Thursday, June 14, 2012

Using yourself as collateral for a college loan

There are a few problematic things about Luigi Zingales's proposal to privately finance the college education of bright young students—starting with the fact that if you have to pre-emptively explain to readers that "this is not indentured servitude," it's probably indentured servitude.

But what really bothers me about the proposal is the assumption underlying this entire statement from Zingales: "This is not a modern form of indentured servitude, but a voluntary form of taxation, one that would make only the beneficiaries of a college education — not all taxpayers — pay for the costs of it."

This presumes that only the recipient of a college education is the beneficiary, and that's not even close to true. One reason the feds underwrite student loans—and why states still pay for public universities, even if that commitment is diminshing—is that the country benefits hugely from having a better-educated workforce. Those trained minds help create innovation and streamline processes, which—in theory anyway—has numerous positive ripple effects throughout the economy. The beneficiaries of a college education, then, include the taxpayers.

1 comment:

Ben Boychuk said...

"...starting with the fact that if you have to pre-emptively explain to readers that 'this is not indentured servitude,' it's probably indentured servitude." Except that it ISN'T, for reasons that Zingales takes pains to explain. But the reason he has to expend the verbiage to explain it is, of course, if he didn't pre-empt the challenge, he would be mischaracterized as arguing for a kind of 21st century indentured servitude.

Your second point is arguable -- it is the long-held liberal line -- except it doesn't take into account the extraordinary inflation in college tuition costs over the last 10-20 years. Government-subsidized higher education has not made college more affordable for the middle class.