Government subsidies to higher education have recently become a hot button political issue. But what if the federal government doesn’t actually subsidize higher education, but rather, taxes it? This article gauges efficient investment levels based on marginal rates of return relative to other investments. Labor economists struggle to explain why the rates of return to higher education have remained much higher than the rates of return to other investments. This article proposes a novel explanation: distortionary taxation. Economic theory suggests that when investments that are substitutes for one another are taxed inconsistently, investors are less likely to choose the investment option that is taxed more heavily. Unfavorable tax treatment of higher education relative to other forms of investment could create an undersupply of educated labor. This distortion would increase pretax returns to education and reduce economic growth and social welfare.Part I of this article reviews empirical evidence linking higher education to increased earnings and economic growth, and considers student responsiveness to financial incentives. Part II explains why the unusually high rates of return to higher education may indicate underinvestment. Part III presents a mathematical model illustrating the link between tax rates and rates of return. Part IV reviews optimal tax theory and the distortion problem. Part V contrasts taxation of favored investments with taxation of higher education. Part VI considers policy implications.

https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=5909&context=uclrev

The Knowledge Tax

https://law.bepress.com/cgi/viewcontent.cgi?article=1388&context=usclwps-lss

Are Law Degrees as Valuable to Minorities

Neoliberal structural shifts, both nationally and globally, are seen in all aspects of human life. Nothing is more drastic than the impact of the neoliberal shift on the place, role, position and structure of higher education in American culture and social structure. Dominant discourses have changed from characterizing education as a public good to viewing education as an individual private investment. Under current federal and state educational policies, students are required to pay a high price for their higher educations in tuition and in the repayment of interest bearing loans. The result is that many low- and middle-income students are either prevented from attending college, or they are required to assume an enormous debt load, equivalent to a thirty-year home mortgage, to obtain a university education.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2404913_code1599777.pdf?abstractid=2404913&mirid=1

Mortgaging human potential: student indebtedness and the practices of the neoliberal state

The cost of higher education continues to rise, forcing many students to seek financial support to pursue their education. Many countries have utilized national systems of student aid to help mitigate the increasing costs. However, these financial aid systems often lead to significant student debt. Guided by restrained choice theory, this study analyzes innovative institution-level policies in the United States called Loan Repayment Assistance Programs (LRAPs), and provides insight into how these policies affect traditionally disadvantaged students’ choice to enroll in a university. Findings suggest that disadvantaged students, specifically first-generation students, are more cognizant and have a better understanding of innovative financial policies (e.g., LRAPs), and the use of such programs could increase student choice and retention, based on their subsequent enrollment satisfaction.

/pdf/student-choice-and-social-mobility-through-institutional-1z1r3nnjmp.pdf

Student Choice and Social Mobility through Institutional Policy: An examination of Loan Repayment Assistance Programs

.................................................................................................................. xiii Chapter 1: Introduction .................................................................................................... 1 Background .................................................................................................................. 1 Statement of the Problem ............................................................................................ 3 Statement of the Purpose ............................................................................................ 4 Research Questions .................................................................................................... 5 Significance of Study ................................................................................................... 6 Key Definitions ............................................................................................................. 9 Assumptions .............................................................................................................. 12 Limitations of the Study .............................................................................................. 12 Summary ................................................................................................................... 13 Chapter 2: Literature Review ......................................................................................... 14 Introduction ................................................................................................................ 14 Historical Background ................................................................................................ 14 Theoretical Framework .............................................................................................. 15 Impact of the Great Recession of 2007–2009 ............................................................ 21 Reasons for Educational Debt ................................................................................... 31 Life After Debt ............................................................................................................ 38 Leadership Considerations ........................................................................................ 40 Conclusion ................................................................................................................. 54 Chapter 3: Methodology and Procedures ...................................................................... 56 Introduction ................................................................................................................ 56

https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1671&context=etd

Student Loan Debt Implications for Hispanic Students Who Have Graduated from College.

For decades, law school administrators, faculty members, students and graduates have worried about the problem of the ever-increasing cost of attendance at the nation’s law schools, and the rapidly rising average debt of graduating law students. The problem was particularly acute for students who desired careers in public service, because starting salaries in the government and non-profit sectors failed to keep pace with the increase in educational debt of law school graduates. In response, many law schools created loan repayment assistance programs (LRAPs), through which they subsidized loan repayment for some or all of their graduates who undertook public service jobs or careers. Most of these programs are insufficiently funded to meet the needs of their graduates who desire to use them, and demand for financial assistance for lower-income graduates has particularly accelerated as the recession that began in 2008 caused private sector firms to reduce their hiring, prompting more student interest in public sector employment. In addition, many law schools had no LRAP programs at all. Fortunately, Congress has significantly alleviated this problem, passing four laws between 2005 and 2010 that collectively reduce the debt repayment burdens on graduates, particularly (though not exclusively) those in public service. The new legislation also makes it possible for law schools to create or restructure LRAP programs in a way that provides a great deal of debt relief to graduates in public service at the lowest possible cost to the law school. As of this writing (in the summer of 2010), at least seven law schools - the University of California at Berkeley, Georgetown, UCLA, Duke, Northwestern, Virginia, and Suffolk - have altered their LRAP programs to take maximum advantage of the federal legislation, and several others are currently considering modifications. This article, together with an associated web-based calculator, provides guidance for law school administrators and faculty members who desire to coordinate law school LRAP benefits with those provided by federal law, and for law students and alumni who might want to suggest LRAP improvements to their schools.

Coordinating Loan Repayment Assistance Programs with New Federal Legislation

For decades, law school administrators, faculty members, students and graduates have worried about the problem of the ever-increasing cost of attendance at the nation’s law schools, along with the rapidly rising average debt of graduating law students. The problem was particularly acute for students who desired careers in public service, because starting salaries in the government and non-profit sectors failed to keep pace with the increase in educational debt. In response, many law schools created loan repayment assistance programs (LRAPs), through which they subsidized loan repayment for some or all of their graduates who undertook public service jobs or careers. Most of these programs are insufficiently funded to meet the needs of the graduates who desire to use them. Moreover, demand for financial assistance for lower-income graduates has accelerated as the recession that began in 2008 caused private sector firms to reduce their hiring, prompting more student interest in public sector employment. In addition, many law schools had no LRAP programs at all. Fortunately, Congress has significantly alleviated this problem, passing four laws between 2005 and 2010 that collectively reduce the debt repayment burdens on graduates, particularly (though not exclusively) those in public service. The new legislation also makes it possible for law schools to create or restructure LRAP programs in a way that provides significant debt relief to graduates in public service at the lowest possible cost to the law school. As of this writing (January, 2011), seven law schools—UC Berkeley, Georgetown,

/pdf/coordinating-loan-repayment-assistance-programs-with-new-4f4k3z0lhu.pdf

Charles W. Pruett

Papers

Coordinating Loan Repayment Assistance Programs with New Federal Legislation

Coordinating Loan Repayment Assistance Programs with New Federal Legislation