6 ms·

The college debt crisis is worse than it seems

67 points by elberto34 10y ago

thearn4 10y ago
It seems clear that the American university system is fed by a largely inelastic demand and isolated from larger market forces, thanks in part to the endless spigot of federal loan money (complimented by the strong preference of employers towards traditional degree holders). What is less clear to me is how to fix this in a reasonable, least-damaging way.
- vkou 10y ago
  Ban education discrimination against job applicants. (Except for jobs which require certification). Right now, there is no drawback for an employer requiring a bachelor's degree for a job that has no use for it. Putting an end to this practice will stop the pointless rat race. Alternatively, cap student loans, and put lower boundaries on what % of tuition goes towards instruction. Most tuition funds do not go towards education, and there is a lot of pressure for universities to spend them on building Potemkin villages.
  - toomuchtodo 10y ago
    > Right now, there is no drawback for an employer requiring a bachelor's degree for a job that has no use for it. Increase an employer's taxes commensurate with the cost of the education for the workers they hire. If you truly need workers with bachelors, masters, PhDs, you pay for the cost. Internalize the externality.
    - SamReidHughes 10y ago
      Instead of taxing through their employers, why not just tax higher-educated employees directly?
      - maxerickson 10y ago
        What would be the goal of that? If someone has more education than is needed for a job but ends up taking it for other reasons, should they be taxed more than their less educated coworker? The idea with taxing the credentialed position is that it provides some incentive to not attach a credential to positions.
        SamReidHughes 10y ago
        > What would be the goal of that? You should ask the parent, not me. I do not advocate taxing getting an education, whether you do it directly on indirectly. Besides, in either case, such a tax would infringe on free speech.
        maxerickson 10y ago
        My question is about what you said. The 2 proposals have very different incentives and will likely have different outcomes. The parent of your post did not propose what you did, your idea has poor incentives for people seeking education and can be expected to have 0 influence on employers. Their idea has little impact on incentives for individuals seeking education and can be expected to encourage employers to consider the necessity of an educational requirement for a given job. Do you really see them as equivalently arbitrary hurdles to employment?
        SamReidHughes 10y ago
        Not at all. The incentives behind an income tax don't change based on whether they're paid on the employee's side or the employer's side. If you're an employee that costs 5% more to hire, you're going to get paid less. (Unless the idea is that taxes should be based on whether or not a job posting requires a degree. But that would be silly, because employers could omit the education requirement from the job posting but still hire the best candidates, or have the need for a credential be taken for granted via codewords like "engineer.")
        10y ago
    - vkou 10y ago
      That's an interesting idea (In that it reduces the amount of zero-training freeloading employers can do), but without other changes, I feel that it would make the problem worse - it would increase the guaranteed fire-hose of money that educational institutions will receive. Limiting the firehose to departments that add economic value won't fix the other wasteful practices.
      - toomuchtodo 10y ago
        > but without other changes, I feel that it would make the problem worse I agree. It must be enacted in concert with the equivalent of single payer education.
      - SamReidHughes 10y ago
        > In that it reduces the amount of zero-training freeloading employers can do I'm confused why you think not training employees constitutes "freeloading." Employers are paying wages on an open market for employees that come pre-trained.
        rayiner 10y ago
        Because the government subsidizes that training. If it didn't, there would be far fewer trained employees for employers to choose from, wages would go up, and employers would have to shoulder more of the burden of training.
        SamReidHughes 10y ago
        I guess that's the sense in which it was meant, and I missed that. On the other hand, that money isn't all pocketed by the employer -- it gets passed on through prices and quality to the employer's customers, and so on. The freeloading is enjoyed by the rest of the economy. (In fact, that freeloading effect is the justification most people give for publicly funding education.)
  - dragontamer 10y ago
    > Right now, there is no drawback for an employer requiring a bachelor's degree Erm... how about fewer applicants and higher wages? The average bachelor graduate will demand higher wages than the average high-school graduate. The market is demanding higher education for some reason. If you think its immoral that's one thing... but its completely different to argue that there is "no drawback". Walmart isn't asking for bachelor degrees to fill in their "Walmart Greeter" or "Walmart Cashier" positions.
    - randyrand 10y ago
      Your explanation of economics really hurts me to read =/ > The average bachelor graduate will demand higher wages than the average high-school graduate. In economics the word 'demand' does not mean 'demanding' your wage or 'demanding' a certain price. Economics demand is how many people want something at a certain price. Lets repeat that. 'Demand'... is how many people... want something ...at a certain price. It's not at all related to literally "demanding higher or lower wages", or "demanding higher or lower prices" as you are suggesting -- that is the colloquial definition of demand, and IMO it really should not be used when talking about economics. They can't be substituted for each other.
      - pc86 10y ago
        A. That's not even remotely related to any definition of "collective bargaining" I've ever heard of. B. I think it's pretty clear what the parent meant by "demand." C. Semantics aside, cp the market clearly bears much higher salaries for a candidate with a Bachelor's degree than for one without. D. Your comment is needlessly rude.
        randyrand 10y ago
        A. I was not defining collective bargaining, just giving an example of the difference between colloquial and economics demand. But lets just ignore that point as its largely unrelated. I removed it from my original comment. B. No, it is not clear, IMO. His use makes it seem like he is actually referring to demand, when in fact he is using the colloquial definition. People routinely confuse the two. C. Semantics become important when things become ambiguous and confusing. Most programmers would likely agree with this. D. Fair.
  - lettergram 10y ago
