Hmmm.... a good way to picture it is.... with the exception of Sweden- every developed country with “tuition free” education has MUCH higher tax rates than a country like the USA- so “college debt” from the perspective of such a country could be thought of as.... “You can choose to take a HUGE life long tax savings if you decide to not get a 4 year degree from a higher learning institute.” If you decide to go to school- you pay.... less over a lifetime than you likely would if you were being taxed at a higher rate. Basically- people who don’t decide to go to school don’t pay for other people to go to school- and people who decide to pay for themselves if they can’t qualify for government aid or a merit based free education.
It works pretty well but isn’t perfect. A contributing factor to this system- is unlike almost all other world leaders in education- then united states tends to have much higher rates of college attendance. The UK for instance only has about 2.2 million students in colleges a year vs. the US with 17.5 million students it would have to pay for IF rates didn’t increase with “free” college. When we look at Sweden- things get worse. The “average” debt per student graduating the “free” school system there is $19,000. Better than the average of $24,000 in the US “paid” system but not by much considering its “free.” But... while about 50% of US graduates carry debt- 85% of Swedish students do! Wow. What’s worse is that the debt to income ratio is higher for graduating Swedish students who don’t go abroad.
In fact- you should probably get accustomed to the term “college debt.” Sweden with its “free schools” has it- the UK doesn’t have “free college” at all- it just defers the fees to students until after graduation, and increasingly the trend across Europe is to pass costs of education on to students with cases in Germany recently allocating more costs to students as well as other countries. So- “student debt” is this thing that tends to exist in globally competitive educational systems serving large numbers of students and having lower private tax rates. If you do t live in such a country these things might make less sense.
Comments