There is also the fact that many students who start a four year degree end up never graduating. At the college I teach at it is clear that we are marketing to students who should not be going to college and shouldn't realistically expect to get a degree. But we need the money due to lack of state support and as a result standards for passing have gone down. What we have now is a system that has the incentives in the wrong place and this will have bad societal consequences years from now.
Like almost everyone else who comments on this topic I have ideas on how to make things better and like almost everyone else those ideas are largely naive.
Moreover, American cost of living is the same in Sweden as in the US (the GDP per capita in nominal dollars is identical to the figure in purchasing-power-adjusted dollars). You may need a car, but housing is cheaper in most of the country.
As to healthcare, making comparisons is difficult. 2/3 of college graduates have employer subsidized healthcare. For those people, you need to look at the median employee premium portion, which is $2,200/year. (There are also out-of-pocket costs, mostly for drugs, but the US figure of about $1,000 is not much different than the Swedish figure of $800 on that front).
The employee premium paid by the typical college graduate is much less than the extra taxes that same person would pay in Sweden. The median college graduate earns $51,000 in the US to start. The median employee premium of $2,200 is 4.4% of that. The tax differential is almost certainly higher than that. (In Sweden, all of that is taxed at 30% county tax, no federal. In the US, the first $12,000 is tax free, and the rest is taxed at 10-12% federal, plus maybe 4-5% state and local, plus 7.65% FICA).
The cost of living is important as this and income level determines the affordability of debt. Just comparing income level and debt level between the two countries is not a deep enough analysis in order to determine if your proposed fix would work.
You are also ignoring the fact that a large number of people who go to college never graduate. These people are completely absent from your analysis of the problem. You are focusing only on the set of college graduates of both countries. I suspect that the rate of college completion for those who enroll at least one semester is much higher in Sweden than in the U.S.
According to your post 1/3 of U.S. college graduates don't have employer subsidized healthcare. This is a huge percentage and you are ignoring them in your analysis of relative debt burden.
Taxes are higher as a percent in Sweden than in the U.S. but in the U.S. at a moment's notice you can get screwed financially really bad in ways that you can't in Sweden. An ambulance ride in the U.S. costs much more than in Sweden and yearly out of pocket expenses for healthcare is much higher. The necessity of a car causes most people in the U.S. to have auto loans and unplanned maintenance costs can send people over the financial precipice.
I suggest that merely looking at the numbers you have does not give a clear picture of the relative situation in both countries.
And european governments have plenty of bs job creation engines like roadwork, too.
Would be nice to have some data. One related observation, that seems less surprising the longer I live here, is that europe has no spacex, google, tesla, nasa, coherent mars rovers, the list goes on... if you give people stuff, they're mostly just afraid someone's going to take it away. But yeah, to echo someone else's comment, I'd rather be poor, or even average, in Europe. I guess being super wealthy here wouldn't be that bad either, since nobody's nipping at your heels.
The European Space Agency, Airbus, a huge number of car manufacturer, ... It's not surprising that the #1 economy in the world has more big company than the #3 one (when they decide to group). A lot can be said also about the American culture and politics when it comes to entrepreneurship. But presenting Europe like its devoid of any important industry is also outright false :) .
Do you really think that there isn't economic value in roadworks?
These lists are meaningless. I can do the same thing and get smug about Intel, TSMC and Samsung buying EUV equipment from Europe.
Cars are required in most rural areas in the US because there is no other way around.
It seems like almost all 4yr colleges do this to some extent nowadays. Freshman lecture halls with 500+ students and one adjunct faculty ratio are a money maker. Capstone classes with 40 students and one tenured professor are a money loser. You'd have to hire really bad bean counters to miss the obvious way to exploit that situation for monetary gain.
Many things can go wrong with interpreting such statistics, see also my comment here: https://news.ycombinator.com/item?id=21760725
Afaik, some of the best (and also most expensive) medical procedures are only available in the US.
These are both components to saying that the health care system is more expensive in the US.
> a rich country could spend more money on health care and still have worse average health than poorer countries
Yes. I think that multiple people on this thread would argue that this is the case with the US.
> many health outcomes may also depend on wealth - for example over-consumption leading to obesity, which might affect health more than spending on health care can compensate.
This implies that differences in social services and urban design have an impact on healthcare spending. This is relevant to /u/sykick's statements "the cost of healthcare, housing, food, and transportation should be taken into account." and "I'd rather be poor in Sweden than in the U.S."
These are both components to saying that the health care system is more expensive in the US."
Sorry, but that doesn't make sense. If the service is better, the higher price is justified. Presumably you can always choose to not use the better technology to save money.
"This implies that differences in social services and urban design have an impact on healthcare spending."
How does it imply that? More social services would stop people from overeating? Do you have a citation for that?
In the USA, you pay taxes for healthcare, but only the old and the poor receive that tax funded healthcare. So the average taxpayer has to buy their own health insurance in addition.
