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Soaring Student Debt Prompts Calls for Relief

• krinchan 10y ago
  College is just all sorts of disgusting in the US right now. I support relief, but I'm sure that we're going to have to see a massive crash in the system before anything happens. I managed to go to a small public university after the tuition hike but before the Great Fees Gouging. I'd probably have escaped with $5,000 less in debt if I had started with my state's (Georgia's Hope) merit based scholarship instead of having to build up 10 semester hours totally on Federal UnSubsidized Loans the first year. At that point, used Ebay books could run you well past $1,000 a semester. Hope only gave you a $150 for books. Hope also did not cover fees. Those started at about $800 every semester when I enrolled. My 4th year, they had hit well past $2,500 per semester. Included in that was $150 to build a new student recreation center that I would never use since it wasn't even being built yet. The amount of hustle I had to do just to escape that school with minimal debt was insane. My overloaded schedule (because semester hours past 12 didn't increase your tuition or fees) meant I needed a job that let me do study or homework while working. So typical service jobs off-campus were out of the question. My year basically was applying for summer retail jobs, lying my face off during the interview that I was going to stay on past the summer, and then of course quitting. I'm basically black-listed from several retailers for quitting for this reason. Christmas was always easier because those jobs are naturally seasonal. During school, I'd tutor various core classes under the table. At my university, this was considered quasi-against-the-rules. Tutors were supposed to go through the Student Support Center. They'd pay you hourly minimum wage and set you up with other students for free. Tutors who were students caught not going this route were usually sanctioned by the university and threatened with all sorts of administrative punishments. Naturally, this was unacceptable to tutors, so we all snuck around advertising by word of mouth and meeting off campus. I mean, when I can easily pull $100 a session as the only person willing to try to cram Plato into your brain, why would I go through the SSC? Calculus was a bit harder because there was more competition, so that usually ran about $60 to start. Once I had kids getting their B's and telling their friends, I was able to pull $100. I ran a group rate for a Fraternity that was a flat $350 a month. I lived off campus, because rent on a 3 bedroom, 2 bath was $950/month plus utilities. Speaking of hustle, keeping those bedrooms stocked with roommates was it's own drama. Kicking roommates who fell behind was even worse. The lease was in my name, because most places I went to rent a room were on 6 month leases and headed home every summer. I wanted something more permanent since I was staying in town year round. All said, I managed to escape with just over $30,000 in debt. That's tuition, fees, and about $10,000 a year to supplement all my other income. I hit a job immediately and started burning it down as fast as possible. I landed a better job with nice, $10,000 yearly bonuses and finished murdering it. This was right as the next big wave of inflation hit higher education. Now? I went back and poked some of my social circle in that town. Getting out without $60,000 in debt is basically impossible. If you live outside of a 10 mile radius of the campus, you are required to live in the dorms your Freshman year. Literally every course uses some sort of book with an online component. To access that component, you have to buy the book new to get a code. The university regularly charges current students fees to raise money for buildings that won't be built for 5 years. They recently charged a parking fee, and then made all lots on campus hourly paid parking. The lot that parking fee is for? It's about a 4 minute walk off campus. Good luck if your class is on the other side of the campus. Part time students are actually charged the exact same fees, but are not allowed access to several benefits of of the campus. This is disguised as "discounts" for full time students at on campus food vendors, a higher co-pay for health services (physical and mental), and being barred from the free tutors (that no one can use because we won't work for them) Student Resource Center. The problem isn't just the loans, it's a deep cultural problem in the administration of these universities. University presidents down to the department chairs are held to metrics that lead to perverse incentives. They must milk students of every dollar possible so they feed the enrollment machine. This leads to admitting students that probably shouldn't be admitted. This leads them to dumb down courses to graduate students who have no business having a degree to feed the graduation rate. TL;DR: The US higher education system is abusive and terrible. Avoid at all costs.
  • thearn4 10y ago
    A good read, and I agree on your points. Like you, I worked my way through undergrad (including a period in the national guard and active army), and escaped with only a few thousand in debt thanks to that. Masters and PhD were free, but that's not too unusual in my area (applied math). I'm teaching one class as a part-time instructor now back at my old university (basically for beer money on top of the day job), and it's blowing my mind how much more flashy the campus is. And naturally, how ridiculously expensive it is after only 10 years. The focus on "student life" facilities strikes me as an odd set of priorities considering how long hiring and pay raise freezes for faculty seem to last. The mandatory online book thing is pretty insidious. We're required to use it by the department, and I can see how there is a kernel of a good idea there. It basically helps you run gigantic course sections while grading all homework for you, but while simultaneously killing the secondary textbook market (which is pretty evil). Worse, they are clearly implemented by the lowest bidder and break every web standard you could imagine. Basically, with increased class sizes and mandatory online content, every core course is slowly turning into a weird online hybrid class. I think this is decreasing the difference between a traditional education and a MOOC bit by bit, which is eventually going to give a lot of universities a bit of an identity and marketing crisis. Pearson, Wiley, Mcgraw-Hill et. al. are the entities that I would most like to see disappear when the college bubble pops. Free open-source community maintained textbooks seem like the obvious way forward to my software developer brain. On the bright side, I do enjoy actual lecturing. It's a lot more fun when you can do it with few or no stakes, since I don't have to rely on it for a living. I'm literally on the exact opposite of the spectrum from a tenured professor, but I weirdly feel like I have to same level of freedom.
