20 ms·

The Lasting Consequences of Student Debt

112 points by happy-go-lucky 10y ago

ourmandave 10y ago
So, is college still worth it? In the most simplistic terms, yes. Let's look back at homeownership. Attending a four-year college — even if you borrow, and even if you do not graduate — still increases your chances of owning a home, compared to people who never enroll. But if the new economy demands that workers have the ability to flow to job opportunities (like dragging-n-dropping them on a spreadsheet) then home ownership is an anchor.
- lovich 10y ago
  Yea, at this point I'd only get a home if I was comfortable with severely limiting my job prospects. Even in the same metro area I've moved apartments after getting a new job so that my commute is around 30 minutes rather than the 1-1.5 hour commutes a lot of my home owning coworkers have had
  - kudokatz 10y ago
    I'm in the same boat ... except I ended up buying to insulate myself from a ridiculous housing market since there are lots of jobs within a 30min trip of my place. The glorification of home ownership really baffles me, although I still ended up purchasing after careful consideration of things like: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrib...
    - agalarza 10y ago
      This is the situation my wife and I are looking at as well. We don't have kids yet, we want to put down roots and barring another housing market collapse, the area we currently live in is getting expensive.
      - tostitos1979 10y ago
        We paid off huge student loans first, instead of getting into housing. Housing doubled. We're priced out of our local city. Also .. I highly suggest that if you want to buy a place, do it before the baby arrives. After the baby, you are so fully absorbed in adjusting to your new life, that taking time out to go house hunting is a herculean task. Every house we bid and lost after the baby represented a much higher cost and led us to bid more than we thought the house were (to the tune of 50K in my opinion - we still lost the bloody bidding wars).
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- John23832 10y ago
  I agree. Most of the high earning young people I hang with basically have to be willing to uproot for opportunity. However, owning a house (I think the term home is something distinctly different) could be used to facilitate moves though. I don't have to be in the same state/country as my rental property (though countries are starting to crack down on foreign rental property ownership).
  - icebraining 10y ago
    Is property management cheap in your area? We rent a couple of apartments, and hiring a property management company would be ruinous, unless both the rent and our personal time was very expensive.
    - John23832 10y ago
      I would pick a rental area which has a college (or colleges) or with a large rental market. In my experience, the presence of a student rental market keeps prices down for property management, but high enough to make rentals viable. However, each person's situation is different.
- CodeCube 10y ago
  Remote working needs to become a standard practice. It's the only way to escape the neverending rise in housing in places like SF, and give people the ability and stability to settle down in a place they love, raise a family, and invest in their housing. Think about all of the coming job losses to automation ... what if high earning tech workers could stay in their communities, and spread some of that SV economy around.
  - rplst8 10y ago
    More people need to realize this. Not only does it allow people to put down roots and let local economies everywhere grow, think of the benefit of getting all those cars off the roads. Less CO2, less traffic, less need for new roads (a big CO2 producer on it's own). If policy makers really wanted to make a dent in fixing our problems, subsidizing remote work positions (within US borders) would be a huge benefit.
contingencies 10y ago
graduating from college makes you almost as likely to own a home, by age 36, as someone from a high-income family. I assume they mean "own" in the sense "get a mortgage on" not "have fully paid for", no?
- agalarza 10y ago
  I think they mean paying a mortgage too. Paying off a house by 36 seems to require either a ton of money or a very, very cheap home.
  - rosbrith 10y ago
    One still owns a home when buying with a mortgage. The lender places a charge on the property while a balance is outstanding, therefore in addition to owning the property you also own the debt secured against it.
- cbr 10y ago
  That's what "own" means with houses. You're a "homeowner" after closing, and you are the legal owner of the property, even though you still owe thousands to your bank.
  - contingencies 10y ago
    That's my point. Debt is not an achievement.
- markwaldron 10y ago
  I'd love to know their definition of "high-income family"
austenallred 10y ago
The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't pay off. I was brought up under the faulty assumption that if you graduate from college you get a promising career, so pay whatever that takes. Full stop. My entire generation was. Not one teacher or counselor or advisor ever mentioned anything about cost relative to career prospects, and now it's my smart friends who are getting kicked in the teeth, while the kids like me who didn't listen and dropped out and played with computers are richly rewarded. I can't even count the number of friends with six figures of student debt and no career on both hands. I think Peter Thiel was right: for some time Americans believed in a college education so fully, so completely that we ignored the cost, even as it skyrocketed. Couple that with federally-backed loans, and no one even considered the risk. 100% of the risk was put on 18-year-old kids, many of whom had never seen a day in the workforce, paid a bill, or had a job. A lot of people will make it out unscathed, but for those that don't we lived through (or are living in) a giant secondary education bubble. But this time it's one that you can't bankrupt your way out of.
- jMyles 10y ago
  I'm part of that generation and made that mistake for sure. > The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The takeaway here is, in part: don't do something just because you're told to. If our generation stops doing what we're told (which seems to be the case), then this will be a small price.
  - austenallred 10y ago
    Agreed, though if the incentives weren't so misaligned it wouldn't doom you to 20-30 years of struggle if/when you didn't think for yourself. For example, if the loans weren't backed by Uncle Sam there would be some threshold at which the loan providers would say "OK people studying this aren't getting jobs." Or if the universities that were promising careers had their feet held to the fire somehow before it had to reach ITT Tech billions of dollars. I've been thinking a lot about a model in which education is extended as credit. If students paid back a percentage of income how would that change colleges? I don't have all of the answers, and bootstrapping that kind of thing is rough, but I'm trying a few experiments along those lines that could be very interesting at scale.
