This is simple: The people who take advantage of these tax credits are those whose kids would attend college, anyway. So, no net gain. Next "problem", please.
If corporations were to pay the same tax rate they paid in 1980 the resultant revenue would pay for public education for pre school through college for all students. The corporate share of revenue has fallen from 33% to 11% in that time.
Our corporations ha ve greater profits then ever and pay less tax then ever.
Our corporations ha ve greater profits then ever and pay less tax then ever.
1
The lesson here is that the American system of dancing around important issues by trying to 'incentivize' the behaviour they want is woefully unreliable. If you want to make college cheaper then give public colleges and universities more public funding so that they can lower tuition. It is that simple.
Here in Britain our tuition is hard-capped at $13,000 per year (it used to be a little over $4,000 a year just a few years ago), and your average undergraduate degree takes only three years. If we can make college affordable, whilst maintaining perhaps the world's best university system pound-for-pound the US can do it too.
Here in Britain our tuition is hard-capped at $13,000 per year (it used to be a little over $4,000 a year just a few years ago), and your average undergraduate degree takes only three years. If we can make college affordable, whilst maintaining perhaps the world's best university system pound-for-pound the US can do it too.
5
We're addressing the wrong problem. Our "business model" for delivering higher education services is simply too expensive. The cost of segregating a young person for 4-5 years while they leisurely attend classes on a cloistered campus, partying each weekend, is p.rohibitive and our society cannot afford this model for the vast numbers of young people needing education. We must dramatically change the model, relying on some mixture of web-based class work and regular classroom experiences without the burden of supporting our kids in separate households.
1
The proposal to pay the credit along with Pell grants when tuition bills are due would have no effect. Colleges would simply include the funds in their financial aid calculations and reduce tuition grants by the same amount. It would not benefit the students or families. Tying college affordability to the personal income tax code is a poor idea.
2
I've attempted for several years to claim the American Opportunity tax credit for college tuition with only some limited success. It seems designed so that only a tiny fraction of those able to pay college tuition can qualify. If it is so difficult to figure out after the fact whether you get a relatively small credit, even with software assistance, how is it supposed to promote college attendance? I think it was politically motivated to make it appear as if the government supported college attendance when in fact it is a small consolation prize for the lucky few.
4
It would be interesting to understand if this impacts completion of university rather than just enrollment. As a success metric, enrollment stats lack. We have seen the number of those with "some college" grow significantly, leaving a generation with only a small increase in income over high school only grads and a whole lot of debt. Tell me how this tax credit impacts graduation from college. If there is a positive impact, then we should keep it. Otherwise, there are a number of other options to drive better college graduation rates that are competing for scarce dollars.
2
Perhaps we need a variation on prior-prior year for the education tax credits. When a student files the FAFSA and uses the IRS Data Retrieval Tool, eligibility for the American Opportunity Tax Credit would be determined based on the prior-prior year federal income tax return and the tax credit would be awarded as part of the financial aid package for that academic year, instead of through a reduced federal income tax liability. This would also give applicants a financial incentive to use the IRS Data Retrieval Tool.
It would also have the benefit of giving extra recognition and credit to Congress for supporting postsecondary education. Today, most taxpayers do not recognize that the tax credits make college more affordable. All they notice is that they have a lower tax bill.
It would also have the benefit of giving extra recognition and credit to Congress for supporting postsecondary education. Today, most taxpayers do not recognize that the tax credits make college more affordable. All they notice is that they have a lower tax bill.
I don't think people realize that the top US schools are what are termed research universities. Part of their mission is to do top level research in addition to education. Research by in large determines university rankings. To do research costs money.
You may say that you don't want to pay for research.
That is your right and you do not have to pay for it. Just send your child to the local community college and they can get an education at a much lower cost.
You may say that you don't want to pay for research.
That is your right and you do not have to pay for it. Just send your child to the local community college and they can get an education at a much lower cost.
1
College attendance is a generational issue as well as an income issue. Costs have increased more rapidly than aid, the benefits of a degree have been eroding, and the terms of borrowing are more restrictive and punitive. Many Millenials believe that college isn't worth the debt required, especially when most degree programs have lost touch with the modern era. And this sets the stage for an undereducated future where retiring Baby Boomers with high skills cannot be replaced, and the USA loses its edge in the world.
2
As a baby boomer I appreciate the lack of competition from younger people. It enables me to postpone retirement indefinitely.
2
Bernie has it right. Higher Education is a requirement to survive in today's economy. For US citizens it should be free. It's an investment in our future of productive adults who will pay taxes for the next 30 to 40 years.
To be consistent, anyone questioning the cost-benefit of free Higher Education should just as well be questioning free K - 12 school.
Tuition costs should be frozen or only allowed to advance at the cost of inflation as taxpayers are paying for the cost. Colleges that don't want to play should have their tax exempt status revoked and receive no federal aide. Students should be encouraged to attend schools close by to defray costs.
Education should be a utility. It builds our country. We need an educated work force with little to no debt that can contribute to society. The benefits will be enormous.
To be consistent, anyone questioning the cost-benefit of free Higher Education should just as well be questioning free K - 12 school.
Tuition costs should be frozen or only allowed to advance at the cost of inflation as taxpayers are paying for the cost. Colleges that don't want to play should have their tax exempt status revoked and receive no federal aide. Students should be encouraged to attend schools close by to defray costs.
Education should be a utility. It builds our country. We need an educated work force with little to no debt that can contribute to society. The benefits will be enormous.
2
What is that third thing in the drawing?
4
Consider that living expenses are a big cost of attending college. Perhaps, since the tax credits show up in time for the second semester when many students are living on ramen, the "late delivery" is right on time?
2
The more money the government "gives" people for college, the more the colleges will raise tuition. Before the days of ever-expanding student loans, tuition was somewhat more reasonable. Back in the early 70s, I managed to get a degree debt-free from a private (somewhat expensive compared to public) university by working full-time summers, part-time during the school year and living frugally. No parental help as they didn't have it to help.
Flash forward 25 years and my kids had to cobble together their own student loans, our Sallie Mae parent loans, a huge junk of my take-home pay, and their working full-time summers and part-time school year, living frugally. Same buildings, same university in the case of one of them. They got their degrees but are still paying off student loans. I just finished the parent loans and I'm now in my late 60s! $2500/year tax credit? Joke.
