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My wife and I are about 30. We still have ~50k in student loan debt. We make enough that her entire paycheck goes towards our student loans and we should have i

• darkerside 8y ago
  Sorry if this is prying, but do you regret the decision to borrow and spend on higher education?
  • tjr225 8y ago
    No, not really. But I understand that I, for the most part, have to participate in a system that I believe is fundamentally broken. There's almost nothing I learned during my 4 year college education that prepared me for any of my (tech) jobs post-graduation. And, due to poor decisions that I made, essentially as a child, I dropped out of high school when I was 16. So, a GED and a college education seemed like the only way out of the hole I dug myself at the time. I guess now that I am 30 and know myself a lot better, what I do regret is not being more creative. I probably could've figured out a way into a job similar to the one I have now if I had been more creative and avoided getting a 4 year degree.
    • jandrese 8y ago
      I wouldn't be quite so quick to dismiss the ability of a college diploma to get you past the first level HR filters at so many companies, especially for tech positions. When there are a ton of candidates for a job it's really easy to circular file the ones that have just a GED and no secondary education.
      • darkerside 8y ago
        It's not so much that it doesn't help as, is it worth the cost? Community colleges, with a transfer to in-state public universities, should be a relatively affordable option for that use case.
    • mrguyorama 8y ago
      >There's almost nothing I learned during my 4 year college education that prepared me for any of my (tech) jobs post-graduation Did you participate? I've always been an avid and successful self-teacher, but college gave me opportunities and goals that I would have as an individual "smart" person. Everyone I've met who "tried" in an educational setting has come out knowing more than when they went in.
• ThrustVectoring 8y ago
  I agree with you on healthcare, disagree on college. College is largely a positional good - it's an earnings advantage by putting you ahead in the line of job candidates. If everyone goes to college, that doesn't advance everyone ahead in line. A good chunk of the effect of free college would be making it more like a high school degree for more and more jobs in the economy. More important is to ensure that a college education is not required and not useful for social mobility.
  • nine_k 8y ago
    But better knowledge will always be important for social mobility, at the very least via earning more money. OTOH the traditional college may be not the best way to acquire certain kinds of knowledge. In many cases learning outside campus using recorded lectures, books, and computers may be as efficient, and visiting labs for necessary work could be vastly less expensive than doing full-time college. I suspect the value of certain independent examinations / certifications, that is, the comparative advantage they give, will grow with time. The effort of passing them will be (or already is) university-level high, and the prices will also grow, but definitely not to the level of college prices. This will democratize learning because of the lower prices, easier choice of time / pace, and easier choice of what you really want to learn. It's already happening, of course, but it's low-key by now. I posit that it will be a major force. Certain things, like medicine, are not amenable to this approach, or course. But a lot of STEM, financial, media, even liberal arts curricula can benefit from such an approach.
    • mantas 8y ago
      If everyone would go to university, nobody would earn more money. It'd just push the boundary where people are separated. In my country, vast majority of people go to post-high-school education. The result is that a lot of people have bachelor's or even master's yet end up working shitty dead-end jobs. Which they could do as well right after high school. In fact, many places prefer to hire people without degrees for such jobs for various reasons. Effectively higher education becomes net negative if you went there for the lulz and didn't make it.
• pitaj 8y ago
  Stop guaranteeing student loans and watch the price of college tumble.
  • jandrese 8y ago
    But at the same time shutting out the poor from college unless they're also straight-A students and somehow magically come from an area with good schools despite being poor... This is not a problem that has any easy solutions. I've been kind of partial to making tuition free for four years (paid for by the state) as long as you can maintain a 3.0 GPA. Basically extended public school but more aggressive about weeding out people who are not cut out for school. The state would negotiate appropriate tuition each year to discourage ever inflating rates.
    • white-flame 8y ago
      The issue of unaffordability of universities if loans were drastically reduced would be a painful transition, but only a transition. Universities are unsustainable from a customer perspective as they are, and something needs to give. A 4-year degree should also not be as widely required as it currently is, which is something else that needs to correct, which would happen with a collapse of graduates. But as mentioned upthread, if we simply keep things as they are and throw good money after bad, people are going to have to be in school until they're 30 in order to meet the minimum requirements for mediocre jobs. Better to have some tough times to weather, given that you can always enroll later in life after things have settled, assuming it's something around a 5-year correction.
