Mitt Romney recently advised students that they should borrow money from their parents so they could get an education or start a business. That’s not bad advice if your parents have the money to loan you. But he said this while Congress was debating whether to keep interest rates low on student loans. In context, he’s saying “don’t borrow money from a bank or the government, borrow it from your parents.” You see, that way you don’t have to worry about the going interest rate unless your parents are going to charge you interest at the going rate. I guess Mitt Romney assumes that parents will just fork over their money with no interest attached. Maybe some families operate that way, but not all. What’s interesting about this is that Romney paid for his college with what appears to have been a gift from his parents. Ann Romney tells it:
They were not easy years. You have to understand, I was raised in a lovely neighborhood, as was Mitt, and at BYU, we moved into a $62-a-month basement apartment with a cement floor and lived there two years as students with no income. It was tiny. And I didn’t have money to carpet the floor. But you can get remnants, samples, so I glued them together, all different colors. It looked awful, but it was carpeting.
We were happy, studying hard. Neither one of us had a job, because Mitt had enough of an investment from stock that we could sell off a little at a time. The stock came from Mitt’s father. When he took over American Motors, the stock was worth nothing. But he invested Mitt’s birthday money year to year—it wasn’t much, a few thousand, but he put it into American Motors because he believed in himself. Five years later, stock that had been $6 a share was $96 and Mitt cashed it so we could live and pay for education.
Now, George Romney was a wise man and a kind father. And he set his son up nicely so he could focus on his studies. It paid off very nicely, as Romney graduated at the top of his class at BYU. Maybe every father should set aside birthday money for their children and invest it in the hope that it will pay off 16 times over. That sounds like a plan!
It also sounds tone deaf.
What do you think?
Well, you have to understand, I was raised in a lovely subdivision in middle America. Probably not very much like Mitt’s neighborhood, though. When I went to college, I had saved as much as I could from working part time, driving a delivery truck since I the time I was sixteen. And though I had a job, I stayed at home during my college years; commuting and taking classes at night, and continuing to work while going to school full-time. Fortunately, though, my bedroom at my parents home had carpet so I didn’t have to paste together remnants and really rough it like Mitt and Ann. But I was happy, even though I didn’t have any stocks my daddy had given me since I was an infant. My father was a salesman, you see, and made only a standard, middle class income. He would have given me money, if I had asked, but somehow that didn’t seem appropriate if I could actually do it on my own. So, in the end, I paid for my college all by myself, with the exception of a loan from my parents for books one semester. But hey, at least I didn’t have to rough it in a basement apartment paid for by someone else and cash in stock to pay for my tuition every year.
Yep, sounds like Mitt would have a real deep understanding and empathy for a poor, midwestern sap such as myself. Hey, from the similar life experiences we have both had, we are practically soulmates.
And could you do that now without loans at the today’s tuition prices?
There is no way that I could do now what I did to pay for college. I left home and started working at 15 and was estranged from my parents (abusive home), so there is no way in hell I could or would have gotten money from them, even if they had it (they didn’t). Instead, I was in and out of school three times, working three part time jobs even when I was in school, and taking insane numbers of credits per quarter (25+) because it was cheaper that way.
In the end, I graduated in a total of nine quarters combined (a bit over two years, broken up while I worked full time in between), and got very little out of my college experience because I had almost no social life – I was working and studying (and occasionally sleeping) the whole time. But it was the only way I could have done it, and I couldn’t do it at all today without loans, which would have meant going through my parents, which wasn’t an option. And I doubt today’s 20-year-old would be able to find work as readily as I did, either. (Fortunately, I did well enough that I got my grad school paid for, which was a much better experience.)
Yeah, Romney knows just what kids like me face today. Right. Does he even have the vaguest clue of how privileged he was at every step of his life? Evidence thus far says: No.
Just doing a quick, back of the napkin calculation; at minimum wage you would need to work 3.7 times the number of hours today to pay for a credit hour of full time tuition at the same school as when I attended. That is strictly tuition. No other fees or books figured into that.
So with all due respect to Ms. Virginia Foxx, it would be impossible to do it today without that most dreaded of socialist evils, student financial assistance.
Unless, of course, you have some of daddy’s stock available or have parents who are otherwise flush with cash.
So that 20-25 hours a week I worked then translates into 74-92 hours a week today to achieve the same bang for the buck on tuition.
Sorry ass kids today……Like Mitt said, “”Hopefully get you a real good job that gets you real good pay,” to pay off that loan. The one, by the way, that he wants to eliminate completely. Or maybe you should, “…. shop around, and try to find the school that has the lowest possible tuition.”
That way, when it comes time to live under a Republican health care plan, you will have some experience at “shopping around for the cheapest alternative”.
Plus,especially in education, you get what you pay for. Strip down version of schools won’t get you the education you were looking for, even if you still get the diploma.
This is one area where I kinda sorta agree with libertarians? Iunno. The thing with those idiots is that they usually get the “cause” correct, but then their “root” cause is always government, and then their solution is just as bad as the status quo, if not worse.
