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I think it's hard to absolutely assess the value of a student loan —however predatory— without considering the prospects of having a higher education. Some degr

I think it's hard to absolutely assess the value of a student loan —however predatory— without considering the prospects of having a higher education. Some degrees are worth a dodgy loan. Some really aren't. You could also say that many students wouldn't be in higher education without the loan. That is especially true here in the UK. That might not be a bad thing except that we've gone through an arms race so that every junior post needs five bachelor degrees and a decade of experience. Experience alone used to be enough. It'd be nice to get back there. Our focus on getting everybody into higher education —and underwriting indefinite liens on lifetime income— has also meant that universities care more about the number of students than the quality of teaching. That alone probably isn't news, what has been recently in the UK is the remuneration of higher management staff. They can apparently justify the 10-20× bump over senior lecturers (plus benefits like housing, cars, lunches) to their boards by saying they're the only people who can attract all the money from the students. It's disgusting and vicious cycle.

PeachPlum 9y ago
I think the UK loan system is pretty much optimum. It's a "can't pay don't pay" system. Even on £40k gross my payments are £1710 a year, leaving £28k after deductions (not including pension). I'm unlikely to default on that.
gbacon 9y ago
It’s similar in the U.S. people going six figures in debt for degrees that qualify them for $30k jobs is a problem, but that is a dirt-simple ROI analysis. Forcing nearly everyone into the college-bound track is a huge problem. Politically, vocational training is deemed classist or racist, and such utopianism creates a sad disservice to lots of young people who could be learning skilled trades and setting themselves up for comfortable living. Just like everyone at the university level is not med-school material, not every high schooler is college material.
- JoeAltmaier 9y ago
  Sadly, in the US, we don't teach ROI. That comes in your 2nd year of college. Its a trap!
- toomuchtodo 9y ago
  It sounds like a partial solution to this is an infographic that must be provided by each college before allowing loans to be taken out showing: * The degrees you're interested in * The total cost of ownership of each of those degrees, based on the dollar cost + interest * The years you'll have to work to pay off the degree based on the median salary of whatever career requires that degree * Placement rate in the career you're obtaining you're degree for after obtaining your education (colleges usually fudge the numbers here by considering a student getting any job as "placement" after going through their pipeline) Very similar to truth in lending requirements for credit cards and mortgages. https://www.occ.treas.gov/topics/consumer-protection/truth-in-lending/index-truth-in-lending.html https://www.occ.treas.gov/topics/consumer-protection/truth-i... https://en.wikipedia.org/wiki/Truth_in_Lending_Act https://en.wikipedia.org/wiki/Truth_in_Lending_Act
  - mechhrt 9y ago
    You can't expect the college to give you a realistic prospect when they are the ones who stand to (non-) profit from your matriculation. At the very least, they will give you a best-case scenario instead of a worst-case or median-case.
    - toomuchtodo 9y ago
      That's why you use the law to do it, like we do with credit card and mortgage products.
- oliwarner 9y ago
  Six figures?! I'm sure some people manage to clock that up, but the 2015 average[1] was $30,100 at graduation. Edit: Don't get me wrong, that's still a huge pile of money for a worthless degree, or something you should have learned "on the job"... But it's a long way off $100k+ [1] https://ticas.org/posd/map-state-data https://ticas.org/posd/map-state-data
MR4D 9y ago
Pretty easy to assess if you google for some basic employment information (at least for the US). [1] Doing so results in seeing that a sociology degree from an expensive school means you'll basically never be able to pay off the loan. Get an engineering degree from a state school, and the interest rate almost doesn't matter. (yes, of course the interest rate matters - I'm just being a bit cheeky in the comparison.) [1] This is literally the first link under google when searching for "starting salaries by major": https://www.forbes.com/sites/susanadams/2015/07/02/the-college-majors-with-the-highest-starting-salaries/#7b4ebe9c3502 https://www.forbes.com/sites/susanadams/2015/07/02/the-colle...

PeachPlum 9y ago

I think the UK loan system is pretty much optimum. It's a "can't pay don't pay" system. Even on £40k gross my payments are £1710 a year, leaving £28k after deductions (not including pension). I'm unlikely to default on that.

gbacon 9y ago

It’s similar in the U.S. people going six figures in debt for degrees that qualify them for $30k jobs is a problem, but that is a dirt-simple ROI analysis. Forcing nearly everyone into the college-bound track is a huge problem. Politically, vocational training is deemed classist or racist, and such utopianism creates a sad disservice to lots of young people who could be learning skilled trades and setting themselves up for comfortable living. Just like everyone at the university level is not med-school material, not every high schooler is college material.

JoeAltmaier 9y ago
Sadly, in the US, we don't teach ROI. That comes in your 2nd year of college. Its a trap!
toomuchtodo 9y ago
It sounds like a partial solution to this is an infographic that must be provided by each college before allowing loans to be taken out showing: * The degrees you're interested in * The total cost of ownership of each of those degrees, based on the dollar cost + interest * The years you'll have to work to pay off the degree based on the median salary of whatever career requires that degree * Placement rate in the career you're obtaining you're degree for after obtaining your education (colleges usually fudge the numbers here by considering a student getting any job as "placement" after going through their pipeline) Very similar to truth in lending requirements for credit cards and mortgages. https://www.occ.treas.gov/topics/consumer-protection/truth-in-lending/index-truth-in-lending.html https://www.occ.treas.gov/topics/consumer-protection/truth-i... https://en.wikipedia.org/wiki/Truth_in_Lending_Act https://en.wikipedia.org/wiki/Truth_in_Lending_Act
- mechhrt 9y ago
  You can't expect the college to give you a realistic prospect when they are the ones who stand to (non-) profit from your matriculation. At the very least, they will give you a best-case scenario instead of a worst-case or median-case.
  - toomuchtodo 9y ago
    That's why you use the law to do it, like we do with credit card and mortgage products.
oliwarner 9y ago
Six figures?! I'm sure some people manage to clock that up, but the 2015 average[1] was $30,100 at graduation. Edit: Don't get me wrong, that's still a huge pile of money for a worthless degree, or something you should have learned "on the job"... But it's a long way off $100k+ [1] https://ticas.org/posd/map-state-data https://ticas.org/posd/map-state-data

MR4D 9y ago

Pretty easy to assess if you google for some basic employment information (at least for the US). [1] Doing so results in seeing that a sociology degree from an expensive school means you'll basically never be able to pay off the loan. Get an engineering degree from a state school, and the interest rate almost doesn't matter. (yes, of course the interest rate matters - I'm just being a bit cheeky in the comparison.) [1] This is literally the first link under google when searching for "starting salaries by major": https://www.forbes.com/sites/susanadams/2015/07/02/the-college-majors-with-the-highest-starting-salaries/#7b4ebe9c3502 https://www.forbes.com/sites/susanadams/2015/07/02/the-colle...