9 ms·

MIT PhD authored article may float your boat a little more: http://www.nytimes.com/2015/09/11/upshot/new-data-gives-clearer-picture-of-student-debt.html?rref=up

MIT PhD authored article may float your boat a little more: http://www.nytimes.com/2015/09/11/upshot/new-data-gives-clearer-picture-of-student-debt.html?rref=upshot http://www.nytimes.com/2015/09/11/upshot/new-data-gives-clea... Or http://www.brookings.edu/about/projects/bpea/papers/2015/looney-yannelis-student-loan-defaults http://www.brookings.edu/about/projects/bpea/papers/2015/loo... For those visual people like myself, this is the most telling: http://www.brookings.edu/~/media/Projects/BPEA/Fall-2015_embargoed/Chart_LooneyYannelis_StudentLoanDefaults.PNG?la=en http://www.brookings.edu/~/media/Projects/BPEA/Fall-2015_emb...

douche 11y ago
It's terrifying to see so many online degree-mills sucking up that much money.
- matthewaveryusa 11y ago
  The sinister in me asks "Well, who tends to make shitty decisions?" The innocent asks "How is this legal?" The realist middle-classer I am asks "Are my tax dollars going to be used to fix this shit again?" The Democrat in me says "well we should definitely introduce legislation to fix this." The Republican alter-ego laughs and says "we already fixed it because you can't get rid of that shit, even in chapter 7 and 13 bankruptcy."
  - rizwank 11y ago
    The Republican in you needs to look up IBR and ICR and debt forgiveness for student loan debt.
    - paulhauggis 11y ago
      ..or maybe students shouldnt choose a major that has no hope of giving them a well-paying job. Ive seen far too many people getting masters in worthless degrees.
  - rayiner 11y ago
    Right now, taxpayers are in the black on those student loan programs, to the tune of $50 billion a year.
    - tedunangst 11y ago
      Is that on a simple cash flow basis? The value of the guarantees being made should count as a "cost", since insurance isn't usually given away for free, even if it doesn't pay out.
      - rayiner 11y ago
        I mean you have to compare like with like, right? If you're comparing the value of guarantees given out, you compare that with the value of the debt received. Or you can compare it on a cash flow basis (money out minus money in).
      - cinquemb 11y ago
        "Many country and city governments in the United States choose to "opt out" of GAAP practices as they operate on a cash basis, as opposed to an accrual basis."[0] If publicly traded companies are expected to report GAAP numbers and our governments aren't, it has to make one wonder… it certainly makes it harder to determine how to go about effective resource allocation in a society, especially when we're asking kids to make informed investment decisions about their futures… [0] https://en.wikipedia.org/wiki/Generally_accepted_accounting_principles https://en.wikipedia.org/wiki/Generally_accepted_accounting_...
      - mikekchar 11y ago
        Actually most insurance companies operate on a cost neutral basis (i.e., the premiums are designed to match the payout on average). They make money because they are allowed to invest the premiums (often with a lot of leverage). This is why Warren Buffet bought up so many insurance companies. It's essentially a free loan (probably made more sense in the 80's than it does now, but you get the idea ;-) ). So, I think the only cost you should account for is the cost of having to pay in the case of default.
  - bsder 11y ago
    > The Republican alter-ego laughs and says "we already fixed it because you can't get rid of that shit, even in chapter 7 and 13 bankruptcy." This is actually one of the problems. If you could dismiss college debt via bankruptcy, then lenders would start pushing back against both the colleges and the students. The degree mills would still exist, but they'd magically price themselves much cheaper.
  - ams6110 11y ago
    None of your personalities are quite seeing the problem. The problem is that student loans are too easy to get. This creates the demand for the shit.