• fredgrott 10y ago
  I would prefer an approach(I am a US citizen) in which if we are going to call college loans financial aid than every student should upon graduation get a 10% more money but in small business grant form so that they can form a small business.
• morgante 10y ago
  Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out of the student loan industry entirely: stop subsidizing them and making interest rates a political issue. Let the market signal which degrees are valuable and which aren't. But also make them dischargeable in bankruptcy. At least then there would be a consequence for people deciding to take out expensive loans for education.
  • toomuchtodo 10y ago
    TL;DR The health of the economy is more important than your moral high ground. Same reason we let people walk away from homes (or not walk away, simply not be able to afford them), but we'll still give them a mortgage 3 years after their foreclosure; the economy needs the monetary velocity to survive.
    • bsbechtel 10y ago
      >>When the Fed could just poof more money into existence? I hope you realize it doesn't quite work like that.
      • toomuchtodo 10y ago
        I removed that part because it wasn't relevant, but it does work exactly that way. The Federal Reserve simply credits the bank's reserve account from thin air. Fiat currency is a shared delusion of value with invisible hands exerting forces to enforce certain behaviors (the Federal Reserve attempts to stoke inflation in order for the economy to reach full employment, arguably unsuccessfully, while technology and cheap Chinese labor is having enormous deflationary effects, with the result being real estate and equities turning yet again into asset bubbles); never be fooled that we're somehow "losing" value by forgiving debts at the national government level.
• h4nkoslo 10y ago
  The two proposals they explicitly call out, allowing employers to subsidize the debt, and allowing farmers to write off their debts, are the exact kind of special carve-outs that caused the damn problem in the first place (the genesis being the non-dischargability & government guarantee of education debts, which was an enormous give-away to the higher ed sector). This is eerily reminiscent of the pre-revolution French or late Soviet Union trying to keep their spinning plates of state obligations, onerous taxes, and corrupt subsidies aloft.
• h4nkoslo 10y ago
  If there is going to be any "debt relief", it should be accomplished by taxing the schools & administrations that have immensely benefitted over the past 60 years from the massive subsidies granted to higher ed. This just shows how incredibly stupid the right wing is in the US. They could be using this as a cudgel to punish their intellectual opponents in the universities (entirely justified, since their claims to be increasing the human capital of their students in an economically productive way were evidently false), and simultaneously break down a barrier used to exclude a large number of their constituents (non-college-educated whites) from white collar employment. Instead it looks like they might be setting up to cut another check and further solidify the role of colleges as ideologically hostile gatekeepers to decent employment.
• mark-r 10y ago
  So did all this free-flowing money actually result in more college grads, or did it just allow the colleges to jack up their prices due to supply/demand? How supply constrained is the market?
• tuna-piano 10y ago
  Who should pay for college? Should it be the individual receiving the education (either at present, or in the future in the form of loans), or other people? Should people who don't go to college be forced to pay for education of those who do? Should we further tell students not to care what price colleges charge them? If we forgive debt, we're telling students to go to a school regardless of the costs, and telling schools to charge whatever they want. We're then forcing non-college-educated plumbers to pay (through the tax system) for the engineers college education. This seems like a terrible idea. I also see a huge problem with lumping all education together. There are some colleges, degrees and people where college can be considered a wise investment. That is, the expected value of the degree is more than the cost. There are other times when it appears college is a consumption expense, like just buying a four year vacation or a luxury car. When someone graduates college with the same productive capacity they had before college, but now with debt, that's sad to me. Working at $10 an hour in a coffee shop isn't that bad. Working at $10 an hour with $50k in debt is very bad. Many times people were just 18 year olds who were handed a blank check (loan) for college, and didn't know better. But there was no checks or balances on this ignorant 18 year old, as the lenders dont care that the student was not increasing their productive capacity. What we need is a system with no lender guarantees, with potential for percent of income repayment (earning equity), and have it be unsecured like other forms of debt. This will make lenders function properly, and only give loans to those who it believes are improving their human potential at college- and for whom college isn't the equivalent as buying a $100k luxury car.
• gregatragenet3 10y ago
  Why is shelling out six figures to go to college even a thing? Any of the knowledge obtainable through a college course is available free on the internet. Is it having the accountability of grades and adult supervision? 60k/yr/student seems like a lot of mark up for repackaging knowledge which is free in a format consumable by the average high school grad. This this is a market waiting to get disrupted.
  • branchless 10y ago
    Leaving aside whether degrees add value or not, the perception is that they do and it absolves hiring managers some responsibility. If you work for a big company and you have an ivy league grad and a guy from a conference you met who seems promising do you: a) hire the ivy guy and if he is crap mumble about youth today b) hire the random guy who screws up and everyone blames you ? Both get hired at low wages as starters, you might save a bit on the random person but not that much. Plus if he is good he'll want a rise. Large corporations are about sitting nice and still and not messing up. I'm not sure it's the market, it's the consumers of the product in our world where managing perception in large companies which often have monopolies is more important that cranking stuff out. Not always, but often.
