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A big takeaway from this article (for me) is that people are surprised that 17 year old kids don't understand what they're doing when they take out that college

• ZanyProgrammer 11y ago
  Who is supposed to work those jobs then? Even if Yelp relocated their non engineering staff, paying them minimum wage in some other city won't help them.
  • fixermark 11y ago
    Actually, it can. It's not just the payment; it's payment against cost of living. $9 an hour might afford a house in the suburbs of a small city, or an apartment in a smaller city. It doesn't scratch the paint on the cost of a basic apartment in the Valley.
    • Retra 11y ago
      And that's assuming you can get enough hours to work full time, and also have benefits to cover whatever mishaps may develop. And that you don't have any dependents.
    • kelukelugames 11y ago
      This is part of the reason zapped moved their call center out of the bay area and into Nevada.
  • qq66 11y ago
    Sure it will help them. Paying a $1200 rent in San Francisco is much harder with a $10 wage than paying a $200 rent in Alabama with a $8 wage. It may not help them enough, but it will help.
• AJ007 11y ago
  A big problem is that at age 17, all of the adults are saying go to college & take out these loans. Guidance councilors, teachers, parents. The most compliant high schoolers will just do what they are told without thinking about it further. I imagine this will start changing. When I was a kid, that group of adults had the benefit of cheap degrees. Today, now that group of adults is us and we did not go to school cheap (personally I don't fall in to that category out of personal choice, but most of my friends do.)
  • Implicated 11y ago
    I had this very experience. Everyone I encountered in my schooling and personal life basically pushed me to take out loans and get a degree by whatever means necessary. Even after I explained that I had no idea what I wanted to do (at the time). Thankfully I thought it foolish to put myself in significant debt for an education I wasn't passionate about and a direction I wasn't sure about. The whole "just go and get it done" excuse is thrown at a _lot_ of young adults and those loans are sure easy to get. Just crazy.
  • pmiller2 11y ago
    > A big problem is that at age 17, all of the adults are saying go to college & take out these loans. Guidance councilors, teachers, parents. The most compliant high schoolers will just do what they are told without thinking about it further. > I imagine this will start changing. When I was a kid, that group of adults had the benefit of cheap degrees. Today, now that group of adults is us and we did not go to school cheap (personally I don't fall in to that category out of personal choice, but most of my friends do.) This rings true for me. The main reason I even went to college was because I bought the story that "if you do well in school and get a college degree, you'll get a good job and be set up for success in life." Yeah. That didn't quite work out as planned. I enjoyed school and the things I learned from my degree were cool, but I use literally 0% of it on the job now, and it doesn't even help get me interviews very often, because it doesn't have the magic letters "CS" in it. Thirty years ago, a bachelor's degree might have been a ticket to a decent professional job, but those days are long past. I'm not sure what I would have done as an alternative plan, but I'm sure it would have been a hell of a lot cheaper. Not starting out behind a very expensive 8-ball could have possibly helped me a lot.
• santaclaus 11y ago
  > Person knowingly takes a minimum wage job in the most expensive city in the world I want to work in Yelp's Monaco offices!
• onion2k 11y ago
  What should really be surprising about the Yelp thing is that Yelp didn't understand what would happen. A company that spends money to recruit and train a member of staff but doesn't pay them enough to stay in their job is just throwing money away. That a company the size of Yelp can't see this really obvious situation arising is amazing. I'm surprised their HR people don't get fired over it.
  • TheOtherHobbes 11y ago
    HR is a profession where you're allowed to believe that someone with a math or robotics degree isn't a good fit for a programming job because there's not enough of that Computer Stuff in their background. It's part of a very curious corporate phenomenon - above a certain level of power you're defined as competent by reason of your department and job title, irrespective of your actual ability. You can be breathtakingly clueless, to the point of creating very negative consequences for the company that employs you, but you will never be held responsible for it.
  • chrissnell 11y ago
    You're assuming that Yelp made a mistake by spending money to hire (and eventually fire) this person. I disagree. I think that was the plan all along. I used to work for Backcountry.com in Park City, UT in the mid-2000s. Back in those days, BC used its ski town locale and perks like "powder days" to attract gen-Y'ers fresh out of college at rock-bottom wages. Smart young people out of good schools showed up, did some okay work for a year or two, accumulated some experience, and then left for greener pastures in the big city. BC understood this and was happy with it. These hires weren't experienced but they were scrappy and bright and they'd work for almost nothing just to be able to strap on snowshoes after work or go mountain biking on their lunch break. When they left, there was a resume stack full of new ones to take their places.