Flash forward 25 years and my kids had to cobble together their own student loans, our Sallie Mae parent loans, a huge junk of my take-home pay, and their working full-time summers and part-time school year, living frugally. Same buildings, same university in the case of one of them. They got their degrees but are still paying off student loans. I just finished the parent loans and I'm now in my late 60s! $2500/year tax credit? Joke.
7
While $20 billion is an impressive number in aggregate, a $2,500 tax credit isn't going to make someone decide to spend $30K-$60K annually on a college education. The government needs to find a more direct route to college affordability than shaving a bit off the tax bill.
14
Dead on. Also, the better off you or your family, the less meaningful is $2500. The conclusion: up the amount for the less affluent to about $25000.
@JimWaddel, your assertion that this is a tax benefit for the upper middle class is incorrect. It's not available for those who earn > ~$80,000 year, so it doesn't benefit high earners. Furthermore, the tax relief (limited to a $2500 income adjustment) is a drop in the bucket compared to the cost of college attendance (often $50,000 year). I'm a physician who recently graduated residency. This is how this tax deduction "works" for the upper-middle class in the real world (it's nearly worthless): I earned $50-60,000/yr as a resident in Seattle (~$36,000 post-tax). I lived and put the majority of my earning toward my student loans, paying $25,000/yr, but could only claim $2,500/year deduction, which resulted in a tax savings of $625/year during my 4 year residency. Now as an attending I make too much to deduct any of the $50,000/yr I pay on my loans. In the end, I'll pay about $300,000 in principal and interest, and earn ~$600,000 to do it after income taxes. Of that $300,000 I pay back over the life of my loans only $10,000 of it is tax deductible resulting in a $2500 tax savings. You may counter (incorrectly) that as a high-earner I don't need tax credits, but you're wrong. I'm 40 years only and spent 10 years in education and training earning an average of nothing. I have retirement to catch up on, don't own a house, and need to provide for a family, and save for my children's college. When you go from the bottom 25% to the top 25% overnight you need tax credits.
8
Tax credits for anything only benefit those who already have money to pay up front. This is true also of tax credits for home improvements to increase energy efficiency. You get rewarded for having the money to replace your rattling old windows or improving insulation, but if you don't have the money to do these kinds of things, tough, you get to pay higher energy bills.
It's incredibly obvious that tax credits don't help families who need to pay tuition right now. It's just another way to funnel money upward. Tuition is too high in relation to median household income, period. That's what needs to be fixed.
It's incredibly obvious that tax credits don't help families who need to pay tuition right now. It's just another way to funnel money upward. Tuition is too high in relation to median household income, period. That's what needs to be fixed.
13
Another tax benefit for the upper middle class. When will have a rational tax system with zero credits and deductions. 75% of Americans don't benefit from the complexity of the tax code and the top 25% don't need the benefits.
5
Why don't they just eliminate these random deductions and just take all the money and push forth Hillary Clinton's plan to lower college to the point where you don't need a loan
3
If the govt. wants to spend money, they can do it by setting standards to keep the clearly inept out of 11th and 12th grades, setting up vocational training for almost everybody except the really academically inclined, and making college virtually free on condition that tough standards are met. Oh and basically shutting down liberal arts after high school. What a joke that is.
It's going to be kind of difficult for that web developer or graphic designer to do their work well if there's no one around to teach them what good art looks like. Similarly, I'm not sure how most lawyers would get buy without a passing understanding of history or philosophy. And, do we really want to test the idea that kids coming out of business programs would be better off having never read or written anything other than reports for business?
Maybe, you say, we can get all that in during the 1st 10 years of school. But, where would you put it given that the amount of time that is currently devoted to STEM in some form and that everyone seems to be of the opinion that we still need more time for STEM.
Maybe, you say, we can get all that in during the 1st 10 years of school. But, where would you put it given that the amount of time that is currently devoted to STEM in some form and that everyone seems to be of the opinion that we still need more time for STEM.
2
No way to know if we would have seen a decline in college admissions without the tax credits. We may have - the middle class is being squeezed to the extent that college is out of reach for mere and more people. Perhaps in these times, level college attendance is a measure of success.
3
There are many problems with the current focus:
Increasing college attendance is the wrong goal. Increasing the number of successful outcomes, IE: degree or desired vocational training will lead to a stronger workforce and less debt. A good degree, well earned, will pay for itself incrementally. Solid vocational training is both good for the workforce and good for those who chose not to attend college. College is not the right solution for everyone, gainful employment should be the focus.
If a student wishes for federal subsidies, grants, etc it should come with a service obligation in their chosen field. This would combine valuable experience with value back to the taxpayers.
federal funds are being used for non academic purposes and to benefit non US citizens/taxpayers. US citizens should receive lower tuition at any public US school. In state students should receive the lowest cost, then US citizens, anyone international or non citizen should pay higher costs. Schools should be required to itemize and declare any costs not associated with academic programs, ie: sports facilities and salaries, fund raising, etc. Non academic costs could be considered when evaluating the value of the cost of a degree at that school.
Increasing college attendance is the wrong goal. Increasing the number of successful outcomes, IE: degree or desired vocational training will lead to a stronger workforce and less debt. A good degree, well earned, will pay for itself incrementally. Solid vocational training is both good for the workforce and good for those who chose not to attend college. College is not the right solution for everyone, gainful employment should be the focus.
If a student wishes for federal subsidies, grants, etc it should come with a service obligation in their chosen field. This would combine valuable experience with value back to the taxpayers.
federal funds are being used for non academic purposes and to benefit non US citizens/taxpayers. US citizens should receive lower tuition at any public US school. In state students should receive the lowest cost, then US citizens, anyone international or non citizen should pay higher costs. Schools should be required to itemize and declare any costs not associated with academic programs, ie: sports facilities and salaries, fund raising, etc. Non academic costs could be considered when evaluating the value of the cost of a degree at that school.
2
Wouldn't it b great if most, if not all, of that information was included in the Annual Report that every college and university in the United States is required to file and make publicly available>
2
Tax Credits are a poor substitute for lower tuition or student aid.
8
Without cost controls of some sort, government subsidies will simply encourage colleges and universities to jack up their tuition.