The cause is twofold: the influx of student loans, and the transition of these loans so that they cannot be discharged in bankruptcy. The influx of student loans allows for virtually no price controls on the universities. They just keep jacking up rates, students keep on borrowing. Cause, you know, the free market will allow students to know that borrowing that much money for a degree that will give them a $40,000 salary is a bad idea. Except, it won’t. State governments know how to control prices a hell of a lot more than students, but the neoliberals just had to give students “skin in the game” (kinda like their dumb health savings accounts idea).
We need to get to the point of either controlling universities’ costs, or getting rid of student loans altogether. I’d prefer the latter (which would result in more state funding and allow for the price controls). I’m not sure if it’d be a good policy prescription, but on its face I’d like to restrict federal student loans to only public and state universities. No federal aid to private schools. It’s just a giant subsidy.
Speaking of which, Rick Scott’s budget cuts to colleges has hurt the University of Florida so much that they’re getting rid of their Computer Science Department. Of course, the University of Florida always has money for their football program, though. Which reminds me: NCAA? Fuck them.
Plus, BYU has kept its tuition a lot lower than other universities. Only around a 60% increase in tuition since 1970 when Mitt attended (assuming you take inflation into account, not a static dollar amount, and you’re LDS). Whereas, say, Virginia state colleges? From 1980 to 2005, 130% increase. So that doesn’t even account the increase in price from 2005 to present, or 1970-1980.
sustaining and may even be giving back to the school.
Most of the large powerhouse football programs are. At the University of Texas the football program makes enough money to cover its expenses, pay for the college sports that lose money, and give back to the general scholarship program of the school.
The pressure on other colleges to have such programs to compete in the NCAA does put pressure on their classroom. College sports are a plague.
http://video.pbs.org/video/1829352492/
I can’t speak for all colleges, but the reason tuition keeps going up at wife’s university has nothing to do with student loans and everything to do with trying to keep the doors open in the face of the state dropping it’s support for the university over and over and over again. They’ve gone from a state supported school to a state assisted school to a state aided school. Want tuition to stop going up? Get health care costs under control and the states to spend more on education than prisons again.
That’s just cost shifting. That doesn’t account for the rise in fees and tuition in pure numbers. Yes, drop in state support, which has cost shifted to students, who then can take out seemingly unlimited amounts of dollars to fund useless administrators, facilities, sports complexes, and other assorted goodies for “prestige.”
IOW: simply increasing state funding will lower costs to students and lower tuition, but it won’t stop the “pure dollar amount” from going up.
seabe: I think you’re getting cause and effect mixed up.
Tuition has gone up at state schools because of a drop in state support. But one result has been a change in the how the state schools set tuitions. It used to be that the priority was “make college education affordable to all HS graduates”, but that went out the door with the state support. Now, it’s just like the privates: whatever the market will bear.
Best way to think of state colleges is a higher ed “public option”, that competes to keep prices down.
The effect of all that tuition money coming in has been administrative bloat: since they’re all non-profits, and can’t pay dividends (and are restricted in how much they can sock away in an endowment), so admins suck up the excess. Now, those admins will do their best to keep costs from going down, but still, they’re an effect, not a cause.
The cause is restricted supply, large demand, and the death of a “public option”.
Why’d that go out the window just because the costs shifted from public dollars to private loans? That makes no sense. They’re still getting money. It’s still a cause; another cause on top of the drop in state support, but a cause nonetheless.
We don’t say that Medicare is going to bankrupt us as a program, we say that health care costs are going to bankrupt us period. So even if you returned more money through state funding, that does nothing if the universities themselves aren’t held responsible for bringing down the cost of instruction (which is the single largest driver of college costs).
Health care costs have affected university operating costs – that’s been a major one. expansion of administration and administration salaries
I agree with that, definitely. Plus it would relieve their Medicaid constraints and give more money to aid the universities.
When states provide ~40% of a university budget, they get a huge say in the the tuition rates, and the priorities behind those rates.
For example, commonly land-grant universities are mandated to admit all in-state HS graduates, and the state makes sure that cost are kept low so that those students can attend. I think those mandates are pretty much gone now, just like the UC system’s promises of “zero in-state tuition”.
When states provide ~5% of a university budget, they have much less influence on tuition, costs, and priorities. If the support drops further, the universities can “go private” and tell the states to GFYS. (which would feel really, really satisfying, I’m sure)
If you ask university admins why they take so much of the budget, they’ll roll out a litany of reasons why much, much more administration is needed today than in years past. Of course they would, that’s just justifying their job. Ask most faculty, and you’ll hear that ~50% of administration exists to impede actual work; ask students and the number will be closer to 100%. Maybe 110%.
I think we’re just talking past each other. See my post below.
At my wife’s university professors and other staff haven’t had a raise in years, and many have taken pay cuts of one kind or another. The cost of instruction hasn’t gone up all that much, the state support of education that used to subsidize student costs has gone down. It’s the lack of state subsidies for education that’s driving the vast majority of the tuition increases. If you want to keep the university open, you need to pay salaries for instructors and professors. It used to be that the state paid the majority of those costs out of general revenues, but over the last few years they’ve been actively cutting budgets. That means cutting staff and increasing class sizes as well as raising tuition and fees. That or shutting the doors. It’s not the availability of student loans that’s driving the process, it’s the refusal by our legislators to raise taxes ever for anything.
