<p>I wonder if there’s a correlation-causation issue there? I imagine the class of people with “some college” includes some groups that were going to be more successful than the high-school-only class even if none of them had ever gone to college. People who were more academically successful in high school, and tested better (therefore were more likely to go to college and encouraged in that direction). People with more ambition, including people who didn’t go to college immediately after high school, but who subsequently had enough success in their careers that the lack of a credential looked like a problem, and they started slowly acquiring college credits part time. People who are among the very highest earners in our society, but whose standard career paths often include a brief collegiate sojourn – professional athletes, actors, tech entrepreneurs. (It’s like that line from several pages ago, about the average starting salary of UNC geography majors in 1984.)</p>
<p>mini,
If administering student loans directly by the federal government, rather than banks, will result in a decrease in costs and a decline in defaults, then I’m all for it. I will believe it when I see it. I have a hunch that efficiency and collections will suffer, due to monopoly and lack of monetary incentive. We will see.</p>
<p>As you say, we’ll see. Since Medicare, with all its problems, is much, much, much more efficient (and cost-effective) than the private sector in delivering health care services, I expect we’ll find the same from the government loan program.</p>
<p>But, as I noted with Sweden, the real question is whether there should be a need for these loans at all.</p>
<p>Pittsburgh seems to be no better, based on its net price calculator (about $25,000 net price for in-state student from family of income $50,000 to $59,999). Seems like the state of Pennsylvania has basically reserved its public universities for wealthy people and those willing to take big debt risks. Seems like the state of Pennsylvania lost sight of what a state university is for.</p>
<p>Bay, The banks are servicing government loans. I don’t know how many. What is happening is interest costs are lower to the students with the government lending the money.</p>
<p>The government hires collective agencies to collect on loans. Also, the govt snatches money from bank accounts.</p>
<p>“Some college” is sometimes used to indicate college attendance, but not attaining a bachelor’s degree. If that is the case, then it is no surprise that people with “some college”, including those who go to the community college for an associates degree, trade certification, or just some useful courses for their job and career goals, have better job and career prospects than those with just a high school diploma (or GED) and no more education beyond that.</p>
<p>That is arguable. Medicare allows any licensed doctor to participate, and it it does little to combat fraud. Therefore its overhead looks low. Private insurance plans that spend resources deciding which doctors to allow in their network and to look for fraud will have higher administrative costs.</p>
<p>In general the government does not do things more efficiently than the private sector. It would be surprising if health care were an exception.</p>
<p>Perhaps it is not so much fraud, but that it is structured to create incentives for more care, as opposed to better care. Private insurance schemes are not immune from this type of incentive either.</p>
<p>It is a difficult problem to solve, since many of the expensive procedures and drugs that are overused are valid choices for some people for whom the less expensive procedures and drugs, or watchful monitoring, are not medically appropriate, or were unsuccessful. If patients were self-pay, that would go a long way to dealing with it, but many types of medical care are too expensive for people other than the wealthy to do pure self-pay (i.e. not carry even catastrophic-level insurance). In addition, the providers structure their billing around insurance, so a pure self-pay patient may have a hard time getting pricing up front.</p>
<p>This really bothers me. I think fixing tuition for the pell eligible at the amount Pell will pay is the solution to this, particularly in the case of state U’s. But, why not say, Pell+the minimial staffords is all a university can charge the pell eligible if they want to receive federal assistance.</p>
<p>The loans are aid for the university, anyway, and not the student. I don’t think it is the mission of our state universities to provide 6 and 7 figure salaries for administrators on the backs of money borrowed by impoverished kids.</p>
<ol>
<li><p>I think in the census system, on which most of this data is based, “some college” means no degree, bachelor or associate. AA degree recipients are usually treated as a separate category. Here’s a recent table: <a href=“http://www.census.gov/compendia/statab/2012/tables/12s0232.pdf[/url]”>http://www.census.gov/compendia/statab/2012/tables/12s0232.pdf</a>. It flatly contradicts mini’s earlier statement, by the way. At every age level, there is a big earnings gap between Some College or Associate’s Degree and Bachelor’s Degree, much greater than the gap between High School Graduate and Some College. It’s the AA degree that doesn’t add much.</p></li>
<li><p>Pennsylvania, like some other states, has a two-tier (at least) public university system. The PASSHE universities – former state teachers’ colleges – are significantly cheaper than Penn State, Pitt, and Temple. So a low-income kid could conceivably get a degree from Millersville State University (a popular destination for low-income kids) without borrowing more than $20-30,000. Of course, that’s still pretty high. </p></li>
</ol>
<p>The PASSHE budget has been a real political football in recent years. It took a huge cut in state support when the current governor came into office, but now that he’s thinking about re-election (and he has experienced the depth of anger he provoked) he is trying to restore some of the funds he cut. Unlike Penn State or Pitt, the PASSHE schools don’t have significant endowments or other sources of support besides tuition, state subsidies, and federal aid.</p>
<p>Medicare is much more efficient only because the entire task of processing claims is contracted out to other insurance companies called fiscal intermediaries. They realize that running an insurance company with civil servants will be much less efficient than having either non-profit or (gasp) for-profit companies do the grunt work. eg. for us in PA, it used to be the local blue cross company, Highmark, but for the last year or two, it’s Novitas, based in Florida. </p>
<p>Similar model with audits “recovery audit contractor” or RAC. So, yes if you look at the number of Medicare claims processed with respect to number of CMS employees, it’s impressive, but only because the government wasn’t naive enough to think they could do the job more efficiently than the private sector.</p>
<p>Do you mean just tuition or COA (including dorm)? The reason I am asking is, because many in-state tuition rates are pretty close to this amount. It is when you start adding, books, fees (including health insurance), dorm, meal plan, you get to this huge amounts.</p>
<p>Also, don’t forget that many states offer state grants in addition to Pell grants. Back when I was going to school both Pell and state grants were enough to cover almost entire tuition (without a fee that covered amenities and health insurance).</p>
<p>dstark,
What is the change in the interest rate that you know about? I thought it was 3.4% or 6.8%, which is the same as it was in 2007 when I first looked.</p>
<p>lerkin, I think if a school has dorms, then yes, the school’s entire COA for the pell eligible must be covered by pell + staffords and grants. Students are capable of small jobs to afford books, and extras, imho.</p>
<p>Anyone who has been responsible for the paperwork of an elderly (age 80+) parent can probably attest to the fact that over-treatment, over-prescribing and fraud is common with Medicare patients.</p>
<p>“In general the government does not do things more efficiently than the private sector. It would be surprising if health care were an exception.”</p>
<p>Whether the private sector is more efficient than the government or not, even if the private sector is more efficient, this doesn’t necessarily translate into lower costs for consumers.</p>
<p>What about students who can live at home? Why do the kids need to live at dorms, if they can live with parents and commute? </p>
<p>Since taxpayers’ money are not bottomless, we should try to come up with the most efficient solution. In fact, it already exists: 2 years of CC plus 2 years of state U. With careful planning, most students can swing it with just Pell+state grand and Stafford debt even if they will not have an option to commute in the last two years.</p>