A true free market solution of cost control would consist of a battery of tests, which, if a student passed, would automatically confer on him/her a college equivalency degree.
College costs would plummet.
A true free market solution of cost control would consist of a battery of tests, which, if a student passed, would automatically confer on him/her a college equivalency degree.
College costs would plummet.
3
Of course they failed to increase attendance. Tax credits are for those who could already afford to pay the bill in the first place and wait to receive a partial "reimbursement" (savings to tax liability) a year later.
19
If you can't afford it, just pay for it up front...
Obviously dreamed up by the graduates of expensive private schools.
Obviously dreamed up by the graduates of expensive private schools.
No Federal assistance is available should a student choose to attend a university overseas. The funds, in essence, are being offered not to American students but to American schools. This is wrong.
That said -- as this article points out -- all financial aid should be given in a single grant and be made available when tuition is due.
That said -- as this article points out -- all financial aid should be given in a single grant and be made available when tuition is due.
2
That is not actually true. There are hundreds of approved non-U.S. colleges at which students can attend and obtain these tax credits.
4
@Robert
Boston
Correct.
Boston
Correct.
1
Why are we so fixated on college? Why aren't we spending education dollars teaching people to do welding, plumbing, electrical, mechanical and other well-paying trades that can't be outsourced. I know one guy who quit his office job at 40 to become a machinist. He didn't actually like the work his business degree prepared him for, but he was brainwashed into thinking college was the one right way. Sure, we need more STEM education, there's no reason we should have to import Indians for that. So give tax breaks for those degrees. Otherwise, why are we giving tax credits to people who would have gone to college any way, for degrees we don't need any more of?
11
Based on your tying of your idea of worthy tax credits to STEM, I'm assuming that the "degrees we don't need any more of" would include the humanities for you. It is true that a business degree is one of the most over-rated out there, but if you ask the Silicon Valley companies the areas where they need more graduates, it's the humanities. It turns out that those people have strong critical thinking and communication skills that translate to a wide variety of careers.
2
Imagine that owning a Rolls Royce was as important as having a college education. How much would the tax credits ease the financial burden buying a Rolls Royce?
1
The operative word is CREDIT - as in credit against taxes owed.
To owe $2500 in taxes, a family of 4 with married couple and 2 kids(using only standard deductions and exemptions) would have to have - minimum - an income of $51,450 in 2015.
For those who do NOT have a taxable of $2500, the tax credit is only partially payable up to 40% of the amount of above the taxes owed --- and capped at all of up $1000 in cash.
So when the credit is claimed, if they they owe an amount equal to or greater than the credit, they get zero cash -- except maybe as a refund
If they don't owe tax in an amount equal to the credit they get, they can only get up to $1000 in cash.
$1000? As an incentive to spend $28000 a year on tuition and room and board at a 4 year public college? To spend $40000 -50000 on a private college? Or even just $8000 a year in tuition at local-yokel community college?
What a joke - it is merely a giveaway to people who would have spent the money on school anyway. Kinda like Cash For Clunkers or the really stupid $8000+/- to homebuyers back in 2010.
To owe $2500 in taxes, a family of 4 with married couple and 2 kids(using only standard deductions and exemptions) would have to have - minimum - an income of $51,450 in 2015.
For those who do NOT have a taxable of $2500, the tax credit is only partially payable up to 40% of the amount of above the taxes owed --- and capped at all of up $1000 in cash.
So when the credit is claimed, if they they owe an amount equal to or greater than the credit, they get zero cash -- except maybe as a refund
If they don't owe tax in an amount equal to the credit they get, they can only get up to $1000 in cash.
$1000? As an incentive to spend $28000 a year on tuition and room and board at a 4 year public college? To spend $40000 -50000 on a private college? Or even just $8000 a year in tuition at local-yokel community college?
What a joke - it is merely a giveaway to people who would have spent the money on school anyway. Kinda like Cash For Clunkers or the really stupid $8000+/- to homebuyers back in 2010.
11
In defense of the Cash for Clunkers program, it worked perfectly for me. It allowed me to buy a new car for the first time in my life. My alternative would have been to borrow a few thousand and buy a ten-year-old Neon. Maybe Cash for Clunkers haters would have preferred that I'd done that instead? No thanks. I got a new Toyota with zero percent financing. I owe my car to Cash for Clunkers and Barack Obama, and it still runs perfectly nearly seven years later. I get a carefully-measured 40 mpg as opposed to around 15 mpg that my pickup was getting. Cash for Clunkers is one thing Obama did right.
4
Cash for clunkers was nothing more than a stimulus. Not a bad thing because the country needed spending to help our auto industry. And that is very nice that it helped you. But comparing that to this with different goals seems out of place.
1
Another hypothesis: If this money disappeared, tuitions would be forced to go down with the same effect on net affordability.
To avoid public support of luxury products, perhaps the credit should only be available for tuition that falls in the lower half of the range, phasing in on a sliding scale as tuition gets cheaper compared to the average. This could encourage price moderation rather than the current system which contributes to price inflation. The premium price universities can afford their own closed-circuit financial aid through price discrimination or direct lending (a sort of vendor financing).
To avoid public support of luxury products, perhaps the credit should only be available for tuition that falls in the lower half of the range, phasing in on a sliding scale as tuition gets cheaper compared to the average. This could encourage price moderation rather than the current system which contributes to price inflation. The premium price universities can afford their own closed-circuit financial aid through price discrimination or direct lending (a sort of vendor financing).
2
Of the proposals given here, only the last one, with money delivered at the time of enrollment, is likely to have much of an effect, and probably a small one. We need to return to having public institutions of higher education be affordable and accessible to greater numbers of students. The current process of trying to determine what college will actually cost is too daunting for most people, especially those who are first-generation college students. Putting a low, clear price tag, readable to all, is what what we need to do.
10
Ninety percent of k-12 education is funded by the states and local governments, so how much the federal government spends is obviously irrelevant tot he priority Americans spend on education.
The money the federal government spend on tax credits, deductions, Pell grants, losses on student loans never had an actual objective of increasing college enrollment except to the extent that it met its primary objective.
