From a European perspective I can only shake my head at this.
It doesn't seem like a good idea at all to indebt a significant part of the young population (which I presume creates a lot of avoidable stress) while the rich gain in wealth and power year after year. But I guess longer-term thinking has been thrown overboard in economic decision/policy making anyway, because that would make the numbers not grow fast enough.
Recently I'm under the impression that American society has been tearing itself apart more than is healthy, damaging social cohesion to a great deal. Good luck building an advanced society on distrust and inequality though...
American here who just went through this process. I returned to finish my undergrad at one of the most expensive schools, in one of the most expensive cities.
I think as others said, many students aren’t doing the ROI calculations.
For me, the government loans are 3.75% which is totally reasonable IMO. One could easily outpace this with an ETF fund.
The private loans are more expensive at 6% and up but the lower end is still totally reasonable.
The real issue is that people taking these loans lack the financial skills to pay them back. A friend who is out of school for 10 years has a near six figure loan debt that he refuses to pay down despite earning six figures. Learning to budget and live frugally is a required skill to escape the debt that many don’t have.
I also know very few that have visited financial aid to get a second look at their scholarships / grants. I went every semester and walked out with something. A friend walked out with $14k extra in financial aid from one meeting. Those in the worst positions financially also get vastly more aid. I had some savings going in but still paid a fraction of the tuition sticker price.
In all, the experience worked out well in my favor with a paid research position and other breaks along the way, but given any other situation I would recommend going the state school route which is often a tenth of the cost.
Don’t mean to sound defensive (I’m not American), and I mostly agree with you.
But, from a non-European perspective, Europe doesn’t seem to be doing well? It seems the EU is slowly disintegrating, and the monetary union isn’t working. Also the political landscape seems to be in turmoil as well.
To be fair, there are plenty of state universities in the US that are considerably cheaper than private schools. Students entering college are generally making two bad decisions:
1. Selecting a very expensive, non-prestigious private school.
2. Selecting a major that has no ROI for the cost of tuition.
To give concrete examples:
Option 1.
4 years at U of Texas at Austin.
Tuition = $40k.
Option 2.
2 Years at Tarrant County College.
2 years at U of Texas at Austin.
Tuition = $24k.
Option 3.
4 years at Southern Methodist University.
Tuition = $250k.
So a student could spend $24k versus $250k, and I would imagine most would consider the UT Austin degree more valuable, as well, though these two schools are ranked similarly for undergraduate.
And, while I would support further taxes to support state schools, I have no desire to support students who are personally selecting to attend a school that will cost 10x just because they want to. And I have no desire to forgive their loans, either.
Education is important. Access to education is important. But our current system of giving out student loans with no regard to if the student will ever have a realistic ability to repay borders on predatory.
If we can't do anything to solve that portion of the problem, we should at least restrict the mandatory fees that are tacked on for non instructional purposes. No student should have to pay for decades to prop up with school's sports ambitions. For every Alabama that makes a profit off of sports, there are dozens of Georgia States that impose ridiculous mandatory fees on students to balance the budget of the athletics department.
Athletics are easy to pick on because they're the most visible but most schools have a whole list of these non instructional fees that students must pay, in most cases, go into debt to pay or be denied access to education.
After removing the mandatory fees, also limit how much of the tuition can be used for non instructional purposes. Every institution has overhead that must exist to keep things operational but there must be a limit to how much or we're once again either denying access to education or condemning students to an overwhelming debt burden.
Instruction of course isn't the only mission of most universities. Research is important. Extension is important. There are many worthwhile activities universities engage in that should continue but not at the expense of access to instruction.
People have been fine with Medicade/Medicare spelling out costs for services and such they should be willing to accept the same in higher education to obtain a Federally backed loan.
Schools will trip over themselves to offer degree programs to meet Federal Assistance requirements. Each degree, each course credit leading to that degree, should all be subject to review on a periodic basis to insure that the needs of the country as a whole are being supported. Colleges which fall outside the loan guarantees will obviously find methods to insure students can attend, by steering endowment funds and sponsorships.
Education is important, but I sometimes wonder if there is a whole lot of correlation does not equal causation going on here. What I mean is, statistics say those with a four year or higher degree earn more than those without. A correlation. But you might say that those who are predisposed with the aptitude for higher earning power are more likely to pursue a higher degree in the first place.
It's this thought, that makes me wonder if government backed higher education is worth the money. I'm inclined to support government backed higher education, but I do think this is an important question to ask when determining specific policy. I'd think we'd only want to pay for STEM degrees where students were able to maintain a certain GPA.