    • gregatragenet3 10y ago
      Option 3, (which may not be a option at F500 Co) is bring him on as a contractor and if he performs convert him to perm. A college degree is this decades version of "nobody got fired for buying IBM"
• grej 10y ago
  Am I the only one that thinks this is actually fairly simple? Change the rules to allow the loans to be discharged by standard bankruptcy and limit the percentage of federal backing. All of the sudden the banks will actually care about doing due diligence and the likelihood of being paid back, instead of throwing money at everyone knowing they have a federal taxpayer backstop. You want a loan for $60k to major in electrical engineering at NC State? Approved. You want us to loan you $225k to major in Sociology at Sarah Lawrence University? Denied. -- note - not to disparage anyone who went to Sarah Lawrence University. Chosen purely because it was listed as the most expensive private school
  • michaelbuddy 10y ago
    Yup and another benefit is it will not set as many of our youth into debt just when they are enjoying freedom for the first time in their life.
• hclgckxjtxjfxur 10y ago
  Since when did HN turn into "objectivism - the discussion forum"? I can't wait for the web bubble to pop to step some of these opinions down a notch.
• srhdmdndtjeyn 10y ago
  Since when did HN turn into an objectivist hellhole? It's like Ayn Rand herself is trying to convince me to harm others for my own benefit.
• madengr 10y ago
  How do all the foreign nationals afford it? In engineering, the majority are Asian paying full tuition.
• ctvo 10y ago
  You walked uphill through snow to get to your current position, with grit and determination and those freeloaders, who majored in THEATER or LITERATURE, spending their college days socializing while you studied for difficult engineering exams shouldn't be allowed to escape without paying for their crime of living in a country with a broken higher education system. Eerily similar narrative to any other welfare debate in the US.
• deleted 10y ago
  [deleted]
• throwawy91316 10y ago
  The solution seems simple: a few years of public service (infrastructure repair, maintaining parks, teaching in inner-city schools, military, etc.) in exchange for loan forgiveness. Our taxes are the dues we pay to live in a civil society, but civic responsibility doesn't end there.
• shanacarp 10y ago
  I'm reminded of the U of C's Aims of Education Address when this discussion comes up. EG: https://aims.uchicago.edu/node/83 https://aims.uchicago.edu/node/83 I tend to think that many things that are now in college degree programs are actually things that should be in trade programs - we've turned everything into a degree, and in the process, stopped realizing what the value of a degree is and/or what the purpose of a theory driven/liberal arts education is. (TL:DR if you don't end up reading the link - to think, to create the ability to teach yourself, to encounter new ideas and figure out which ones are hot air and which ones are not. To learn how to create good new ideas for yourself! To become a better human being and citizen in order to better participate in this world) If we separated out the trade school aspect, well, it becomes very hard to value an education in the traditional degree/liberal arts sense - and it becomes easier to tell what's the value of that immediate trade school diploma by market forces. In that, then the government could apply a limit on loans to what is very knowable (market forces) and apply some other metric because of the public good gained by aiming towards education in general
  • hyperion2010 10y ago
    Was there in person for that address (was that 10 years ago...). In my view if you go to college today and don't get a real liberal education (distribution requirements!) then you have waisted your time and probably your money.
    • shanacarp 10y ago
      you're lucky. My year didn't have nearly as entertaining a speech. I still think his points hold (as do many of the speeches points, most of which in some ways are similar). However, attaching liberal education to everything may or may not be a good idea - and with the trade-ism of college, liberal education is sort of conceptually odd
• awqrre 10y ago
  Allow student loans to be dischargeable in bankruptcy (don't forgive them all) and for all future public college & university students, let them go tuition-free...
• JustUhThought 10y ago
  The comments,,, so,,, ignorant. As if, all in one place, all the reasons I needed to stop reading social commentary in HN comments. The ignorance, the abundance of it, the diversity of it, Trump would be unable to stop himself from jizzing over the cornucopia of bigotry. Trump bigotry jizz, everywhere.
• matt_wulfeck 10y ago
  I'm not sure why it has to be forgiveness. They should be be able to file for bankruptcy just the same as if it was some other bad investment. All investments should come with risks and rewards and be "priced" appropriately. This will have a drastic affect on the interest rate of student loans, but perhaps a turn towards normal will be good for us. As of right now the government gaurantees it 100% -- which is to say YOU guarantee it!
• robohamburger 10y ago
  I got a 2-year degree from a community college and then went to a cheaper university for CS. I would recommend it, especially if your grades are not the best or you don't have a ton of money. My wife, on the other hand, is in another boat. She is studying vet med and has a pile of debt, and will likely be paying off her loans for most of her career.
• twblalock 10y ago
  There are a few things that the government could do to help, without blanket loan forgiveness: 1. Allow people to pay off their loans with pre-tax dollars, just like 401k investments. 2. Cap interest rates. The high rates are a big problem for people with large balances. The interest rates are a little lower now than the used to be -- 6.8% was standard for Federal loans for many years, and private loans are even higher. 3. Limit the amount that can be borrowed in the first place. Colleges have been raising tuition because they know students will be able to get the money. Apparently there are already limits, but I know people with over $100k in debt for a bachelor's degree, so clearly the limits aren't low enough. Limit what students will borrow, and you limit what they can pay -- tuition increases will become a lot harder to justify. 4. Make it easier to discharge loans in bankruptcy. This will also reduce lending, which is actually a good thing.
• bcheung 10y ago
  Society has an over emphasis on going to college. So much education is available for free in the Internet age. s/college/youtube/g Also, bring back the apprenticeships. Why not let someone learn for free or even get paid a small amount? It's so much better than them going into debt. College is such a racket.