I never said it was the professors’ fault, or that they have been making out like bandits; I blamed the administrators and deans and upper management staff. And with expanded universities that do more “stuff,” that’s going to require more administration — a lot of it useless that provides no educational value.
And no, the cost of instruction is the reason for 25% of the increases:
Causes of faster-than-inflation increases in college tuition
But, you’re not wrong in your citation that the lowering of state support correlates with the increase in higher tuition to students. I never disagreed that it did — I disagreed that it’s why the costs in pure dollars have gone up (ie, an increase in taxes of $1,000 per student will not necessarily lower tuition by $1,000 per student):
Now, the best way to lower costs? Fund the damn colleges through the state — we’re both in agreement here. But on top of that we need to reduce dependency on loans, and implement cost controls on the universities themselves. Sports, increased administration, unneeded dormitory facilities (my college just refurbished an old, old dorm to make it into a college suite…the cost of living on campus is now more expensive than local apartments), and reduce their physical expansion (my college is in the process of trying to chop down oak trees that are hundreds of years old and quite rare…to build another fucking sports facility)
If you look into that report in detail, you find that “the cost of instruction” includes a lot of provosts, vice provosts, assistant vice provosts, deans, assistant deans, deanlets, etc.
Sorry, that counts as “administration” in my book.
Faculty salaries have risen at or below inflation rate. Faculty numbers have only increased where “full time” have been replaced by very low-paid “part time”. Health care costs have gone up, but a significant fraction of those costs have been passed on to the employees.
Still, I think that tuition inflation is a reaction to (minimally constrained) market forces, and that the admin bloat is mostly a result, not a cause. And the student loans just put off the day of reckoning.
This, exactly. Actual costs of instruction, not really going up. Things that get binned in as costs of instruction like ridiculous admin costs and health care for faculty driven by America’s insane health care system yes. Calling them costs of instruction just gives the right wing’s attacks on teachers and professors as overpaid extra ammunition.
I thought it was a headline from The Onion.
honest.
and the thing is, translate those dollars into today dollars and he’s talking about getting 53k from your parents.
unfuckingbelievable.
This is really another amazing gaffe from Mr. 1%.
Mitt’s plan for professional education: have well-to-do parents.
If that gaffe had been in front of a Liberal crowd questions would have been allowed and I’m betting the first one would have been to the crowd itself, “How many of you have parents would have $20,000 in this economy to loan to your kids?”
I can’t remember where I saw the article but there is also the issue that the large universities, CA comes to mind, treat their endowments to hedge fund management and don’t plow the money back into the system. I’m thinkin Taibbi needs to do a RS article on just how much of the tuition hike is due to, I’ll say it, financial mismanagement?
Oh, so that’s the plan:
Plan A: have rich parents
Plan B: have your parents buy stock for you, if the stock goes up, you’re set. If it doesn’t go up, don’t buy it.
All well and good, if you have a time machine.
Son: Hay Dad, can I borrow $150,000.00?
Dad: Sure. You want that in small bills?
Son: Yeah, I’ll just get a shopping bag to carry it to the registrar’s office.
Dad: Are you sure that this is the way that Mitt did it?
Revision for GHWB & GWB:
Dad: “What? On top of that million dollars I had to denote just to get you admitted?”
Education, or “Knowledge capitalism”, is now the key way of transmitting class privilege from one generation to the next. As well as inheriting wealth, you inherit an education which is the key to more wealth and allows income inequality to be passed off as a meritocracy
The other issue is competition. How are dumb/lazy kids of the privileged supposed to be able to compete with the smart/hard working kids of the lower income groups if college loans are there to even the playing field somewhat.
And how are doctors going to command astronomical salaries if everyone (with the ability) can afford to go to Med school? The key to value is scarcity. The value of privilege is undermined if state supports give those without privilege a shot at the best jobs.
Those who go on most about fair competition and choice are generally the same people who would deny it to others. Inequality of wealth and access to education is key to maintaining a class society, so no wonder RMoney wants to perpetuate it.
classic speech, up there with demon sheep. the student in back of him who has nodded off in the borrow $ from parents clip begins to nod off as soon as Meh starts droning on about cost of office supplies.
http://2012.talkingpointsmemo.com/2012/04/college-students-not-exactly-fired-up-for-mitt-romney.php?
ref=fpa
Obama: I Love you and want to keep down your interest payments on your loans
RMoney: I’m so smart I can save you money on your office supplies
hmmm – who will I vote for?
zzzzzzzzz
I view that quote as a very “country club” talk, where selling shares from your trust fund so you can pay everyday living expenses. What this reminds me of, is that HW never gave W a dime to start his dry hole oil business.
Not to be an ass about it, but isn’t there such a thing as the GI BILL??? I went to school for 3 years based on my service.
I’m certainly for keeping the the loan programs, but I’m also for the GI Bill and think that should be an option for anyone who can get into the service … which is, admittedly, not all.