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The real problem with higher education is really how we finance it. Give the lenders the ability to discriminate based on major and borrowers the ability to def

The real problem with higher education is really how we finance it. Give the lenders the ability to discriminate based on major and borrowers the ability to default easier and all of a sudden you’ve got some banks seriously motivated to ensure students get economic return on their investments. Besides, it just shouldn’t take a decade or more for someone to discharge a bad debt. Student debt seems uniquely oppressive within the American system, and it really needs to look more like other forms of personal debt.

CPLX 8y ago
Or instead, like most other advanced societies, we could stop trying to quantify higher education in purely personal economic return on investment grounds and consider an educated populace a public good.
- tikhonj 8y ago
  If education rather than credentialing was the overwhelming driver, a priority should be providing education to people without credentialing built-in, in a form factor that's a lot more flexible than a classic four-year degree. Ideally, it should be easy for people to educate themselves on their own pace, even as they are doing other things at the same time (like working). I somehow expect a system focused just on education like this would not have the ballooning costs we see now. The incessant obsession with multi-year degree-granting programs specifically is a lot more about the degree than the education.
  - vertex-four 8y ago
    I mean, in the U.K., if you’re interested in learning at your own pace, every university has at least some form of part-time course, local FE colleges do part time courses regularly, and there’s the Open University if you want to work towards a degree part-time. This is an American problem, not one to do with the concept of being able to prove you’ve completed an education.
    - foldr 8y ago
      This is missing the point. There are plenty of flexible educational opportunities in the US too (e.g. community colleges). Both the UK and the US (and I say this as someone who's taught at universities in both countries) face the problem that the majority of people going to college now are going just because they need a degree to get a job, not because they have any interest in learning anything. Education is a public good. Forcing people through diploma mills isn't.
      - mrguyorama 8y ago
        Part time education in america is still expensive
        foldr 8y ago
        It's not free in the UK. The open university certainly isn't cheap.
        vertex-four 8y ago
        You get the OU funded the same way you get regular university funded, in Scotland at least.
        foldr 8y ago
        Well, yes, you can fund it by borrowing the money, but only if you don't already have a degree.
        extra88 8y ago
        Compared to what? Taking one three-credit course at Bunker Hill Community College is $558, taking four three-credit courses is $2,232 ($3,925 with health insurance) [0]. At City College of San Francisco (one I picked for to have a west coast option) is $138 for one typical course and $552 for four (that's just tuition but other fees are extremely low). If you're taking courses at a private college part-time, sure their tuition is a lot higher; taking just one course like Fundamentals of Instructional Technology from RIT Online is $3,243 [2]. Four-year public universities will probably cost somewhere in-between but it varies a lot by state. [0] https://www.bhcc.edu/tuition/tuitionfees-fall2018/ https://www.bhcc.edu/tuition/tuitionfees-fall2018/ [1] http://www.ccsf.edu/en/student-services/admissions-and-registration/registration/tuition-and-fees.html http://www.ccsf.edu/en/student-services/admissions-and-regis... [2] http://www.rit.edu/ritonline/course/2181-1-HCIN-660-01 http://www.rit.edu/ritonline/course/2181-1-HCIN-660-01
- dantheman 8y ago
  I've been in these 'advanced' societies, and often they have a lower rate of bachelors degrees (with lower requirements) than the US. They track individuals early on to non-college career paths. Also, the quality of the education is not the same.
- skate22 8y ago
  I really like CS don't get me wrong, but I would not have majored in it if I could get the same ROI on somthing I enjoyed more.
- mkirklions 8y ago
  This sounds like/is bad economics. Educated populace in video game history isnt value added like an engineering degree. You can educate yourself in anything, but society only values education in a few value-added sectors.
  - sgroppino 8y ago
    It is pure economics, supply and demand.
- zip1234 8y ago
  Already done. Education is considered a public good. That is why K-12 education is paid for in the US. As far as a higher degree, the landscapers working across the street probably would not benefit from getting a degree and I do not see how the public would benefit from paying for a degree for those guys either. There are a significant number of jobs out there that would not benefit from people getting a degree. There are perhaps classes that might help in regards to those jobs but a degree is not something that would help. Also, the classes that would help are generally provided exceptionally reasonably priced at community colleges.
  - gdubs 8y ago
    The degree might not matter for certain types of jobs, but the additional education could still enrich people’s lives — and a more educated populace could make for a better society in general.
    - zip1234 8y ago
      Did you read my comment? I mentioned that community colleges already provide additional, cheap, education that fulfill that additional education.
      - gdubs 8y ago
        Honestly missed / misread that last sentence!
    - jriot 8y ago
      Libraries are publicly funded places allowing you to enrich your educational needs. Yet, they have become a homeless shelter.
- bytematic 8y ago
  I wish this was auto-replied to every comment in this thread. Each tackling the "real" problem with education
jedberg 8y ago
That's how you get nothing but science and engineering majors, because most other majors don't have the ROI on average. But society is probably better off with some history and art majors too. We need to find a way to finance education that isn't based on future income.
- tomglynch 8y ago
  Well there's quite a few progressive European countries which it might be worth the USA having a look at