• jknoepfler 10y ago
  Having deliberately attended the University of Minnesota - Twin Cities rather than an expensive private college, and having paid for it with a combination of savings, work, and some loans which I paid off immediately after graduating, I find the idea of loan relief morally reprehensible. Some ideas to improve the "situation on the ground": - reduce the demand for college education - reduce the cost of attending college by providing better material support for students in the form of affordable room and board. - reduce the cost of attending college by providing better public funding (by an order of magnitude) for public universities, state schools, and community colleges for students of proven ability (3rd/4th year students). - fail students who are wasting their money more quickly and aggressively. - make it easier to attend college part-time while working or while raising kids (the idea of intensive four-year study with "Summer Breaks" is absurd in the modern non-agrarian economy) - publish clear metrics on loan-repayment/income prospects after achieving a 4-year degree of <type> from <institution> with <gpa/perf metrics/etc> and use these to gate loans (it is probably rational to take out loans to get a philosophy degree from Harvard, it is probably not rational to take out loans to get a philosophy degree from a random state school in Minnesota. - regulate predatory loan-lending even more aggressively. - offer insurance as part of loans to allow students to hedge against catastrophic life/economic problems. If you are a dead average intellect with dead average work-ethic and ambitions, I see absolutely no reason to support your post-secondary education beyond a year or so. That's throwing damp logs on a dead fire. If you're a dead average intellect with dead average work-ethic and ambitions and you take out tens of thousands of dollars in loans gambling on a future that doesn't exist, I see no reason to treat you any differently than someone who gambles and loses in the market.
  • x2398dh1 10y ago
    I also went to the University of Minnesota...same story. That being said - do you remember those ads on daytime TV for ITT Technical Institute? Well it turns out that they shut that school down last month, for basically being a fraud school. The people who went to that school still owe federal debt. So, it's more complicated than that. Also, by saying, "dead average intellect and dead average work ethic," I think you're building a construct, which doesn't really exist. There are all sorts of reasons why people may have chosen a place like ITTTI - desperation, a family to support, lack of a proper background information on what education can do, lack of information, etc. You and I are lucky. Also, if you were presumably white, let's keep in mind that there is a massive educational gap in the Twin Cities...the largest in the nation. So we can get on our moral John Lockeian high horse about how responsible we are, talk about property rights, etc, but there have been many injustices perpetrated in all sorts of directions in the past, and we have a duty as members of society to improve that society, by whatever means make the most sense. Source: https://en.wikipedia.org/wiki/ITT_Technical_Institute https://en.wikipedia.org/wiki/ITT_Technical_Institute
• segmondy 10y ago
  This should be framed as call to increase tax on everyone for student debt relief. I wonder if people will be happy then.
• Paperweight 10y ago
  Why doesn't competition bring down the prices of university degrees?
  • imtringued 10y ago
    Can they compete with prestige?
    • deleted 10y ago
      [deleted]
    • Paperweight 10y ago
      Why can't a new college have prestige?
• hasbroslasher 10y ago
  Armchair marxist opinion: forgive the students debt, make the administrators pay more taxes. In all seriousness, though, there is a real sense in which students who go to college are being scammed, in this sense I pity them. Their money isn't going to better professors, who are still paid a pittance for a lifetime of devotion to their field, even in the sciences. It's going to the administrators, whose motives are not actually education, but gaming the already broken system of academia. In my eyes, this makes the case for socialized higher-ed even stronger. A system which incurs financial ills so great is , by definition, a market failure, one so vast that it begs the question why it is a market in the first place. It'd be much more prudent to pay for students educations if they show potential for success in the first place, rather than financing many of my college peers who now work in coffee shops as compensation for their $200k Anthropology degree. No system built on craftily selling economically useless degrees as an "investment in one's future" will actually provide any benefit to society. So what's to be done? First, Provide students with scholarships, or the like, to schools which limit administrative expenditures or those whose administrative expenses pale in comparison to the money they spend on qualified professors. Second, disqualify schools which do not produce a threshold percentage of net-gain employees - if a school has a track record of pumping out angsty coffee shop Lit majors, it has no business in taking taxpayer dollars. Last, provide outlets for students who aren't destined for a career in the sciences. Maybe trade schools that offer classes in academics alongside chances to become electricians or plumbers, both careers face workforce due to people's obsession with reading hundred-year-old books instead of doing something meaningful with their time. Rant complete
• overcast 10y ago
  With a year left on my massive loan, I can not wait. I can't imagine students these days coming out, and not having the luxury of being picked up right out of school to a well paying job. And god forbid they chose a less "desirable" concentration.
• NikolaeVarius 10y ago
  If this happens, do I get benefits on the debt I've already paid off? I would be pretty pissed if I didn't. I worked my ass off to pay my loans.
  • Salgat 10y ago
    I always loved this quote, “The only time you look in your neighbor's bowl is to make sure that they have enough. You don't look in your neighbor's bowl to see if you have as much as them.” I'm almost done paying off my student loans, and because of that, I don't want anyone else to have to endure paying for student loans, even if I myself don't get the benefit.
    • h4nkoslo 10y ago
      No one's stopping you from cutting them a check. Ideally you would not hold a gun to my head and demand I do the same.
      • st3v3r 10y ago
        You completely missed the point. Further, this "holding a gun to your head" thing is completely asinine.
        • dbcurtis 10y ago
          Is it really? What happens if you don't pay your taxes? Eventually you will be arrested. What if you resist arrest? Do the police ask you to come along nicely with an Especially Firm Voice the second time? Eventually, someone will deploy state-sanctioned violence in this situation. Stop whistling past the grave yard. That is how government works. They have guns, and prefer that you don't, just in case you get all argumentative and pouty.
