5 ms·

Perhaps one of the silver linings of growing up poor was that I, and my friends, were conscious of money, or its lack. I wanted to pursue a writing degree and k

by r_smart 10y ago

Perhaps one of the silver linings of growing up poor was that I, and my friends, were conscious of money, or its lack. I wanted to pursue a writing degree and knew I shouldn't spend a ton of money on it, so I stayed local and worked to mostly pay my way through my first degree. My friends went to fancier schools, but did it in pursuit of business degrees, looking to get a good return on their education. The point being, because we maybe understood money a little better, we made more practical decisions with regards to education. We certainly didn't get useful advice from our parents or school.

ep103 10y ago
You make a good point. Yet the entire time I'm reading it, the main thought going through my mind, is people shouldn't have to make choices like this about education. And definitely not in a democracy.
- austenallred 10y ago
  100%. It's a broken system with misaligned incentives. The college doesn't have to care if you get a job, the loans are backed by the federal government so there's no risk there, and 100% of the risk is placed on the shoulders of the student. Even if we didn't have government sponsored education straight up, if any of the money involved were dependent upon a student's career success I believe we'd see a very different educational system.
  - crusso 10y ago
    Are you saying to get rid of the federal government backing of the loan? Let the banks making the loans sink or swim based upon the success of the students and their ability to pay it back?
    - austenallred 10y ago
      In my ideal world (I'm trying to start a company that will eventually do this, but hard for obvious reasons) college would be a place where you "just show up," you learn what you need to, then you pay back the school with a percentage of income. The percentage piece aligns incentives, because the school is now invested in you earning the highest income, and it's now in part the school's responsibility to make sure it's providing skills that are in-demand in the workforce. I also think a system like this would help a lot of the social divide; right now it's much more risky for poor people to go to college (or trade school), so many opt out. I'm obviously biased and could be wrong, it's just a problem that's been eating at me for a long time.
      - winstonewert 10y ago
        I like the idea in general, but a few issues seem problematic to me. The school would seem to have a strong incentive to only accept applicants who they are pretty sure will make a lot of money. The incentive isn't to teach anyone who shows up. The school would also seem to have a strong incentive to control the life decisions of students after they leave. i.e. they won't want to let students switch careers after they discover they weren't cut out to be whatever they trained for. Collecting a percentage of income seems like it might be difficult to enforce. People are eventually going to decide they've paid the school enough and want to stop paying. Is the school going to constantly face legal costs trying to recapture it? Furthermore, legally, can you sign a contract that permanantly grants a percentage of your income? I'm wondering if that would be declared invalid by the courts.
        austenallred 10y ago
        > The school would seem to have a strong incentive to only accept applicants who they are pretty sure will make a lot of money. The incentive isn't to teach anyone who shows up That's true at first, but at a certain point the incremental cost of each additional student gets really low. Consider existing scholarships and financial aid - you can work in a level of "default" or "higher risk" into the student "portfolio". > The school would have a strong incentive to control the lives of students That's true > Collecting a percentage of income might be difficult to enforce Not sure how it's more difficult to enforce than any other type of debt, other than if income is misreported. (That's easy: require a W2). > Legslly, can you sign a contract that permanently grants a percentage of your income? I don't view it as a "permanently" thing. Just x% for the first y years.