• drumdance 11y ago
  I would think their parents would help in making that decision.
  • dragontamer 11y ago
    A lot of parents grew up in the era of "get a degree, get a job". Their experience doesn't actually help as much as they'd like in today's world. Nothing malicious or anything, but times have changed.
  • deleted 11y ago
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• microcolonel 11y ago
  I know more about managing debt than most 30 year olds, and I did when I was 17. I think it's just a matter of interest in understanding it; and also people's inability to come to terms with the fact that they can't actually afford the things they're buying. For what it's worth, I never did go to University or College; never planned on it. I wouldn't understand the motivation for it.
• beatpanda 11y ago
  This is insulting. What choice do you think these kids have? A university degree is the only gateway to social mobility available to most young people in the United States, and at current prices, most of them can't actually afford it. What do you expect the kids to do? "Gee, I guess I'll just have to spend the rest of my life in the service industry, making other people rich." Give me a break. Of course they're going to take on the loans, and of course they're not going to pay them back. This is even more predictable when you realize that plenty of good careers requiring college degrees also don't pay enough to cover basic expenses and make loan payments at the same time. Blaming the victim for a system that is too big for them to do anything about is the wrong way to look at this. The education system is broken, and I don't blame anybody who simply blows off their creditors in the meantime.
  • coryrc 11y ago
    They have the choice to get a degree that actually makes money, not <insert anything> Studies or Art History.
    • brandonmenc 11y ago
      Being indoctrinated with, "it doesn't matter what the degree is in, just that you have one," absolves them of at least some of the responsibility.
      • awinder 11y ago
        That, as well as a highly linked issue right now that people at the end of their careers are still hanging in the workforce because they can't afford to retire. I think normally if you didn't have 2008, that adage about "just get a degree" might have still rung true. It's not like kids without degrees are making out like bandits in the job market -- it's just that outside of a few lucky / strategic fields, the jobs aren't there. Which is also why blaming kids sucks for them, because theyre about the least culpable members of society for the macroeconomic conditions that landed them in this predicament.
  • Camillo 11y ago
• joe_the_user 11y ago
  I would interject that the problem is that problem isn't a lack financial literacy but a lack of good choices for those 17 year olds. No amount of financial understanding can squeeze a good deal from "barrow $100K and maybe get great success or start on a minimum wage job now". And sure, there are half-way points like entering a trade but the future of those positions is pretty uncertain as well.
  • daniel-cussen 11y ago
    > And sure, there are half-way points like entering a trade but the future of those positions is pretty uncertain as well. I would totally go with welder or carpenter. Or better yet, robot repairman. Things will have to be pretty far gone before robots are able to repair each other.
  • elihu 11y ago
    There's also a lack of experience dealing with (comparatively) large amounts of money. When I was in high school, a hundred dollars seemed like a lot of money. It's hard to compare the costs of rent, food, transportation, insurance, interest payments against potential income, when all those numbers sound like unfathomably-huge sums of money. I think you have to live at a certain income level for awhile to really understand how much money you're making and what things cost relative to that. You can make a mock budget as a high-schooler (I was required to do that for one of my classes), but it's hard to know if the numbers you're plugging into your budget are even remotely realistic.
    • joe_the_user 11y ago
      But a lack of knowledge and understanding is a solvable problem by education and advice. A lack of reasonable choices is a problem that can only be solved by social change of one sort or another. You could almost say that "you have known better than to get yourself into this" aspect of the situation is a cover for the "you were screwed no matter what by the way things were set up" problem.
• whoopdedo 11y ago
  Is it necessary for the 17-year old to fully grasp what he's getting into and how to deal with it? The point of an education loan is that it will pay to mature the young person and provide him with the capital necessary to become educated about how to handle debt. And more specifically to obtain skills and experience that can be converted to a prosperous career which allows him to repay what he owes. If a college graduate is not able to keep up with his student debt is it his fault for not being fiscally responsible? Or is it the school's fault for not doing the job it was paid to do? It is as if we are building bridges that collapse easily then blaming it on the trucks being too heavy when the problem is the engineers are making crappy bridges.