    • kansface 8y ago
      > But at the same time shutting out the poor from college unless they're also straight-A students and somehow magically come from an area with good schools despite being poor... Is this better or worse than the credential treadmill and a lifetime servicing debt? At least when college was cheap in the 70s, you could pay for it with a summer job and part time work during school. > more aggressive about weeding out people who are not cut out for school This would never happen.
• wycs 8y ago
  >College education and healthcare /should/ be free for all in this country(USA). They are fundamental to the social mobility and freedom that our founding principles were created for. We had this. It was called high school. But then standards were lowered so it was no longer a good filter for intelligence and conscientiousness. Standards were lowered to increase "social mobility." This did not work. Now college performs the same function. But the average IQ of college graduates will continue to decline as the percent of the population that graduates approaches 100, and so masters degrees are becoming increasingly common. Will this, too, increase social mobility? Social mobility in a meritocratic society is hard given the heritability of valuable mental traits. If we keep sacrificing our schools on the alter of social mobility, we will end up burning the first 30 years of or lives getting Phds in mopping floors.
  • omegaworks 8y ago
    >But then standards were lowered Standards have never been higher. Students face pressure from college admissions and teachers face pressure from national standards bodies. Policies that have enriched standardized testing companies. The real issue: Labor power has never been lower. Wages have been stagnant for the past two decades. You need a college degree now because safe middle class lifestyles that were previously available to graduates of high school are now limited to those with certain bachelors degrees. Whether this is due to political collusion with capital, increased automation, globalized labor or a combination of the three is up for debate. The middle class you're imagining was fueled by an economic engine tooling up to rebuild Europe and a political climate that taxed the rich at 80-90%.
  • Afforess 8y ago
    Unfortunately this is likely correct. The race to the bottom with credentialism will continue until we break the game. The answer isn't more credentials (free college, etc), but to make credentials worthless as a social signal. Educational backgrounds should be made a protected class, much like race or religion is. Then employers will have to rely on examinations or merit (see: Bar exam for attornies), rather than pedigrees. If you can't judge or ask about your college degree or lack, the job market becomes a vastly more level place.
• oldManRiver 8y ago
  Incorporate. Seriously. Setup a corporation owned by a trust, all your assets go into the corporation. If you have a catastrophic life changing event, your base will be secure. You can also rent your home back from yourself and write off things you can't do as a homeowner (depreciation, upgrades, interest, etc.). Moving your assets to their own entity is how you protect them. Should something go wrong, you have no assets for them to come after as they're owned by the trust. You can use your lifetime estate giving to help avoid taxes on the first few million. Plus if you're putting things in there before they've appreciated over decades, it will be at a lower cost basis as well. Discuss this with an accountant and attorney that understands trusts and the tax implications of course.
  • refurb 8y ago
    My understanding is that unless you have a lot of assets, it's not worth setting up a trust as the upkeep is costly.
    • oldManRiver 8y ago
      If your assets will be over 5.4 million (the current exempt amount from estate taxes) for a couple you should have a trust, if you're no where near that, then yes, a trust for your home alone is pointless. The business write-off part still stands.
• hinkley 8y ago
  Have you talked to a financial advisor about this? Interest rates are low enough now that this might be your best use of the money but there have been many periods where holding onto your student loans and investing the money you haven't paid yet is a net increase in income. The mental shift and peace of mind GP is talking happened for me when we could pay off all of our debts with our liquid assets. We chose not to do this however because of interest rates, and because the nest egg meant we never had to pay for anything, even a broken car or arm, on credit. I believe that you will discover you feel the same way. Don't confuse 'no debt' with 'wealthy'. Wealthy people take loans too, when it's cheaper than the alternative.
  • tjr225 8y ago
    I think about this a lot and weigh your line of reasoning heavily. My reasoning is that we(my family) would like my wife to be able to focus on raising children and only work if she wanted to...we could, in theory, afford to do this on my paycheck alone - but not if we also have to pay minimums on student loans. Therefor it makes more sense to us to focus on paying them off as quickly as we can so that her time becomes freed up. I understand the financial reasoning behind not paying them off...but I think her time is worth more to us than whatever money we would save if she had to continue working.
