Federal student loans aren't loans any more, writes Rick Hess of the American Enterprise Institute. President Joe Biden is "establishing a massive government subsidy to the affluent, the nation’s college-goers, and the higher education cartel."
Most college borrowers won't repay their loans, especially those who studied not very lucrative fields, write Michael Brickman and Robert Eitel on RealClearPolicy. SAVE will cost taxpayers "up to $559 billion over 10 years, meaning that it will surpass the size of the mass loan cancellation program nixed by the Supreme Court earlier this year."
Borrowers will pay only 5 percent of income above 225 percent of the federal poverty level under SAVE. Many middle-class college graduates will pay little or nothing.
"The forgiveness triggered by low earnings will provide the greatest reward to the academic programs with the very worst outcomes, highest prices, and least alignment with workforce needs," Brickman and Eitel write. Since students can borrow to cover their living expenses, SAVE will "create a new road to de facto welfare assistance."
SAVE also will end accountability for programs with high default rates, they write. The very, very generous loan forgiveness terms will make default "nearly impossible."
Needy Californians could make $16 an hour for taking community college classes under the state-funded Hire UP pilot program. Former prisoners and foster youth are the top priority, followed by parents on welfare.
Low-income students already pay no tuition, but many work half- or full-time to cover their living expenses. The goal is to make it possible for them to work less, take more classes and earn a useful certificate or degree.
Steven Cesario is taking a full-time load at Santa Rosa Junior College while working 50 hours a week at a local deli. The Hire Up money will let him cut his work hours and get closer to a psychology or social work degree. A formerly incarcerated addict, he hopes to become a sobriety counselor.
Leah Richardson, also a former inmate and recovering addict, will receive nearly $2,000 a month for spending 30 hours a week on community college classes, reports Adam Echelman in Cal Matters. Like Cesario, she hopes to cut her work hours at Safeway and at bakeries to attend college full time.
I'm not sure community college classes will increase their earnings: I'd bet counseling addicts doesn't require a degree and pays no more than $16 an hour. But it's pilot with plans to follow Hire Up participants for five years, so we'll see if the program boosts their upward mobility.