Friday, April 3, 2015

Welfare for college graduates

Social welfare programs have always been a source of frustration for New York’s taxpayers, especially when the Empire State offers one of the most costly and benefit-rich Medicaid systems in the country, which has always been an albatross on the neck of property owners who shoulder the greatest burden.

But, as frustrating as such programs for the poor can be, there’s nothing more confounding than welfare taken by the rich or, more specifically, corporate welfare which now sees hundreds of millions of taxpayer’s dollars pumped into private interests every year under the guise of “economic development”.

Thanks to Governor Andrew Cuomo, we are now venturing into new territory in New York welfare, one that knows no socioeconomic differentiation. In a plan that he unveiled in January as a part of his Opportunity Agenda, Cuomo would have the state (read “taxpayers”) provide student loan relief. It was adopted by the Legislature as a part of the 2015-2016 state budget. So now, we the taxpayers will be providing social welfare payments to the adult children of the middle class and upper class and, to a far lesser degree, the adult children of the poor.     

The Get on Your Feet Loan Forgiveness Program will be made available to those who attended college in New York State, continue to live in New York following graduation, participate in the federal government’s Pay as You Earn (PAYE) program, and make less than $50,000. Under the program, the state will pay the difference between what the federal government covers and the student’s total debt for their first two years out of college, meaning that the college grad will personally be paying nothing towards his or her debt over that period.    

That vast umbrella would cover more than 24,000 graduates by 2020 and the Governor’s office estimates that it will cost approximately $42 million per year. Each grad will receive on average of $1,800 per year for a 2-year total of $3,600.

New York’s burden is set to grow exponentially as more students enroll in the relatively-new PAYE, which as I mentioned in a 2012 column for this paper ( is an unconscionable endeavor that sees college loan payments capped at 10% of one’s annual discretionary income and, after 20 years, has that loan balance forgiven unless, of course, you work for some form of government – when under such employ your loans will be forgiven after 10 years.

The state should not be in the business of paying off student loans. A college degree is a discretionary purchase; it’s not a right nor is it a necessity. Its purchase should be the sole responsibility of the person going through college because it is no different than buying a car, or a house, or a television set.

And, as can be done with those purchases, people also make stupid decisions with their college degrees. They go to pricier universities, live in palatial dorms, 40 percent take 6 years to graduate from a 4-year college and they pursue degrees of which there are too many in the marketplace or, other cases, have absolutely no value in economy. So, under Get on Your Feet (as we are with PAYE) we will be subsidizing such foolish investments.  

Likewise, as I’ve written here numerous times before, not everyone needs college to succeed. College degrees are really a dime a dozen today, yet trade certificates and commercial drivers licenses are too few and that is why machinists, truck drivers, plumbers and electricians earn more than college graduates and will continue to earn more for the foreseeable future.  Yet, as critical as those jobs are to the economy you won’t see the state paying for their trade schools and apprenticeships (nor should you).

It’s programs like Get On Your Feet and a loan market covered almost in full by the federal government that makes college so expensive. Deans and college presidents know that almost everyone has access to funding and will buy their product (because the government tells them they need it), so they are charging what they want and whatever the market can bear. Since 1985 the college education inflation rate has risen nearly 500%, more than 4.3 times the amount of all other consumer prices.

It’s those higher prices that keep the poor away from college and keep only the middle class and upper class engaged in higher education, perpetuating the social standing of the poor.

It’s that broken system that will ensure only the people who don’t need it the most are benefitting from the largesse of New York’s newest welfare program.  

From the 06 April 2015 Lockport Union Sun & Journal

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