With that said, yes, the system is predatory. It's disgusting the amount of interest I paid for ten years to these loan sharks.
I can observe a dillution of education systems. It used to be stricter with clear benefits for every party:
Students that got in would go through a dense cursur and be viewed as higher intellect for the work market. With years (at least in France) there was a desire to make everybody get a higher education degree, but often by relaxing barriers of entry. You get more students but less good ones, the market is saturated by mild masters degree, not enough jobs, they trickle down (sic) and cause degree inflation (post office summer positions required 2-3 years diplomas, not rare to see a 5y college student working there).
At the same time what used to be a simple way to absorb people's need for a job is a bit comatose, simpler hands on jobs (which value was seen as less at the era of Master's degree or nothing) were nice to let people find a salary without much hassle.
I remember a tv host saying he went to Paris without anything and got a job by almost knocking at the first door he saw..
> .. current system of giving out student loans with no regard to if the student will ever have a realistic ability to repay borders on predatory.
This morning my university sent me an email about a `Summer Funds & FAFSA Workshop` to `receive guided 2019-2020 FAFSA filing help.` In their words: `an open lab session to help you complete the FAFSA .`
Schools seem of the opinion that the money is already theirs; If they could file it without the students they would.
Just because it's systemic doesn't it's not predatory. With admins focused on the money and teachers focused on research, how are universities any more than glorified testing centers?
There is so much waste in universities: bloated admin/it staff
, libraries filled with journals/magazines that no one reads, tenure system that doesn't allow you to downsize departments that have no students. Tuition can be reduced, however there is no incentive to do it since students can easily get loans.
Let it burn down. No one should pay back their student loan debt. Seriously, just stop. This is a scheme in which they've fucked over a large portion of the population with the skyrocketing prices of education. Further, this education is the regularly accepted means of increasing your production. Society says you have to do this, and then continuously increases the price, without reason.
The gist of this is; some shithead, many years ago decided to increase his bottom lines by fucking with future generations and our ability to output... when they started this whole fucking problem, and you know what? Let it burn to the ground.
You know who's not gonna lose a bunch of money? The people in student debt, we already fucking have.
This would be beautiful to see. Considering the scope of the population affected, there would be little to no recourse if everybody collectively decided to stop paying at the same time.
If you trash every millennials credit score, the scores would become worthless.
That would be the end of poor people going to college in this country, at least under the current legislative regime. The only reason anyone loans money to poor people to go to college right now is because they know the recipients can't get out from under the loans. A no-collateral loan to someone with few assets or prospects just wouldn't happen if that provision in the law didn't exist. Or the interest rate would be enormous. But if the interest rate were high then defaults would be high. So you'd probably have some sort of death spiral. No, I doubt such lending would happen any more.
Now, the legislative regime could change. But it would have to change quite a bit to get significant increases in funding for college. Or maybe it's better if poor people just don't go to college? That's questionable at best.
I think this problem is a lot harder than people on this thread are making it out to be. Making student loan debt bankruptcy proof is within the Overton window in this country. I guess not making it bankruptcy-proof with no other changes is also within that window. Free or reduced price college tuition for the vast swathes of people who need it to attend is just outside, so it's definitely a foreseeable outcome, but if we don't get there in the next two decades that wouldn't surprise me either.
>No one should pay back their student loan debt. Seriously, just stop.
Sorry. But you took a debt, you pay it back. Integrity isn’t outdated.
I agree that the idea and industry behind “13th grade” is dumb. Obviously not every kid should be encouraged to take on debt to go to college. But “stop paying your debts” is a bad message imo.
This may happen automatically with another recession or X market collapse... But it's not like the borrowers will be completely unaffected in that case.
It sounds great but good luck. I’ve been struggling with my $97k student loan debt for 9 years and I’m finally on the downhill slide. There’s no way I’m wrecking all the work I’ve already put in at this point. I suspect many others would feel the same way.
Yeah...honestly student loans make the future feel bleak and pointless anyway. The amount of interest that gets put on every month makes paying it back fucking pointless as it is. Unless I like starving and not paying rent so I can do more than just stop the loan from getting bigger while paying it.
Meh...I figure maybe society will just collapse at some point and it won't matter anyway. Either that or a bunch of people are going to start going crazy because of this and things will get interesting.
If you add up the total cost of all education institutions in the US, multiply by 4 years, then build a payment structure based on that number, there is simply not enough income left over in the corhort of new grads (first 10 years out of school) to pay the debt service.
The problem has nothing to do with liberal art majors, or irresponsible borrowing.
The problem is entirely driven by an excessive cost structure of both public and private institutions.