The primary objective is, and always has been, to feed additional revenue to educational administrative and to pay for partisans like Obama to be paid $150,000 to teach two classes per year and to pay Warren and her husband each $350,000 per year to each teach two classes per year. Leaving Elizabeth free to devote the majority of her time consulting with insurance companies to help them avoid paying claims.
DC policy has been to feed the beast and then attempt new regulations to address the consequences of their crony socialism.
The money the federal government spend on tax credits, deductions, Pell grants, losses on student loans never had an actual objective of increasing college enrollment except to the extent that it met its primary objective.
The primary objective is, and always has been, to feed additional revenue to educational administrative and to pay for partisans like Obama to be paid $150,000 to teach two classes per year and to pay Warren and her husband each $350,000 per year to each teach two classes per year. Leaving Elizabeth free to devote the majority of her time consulting with insurance companies to help them avoid paying claims.
DC policy has been to feed the beast and then attempt new regulations to address the consequences of their crony socialism.
The point of the credit is to lighten the financial load of attending college. Many families are stretched by the cost of college.
The net gains from the American Opportunity Tax Credit and the Lifetime Learning Credit are only $1500.00 combined. When, after 17 years of age, losing the $1000.00 Child Tax Credit, I fail to understand the logic in this considering their needs are at their highest.
1
My wife and I earn about $70K a year each. I am a full-time graduate student. We did not qualify for any education credits this year. It's absurd. In years past when I did qualify, it was only $2000. That also is absurd. $2000 is just way to little as a credit to encourage me to continue my education.
3
"just way too little" (instead of to) I hope you were not pursuing your graduate degree for the sake of a tax credit. "Spend a lot in order to save a little" never makes sense.
1
How genius one must feel to find a typo in a forum and point it out. Large companies don't open their doors for a tax credit either, but they take advantage of every credit available to them. In fact, they get to write off so much that companies never ever pay taxes, we all know that. So it's left to me and other working class people to ask for more, because that's exactly what the business community does all day, every day. We bail out banks, auto companies, and Wall Street, yet people question a higher education? How unAmerican.
1
I don't think the study, as described, at all tests the effect of the credits on college attendance. A "kink" in the regression slope is not at all what I would expect if the credits work. What is needed is some way of comparing a group that can take the credit vs. a group that can't, controlling for income. The last bit is very important, and income was not controlled for in this study. The comparison could perhaps be made in a before vs. after experimental design, but this would have it's own difficulties. Whether the credit "works" is a difficult hypothesis to test. The authors of the study could apparently not think of a way to test it, so they tested something else, but their result is not terribly relevant to the original question.
2
A big problem with the credits are that you have to have earned income. I became disabled due to an on the job injury in 2002. I have had 3 back surgeries. I would love to go back to work but that is not possible. My only income is workers compensation and social security disability. I have unfortunately gone through my 401 K in less than 13 years trying to compensate for the huge differences in income loss. I have zero taxable income to take the credit against for my daughters tuition and expenses.
So for the past three years my daughter has filed her taxes as an not a dependent in order that she can take the credit against her part-time job income.
Together we made less than $40k last year and they cut her Pell Grant to $966 for next year with $22k in tuition for year 4 of a 5 year nursing program. We got $5,600 her freshman year. This all makes no scense.
So for the past three years my daughter has filed her taxes as an not a dependent in order that she can take the credit against her part-time job income.
Together we made less than $40k last year and they cut her Pell Grant to $966 for next year with $22k in tuition for year 4 of a 5 year nursing program. We got $5,600 her freshman year. This all makes no scense.
9
The reason the system doesn't make sense is that the tuition @ $22,000 is far more than a fair price. It is four to five times higher than the inflation adjusted annual price in 1970, at which time your daughter could have become a RN with two years of college level training. Big hospitals also had work and study programs for those nurses who wanted four year degrees.
In 1950 through 1980, if someone wanted to be an RN and his family was prepared to pay for a four year degree, it was affordable. If the family was unwilling or unable to pay, there were tracks for someone to be licensed after two years and then continue his education while he worked, subsidized by the teaching hospital in exchange for the labor.
The federal money that flowed into the system was all captured by the educational institutions in excess administrative cost.
In 1950 through 1980, if someone wanted to be an RN and his family was prepared to pay for a four year degree, it was affordable. If the family was unwilling or unable to pay, there were tracks for someone to be licensed after two years and then continue his education while he worked, subsidized by the teaching hospital in exchange for the labor.
The federal money that flowed into the system was all captured by the educational institutions in excess administrative cost.
4
I think what's puzzling is that they expected some kind of reduction in attendance above the phase out. The results they found seem completely intuitive. Wealthy people aren't going to let what's to them a piddly tax credit stop them from sending their kids to universities. They were going to send them for higher education anyway. Whether they get a tax break is almost immaterial.
OTOH, if they looked at the lower income end, where $1000 is real money, they might see an effect. But there's still the problem that for the first year of college, as other people have pointed out, the money comes back well after you've paid a year of bills. It's a nice little reimbursement (that just gets eaten up by the next year's payments until that last year), but it's far too late to encourage more people to go to universities. And really, the colleges have already taken it into account in their financial aid calculations, so again, except for that last year, it really doesn't mean anything anyway, except a bit more tuition money for universities.
OTOH, if they looked at the lower income end, where $1000 is real money, they might see an effect. But there's still the problem that for the first year of college, as other people have pointed out, the money comes back well after you've paid a year of bills. It's a nice little reimbursement (that just gets eaten up by the next year's payments until that last year), but it's far too late to encourage more people to go to universities. And really, the colleges have already taken it into account in their financial aid calculations, so again, except for that last year, it really doesn't mean anything anyway, except a bit more tuition money for universities.
10
If someone is bright enough to be "college material" he or she should be bright enough to submit the 1040 and the FAFSA, but I wish the system you suggest had been in place when one of my kids was applying to college. She had some income that was not taxable and thus never appeared on a tax form, but, as honest people, we declared it on the FAFSA and she received less aid. Under your system, someone like that would be flying under the radar, so to speak.
What difference have Pell grants made? Were the credits to be added to those, one could assume that their effect would be about the same.
I take issue with your characterization of the credits as a windfall. A windfall is something that has not been earned or disproportionate compensation. Reimbursement for something for which a person has already paid is not a windfall.
What difference have Pell grants made? Were the credits to be added to those, one could assume that their effect would be about the same.
