Thursday, April 18, 2019

Free College and Student Loan Forgiveness

A presidential election approaches and the giveaway bidding keeps rising.   The two big ticket bids are “free college education” and “forgiveness of student loan debt.”   These two issues are symptoms of a problem.  They are not the problem.  Too often in our culture we focus on symptoms and politicians pander with supposed solutions.  That is why many problems are never solved.  The real problem is a higher education system that is far too costly and ineffective in delivering quality outcomes efficiently.

Students and their parents sense that something is out of joint.   Increasingly they are questioning the value proposition of the four-year college.  (Actually, only 39% of students graduate in 4 years and only about 60% by year six.)  The cost is too high.  The rigor of the experience is questionable as everything outside of academics seems a priority on campus with socialization atop the list.   The enhanced economic promise associated with the degree are diminishing.  And the debt burden incurred can be stifling.

Higher education costs have skyrocketed.  The quality of education has not improved in any way proportionate to the rise in cost.   Government programs to make higher education affordable have in fact had the opposite effect – fueling rising costs.   Much of the burden of that cost is placed on the shoulders of those ill prepared to complete college and ill prepared to pay back the debt burden.

The U.S. spends about $30,000 annually per student according to the Atlantic Magazine, about double the average of most developed countries.  The Director for Education and Skills at the Organisation for Economic Co-operation and Development, Andreas Schleicher says in the Atlantic, “The U.S. is in a class of its own…Spending per student is exorbitant, and it has virtually no relationship to the value that students could possibly get in exchange.”
The national higher education finance system needs an intervention.   I propose the transformation of the higher education finance system over the next ten years.  The system would be transformed from its focus on subsidizing and supporting all students through grants and loans to one of direct block grants to states tied to improved outcomes and more efficient operations at pubic colleges.  Tax incentives and the competition created by more effective and efficient public colleges would force private colleges to respond with increased access and affordability.

At a time when student debt is driving major economic and family formation decisions by young people a reassessment is underway of the value of the traditional four-year college pathway.  Parents and students are looking at other options such as community college and vocational education, and very specific technical education such as coding boot camps.  When only half of the 70% of high school graduates who begin college actually graduate a major reassessment of policy is due. 

The timing is right for another reason.  According to Demographics and the Demand for Higher Education, by Nathan D. Grawe, there are major demographic shifts occurring that will put increasing pressure on higher education.  College age populations are decreasing and they are shifting North to South and East to West.   The time is ripe for a major change in the way we deliver higher education.

According to Best Value Schools the cost of “higher education has surged more than 538% since 1985. In comparison, medical costs have jumped more than 286% while the consumer price index has jumped 121%. Meaning higher education is almost 4.5 times as expensive as it was 30 years ago.”
In more recent years, according to the College Board, costs since 2000 have risen 4% to 6% per year, double the inflation rate.  At the same time, according to Forbes, salaries of recent college graduates decreased while debt burden increased.

Have those disproportionate cost increases improved the educational outcomes and earning potential of graduates, or improved worker productivity?   The answer is no on all counts.  According to the New York Times, “Since 2000, the growth in the wage gap between high school and college graduates has slowed to a halt; 25 percent of college graduates now earn no more than does the average high school graduate.”

According to the Bureau of Labor Statistics, less than one fifth of jobs require a four-year degree.  That does not mean that high school students do not need further education.  They do.  But the emphasis on four-year degrees, is misguided for a variety of reasons.  Fewer than 20 percent of American jobs actually require a bachelor’s degree. By 2026, the bureau estimates that this proportion will rise, but only to 25 percent.  A study by Georgetown University indicates 63 percent of new jobs in the U.S. will require some sort of higher degree or meaningful certificate, not necessarily a four year degree.

According to the National Center for Education Statistics the 6-year graduation rate for full-time undergraduate students at a 4-year degree-granting institution is only 60 percent. “The 6-year graduation rate was 59 percent at public institutions, 66 percent at private nonprofit institutions, and 26 percent at private for-profit institutions.”   The statistics are much worse when broken down by admissions policies.  Those with open admission had a 32% graduation rate.  The more selective the admission policy the higher the graduation rate.

We are sending too many high school graduates to college that are not prepared to be there.  Worse, when they fail they often leave with a debt obligation they cannot pay.  Sixty percent of students entering a community college require remedial classes because they cannot handle the most basic course work.  There are other pathways that can provide better economic outcomes that should be developed and emphasized in technical and vocational education.