davidf18 10y ago
A problem is that many of the higher paying jobs are in cities such as NYC, SF, LA, Boston, DC, (also London, ...) and the housing is expensive in these cities because of "rent-seeking" -- a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This harms renters and those starting out in life while benefiting wealthy landlords such as President Trump. The fix is a simple one which is to overturn the zoning density restrictions. In 2002 Japan passed a federal law that gave the federal government control of housing density restrictions: the result is that in 2014 Tokyo built 140,000 homes vs. 20,000 for NYC and less than 90,000 for all of California. The local politicians are bought off by the wealthy landlords and those just trying to make their life after graduating from college and poor people are paying for it. I wrote more about this today at: https://news.ycombinator.com/item?id=14032591 https://news.ycombinator.com/item?id=14032591
- TheAdamAndChe 10y ago
  > a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This is true, but it's also a failure of policies that have led to the majority of job growth being in the biggest cities in the country. If we could spread things out a bit and keep smaller cities a viable place to create jobs, the bigger cities wouldn't be impacted nearly as hard.
  - Retric 10y ago
    I think it has less to do with viable job creation than wider political issues. It's cheap to open an office in Iowa, but talent/upper middle class people don't want to move there. Not simply because of social issues, but because companies don't pay enough. IE if I can save 20% of 150k moving to a cheap location is only viable if I can save 30k not just 20% of a lower salary.
    - TheAdamAndChe 10y ago
      The reason people don't want to move there is because that's not where the money is, which makes sense. But when everyone thinks like that, it causes most of the wealth to concentrate to a handful of areas across the nation while the rest suffers from lack of development. It's not even. There used to be a lot of legislation that prevented that and led to development across the nation, but most of that legislation was overturned by the 90's[1]. [1] http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-bust/ http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-...
nojvek 10y ago
> So, is college still worth it? In the most simplistic terms, yes. Not really, college is only worth it if you finish a select number of degrees and are somewhat middle class to begin with. US education system slowly alienates a large portion of the country putting them in debt forever. It's a stark contrast to Germany and some of the Nordic countries. But I also believe America is too big to make much changes regarding education.
supergeek133 10y ago
These types of things are always a cause and effect relationship, and I feel we never look at the cause. This line bothers me in particular: > So, is college still worth it? In the most simplistic terms, yes. It is only worth it because we've made it a requirement to find employment with growth potential outside of the trades or sales. Hell, even some sales jobs are requiring degrees now. If Corporate America was honest with itself about which jobs REALLY required a degree versus just some level of experience, college would become devalued in some respects. I'm 'one of the lucky ones'. I don't have a degree, I work in a fairly important job for a fortune 100 company. I am paid fairly well for my area and I enjoy my job. My experience built up over time got me to where I am, but I know many others who weren't afforded the same chance just because their resume didn't have a piece of paper and debt attached to it. That being said I'll probably eventually hit a wall where I can't advance anymore, and I'm probably OK with that. The other cause we've failed to address is the constantly rising cost of going to college. Government programs to increase loan availability (and forgiveness) have just raised the price, because the student can "afford" it.
chestervonwinch 10y ago
> debt significantly hurts your chances of buying a home 60k in the hole still from undergrad loans. The thought of taking out a mortage after this debt is finished is not appealing. "hurts my chances"? Sure, that's one way to put it.
- cryoshon 10y ago
  it's just boomer re-framing of the issue to make it less clear. buying a home isn't something that is up to chance. it's not like you are cruising one day, and BANG!, you buy a home. you save up for fucking years, then you put the down payment. having student loans precludes saving as much each year, making home ownership extremely distant for most.
- giardini 10y ago
  It may not be to your advantage to buy a home. Once you do, you're tied forever to the local economy. Ofttimes once many people move to an area and buy homes at artificially-inflated prices, the local economy tanks and everyone is stuck with their overpriced home. Look at the people in cities (in Montana, North Dakota, West Texas) caught up in the fracking boom - they're stuck with thousands of overpriced homes now. If you rent, you can move easily to an area that is growing. https://www.google.com/search?q=buying+a+home+is+not+worth+it&client=opera&hs=nnT&channel=suggest&gbv=2&sei=JMnjWOm1DIis0gK3yrq4BQ&gws_rd=ssl#spf=1 https://www.google.com/search?q=buying+a+home+is+not+worth+i...
  - BeetleB 10y ago
    >Ofttimes once many people move to an area and buy homes at artificially-inflated prices, the local economy tanks and everyone is stuck with their overpriced home. At other times, a city grows so fast and rents go up so much in a few years that a house shields you from it. I bought my house "late" (i.e. when prices were on an increasing curve). Less than 3 years later, too many 2 bedroom apartments charge more for rent than my much bigger house. If I were to sell now, I'd make a profit, even after you account for real estate fees, etc. Obviously, my case is not the norm. But neither is your scenario. >https://www.google.com/search?q=buying+a+home+is+not+worth+i.. https://www.google.com/search?q=buying+a+home+is+not+worth+i.... Oh, please! The first rule of Google searching is: Do not ask it to return what you are looking for!
treehau5 10y ago
Did any of these kids (and I am one of them, graduated in 2013) stop and think that paying 50-70k a year after room and board to attend a university was insane? I had the option to go to a nice university, and maybe my horizons would have been expanded, maybe they wouldn't, but at the end of the day I am happy where I ended up and I went to community college for 2 years, and the public state university, for the remaining two., driving 1 hour to college from my parents house. Crazy I know. I lived at home! I ended up with 1/16th the debt of most of my cohorts. It's fine if these kids were just doing exactly what they were told or people sold them on the koolaid, but generations prior also had to navigate the diverse world of snake-oil salesmen and people hyping up things and overvaluing them -- you can't beat teaching common money sense. Simple math. Teaching personal finance should be in inserted into middle school and taught all the way to graduation.