        gozur88 10y ago
        >The school would seem to have a strong incentive to only accept applicants who they are pretty sure will make a lot of money. The incentive isn't to teach anyone who shows up. They would also have a big incentive to boot you if you had a bad semester or two, like an underperforming stock or race horse.
      - antisthenes 10y ago
    - gshubert17 10y ago
      One alternative is to have the college be on the hook for the first 20% of the loan. Now they would have skin in the game. Once 20% is gone, then the federal government could backstop the rest.
  - deleted 10y ago
    [deleted]
- crusso 10y ago
  People shouldn't have to make choices to get educations that will provide marketable value? What should drive such an important choice? Pleasure? Fashion? Government quotas?
- randomdata 10y ago
  For better or worse, here in North America the government does mandate and provide, with little choice, the education it deems necessary for its young citizens to become functioning members of society. If someone chooses to pursue a hobby beyond that, which is what the parent seems to be referring to, why shouldn't they have full choice of what they want to study and how they want to study it? Especially in a capitalistic democracy.
- winstonewert 10y ago
  But choices like that are inevitable. There are only so many places available at the top schools. Somebody has to make the choice about which students get to go there. That somebody may be the students deciding whether the cost is worthwhile, or it may be the school deciding which students to accept, but the decision is inevitable.
  - fulafel 10y ago
    The large debt is very evitable, in many countries higher education is free or negative cost (=everyone gets a student allowance). This doesn't mean top schools have unlimited admissions.
    - winstonewert 10y ago
      Did I say anything about debt?
- r_smart 10y ago
  |people shouldn't have to make choices like this about education. And definitely not in a democracy. With all due respect, that doesn't really make any sense. What about a democracy should keep people from making important decisions? I think our education of students on the matter needs work, but they should absolutely be making this decision. For a lot of people it's the first really big decision they get to make, and is a good step to taking on the responsibility that comes with adulthood. That coupled with (hopefully) having a part time job through high school puts them in a pretty good position to transition into becoming a responsible citizen. We just need to teach them more about the costs, expected returns, etc. None of it is that complicated, and could be reasonably taught in a high school algebra course. Probably sooner to be honest.
- gozur88 10y ago
  What does the system of government have to do with it?
watwut 10y ago
According to this article, people who went to college still do better then people who did not went to college in terms of home ownership. Which is exactly the same result I have seen in other similar stats. They are not doing as good as they were expected to and that has consequences. However, the assumption so many people in this discussion take for granted - that young college graduates did overwhelmingly stupid decisions is simply wrong.
- r_smart 10y ago
  Perhaps we're talking past each other here. You'll notice from my example that I and my friends all went to college. I'm not advocating against going to college. What I'm saying is there are a lot of options out there and the financial side should weigh in your decisions. I was getting a writing degree and decided that shooting for a big expensive school was probably a stupid idea. So I picked a far cheaper option, which allowed me to pay as I went, and graduate with ~$10k in loans after I finished.