People like the founder of Lambda School understand the problem and will be the solution.
Why can't it be both? Granted as anecdotal, I don't have enough fingers to count all the young people I know who got liberal arts degrees and are either floundering or working crap jobs that have nothing to do with their degrees. I'm not saying they are entirely responsible, as there is tons of pressure to go to college and pursue a major, but there's enough information available to determine what degrees pay and what degrees are worthless. If you borrow money for something inviable, that's a poor business decision.
Lambda School isn't exactly cheap. 17% of 2 years salary (edit) is capped at $30k. I paid less than that in tuition for 4 years of in-state tuition at a top 10 public school.
It's irresponsible to borrow when you will not have the means to pay back the debt. Most college graduates end up underemployed or unemployed after earning a degree in a non-rigorous major from a mediocre school. With only a BS degree and ~$30k debt, a professional job can easily pay this off. If the market could price the loans properly, perhaps they'd be discouraged from taking out the loans. Realistically, a loan would not be made in the first place.
> People like the founder of Lambda School understand the problem and will be the solution.
The solution is in plain sight and has been successful in other first-world countries for decades: government funding of higher education.
People who suggest a market-based solution need to explain why none of the first-world countries that have achieved affordable, high quality higher education have used a market solution. The only way it can be achieved is through high levels of government funding.
* Subprime share of that fell to 22% but because so many loans are being created, total number of subprime borrowers (SBPs) is now at all-time highs.
* 8% of SBPs are seriously delinquent. Cycle low was 6% in 2012. Peaked at 10% in 2010.
* Increasing share of prime loans is offsetting the deteriorating SBP picture.
* “Although rising overall delinquency rates remain below 2010 peak levels, there were over 7 million Americans with auto loans that were 90 or more days delinquent at the end of 2018. That is more than a million more troubled borrowers than there had been at the end of 2010 when the overall delinquency rates were at their worst since auto loans are now more prevalent. The substantial and growing number of distressed borrowers suggests that not all Americans have benefitted from the strong labor market and warrants continued monitoring and analysis of this sector.”
As someone who graduated from a top tier school, I'm constantly befuddled by society's expectation/belief that college degrees are useful.
I learned absolutely nothing during my 4 years of undergrad that is practically useful to my current vocation, and I can say the same is true for 90% of my peers.
For some areas of study, college IS worth the cost. For example, hard sciences. But, for the vast majority, it's not (think: business and administration, art, history, economics, etc.)
I would guess that in 90% of cases, graduates would be more valuable to companies and potential employers if they spend those 4 years and $300K (tuition + lost wages) learning/practicing their specific trade/industry.
So, when are we as a society going to realize that 90% of us are wasting 20% of our most productive years on useless learning? This really seems like a travesty to me.
I think the disconnect is that a university degree is NOT vocational training, and it never has been.
What happened is that for a long time, only a certain class of people got to go to a university, and that class of people were the same ones that got the best jobs. In fact, many companies used a university degree as a filtering mechanism to select that class of person.
Other classes saw this, and assumed that if they also got this degree, it would open up that other class. It worked for a bit, but soon there were simply too many people getting the degrees for it to work anymore as a way to select a limited group. It is no longer the gateway into a higher class lifestyle.
At the same time, though, I think it is a bit dismissive to call the education useless. I learned a ton studying philosophy at a university, even if it doesn't directly apply that often to my work. It helped me understand the world, its history, and how we think. I am very glad I did it.
However, it was not training me for a job. Not everything we do is for job training.
From my CS Bachelor's degree I think 15% or less of classes made me a better programmer, 15% or less made me a more well rounded individual, and the remainder were a total waste of time. I did it because I felt like I had to play the game to succeed in the way I wanted to, and I think playing along makes me a small part of the problem.
There's going to be a bunch of comments about waste in universities, how people are irresponsible, trade schools, government alone guarantees that make it a crisis, no ability to discharge debt, etc.
The two big things that typically don't get brought up in these discussions is that government funding for college is way down and medical costs. All these state schools, which are pretty much the backbone of higher education in america are chronically underfunded. The last 40 years in america we have been borrowing against our future and higher education funding is just one aspect.
The second aspect is that higher education is fairly labor intensive, a large part of the labor cost is health care. When a pharmaceutical company acquires the rights to a rare drug and jacks up the cost 1000% that cost ultimately is passed on to students.
College students in the previous century had a remedy. It was removed in 2005.
Forbes: "In 2005, Congress passed, and President George W. Bush signed, the Bankruptcy Abuse Prevention and Consumer Protection Act, which exempted federal and private students loans from discharge."