    I really want my aerospace engineers to be able to do math... Universities accredit them, so companies don't have to spend their money doing it (via a ridiculous number of interviews). Interviewing is already one of the largest sinks of money for a largish company, no need to make it worse. Far better, would removing the guaranteed loan payback the government provides. This would force universities to lower prices as students wouldn't be eligible for loans. Further, it increases the barrier to universities, meaning less people will have degrees and in turn companies would have an incentive to hire people without degrees. Plus people with degrees would get paid more (making it easier to pay off loans). The whole issue is universities aren't having to deal with market forces. Add back in the incentives and it'll be 10x cheaper.
    - vkou 10y ago
      Your aerospace engineers already need to pass engineering certification. My fast food franchise managers, on the other hand, need to show up, and apply a little common sense.
      - thearn4 10y ago
        > Your aerospace engineers already need to pass engineering certification Generally not in the U.S., unless it's a civil or electrical engineer designing infrastructure. I say this as an aerospace engineer with a mathematics PhD only.
    - aantix 10y ago
      You already have to interview the candidate; surely asking a question specific to your industry also will demonstrate their proficiencies in the math skills that you're concerned with? I can't imagine taking it for granted that because a University has certified someone that they're already proficient in the fundamentals? In fact, isn't that part of the problem? I once interviewed a CS grad from MIT for a mid-level software engineering position; smart guy. Couldn't code. Sorry sir, but we need someone that can contribute immediately. We don't care about your school. We care about your output. Next.
      - 10y ago
  - rm_-rf_slash 10y ago
    Great idea! 1: Job gets posted 2: High school graduate applies 3: Manager searches applicant and sees no higher education 4: "Thank you for your interest in this position, however we are looking for someone with a little more experience."
    - AnimalMuppet 10y ago
      It's going to have to be phrased better than that, because (for the same age), the person who stopped at high school has more experience.
      - rm_-rf_slash 10y ago
        At coding?
        AnimalMuppet 10y ago
        Potentially even at coding, yes, though the discussion has been more about general employment, not specifically coding.
        rm_-rf_slash 10y ago
        Yeah but a even decade of bagging groceries doesn't mean a thing in a professional context, except maybe demonstrating how well one can put up with bagging groceries for ten years.
    - danielweber 10y ago
      That same workaround should work for discriminating against people based on sex or race.
      - rm_-rf_slash 10y ago
        And as we all learned in Training Day: it's not what you know, it's what you can prove in court.
  - FussyZeus 10y ago
    It's not JUST the education though. Holding a degree shows you're capable of following a schedule, arriving to predetermined places on time regularly, keeping yourself relatively organized, receiving and completing assignments from authority, and are willing to work hard at things that aren't immediately obviously essential but you do them anyway.
    - vkou 10y ago
      So does graduating high school... Or having a previous job where you got a good reference. Or passing a probationary period.
      - FussyZeus 10y ago
        High school is mandatory though, and enforced via truancy laws. The only consequence to not showing up for college courses is wasting your (probably borrowed) money.
        vkou 10y ago
        So is gainful employment - it's enforced via poverty, homelessness, and early death... Yet, just because most of us show up to work under duress, doesn't diminish the value of work experience.
    - steffan 10y ago
      That used to be true in the case of a high school diploma as well. As a society, we've diluted the value of that to the extent that you need to see a 4-year degree to determine those things. Even a four-year degree seems to be diluted to the point that I wonder if we'll start require a Master's degree just to ensure someone is capable of reasonably correct written communication.
    - mulcahey 10y ago
      > willing to work hard at things that aren't immediately obviously essential but you do them anyway. I view this as actually one of the biggest problems with current pedagogies and curriculum structures. They don't teach the why of things[1] and so students either are unmotivated because it seems meaningless to them, or the ones who follow blindly on faith, who think less for themselves, end up looking like the smart ones. But then maybe that's what some employers are looking for. As Musk puts it, they fail to teach to the problem instead of the tools.[2] [1] https://youtu.be/vDwzmJpI4io?t=35m2s https://youtu.be/vDwzmJpI4io?t=35m2s [2] https://youtu.be/3UxL-0--oQo?t=25m25s https://youtu.be/3UxL-0--oQo?t=25m25s
  - gherkin0 10y ago
    > Ban education discrimination against job applicants. (Except for jobs which require certification). All that will do is create a regime of required certifications that people will need to get a job, and it will probably greatly reduce (individual) employment flexibility. Employers need some way of judging applicants ability, and it's my understanding that explicit aptitude tests have basically been banned, employers have to use education as a proxy. > put lower boundaries on what % of tuition goes towards instruction. Most tuition funds do not go towards education, and there is a lot of pressure for universities to spend them on building Potemkin villages. I think this is a much more reasonable suggestion. Cut out all the extra costs and make college a spartan environment focused on learning.
  - marincounty 10y ago
    I always felt a rigorous test could be administered, and tailored to specific job applicants. And yes, if we had tough tests, make it illegial for an employer to even ask where you went to school. For example, if a person can pass the CA bar, let him/her practice law? I bring up the CA bar test because it's especially hard. There are some professions that wouldn't lend themselfs to testing, but they would be the exception.
    - maxerickson 10y ago
      Bad example. You can do it! http://www.cbtronline.com/index.php/californias-law-office-study-program http://www.cbtronline.com/index.php/californias-law-office-s...
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  - danielweber 10y ago
    I like this idea, and have recommended it before. A partial step towards that end would be to return to the situation 20 years where student loans could be discharged in bankruptcy. This would indirectly put the pressure on the other parts of the system that never cared what kind of debt load the student was being saddled with.
- replicatorblog 10y ago
  Probably impossible politically and even difficult operationally, but cutting off the federal funds would go a long way towards getting these institutions to get competitive. Texas has been piloting programs that grant BA's for $10K. Not per year, all in (https://www.texastribune.org/2013/01/30/guide-getting-one-texas-new-10000-degrees/ https://www.texastribune.org/2013/01/30/guide-getting-one-te...). If Texas can do it, why not more schools. There will always be a place for elite educational institutions, the Rolls Royce of higher ed, but there should be a Toyota Corolla equivalent as well. This program in Texas proves that it is possible.