          • kalleboo 10y ago
            > What happens if you don't pay your taxes? Eventually you will be arrested. At least where I'm from, no you won't. Your debt to the state will grow and eventually they'll try to repossess it (through e.g. wage garnishing). They can't arrest you for not paying taxes.
• tswartz 10y ago
  It's such a weight off of the shoulders to have paid my wife and my student loans off a few months ago. Instead of the 20 or 30yr plan we put every extra dollar towards it and paid it off in 3.5 years. It feels fantastic! It's bizarre that student debt has become the norm and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major.
  • theandrewbailey 10y ago
    I thought I could pay mine off in 2 or 3 years of graduating, but ended up taking about 5. I paid my car off about a month ago, so I have zero loans! I've been entertaining the idea of buying a house in my neighborhood. This town never had real estate inflation and bubble, because of rust belt economics. $150,000 should buy a nice place.
  • Broken_Hippo 10y ago
    Comparatively, teaching is a low-earning major on average, as are many that wind up in a government or public service job. Teaching, btw, is one of the options with a history degree. We need public defenders (and the funds to properly pay them), but that isn't generally a get-rich job either. Especially in a small county or cheap area. And we need these sorts of jobs. It seems mighty unfair to limit the money simply because a degree doesn't earn so much. I think such a system would lead to sub-par schools for the 'lesser' degrees and better ones for those with better earning potential.
  • gerbilly 10y ago
    >It's bizarre that student debt has become the norm Our generation has no solidarity. We should just strike or protest and demand lower tuition. Or just not pay back the loans en-masse. How come with the internet and twitter etc, we can't organize whereas in the 60s and 70s they could get their act together? >and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major The corporations would love to turn universities into training grounds for the skills they need. Yet another example of them pushing an externality back onto the rest of us again. Education is not the same as training. Education is more than training and expands your mind. Training just teaches you a set of job skills.
• idsout 10y ago
  Can't read the article without signing in or subscribing.
  • ceejayoz 10y ago
    You can Google the headline of any WSJ article, click the result, and it'll let you through.
    • idsout 10y ago
      That works, thanks.
  • douche 10y ago
    Next addition to HN: automatically inserting comments complaining about the paywall and then explaining how the "web" and google search tricks work when Wall Street Journal links are posted.
• icehawk219 10y ago
  Part of the problem is that the last few generations have been told the same thing: blue collar jobs aren't "good" jobs. You need to go to college so you can get a "good" job sitting at a desk because those other jobs are below you. If you take one of those blue collar jobs then you've failed and aren't "achieving your potential". The grand irony in all of this is that the people who did go on to become plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the ones that are currently in huge demand. And over the next 20 - 30 years they're the ones that aren't going to be automated (well ... mechanics may become less relevant with electric cars rising in popularity). As much as I'd love to automate remodeling my kitchen I'm not holding my breath on seeing it happen any time soon.
  • massysett 10y ago
    > And over the next 20 - 30 years they're the ones that aren't going to be automated Not true. Look at any construction site and labor-saving innovations abound. Plumbing comes in new materials like PEX, which takes less labor to install. Large parts of houses are fabricated off-site and shipped in on trucks. No job is immune from automation and increased efficiency.
  • pwthornton 10y ago
    Blue collar employment has been falling in this country, replaced by either knowledge work -- which usually requires further education -- or service industry jobs. If there were truly huge demand for many of these professions, pay would be skyrocketing, encouraging more and more people to go into these professions. I agree that there are and will continue to be good skilled trade jobs and many people would be better served by pursuing these options, but there is tremendous value for the average American in a college degree. The problem is that a lot of Americans are unable to graduate college, and waste their time and money pursuing a degree instead of doing something more inline with their talents or their drive. As it stands, automation will most likely continue to primarily affect blue collar workers before it hits knowledge workers. Long-haul truck driving will probably fall relatively soon and factories will continue to have more and more automation.
    • 10y ago
• Retric 10y ago
  IMO, a large chunk of this would be resolved if federal loans where limited based on tuition not just need. If a school charges more than ~20k/year then students can't apply for federal loans and private loans become dischargeable. Note: Some schools still charage less than 10k/year. http://www.usnews.com/education/best-colleges/the-short-list-college/articles/2015/09/09/10-private-colleges-and-universities-with-highest-lowest-sticker-prices http://www.usnews.com/education/best-colleges/the-short-list... Instead, schools have a huge incentive to raise tuition endlessly and family's are stuck playing a zero sum reputation game.
  • ceejayoz 10y ago
    I like this idea. FDIC-style "look, we'll protect a reasonable amount" approach.
  • awinder 10y ago
    This. You're also just looking at private schools there; whereas students could attend public universities in their state and realize benefits that their (or their parents) tax dollars have defrayed the cost of tuition. The amount of money that amounts to poor spending on "needing" to live on campus, "needing to go to your top pick school", etc. is a little astounding. Also astounding is the ability to finance things like living expenses / room & board, which are often a huge component of total cost
  • dman 10y ago
    Who sets those limits and how are they enforced over time? What if colleges find other ways to charge you money (accomodation, usage fees for equipment etc).
    • zo1 10y ago
      It'll be a never-ending cat and mouse game deciding those limits. I'd say artificially skewing the market is unsustainable and shouldn't be done.