- reader5000 10y ago
  I agree, the taxpayers were pretty stupid for taking on the risk that kids wont be able to pay on their student loans. Too bad for the taxpayer!
  - DamnYuppie 10y ago
    The government is collecting quite a bit of interest on over $1.4 trillion dollars in student loans. I was also under the impression that for the vast majority, outside of a few programs, can't get rid of the debt, even with bankruptcy. So overall the money is being made.
  - mywittyname 10y ago
    The government only took on $32k of the risk, that's where federal aid caps for undergrad. It's private banks that are more than happy to sink kid's futures prospects by lending them that extra $50, 60, 70 thousand dollars or more (and to take their parents down with them).
enobrev 10y ago
This article and thread reminds me of how lucky I was for being a stubborn idiot after graduating high school. I, too, was told I was too smart to skip college and that I'd be wasting my life. And since I graduated HS at seventeen, my insistent immigrant mother was able to dump me into the local university regardless of my feelings about taking a year off. And, so, I partied my ass off every day and dropped out after the first semester. Mom wasn't happy, so I was allowed temporary quarters until I found a job, and then I was off to find an apartment, and that semester was all mine to pay off. A year later I found myself with a shitty job downtown (back room at a clothing store) and art school (graphic design). I lucked into a job doing IT and on-site tech support (managing DOS servers and clients), and by nineteen I decided all the adults were full of shit, dropped out of art school and moved to NYC. It was hard. Lots of work; Lots of hustle; Lots of failures and bad days; All along with the occasional fear that I'd made the wrong choice by skipping college, as I saw a few of my friends who had gone to college get to about where I was in my own career. They'd caught up. My head start was over; But rarely surpassed. At any rate, I'm 38, back home in Chicago where the price of housing is far more reasonable than the cities I've lived in (NYC, Seattle, Los Angeles), working 100% remotely, and just bought a house. As for the stats mentioned in this article, my wife really made the cut as a 36-year-old bartender who also didn't finish college. I definitely feel like I missed out on something important by skipping school. But my career hasn't suffered for it, and I'm not sad I missed out on paying for it. And I'm pretty sure spending my twenties in NYC made up for whatever I might have missed, socially.
ge96 10y ago
I was an idiot, like "Hell yeah give me this money." Only later realizing how long it would take me to pay. Luckily for me what I owe is a mere pittance compared to someone like a doctor. But I also make 1/3rd of a pitance per year... haha I like that word pittance. Tribute to that Futurama episode, "Honking" Anyway yeap... sucks thankfully I have a somewhat functioning brain, despite the loans, not getting a useful degree/potentially wasting three years of money/life, I have an opportunity to dig myself out. It's my own fault by the way I had a great opportunity and I pissed it away because I was a jackass. But yeah, it's easy to accept this money and not realize the interest like a couple of my loans are 6.8% APR and paying the interest down alone holy crap.
OliverJones 10y ago
If you're going to university, repeat after me. "People who loan money to students are dangerous predators, and I am their lawful prey." That doesn't mean you shouldn't go to university, or that you shouldn't borrow money. Just be careful around predators.
- compiler-guy 10y ago
  "People who loan money to anyone are dangerous predators, and the people who take the loan are their lawful prey."
cryoshon 10y ago
peep these stats: https://trends.collegeboard.org/student-aid/figures-tables/federal-student-loan-default-rates-sector-over-time https://trends.collegeboard.org/student-aid/figures-tables/f... this is what system failure in the making looks like. look at those percentages who are still in default. even if people aren't in default, the cost of paying off their loans is stifling their economic livelihood. here is the lasting consequence of student debt: poverty poverty precludes home ownership, marriage, reinvestment into the economy, and casual consumption. the US has dug its own grave by rejecting its obligation to provide education to its citizenry. loan forgiveness would solve these problems somewhat, but honestly the ship has sailed. millenials will continue to be poorer indefinitely.
Prego 10y ago
But what would the lasting consequences of forgiving 1 Trillion US$ of student debt be?
giardini 10y ago
Taleb's 2012 book "Antifragility" discusses the state of university education and student loans: "Harvard is like a Vuitton bag or a Cartier watch. It is a huge drag on the middle-class parents who have been plowing an increased share of their savings into these institutions, transferring their money to administrators, real estate developers, professors, and other agents. In the United States, we have a buildup of student loans that automatically transfer to these rent extractors, In a way it is no different from racketeering..." On the future of education: "My answer: BS is fragile. Which scam in history has lasted forever? I have an enormous faith in Time and History as eventual debunkers of fragility. Education is an institution that has been growing without external stressors; eventually the thing will collapse." - "Antifragile", Chapter 17 (last 2 pages) - Nassim Nicholas Taleb
- giardini 10y ago
  Hey, why the downvote?
ThrustVectoring 10y ago
College is a positional good, so "Is college worth it" is a question with two answers. Let me explain. The first question is "as an individual job-seeker, is college worth it to me personally". Which it probably still is - there's very real discrimination against folks without a degree. The second question is "for job-seekers as a class, does college help them". Which it almost certainly isn't - there's a huge amount of time and money spent on what's mostly a piece of paper that says "I'm smart enough to get into college, not-lower-class enough to spend the time and money, and obedient enough to jump through arbitrary hoops". Employees as a class aren't magically better because they have a piece of paper, they're better because of specific skills and abilities that they learn that enable extra productivity. People see that college is worth it for individuals, and then they go and shovel gigantic piles of money at college for everyone, and this just pisses me the hell off because it's so goddamn wasteful. IMO, the only realistic way out of this hole is to make it illegal to ask about college education or verify with an issuing institution whether or not you have a degree. If an employer asks, they get sued or prosecuted. If a job-seeker tells, the employer can't find out if they're lying. Only remaining thing is to screen for actual knowledge, like "are you a good enough engineer to not make buildings that collapse". Professional exams - like the Fundamentals of Engineering or actuarial exams - seem like an appropriate fit for that.
