This is the Cato Daily Podcast for Wednesday, May 29th, 2019.

I'm Caleb Brown.

The high cost of college and the debt that students take on in order to pay for it

may yet prove to be an important election issue.

Cato's Diego Zulawaga has taken a look at two plans aimed at reducing college costs

offered by presidential candidates and US Senators Elizabeth Warren and Bernie Sanders.

When you take out higher education, typically you do it as an investment to gain skills that

will increase your future income and will enable you to have access to jobs that otherwise

you wouldn't which are more remunerative in general than non-college degree requiring jobs.

And in fact if you look at the income premium that is the

extra income that you earn when you have a college degree that stayed pretty

constant or even increased in the last 25, 30 years.

So for a lot of people, I think it still makes sense to obtain higher education.

The question is, do they have the information and the market signals to make the right decision when it comes to deciding which

degree to take, how much money to borrow for their degree and how long to stay in higher education. And I think that's where the signals get confused

mostly because of government intervention. A lot of Americans aren't aware of the

fact that more than 90% of outstanding student loan burdens are related to the federal government.

And so it's basically a government-run program of financial aid.

And therefore it shouldn't come as a surprise that it's been since that

takeover in 2008- 2009 that most of the outstanding loan liabilities have accrued so

about half of the one and a half trillion dollars outstanding in student loans has been accrued since 2009.

This is not a long standing problem as is often described, but rather it's something that has been driven both by the government takeover as

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