  • danielsju6 11y ago
    The kicker to me is that you can't drink till you're 21; look at porn, buy cigarettes, or consent to sex with an adult until you're 18... but you can sign a federal promissory note for "super debt" that will fuck up your life and the lives of your next of kin.
    • jMyles 11y ago
      > consent to sex with an adult until you're 18 Holy shit, there are places in the USA where you have to be 18 to have sex. TIL.
  • IkmoIkmo 11y ago
    Well both are right. Yes, 17 year olds need to fully grasp these decisions, and yes colleges and gov should do more, much more, too. For example my gf's now doing her 2nd master's to become a teacher, in a field which, surprise, there are no jobs in. Now frankly she mostly knew this, wanted to do it anyway because she's got the resume to get that 1 job that opens up every 5 billion years and she's really passionate about teaching this field. But what struck me was that a few days ago as she was complaining about her job prospects, I said 'your uni has a responsibility here, too', and I went to the website to see if they offered any support. Got to the 'employability' page, and it essentially said the prospects were 'good'. In reality, the employability of this particular degree is probably in the bottom 5%. I mean this is the Netherlands, tuition is $2k a year, it's a 1y programme and student loan rates are currently 0.01% (fixed until 2020, and averaged < 1% in the past 20 years), so it's fine. But for other institutions in other countries, that's blatant false advertising bordering on the criminal as we're talking about multi-year time investments in addition to tens of thousands of dollars. And I see this all the time, but institutions and governments aren't currently willing to be dead honest about job prospects.
• carsongross 11y ago
  Education isn't the problem. Indoctrination is. Responsible, reasonably intelligent adults are encouraging children to take on this debt. If there is anyone to educate, it is the adults, not the children.
  • coredog64 11y ago
    Discriminating against people with college degrees is the last bastion of acceptable racism. We would look askance at companies that put out ads that advised that people of color should not apply. But there's not nearly the same level of outrage when a college degree is required to be an administrative assistant.
    • deleted 11y ago
      [deleted]
    • warmblood 11y ago
      I'm strongly with you but it's hardly the last bastion of acceptable racism. It's one of very many we still have. Adequate education in any form or at any age, he kind that is crucial for access to college, is flat out unavailable for many people in underserved communities.
    • refurb 11y ago
      Having or not having a degree doesn't make you a certain "race". College degrees are proxy for skill set and ability. Sure, maybe not a good once, but one that's used. And companies are allowed to discriminate based on skill set/ability.
• sdegutis 11y ago
  Honestly, screw the modern "higher education" system. It's a business, pure and simple, designed to milk out every penny from kids and their parents, as much as humanly possible while still being "legal". It wasn't always so unbalanced, but that's the way it is today, and that's a crying shame.
  • warmblood 11y ago
    Many would say that it's actually designed to milk the pennies from the federal government by proxy of the student and parent with a significant markup. This is somewhat worse than simply taking from individuals because it implies a systemic breakage that someone is taking advantage of, possibly using political influence to keep that breakage from being fixed.
    • rlucas 11y ago
      This. Although I am a believer in and a onetime recipient of federal student aid, there's no denying that there exists an educational-financial-industrial complex which needs to churn through new student borrowers as the substrate for keeping uncle sam's cash flowing. Very similar to the Medicare and 401k industries in a way, given their ostensible social goals, the massive government supplied sums involved, and the need to attach these sums to individual names and lives.
• erichocean 11y ago
  > A big takeaway from this article (for me) is that people are surprised that 17 year old kids don't understand what they're doing when they take out that college loan. Student loans are the only legal way to sell yourself into "debt slavery"[0] in the United States. It's not the 17 year olds that are screwing up, it's society as a whole by even allowing this situation to exist. [0] https://en.wikipedia.org/wiki/Debt_bondage https://en.wikipedia.org/wiki/Debt_bondage
  • reality_czech 11y ago
    I agree with this 100%. Student loan debt should not be treated specially. It should just be normal debt that you can discharge through bankruptcy. At that point, the incentives of schools and the incentives of students would be aligned. Schools would not lend huge sums to students unless they had confidence that the education those students got was adequate to prepare them to repay. And the situation would fix itself. The fixed situation would probably have a lot fewer humanities students, and those students would have better job prospects since supply and demand would be aligned. Degrees would be shorter and less expensive, and overheads would be lower.
