NOW I KNOW how Larry Summers feels. Two years ago the former president of Harvard University made a speech saying that it's possible that there are fewer top women scientists because there was a greater variance in scientific ability among men than women. At face value, this is an interesting hypothesis worthy of study. Instead, Summers got roiled by the media for being a misogynist before being formally censured by the Harvard faculty.
While I certainly don't claim to possess Summers' brilliance, this past week I've been accused of saying many things I haven't said -- namely, that I think students on financial aid are less motivated and don't deserve be in college. I never said that nor do I think that. This hasn't stopped angry students from filling my inbox with hate mail. I've been called a racist, a misogynist and there was a flyering campaign insinuating that I eat babies. There's even a Facebook group devoted to damning me. So much for constructive dialogue.
What I did say is that financial aid is inefficient and, therefore, bad policy. In a county with as advanced a financial sector as ours, anyone who can't afford to attend college can easily take out loans. The litmus test, then, is would you still go to college if you had to take out loans? If financial aid disappeared tomorrow, I have little doubt that most, if not all, University students currently on financial aid would do just that. Anyone committed to their education enough to take out loans certainly deserves to be here.
Before my detractors bemoan having to shoulder unmanageable debt, let's do some math. I'll use a very reasonable hypothetical scenario: an in-state student, "Sarah," whose parents cannot afford to pay for college. The University financial aid Web site estimates the cost of attendance for a returning in-state student at $19,820, which for these purposes I'll round up to $20,000. (Since the cost for an entering student is cheaper, this actually overstates the cost.) This means Sarah needs to borrow $80,000.
If she agrees to pay off her loans over ten years at a five percent interest rate, then she pays exactly $1,085.93 per month. Let's also say Sarah was a good student and landed a $48,000 a year job after graduation. That works out to $4,000 per month. She might not be able to live in the Upper West Side, but she has plenty of money to pay for her debt, rent, food, clothing and still have some left over to put into savings.
In fact, my thought experiment puts Sarah in much a tougher situation than most students ever have to face. If her parents could put something toward her tuition, then her debt would be significantly less since the interest is compounded. Furthermore, if she majored in a subject like math or finance then her starting salary would be much higher. I also completely excluded the possibility that Sarah could work while at school and pay off the principal before the interest even started to accrue. Despite what my detractors claim, accusations of misogyny and racism are utter nonsense: Not only is it illegal for lenders to discriminate on the basis of race or sex, but it's against their self-interest as they make thousands of dollars.
But, my critics gripe, banks won't make $80,000 loans to 18-year-olds. Actually, they probably will so long as the student's parents have jobs and own a house. And, as I wrote last week, the government has an obligation to ensure that students have access to credit. My critics, it seems, were too busy enjoying their self-righteous indignation to make it to the end of the column. If access to credit is a real problem, then a public-private partnership along the lines of Fannie Mae is in order with the government guaranteeing securitized loans. Just as Fannie Mae makes it easier to get mortgages, this new program would make it easier for students to get loans.
But there remains that small subset of students who are not committed to their education. They would not take out loans and were pushed into college by the lure of free money based on need, not merit. They are, essentially, free-riding off everyone else's tuition. We need them in the workforce too, just doing different types of jobs. The visceral hatred exhibited by many to the prospect of blue collar jobs makes me makes suspect my detractors are the real elitists.
I'll take a very current example: the trucking industry. It's illegal under federal law for any foreign company to ship goods between U.S. cities. It's a xenophobic, protectionist law (and technically illegal under NAFTA), but it means that the American economy cannot function without American truck drivers. Still think everyone needs to go to college?
John Maynard Keynes wrote about people's tendency to project their beliefs and build "castles in the air." So I've become the bogeyman of the activist Left. It's unfair, they cry, that rich students would not have to take out loans. Yet they merely point out the obvious: it's easier for the rich to afford everything. If we took the millions spent on aid and used it to improve the University, then we get more research, which drives economic growth, and the value of our degrees goes up. And it's poor students who benefit most from that.
Josh Levy's columns appear Mondays in The Cavalier Daily. He can be reached joshlevy@cavalierdaily.com.
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