  - intrasight 10y ago
    Makes sense that the states will have to lead the way. And if those programs don't accept federal funds, then that becomes a powerful vote against the current paradigm.
- the_watcher 10y ago
  It is clear and it's not in part, it's entirely caused by.
  - mulcahey 10y ago
    State funding has also drastically decreased. But perhaps that's because the federal government was willing to help out instead: https://qph.is.quoracdn.net/main-qimg-d6bcc38832f7f3716570d302f4acb5c8?convert_to_webp=true https://qph.is.quoracdn.net/main-qimg-d6bcc38832f7f3716570d3...
- thescriptkiddie 10y ago
  Here's an idea. Instead of using federal funds to subsidize the student loan industry, give that money straight to public colleges so they don't have to charge tuition anymore.
rm_-rf_slash 10y ago
The article should have mentioned the inflationary effects of foreign students. A lot of foreigners who study in the US are either A: loaded or B: backed by their home state. It has gotten to the point where foreign students are somewhat expected to come to subsidize American financial aid. Add in the article's woes: increasing value of a college degree, cuts in education budgets, and cutthroat competition leading to a state of constant expensive campus development all leads to an enormous bill just to keep the lights on. The other aspect I take issue with is the farming out of federal loans to private companies. The US Department of Education doesn't need to make a profit on my federal student loans to exist, but my loan company does, and I'm stuck paying 6%. I have never seen a convincing argument as to why people like me are saddled with profit-seeking companies doing what should be a purely public service.
- shas3 10y ago
  Foreign students are 1.13 million [1] and the sum total of all students in the US is around 20 million ( age < 25 + age > 25) [2]. How much can they really contribute marginally to tuition inflation given that they are only 5-10% of the population? If foreign workers are taking American jobs, Chinese factories are taking over manufacturing, and international students are leading to tuition inflation, in general, US seems to be coping rather poorly with the effects of globalization. More likely, internationals are like Don Quixote's windmills. Edit: forgot references [1] http://www.wsj.com/articles/international-students-stream-into-u-s-colleges-1427248801 http://www.wsj.com/articles/international-students-stream-in... [2] http://nces.ed.gov/fastfacts/display.asp?id=98 http://nces.ed.gov/fastfacts/display.asp?id=98
  - rm_-rf_slash 10y ago
    "Coping poorly" is one way of putting it. I prefer "[the American people were] suckered into bad trade deals with countries with nonexistent labor and environmental standards which forced them to compete on the same level even though foreign competitors were handed enormous advantages as though they were US states but immune from regulation, thereby gutting the American middle class and the necessary tax base necessary to foot the bill for the kind of human investments necessary for a large country to succeed in a global information economy," but I guess your way works too.
eastbayjake 10y ago
It seems like these thinkpieces about "debt" are really about two separate issues: (1) College debt is a good investment if you learn things and graduate, but too many colleges are failing to educate students and too many students end up dropping out with debt and no degree. The good news is that this problem has a pedagogical solution, but it requires many colleges to hire faculty based on teaching skill rather than research achievements. The US is doing some of the world's best research, but too many academics are doing second-rate research at third-rate institutions. Many of those academics should instead be focused on teaching instead of research. (2) Everyone can benefit from learning new things -- even (or perhaps especially) a liberal arts education -- but many students are attending college to get a credential and land a good job. We should be clearer about what we want institutions of higher learning to teach: life's big questions or job skills? I could imagine a higher education system that does both, but there's no good reason it should cost $50k/year to read literature/philosophy with thoughtful guidance and peer discussion. Maybe our liberal arts educations should look more like structured gap years, while technical education would have specific learning outcomes tied to workforce demand and better information for prospective students about passing rate, job placement rates, and starting salaries so they can make informed decisions about their financial risk. My final complaint: I've never wanted my student debt forgiven, but it does sting to make student loan payments with after-tax income that goes directly to banks bailed out at taxpayer expense during the recession. If lawmakers wanted to help the student debt crisis, a great start would be making student loan payments tax-deductible (up to a certain total, and only below a certain income level) instead of just having student loan interest be tax-deductible.
- jdmichal 10y ago
  > We should be clearer about what we want institutions of higher learning to teach: life's big questions or job skills? This used to be easy to answer. The first is a university and the second is a trade school or apprenticeship. However, the latter has fallen out of favor (for some reason?), and universities are having to pick up both roles. I don't think this is the right answer, but it's the only one that seems to have political / financial support. Interestingly, software rediscovered "trade school light" in the form of coding bootcamps. > If lawmakers wanted to help the student debt crisis, a great start would be making student loan payments tax-deductible ... instead of just having student loan interest be tax-deductible. Tuition is deductible. So you effectively deduct the principle payments the year you pay tuition. It makes perfect sense for only the interest to be deductible the second time around.
Kinnard 10y ago
I think it's obvious to anyone not living under a rock that the higher education cliff is in view.
EnFinlay 10y ago
That first graph is really confusing.
mswen 10y ago
Here is my observation: based on oldest kid graduating 1.5 years ago from a Big 10 University with a degree in Scientific & Technical Communication. It was substantially harder to get a job than we expected. With my network - I finally located her a summer internship on 1099 basis that has turned into a year long engagement - still on a 1099 basis. To date she is showing no financial advantage from attending college. She could make the equivalent doing any number of things that don't require a 4 year degree. They are finally making noise about bringing her on FT salaried with benefits. Then we run into someone who graduated in her same class - still hasn't found work in her field and is making do as a hostess at a restaurant. No financial advantage. These are kids who graduated from respected university and yet here they are still struggling to see a financial benefit. My daughter's debt is fairly low because: she took advantage of a state program that pays tuition to start college early, she lived at home, took public transportation, didn't buy a car until she got this 'job' and still lives at home with our support so that she can focus on paying off the education loans that she did end up with. Was college worth it? I still think so and I have 3 more to go, but I have to say that I am really starting to think hard about the value of higher education.