    • massysett 11y ago
      Mostly it is the federal government doing the lending, not the schools. Eligibility is fixed by law and has nothing to do with ability to repay.
      • lliamander 11y ago
        Good point, which allows them to make lending decisions for political rather than purely economic reasons.
      • reality_czech 11y ago
        I agree that there are a lot of government loans for education-- another thing that ought to stop. The government shouldn't be a loan shark for young people.
    • deleted 11y ago
• rconti 11y ago
  I was fairly financially literate, and I was fortunate to have a family who supported my education, and grandparents who wanted to do what it took to fund it. That said, it's a very ... odd process for most people. You're told to go to college, so you jump through the hoops; SATs, applications, etc. You choose a school. Now, hopefully as you're choosing a school, you're aware of costs and whether or not you can reasonably afford it. But, if I remember correctly, you don't have full information on what forms of aid you'll be receiving. Some schools offer much more generous financial aid and scholarships than others, and you don't have all of the info up front (again, from what I remember). You also don't know how much you'll be borrowing. So then during your orientation you go to a "responsible borrowing" class and sign the paperwork for your loans and find out how much they'll be. It doesn't really feel like you have an option. In my case, I only had to take out federally backed loans, which (for me) had very low per-year borrowing limits, so we're talking a minimal debt burden; a few thousand a year. I knew I'd be borrowing, and knew it wouldn't be an obscene amount. But it just feels like the borrowing component is so far down the line that you're already committed to a school before you even get to it. Again, I'm not saying you shouldn't be prepared and have frank discussions before even choosing a school. Just that the system makes it easy to NOT be aware of it until it's too late. Nobody wants to back out of their freshman year in college at the last minute (likely after some money has been put down) because they balk at the loan paperwork.
  • quicklyfrozen 11y ago
    And once you get that financial info from the schools you really don't have a lot of time to make a decision -- only a few weeks in many cases. Very little time to make a $160K+ commitment. (It took us a year to buy our first house and it wasn't much more then that...)
• brightball 11y ago
  I remember seeing an article talking about removing some advanced math in high school and replacing it with something more useful like statistics. IMO it should be replaced with basic finance.
• nibs 11y ago
  More victimization of the people who take these loans on. If you can drive one ton of sheet metal 60 miles an hour among peers, you can understand that spending other people's money on something requires you pay it back. The problem is people think it is worth it, not that they are victims.
  • Broken_Hippo 11y ago
    How many 16 year olds have a clear enough mind to realize how much responsibility driving is? And is there an actual choice for most people? McDonalds used to as on their application if you had transportation to and from work, and public transportation is non-existent in most places, and horrible in many others. For example: I lived in one city that only had cab service. You could not rely on it to get to work on time. You could not order a cab in advance, and the wait time for a cab could be anywhere from 10 minutes to 2 hours. Many of the city's roads had no sidewalks, and bikers were required to share the road with cars and follow the same legal rules as cars - turn lanes and all. Which might not be so bad on a nice day, but during a snowstorm it would be downright treacherous. Besides - one must prove, to an extent - that they can drive the cars and know rules of the roads. The same sort of thing is completely absent in schools. The most 'personal finance' training I recieved was in 8th grade - a 6 week course ran by a dude that owned a car dealership. We got extra credit if our parents went to look at a car, and more if they bought one.
• skywhopper 11y ago
  It's unfair to blame the 17 year olds who are told by everyone they know and trust that getting a college education at the best school you can get into is the most important thing in the world. It's also unfair to blame them for not calculating the risk that in four years the degree they've been taught means everything will not be sufficient to get a high-paying job to cover rising housing costs and student loan debt when median wages have been falling.
• sjg007 11y ago
  Well you can take the job on the risk that you learn something, get promoted and get a better job. But I agree, even for the median wage programmer it is too expensive.
