Benjamin Studebaker

Yet Another Attempt to Make the World a Better Place by Writing Things

Tag: Student Debt

Could Corbyn Cancel All the Student Debt? Yes–But He Has to Bend a Rule

There was a row this week in the UK over Labour’s plan for the university system. Individual Labour politicians have in the past talked about doing something about student debt, but this week Labour leader Jeremy Corbyn distanced himself from outright debt relief:

What I said was we would deal with it by trying to reduce the burden of it, we never said we would completely abolish because we were unaware of the size of it at that time.

Some in the British press are trying to portray this as a U-turn, but the Labour manifesto did not itself make any firm pledges on debt relief. It promised to eliminate tuition fees, but the debt issue was left to one side:

The average student now graduates from university, and starts their working life, with debts of £44,000. Labour will reintroduce maintenance grants for university students, and we will abolish university tuition fees.

Corbyn indicated this prior to the election–Labour was still trying to figure out the debt issue:

Yes, there is a block of those that currently have a massive debt, and I’m looking at ways that we could reduce that, ameliorate that, lengthen the period of paying it off, or some other means of reducing that debt burden. I don’t have the simple answer for it yet – I don’t think anybody would expect me to, because this election was called unexpectedly; we had two weeks to prepare all this – but I’m very well aware of that problem. And I don’t see why those that had the historical misfortune to be at university during the £9,000 period should be burdened excessively compared to those that went before or those that come after. I will deal with it.

So instead of playing he-said he-said, let’s take a look at what Labour could do about student debt and see if we can help Corbyn figure it out.

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John Oliver Doesn’t Understand How Stein’s Student Debt Policy Works

Last Week Tonight‘s John Oliver recently ran a segment in which he slated Jill Stein’s proposal to eliminate student debt through quantitative easing:

His criticism seemed to suggest that the Federal Reserve is obviously irrelevant in this policy area:

It’s basically akin to saying, ‘I’ll make us energy independent by ordering the Post Office to invade Canada.’ No, Jill. That’s impractical, it’s a terrible idea, and you don’t seem to understand anything about it.

Oliver, who is usually quite perceptive and well-informed, gets this wrong, and he gets it wrong in no small part because monetary policy is complicated and difficult to understand, both in terms of the economics and in terms of the politics. So let’s talk about how Stein’s idea works.

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Britain Must Refuse to Honor the Results of the Brexit Referendum

In a shockingly stupid decision, the British public have voted 52% to 48% to leave the European Union. In the short term this means an economic disruption that will blight people’s lives. In the long term this means that unless it is permitted to remain in the European Economic Area, Britain will no longer have EU regulations to protect its workers, consumers, and environment. Even if it stays in the EEA (and the EU has every reason to refuse to permit it to do so to deter other countries from leaving the EU), it will no longer be able to play a part in solving collective action problems like tax avoidance and climate change, and its non-involvement will undermine the solutions proposed by others in Europe. Brexit will also aid and abet other Euroskeptic movements throughout Europe and dump gasoline on the right nationalist fire that grips so much of the world today. Many people in Britain and elsewhere throughout the world will be harmed, some now, some later, many irretrievably so. No political outcome can be legitimate if it permanently and irretrievably harms so many people with no substantive advantages. For these reasons the next British government must refuse to invoke Article 50. Parliament is sovereign, and its sovereignty cannot be abrogated by a referendum. This is a controversial view–refusing to honor the referendum would make a lot of people very angry. But the long term harms of Brexit to Britain’s young people are too great for any government to morally justify invoking Article 50, irrespective of public opinion.

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How ISAs Allow Rich People to Exploit College Students

A friend of mine at Purdue University recently informed me that under the leadership of former Governor Mitch Daniels (R-IN), Purdue has become the first major American university to offer Income Sharing Agreements (ISAs) to students as a new alternative to traditional student loans. ISAs are exploitative and morally disgusting. Here’s why.

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