- brians 10y ago
  What department at your employer would you expect to hire a Comms major? How many do they need per year? What fraction of those are college hires, vs people who have paid their dues in some trench elsewhere?
  - mswen 10y ago
    She is working in an Engineering department for a company that does sensors and cloud monitoring in a specific vertical industry. She does a combination of QA for devices and related software plus has been migrating their documentation from a wiki to SharePoint and editing the entries for clarity, grammar and writing style of the documentation as she does the migration. People from her degree typically would work with product and engineering teams to do both internal documentation as well as user manuals, well written FAQs and other support documentation. In a major medical device company located near here they have teams of people doing this working with expert translators to appropriately localize surgical guides for surgeons around the world. In more academic settings they are sometimes employed to provide assistance in grant writing. You make some good points about new college hires versus experienced people who have paid their dues - but that is true of any field. I am not saying I expected that she would match the salary of CS or engineering grad from the same university. But in comparison to pure communications degrees or English lit degrees - this degree is positioned as the sensible writing degree that actually has corporate positions available. And, to the point of the article - which focused on people who maybe aren't quite ready for college and don't finish their degree but still end up with debt. If anything she is the opposite - qualified to start college 2 years early. Finished in a total of 4.5 years and for what? Now it may payoff as she continues to pay dues in entry level work but for now she could make as much money doing any number of jobs that don't require a 4 year degree.
_xander 10y ago
Maybe we should learn from the ‘controlled’ experiment in the UK. There the new fees structure caps undergraduate tuition at £9k per year. Gov loans with very forgiving repayment terms are provided for students. The government expected only a few elite universities to charge the full £9k, with the rest charging between 6k and £8k. Their rationale was that universities would compete on price and try to deliver value for money. In reality, universities interacted with each other in entirely the opposite direction – they raced to the top. This is quite surprising, considering the huge variability between universities and courses: 3 years of tutorials in economics at Cambridge cost the same as staying at home and doing social work at the University of Huddersfield. LSE used to charge £8.5k (a symbolic gesture, more than anything), but bumped it up to £9k when it realised (1) their perceived value was derived from their price tag (the higher the better) and (2) that hyper-competition over league tables encourages aggressive spending programmes. I think this tells us that universities will always charge as much as they can get away with, and that laissez faire economics does not work well in a market filled with institutions that are often shielded from free market effects (e.g. ‘lock-in’ to past choices, difficulties for new entrants into the market, no easy way to weigh-up costs/benefits of investment, etc.). Colleges in the US have a broad range of incentives to charge the highest acceptable market rate (which is usually between $55k and $85k for undergraduate tuition).
- maxerickson 10y ago
  It think that gets a lot of it. If everyone has loan money, universities get less out of competing for students than students get out of competing for spots at universities. So the universities stop competing (financially) for students (that's a euphemism for charging the maximum). To me it makes sense to limit the support that students see to competitive grants that only cover most of the cost of tuition (like 75 or 80 percent). Then universities have some reason to keep tuition lower (students will be somewhat price sensitive), students have motivation to examine whether they should go to school. There's probably some fairness issues to address with that, I guess the competitive aspect of the grants could be the size of the grant, with every student having some access. edited in the (financially) in the first paragraph.
  - 10y ago
zackmorris 10y ago
The college debt crisis is not so much about specifics like the rising cost of education or that more women and minorities are attending now than in the past. It's really about corruption. Fannie Mae and Freddie Mac got big after the saving and loan scandal in the 80s, orchestrated by Neil Bush: https://en.wikipedia.org/wiki/Savings_and_loan_crisis https://en.wikipedia.org/wiki/Savings_and_loan_crisis https://en.wikipedia.org/wiki/Neil_Bush https://en.wikipedia.org/wiki/Neil_Bush Sallie Mae got big after Reagan largely defunded public universities, switching to student loan based funding with the goal of moving those loans over to private institutions. So what it basically comes down to is each generation keeps getting fleeced by these private firms while the government looks the other way, and taxpayers pick up the tab. Just watch as this thread fills up with thousands of comments blaming this or that. They have us all distracted bickering amongst ourselves so we don't see who is profiting. If we want to fix higher learning in America, we need to go back to pre-1980s policies and get private financing out. Universities should be funded by endowments set up by the alumni who have profited greatly by the quality educations they received. It's no wonder that people are doing the math and opting out of college because the loans are too expensive. It was never supposed to be like that in the first place.
Overtonwindow 10y ago
This is another article beating the college debt drum, and unfortunately it also misses a few critical points: Students are attending expensive schools, with expensive private loans. Instead of going to a community or state school, paid for by the federal Stafford loan, they choose to take out loans from banks to go to private, or worse, for-profit schools, with zero certainty and little guidance. This is further compounded by the endless number of require classes students are forced to take, that have little to no impact on their major, career choice, or academic goals, and are further saddled with endless labs, and fees. Large student debt is the fault of both the students, and the schools. Both need to take responsibility.
scarface74 10y ago
No one is forced to go to a private college and rack up debt. Go to a state college. Most students could probably go to a junior college their first two years close to home and transfer. I always laughed seeing people thousands in debt getting a comp Sci degree making no more than me - a graduate of an unremarkable state school.