    - Kalium 11y ago
      A lot of the shitty degree mills take advantage of veterans, too.
    - slackson 11y ago
      Why are they too easy to get?
      - cmsmith 11y ago
        For any other type of loan, if you have more current/future income, you can get a larger loan. For student loans, you get a larger loan for having LESS current income. This is reasonable since the loans are government-subsidized, but it might help to have some correlation between the loan and your ability to pay it off (i.e. future expected earnings due to your education).
        aianus 11y ago
        This sounds like an excellent arbitrage opportunity for a startup. Find mispriced student loans (say, some honor roll student in MIT Computer Science paying the same 7% as some fine arts student at University of Phoenix) and refinance them at 4%. You could even securitize the debt and sell it to alumni! I know I'd buy Waterloo CS Class of 2018 Honour Roll debt at even 3%.
        cbhl 11y ago
        If they're Waterloo kids, I'd hope they're financing their education past first year with their co-op income, rather than debt. :P
        11y ago
  - superuser2 11y ago
    It's legal because many people have a belief that the free market will successfully detect and avoid such scams, despite seemingly obvious evidence to the contrary.
    - T2_t2 11y ago
      That makes no sense. It is an unfree market, therefore there is no check or balance.
    - zo1 11y ago
      If people are willing to spend money on something that is apparently "worthless", then who are we to complain or be "high-morals" about and make illegal? It obviously represents some value to them, therefore they are willing to pay money for it. Are they worthless, scammy degrees? Who knows, maybe. Are some people told lies and believing in it? Maybe the case, too.
  - hueving 11y ago
    >The Republican alter-ego laughs and says "we already fixed it because you can't get rid of that shit, even in chapter 7 and 13 bankruptcy." That's not Republican at all. Debt that is impossible to get rid of is the entire reason that the market can't price this correctly. People essentially have access to hundreds of thousands of dollar loans without collateral or any proof of the ability to pay it back because of government intervention. It's antithetical to the entire 'free market' ideology. The Republican alter-ego in you would actually say something like, "treat this like any other debt that can be discharged in bankruptcy and it will be priced appropriately by the market."
    - zyxley 11y ago
      Dschargeable student loans, and the subsequent elimination of everyone and their dog automatically getting student loans, would also probably go a long way towards reducing constantly-ballooning tuition in the US.
  - kevindeasis 11y ago
    The style of using different perspectives is very entertaining! #veryentertaining
  - tajen 11y ago
    The answer is in Australia. For their studies, they borrow from the state. Then they pay their debt through 50% income taxes, limited to 7 years. If they get a bartender job with their engineering degree, they can still survive. Therefore studies are not free, they still have the responsibility of choosing right, they're not choked with debt and they still get a margin if they get a good job.
    - nevdka 11y ago
      As an Australian currently paying off his education, this isn't accurate. Firstly, there's no time limit. You need to pay back all of it. Secondly, it's not a 50% tax rate. It's a additional % (4-8 %) on top of your normal tax rate, depending on how much you earn. There's also a threshold, so if you earn less than about $54k, you don't pay it back. At least, not that year. Edit: Although I do agree with you: The answer is in Australia :)
    - anon4 11y ago
      Or in Germany, where higher education is free.
      - tajen 11y ago