- Kinnard 10y ago
  That's a great idea, like the ban the box campaigns to prevent discrimination against ex-con's: https://en.wikipedia.org/wiki/Ban_the_Box https://en.wikipedia.org/wiki/Ban_the_Box http://bantheboxcampaign.org/ http://bantheboxcampaign.org/ I bet some sort of uncollege[1] labor group that calls out and rallies/lobbies against discrimination would be effective too. [1] https://www.facebook.com/groups/UnCollegeNetwork https://www.facebook.com/groups/UnCollegeNetwork
- stinkytaco 10y ago
  I like this idea, but I also routinely see criticism on HN of interviews that attempt to determine knowledge level (puzzle solving, programming tasks, and so on). And, of course, you start to wade into the problem of any exam, that it's too narrow, biased, and so on. I think your point about job-seekers as a class is mostly right, but it doesn't bring into account one of the things college provides you, which is a well-rounded education. Now, this may or may not be worthwhile to you, but my experience is that college is a good shorthand to "will this person be a good coworker". There are plenty of things about that hoop jumping that have value in the working world. They are probably OK in teams, they are probably OK at administrative work, and so on. I had a friend who went to MIT that said "if someone graduated from MIT, at least I know they have good time management skills". This is absolutely not universally true, but a higher percentage of the college graduates I've worked with are good in teams than of non-college graduates I've worked with.
RUG3Y 10y ago
This is a bit tangential to the conversation, but relevant: I have an art degree. I was pushed into getting any degree. I'm a part of that same generation that was told to go to college at all costs, even if you don't know what you want to do with yourself. Fast forward 11 years, and I've just finally paid my student loans off. Now I'm in this situation: I'm not doing a whole lot with art, and I'm trying to break into software development. Do I need a CS degree? Any opinions? I'm thinking about going back to school but the thought of possibly having more debt is not something I'm interested in. I'm having a hard time finding even junior level jobs that are interested in people without degrees. I'm a fairly competent programmer as-is, self taught.
- stinkytaco 10y ago
  Freelance? Start contributing to OS projects and consult? I mean, if you're trying to break in without existing credentials or work product, I would have to think you'd need to create some work product and connections.
  - RUG3Y 10y ago
    I have some creds + experience but I'm looking to get more. I haven't cracked freelancing yet. Places like Odesk seem like a mess and I haven't had good results.
    - GFischer 10y ago
      Don't go to Odesk. There's plenty of advice on how to freelance here on Hacker News. I've actually been on both sides of the table - as a freelancer I never got work through Odesk, I was actually hired through Hacker News once, and when it comes to hiring freelancers, I've recruited through my network (recommendations, etc.) and haven't considered Odesk. If I were to go freelance again I would make it known in the local entrepreneurship community.
    - stinkytaco 10y ago
      Well, I'm looking for some experienced Perl devs, so if that's in your tool box, we should talk.
akeck 10y ago
I started at a "small liberal arts school," but had to leave early. I then started an IT career while living at home and somehow had the good sense to pay off the loans from my aborted college career. Then degree requirements started to kick in on IT positions, so I went to night school to finish my B.S. Because I could only handle one class per semester on top of full time IT work, my degree inadvertently ended up being pay-as-you-go. I graduated a bit exhausted, but debt free. Younger friends who did their four year degrees in the same time frame essentially pay an extra rent payment each month. It's crushing them.
nercht12 10y ago
Even STEM can be a bad investment, depending on what you do. I graduated with a degree in Chem, wanting to do nanoscale computers and -later- optical computing. Found out 3rd year that unless I got a doctorate, I'd be a glorified lab rat. What's worse is that even if I got a doctorate, I'd still be a lab rat while trying to get one and would have a sliver of a chance to get a job anyways. My choice? I graduated, but didn't do grad school. Think of that next to you wonder why STEM jobs aren't being filled. There were some redeeming measures of school. I got a minor in CS, some text on my resume that says I went to school and got good grades - the first step for many companies to even consider you - and learned about a number of really good books I might not have encountered by just randomly exploring the net. Still, I probably would've done better without school. I will now take this opportunity to mention that I'm still looking for work, albeit sunny Cal is too expensive for me to consider jobs out there.
- dikdik 10y ago
  I did an undergrad in biotechnology which was effectively worthless, could barely make a dent on my 20k in undergrad debt. Now I've got a MS in bioinformatics and while I got a slight raise, I also had to take out more loans for the second degree. So I'm still floundering. If I had known what I know now, I never would have attended college (even though I had 70k worth of scholarships thrown at me). Would have picked up some programming on my own and maybe taken a few courses at a community college. Feel like I've completely wasted a decade of my life and it looks like I'm about to waste another decade.
  - nercht12 10y ago
    My sympathies. We're stuck in the same boat. That said, assuming you have some steady work, have you looked into quicker loan payoff services like Sofi?
    - dikdik 10y ago
      I have never heard of that, will check it out. Thanks.
- 10y ago
Pica_soO 10y ago
The real costs are not even visible, the iceberg of debt is killing other risky behavior (like entrepreneurship). You do not build a company in a garage, if you are already in to your chin with debt. Any risky move, be it political or in your job, will be well thought through and in doubt, be aborted, because you "know" where risky decisions get you.