IIRC correctly, the number and size of student loans grew greatly after this Act. College students who received advice which encouraged them to take on huge debt loads - on speculation - were essentially thrown into the water to see if they could learn to swim.
No creditor would give a loan to someone who doesn't have a chance of paying it back. There are kids going to school for music therapy that are taking $100K in debt. It's time to end government subsidized loans, at least in the current form. The private market does a great job of evaluating risk, the only thing that needs to be done is ensure there is ample competition so it self-regulates.
In principle I agree, but in practice, it seems like private lenders are empirically doing a bad job evaluating risk. Rates for private loans are so high they can only be explained by a high default rate, even among "low-risk" demographics. These rates are very high even for students that we'd view as a low credit risk (e.g. studying CS and not music therapy). I think this shows the private market is doing a poor job evaluating risk.
That said, it's probably still a good thing long-term to end government subsidized loans. But that doesn't mean the private market is healthy. I'm not an expert on this area, and I don't know why there aren't "smart" lenders that do a better job arbitraging this. It could be possible that it's inherently difficult to predict whether someone will default or not.
As other people have pointed out, the real problem is the incentive structure for colleges and the increase in administrative staff (and thus tuition) who are enriching themselves at the expense of everyone else.
> The private market does a great job of evaluating risk
Like it did in 2007? One in a million voices might have even thought to bring up how spoiled the housing loan market was, but the markets kept singing the tune of growth until hundred year old banks were out of business from loan defaults. That was the government pushing bad loan policy on private banks who lopped them up like candy from a free money fountain until everyone involved got a taste of reality.
Private industry easily gets caught in its own deliriums in pursuit of endless profit.
I don’t regret going to a public college at all. College is more than just a job factory. You make some of your strongest friendships, connections, potentially future partner in school. You learn a lot about yourself.
Private edu costs are out of control, but if we can figure out how to cut costs then I don’t think the institution of college/higher ed should go away.
You have the rest of your life to work...as a working adult I don’t particularly wish I had skipped college and taken a 6-month online class instead so I could start working earlier.
> Compared to their peers at other colleges, students attending for-profit institutions -- mostly those classified as inclusive, part-time or two-year -- are falling behind in their debt repayments. Twenty-two percent at for-profit schools were behind on their academic loan payments compared with six percent of students at public institutions, according to a survey by the Federal Reserve.
So, one of my side hobbies is saving the world, and my conclusion is that any fiat frb system requires regular debt jubilees (Hammurabi did it first), and part of why our system is so fucked is because people ignore this fact. Any conversation about usurious debt without talking about jubilees is missing the bigger picture.
The entire credit system for education ends up combining government spending and market forces in the worst ways possible. The Federal Reserve Bank of NY drew some conclusions a few years ago to this extent.[0]
The Federal government provides an enormous amount of free/"free" credit, the schools get cash and the students take on the risk. Coupled with the role of academic institutions as gatekeepers of a shot at a better future, and we get the system we have. Hyperbolically, t only outcomes schools are incentivized to care about are applications (lower acceptance rates raise prestige) and attendance (money is transferred to the school only while the student is attending).
There are a few trade jobs that are good money, but I find this idea that trade jobs overall are some overlooked gem completely preposterous. I work in the trades and while some jobs are decent, most trade jobs are still shit and pay shit for what you are doing. Especially when you factor in the high rates of injury and death, and the life long physical ailments that many of these jobs cause. Yeah you will make decent money laying brick, but what kind of physical shape are most 60 year old brick layers in? How much pain do they suffer and how much does that effect their total life span? You might look at a heavy equipment mechanic and think "Wow, they make a decent bit more than just a normal mechanic! What a good deal!" and not think about what kind of condition your hands are in after 40 years of wrenching on huge shit, a lot of the older mechanics have to get their wives to open jars because their hands are basically shot and can only hold a few clawed wrenching positions.
Now there are some real sweet positions and trade jobs out there, don't get me wrong, but there are a whole lot more shit positions beneath that and a whole lot of other factors other than just the hourly pay.
I highly recommend Marine Engineering at a maritime academy if mechanically or mathematically -inclined. You get a four-year engineering degree and a license from the US Coast Guard as an Engineering Officer.
You can easily pay off your student loans very quickly, you get to see the world, and if you do it right, you have little to no expenses while you're sailing and can bank that money for when you quit.
For most people though, I don't recommend making it a long-term career though. It can be dangerous, and I always felt like my life was on pause while many of my friends were getting married, having kids, etc. (And I worked with a lot of older men who did not have good family/wife situations.)
One can certainly get a desk job with a Marine Engineering degree, but one leaves so much on the table if they do.