- exclusiv 8y ago
  Well it's also how you have a globally competitive workforce that can experience wage growth. We have a shortage and companies are outsourcing for good paying jobs because we aren't prepping enough people for the market. There are some that can't get scholarships or even into universities in their state for engineering because there aren't enough spots. The no return majors take up resources and funding and leave countless people in debt they can't pull out of for a long time. We don't have a shortage of history and art majors or lawyers and also, real artists would be a better investment than art majors anyway. No need for the debt. Just invest in the talent for society to thrive and be balanced. > We need to find a way to finance education that isn't based on future income. This already happens. One example - We have collegiate sports revenue financing no return liberal art degrees directly or indirectly via scholarships.
- deleted 8y ago
  [deleted]
- gaius 8y ago
  It’s OK for people to study the history of art, once they have already gained the STEM skills to support themselves
- cm2012 8y ago
  Studying things that don't make money has always been the privilege of the wealthy. Just because college was once only for the elite doesn't mean those same tedious sayings apply to our current world.
kazagistar 8y ago
Discrimination on major, quality, and completion happens through fintech refinancing already. All the good borowers get scooped away into lower rates leaving all the toxic loans on the state supported books, and it's only a matter of time til it comes crashing down.
- murph-almighty 8y ago
  I find this line of logic tempting, but this seems to not apply to my scenario at all- hear me out. Major: ECE Job: Software Engineer Debt: Some private variable rate, some public fixed rate. The highest private loans were originally around 100bp higher than my public, and eventually jumped to a 300bp gap, but by that point I had paid them off so it didn't impact me. Credit rating: Pretty high- no missed payments, multi-year-old account, has multiple lines of credit. All of my re-fi offers, for the most part, have advertised lower interest rates than my private loans and the lower bound of their advertised rate was slightly less (50-100 bp) than my public loans. However, when I'd start going through the process my offered interest rate would end up around the median of the rate window they were offering, and refinancing would have been a wash. This meant refinancing only would have made sense for my private loans, not public. By the time I had seen these offers, it didn't make sense for me to refinance because by that point I had paid off the highest interest private loans (as general debt repayment strategy suggests)! I don't think the incentive to refinance from a government loan is there because those interest rates are already pretty good. Obviously, someone might make a poor decision and refinance with a higher rate "because it's easier" but if my case generalizes I can only see private lenders suffering because of higher rates. On a side note, I also don't want to get rid of my government debt too soon in case some sort of policy change occurs in my favor. This isn't to say I'm not pursuing an aggressive debt strategy, just that my private loans are my higher priority.
deleted 8y ago
[deleted]
chrisseaton 8y ago
If you can default on education loans what are they going to take as collateral? Your knowledge? What would stop every new graduate defaulting? Do you think your idea might lead to greatly increased costs for everyone due to the risk?
- bigmanwalter 8y ago
  People like credit. The threat of losing it is more than enough reason to avoid bankruptcy.
  - chrisseaton 8y ago
    My understanding of the current situation is that if you don't pay your federal student loans, they will take gradually money from your earnings or benefits instead. If you don't have earnings or benefits I guess they don't take anything? That seems like a better situation then permanently ruining someone's credit score, which seems like it's regressive and stops people getting out of the situation because it's harder to get back on track. This seems like a step backward not forward to me.
  - scarface74 8y ago
    You can completely recover from bankruptcy within 7 years - a much shorter time than it takes to pay off a loan. More than likely though, it won’t come to bankruptcy. After not paying your credit card for awhile, you can usually negotiate a lower rate. There are all kind of ways to get around bad credit - co-signers, putting things in your spouses name, etc. You can also buy a house three years after a foreclosure with a government backed low interest FHA loan with only 3 percent down payment. I did a “strategic default” on two mortgages and had a short sale. I had an unofficial “pre-pre approval” for a mortgage 34 months afterwards and started the process of getting a house built. 36 months to the day, they started the loan process for an FHA mortgage. It’s really easy to get a secured loan. I also got a great interest rate on a car loan during those three years. I couldn’t get unsecured credit to save my life though.
    - chrisseaton 8y ago
kevindong 8y ago
My school, Purdue, offers a program (Income share agreement - ISA) where a borrower pledges a percentage of their future income for 10 years in exchange for tuition money. To me, the most "innovative" part of the program is that the percentage charged varies by major. The main conclusion from this program is that if you're income is going to be high (basically >=$70k/year starting salary), you're better off with a traditional loan. Main site: https://www.purdue.edu/backaboiler/ https://www.purdue.edu/backaboiler/ Tool for comparing ISA to traditional loans: https://www.purdue.edu/backaboiler/comparison/index.html https://www.purdue.edu/backaboiler/comparison/index.html
- ryanworl 8y ago
  Purdue also makes it simple to graduate in 3 years for certain majors (I did, 2015 MGMT) and in-state tuition is extremely affordable. I think my total tuition while I was there was less than $40,000, which included extra summer course tuition to facilitate that 3 year graduation.
- secfirstmd 8y ago
  In Europe we call that taxes.
  - sidr 8y ago
    Where in Europe are the tax rates determined by your field of study?
    - keithwhor 8y ago
      Here's the wonderful part, "being a human being" is something we all study and strive to be good at!