      • Retric 10y ago
• talmand 10y ago
  Ah yes, the old "let's attempt to solve a problem by introducing more of what caused the problem in the first place" solution.
• up_and_up 10y ago
  As you are paying off your loans remember the high price of your education helped pay for not just a fancy diploma but also: Shiny new buildings, Hotel-like dorms, Professors making 400k, Administrators making 700k, a moped for every football player ...
  • CalRobert 10y ago
    Not to mention the adjuncts making $900 a month to do the actual teaching. Not sure I can imagine a football player on a moped, though.
  • Ar-Curunir 10y ago
    Lol in which world do professors get paid 400k? Even at Berkeley CS mis career pay is roughly 150k. Administrators have ballooned. Also our dorms are pretty shit.
    • up_and_up 10y ago
      Business school professors even at Michigan make 200-600k. I know one of them.
      • Ar-Curunir 10y ago
        I doubt that those professors get pair directly from the University; probably alumni donations fund a lot of that.
      • vkou 10y ago
        How much do European history professors get paid? Better yet, how many professors get hired as non-adjuncts?
        • up_and_up 10y ago
          Not sure, but I know a full professor in Philosophy at a top public University that makes 70k
• maxerickson 10y ago
  The typical new graduate owes less than $40,000. The great majority of student debt holders owe less than $30,000. I'd like to see more direct funding for schools and a shift of federal support to competitive grants, but those aren't huge numbers when you look at a degree bringing in hundreds of thousands of extra dollars over a career. Grants aren't as egalitarian as giving anyone who wants it a loan, but they can be expected to distort the market less (because schools have to compete for people who don't get them).
  • dv_dt 10y ago
    They may not seem that large, but I suspect that compounding interest effects and the fact that the debt is there very early in peoples lifetimes make them very heavily weighted in terms of the effects on lives and economies.
    • maxerickson 10y ago
      The interest compounding on a $30,000-40,000 loan wouldn't really be a student loan issue, it would be a job issue. The interest on the loan sizes I've mentioned is typically going to be less than $4000 a year, so if they pay $6000 a year the loan will go away quite quickly. That's a substantial amount of after tax income for a lot of jobs, but students should be looking at the debt in those sort of terms, that it is going to be one of their main payments for a while.
      • dv_dt 10y ago
        Not the interest of the student loan, the 'interest' of the opportunity cost of paying $4000-$6000 year instead of some other use (eg personal or retirement savings, or saving for a house). There is a huge forward cost in their financial quality of life because of these early debt payments.
• no_wave 10y ago
  As a college graduate, I'd be ok with student loan relief as long as it's funded by a tax on college graduates (and it has to be preceded by something preventing this occurring in the future, like making student loan debt dischargeable under certain circumstances) Seems twisted to tax the rest of the country who decided not to or weren't able to participate in college in the first place
  • lawnchair_larry 10y ago
    As someone who has never spent a dime on student loans, I would be happy to help bail out graduates with my tax dollars. What do I care? I've been paying for the trillions dollar war for 15 years now, so paying for something this would be a breath of fresh air. You folks are getting screwed.
  • h4nkoslo 10y ago
    How about a tax on college endowments instead?
• surfmike 10y ago
  I wish we could switch to a system like Australia. Graduates take on no debt but have to pay a few extra percentage points of taxes after.
• Mc_Big_G 10y ago
  America's student loan policy for the last 20 years: Reward bad decisions, punish hard work and responsibility.
  • h4nkoslo 10y ago
    America's general policy for the last 80 years on any particular issue you can name.
• forrestthewoods 10y ago
  Situation: Government guarantees student loans and forbids issuing of loans based on likelihood they'll be bad back. Problem: Schools charge max loan value. Students can't pay them back. Solution: Give away free money. All the government has to do is nothing. Just stop doing things. Stop being involved. The problem will fix itself overnight if they did literally nothing. Le sigh.
  • dv_dt 10y ago
    The education market won't fix itself because students are not in a sufficiently secure bargaining position where they (collectively) can make an informed decision that corrects the market.
    • forrestthewoods 10y ago
      What? How is the education loan market any different than the automobile or home loan market with respect bargaining position and ability to make an informed decision? Loan issuers are forced to issue loans without regard to the likelihood those loans will be paid back. Someone seeking a computer science degree from Stanford is treated the same as someone getting an English degree from a 4th tier state school. That's utterly insane.
      • Broken_Hippo 10y ago
        First of all, most education loans are handled by the government. Most students can't qualify for normal private loans due to little things like lack of credit history. There is really no way to tell if a 17-18 year old just legal enough to get a loan will be able to pay it back in 4-8 years after completing their education. This is why the government backed loans are issued in this manner. most middle to low income students need these loans to go to school. Private student loans, however, usually have a cosigner with good credit. Second, students don't get much choice in loans with the government-backed loans. There really is no 'market' for the student to shop, nor does the student have bargaining power except for refusal to accept the loan. With automobile or home loans, one can do things like have a larger down payment, shop aroudn for interest rates, or improve their credit rating. Students have none of these options. Third, informed decision? You get promised for years as a young person that college is the key to having a comfortable life. The university promises all sorts of possible careers with the degree, and quotes numbers that may or may not be true.
• test6554 10y ago
  They should probably make general core classes free, but make students pay for anything specialized and solely related to their major. This would strike a balance between having an educated population, and having education focus on subjects that are in-demand and beneficial to society.