67 points by elberto34 10y ago

It seems clear that the American university system is fed by a largely inelastic demand and isolated from larger market forces, thanks in part to the endless spigot of federal loan money (complimented by the strong preference of employers towards traditional degree holders). What is less clear to me is how to fix this in a reasonable, least-damaging way.

vkou 10y ago
Ban education discrimination against job applicants. (Except for jobs which require certification). Right now, there is no drawback for an employer requiring a bachelor's degree for a job that has no use for it. Putting an end to this practice will stop the pointless rat race. Alternatively, cap student loans, and put lower boundaries on what % of tuition goes towards instruction. Most tuition funds do not go towards education, and there is a lot of pressure for universities to spend them on building Potemkin villages.
- toomuchtodo 10y ago
  > Right now, there is no drawback for an employer requiring a bachelor's degree for a job that has no use for it. Increase an employer's taxes commensurate with the cost of the education for the workers they hire. If you truly need workers with bachelors, masters, PhDs, you pay for the cost. Internalize the externality.
  - SamReidHughes 10y ago
    Instead of taxing through their employers, why not just tax higher-educated employees directly?
    - maxerickson 10y ago
      What would be the goal of that? If someone has more education than is needed for a job but ends up taking it for other reasons, should they be taxed more than their less educated coworker? The idea with taxing the credentialed position is that it provides some incentive to not attach a credential to positions.
      - SamReidHughes 10y ago
        > What would be the goal of that? You should ask the parent, not me. I do not advocate taxing getting an education, whether you do it directly on indirectly. Besides, in either case, such a tax would infringe on free speech.
        maxerickson 10y ago
        My question is about what you said. The 2 proposals have very different incentives and will likely have different outcomes. The parent of your post did not propose what you did, your idea has poor incentives for people seeking education and can be expected to have 0 influence on employers. Their idea has little impact on incentives for individuals seeking education and can be expected to encourage employers to consider the necessity of an educational requirement for a given job. Do you really see them as equivalently arbitrary hurdles to employment?
        SamReidHughes 10y ago
        Not at all. The incentives behind an income tax don't change based on whether they're paid on the employee's side or the employer's side. If you're an employee that costs 5% more to hire, you're going to get paid less. (Unless the idea is that taxes should be based on whether or not a job posting requires a degree. But that would be silly, because employers could omit the education requirement from the job posting but still hire the best candidates, or have the need for a credential be taken for granted via codewords like "engineer.")
        10y ago
  - vkou 10y ago
    That's an interesting idea (In that it reduces the amount of zero-training freeloading employers can do), but without other changes, I feel that it would make the problem worse - it would increase the guaranteed fire-hose of money that educational institutions will receive. Limiting the firehose to departments that add economic value won't fix the other wasteful practices.
    - toomuchtodo 10y ago
      > but without other changes, I feel that it would make the problem worse I agree. It must be enacted in concert with the equivalent of single payer education.
    - SamReidHughes 10y ago
      > In that it reduces the amount of zero-training freeloading employers can do I'm confused why you think not training employees constitutes "freeloading." Employers are paying wages on an open market for employees that come pre-trained.
      - rayiner 10y ago
        Because the government subsidizes that training. If it didn't, there would be far fewer trained employees for employers to choose from, wages would go up, and employers would have to shoulder more of the burden of training.
        SamReidHughes 10y ago
        I guess that's the sense in which it was meant, and I missed that. On the other hand, that money isn't all pocketed by the employer -- it gets passed on through prices and quality to the employer's customers, and so on. The freeloading is enjoyed by the rest of the economy. (In fact, that freeloading effect is the justification most people give for publicly funding education.)
- dragontamer 10y ago
  > Right now, there is no drawback for an employer requiring a bachelor's degree Erm... how about fewer applicants and higher wages? The average bachelor graduate will demand higher wages than the average high-school graduate. The market is demanding higher education for some reason. If you think its immoral that's one thing... but its completely different to argue that there is "no drawback". Walmart isn't asking for bachelor degrees to fill in their "Walmart Greeter" or "Walmart Cashier" positions.
  - randyrand 10y ago
    Your explanation of economics really hurts me to read =/ > The average bachelor graduate will demand higher wages than the average high-school graduate. In economics the word 'demand' does not mean 'demanding' your wage or 'demanding' a certain price. Economics demand is how many people want something at a certain price. Lets repeat that. 'Demand'... is how many people... want something ...at a certain price. It's not at all related to literally "demanding higher or lower wages", or "demanding higher or lower prices" as you are suggesting -- that is the colloquial definition of demand, and IMO it really should not be used when talking about economics. They can't be substituted for each other.
    - pc86 10y ago
      A. That's not even remotely related to any definition of "collective bargaining" I've ever heard of. B. I think it's pretty clear what the parent meant by "demand." C. Semantics aside, cp the market clearly bears much higher salaries for a candidate with a Bachelor's degree than for one without. D. Your comment is needlessly rude.
      - randyrand 10y ago
        A. I was not defining collective bargaining, just giving an example of the difference between colloquial and economics demand. But lets just ignore that point as its largely unrelated. I removed it from my original comment. B. No, it is not clear, IMO. His use makes it seem like he is actually referring to demand, when in fact he is using the colloquial definition. People routinely confuse the two. C. Semantics become important when things become ambiguous and confusing. Most programmers would likely agree with this. D. Fair.
- lettergram 10y ago
  I really want my aerospace engineers to be able to do math... Universities accredit them, so companies don't have to spend their money doing it (via a ridiculous number of interviews). Interviewing is already one of the largest sinks of money for a largish company, no need to make it worse. Far better, would removing the guaranteed loan payback the government provides. This would force universities to lower prices as students wouldn't be eligible for loans. Further, it increases the barrier to universities, meaning less people will have degrees and in turn companies would have an incentive to hire people without degrees. Plus people with degrees would get paid more (making it easier to pay off loans). The whole issue is universities aren't having to deal with market forces. Add back in the incentives and it'll be 10x cheaper.