The federal government created higher education grant and loan programs in response to high inflation in the 1970s and early 1980s.   Like so many programs there were unintended consequences.  When inflation was tempered the programs were not ended. Rather, they were continued and expanded.  The influx of grants and loans contributed to the inflation of higher education costs.  Some studies indicate for every granted or loaned federal dollar the cost of higher education was inflated by 60 cents.  

The default on student loans is over $75 billion with a trend line that gets worse.  Indebtedness is causing changes in life decisions.  Indebted graduates are delaying family formation and home purchases, and the psychological burden of beginning their adult lives is creating undue stress.  The impact extends beyond the individual to the broader economy.

The time has come for another look at higher education funding.   Not to increase the amount of federal dollars allocated necessarily, but to redirect the funding in a way to make it more effective in delivering greater access and outcomes with more effective and efficient delivery.

Democratic presidential candidates are making pronouncements of “free college for all,” “tuition free college,” “debt free college,” etc.  There is little meat on the bones of these “proposals” and that which they have said has a very wide variety of meaning.  Bernie Sanders probably has the most detail based on his proposed College for All Act but it too is very thin.   Basically, he proposes taxation of Wall Street to pay for tuition.  All of these programs are treating symptoms and failing to look at the underlying disease and movement toward a cure. 

Sander’s proposal and others are largely about further subsidizing individuals with cash infusions to pay colleges and universities under the same system that has failed.   They do not change how we deliver education, its priorities, effectiveness, or efficiency.   It will end up only emboldening a fatted higher education system focused largely on the business of attracting customers (students) to increase revenues.

I propose looking back to the Land Grant college model in the Morrill Act of 1862 . The purpose was to expand the availability of higher education, but also to expand the focus to practical agriculture, science, military science, and engineering in addition to classical liberal arts education.   In 1890 the Morrill Act was expanded to include the states of the confederacy with the same opportunities, but with additional requirements to advance Black opportunities.  Many of the historically Black colleges of today were formed under this law.

The model was one of the federal government empowering the states with specific requirements and holding them to account.   This model is more appropriate today.  All student aid programs (grants and loan guarantees) would be eliminated.  In their place would be state block grants with specific targeting and requirements placed on the state and its public higher education systems. 


  • Elimination of all federal student loan programs
  • Elimination of federal Pell Grants, Federal Supplemental Educational Opportunity Grants, GI Bill, and all other direct subsidies of students.
  • A refinancing program of all outstanding federal student loans that cuts the remaining balance on all loans by 25% and sets the rate for remaining obligation at 1% for 3 year loans, 2% for 5 year loans, 3% for 10 year loans, and 4% for 20 year loans.
  • Creates a block grant program for state public colleges and universities that reduces the cost of vocational and community college education to zero for students that is open to all assessed able to do the work.  Four-year public colleges and universities would have a sliding scale of cost to qualified students based on household income, major selected, and academic preparedness from $0 to $5000 per year. A rigorous array of performance standards of effectiveness and efficiency would be tied to the grants.
  • Establish criteria for state block grants that includes requirements for funding linked to the percentage of students that are in-state and banning any funding to state public institutions that have student bodies less than 70% in-state.
  • Incentive the creation of innovative models of intensive technical and vocational training in funding formulas.
  • Banning any college or university from receiving federal or state funding that ranks in the bottom 5% of any one, bottom 10% of any two or bottom 20% of three of the following measurements: graduation rate, salary after attending, and rate of student loan repayment.
  • Taxation of private college and university endowments by the federal government to subsidize the block grant program and state taxation of private college and university property on a sliding scale based on the percentage of enrolled and graduated students from low and middle income households.

A great deal of detail would have to be debated and compromises struck before such a bill could be enacted to transform the higher education system.  But both Democratic and Republican members of Congress could find value in an opportunity to reshape the system.

To continue as we are today is a mistake and the pandering offers of greater and greater benefits to voters stressed and strapped by the current system will change nothing.   We can do better.

Saturday, April 6, 2019

Hometown Nostalgia

The recent creation of a Facebook Group for people from my hometown "This was Randolph" quickly drew nearly 5,000 members.  Thousands of posts, comments and reactions indicated life in Randolph, Massachusetts in the 1960s into the 1980s was overwhelmingly positive for children and teenagers.  No doubt young people in many small towns across the country in the same period shared that positive experience.

The purpose of the Facebook Group was to reminisce about experiences growing up in the town.  The creator insisted that members must have lived in Randolph, Massachusetts at some time.  Group members could submit a post on pretty much any topic except politics.  Postings quickly poured in and thousands of reactions and comments followed.  Additional conversations were sparked and in many cases friendships that had faded with time were renewed.  Reading through the posts and comments an abundance of fond recollections and appreciation for the environment, institutions, and people of my hometown flowed readily.
In a 1993 Washington Post Sunday Magazine feature  about Rod Langway, an NHL Hall of Fame hockey player from Randolph, the author described Randolph as a “tough blue-collar community south of Boston.”  I was living in Washington, D.C. at that time. Reading the article I was taken aback by that description of my hometown. 

