18 ms·

It sure feels like a bubble to me. I don't know how many friends I have with six figures of student loans and no career, but it's a lot. Considering that those

• fratlas 9y ago
  Your last paragraph describes the Australian university system. Government foots the bill to invest in your education, you pay it back gradually (and not until you're earning enough for it not to hurt).
  • austenallred 9y ago
    Makes a hell of a lot of sense, to be honest. The problem in the US system is the government feels everyone has a "right" to an education, so it will underwrite an unlimited amount of loans regardless of what you do with them. That pumps the system so full of cash no one is quite sure what to do. They just keep raising prices and people keep coming, because what are you going to do, not go to college? Even after funding slows, the prices are still sky high, and people keep paying.
    • muninn_ 9y ago
      Why would this be any different than a right to, say, health care? Why even pay for k-12?
      • austenallred 9y ago
        The government isn't running the schools (most of the time), it's just underwriting an infinite amount of loans for students to take and go to private companies with. So if you're a University you know a) students think they should pay however much it costs to attend and b) they have an unlimited amount of funding to do so with. Thus ITT Tech.
        • muninn_ 9y ago
          Sure but we're talking about rights, not operations.
          • austenallred 9y ago
            I'm not trying to comment on whether or not education should be a right, I'm just saying that believing it should be given our current system has had some negative repercussions.
            • muninn_ 9y ago
              Which is fine, but my comment was addressing the right to education.
          • salesguy222 9y ago
            I would say there is a major difference between local property owners paying reasonable sums for children to become literate (k-12)... and a nation paying highly unreasonable and ballooning sums of money so that a functional literate adult can obtain an education that rarely leads to 10x better outcomes
      • programmarchy 9y ago
        No such thing as a right to either because neither health providers nor educators are slaves.
      • thatwebdude 9y ago
        You do have a right to public K-12, and it's free (your taxes pay for it). You can pay for private K-12, or "pay up" and move to a more expensive school district (read: taxes) which would theoretically give you a better education. School districts have problems with people claiming grandparent's home addresses to attend a better school, and it happens across the country.
  • maccard 9y ago
    And the UK (in principle). Although it's quite savage, as the repayments are tied to RPI if you took out your loan post 2012. You pay 9% of your income over 21k-ish until the debt is paid off. Calculator here to show just how grossly unfair this system is in practice [0]. [0] http://www.moneysavingexpert.com/students/student-finance-calculator http://www.moneysavingexpert.com/students/student-finance-ca...
    • simonbarker87 9y ago
      Out of interest, what makes this system unfair? Or are you just talking about the year demarcations? I've always quite liked that my student loan repayment is tied to my salary as it's one less bill to worry about if/when things go badly. It means that when we were getting our business off the ground and didn't take salary out, I at least didn't have to worry about the student loan. Don't get me wrong, I'm looking forward to the day I'm not having to pay it but at the same time, I think the changes in university fees would be better received if they simply called it a graduate tax that expires after 20 years.
• gregable 9y ago
  The problem with this incentive is that it would encourage the university to only accept applicants who have a good financial background to begin with. For example, applicants whose parents have significant assets. We don't like to admit it, but this would probably be as useful a predictor as to the student's income as the quality of education. If universities started choosing applicants this way, we end up with a system that reinforces generational wealth, rather than lifting folks out of poverty. No easy solutions here.
  • austenallred 9y ago
    They'd be looking to accept the students with the greatest aptitude for a high paying career. There may be some level of correlation, but I highly doubt it's as strong as the ivy leagues would lead you to believe.
    • gregable 9y ago
      The correlation is very strong. The single biggest predictive input into a child's income is their parent's income.
  • skummetmaelk 9y ago
    Whereas now they just charge insane prices to stay on the government guaranteed gravy train.
• theptip 9y ago
  > Considering that those loans don't even go away with bankruptcy What? How does that work? Edited to add: this link suggests you can make it go away, but you need to do some extra work: https://studentloanhero.com/featured/student-loan-bankruptcy-discharge/ https://studentloanhero.com/featured/student-loan-bankruptcy...
  • koolba 9y ago
    The rationale is that you can't take away an education the way you can repo a house or car. That and something about doctors borrowing a couple hundred K, then declaring bankruptcy to discharge it after graduation.
    • vkou 9y ago
      And yet, nothing prevents me from maxing out my credit cards, and spending it all on whiskey and limousine rides... Or totaling my car (While only having liability insurance). Lenders charge a premium over the prime interest rate because of the risk that they will never get their money back. Student loans are backed by the federal government - there is zero risk for these lenders. They seem to be under the impression that they should be getting paid for risk that they don't have to shoulder. Why on earth should 18 year olds be entering financial transactions over hundreds of thousands of dollars, where they, but not their counterparty, get to shoulder all the risk? One would expect that the lenders should be sophisticated enough to know how to deal with it, and price accordingly.
      • salesguy222 9y ago
        Of course the answer is that 18 year olds shouldn't be strapping themselves up with debt. And it should be dischargable. But of course, we are living in a country that is controled by fabulously wealthy and powerful individuals and their businesses. The education lobby, like any other lobby, successfully petitioned the government to make student loans a contract in blood. It is deeply irrational, unfair, and leads to inflation and rampant misallocation of resources. But the education cartel and its alligned politicians don't give one fuck about that. In fact, this was the intended outcome. They count the money and if it ever breaks, hey, they're rich!