  - vkou 10y ago
    Your aerospace engineers already need to pass engineering certification. My fast food franchise managers, on the other hand, need to show up, and apply a little common sense.
    - thearn4 10y ago
      > Your aerospace engineers already need to pass engineering certification Generally not in the U.S., unless it's a civil or electrical engineer designing infrastructure. I say this as an aerospace engineer with a mathematics PhD only.
  - aantix 10y ago
    You already have to interview the candidate; surely asking a question specific to your industry also will demonstrate their proficiencies in the math skills that you're concerned with? I can't imagine taking it for granted that because a University has certified someone that they're already proficient in the fundamentals? In fact, isn't that part of the problem? I once interviewed a CS grad from MIT for a mid-level software engineering position; smart guy. Couldn't code. Sorry sir, but we need someone that can contribute immediately. We don't care about your school. We care about your output. Next.
    - 10y ago
- rm_-rf_slash 10y ago
  Great idea! 1: Job gets posted 2: High school graduate applies 3: Manager searches applicant and sees no higher education 4: "Thank you for your interest in this position, however we are looking for someone with a little more experience."
  - AnimalMuppet 10y ago
    It's going to have to be phrased better than that, because (for the same age), the person who stopped at high school has more experience.
    - rm_-rf_slash 10y ago
      At coding?
      - AnimalMuppet 10y ago
        Potentially even at coding, yes, though the discussion has been more about general employment, not specifically coding.
        rm_-rf_slash 10y ago
        Yeah but a even decade of bagging groceries doesn't mean a thing in a professional context, except maybe demonstrating how well one can put up with bagging groceries for ten years.
  - danielweber 10y ago
    That same workaround should work for discriminating against people based on sex or race.
    - rm_-rf_slash 10y ago
      And as we all learned in Training Day: it's not what you know, it's what you can prove in court.
- FussyZeus 10y ago
  It's not JUST the education though. Holding a degree shows you're capable of following a schedule, arriving to predetermined places on time regularly, keeping yourself relatively organized, receiving and completing assignments from authority, and are willing to work hard at things that aren't immediately obviously essential but you do them anyway.
  - vkou 10y ago
    So does graduating high school... Or having a previous job where you got a good reference. Or passing a probationary period.
    - FussyZeus 10y ago
      High school is mandatory though, and enforced via truancy laws. The only consequence to not showing up for college courses is wasting your (probably borrowed) money.
      - vkou 10y ago
        So is gainful employment - it's enforced via poverty, homelessness, and early death... Yet, just because most of us show up to work under duress, doesn't diminish the value of work experience.
  - steffan 10y ago
    That used to be true in the case of a high school diploma as well. As a society, we've diluted the value of that to the extent that you need to see a 4-year degree to determine those things. Even a four-year degree seems to be diluted to the point that I wonder if we'll start require a Master's degree just to ensure someone is capable of reasonably correct written communication.
  - mulcahey 10y ago
    > willing to work hard at things that aren't immediately obviously essential but you do them anyway. I view this as actually one of the biggest problems with current pedagogies and curriculum structures. They don't teach the why of things[1] and so students either are unmotivated because it seems meaningless to them, or the ones who follow blindly on faith, who think less for themselves, end up looking like the smart ones. But then maybe that's what some employers are looking for. As Musk puts it, they fail to teach to the problem instead of the tools.[2] [1] https://youtu.be/vDwzmJpI4io?t=35m2s https://youtu.be/vDwzmJpI4io?t=35m2s [2] https://youtu.be/3UxL-0--oQo?t=25m25s https://youtu.be/3UxL-0--oQo?t=25m25s
- gherkin0 10y ago
  > Ban education discrimination against job applicants. (Except for jobs which require certification). All that will do is create a regime of required certifications that people will need to get a job, and it will probably greatly reduce (individual) employment flexibility. Employers need some way of judging applicants ability, and it's my understanding that explicit aptitude tests have basically been banned, employers have to use education as a proxy. > put lower boundaries on what % of tuition goes towards instruction. Most tuition funds do not go towards education, and there is a lot of pressure for universities to spend them on building Potemkin villages. I think this is a much more reasonable suggestion. Cut out all the extra costs and make college a spartan environment focused on learning.
- marincounty 10y ago
  I always felt a rigorous test could be administered, and tailored to specific job applicants. And yes, if we had tough tests, make it illegial for an employer to even ask where you went to school. For example, if a person can pass the CA bar, let him/her practice law? I bring up the CA bar test because it's especially hard. There are some professions that wouldn't lend themselfs to testing, but they would be the exception.
  - maxerickson 10y ago
    Bad example. You can do it! http://www.cbtronline.com/index.php/californias-law-office-study-program http://www.cbtronline.com/index.php/californias-law-office-s...
    - deleted 10y ago
      [deleted]
    - deleted 10y ago
      [deleted]
- danielweber 10y ago
  I like this idea, and have recommended it before. A partial step towards that end would be to return to the situation 20 years where student loans could be discharged in bankruptcy. This would indirectly put the pressure on the other parts of the system that never cared what kind of debt load the student was being saddled with.
replicatorblog 10y ago
Probably impossible politically and even difficult operationally, but cutting off the federal funds would go a long way towards getting these institutions to get competitive. Texas has been piloting programs that grant BA's for $10K. Not per year, all in (https://www.texastribune.org/2013/01/30/guide-getting-one-texas-new-10000-degrees/ https://www.texastribune.org/2013/01/30/guide-getting-one-te...). If Texas can do it, why not more schools. There will always be a place for elite educational institutions, the Rolls Royce of higher ed, but there should be a Toyota Corolla equivalent as well. This program in Texas proves that it is possible.
- intrasight 10y ago
  Makes sense that the states will have to lead the way. And if those programs don't accept federal funds, then that becomes a powerful vote against the current paradigm.
the_watcher 10y ago
It is clear and it's not in part, it's entirely caused by.
- mulcahey 10y ago
  State funding has also drastically decreased. But perhaps that's because the federal government was willing to help out instead: https://qph.is.quoracdn.net/main-qimg-d6bcc38832f7f3716570d302f4acb5c8?convert_to_webp=true https://qph.is.quoracdn.net/main-qimg-d6bcc38832f7f3716570d3...
thescriptkiddie 10y ago
Here's an idea. Instead of using federal funds to subsidize the student loan industry, give that money straight to public colleges so they don't have to charge tuition anymore.

