers with better working conditions and pay, better facilities, and often better outcomes (though home-life remains the primary determining factor in individual student outcomes). Federalizing k12 education, which would dramatically reduce administration costs (notably by running pay and benefits through existing federal bureaucracies), even out per-pupal and per-facility funding for more consistent funding across schools, and more evenly distribute personnel based on need rather than creating a bidding war between districts, can alleviate many of these issues. Funding for private schools should also be limited (not necessarily eliminated) as such institutions should be able to stand on their own to justify their tuition to their customers (parents) rather than rely on funds that could be better utilized within the existing public school system (the main exception being scholarships for low-income students).
5a) Dramatically reduce the cost of public college. A trend that started in the 1970s and accelerated in the '90s and 2000s was the cutting of state-level public assistance to major public universities which, when combined with federally-backed private (and later fully public) loans, created a spiral where colleges could charge virtually whatever they wanted and lose relatively few applicants because of it, with the bulk of the bearers of the debt being students. While the average student loan debt is relatively modest at $25-50,000, it balloons substantially for graduate school debt (I remember trying to buy a car and the guy came back saying they initially thought I had bought a house with my $190k in student loan debt). Capping tuition and room and board costs to a much lower rate and increasing state and federal funding to compensate would greatly diminish future debt burdens, giving more flexibility and spending power to future generations.
5b) Student Loan Reform. Simultaneously, you also have an issue with student loan repayment and forgiveness. The tax deduction for a student loan debt interest payment is $2,500.00. To give you an idea of what that looks like when applied, my student loan monthly payment (pre COVID-19 interest waiver) is approximately $1,250.00, which means a little more than 82% of my loan is paid out of pocket with no offset. Loan forgiveness, either in the partial model proposed by Warren or the complete model proposed by Sanders, ironically, would actually screw me over more in taxes because loan forgiveness is considered income (i.e. you gain the de facto benefits of the cash value of the remainder of your loan, so you gain the income on paper, which is immediately spent on that specific item of your loan balance). Loan forgiveness being treated as income for most items such as vehicles, houses, and most unsecured loans makes sense in that there is often a cash value that was directly received at the time of the loan, whether that be in the value of the good or a literal deposit in a bank. Education's value, on the other hand, is often more abstract and ethereal (though economists have quantified it in income terms) and not everyone benefits in the same way nor has necessarily the same income potential or goals as a result. Teachers are the prime example, where most need a graduate level of education but often can only get positions that do not pay adequately for their monthly loan payments. Similarly, lawyers and doctors are effectively forced to go where they can be afforded to be paid enough to cover their needs, which results in shortages of new professionals in rural areas that often have lower incomes and more urgent needs, as well as fewer slots for organizations trying to hire said professionals due to the salary needs in order to effectively recruit.
A long explanation to cover the complexities of the situation aside, the ideal situation would be to forgive most if not all student loans with an explicit provision that such forgiveness was not taxable income. Following that, any remaining loans should be available as fully tax deductible (interest and principle), which would encourage faster repayment and emphasize the government's interest in an educated populous.
5c) Federalize k12 public education and limit subsidies for private schools. The incredibly fractured public school system in the US has created serious inconsistencies in school's quality and resources, largely because the funding is often tied to property taxes, which means wealthier districts have more resources than poorer ones. More resources means more teachers with better working conditions and pay, better facilities, and often better outcomes (though home-life remains the primary determining factor in individual student outcomes). Federalizing k12 education, which would dramatically reduce administration costs (notably by running pay and benefits through existing federal bureaucracies), even out per-pupal and per-facility funding for more consistent funding across schools, and more evenly distribute personnel based on need rather than creating a bidding war between districts, can alleviate many of these issues. Funding for private schools should also be limited (not necessarily eliminated) as such institutions should be able to stand on their own to justify their tuition to their customers (parents) rather than rely on funds that could be better utilized within the existing public school system (the main exception being scholarships for low-income students).