• ryandrake 9y ago
  I don't know, maybe it's different now, but my generation (went to school in the mid 90s) was not told to "just go to the best college no matter what": We were also advised to consider the cost and carefully choose a major so as to produce a positive expected ROI. Obviously nobody has a crystal ball and you can never tell when huge, industry-wrecking changes are coming, but it was well understood that majoring in Underwater Basket Weaving was not a great idea from a financial point of view. Have we forgotten this lesson?
  • austenallred 9y ago
    I was definitely told to go to the best school no matter what and to not consider the cost. But I graduated in 2008 in a perma-middle-class suburb that probably wished those things were true. I'm sure it's very different for others.
  • Meekro 9y ago
    My experience was similar to yours. I immigrated from Russia at a young age so we had very little money. I attended a great college mostly on scholarship. My mom had always taught me to work hard and pick a major carefully, taking into account ROI. Thanks to merit-based scholarships and need-based aid, I graduated with minimal debt, despite attending a private college with a $45k per year sticker price. Thanks to a proper choice of majors, I made good money right out of school. I'm always puzzled when people claim that one needs to come from money to succeed.
    • austenallred 9y ago
      I'd venture a guess that helpful and savvy parents matter as much as (if not more than) coming from money
      • labster 9y ago
        You need luck or connections or wealth to succeed. Connections can include parents, friends, etc. But something has to break your way -- simply attending college is not enough to tilt the odds in your favor.
• hrehhf 9y ago
  By the way, your https certificate for lambdauniversity.com is broken (it is for github, not your domain), and www.lambdauniversity.com/contact returns a 404.
  • austenallred 9y ago
    Ya, migrating stuff as we speak. Bad timing. Thanks.
• dba7dba 9y ago
  Hm, lambdauniversity.com seems real interesting. Too bad I'm way past the point of applying for a college.
• nerfhammer 9y ago
  Bubbles are caused by speculation, often by unsophisticated investors. Since an education is a non-transferrable asset it's difficult to conceive how it could be classified as a "bubble". Speculators buy assets that they aren't going to use themselves purely to sell it to someone else. If speculators are selling to mostly to other speculators and transactions between speculators starts taking up the bulk of the active market and it starts driving prices up... that's a bubble. What happens is that at some point speculators will panic when other speculators stop buying the asset, and they race to cash out of the asset before everyone else does, except there's mostly other speculators who are also trying to dump the asset on the market... Those Dutch tulips or 2000-era dot-com stocks are examples of this type of asset. These are assets that didn't have much value except to speculators. (Cf. you can live in or rent out a house, or collect dividends from other categories of stock, or melt down gold, etc.) As soon as there's a price drop... every speculator is terrified of being the last one holding the bag and sees every other speculator thinking the same thing and accurately see speculators as controlling the price and they all race like hell to dump the asset as quickly as possible. The price drops to near zero. With an education it's difficult to imagine how this sort of thing could happen. In short, it's an exceedingly difficult asset to transfer. You can't sell your education. There doesn't seem to be a conceivable way that everyone would "sell" their education all at once. Also the process of buying an education takes many years to carry out and so doesn't seem so compatible with overnight frenzies. And the value of previously acquired educations doesn't drop if people buy fewer or cheaper ones; it might actually go up instead. If people collectively decide Ivy league educations aren't worth buying anymore... it will probably be a trend that occurs over a matter of decades. Just because something feels dumbfoundingly "expensive" doesn't mean that it's a "bubble".
  • fictioncircle 9y ago
    The housing bubble was sophisticated investors thinking they swindled unsophisticated investors to some degree. Private student loans operate similarly and have similar risks. Similarly, you can't _sell_ an education except with a job so if there is even the slightest panic a bunch of people can't pay their loans and the holder of the note can't sell the underlying "education".
  • 9y ago
• aswanson 9y ago
  In the meantime, tuition outpaces inflation 3x, administrator costs escalate, construction projects continue apace on every "higher-education" campus in the country, and financially shielded, tenured professors who have guaranteed retirement plans and have never started so much as a lemonade stand prepare our youth for the future. I mean,non-Ivy USC tuition is only 72k a year. Why not go for the fun and profit of the uni. Thanks, baby boomers. At least you have your guaranteed pensions. The world you made sucks for your kids, though. Bubble, meet pin.
• lawrenceyan 9y ago
  What do you think about Make School in comparison to Lambda University? They seem to based around the same concept of paying the fee for training through salary repatriation.
  • sylvainkalache 9y ago
    You should also check out Holberton School, same tuition fee model.
• RealityNow 9y ago
  Except now there's a glut of aspiring junior engineers in the market. A friend of mine who graduated 1-2 years ago from a bootcamp told me his cohort's job placement rate after 3 months was 90% whereas this year it's less than 50% at the same school.
  • austenallred 9y ago
    IMO there's a glut of subpar junior engineers that don't understand CS principles. Have been doing this a while; everyone who understands data structures and algorithms gets snapped up pretty quickly.
    • 0xC0DECAFE2020 9y ago
      Lol. Snap me up Scotty!
  • bdcravens 9y ago
    Perhaps they stopped hiring grads as TAs and counting it as a placement.
• kome 9y ago
  Also, for those who are struggling: http://www.uopeople.edu/ http://www.uopeople.edu/ They are a (nationally) accredited university. A bachelor with them is no more than $4000. They offer just AAs and BAs in business and computer science tho. Here their wikipedia for more info: https://en.wikipedia.org/wiki/University_of_the_People https://en.wikipedia.org/wiki/University_of_the_People