    • zamfi 8y ago
      I think the previous poster is trying to say something slightly different. If the interest rate on your student loan is lower than the investment returns you make, then you: (1) End up with more money if you don't pay off your student loans, and (2) Can still pay off your student loans whenever you need to, so your wife would not have to continue working any longer than she would otherwise. It is strictly more money, and doesn't change your wife's timeline. You basically get free money at the spread in yields between your student loan debt and your investment returns. One way to think about it is this: If you could borrow $50k at (say) 3% interest and could invest it in a way to make (say) 8% returns, why wouldn't you? You'd make 5% on that $50k! The fact that you already have the debt, and the cash comes from saving monthly instead of in a lump sum doesn't change that basic math, and doesn't change how long you need to keep saving for -- in fact, it would lower it! Of course, that assumes a low student loan interest rate and a high rate of return on investments, as well as risk tolerance, etc. etc. etc.
• Pmop 8y ago
  One thing I'd like to see added to freebies discussion is the meaning behind of the word 'free'. For example: 'College education and healthcare /should/ be free for all in this country(USA).' really means 'College education and healthcare /should/ be paid with taxpayers' money for all in this country(USA).' This really adds to discussion as people get also to discuss if they really want to spend more of their own money. The word 'free' in this context seems to automatically dismiss any discussions about tax rise and public spending. Disclaimer: I'm Brazilian, not some angry republican.
  • tjr225 8y ago
    GP here...while I think it is a given that what I meant is that these would be free for all by leveraging taxation, I don't think we(average joe) really need to spend any more money to accomplish these things. Our politicians gladly pour money hand over fist into private defense contractors pockets and I think this is wrong. We should be spending this money on Education and Healthcare for all, instead.
    • tomcam 8y ago
      What math leads you to this conclusion?
      • tjr225 8y ago
        As of right now, the US military budget is 610 billion $ per year
  • piva00 8y ago
    And what person wouldn't want to fund and invest in their own future? Using tax money to fund free education for every child and healthcare so no one has to be burdened for life with debt is one of the best return of investments of your taxes in the long run. I'm Brazilian and living in Sweden, that is how society here thinks (mostly), social mobility here is absolutely real. Just as an anecdote, I have friends who are 1st generation born here from very poor immigrant families, they are architects, engineers and fashion designers with good careers ahead. That was only possible because they had access to free education for all of their lives. I am proud to pay my taxes here and fund this, even though I never have used (and don't plan to have a family), as many issues as this society has it works and tries to improve itself, coming from Brazil it's another world. So I don't appreciate the rhetorics around not funding public education and healthcare, these are basic tenants of the societies of the future.
• deleted 8y ago
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• scarface74 8y ago
  Education is only “expensive” because people choose to overspend on it. The cost of my education was less over 4 years than a lot of people paid in one year. There were plenty of people sitting right next to me at 25 years old in tens of thousands of student loan debt making the same amount I was. I was accepted to a well known engineering school. I chose to go to a much cheaper state college and stay at home. Looking at the salaries reported by the engineering school for graduates three years out, I was making the same.
• conanbatt 8y ago
  /should/ be free means they increase the taxes you pay today so you have a "free" college later on.
  • dragonwriter 8y ago
    Most people's prime taxpaying years are after the most common going to college years, so that's exactly backwards if it is the same “you” in both halves.
    • conanbatt 8y ago
      He is talking about free college for his kid, thats why the tax first, the college later.
• josephjrobison 8y ago
  I have a lot of debt from a private university, so I'm aware of that side of things. But, in-state tuition at universities can be very affordable. The average public four year tuition is $6,841. Knock out two years at junior college and it's even cheaper. There are pretty generous subsidies based on income, where you can get junior college almost for free. Yes private university tuition is very expensive, but public colleges are not.
  • dragonwriter 8y ago
    “Expensive” private universities often have lower net costs for the poor than public universitied, even though the sticker price is higher, because they can offer their own need-based grants. (Lots of poor people applying for colleges don't know this, of course, and restrict themselves to “cheaper” public schools.)
• ThrowawayUry 8y ago
  I'm 37. I made an idiotic decision several years ago and got some crippling debt. Now I have a stable relationship and I'd love to have children... but I can't, because 70% of my income goes to debt payment. My country has no US-style bankruptcy (if I stop paying I'm a pariah for life). Absolutely agree about universal healthcare, that's something my country does well, and would improve the life of Americans. Education... well, I'm more on the fence. I think current college prices in the U.S. are too high, but there's so much amazing free education... but yes, some basic level should be free. Maybe UBI would enable self-taught or other alternatives (I know there are some YC startups focused on alternatives). Edit: no idea why I was downvoted :(