The linked chart also shows a clear correlation with Purchasing Power Parity, which also should be accounted for.
Also government employees, and those under the care of the VA.
> Purchasing Power Parity, which also should be accounted for.
Yes, I agree.
To illustrate with a simplified example:
Imagine nation A has median wage of $20k and nation B has median wage of $40k. Also imagine that their income distribution is the same. Then, if healthcare costs in nation B are twice as high, healthcare is equally as affordable.
How the money is collected is pretty irrelevant (indirectly via taxes or directly by the insurance company or physician). What matters is the overall cost.
It could be that richer countries simply have more money to spend on health care, so why wouldn't they spend it.
On the other hand many health outcomes may also depend on wealth - for example over-consumption leading to obesity, which might affect health more than spending on health care can compensate.
In that example, a rich country could spend more money on health care and still have worse average health than poorer countries.
Not saying that is exactly what is going on, just that it makes sense to be careful with judging.
Another question perhaps is who pays taxes - another source I found said 2/3rds of voters in Sweden get their money from the state, either because they are government employees or recipients of welfare.
So an average tax rate might also be misleading, if many don't pay taxes at all.
I would suggest the federal government get out of educational loans entirely. Let the private loan market evaluate and take the risks, probably with an income based repayment contract that favored degrees/programs that are likely to lead to reasonable incomes.
This article says 90% of student loans are from the gov't, so it appears it currently does exactly what you're suggesting. https://www.nationalreview.com/2017/02/student-loans-governm...
I'd rather have non of my tax dollars allocated that way, but if I don't have a choice then there should be some attempt to invest in people and skills that produce self-sufficient citizens.
Despite the fact that be more likely to help than hurt my family, I think it’s undesirable societal policy.
Or we could just socialize college and abolish the distinction between "elite" and "not elite".
Lenders have no reason not to give out these loans as they will be repaid even if it is sub-prime.
Schools have no reason not to jack up rates because students are given largely unlimited access to loans.
Both parties have been repeating this and raising their incomes for decades ever since student loans have become non-dischargeable.
Instead of ranking loans based on repayability, lenders have divorced themselves from financial reality because government intervention.
People have been saying this for many, many years! And using as an example of the Law of Unintended Consequences.
To keep interest rates on student loans low and to make sure the loans are available to 18 year olds with no credit history.
There was a real problem with medical students racking up huge sums, declaring bankruptcy when they were making low money during residency, but then making 6 figure salaries a few years later.
>It seems like student loans should be treated like any other unsecured loan.
Nobody loans 18-22 tens of thousands (and 22-26 years olds hundreds of thousands of dollars) in unsecured loans.
And look at the interest rates for other unsecured loans. My credit card rate is 19%. Earnest gave me LIBOR + 3% on 200,000 dollars of student loans.
My loan rates are 6.55%. After 10 years of continuous school, that really, really adds up. I even had scholarships but they wouldn't cover my dorm, the mandatory meal plan, or summer classes so that I could finish undergrad faster. I looked to refinance with 3-4 different companies, like SoFi, but the lowest they offered was around 7% despite my very good credit score.
and without an income
Not addressed to you, personally.
Lots of options here.
It was in 1976, not very recent.
The person to whom you are replying is referring to the poorly-named Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. That law expanded the exemption from discharge in bankruptcy of student loans to be any student loan, including privately-issued student loans, not just ones issued by the government through a federal or state program.
This is why you see companies like SoFi running around offering screamingly low rates on student loans. Because they are private, those companies need not offer any of the protections a government loan offers (income-based repayment, forbearance options in the event of loss of income or disability, and so on) but retain the power to garnish tax refunds and the loans cannot be discharged in bankruptcy.
Edit: forgot to say non-dischargable goes back way before that switch. I have personal experience around 2001, but I'm pretty sure it goes back to the 80's.
Set aside the education component entirely. It costs money to be housed, fed, entertained, and consume other things. That’s getting paid for somehow and that somehow is often borrowing for undergrads.
I believe it was something along the lines of people borrowing for law degrees then discharging the debt right after graduation with the knowledge gained from their new degree. I'm sure it was done in other degrees as well.
Average BA holders in the US graduate with $28,000 in debt, versus $21,000 in Sweden. The Swedish system is basically like our income-based-repayment, which we have had since the 1980s. Except, as you’d expect with Sweden, there is less paperwork and fewer gotchas. Simply tweaking the PAY-E system Obama created, to add automatic enrollment and automatic annual income verification based on tax returns, would get us a system that has proven workable in Europe. All without trillion dollar loan forgiveness or radical changes. (And with, in my opinion, a fairer system of redistribution, where those who needed loans and got high paying jobs subsidizing those who needed loans but didn’t get high paying jobs.)
(And simply tweaking ACA would get us pretty close to the Dutch model of health insurance. But that doesn’t get headlines.)