When thousands began migrating from Boston to the fast-growing town in the 1950s it was considered a country backwater.  It quickly became a blue-collar working-class town in the 1950s and 60s, but it never seemed “tough” in a pejorative way.   It was a place of large families and bursting schools where children played outdoors with little or no supervision.   It wasn’t perfect, and there were some that suffered in isolation and abuse, but the reflections on the Facebook Group surely show it was in general a wonderful place to grow up.

Reading the posts within the group, one could not help but think how much has changed - not just in my hometown, but in many small towns across the country.

Who are these 5000 people in the Facebook Group?

Thursday, March 28, 2019

Census Controversy and Gerrymandering before the Supreme Court - Part 2: Gerrymandering

There are two interesting and very important questions before the Supreme Court this term relating to congressional representation.   One case is about apportionment – the way in which the federal government allocates the 435 Congressional Districts to the states.  The other is about redistricting – the way in which districts are drawn within and by states.  As they are both complex issues this will be a two series blog, Part 1: Apportionment and Part 2: Gerrymandering.   Apportionment is the process of allocating congressional districts after the decennial census.  Gerrymandering is the manipulation of congressional districts within state boundaries for political advantage.

These are complex issues for the Supreme Court that float in a gray area between politics and clear-cut law.  The issues may seem arcane to many, but they are of major consequence for the republic relating to representation, power, and resource allocation.  Both issues are worthy of considerable citizen attention.


In Part 1: Apportionment, the Constitutional requirement was described to conduct a census every ten years from which the 435 Congressional Districts are reapportioned to the states.  A further mandate that each of those districts have roughly the same numbers represented was also established.   Beyond those broad goal posts the responsibility for creating the districts within states is left almost entirely to the states themselves.

Article 1, Section 4 of the Constitution says, “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature.”  It further provides a regulating authority stating, “the Congress may at any time by Law make or alter such Regulations.”

Placing the state legislatures in charge of creating districts within their borders makes the process a political one.  As in all political activities advantage is sought by competing interested parties.  An environment ripe for abuse is created. 

Sunday, March 24, 2019

Trump exonerated - stop the resistance! It's futile

To win the 2020 presidential election and retain control of the House of Representatives the Democratic Party must stop the endless acrimony over Hillary Clinton’s 2016 presidential election loss and move on to offering solutions to real problems.  If not, it will lose the 2020 presidential election and the House of Representatives. The nation is worn thin by the post 2016 rancor.  Further continuation of a strategy of “resistance” is harmful to the nation and likely counter to future Democratic electoral success.

On May 17, 2017 Deputy Attorney General Rod Rosenstein appointed Robert Mueller in an “Appointment of Special Counsel to Investigate Russian Interference with the 2016 Presidential Election and Related Matters.”  Thirty-four indictments of individuals and three companies resulted.  Thirteen Russians and two companies were indicted for social media trolling and twelve Russian military officers were indicted for hacking the Democratic National Committee Email servers.  The remaining indictments and convictions were for peripheral violations of the law such as lying to the FBI or Congress or long-past crimes unrelated to the election. 

On March 24, 2019 Attorney General William Barr provided the major findings of Special Counsel Robert Mueller’s report titled:  “Report on the Investigation into Russian Interference in the 2016 Presidential Election.”  Barr writes, “the Special Counsel’s investigation did not find that the Trump campaign or anyone associated with it conspired or coordinated with Russia in its efforts to influence the 2016 US. presidential election.”  Further, the Attorney General found that, “the evidence developed during the Special Counsel’s investigation is not sufficient to establish that the President committed an obstruction-of-justice offense.”

In 2017 a special counsel was demanded.  Attorney General Jeff Sessions recused himself as demanded. Deputy Attorney General Rosenstein provided the Special Counsel with an extremely broad authority and scope.   Mr. Mueller was unhindered by the White House or the Department of Justice in his investigation.   Everything possible was done to accommodate those that demanded a full, fair and thorough investigation. 

Immediately following the release of the Attorney General’s top-level summary Representative Maxine Waters said, “this is not the end of anything!”   The Democratic Party follows her lead at its peril.