I take issue with your characterization of the credits as a windfall. A windfall is something that has not been earned or disproportionate compensation. Reimbursement for something for which a person has already paid is not a windfall.
5
This is why it's important to lay out a PLAN when discussing this idea of "free college" in our current political debates. As an adjunct instructor at three different colleges, running the gamut from a four year state college, a community college and a for-profit business school (because when you live from hand-to-mouth, as almost all adjunct faculty do, you teach where ever you can), most colleges are certainly moving towards a business model in administration. At one of my schools (guess which one), 80% of the faculty are adjuncts. Twenty years ago, all of us who are adjuncts would have been hired as full time faculty. But gone are the days when most college professors are tenured full-timers, in solid careers based on publishing, researching and teaching. Bloated to the extreme, administrative roles have all but eclipsed faculty development and students suffer for it.
Giving a tax credit or even just blanket funds from the Feds earmarked for college tuition (to make it essentially "free") would do nothing to halt this trend. Schools would still be able to allocate funds as they see fit, and what they see as "fit" means countless admin positions. It tells you something about the state of education when administration, fundraising and sports coaching are the most lucrative positions at any college. The fight for fairer pay and job security (and opportunity) for adjuncts is no longer a back-burner issue, but it's one that, so far, none of the candidates have addressed.
Giving a tax credit or even just blanket funds from the Feds earmarked for college tuition (to make it essentially "free") would do nothing to halt this trend. Schools would still be able to allocate funds as they see fit, and what they see as "fit" means countless admin positions. It tells you something about the state of education when administration, fundraising and sports coaching are the most lucrative positions at any college. The fight for fairer pay and job security (and opportunity) for adjuncts is no longer a back-burner issue, but it's one that, so far, none of the candidates have addressed.
31
> "It tells you something about the state of education when administration, fundraising and sports coaching are the most lucrative positions at any college"
GREAT POINT !
Like Healthcare, the Feds should require that colleges which receive Taxpayer$$ should spend at least 90% on classroom teacher salaries, with no wiggle-room to reclassify ANYTHING else into the equation
And likewise, they should stop lumping all kinds of funding into student tuition, If groups like cultural-associations, and leftist, feminist, conservative affiliations need $$, they should get it from students that WANT to support those operations, and be able to siphon it out of the pockets of students who don't want to support those activities
Ditto, especially for Sports, sell those operations off to Private Enterprise, and let THEM, provide any scholarships
Lastly. they should eliminate all the Free-Riders, every student who gets to attend for free, requires another student somewhere to pay double.
GREAT POINT !
Like Healthcare, the Feds should require that colleges which receive Taxpayer$$ should spend at least 90% on classroom teacher salaries, with no wiggle-room to reclassify ANYTHING else into the equation
And likewise, they should stop lumping all kinds of funding into student tuition, If groups like cultural-associations, and leftist, feminist, conservative affiliations need $$, they should get it from students that WANT to support those operations, and be able to siphon it out of the pockets of students who don't want to support those activities
Ditto, especially for Sports, sell those operations off to Private Enterprise, and let THEM, provide any scholarships
Lastly. they should eliminate all the Free-Riders, every student who gets to attend for free, requires another student somewhere to pay double.
2
Republicans have limited the student loan tax deduction on student loans to a worthless $2000. We don't need a tax cut/credit we need higher pay and for tutition to be significantly reduced.
11
Republicans??? I think you are a bit confused. The President needs to sign any bill before it becomes law.
3
Got to pass a bill to sign a bill. So the onus is on the GOP controlled Congress.
5
Who says the purpose of tax credits was to encourage people to go to college?
This program was structured as tax credits because it was the only thing Republicans would support. The way the right-wingers look at it, $20 billion in tax credits is $20 billion toward "starving the beast" -- cutting government spending. It meets the Grover Norquist test.
So the Democrats could write press releases about helping families pay for college, and Republicans could call it $20 billion worth of tax cuts.
That's what bipartisanship used to look like way back in the 20th century.
This program was structured as tax credits because it was the only thing Republicans would support. The way the right-wingers look at it, $20 billion in tax credits is $20 billion toward "starving the beast" -- cutting government spending. It meets the Grover Norquist test.
So the Democrats could write press releases about helping families pay for college, and Republicans could call it $20 billion worth of tax cuts.
That's what bipartisanship used to look like way back in the 20th century.
17
$20 Billion should be taken out of the DoD budget. It will hardly be missed.
"The intuition is that . . ."?
Implication, insinuation, indication--perhaps.
Intuition, no. Unless, of course, it's a rise--in which case, always.
Implication, insinuation, indication--perhaps.
Intuition, no. Unless, of course, it's a rise--in which case, always.
You forgot the largest taxpayer subsidy for colleges - the tax deduct-ability of donations to universities, and the tax free earnings of university foundations.
18
Let's not forget that the norm is that these institutions pay no property tax while benefitting from the local services (police, fire, streets, hospital).
2
As long as churches get this benefit, I don't have any problem with (non-profit) colleges and universities getting it.
4
I DO! In baltimore city, and many other cities own a huge portion of the land.
So much of property in baltimore is tax free(JHU is the largest employer in the city and is really the engine of the city). Universities should have to pay property tax. I pay my taxes. I work at a university and I am very supportive of the research and education that happens at universities. I do not understand why they should get special tax status. We can encourage their work in other ways if we want. But what is the difference between them a and any other business?
Then again as I write this I recall that most big businesses negotiate low or no tax deals with states before they move in a build a new factory or center or whatever.
So who does pay taxes besides the middle class anyway?
So much of property in baltimore is tax free(JHU is the largest employer in the city and is really the engine of the city). Universities should have to pay property tax. I pay my taxes. I work at a university and I am very supportive of the research and education that happens at universities. I do not understand why they should get special tax status. We can encourage their work in other ways if we want. But what is the difference between them a and any other business?
Then again as I write this I recall that most big businesses negotiate low or no tax deals with states before they move in a build a new factory or center or whatever.
So who does pay taxes besides the middle class anyway?
Very simple--College costs raised to soak up credits.
19
This is easy to understand - well over 80% of all federal aid for college goes to middle-class and wealthy families, and the portion they (we) receive from tax credits is even higher.