rm_-rf_slash 10y ago

The article should have mentioned the inflationary effects of foreign students. A lot of foreigners who study in the US are either A: loaded or B: backed by their home state. It has gotten to the point where foreign students are somewhat expected to come to subsidize American financial aid. Add in the article's woes: increasing value of a college degree, cuts in education budgets, and cutthroat competition leading to a state of constant expensive campus development all leads to an enormous bill just to keep the lights on. The other aspect I take issue with is the farming out of federal loans to private companies. The US Department of Education doesn't need to make a profit on my federal student loans to exist, but my loan company does, and I'm stuck paying 6%. I have never seen a convincing argument as to why people like me are saddled with profit-seeking companies doing what should be a purely public service.

shas3 10y ago
Foreign students are 1.13 million [1] and the sum total of all students in the US is around 20 million ( age < 25 + age > 25) [2]. How much can they really contribute marginally to tuition inflation given that they are only 5-10% of the population? If foreign workers are taking American jobs, Chinese factories are taking over manufacturing, and international students are leading to tuition inflation, in general, US seems to be coping rather poorly with the effects of globalization. More likely, internationals are like Don Quixote's windmills. Edit: forgot references [1] http://www.wsj.com/articles/international-students-stream-into-u-s-colleges-1427248801 http://www.wsj.com/articles/international-students-stream-in... [2] http://nces.ed.gov/fastfacts/display.asp?id=98 http://nces.ed.gov/fastfacts/display.asp?id=98
- rm_-rf_slash 10y ago
  "Coping poorly" is one way of putting it. I prefer "[the American people were] suckered into bad trade deals with countries with nonexistent labor and environmental standards which forced them to compete on the same level even though foreign competitors were handed enormous advantages as though they were US states but immune from regulation, thereby gutting the American middle class and the necessary tax base necessary to foot the bill for the kind of human investments necessary for a large country to succeed in a global information economy," but I guess your way works too.

eastbayjake 10y ago

It seems like these thinkpieces about "debt" are really about two separate issues: (1) College debt is a good investment if you learn things and graduate, but too many colleges are failing to educate students and too many students end up dropping out with debt and no degree. The good news is that this problem has a pedagogical solution, but it requires many colleges to hire faculty based on teaching skill rather than research achievements. The US is doing some of the world's best research, but too many academics are doing second-rate research at third-rate institutions. Many of those academics should instead be focused on teaching instead of research. (2) Everyone can benefit from learning new things -- even (or perhaps especially) a liberal arts education -- but many students are attending college to get a credential and land a good job. We should be clearer about what we want institutions of higher learning to teach: life's big questions or job skills? I could imagine a higher education system that does both, but there's no good reason it should cost $50k/year to read literature/philosophy with thoughtful guidance and peer discussion. Maybe our liberal arts educations should look more like structured gap years, while technical education would have specific learning outcomes tied to workforce demand and better information for prospective students about passing rate, job placement rates, and starting salaries so they can make informed decisions about their financial risk. My final complaint: I've never wanted my student debt forgiven, but it does sting to make student loan payments with after-tax income that goes directly to banks bailed out at taxpayer expense during the recession. If lawmakers wanted to help the student debt crisis, a great start would be making student loan payments tax-deductible (up to a certain total, and only below a certain income level) instead of just having student loan interest be tax-deductible.

jdmichal 10y ago
> We should be clearer about what we want institutions of higher learning to teach: life's big questions or job skills? This used to be easy to answer. The first is a university and the second is a trade school or apprenticeship. However, the latter has fallen out of favor (for some reason?), and universities are having to pick up both roles. I don't think this is the right answer, but it's the only one that seems to have political / financial support. Interestingly, software rediscovered "trade school light" in the form of coding bootcamps. > If lawmakers wanted to help the student debt crisis, a great start would be making student loan payments tax-deductible ... instead of just having student loan interest be tax-deductible. Tuition is deductible. So you effectively deduct the principle payments the year you pay tuition. It makes perfect sense for only the interest to be deductible the second time around.

Kinnard 10y ago

I think it's obvious to anyone not living under a rock that the higher education cliff is in view.