• lliamander 11y ago
  Financial literacy is important, but honestly most of these loans shouldn't be given out in the first place. If I take out a loan for a house, I provide evidence that I will be able to pay it back, and there is the collateral of the house in case I don't. Banks won't give out a loan unless there is a reasonable chance that they will make a good return on their investment. As far as I can tell, banks are prevented from making those same kinds of calculations for student loans.
  • Broken_Hippo 11y ago
    That is the actual reason for the government giving student loans instead of the banks - there really isn't a good way to tell if someone will pay it back, and no one has had enough time to prove responsibility at that age. Most of the private loans require parents or others to co-sign for the loans, and sometimes they don't really understand what they are getting into. Even the banks rely on a credit score based on how well you've paid back credit cards and other credit. One cannot prove responsibility simply by saving money and paying bills on time and living within one's means - if one does this, they go to the bank for a loan, and despite having saved a sizable chunk of down payment, get told they have no credit.
    • lliamander 10y ago
      > That is the actual reason for the government giving student loans instead of the banks - there really isn't a good way to tell if someone will pay it back, and no one has had enough time to prove responsibility at that age. Fair point, but if it is really true that there is no way whatsoever to establish credit-worthiness, I don't think anyone (government or private business) should be issuing student loans. Yet, are you sure that just because these kids^H^H^H^H young adults don't have a credit score that there isn't a way for banks to assess the likelihood of repayment? We all have ways of informally assessing a person's likelihood of success (and therefore at least their ability to repay). We look at things like SAT scores, college GPA, the quality of their school, the quality of their choice in major, etc. Banks could make the credit available to a student each year/semester dependent upon whatever of these factors are available. Banks could try out different risk-assessment models and the market would select those banks that have good enough models to produce a return on investment. And if our current credit score system is the only way to reliably measure credit-worthiness, why not use it? The obvious negative consequences include delaying when people can get a start on their career, and just the general economic chaos that would result from drastically altering the incentives at play. I am skeptical of radical change, but it is not immediately obvious that these negatives (while serious) are less than the consequences of our current usurious system.
• ben_jones 11y ago
  I think kids are perfectly capable of understanding it, and most of the time they do. They just think to themselves "I'll just get a $100k salary and pay it off in no time, because it's easy and I'm special". Source: Pretty similar to my life story.
• smadge 11y ago
  Financial literacy is not enough. Lenders are always going to have more knowledge about their own financial products and the ability of the borrower to make payments. For example, in the subprime mortgage crisis, borrowers were blamed for recklessly borrowing money. This makes no sense. Who is more reckless, 1) a working class borrower with little financial literacy taking a loan, or 2) a multibillion dollar, multinational bank with extensive financial knowledge giving that loan to the borrower? It's the same situation with student loans. Don't blame the students, blame the banks.
• dannylandau 11y ago
  Not sure this has anything to do with young age (e.g 17 year olds). Plenty go to graduate school, to get MBA, Law degree and end up with insane amount of debt. Even from top tier schools, most are struggling to pay it off.
• swiley 11y ago
  I actually was taught a lot about personal finance in highschool and was absolutely horrified at the way higher education was financed to the point of avoiding it for years.
• tluyben2 11y ago
  Depending on type of degree, skill and country etc it can be even earlier: I had to decide this at 16 and really besides girls, guitars and computers I had no clue what I would be doing later on. I did dev for clients freelance already and thought I might just as well get a degree. Turns out that I would never have needed it as I never had a 'job' (41 y/o now), always had my own companies and that allowed me to pay back my loan (which was not that big) when I sold my first company in my 20s. Besides that I like theoretical CS it never helped me as far as the title is concerned; I have always been the gatekeeper in my companies meaning I help out or pick up slack both hardware and software when needed in whatever tech needed but never had to use my diploma's, grades, minors/majors or title. If I had done what my parents wanted though, aka work at a big corp, diplomas, grades and titles work imho. Most (maybe all) people I work with at partners or clients (usually banks or big financials) have degrees and would not be at the company they are without I believe. I find the age or 16/17 way too young though to decide anything like that as you won't probably understand the impact until much later. Better is just fixing the rediculous fees etc.
• golergka 11y ago
  What special knowledge do they need except basic math?
• smileysteve 11y ago
  I question whether we should be shocked that we have taught such little financial literacy by the age of 17. But the truth is that the kids mowing the lawn each weekend are getting rarer.