College aid has the greatest impact on families who cannot afford college unless they receive it. Sadly, there is almost no political will to help OPK; in fact, most well-off parents see greater opportunities for low-SES, racial minority, and first-generation college students as competition against their own children's trajectories, and are only too happy to slam shut any doors.
Until we look for universal benefit - i.e., the most academically-promising are able to attend, not the most privileged - financial incentives will continue to disproportionately shift to higher-income families, with zero impact on attendance rates.
College aid has the greatest impact on families who cannot afford college unless they receive it. Sadly, there is almost no political will to help OPK; in fact, most well-off parents see greater opportunities for low-SES, racial minority, and first-generation college students as competition against their own children's trajectories, and are only too happy to slam shut any doors.
Until we look for universal benefit - i.e., the most academically-promising are able to attend, not the most privileged - financial incentives will continue to disproportionately shift to higher-income families, with zero impact on attendance rates.
6
Higher-income taxpayers are not able to utilize these credits. Look at the income limitations on the beneficiaries of the credits and you will see that my statement is true. Upper middle income families cannot use the credits and the "wealthy" certainly cannot use them.
13
I can't fathom where you get the 80% statistic from. This is absolutely false....even if we include unsubsidized loans and parent loans as "federal aid" it is not even close.
2
I'm scratching my head over this article, as it comes a few weeks / months after two of the most massive donations to higher education -- $400m to Stanford by Nike founder Phil Knight, and something along those lines to Harvard by investor James Paulson, I believe. That's $800m to two schools -- in fact, two of our smallest universities on a numbers basis.
Is it a bit far-fetched to say that maybe, just maybe we should make undergraduate studies entirely free? Or at least mostly free for those
whom the costs is prohibitive? The economic idea is that aggregate
demand goes up with higher educations, and as per Lawrence Summer's recent rants -- maybe, just maybe increasing consumer demand is what
will tend to make our economy stronger, level out income disparities, and so on...
Is it a bit far-fetched to say that maybe, just maybe we should make undergraduate studies entirely free? Or at least mostly free for those
whom the costs is prohibitive? The economic idea is that aggregate
demand goes up with higher educations, and as per Lawrence Summer's recent rants -- maybe, just maybe increasing consumer demand is what
will tend to make our economy stronger, level out income disparities, and so on...
7
Huh? Big gifts...make it free...more consumer spending. Is there a topic sentence here somewhere? Bueller? Bueller?
Yes. Convoluted tax rules do not increase enrollments, but free college education surely would. And since endowments in some instances are huge (evidenced by said donations), free college education is not out of reach. Plus, with "secular stagnation" afflicting the world economies (as per Summer's accounts), one road to greater consumer demand is free college education, which often leads to higher incomes, and therefore more disposable income.
Sorry for the confusion.
Sorry for the confusion.
4
I don't think credits help because the problem with college tuition is the uncontrollable increase in costs. Parents have shown a willingness to pay whatever it takes to get their student into a good school, and schools have shown their willingness to spend and raise tuition at every chance they get. Giving people a $2,500 tax credit just allows colleges to raise tuition by $2,500 and build another building.
38
I think the feds need to think seriosuly about refusing to give $$ to students who attend universities that have extremely bloated administrative costs. It would be politically DOA but administrative costs are what's driving the total cost upwards and there's no check on those costs.
33
Administrative costs? Is that code for unions and health benefits? Most universities have moved to adjunct professors, so Im not sure what costs you are referring to.
When the country is going broke, that being $20 plus trillion in debt, the ideas in this article proposed adding another $5 billion a year. Of course, the offset, far into the future is that these additional graduates would pay higher taxes. Typical Washington thinking. Full disclosure, I reap every last dime of Federal credits now, including Pell. You do need to know how to take advantage of the government as it is always trying to take advantage of you. I will be retired long before the government will see higher earnings to tax. Thank goodness, and thank all you current taxpayers.
1
No, the thinking is not that "these additional graduates would pay higher taxes." It is, rather, that increasing the number of college graduates expands the economy -- these programs are, in effect, a form of capital investment.
2
Since we currently have a surplus of recent graduates who are underemployed, what advantage is there to encouraging the next tier down of potential students from borrowing money to get degrees.
1
Cluephone: financial aid already exists for people yearning to attend college. I got by on an A.S. from a community college and a Baccalaureate funded by various grants and loans. Not everybody needs four years at a Top 10 money pit.
12
The total tax credit numbers are large in the aggregate but small for an individual household. Come on, $2500 is a drop in the bucket for the college sticker price.
22
The credits are not essential - I took them, however, they had absolutely no bearing on whether my children attended or completed college.
Regarding tuition costs, I supported myself through college by working part time and going to school part time. The college I attended was in my hometown and the tuition was very affordable - it still is today. It's a small obscure school in a small Midwestern city - however, I received a good education which enabled me to support myself and a family.
The opportunity for affordable education still exists in America- there are hundreds of affordable colleges offering tuition assistance and even helping arrange part time employment for those students who would like to work while going to school.
I'm tired of hearing about the high costs of college - don't go to those schools! Eventually, the tuition costs will have to come down.
Regarding tuition costs, I supported myself through college by working part time and going to school part time. The college I attended was in my hometown and the tuition was very affordable - it still is today. It's a small obscure school in a small Midwestern city - however, I received a good education which enabled me to support myself and a family.
The opportunity for affordable education still exists in America- there are hundreds of affordable colleges offering tuition assistance and even helping arrange part time employment for those students who would like to work while going to school.
I'm tired of hearing about the high costs of college - don't go to those schools! Eventually, the tuition costs will have to come down.
12
Unless you graduated in the last 10 years, I doubt your experience is relevant for many students today. Costs have risen dramatically even at smaller state schools. Many schools' "tuition" is only a small part of the cost of attendance, which can include thousands of dollars of mandatory fees as well as living expenses. It also sounds as though you were able to continue living at home with your family, which isn't possible for students whose families don't live in areas with a college or university or for students whose families aren't supportive.
Ironically, it can be cheaper to attend an expensive school than a cheap one. Two years at a California State University school cost me much more than 4 years at a prestigious liberal arts college, even though my income was far lower when I attended the CSU.