• dv_dt 10y ago
  Many generations before now either had access to very low or free tuitions from public universities, or fairly low tuitions (relative to future earnings) for private schools. Society subsidized those costs because it was an excellent investment on future economic growth. Somehow we got twisted into this track of thought that everything must be individually accounted, and student became individually loaded with the debt of their education. And because students as a group are in a poor bargaining position for tuitions - the inflation of education costs skyrocketed. I think they are the only life cost that gives healthcare a run for it's money in it's ability to exceed (by multiples) both the growth in the economy, let alone the growth in personal incomes. This cannot continue. Plans to give student aid to income below a certain threshold will only serve to further cause tuition inflation. It is a case where individual allocation of cost/debts is much less efficient and harmful to our economy than social allocation of the cost. I think we need to go back to funding public universities out of direct state and federal budgets so that public institutions can offer low or no tuitions. This way, gov't organizations with the budget leverage, with much better visibility and oversight can keep costs down at public universities. Low public university costs will also help cap the excesses of private tuitions via market competition. Unwinding the current mess of student debt is also a huge issue, but should be undertaken too (but I'll leave that to some other time...)
  • karma_vaccum123 10y ago
    It really requires a rethinking of the need for college, how college should work, and how it should be paid for. Most undergraduates have no real need to obtain a gold-plated degree. Undergraduate education in nearly all fields is well-understood and can be delivered adequately at low cost. This is why foreign countries that aren't wealthy still produce excellent undergrads. Only in the US do we believe you really can't get educated unless you went to an expensive and/or elite school.
• bradleyjg 10y ago
  I'd like to see something similar to the risk retention rule that was supposed to be put in place for mortgages by Dodd-Frank.* Colleges should only get 80 or 90 cents on the dollar from student loans and have to wait for the rest until the loans are repaid (if at all). Perhaps a sliding scale could be used depending on the amount borrowed, with more expensive schools bearing more of the risk. * I say supposed to be because the rule was swallowed by an exception during the regulatory process and now only plays a minor role.
• rvail2 10y ago
  How about colleges and universities stop price gauging the population? Or, eliminate student loans, so the population will not be able to afford their ridiculous rates and force the cost down.
  • boodm 10y ago
    >eliminate student loans This will do nothing more than favor the rich and further suppress the poor.
• clifanatic 10y ago
  I'm going to be so pissed off if a whole generation of students gets their students loans forgiven two decades after I paid mine off.
  • n72 10y ago
    So, let's see, if you were a black person in 1863 who'd been enslaved but bought your freedom prior to the Emacipation Proclamation, you'd resent the Emancipation Proclamation since from then on other wouldn't have to buy their freedom?
    • clifanatic 10y ago
      Wow, did you seriously just compare your student loan debts that you entered into freely and of your own will to slavery?
      • n72 10y ago
        Nope!
  • n72 10y ago
    Then instead of feeling bad that others got a benefit you didn't, perhaps be happy your college education was much, much less expensive than those that came after you.
  • vkou 10y ago
    If it makes you feel any better, they will be the generation that will get to pick up the tab for climate change caused by yours (And the one before it.) Not to mention that college was a lot more affordable two decades ago...
• karma_vaccum123 10y ago
  This will impact every other aspect of our consumption economy...home sales and even car sales will be impacted as working adults have to dedicate more and more earning potential to paying off student loans...far in excess of any real economic value these degrees have provided. I hate to get all "Zero Hedge", but this really does stink of some conspiracy to turn the middle class into lifelong renters instead of owners. The independence the middle class once had by achieving a debt-free existence and owning their own residence is being wiped out, and as a result, the middle class itself will effectively be destroyed.
  • ArkyBeagle 10y ago
    Home ownership is a bubble created first by VA and then FHA subsidized financing. Mortgages were sort of unusual - housing was simpler then and people just paid cash. Sears sold home kits - of 12,000 pieces they said could be finished in 90 days by the owner - and while they offered financing, they topped out @ 60K in 2016 dollars. I don't think the financing was a "mortgage" per say, closer to consumer credit. People pay $60k for cars on four and five year notes.
  • ThrustVectoring 10y ago
    It doesn't need a conspiracy - macroeconomic forces and demographics are more than enough. On a societal and generational scale, it's basically impossible to make things now and have them be valuable in the future. Roads crumble, machines break down, inventions become obsolete, and in general what you did thirty years ago is of no particular value today. The one small exception to this is deciding to pump oil out of the ground later instead of today. So if saving real goods and services doesn't work, what does? You can make things now, and sell them to people for dollars or some equivalent promise of future goods and services. Then you can later redeem these for the stuff you need later. Oh, and did I mention the generational stuff? Small family sizes and aging Baby Boomers means that there's huge pressure to turn today's resources into promises to give people stuff later. Hence, debt. I'd actually prefer if a conspiracy was responsible for this. Economic forces make a lot more people work a lot harder to push back against changes. Price controls are a great case in point for this.
• gxs 10y ago
  I'm really torn on this for the same reason I'm torn on what to do with the people in jail for marijuana offenses: On the one hand, yes what's happening is wrong. On the other hand, you CHOSE to go into debt knowing that you would have to repay it after you graduated. Just like people who CHOSE to deal marijuana KNEW it is illegal. Disagreeing with the law doesn't entitle you to break it. Similarly, disagreeing with your loan terms doesn't entitle you to not pay them. I CHOSE to go to a cheap state school to avoid this fiasco. Now others who didn't choose prudently get "relief"? At one point do we just say, hey, you made shitty choices, sorry. Where is that line? I'm not saying we shouldn't do something, just offering up a different point of view.