by r_smart 10y ago

ep103 10y ago

You make a good point. Yet the entire time I'm reading it, the main thought going through my mind, is people shouldn't have to make choices like this about education. And definitely not in a democracy.

austenallred 10y ago
100%. It's a broken system with misaligned incentives. The college doesn't have to care if you get a job, the loans are backed by the federal government so there's no risk there, and 100% of the risk is placed on the shoulders of the student. Even if we didn't have government sponsored education straight up, if any of the money involved were dependent upon a student's career success I believe we'd see a very different educational system.
- crusso 10y ago
  Are you saying to get rid of the federal government backing of the loan? Let the banks making the loans sink or swim based upon the success of the students and their ability to pay it back?
  - austenallred 10y ago
    In my ideal world (I'm trying to start a company that will eventually do this, but hard for obvious reasons) college would be a place where you "just show up," you learn what you need to, then you pay back the school with a percentage of income. The percentage piece aligns incentives, because the school is now invested in you earning the highest income, and it's now in part the school's responsibility to make sure it's providing skills that are in-demand in the workforce. I also think a system like this would help a lot of the social divide; right now it's much more risky for poor people to go to college (or trade school), so many opt out. I'm obviously biased and could be wrong, it's just a problem that's been eating at me for a long time.
    - winstonewert 10y ago
      I like the idea in general, but a few issues seem problematic to me. The school would seem to have a strong incentive to only accept applicants who they are pretty sure will make a lot of money. The incentive isn't to teach anyone who shows up. The school would also seem to have a strong incentive to control the life decisions of students after they leave. i.e. they won't want to let students switch careers after they discover they weren't cut out to be whatever they trained for. Collecting a percentage of income seems like it might be difficult to enforce. People are eventually going to decide they've paid the school enough and want to stop paying. Is the school going to constantly face legal costs trying to recapture it? Furthermore, legally, can you sign a contract that permanantly grants a percentage of your income? I'm wondering if that would be declared invalid by the courts.
      - austenallred 10y ago
        > The school would seem to have a strong incentive to only accept applicants who they are pretty sure will make a lot of money. The incentive isn't to teach anyone who shows up That's true at first, but at a certain point the incremental cost of each additional student gets really low. Consider existing scholarships and financial aid - you can work in a level of "default" or "higher risk" into the student "portfolio". > The school would have a strong incentive to control the lives of students That's true > Collecting a percentage of income might be difficult to enforce Not sure how it's more difficult to enforce than any other type of debt, other than if income is misreported. (That's easy: require a W2). > Legslly, can you sign a contract that permanently grants a percentage of your income? I don't view it as a "permanently" thing. Just x% for the first y years.
      - gozur88 10y ago
        >The school would seem to have a strong incentive to only accept applicants who they are pretty sure will make a lot of money. The incentive isn't to teach anyone who shows up. They would also have a big incentive to boot you if you had a bad semester or two, like an underperforming stock or race horse.
    - antisthenes 10y ago
  - gshubert17 10y ago
    One alternative is to have the college be on the hook for the first 20% of the loan. Now they would have skin in the game. Once 20% is gone, then the federal government could backstop the rest.
- deleted 10y ago
  [deleted]
crusso 10y ago
People shouldn't have to make choices to get educations that will provide marketable value? What should drive such an important choice? Pleasure? Fashion? Government quotas?
randomdata 10y ago
For better or worse, here in North America the government does mandate and provide, with little choice, the education it deems necessary for its young citizens to become functioning members of society. If someone chooses to pursue a hobby beyond that, which is what the parent seems to be referring to, why shouldn't they have full choice of what they want to study and how they want to study it? Especially in a capitalistic democracy.
winstonewert 10y ago
But choices like that are inevitable. There are only so many places available at the top schools. Somebody has to make the choice about which students get to go there. That somebody may be the students deciding whether the cost is worthwhile, or it may be the school deciding which students to accept, but the decision is inevitable.
- fulafel 10y ago
  The large debt is very evitable, in many countries higher education is free or negative cost (=everyone gets a student allowance). This doesn't mean top schools have unlimited admissions.
  - winstonewert 10y ago
    Did I say anything about debt?
r_smart 10y ago
|people shouldn't have to make choices like this about education. And definitely not in a democracy. With all due respect, that doesn't really make any sense. What about a democracy should keep people from making important decisions? I think our education of students on the matter needs work, but they should absolutely be making this decision. For a lot of people it's the first really big decision they get to make, and is a good step to taking on the responsibility that comes with adulthood. That coupled with (hopefully) having a part time job through high school puts them in a pretty good position to transition into becoming a responsible citizen. We just need to teach them more about the costs, expected returns, etc. None of it is that complicated, and could be reasonably taught in a high school algebra course. Probably sooner to be honest.
gozur88 10y ago
What does the system of government have to do with it?

watwut 10y ago

According to this article, people who went to college still do better then people who did not went to college in terms of home ownership. Which is exactly the same result I have seen in other similar stats. They are not doing as good as they were expected to and that has consequences. However, the assumption so many people in this discussion take for granted - that young college graduates did overwhelmingly stupid decisions is simply wrong.

r_smart 10y ago
Perhaps we're talking past each other here. You'll notice from my example that I and my friends all went to college. I'm not advocating against going to college. What I'm saying is there are a lot of options out there and the financial side should weigh in your decisions. I was getting a writing degree and decided that shooting for a big expensive school was probably a stupid idea. So I picked a far cheaper option, which allowed me to pay as I went, and graduate with ~$10k in loans after I finished.