Should you really be actively pushing your child in any direction? Would the best course of action not just be to make sure that trade schools are a completely viable choice, should she not be interested in an academic subject?
Honest question: what are the best two or three studies showing where all the extra money has gone over the last few decades?
If millions of people are losing, some set of people must be winning (by an amount roughly inversely proportional to their size). I understand economics is complex, feedback loops, etc., but with so much money flowing it must accumulate somewhere. And I’m sure people have studied it on a deeper than anecdotal level
There are many winners, probably some we'll never know. Real estate developers near universities are big winners. The living standard of the average student are much higher than they were in the days of shared bedrooms and a single large shared bathroom per floor. Apartments marketed to students are pretty upscale these days. For some students, their college years will be the peak as far as living standards go. There is a whole economic ecosystem that thrives off of student dollars that were nowhere as plentiful before easy federal student loans expanded.
The financial markets no doubt have some pretty big winners though the way all of that works is a bit convoluted and difficult to pin down individual winners. If there is no tsunami of default, the government itself (and hopefully taxpayers by extension) likely will come out a winner.
The money flowing through campuses flow out in many ways beyond student spending. New construction, salaries for professors and administrators, textbook companies, journal middlemen, and many others are all thriving off of the diversion of so much money into these institutions. In general it's good for the economy around the schools but a million little drags on the economy wherever the students live after graduation as their potential spending dollars are diverted to loan payments instead of the local economy.
The trend in American high schools is to push everyone to go to a college; regardless of what each student's interests are, how useful a college education would be in attaining the jobs that the major is applicable towards, the student's academic aptitude, etc.
My high school was thankfully somewhat resistant to this trend in that there was a very large vocational program that was somewhat popular amongst my graduating class.
I don't mean to offend people when I say this, but there are certain majors that very, VERY few people (if any) should actually pick as a matter of practicality (likelihood of getting a livable-wage job related to the major vs. getting saddled with debt for a degree that you won't use during your lifetime).
Law regarding repayment and non payment of student loan should be seriously relaxed. Increase risk factor will reduce the amount of float in the market, and supply and demand ultimately force institution to better manage and reduce the cost and price.
The system lacks check and balance to rein in the runaway college cost. Graduated students with crushing debt should start suing the schools to get back some of the money. The schools clearly jack up the overall tuition to push up the debt.
[+] [-] RGamma|7 years ago|reply
It doesn't seem like a good idea at all to indebt a significant part of the young population (which I presume creates a lot of avoidable stress) while the rich gain in wealth and power year after year. But I guess longer-term thinking has been thrown overboard in economic decision/policy making anyway, because that would make the numbers not grow fast enough.
Recently I'm under the impression that American society has been tearing itself apart more than is healthy, damaging social cohesion to a great deal. Good luck building an advanced society on distrust and inequality though...
[+] [-] jclay|7 years ago|reply
I think as others said, many students aren’t doing the ROI calculations.
For me, the government loans are 3.75% which is totally reasonable IMO. One could easily outpace this with an ETF fund.
The private loans are more expensive at 6% and up but the lower end is still totally reasonable.
The real issue is that people taking these loans lack the financial skills to pay them back. A friend who is out of school for 10 years has a near six figure loan debt that he refuses to pay down despite earning six figures. Learning to budget and live frugally is a required skill to escape the debt that many don’t have.
I also know very few that have visited financial aid to get a second look at their scholarships / grants. I went every semester and walked out with something. A friend walked out with $14k extra in financial aid from one meeting. Those in the worst positions financially also get vastly more aid. I had some savings going in but still paid a fraction of the tuition sticker price.
In all, the experience worked out well in my favor with a paid research position and other breaks along the way, but given any other situation I would recommend going the state school route which is often a tenth of the cost.
[+] [-] monting|7 years ago|reply
But, from a non-European perspective, Europe doesn’t seem to be doing well? It seems the EU is slowly disintegrating, and the monetary union isn’t working. Also the political landscape seems to be in turmoil as well.
[+] [-] oldprogrammer2|7 years ago|reply
1. Selecting a very expensive, non-prestigious private school.
2. Selecting a major that has no ROI for the cost of tuition.
To give concrete examples:
Option 1.
Option 2. Option 3. So a student could spend $24k versus $250k, and I would imagine most would consider the UT Austin degree more valuable, as well, though these two schools are ranked similarly for undergraduate.And, while I would support further taxes to support state schools, I have no desire to support students who are personally selecting to attend a school that will cost 10x just because they want to. And I have no desire to forgive their loans, either.