Ironically, it can be cheaper to attend an expensive school than a cheap one. Two years at a California State University school cost me much more than 4 years at a prestigious liberal arts college, even though my income was far lower when I attended the CSU.
6
Exactly. As a first generation college student and now graduate my family didn't even know where to start when it came to paying for college so we(I) spent more money than I should have.
2
Why not just put federal dollars towards making state colleges and universities tuition-free rather than towards subsidizing outrageously priced private institutions? According to an analysis by Jordan Weissman (Atlantic Monthly, March 8, 2013), doing so would actually reduce federal spending by over $20 billion.
40
Money Losing Sports Programs
A bevy of recent articles document that most college sports programs are money losing. The original conceit "mens sana in corpore sano" has gone the way of philosophical inquiry as few students actually participate in any college sports activity, those that do are more semi-professional athletes than students, or well rounded young men and women. One must ask with all the other problems of higher education in the US why.
A bevy of recent articles document that most college sports programs are money losing. The original conceit "mens sana in corpore sano" has gone the way of philosophical inquiry as few students actually participate in any college sports activity, those that do are more semi-professional athletes than students, or well rounded young men and women. One must ask with all the other problems of higher education in the US why.
6
I agree that we ought to design financial aid programs that benefit families at the time of enrollment and eliminate deductions that aren't working. In a perfect world we'd consolidate what's best and drop the rest. But given the glacial pace of change in Congress these days, how about we start by making some well-intentioned programs less regressive?
For example, the US Government Accountability Office has found that 529 college savings plans predominantly benefit wealthy families (http://www.gao.gov/assets/660/650759.pdf), but as Ms. Dynarski suggests, those families may be less likely to change their behavior as the result of a credit. Perhaps if such plans were structured as refundable credits that better target low-income families, as does the oft-celebrated Earned Income Tax Credit (EITC), they would have a more powerful effect on college attendance -- not to mention long-term savings habits.
For example, the US Government Accountability Office has found that 529 college savings plans predominantly benefit wealthy families (http://www.gao.gov/assets/660/650759.pdf), but as Ms. Dynarski suggests, those families may be less likely to change their behavior as the result of a credit. Perhaps if such plans were structured as refundable credits that better target low-income families, as does the oft-celebrated Earned Income Tax Credit (EITC), they would have a more powerful effect on college attendance -- not to mention long-term savings habits.
2
Another approach to this issue could be applying these tax credits to areas of required employment demand.
While I agree low-income students who want to achieve higher education should have an avenue available to get them there - we also need to apply these tax credits to fields of study where the economy desperately needs workers.
Ironically we enter this vicious cycle. For example, tech companies say they can't find enough programmers and engineers locally to fill vacancies, so they search abroad. If we used tax credits to encourage students not only to study, but to study in specializations that are in high demand...you might see an uptick in the number of those who attend college, given the relative guarantee in their post graduation employment. It would also help the overall economy.
While I agree low-income students who want to achieve higher education should have an avenue available to get them there - we also need to apply these tax credits to fields of study where the economy desperately needs workers.
Ironically we enter this vicious cycle. For example, tech companies say they can't find enough programmers and engineers locally to fill vacancies, so they search abroad. If we used tax credits to encourage students not only to study, but to study in specializations that are in high demand...you might see an uptick in the number of those who attend college, given the relative guarantee in their post graduation employment. It would also help the overall economy.
3
Pete, I graduated from UofT with honours in Computer Science in 2004. There were no jobs after Nortel went down. The line to job fair in Fall 2003 went around University College, and nobody was taking CV's.
The media went on "we have too many IT people, Indians can code for pennies" rampage up until I believe 2006, when all of a sudden the mantra became "We don't have enough IT grads" almost overnight (by that time I switched fields and got MSc to stay afloat), with nobody seemingly remembering even remotely what they were saying just a short time ago.
Making tax credits "targeted" judging by wisdom de jour is a recipe for disaster. The author here essentially runs against Canadian model of subsidized tuition and tax exemption for all, and advocates for more "targeted" spending, as if it worked in US terribly well. I'd rather keep things universal, like they are in Canada now.
The media went on "we have too many IT people, Indians can code for pennies" rampage up until I believe 2006, when all of a sudden the mantra became "We don't have enough IT grads" almost overnight (by that time I switched fields and got MSc to stay afloat), with nobody seemingly remembering even remotely what they were saying just a short time ago.
Making tax credits "targeted" judging by wisdom de jour is a recipe for disaster. The author here essentially runs against Canadian model of subsidized tuition and tax exemption for all, and advocates for more "targeted" spending, as if it worked in US terribly well. I'd rather keep things universal, like they are in Canada now.
22
Government money doesn't make college more affordable, it makes it less so. Colleges would go out of business without student so they have to price themselves to be affordable to students. Once the government floods the market with cash, colleges lose the ability to match expenses to customers ability to pay. Colleges respond to extra government money by raising prices so as to leave nothing on the table. That the government money comes from issuing bonds that will never be repaid, only rolled over, and much tuition money comes from loans that will never be repaid suggests college is a house of cards.
24
Exactly this - the problem is controlling the cost, not figuring out how to keep paying more as the costs spiral further and further into insanity.
4
> "Once the government floods the market with cash, colleges lose the ability to match expenses to customers ability to pay. Colleges respond to extra government money by raising prices so as to leave nothing on the table"
This is especially true for Pell Grants, one of the worst liberal interventions in the field of education. If a student WANTS to get an education, they will take out loans and accept personal responsibility for the costs
Pell Grants have a massive impact in attracting marginal students who, have done little prep-work, are unlikely to step up to do the kind of work and study that is necessary to do well in college, and will end up dropping out with less than 25 credit hours
This is especially true for Pell Grants, one of the worst liberal interventions in the field of education. If a student WANTS to get an education, they will take out loans and accept personal responsibility for the costs
Pell Grants have a massive impact in attracting marginal students who, have done little prep-work, are unlikely to step up to do the kind of work and study that is necessary to do well in college, and will end up dropping out with less than 25 credit hours
2
Going to college in the U.S. should not result in $60K or more in school debt. Colleges penalize students who don't graduate quickly enough so working your way through school is all but impossible. Pell Grants are wonderful and make it possible for more people to go to college. Most people do not flunk out of college. They are usually unable to pay for it. And colleges keep,raising prices because stingy Republicans refuse to fund education.