EnFinlay 10y ago

That first graph is really confusing.

mswen 10y ago

Here is my observation: based on oldest kid graduating 1.5 years ago from a Big 10 University with a degree in Scientific & Technical Communication. It was substantially harder to get a job than we expected. With my network - I finally located her a summer internship on 1099 basis that has turned into a year long engagement - still on a 1099 basis. To date she is showing no financial advantage from attending college. She could make the equivalent doing any number of things that don't require a 4 year degree. They are finally making noise about bringing her on FT salaried with benefits. Then we run into someone who graduated in her same class - still hasn't found work in her field and is making do as a hostess at a restaurant. No financial advantage. These are kids who graduated from respected university and yet here they are still struggling to see a financial benefit. My daughter's debt is fairly low because: she took advantage of a state program that pays tuition to start college early, she lived at home, took public transportation, didn't buy a car until she got this 'job' and still lives at home with our support so that she can focus on paying off the education loans that she did end up with. Was college worth it? I still think so and I have 3 more to go, but I have to say that I am really starting to think hard about the value of higher education.

brians 10y ago
What department at your employer would you expect to hire a Comms major? How many do they need per year? What fraction of those are college hires, vs people who have paid their dues in some trench elsewhere?
- mswen 10y ago
  She is working in an Engineering department for a company that does sensors and cloud monitoring in a specific vertical industry. She does a combination of QA for devices and related software plus has been migrating their documentation from a wiki to SharePoint and editing the entries for clarity, grammar and writing style of the documentation as she does the migration. People from her degree typically would work with product and engineering teams to do both internal documentation as well as user manuals, well written FAQs and other support documentation. In a major medical device company located near here they have teams of people doing this working with expert translators to appropriately localize surgical guides for surgeons around the world. In more academic settings they are sometimes employed to provide assistance in grant writing. You make some good points about new college hires versus experienced people who have paid their dues - but that is true of any field. I am not saying I expected that she would match the salary of CS or engineering grad from the same university. But in comparison to pure communications degrees or English lit degrees - this degree is positioned as the sensible writing degree that actually has corporate positions available. And, to the point of the article - which focused on people who maybe aren't quite ready for college and don't finish their degree but still end up with debt. If anything she is the opposite - qualified to start college 2 years early. Finished in a total of 4.5 years and for what? Now it may payoff as she continues to pay dues in entry level work but for now she could make as much money doing any number of jobs that don't require a 4 year degree.

_xander 10y ago

Maybe we should learn from the ‘controlled’ experiment in the UK. There the new fees structure caps undergraduate tuition at £9k per year. Gov loans with very forgiving repayment terms are provided for students. The government expected only a few elite universities to charge the full £9k, with the rest charging between 6k and £8k. Their rationale was that universities would compete on price and try to deliver value for money. In reality, universities interacted with each other in entirely the opposite direction – they raced to the top. This is quite surprising, considering the huge variability between universities and courses: 3 years of tutorials in economics at Cambridge cost the same as staying at home and doing social work at the University of Huddersfield. LSE used to charge £8.5k (a symbolic gesture, more than anything), but bumped it up to £9k when it realised (1) their perceived value was derived from their price tag (the higher the better) and (2) that hyper-competition over league tables encourages aggressive spending programmes. I think this tells us that universities will always charge as much as they can get away with, and that laissez faire economics does not work well in a market filled with institutions that are often shielded from free market effects (e.g. ‘lock-in’ to past choices, difficulties for new entrants into the market, no easy way to weigh-up costs/benefits of investment, etc.). Colleges in the US have a broad range of incentives to charge the highest acceptable market rate (which is usually between $55k and $85k for undergraduate tuition).

maxerickson 10y ago
It think that gets a lot of it. If everyone has loan money, universities get less out of competing for students than students get out of competing for spots at universities. So the universities stop competing (financially) for students (that's a euphemism for charging the maximum). To me it makes sense to limit the support that students see to competitive grants that only cover most of the cost of tuition (like 75 or 80 percent). Then universities have some reason to keep tuition lower (students will be somewhat price sensitive), students have motivation to examine whether they should go to school. There's probably some fairness issues to address with that, I guess the competitive aspect of the grants could be the size of the grant, with every student having some access. edited in the (financially) in the first paragraph.
- 10y ago

zackmorris 10y ago

The college debt crisis is not so much about specifics like the rising cost of education or that more women and minorities are attending now than in the past. It's really about corruption. Fannie Mae and Freddie Mac got big after the saving and loan scandal in the 80s, orchestrated by Neil Bush: https://en.wikipedia.org/wiki/Savings_and_loan_crisis https://en.wikipedia.org/wiki/Savings_and_loan_crisis https://en.wikipedia.org/wiki/Neil_Bush https://en.wikipedia.org/wiki/Neil_Bush Sallie Mae got big after Reagan largely defunded public universities, switching to student loan based funding with the goal of moving those loans over to private institutions. So what it basically comes down to is each generation keeps getting fleeced by these private firms while the government looks the other way, and taxpayers pick up the tab. Just watch as this thread fills up with thousands of comments blaming this or that. They have us all distracted bickering amongst ourselves so we don't see who is profiting. If we want to fix higher learning in America, we need to go back to pre-1980s policies and get private financing out. Universities should be funded by endowments set up by the alumni who have profited greatly by the quality educations they received. It's no wonder that people are doing the math and opting out of college because the loans are too expensive. It was never supposed to be like that in the first place.

Overtonwindow 10y ago

This is another article beating the college debt drum, and unfortunately it also misses a few critical points: Students are attending expensive schools, with expensive private loans. Instead of going to a community or state school, paid for by the federal Stafford loan, they choose to take out loans from banks to go to private, or worse, for-profit schools, with zero certainty and little guidance. This is further compounded by the endless number of require classes students are forced to take, that have little to no impact on their major, career choice, or academic goals, and are further saddled with endless labs, and fees. Large student debt is the fault of both the students, and the schools. Both need to take responsibility.

scarface74 10y ago

No one is forced to go to a private college and rack up debt. Go to a state college. Most students could probably go to a junior college their first two years close to home and transfer. I always laughed seeing people thousands in debt getting a comp Sci degree making no more than me - a graduate of an unremarkable state school.