[+] [-] Mountain_Skies|7 years ago|reply
If we can't do anything to solve that portion of the problem, we should at least restrict the mandatory fees that are tacked on for non instructional purposes. No student should have to pay for decades to prop up with school's sports ambitions. For every Alabama that makes a profit off of sports, there are dozens of Georgia States that impose ridiculous mandatory fees on students to balance the budget of the athletics department.
Athletics are easy to pick on because they're the most visible but most schools have a whole list of these non instructional fees that students must pay, in most cases, go into debt to pay or be denied access to education.
After removing the mandatory fees, also limit how much of the tuition can be used for non instructional purposes. Every institution has overhead that must exist to keep things operational but there must be a limit to how much or we're once again either denying access to education or condemning students to an overwhelming debt burden.
Instruction of course isn't the only mission of most universities. Research is important. Extension is important. There are many worthwhile activities universities engage in that should continue but not at the expense of access to instruction.
edit: spacing
[+] [-] Shivetya|7 years ago|reply
Schools will trip over themselves to offer degree programs to meet Federal Assistance requirements. Each degree, each course credit leading to that degree, should all be subject to review on a periodic basis to insure that the needs of the country as a whole are being supported. Colleges which fall outside the loan guarantees will obviously find methods to insure students can attend, by steering endowment funds and sponsorships.
[+] [-] systematical|7 years ago|reply
It's this thought, that makes me wonder if government backed higher education is worth the money. I'm inclined to support government backed higher education, but I do think this is an important question to ask when determining specific policy. I'd think we'd only want to pay for STEM degrees where students were able to maintain a certain GPA.
With that said, yes, the system is predatory. It's disgusting the amount of interest I paid for ten years to these loan sharks.
[+] [-] agumonkey|7 years ago|reply
Students that got in would go through a dense cursur and be viewed as higher intellect for the work market. With years (at least in France) there was a desire to make everybody get a higher education degree, but often by relaxing barriers of entry. You get more students but less good ones, the market is saturated by mild masters degree, not enough jobs, they trickle down (sic) and cause degree inflation (post office summer positions required 2-3 years diplomas, not rare to see a 5y college student working there).
At the same time what used to be a simple way to absorb people's need for a job is a bit comatose, simpler hands on jobs (which value was seen as less at the era of Master's degree or nothing) were nice to let people find a salary without much hassle.
I remember a tv host saying he went to Paris without anything and got a job by almost knocking at the first door he saw..
[+] [-] wtvanhest|7 years ago|reply
We need to vastly cut costs and sports and non-instructional costs wont move the needle.
[+] [-] loosetypes|7 years ago|reply
This morning my university sent me an email about a `Summer Funds & FAFSA Workshop` to `receive guided 2019-2020 FAFSA filing help.` In their words: `an open lab session to help you complete the FAFSA .`
Schools seem of the opinion that the money is already theirs; If they could file it without the students they would.
Just because it's systemic doesn't it's not predatory. With admins focused on the money and teachers focused on research, how are universities any more than glorified testing centers?
[+] [-] anilshanbhag|7 years ago|reply
[+] [-] rubyn00bie|7 years ago|reply
The gist of this is; some shithead, many years ago decided to increase his bottom lines by fucking with future generations and our ability to output... when they started this whole fucking problem, and you know what? Let it burn to the ground.
You know who's not gonna lose a bunch of money? The people in student debt, we already fucking have.
[+] [-] pxeboot|7 years ago|reply
If you trash every millennials credit score, the scores would become worthless.
[+] [-] booleandilemma|7 years ago|reply
[+] [-] asdfasgasdgasdg|7 years ago|reply
Now, the legislative regime could change. But it would have to change quite a bit to get significant increases in funding for college. Or maybe it's better if poor people just don't go to college? That's questionable at best.
I think this problem is a lot harder than people on this thread are making it out to be. Making student loan debt bankruptcy proof is within the Overton window in this country. I guess not making it bankruptcy-proof with no other changes is also within that window. Free or reduced price college tuition for the vast swathes of people who need it to attend is just outside, so it's definitely a foreseeable outcome, but if we don't get there in the next two decades that wouldn't surprise me either.
[+] [-] SlowRobotAhead|7 years ago|reply
Sorry. But you took a debt, you pay it back. Integrity isn’t outdated.
I agree that the idea and industry behind “13th grade” is dumb. Obviously not every kid should be encouraged to take on debt to go to college. But “stop paying your debts” is a bad message imo.
