This is a long comment, but the summary is that this article tries to talk about externalities, but doesn't look at a big enough picture.

Like complete lack of economic regulation (markets cannot accurately price all externalities), or universal basic income, the article makes good points about the market distortions introduced by this policy. It offers a concrete example of the cost of a graduate student at Columbia University[1].

The article asserts that most of the cost of student loans is actually to cover living expenses. For the Columbia graduate student, the article estimates about $30k annually, which agrees with Columbia’s estimate. Using their estimates at the link [1], I computed the annual cost of non-tuition elements, including rent, as $37,522. Columbia estimates rent at $23k, with other living expenses pegged at $7k. Fees account for roughly 20% of non-tuition. The tuition is about $52k annually for a doctoral program and is more expensive for Master’s students.

All of which is to say: this article's example doesn't understand true student costs. To bring the cost of attendance down, often universities with large endowments (like Columbia’s $14.35 billion) will privately subsidize tuition for some students, sometimes by half or more. Let’s say half for the typical student. This doesn’t change fees or COL. So now annual rent is on-par with tuition. So then the student is on the hook for "only" $60k per year, or $300k over the course of 5 years (remember, doctoral program). If the student is good, then the university will pay a stipend of $40k annually, bringing the shortfall to a more reasonable $20k per year. But you cannot have another job if you accept the stipend. So $20k in loans per year, or $100k once they graduate. Compared to the average US mortgage of $460k in 2022, it's the size of a home downpayment.

For this lucky student, the article computes the government's additional cost to support this student as twice to house someone on Section 8. Most US students will not attend a private selective institution with a large endowment, but the sticker price is still very high, sometimes comparable to Yale or Columbia [2]. This is because the price is a signal for value. The actual price that a student, whether mechanical engineer or not, will pay for college is NOT what it says on the tin. The article is correct in that it can be abused since it is technically forcing the government to pay for loans after a certain amount of time for those students who haven't found a well-paying job.

So this legislation that the article complains about is a possible way out of this mess, at least in the short term. This is indeed more generous than the state money that it is replacing (since most students are educated by public universities).

I think the real question is whether we want to encumber long-term those who didn't figure out a way to use their degree to earn a lot of money, and whether money is the right way to measure their contribution to society. Entertainers (including athletes) will typically earn much less over their lives than a ML researcher, but well, they're more fun to observe for a lot of people. Most US teachers and professors will struggle to earn enough money that they aren't subsidized by this program, but hopefully the pandemic has taught people about their value.

You could argue that this is really a public-works program because isn't it better that people follow their passions instead of maximizing their individual profit? Specifically, isn't the drama major more likely to substantially contribute to the public sphere instead of a quant? Not saying quants don't help, but public money should help the public sphere. And for those who might quibble about where their taxes go: I sure am glad that I live in a country that other global would-be superpowers think very carefully about attacking (the majority of the US annual budget is military). Not a perfect place by a long shot, but my taxes definitely go to the public good, if not always efficiently.

[1] https://www.gsas.columbia.edu/content/cost-attendance
[2] https://www.nytimes.com/2022/09/14/podcasts/the-daily/colleg...