112 points by happy-go-lucky 10y ago

So, is college still worth it? In the most simplistic terms, yes. Let's look back at homeownership. Attending a four-year college — even if you borrow, and even if you do not graduate — still increases your chances of owning a home, compared to people who never enroll. But if the new economy demands that workers have the ability to flow to job opportunities (like dragging-n-dropping them on a spreadsheet) then home ownership is an anchor.

lovich 10y ago
Yea, at this point I'd only get a home if I was comfortable with severely limiting my job prospects. Even in the same metro area I've moved apartments after getting a new job so that my commute is around 30 minutes rather than the 1-1.5 hour commutes a lot of my home owning coworkers have had
- kudokatz 10y ago
  I'm in the same boat ... except I ended up buying to insulate myself from a ridiculous housing market since there are lots of jobs within a 30min trip of my place. The glorification of home ownership really baffles me, although I still ended up purchasing after careful consideration of things like: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrib...
  - agalarza 10y ago
    This is the situation my wife and I are looking at as well. We don't have kids yet, we want to put down roots and barring another housing market collapse, the area we currently live in is getting expensive.
    - tostitos1979 10y ago
      We paid off huge student loans first, instead of getting into housing. Housing doubled. We're priced out of our local city. Also .. I highly suggest that if you want to buy a place, do it before the baby arrives. After the baby, you are so fully absorbed in adjusting to your new life, that taking time out to go house hunting is a herculean task. Every house we bid and lost after the baby represented a much higher cost and led us to bid more than we thought the house were (to the tune of 50K in my opinion - we still lost the bloody bidding wars).
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John23832 10y ago
I agree. Most of the high earning young people I hang with basically have to be willing to uproot for opportunity. However, owning a house (I think the term home is something distinctly different) could be used to facilitate moves though. I don't have to be in the same state/country as my rental property (though countries are starting to crack down on foreign rental property ownership).
- icebraining 10y ago
  Is property management cheap in your area? We rent a couple of apartments, and hiring a property management company would be ruinous, unless both the rent and our personal time was very expensive.
  - John23832 10y ago
    I would pick a rental area which has a college (or colleges) or with a large rental market. In my experience, the presence of a student rental market keeps prices down for property management, but high enough to make rentals viable. However, each person's situation is different.
CodeCube 10y ago
Remote working needs to become a standard practice. It's the only way to escape the neverending rise in housing in places like SF, and give people the ability and stability to settle down in a place they love, raise a family, and invest in their housing. Think about all of the coming job losses to automation ... what if high earning tech workers could stay in their communities, and spread some of that SV economy around.
- rplst8 10y ago
  More people need to realize this. Not only does it allow people to put down roots and let local economies everywhere grow, think of the benefit of getting all those cars off the roads. Less CO2, less traffic, less need for new roads (a big CO2 producer on it's own). If policy makers really wanted to make a dent in fixing our problems, subsidizing remote work positions (within US borders) would be a huge benefit.

contingencies 10y ago

graduating from college makes you almost as likely to own a home, by age 36, as someone from a high-income family. I assume they mean "own" in the sense "get a mortgage on" not "have fully paid for", no?

agalarza 10y ago
I think they mean paying a mortgage too. Paying off a house by 36 seems to require either a ton of money or a very, very cheap home.
- rosbrith 10y ago
  One still owns a home when buying with a mortgage. The lender places a charge on the property while a balance is outstanding, therefore in addition to owning the property you also own the debt secured against it.
cbr 10y ago
That's what "own" means with houses. You're a "homeowner" after closing, and you are the legal owner of the property, even though you still owe thousands to your bank.
- contingencies 10y ago
  That's my point. Debt is not an achievement.
markwaldron 10y ago
I'd love to know their definition of "high-income family"

austenallred 10y ago

The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't pay off. I was brought up under the faulty assumption that if you graduate from college you get a promising career, so pay whatever that takes. Full stop. My entire generation was. Not one teacher or counselor or advisor ever mentioned anything about cost relative to career prospects, and now it's my smart friends who are getting kicked in the teeth, while the kids like me who didn't listen and dropped out and played with computers are richly rewarded. I can't even count the number of friends with six figures of student debt and no career on both hands. I think Peter Thiel was right: for some time Americans believed in a college education so fully, so completely that we ignored the cost, even as it skyrocketed. Couple that with federally-backed loans, and no one even considered the risk. 100% of the risk was put on 18-year-old kids, many of whom had never seen a day in the workforce, paid a bill, or had a job. A lot of people will make it out unscathed, but for those that don't we lived through (or are living in) a giant secondary education bubble. But this time it's one that you can't bankrupt your way out of.

jMyles 10y ago
I'm part of that generation and made that mistake for sure. > The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The takeaway here is, in part: don't do something just because you're told to. If our generation stops doing what we're told (which seems to be the case), then this will be a small price.
- austenallred 10y ago
  Agreed, though if the incentives weren't so misaligned it wouldn't doom you to 20-30 years of struggle if/when you didn't think for yourself. For example, if the loans weren't backed by Uncle Sam there would be some threshold at which the loan providers would say "OK people studying this aren't getting jobs." Or if the universities that were promising careers had their feet held to the fire somehow before it had to reach ITT Tech billions of dollars. I've been thinking a lot about a model in which education is extended as credit. If students paid back a percentage of income how would that change colleges? I don't have all of the answers, and bootstrapping that kind of thing is rough, but I'm trying a few experiments along those lines that could be very interesting at scale.