        Anything free creates a perverse incentive. Each year wagons of French students get graduated with History degrees at the free university. What job do they really intend to perform, how do they plan to contribute to society and how do they plan to earn money to give it back? How many historians do we really need? Most of them go straight to unemployment benefits for years. Which I also pay for. I mean it has to be easy to study, like in Australia, but students need to be responsible with society's money, therefore it shouldn't be free.
- revelation 11y ago
  I did actually have a scroll through that gov tool for comparison yesterday and 90%+ graduation rates were extremely common, even for the highest echelon of US universities. How are these not degree mills?
  - douche 11y ago
    We've made the college diploma the equivalent of the high school diploma - it's become the minimum bar for many jobs, even when it's not remotely useful. Outside of a few fields, if you want to escape low-paying, part-time service industry work, you've got to have that piece of paper. And a lot of institutions are happy to give it to you, if you (or your parents, or private lenders, or the government) are willing to fork over $50,000-$200,000.
  - eli_gottlieb 11y ago
    So you're saying that a proper university fails some amount of students who understand the material in order to acquire prestige from the appearance of stringency? Or that a double-digit percentage of admitted students are, for some reason, incompetent?
    - revelation 11y ago
      No, I'm saying a good university makes a large-ish proportion of students realize that this isn't what they signed up for.
      - deleted 11y ago
        [deleted]
      - Riseed 11y ago
        I posit that a good university has an ethical admissions office, and an ethical admissions office helps students realize this isn't want they signed up for before they get to the "signed up for" part.
      - CydeWeys 11y ago
        Why do you think that a good university should necessarily be incompetent at telling students what they're in for? That they have to pull bait-and-switches? I knew exactly what I was getting into at my university.
- ghrifter 11y ago
  A coworker I know is attending such an online-degree like mill. He is graduating this fall with a Comp Sci degree and a Web Design? degree. He names his variables atrociously(MethodName(id) instead of something more descriptive like MethodName(organizationID), doesn't know what an enum is, and so much more. Gah rant. I wish online-degree mills were regulated well.
  - darkxanthos 11y ago
    Easy there. I've seen people with BS and MS who do exactly what you describe. I don't have a degree at all and I don't do that. Cmon.
  - jedmeyers 11y ago
    I have met a PhD in Computer Science from a major German university who asked what type casting is. Even PhD does not guarantee that the person will have a broad knowledge of everything related to computer science. However, some might argue that type casting is one of those things every CS graduate should know about.
    - plonh 11y ago
      I don't expect everyone to know all the names of all he thngs they should never do, although it does help to know which languages to avoid.
    - jhund 11y ago
      Make sure not to confuse lack in understanding of language with lack in understanding of the concept.
- mbesto 11y ago
  It's no coincidence these companies' revenues are not trending upwards: https://www.google.com/finance?q=NYSE%3ADV&fstype=ii&ei=Tt31VbHbBoa2iAKQgK5Y https://www.google.com/finance?q=NYSE%3ADV&fstype=ii&ei=Tt31... https://www.google.com/finance?q=NASDAQ%3AAPOL&fstype=ii&ei=ft31VdmIOYa2iAKQgK5Y https://www.google.com/finance?q=NASDAQ%3AAPOL&fstype=ii&ei=...
- avn2109 11y ago
  Also this makes me wonder if we should recategorize NYU.
  - siphor 11y ago
    It doesn't look like that graph is averaged per student, so thats why a lot of big public schools are on there...
ZanyProgrammer 11y ago
From what I could tell, none of those articles really break things down by major.
deleted 11y ago
[deleted]

