4 ms·

I keep seeing people say that the student loan crisis will be the next "bubble pop". It seems like colleges and lenders both got greedy and created a mass of de

I keep seeing people say that the student loan crisis will be the next "bubble pop". It seems like colleges and lenders both got greedy and created a mass of debt to them that will never be paid off. That, and I imagine the current generation will send their own kids to college at a much lower rate than their parents did. The "college bubble" is going to pop.

nhangen 10y ago
I have two teenagers and a 7 year old. The oldest is 15 and doesn't even think about college. I don't nudge him either way, but find it interesting he has not even considered it. My daughter is 13 and wants to go to college, but only because TV says that's where you go to meet boys and get married.
- artursapek 10y ago
  Hah. I have a 3 year old and am very curious what the "college scene" will look like in 15 years.
  - HarryHirsch 10y ago
    A lot less than Sweetbriar and much more like Virginia Commonwealth University. Stanford and MIT will be fine, the University of California won't be. Sweetbriar: https://www.nytimes.com/2015/04/23/fashion/the-independent-women-of-sweet-briar.html https://www.nytimes.com/2015/04/23/fashion/the-independent-w... The very top will survive the cuts in federal funding, but research at lower tiers won't survive. The larger sectarian colleges will survive, the smaller ones will die. Notre Dame will remain, Seton Hall and the Franciscan University of Steubenville will go away, that's a good thing.
madenine 10y ago
Its going to be a really rough bubble. There's no one source to point the finger at, but we've got ourselves in a spiral where: -More people are going to school -University costs have skyrocketed (mostly due to expanded administration services), which has increased the need for students to secure loans -Wage growth has been low/flat for a long time -A college degree has replaced a high school diploma/GED as a minimum requirement for most middle class jobs -New grads are coming out of school to lower paying jobs relative to the cost of their education than ever before, driving defaults. -As college matriculation becomes more and more necessary, even great high schools pivot towards a goal of getting students into college, instead of providing them great educations which have a secondary effect of getting them into college. Further decreasing the value of high school as someone's highest degree of education. The last one is very worrisome for me, and something I hear a lot about. I have family and friends who are college professors - even those at ivy league universities are saying their students are just as smart as before, but on average now they're not as generally educated and way less prepared for serious academic work. They can't handle the same work loads, don't write or research as well, require more oversight/direction - things like that. How do you fix that without blowing everything up and probably destroying the lives for a huge group of people who's only crime was being born in a certain set of years? Not to mention the economic implications of an entire generation going into middle age already carrying massive debt - how are they going to generate asset wealth?
- xor1 10y ago
  >How do you fix that without blowing everything up and probably destroying the lives for a huge group of people who's only crime was being born in a certain set of years? A huge number of millennial college students who weren't fortunate enough to graduate into a tech career between 2007-2011 already went through this. It wouldn't be anything new. >Not to mention the economic implications of an entire generation going into middle age already carrying massive debt - how are they going to generate asset wealth? I mean...this is already happening. I'm not sure what you're getting at here. "Blowing everything up" is the only way to stop this cycle.
  - madenine 10y ago
    Probably should've separated/clarified my last two sentences; I agree that its already happening, and that the system will blow up on its own eventually. My questions are: Can we do something about to reverse it? If not can we do a "controlled demolition"? Is there even anyone in a position to do anything / is the train accelerating with no breaks and no one at the helm?
shostack 10y ago
Is this debt that will blow up the economy somehow? Is it being bought and sold on the public markets and being packaged as derivatives? The bubble of it may pop, but I'm not clear how it hurts anyone but the banks and colleges. Students who can't pay will continue not having any money to pay anything with, and that needs to be addressed, but it doesn't seem like the same scale as the mortgage crisis.
codexon 10y ago
I'm trying to think about how one can profit from this bubble popping through the stock market but I just don't see it really popping. You can't really default on student loans and the government can garnish your wages.

nhangen 10y ago

I have two teenagers and a 7 year old. The oldest is 15 and doesn't even think about college. I don't nudge him either way, but find it interesting he has not even considered it. My daughter is 13 and wants to go to college, but only because TV says that's where you go to meet boys and get married.

artursapek 10y ago
Hah. I have a 3 year old and am very curious what the "college scene" will look like in 15 years.
- HarryHirsch 10y ago
  A lot less than Sweetbriar and much more like Virginia Commonwealth University. Stanford and MIT will be fine, the University of California won't be. Sweetbriar: https://www.nytimes.com/2015/04/23/fashion/the-independent-women-of-sweet-briar.html https://www.nytimes.com/2015/04/23/fashion/the-independent-w... The very top will survive the cuts in federal funding, but research at lower tiers won't survive. The larger sectarian colleges will survive, the smaller ones will die. Notre Dame will remain, Seton Hall and the Franciscan University of Steubenville will go away, that's a good thing.

madenine 10y ago

Its going to be a really rough bubble. There's no one source to point the finger at, but we've got ourselves in a spiral where: -More people are going to school -University costs have skyrocketed (mostly due to expanded administration services), which has increased the need for students to secure loans -Wage growth has been low/flat for a long time -A college degree has replaced a high school diploma/GED as a minimum requirement for most middle class jobs -New grads are coming out of school to lower paying jobs relative to the cost of their education than ever before, driving defaults. -As college matriculation becomes more and more necessary, even great high schools pivot towards a goal of getting students into college, instead of providing them great educations which have a secondary effect of getting them into college. Further decreasing the value of high school as someone's highest degree of education. The last one is very worrisome for me, and something I hear a lot about. I have family and friends who are college professors - even those at ivy league universities are saying their students are just as smart as before, but on average now they're not as generally educated and way less prepared for serious academic work. They can't handle the same work loads, don't write or research as well, require more oversight/direction - things like that. How do you fix that without blowing everything up and probably destroying the lives for a huge group of people who's only crime was being born in a certain set of years? Not to mention the economic implications of an entire generation going into middle age already carrying massive debt - how are they going to generate asset wealth?

xor1 10y ago
>How do you fix that without blowing everything up and probably destroying the lives for a huge group of people who's only crime was being born in a certain set of years? A huge number of millennial college students who weren't fortunate enough to graduate into a tech career between 2007-2011 already went through this. It wouldn't be anything new. >Not to mention the economic implications of an entire generation going into middle age already carrying massive debt - how are they going to generate asset wealth? I mean...this is already happening. I'm not sure what you're getting at here. "Blowing everything up" is the only way to stop this cycle.
- madenine 10y ago
  Probably should've separated/clarified my last two sentences; I agree that its already happening, and that the system will blow up on its own eventually. My questions are: Can we do something about to reverse it? If not can we do a "controlled demolition"? Is there even anyone in a position to do anything / is the train accelerating with no breaks and no one at the helm?

shostack 10y ago

Is this debt that will blow up the economy somehow? Is it being bought and sold on the public markets and being packaged as derivatives? The bubble of it may pop, but I'm not clear how it hurts anyone but the banks and colleges. Students who can't pay will continue not having any money to pay anything with, and that needs to be addressed, but it doesn't seem like the same scale as the mortgage crisis.

codexon 10y ago

I'm trying to think about how one can profit from this bubble popping through the stock market but I just don't see it really popping. You can't really default on student loans and the government can garnish your wages.