davidf18 10y ago

A problem is that many of the higher paying jobs are in cities such as NYC, SF, LA, Boston, DC, (also London, ...) and the housing is expensive in these cities because of "rent-seeking" -- a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This harms renters and those starting out in life while benefiting wealthy landlords such as President Trump. The fix is a simple one which is to overturn the zoning density restrictions. In 2002 Japan passed a federal law that gave the federal government control of housing density restrictions: the result is that in 2014 Tokyo built 140,000 homes vs. 20,000 for NYC and less than 90,000 for all of California. The local politicians are bought off by the wealthy landlords and those just trying to make their life after graduating from college and poor people are paying for it. I wrote more about this today at: https://news.ycombinator.com/item?id=14032591 https://news.ycombinator.com/item?id=14032591

TheAdamAndChe 10y ago
> a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This is true, but it's also a failure of policies that have led to the majority of job growth being in the biggest cities in the country. If we could spread things out a bit and keep smaller cities a viable place to create jobs, the bigger cities wouldn't be impacted nearly as hard.
- Retric 10y ago
  I think it has less to do with viable job creation than wider political issues. It's cheap to open an office in Iowa, but talent/upper middle class people don't want to move there. Not simply because of social issues, but because companies don't pay enough. IE if I can save 20% of 150k moving to a cheap location is only viable if I can save 30k not just 20% of a lower salary.
  - TheAdamAndChe 10y ago
    The reason people don't want to move there is because that's not where the money is, which makes sense. But when everyone thinks like that, it causes most of the wealth to concentrate to a handful of areas across the nation while the rest suffers from lack of development. It's not even. There used to be a lot of legislation that prevented that and led to development across the nation, but most of that legislation was overturned by the 90's[1]. [1] http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-bust/ http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-...

nojvek 10y ago

> So, is college still worth it? In the most simplistic terms, yes. Not really, college is only worth it if you finish a select number of degrees and are somewhat middle class to begin with. US education system slowly alienates a large portion of the country putting them in debt forever. It's a stark contrast to Germany and some of the Nordic countries. But I also believe America is too big to make much changes regarding education.

supergeek133 10y ago

These types of things are always a cause and effect relationship, and I feel we never look at the cause. This line bothers me in particular: > So, is college still worth it? In the most simplistic terms, yes. It is only worth it because we've made it a requirement to find employment with growth potential outside of the trades or sales. Hell, even some sales jobs are requiring degrees now. If Corporate America was honest with itself about which jobs REALLY required a degree versus just some level of experience, college would become devalued in some respects. I'm 'one of the lucky ones'. I don't have a degree, I work in a fairly important job for a fortune 100 company. I am paid fairly well for my area and I enjoy my job. My experience built up over time got me to where I am, but I know many others who weren't afforded the same chance just because their resume didn't have a piece of paper and debt attached to it. That being said I'll probably eventually hit a wall where I can't advance anymore, and I'm probably OK with that. The other cause we've failed to address is the constantly rising cost of going to college. Government programs to increase loan availability (and forgiveness) have just raised the price, because the student can "afford" it.

chestervonwinch 10y ago

> debt significantly hurts your chances of buying a home 60k in the hole still from undergrad loans. The thought of taking out a mortage after this debt is finished is not appealing. "hurts my chances"? Sure, that's one way to put it.

cryoshon 10y ago
it's just boomer re-framing of the issue to make it less clear. buying a home isn't something that is up to chance. it's not like you are cruising one day, and BANG!, you buy a home. you save up for fucking years, then you put the down payment. having student loans precludes saving as much each year, making home ownership extremely distant for most.
giardini 10y ago
It may not be to your advantage to buy a home. Once you do, you're tied forever to the local economy. Ofttimes once many people move to an area and buy homes at artificially-inflated prices, the local economy tanks and everyone is stuck with their overpriced home. Look at the people in cities (in Montana, North Dakota, West Texas) caught up in the fracking boom - they're stuck with thousands of overpriced homes now. If you rent, you can move easily to an area that is growing. https://www.google.com/search?q=buying+a+home+is+not+worth+it&client=opera&hs=nnT&channel=suggest&gbv=2&sei=JMnjWOm1DIis0gK3yrq4BQ&gws_rd=ssl#spf=1 https://www.google.com/search?q=buying+a+home+is+not+worth+i...
- BeetleB 10y ago
  >Ofttimes once many people move to an area and buy homes at artificially-inflated prices, the local economy tanks and everyone is stuck with their overpriced home. At other times, a city grows so fast and rents go up so much in a few years that a house shields you from it. I bought my house "late" (i.e. when prices were on an increasing curve). Less than 3 years later, too many 2 bedroom apartments charge more for rent than my much bigger house. If I were to sell now, I'd make a profit, even after you account for real estate fees, etc. Obviously, my case is not the norm. But neither is your scenario. >https://www.google.com/search?q=buying+a+home+is+not+worth+i.. https://www.google.com/search?q=buying+a+home+is+not+worth+i.... Oh, please! The first rule of Google searching is: Do not ask it to return what you are looking for!

treehau5 10y ago

Did any of these kids (and I am one of them, graduated in 2013) stop and think that paying 50-70k a year after room and board to attend a university was insane? I had the option to go to a nice university, and maybe my horizons would have been expanded, maybe they wouldn't, but at the end of the day I am happy where I ended up and I went to community college for 2 years, and the public state university, for the remaining two., driving 1 hour to college from my parents house. Crazy I know. I lived at home! I ended up with 1/16th the debt of most of my cohorts. It's fine if these kids were just doing exactly what they were told or people sold them on the koolaid, but generations prior also had to navigate the diverse world of snake-oil salesmen and people hyping up things and overvaluing them -- you can't beat teaching common money sense. Simple math. Teaching personal finance should be in inserted into middle school and taught all the way to graduation.

