Very pertinent recent viewpoints of Gary Becker and Richard Posner on the issue of whether the debt of students to finance their college education is too high, as the new Congress claims (they also blogged about these issues – focusing at that time on commercial vs. government subsidized student loans- about a year ago, see Becker’s and respectively Posner’s comment from then, as well as their replies to comments following those posts: Becker, Posner). David Card is is also in agreement with their answer (read the “Return to education” part from Card’s interview; he also tackles in that interview many other very interesting things, inter alia tax rates and labour supply and increases in mimum wage). I thought for a long time that the US system where most people can borrow to go to college (as the old posts of Becker and Posner point out, another immediate issue here is how those loans are funded) and thus the opportunity to go to college is largely provided to anyone (although much more is needed to ensure this also for the most disadvantaged social categories- and much more so in terms of schooling at young ages, which is a different discussion but equally, if not even more, important) is an excellent one and if one (eg. any other country not having implemented such a system, including my own) wishes to copy anything from the US, this should be (should have been) really the first thing on the list. In his recent post mentioned above, Becker also discusses a very interesting alternative where there would be a full income-contingent loan program in place of the current system which currently operates mostly as a fixed interest rate system (apparently this rate is 7%; I didn’t know this until now).
PS. I’ve also discovered the website of Pablo Pena a (Becker talks in his post about Pablo’s research on tuition fee raises at private colleges), a PhD student from Chicago (on the job market this year) whom I met in Boston at a conference earlier this year. Now this guy really knows how to market himself! Pablo, chapeau!