Norman from Boston is right. Increased taxpayer involvement in higher-ed has driven up costs, providing the "business model" for higher-ed profiteers. Tuition at major state universities was only a minor expense some 40 or so years ago. Relatively efficient faculty and staff were "public servants" with modest salaries and benefits. Cadres of unnecessary and greedy "administrators" were hardly to be found. Classrooms, dorms, etc. were functional but not luxurious. It was fairly easy to "work your way through" a college degree. This model served the country well.
61
And the faculty were mostly full time, not the indentured servants of the current adjunct prof model.
2
OK, this is annoying.
College tuition is the money I gave away. I don't have them. I spent them to make the salary I have now. It is investment.
The author approaches the tax bill as something that it rightfully owns, and anything different from what she things I should be paying as a "subsidy". I approach a tax bill as a fair share of income based on the money I have. Treating college money as the money I don't have is only logical. However, based on this faulty assumption she starts a windy argument that this big universal welfare program is something that the government spends, and it spends it not it the way to benefit the poor (Why every single program has to benefit the poor is a mystery to me. What happened to middle class?), thus it should be clawed back.
If current crop of "big government" proponents keep doing this, the middle class will keep voting for small government, as they outright advocate to make universal programs not benefit the people who finance them.
College tuition is the money I gave away. I don't have them. I spent them to make the salary I have now. It is investment.
The author approaches the tax bill as something that it rightfully owns, and anything different from what she things I should be paying as a "subsidy". I approach a tax bill as a fair share of income based on the money I have. Treating college money as the money I don't have is only logical. However, based on this faulty assumption she starts a windy argument that this big universal welfare program is something that the government spends, and it spends it not it the way to benefit the poor (Why every single program has to benefit the poor is a mystery to me. What happened to middle class?), thus it should be clawed back.
If current crop of "big government" proponents keep doing this, the middle class will keep voting for small government, as they outright advocate to make universal programs not benefit the people who finance them.
7
Everyone should vote for a small federal government, let the programs that the citizens desire be managed by the states. In some states college tuition and books are already free for many individuals.
1
Education is already highly subsidized (discounted student loans, tax-exempt status of most educational institutions, 529 plans, charitable donations to schools), yet the education industry as a whole has used those subsidies to expand its administrative bloat without demonstrably improving the quality of its service. The quadrupling of educational costs since the '60s or so is due mainly to the hiring of an army of administrators. The existing subsidies are not linked to efficiency of the institutions nor the economic value of the resulting degree. The existing subsidies merely shift around the burden of paying for education among different payers at different times but do absolutely nothing to encourage efficiency gains in the production of educational services. In fact the subsidies just allow schools to further raise their prices.
Basically, calls for further subsidies will do nothing to lower per-capita educational spending or to increase the efficiency of education. The real question is about how schools can produce the same or better education with less inputs than before. Private sector innovation is more likely to solve that problem than poorly designed and poorly cost-controlled subsidies.
Basically, calls for further subsidies will do nothing to lower per-capita educational spending or to increase the efficiency of education. The real question is about how schools can produce the same or better education with less inputs than before. Private sector innovation is more likely to solve that problem than poorly designed and poorly cost-controlled subsidies.
19
Yes, administrative overhead has gone up when enrollments rise. But rather than viewing this as a power/money grab by evil administrators at the expense of student learning, it needs to be considered in the context of a labor-intensive industry such as education. Unlike the capital intensive manufacturing of physical goods, where new technologies can generate returns to scale, in education as in many other "service sector" industries more output requires more people to manage the larger volume. If this overhead isn't added, then there is a high possibility of declines in quality. Norman is absolutely correct in noting that productivity-improving innovation has occurred in the private sector service industries-- and perhaps the best example in education is the use of on-line learning. However, the jury is still out on weather or not on-line can compete in quality with the traditional labor intensive "human teaching" that predominates.
So, the question is how much quality are we willing to sacrifice in order to reduce costs? One answer I would put forward for consideration: too many students attend college in the US today! We need to find alternatives to the traditional four-year degree that can adequately prepare people to thrive in the 21st Century world and economy-- and that alternative might not require the breadth of subject matter, or investment in time, that currently prevails.
So, the question is how much quality are we willing to sacrifice in order to reduce costs? One answer I would put forward for consideration: too many students attend college in the US today! We need to find alternatives to the traditional four-year degree that can adequately prepare people to thrive in the 21st Century world and economy-- and that alternative might not require the breadth of subject matter, or investment in time, that currently prevails.
2
I agree that there may be some fundamental economic reason for which productivity in the education sector cannot go up at the same rate as in non-service industries or even as in other service industries (see Baumol's "cost disease"), but it is very hard to evaluate whether that's really the case when the educational sector has not been placed under much competitive pressure to improve its efficiency. To analogize, a poorly behaved dog might be untrainable, but unless the owner has rigorously attempted to train the dog, it is very difficult to know.
As my original post suggested, current subsidies for education in the US pay for educational *service* - they don't pay for what we really want, which is young people with socially and economically valuable skills and knowledge. In fact the subsidies are so poorly linked to the desired end product that they have been effectively used to pay for a variety of administrative services only tangentially linked to education. Of course I acknowledge that some administrative expenses are necessary, but the administrative bloat is for functions not really essential for education. Why do universities need to have huge offices for student activities or a bunch of admin people whose function is to micro-manage student speech and social behavior? Notice that schools have hired many part-time educators but the admin offices are staffed with full-time administrators. How would further subsidies address this problem?
As my original post suggested, current subsidies for education in the US pay for educational *service* - they don't pay for what we really want, which is young people with socially and economically valuable skills and knowledge. In fact the subsidies are so poorly linked to the desired end product that they have been effectively used to pay for a variety of administrative services only tangentially linked to education. Of course I acknowledge that some administrative expenses are necessary, but the administrative bloat is for functions not really essential for education. Why do universities need to have huge offices for student activities or a bunch of admin people whose function is to micro-manage student speech and social behavior? Notice that schools have hired many part-time educators but the admin offices are staffed with full-time administrators. How would further subsidies address this problem?
20
Yikes! Has the real, per-student cost that universities incur really quadrupled since 1980? Or is it the nominal average tuition that (some) students pay?
2