reader5000 10y ago
I agree, the taxpayers were pretty stupid for taking on the risk that kids wont be able to pay on their student loans. Too bad for the taxpayer!
- DamnYuppie 10y ago
  The government is collecting quite a bit of interest on over $1.4 trillion dollars in student loans. I was also under the impression that for the vast majority, outside of a few programs, can't get rid of the debt, even with bankruptcy. So overall the money is being made.
- mywittyname 10y ago
  The government only took on $32k of the risk, that's where federal aid caps for undergrad. It's private banks that are more than happy to sink kid's futures prospects by lending them that extra $50, 60, 70 thousand dollars or more (and to take their parents down with them).

enobrev 10y ago

This article and thread reminds me of how lucky I was for being a stubborn idiot after graduating high school. I, too, was told I was too smart to skip college and that I'd be wasting my life. And since I graduated HS at seventeen, my insistent immigrant mother was able to dump me into the local university regardless of my feelings about taking a year off. And, so, I partied my ass off every day and dropped out after the first semester. Mom wasn't happy, so I was allowed temporary quarters until I found a job, and then I was off to find an apartment, and that semester was all mine to pay off. A year later I found myself with a shitty job downtown (back room at a clothing store) and art school (graphic design). I lucked into a job doing IT and on-site tech support (managing DOS servers and clients), and by nineteen I decided all the adults were full of shit, dropped out of art school and moved to NYC. It was hard. Lots of work; Lots of hustle; Lots of failures and bad days; All along with the occasional fear that I'd made the wrong choice by skipping college, as I saw a few of my friends who had gone to college get to about where I was in my own career. They'd caught up. My head start was over; But rarely surpassed. At any rate, I'm 38, back home in Chicago where the price of housing is far more reasonable than the cities I've lived in (NYC, Seattle, Los Angeles), working 100% remotely, and just bought a house. As for the stats mentioned in this article, my wife really made the cut as a 36-year-old bartender who also didn't finish college. I definitely feel like I missed out on something important by skipping school. But my career hasn't suffered for it, and I'm not sad I missed out on paying for it. And I'm pretty sure spending my twenties in NYC made up for whatever I might have missed, socially.

ge96 10y ago

I was an idiot, like "Hell yeah give me this money." Only later realizing how long it would take me to pay. Luckily for me what I owe is a mere pittance compared to someone like a doctor. But I also make 1/3rd of a pitance per year... haha I like that word pittance. Tribute to that Futurama episode, "Honking" Anyway yeap... sucks thankfully I have a somewhat functioning brain, despite the loans, not getting a useful degree/potentially wasting three years of money/life, I have an opportunity to dig myself out. It's my own fault by the way I had a great opportunity and I pissed it away because I was a jackass. But yeah, it's easy to accept this money and not realize the interest like a couple of my loans are 6.8% APR and paying the interest down alone holy crap.

OliverJones 10y ago

If you're going to university, repeat after me. "People who loan money to students are dangerous predators, and I am their lawful prey." That doesn't mean you shouldn't go to university, or that you shouldn't borrow money. Just be careful around predators.

compiler-guy 10y ago
"People who loan money to anyone are dangerous predators, and the people who take the loan are their lawful prey."

cryoshon 10y ago

peep these stats: https://trends.collegeboard.org/student-aid/figures-tables/federal-student-loan-default-rates-sector-over-time https://trends.collegeboard.org/student-aid/figures-tables/f... this is what system failure in the making looks like. look at those percentages who are still in default. even if people aren't in default, the cost of paying off their loans is stifling their economic livelihood. here is the lasting consequence of student debt: poverty poverty precludes home ownership, marriage, reinvestment into the economy, and casual consumption. the US has dug its own grave by rejecting its obligation to provide education to its citizenry. loan forgiveness would solve these problems somewhat, but honestly the ship has sailed. millenials will continue to be poorer indefinitely.

Prego 10y ago

But what would the lasting consequences of forgiving 1 Trillion US$ of student debt be?

giardini 10y ago

Taleb's 2012 book "Antifragility" discusses the state of university education and student loans: "Harvard is like a Vuitton bag or a Cartier watch. It is a huge drag on the middle-class parents who have been plowing an increased share of their savings into these institutions, transferring their money to administrators, real estate developers, professors, and other agents. In the United States, we have a buildup of student loans that automatically transfer to these rent extractors, In a way it is no different from racketeering..." On the future of education: "My answer: BS is fragile. Which scam in history has lasted forever? I have an enormous faith in Time and History as eventual debunkers of fragility. Education is an institution that has been growing without external stressors; eventually the thing will collapse." - "Antifragile", Chapter 17 (last 2 pages) - Nassim Nicholas Taleb

giardini 10y ago
Hey, why the downvote?

ThrustVectoring 10y ago

College is a positional good, so "Is college worth it" is a question with two answers. Let me explain. The first question is "as an individual job-seeker, is college worth it to me personally". Which it probably still is - there's very real discrimination against folks without a degree. The second question is "for job-seekers as a class, does college help them". Which it almost certainly isn't - there's a huge amount of time and money spent on what's mostly a piece of paper that says "I'm smart enough to get into college, not-lower-class enough to spend the time and money, and obedient enough to jump through arbitrary hoops". Employees as a class aren't magically better because they have a piece of paper, they're better because of specific skills and abilities that they learn that enable extra productivity. People see that college is worth it for individuals, and then they go and shovel gigantic piles of money at college for everyone, and this just pisses me the hell off because it's so goddamn wasteful. IMO, the only realistic way out of this hole is to make it illegal to ask about college education or verify with an issuing institution whether or not you have a degree. If an employer asks, they get sued or prosecuted. If a job-seeker tells, the employer can't find out if they're lying. Only remaining thing is to screen for actual knowledge, like "are you a good enough engineer to not make buildings that collapse". Professional exams - like the Fundamentals of Engineering or actuarial exams - seem like an appropriate fit for that.