douche 11y ago

It's terrifying to see so many online degree-mills sucking up that much money.

matthewaveryusa 11y ago
The sinister in me asks "Well, who tends to make shitty decisions?" The innocent asks "How is this legal?" The realist middle-classer I am asks "Are my tax dollars going to be used to fix this shit again?" The Democrat in me says "well we should definitely introduce legislation to fix this." The Republican alter-ego laughs and says "we already fixed it because you can't get rid of that shit, even in chapter 7 and 13 bankruptcy."
- rizwank 11y ago
  The Republican in you needs to look up IBR and ICR and debt forgiveness for student loan debt.
  - paulhauggis 11y ago
    ..or maybe students shouldnt choose a major that has no hope of giving them a well-paying job. Ive seen far too many people getting masters in worthless degrees.
- rayiner 11y ago
  Right now, taxpayers are in the black on those student loan programs, to the tune of $50 billion a year.
  - tedunangst 11y ago
    Is that on a simple cash flow basis? The value of the guarantees being made should count as a "cost", since insurance isn't usually given away for free, even if it doesn't pay out.
    - rayiner 11y ago
      I mean you have to compare like with like, right? If you're comparing the value of guarantees given out, you compare that with the value of the debt received. Or you can compare it on a cash flow basis (money out minus money in).
    - cinquemb 11y ago
      "Many country and city governments in the United States choose to "opt out" of GAAP practices as they operate on a cash basis, as opposed to an accrual basis."[0] If publicly traded companies are expected to report GAAP numbers and our governments aren't, it has to make one wonder… it certainly makes it harder to determine how to go about effective resource allocation in a society, especially when we're asking kids to make informed investment decisions about their futures… [0] https://en.wikipedia.org/wiki/Generally_accepted_accounting_principles https://en.wikipedia.org/wiki/Generally_accepted_accounting_...
    - mikekchar 11y ago
      Actually most insurance companies operate on a cost neutral basis (i.e., the premiums are designed to match the payout on average). They make money because they are allowed to invest the premiums (often with a lot of leverage). This is why Warren Buffet bought up so many insurance companies. It's essentially a free loan (probably made more sense in the 80's than it does now, but you get the idea ;-) ). So, I think the only cost you should account for is the cost of having to pay in the case of default.
- bsder 11y ago
  > The Republican alter-ego laughs and says "we already fixed it because you can't get rid of that shit, even in chapter 7 and 13 bankruptcy." This is actually one of the problems. If you could dismiss college debt via bankruptcy, then lenders would start pushing back against both the colleges and the students. The degree mills would still exist, but they'd magically price themselves much cheaper.
- ams6110 11y ago
  None of your personalities are quite seeing the problem. The problem is that student loans are too easy to get. This creates the demand for the shit.
  - Kalium 11y ago
    A lot of the shitty degree mills take advantage of veterans, too.
  - slackson 11y ago
    Why are they too easy to get?
    - cmsmith 11y ago
      For any other type of loan, if you have more current/future income, you can get a larger loan. For student loans, you get a larger loan for having LESS current income. This is reasonable since the loans are government-subsidized, but it might help to have some correlation between the loan and your ability to pay it off (i.e. future expected earnings due to your education).
      - aianus 11y ago
        This sounds like an excellent arbitrage opportunity for a startup. Find mispriced student loans (say, some honor roll student in MIT Computer Science paying the same 7% as some fine arts student at University of Phoenix) and refinance them at 4%. You could even securitize the debt and sell it to alumni! I know I'd buy Waterloo CS Class of 2018 Honour Roll debt at even 3%.
        cbhl 11y ago
        If they're Waterloo kids, I'd hope they're financing their education past first year with their co-op income, rather than debt. :P
        11y ago
- superuser2 11y ago
  It's legal because many people have a belief that the free market will successfully detect and avoid such scams, despite seemingly obvious evidence to the contrary.
  - T2_t2 11y ago
    That makes no sense. It is an unfree market, therefore there is no check or balance.
  - zo1 11y ago
    If people are willing to spend money on something that is apparently "worthless", then who are we to complain or be "high-morals" about and make illegal? It obviously represents some value to them, therefore they are willing to pay money for it. Are they worthless, scammy degrees? Who knows, maybe. Are some people told lies and believing in it? Maybe the case, too.
- hueving 11y ago
  >The Republican alter-ego laughs and says "we already fixed it because you can't get rid of that shit, even in chapter 7 and 13 bankruptcy." That's not Republican at all. Debt that is impossible to get rid of is the entire reason that the market can't price this correctly. People essentially have access to hundreds of thousands of dollar loans without collateral or any proof of the ability to pay it back because of government intervention. It's antithetical to the entire 'free market' ideology. The Republican alter-ego in you would actually say something like, "treat this like any other debt that can be discharged in bankruptcy and it will be priced appropriately by the market."