[+] [-] viraptor|7 years ago|reply
[+] [-] bronco21016|7 years ago|reply
[+] [-] YaxelPerez|7 years ago|reply
[+] [-] grawprog|7 years ago|reply
Meh...I figure maybe society will just collapse at some point and it won't matter anyway. Either that or a bunch of people are going to start going crazy because of this and things will get interesting.
[+] [-] wtvanhest|7 years ago|reply
The problem has nothing to do with liberal art majors, or irresponsible borrowing.
The problem is entirely driven by an excessive cost structure of both public and private institutions.
People like the founder of Lambda School understand the problem and will be the solution.
[+] [-] ravenstine|7 years ago|reply
[+] [-] temp1928384|7 years ago|reply
[+] [-] Kephael|7 years ago|reply
[+] [-] twblalock|7 years ago|reply
The solution is in plain sight and has been successful in other first-world countries for decades: government funding of higher education.
People who suggest a market-based solution need to explain why none of the first-world countries that have achieved affordable, high quality higher education have used a market solution. The only way it can be achieved is through high levels of government funding.
[+] [-] kaycebasques|7 years ago|reply
* $1.27T of outstanding debt.
* Subprime share of that fell to 22% but because so many loans are being created, total number of subprime borrowers (SBPs) is now at all-time highs.
* 8% of SBPs are seriously delinquent. Cycle low was 6% in 2012. Peaked at 10% in 2010.
* Increasing share of prime loans is offsetting the deteriorating SBP picture.
* “Although rising overall delinquency rates remain below 2010 peak levels, there were over 7 million Americans with auto loans that were 90 or more days delinquent at the end of 2018. That is more than a million more troubled borrowers than there had been at the end of 2010 when the overall delinquency rates were at their worst since auto loans are now more prevalent. The substantial and growing number of distressed borrowers suggests that not all Americans have benefitted from the strong labor market and warrants continued monitoring and analysis of this sector.”
https://libertystreeteconomics.newyorkfed.org/2019/02/just-r...
[+] [-] smallgovt|7 years ago|reply
I learned absolutely nothing during my 4 years of undergrad that is practically useful to my current vocation, and I can say the same is true for 90% of my peers.
For some areas of study, college IS worth the cost. For example, hard sciences. But, for the vast majority, it's not (think: business and administration, art, history, economics, etc.)
I would guess that in 90% of cases, graduates would be more valuable to companies and potential employers if they spend those 4 years and $300K (tuition + lost wages) learning/practicing their specific trade/industry.
So, when are we as a society going to realize that 90% of us are wasting 20% of our most productive years on useless learning? This really seems like a travesty to me.
[+] [-] cortesoft|7 years ago|reply
What happened is that for a long time, only a certain class of people got to go to a university, and that class of people were the same ones that got the best jobs. In fact, many companies used a university degree as a filtering mechanism to select that class of person.
Other classes saw this, and assumed that if they also got this degree, it would open up that other class. It worked for a bit, but soon there were simply too many people getting the degrees for it to work anymore as a way to select a limited group. It is no longer the gateway into a higher class lifestyle.
At the same time, though, I think it is a bit dismissive to call the education useless. I learned a ton studying philosophy at a university, even if it doesn't directly apply that often to my work. It helped me understand the world, its history, and how we think. I am very glad I did it.
However, it was not training me for a job. Not everything we do is for job training.
[+] [-] bootlooped|7 years ago|reply
[+] [-] brohoolio|7 years ago|reply
The two big things that typically don't get brought up in these discussions is that government funding for college is way down and medical costs. All these state schools, which are pretty much the backbone of higher education in america are chronically underfunded. The last 40 years in america we have been borrowing against our future and higher education funding is just one aspect.
The second aspect is that higher education is fairly labor intensive, a large part of the labor cost is health care. When a pharmaceutical company acquires the rights to a rare drug and jacks up the cost 1000% that cost ultimately is passed on to students.
[+] [-] 8bitsrule|7 years ago|reply
Forbes: "In 2005, Congress passed, and President George W. Bush signed, the Bankruptcy Abuse Prevention and Consumer Protection Act, which exempted federal and private students loans from discharge."
https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an...
IIRC correctly, the number and size of student loans grew greatly after this Act. College students who received advice which encouraged them to take on huge debt loads - on speculation - were essentially thrown into the water to see if they could learn to swim.
[+] [-] exabrial|7 years ago|reply
[+] [-] maxkwallace|7 years ago|reply
That said, it's probably still a good thing long-term to end government subsidized loans. But that doesn't mean the private market is healthy. I'm not an expert on this area, and I don't know why there aren't "smart" lenders that do a better job arbitraging this. It could be possible that it's inherently difficult to predict whether someone will default or not.