Kinnard 10y ago
That's a great idea, like the ban the box campaigns to prevent discrimination against ex-con's: https://en.wikipedia.org/wiki/Ban_the_Box https://en.wikipedia.org/wiki/Ban_the_Box http://bantheboxcampaign.org/ http://bantheboxcampaign.org/ I bet some sort of uncollege[1] labor group that calls out and rallies/lobbies against discrimination would be effective too. [1] https://www.facebook.com/groups/UnCollegeNetwork https://www.facebook.com/groups/UnCollegeNetwork
stinkytaco 10y ago
I like this idea, but I also routinely see criticism on HN of interviews that attempt to determine knowledge level (puzzle solving, programming tasks, and so on). And, of course, you start to wade into the problem of any exam, that it's too narrow, biased, and so on. I think your point about job-seekers as a class is mostly right, but it doesn't bring into account one of the things college provides you, which is a well-rounded education. Now, this may or may not be worthwhile to you, but my experience is that college is a good shorthand to "will this person be a good coworker". There are plenty of things about that hoop jumping that have value in the working world. They are probably OK in teams, they are probably OK at administrative work, and so on. I had a friend who went to MIT that said "if someone graduated from MIT, at least I know they have good time management skills". This is absolutely not universally true, but a higher percentage of the college graduates I've worked with are good in teams than of non-college graduates I've worked with.

RUG3Y 10y ago

This is a bit tangential to the conversation, but relevant: I have an art degree. I was pushed into getting any degree. I'm a part of that same generation that was told to go to college at all costs, even if you don't know what you want to do with yourself. Fast forward 11 years, and I've just finally paid my student loans off. Now I'm in this situation: I'm not doing a whole lot with art, and I'm trying to break into software development. Do I need a CS degree? Any opinions? I'm thinking about going back to school but the thought of possibly having more debt is not something I'm interested in. I'm having a hard time finding even junior level jobs that are interested in people without degrees. I'm a fairly competent programmer as-is, self taught.

stinkytaco 10y ago
Freelance? Start contributing to OS projects and consult? I mean, if you're trying to break in without existing credentials or work product, I would have to think you'd need to create some work product and connections.
- RUG3Y 10y ago
  I have some creds + experience but I'm looking to get more. I haven't cracked freelancing yet. Places like Odesk seem like a mess and I haven't had good results.
  - GFischer 10y ago
    Don't go to Odesk. There's plenty of advice on how to freelance here on Hacker News. I've actually been on both sides of the table - as a freelancer I never got work through Odesk, I was actually hired through Hacker News once, and when it comes to hiring freelancers, I've recruited through my network (recommendations, etc.) and haven't considered Odesk. If I were to go freelance again I would make it known in the local entrepreneurship community.
  - stinkytaco 10y ago
    Well, I'm looking for some experienced Perl devs, so if that's in your tool box, we should talk.

akeck 10y ago

I started at a "small liberal arts school," but had to leave early. I then started an IT career while living at home and somehow had the good sense to pay off the loans from my aborted college career. Then degree requirements started to kick in on IT positions, so I went to night school to finish my B.S. Because I could only handle one class per semester on top of full time IT work, my degree inadvertently ended up being pay-as-you-go. I graduated a bit exhausted, but debt free. Younger friends who did their four year degrees in the same time frame essentially pay an extra rent payment each month. It's crushing them.

nercht12 10y ago

Even STEM can be a bad investment, depending on what you do. I graduated with a degree in Chem, wanting to do nanoscale computers and -later- optical computing. Found out 3rd year that unless I got a doctorate, I'd be a glorified lab rat. What's worse is that even if I got a doctorate, I'd still be a lab rat while trying to get one and would have a sliver of a chance to get a job anyways. My choice? I graduated, but didn't do grad school. Think of that next to you wonder why STEM jobs aren't being filled. There were some redeeming measures of school. I got a minor in CS, some text on my resume that says I went to school and got good grades - the first step for many companies to even consider you - and learned about a number of really good books I might not have encountered by just randomly exploring the net. Still, I probably would've done better without school. I will now take this opportunity to mention that I'm still looking for work, albeit sunny Cal is too expensive for me to consider jobs out there.

dikdik 10y ago
I did an undergrad in biotechnology which was effectively worthless, could barely make a dent on my 20k in undergrad debt. Now I've got a MS in bioinformatics and while I got a slight raise, I also had to take out more loans for the second degree. So I'm still floundering. If I had known what I know now, I never would have attended college (even though I had 70k worth of scholarships thrown at me). Would have picked up some programming on my own and maybe taken a few courses at a community college. Feel like I've completely wasted a decade of my life and it looks like I'm about to waste another decade.
- nercht12 10y ago
  My sympathies. We're stuck in the same boat. That said, assuming you have some steady work, have you looked into quicker loan payoff services like Sofi?
  - dikdik 10y ago
    I have never heard of that, will check it out. Thanks.
10y ago

Pica_soO 10y ago

The real costs are not even visible, the iceberg of debt is killing other risky behavior (like entrepreneurship). You do not build a company in a garage, if you are already in to your chin with debt. Any risky move, be it political or in your job, will be well thought through and in doubt, be aborted, because you "know" where risky decisions get you.