Monday, March 18, 2019

Census Controversy and Gerrymandering before the Supreme Court - Part 1: Apportionment

There are two interesting and very important questions before the Supreme Court this term relating to congressional representation.   One case is about apportionment – the way in which the federal government allocates the 435 Congressional Districts to the states.  The other is about redistricting – the way in which districts are drawn within and by states.  As they are both complex issues this will be a two series blog, Part 1: Apportionment and Part 2: Gerrymandering.   Apportionment is the process of allocating congressional districts after the decennial census.  Gerrymandering is the manipulation of congressional districts within state boundaries for political advantage.

These are complex issues for the Supreme Court that float in a gray area between politics and clear-cut law.  The issues may seem arcane to many, but they are of major consequence for the republic relating to representation, power, and resource allocation.  Both issues are worthy of considerable citizen attention.


Every ten years the United States Census Bureau conducts the census in accordance with Article 1 Section 2 of the United States Constitution.  The Constitution originally provided for the maximum amount of people in a district (30 thousand) at the start of the republic. However, as the number of states increased, and the population grew, it became impractical to keep expanding the number of districts or to restrict the number in each district to thirty thousand.

The Apportionment Act of 1911 established that there shall be 435 congressional districts in the House of Representatives to represent the interests of the citizens.   The Senate represents states. Each state is allotted two senators by Article 1, Section 3 of the Constitution (50 states x 2 senators = 100 senators).  

The 535 members of the Senate and House of Representatives together make up the bicameral legislature that together are called the United States Congress.   Additionally, the District of Columbia is allocated three Electors through the 23rd Amendment to the Constitution.  Total electors therefore are 538 resulting in the requirement that a presidential candidate obtain over half, or 270 electors, to win a presidential election.

Friday, March 8, 2019

Who will win in 2020? - syllables and follicles may tell

Former Colorado Governor John Hickenlooper will not be president – bet on it.  Only one person with a four syllable last name was ever elected president (and he was a five star general national hero) and the trend is toward fewer syllables.  Former Maryland Representative John Delaney will not be president – bet on it.  Delaney is bald.   We very rarely elect bald presidents.

Prognosticating about the 2020 election is well underway.  Much of it is based on anecdotal evidence.  As the readers of the Liberty Takes Effort blog know - facts and analysis dominate here.  The above predictions are based on statistical analysis of historic patterns.  Syllables and follicles do not appear to have been analyzed as a predictor of presidential contest outcomes in the past.

Reading last week of Hickenlooper’s presidential candidacy one might think, “no one with that name will ever be elected president.”   That conclusion is supported by analysis of past president names.   Cultural and ethnic biases toward this modified German-origin name are not at issue.  Rather, it is the number of syllables of this lengthy last name. 

Constructing a table with the names of all past presidents one discovers that only one president has ever had a last name of more than three syllables (Dwight Eisenhower).   In fact, the majority were two syllable last names.   This insight deserved further analysis.

Two syllable first names also dominate throughout presidential history.   Looking at both the last and first names of presidents one discovers that over 70% of presidents had three or four syllable first and last name combinations, but most prominent are two syllable first and last name combinations.

Wednesday, February 13, 2019

What is the condition of our economy?

The last quarter of 2018 saw a constant drumbeat of negative “news” that likely contributed to a psychologically induced drop in the stock market.   Headlines like, “Worst December for stocks since 1931 gets worse as rate hikes spook investors” were commonplace.   Social media regurgitated the narratives.    One would have thought the sky was falling despite an abundance of contrary economic performance measures that the economy is strong.
Something is wrong when armchair analysis by novice investors can detect the difference between economic reality and a false perception, but “journalists” cannot or will not.  The American public would do well to guard against watching biased and unreliable television “news” and informing itself (or rather not informing itself) through social media.  The resources are available to make better economic decisions.  The only requirements are time and focus.   The rewards can be significant.  

What is the evidence the economy is strong?

In the 1960s, economist Arthur Okun created the misery index economic indicator.  The misery index is largely the addition of the inflation rate and the unemployment rate.  The lower the number the better the economy.  The Carter Administration holds the title for the worst Misery Index at more than 20 (Inflation over 14% and Unemployment over 7%).  Dwight Eisenhower had the best at only 3.28.   The current misery index under the Trump Administration is 5.9 – the best since Eisenhower in 1952.

Recent release of end of year 2018 and January, 2019 economic data confirm a strong U.S. economy.

Lagging Economic Indicators (Table 1) illustrate how well the U.S. economy is performing.   LAGGING indicators are facts about what has happened in the recent past.  They can help in making some prediction about the immediate future, but straight-line projections of historical trends are dangerous and to be avoided.   In general, look at this table to assess where the economy is right now.