{"id":3502,"date":"2022-10-12T16:45:23","date_gmt":"2022-10-12T16:45:23","guid":{"rendered":"https:\/\/www.rubinwealthadvisors.com\/rubinreport\/?p=3502"},"modified":"2024-11-26T14:51:28","modified_gmt":"2024-11-26T14:51:28","slug":"biden-student-loan-forgiveness","status":"publish","type":"post","link":"https:\/\/www.rubinwealthadvisors.com\/rubinreport\/biden-student-loan-forgiveness\/","title":{"rendered":"Biden Student Loan Forgiveness: Pay More-Get Less"},"content":{"rendered":"\t\t
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Considering the importance of the Biden student loan forgiveness, a multi-part article is warranted.<\/p>

Part two of a three-part series on Joe Biden’s announcement that he intends to cancel up to $519 billion in student loan debt. In part one<\/a>, I focused on the economics of the idea.\u00a0<\/p>

In this piece, I will focus on subsidizing higher education and whether or not that is a good decision for the country and the student.<\/p>

Unlike so many others, a fundamental principle of economics that is uncontested is that when you tax something, you will receive less of it. When you subsidize something, you will receive more of it. As a result of the “game of loans” played over the past few decades, more students are attending university than ever before.<\/p>

Does College Guarantee More Pay?<\/p>

Here at Rubin Wealth Advisors,<\/a> we found some interesting statistics. As of the spring of 2022, approximately 16 million students are enrolled in college. Just over 60% of American high school students enroll in college immediately after their graduation. The graduation rate (students who obtain a four-year degree within six years of enrolling) is just over 60%.<\/p>

Not enough time is spent considering that 60% number. There is virtually no activity that people regularly undertake where a forty-percent failure rate is deemed acceptable. Why do Americans accept this kind of failure rate on something that A) involves their beloved children and B) costs significant amounts of money? Parents have been taught to mistreat their children unless they enroll them in the most prestigious (read, most expensive) colleges available.<\/p>

According to predictors of success, college graduates are more likely than their non-college-educated counterparts to be employed and earn more money. Data from 2019 shows that college graduates had an 87% employment rate compared to a 70% rate for non-college-educated competitors.\u00a0<\/a><\/p>

The average earnings for a college graduate between the ages of 22-27 are $44 thousand per year as opposed to only $30 thousand per year for a high school graduate in the same age range. Those numbers alone should justify the need and the benefit of attending university, correct?<\/p>

This is where we get into trouble citing statistics. We must ask the following questions if we accept the above numbers as accurate (it is difficult to collect such data, but most sources provide similar numbers).<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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