As other people have pointed out, the real problem is the incentive structure for colleges and the increase in administrative staff (and thus tuition) who are enriching themselves at the expense of everyone else.
[+] [-] zanny|7 years ago|reply
Like it did in 2007? One in a million voices might have even thought to bring up how spoiled the housing loan market was, but the markets kept singing the tune of growth until hundred year old banks were out of business from loan defaults. That was the government pushing bad loan policy on private banks who lopped them up like candy from a free money fountain until everyone involved got a taste of reality.
Private industry easily gets caught in its own deliriums in pursuit of endless profit.
[+] [-] randomacct3847|7 years ago|reply
Private edu costs are out of control, but if we can figure out how to cut costs then I don’t think the institution of college/higher ed should go away.
You have the rest of your life to work...as a working adult I don’t particularly wish I had skipped college and taken a 6-month online class instead so I could start working earlier.
[+] [-] malvosenior|7 years ago|reply
"You make some of your strongest friendships, connections, potentially future partner in school. You learn a lot about yourself."
[+] [-] curtis|7 years ago|reply
This article addresses the issue directly:
"Student debt a harsh math lesson for US graduates as wages lag" - https://www.nola.com/education/index.ssf/2018/03/student_deb...
For instance:
> Compared to their peers at other colleges, students attending for-profit institutions -- mostly those classified as inclusive, part-time or two-year -- are falling behind in their debt repayments. Twenty-two percent at for-profit schools were behind on their academic loan payments compared with six percent of students at public institutions, according to a survey by the Federal Reserve.
[+] [-] arminiusreturns|7 years ago|reply
[+] [-] i_am_proteus|7 years ago|reply
The Federal government provides an enormous amount of free/"free" credit, the schools get cash and the students take on the risk. Coupled with the role of academic institutions as gatekeepers of a shot at a better future, and we get the system we have. Hyperbolically, t only outcomes schools are incentivized to care about are applications (lower acceptance rates raise prestige) and attendance (money is transferred to the school only while the student is attending).
[0] https://www.newyorkfed.org/medialibrary/media/research/staff...
[+] [-] ourmandave|7 years ago|reply
(Once you become immune to eye-rolling life gets easier.)
There's a lot of companies with unfilled skilled blue collar jobs. And despite self-driving trucks, semi drivers can make some serious money.
And HVAC projected job growth is 14% over the next 10 years. Thank you Global Warming!
[+] [-] AngryData|7 years ago|reply
Now there are some real sweet positions and trade jobs out there, don't get me wrong, but there are a whole lot more shit positions beneath that and a whole lot of other factors other than just the hourly pay.
[+] [-] Casseres|7 years ago|reply
You can easily pay off your student loans very quickly, you get to see the world, and if you do it right, you have little to no expenses while you're sailing and can bank that money for when you quit.
For most people though, I don't recommend making it a long-term career though. It can be dangerous, and I always felt like my life was on pause while many of my friends were getting married, having kids, etc. (And I worked with a lot of older men who did not have good family/wife situations.)
One can certainly get a desk job with a Marine Engineering degree, but one leaves so much on the table if they do.
[+] [-] bad_good_guy|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] orzig|7 years ago|reply
If millions of people are losing, some set of people must be winning (by an amount roughly inversely proportional to their size). I understand economics is complex, feedback loops, etc., but with so much money flowing it must accumulate somewhere. And I’m sure people have studied it on a deeper than anecdotal level
[+] [-] Mountain_Skies|7 years ago|reply
The financial markets no doubt have some pretty big winners though the way all of that works is a bit convoluted and difficult to pin down individual winners. If there is no tsunami of default, the government itself (and hopefully taxpayers by extension) likely will come out a winner.
The money flowing through campuses flow out in many ways beyond student spending. New construction, salaries for professors and administrators, textbook companies, journal middlemen, and many others are all thriving off of the diversion of so much money into these institutions. In general it's good for the economy around the schools but a million little drags on the economy wherever the students live after graduation as their potential spending dollars are diverted to loan payments instead of the local economy.
[+] [-] dqpb|7 years ago|reply
[+] [-] kevindong|7 years ago|reply
My high school was thankfully somewhat resistant to this trend in that there was a very large vocational program that was somewhat popular amongst my graduating class.
I don't mean to offend people when I say this, but there are certain majors that very, VERY few people (if any) should actually pick as a matter of practicality (likelihood of getting a livable-wage job related to the major vs. getting saddled with debt for a degree that you won't use during your lifetime).
[+] [-] iamgopal|7 years ago|reply
[+] [-] ww520|7 years ago|reply