  • imgabe 10y ago
    You would seriously keep people in jail for marijuana charges after marijuana was legalized? If a mistake is made, remedy the mistake. The government made a mistake in providing a glut of cheap money and prohibiting the borrowers from discharging the debt in bankruptcy. They need to fix their mistake by undoing that. What you're proposing is like abolishing slavery, except for everyone who is currently a slave. "Sorry guys, there will be no NEW slaves, but you were slaves when it was legal, so, tough"
    • gxs 10y ago
      Your response doesn't make any sense. Throw a hissy fit all you want about your pot, but you KNOW it's illegal and if you choose to ignore that that's on you. Same as with loans. You choose to take out the loan, that's on you. If I choose to run my car into a crowd I suffer the consequences, not Chrysler. (And yes, I realize this analogy isn't perfect) And comparing this to slavery is plain stupid. That is an issue much greater than this regarding equality for everyone. You didn't have a choice to be born a slave. And here I don't even necessarily agree with not helping these people - I just want the issue addressed of where we draw the line between poor decision making and poor choices.
    • dredmorbius 10y ago
      That description bears similarities to how slavery was constrained in the US: The international slave trade was abolished in 1800, but existing slaves, and their children, could still be kept, bought, and sold, until 1863.
• readhn 10y ago
  The only recent grads (within 5 years) with student debt in my circles who could afford and have bought a house recently are: 1. Doctor & Finance couple with combined income $400,000+/year 2. Pharmacist & Finance couple with combined income $200,000+/year 3. Science Research & Quant(finance) couple with combined income $300,000+/year Interestingly - all have finance or medical field/science exposure.. The rest are renting forever paying of debt with no plans to buy soon (we are in hot real estate area). I dont see who will support real estate prices going forward.
  • flubert 10y ago
    Location, Location, Location: $124/mo, 840 sq. ft: http://www.zillow.com/homedetails/1204-Via-Seville-Cathedral-City-CA-92234/17753721_zpid/ http://www.zillow.com/homedetails/1204-Via-Seville-Cathedral... $93/mo, 1190 sq. ft: http://www.zillow.com/homedetails/617-NW-8th-Ave-UNIT-11-Milton-Freewater-OR-97862/84550079_zpid/ http://www.zillow.com/homedetails/617-NW-8th-Ave-UNIT-11-Mil... $70/mo, 832 sq. ft: http://www.zillow.com/homedetails/1745-35th-St-NW-Winter-Haven-FL-33881/55127908_zpid/ http://www.zillow.com/homedetails/1745-35th-St-NW-Winter-Hav... $72/mo: http://www.zillow.com/homedetails/8528-Highland-Ave-Kansas-City-MO-64131/2427608_zpid/ http://www.zillow.com/homedetails/8528-Highland-Ave-Kansas-C... $92/mo, 2302 sq. ft.:http://www.zillow.com/homedetails/122-Cheyenne-Rd-Shohola-PA-18458/89387749_zpid/ http://www.zillow.com/homedetails/122-Cheyenne-Rd-Shohola-PA...
    • FireBeyond 10y ago
      Come on now: "Sold as is-where is-no disclosures available-Seller has had no knowledge of property-no representations made as to a warranty-habitability,marketability.express or implied." I guarantee you that the seller _DOES_ have a knowledge of the property, and that's why it's only $19,500. And in real estate, where flowery language is the name of the game, the above is coded language for: "Bulldoze it and build" (come on, "no guarantee of habitability"?) Likewise, your place in PA - did you look at the photos? There are entire exterior walls covered with (torn) Tyvek and tarps. There are unfinished walls, roofs and floors. Another, a cinder block hoarder dwelling that is missing multiple windows. I get that you're trying to make a point, but you're also picking out not just low end locations, but houses that are in some cases quite possibly condemned, or should be. Only two of those looked remotely habitable (and not a matter of pleasantness, I mean from a health and/or safety perspective).
• davidf18 10y ago
  Thanks to the new health care laws, states must (or will be) spending more money on Medicaid which takes money away from public higher education. As it is, the boomer generation is funding a far lower proportion of the state public universities than their parents' generation did for them, which is really unfair. It is because of increased Medicaid costs and also because boomers aren't financing the proportion of state higher education that their parents did that many of today's young have higher student debt than it the past. Doctors don't haven't to incur debt in medical school if they spend four years in the military as doctors.
  • Broken_Hippo 10y ago
    That first point i'm not sure if it is true or not: My understanding was that the federal government was going to pay most of the money. Besides, if we as voters thought a little more and demanded better funding for schools - and say, cutting money spent on unwanted or unneeded military equipment - we could get it. Your option for doctors to not incur medical debt is very hopeful. First, I doubt the military has enough positions for all the doctors to fill, and I doubt all doctors would be fit enough to qualify for military service. On top of that, that is 4-6 years longer before they can actually practice. There should be a way that is much better than sending potential doctors and surgeons off to war. For instance, forgive loans to folks that work in general family practice for 7 or 8 years, less if they move and practice in an area that is in a high demand (poverty stricken area) - with the disclaimer that they must take all forms of government backed insurance.
• readhn 10y ago
  My call is that we will have a student debt relief fund when enough government folks get scared (within 5 years my guess). So basically the printing press will turn on and we will bail out students. Watch out for all the controversy that's going to come with this bail out.