  - zyxley 11y ago
    Dschargeable student loans, and the subsequent elimination of everyone and their dog automatically getting student loans, would also probably go a long way towards reducing constantly-ballooning tuition in the US.
- kevindeasis 11y ago
  The style of using different perspectives is very entertaining! #veryentertaining
- tajen 11y ago
  The answer is in Australia. For their studies, they borrow from the state. Then they pay their debt through 50% income taxes, limited to 7 years. If they get a bartender job with their engineering degree, they can still survive. Therefore studies are not free, they still have the responsibility of choosing right, they're not choked with debt and they still get a margin if they get a good job.
  - nevdka 11y ago
    As an Australian currently paying off his education, this isn't accurate. Firstly, there's no time limit. You need to pay back all of it. Secondly, it's not a 50% tax rate. It's a additional % (4-8 %) on top of your normal tax rate, depending on how much you earn. There's also a threshold, so if you earn less than about $54k, you don't pay it back. At least, not that year. Edit: Although I do agree with you: The answer is in Australia :)
  - anon4 11y ago
    Or in Germany, where higher education is free.
    - tajen 11y ago
      Anything free creates a perverse incentive. Each year wagons of French students get graduated with History degrees at the free university. What job do they really intend to perform, how do they plan to contribute to society and how do they plan to earn money to give it back? How many historians do we really need? Most of them go straight to unemployment benefits for years. Which I also pay for. I mean it has to be easy to study, like in Australia, but students need to be responsible with society's money, therefore it shouldn't be free.
revelation 11y ago
I did actually have a scroll through that gov tool for comparison yesterday and 90%+ graduation rates were extremely common, even for the highest echelon of US universities. How are these not degree mills?
- douche 11y ago
  We've made the college diploma the equivalent of the high school diploma - it's become the minimum bar for many jobs, even when it's not remotely useful. Outside of a few fields, if you want to escape low-paying, part-time service industry work, you've got to have that piece of paper. And a lot of institutions are happy to give it to you, if you (or your parents, or private lenders, or the government) are willing to fork over $50,000-$200,000.
- eli_gottlieb 11y ago
  So you're saying that a proper university fails some amount of students who understand the material in order to acquire prestige from the appearance of stringency? Or that a double-digit percentage of admitted students are, for some reason, incompetent?
  - revelation 11y ago
    No, I'm saying a good university makes a large-ish proportion of students realize that this isn't what they signed up for.
    - deleted 11y ago
      [deleted]
    - Riseed 11y ago
      I posit that a good university has an ethical admissions office, and an ethical admissions office helps students realize this isn't want they signed up for before they get to the "signed up for" part.
    - CydeWeys 11y ago
      Why do you think that a good university should necessarily be incompetent at telling students what they're in for? That they have to pull bait-and-switches? I knew exactly what I was getting into at my university.
ghrifter 11y ago
A coworker I know is attending such an online-degree like mill. He is graduating this fall with a Comp Sci degree and a Web Design? degree. He names his variables atrociously(MethodName(id) instead of something more descriptive like MethodName(organizationID), doesn't know what an enum is, and so much more. Gah rant. I wish online-degree mills were regulated well.
- darkxanthos 11y ago
  Easy there. I've seen people with BS and MS who do exactly what you describe. I don't have a degree at all and I don't do that. Cmon.
- jedmeyers 11y ago
  I have met a PhD in Computer Science from a major German university who asked what type casting is. Even PhD does not guarantee that the person will have a broad knowledge of everything related to computer science. However, some might argue that type casting is one of those things every CS graduate should know about.
  - plonh 11y ago
    I don't expect everyone to know all the names of all he thngs they should never do, although it does help to know which languages to avoid.
  - jhund 11y ago
    Make sure not to confuse lack in understanding of language with lack in understanding of the concept.
mbesto 11y ago
It's no coincidence these companies' revenues are not trending upwards: https://www.google.com/finance?q=NYSE%3ADV&fstype=ii&ei=Tt31VbHbBoa2iAKQgK5Y https://www.google.com/finance?q=NYSE%3ADV&fstype=ii&ei=Tt31... https://www.google.com/finance?q=NASDAQ%3AAPOL&fstype=ii&ei=ft31VdmIOYa2iAKQgK5Y https://www.google.com/finance?q=NASDAQ%3AAPOL&fstype=ii&ei=...
avn2109 11y ago
Also this makes me wonder if we should recategorize NYU.
- siphor 11y ago
  It doesn't look like that graph is averaged per student, so thats why a lot of big public schools are on there...

ZanyProgrammer 11y ago

From what I could tell, none of those articles really break things down by major.

deleted 11y ago

[deleted]