CPLX 8y ago

Or instead, like most other advanced societies, we could stop trying to quantify higher education in purely personal economic return on investment grounds and consider an educated populace a public good.

tikhonj 8y ago
If education rather than credentialing was the overwhelming driver, a priority should be providing education to people without credentialing built-in, in a form factor that's a lot more flexible than a classic four-year degree. Ideally, it should be easy for people to educate themselves on their own pace, even as they are doing other things at the same time (like working). I somehow expect a system focused just on education like this would not have the ballooning costs we see now. The incessant obsession with multi-year degree-granting programs specifically is a lot more about the degree than the education.
- vertex-four 8y ago
  I mean, in the U.K., if you’re interested in learning at your own pace, every university has at least some form of part-time course, local FE colleges do part time courses regularly, and there’s the Open University if you want to work towards a degree part-time. This is an American problem, not one to do with the concept of being able to prove you’ve completed an education.
  - foldr 8y ago
    This is missing the point. There are plenty of flexible educational opportunities in the US too (e.g. community colleges). Both the UK and the US (and I say this as someone who's taught at universities in both countries) face the problem that the majority of people going to college now are going just because they need a degree to get a job, not because they have any interest in learning anything. Education is a public good. Forcing people through diploma mills isn't.
    - mrguyorama 8y ago
      Part time education in america is still expensive
      - foldr 8y ago
        It's not free in the UK. The open university certainly isn't cheap.
        vertex-four 8y ago
        You get the OU funded the same way you get regular university funded, in Scotland at least.
        foldr 8y ago
        Well, yes, you can fund it by borrowing the money, but only if you don't already have a degree.
      - extra88 8y ago
        Compared to what? Taking one three-credit course at Bunker Hill Community College is $558, taking four three-credit courses is $2,232 ($3,925 with health insurance) [0]. At City College of San Francisco (one I picked for to have a west coast option) is $138 for one typical course and $552 for four (that's just tuition but other fees are extremely low). If you're taking courses at a private college part-time, sure their tuition is a lot higher; taking just one course like Fundamentals of Instructional Technology from RIT Online is $3,243 [2]. Four-year public universities will probably cost somewhere in-between but it varies a lot by state. [0] https://www.bhcc.edu/tuition/tuitionfees-fall2018/ https://www.bhcc.edu/tuition/tuitionfees-fall2018/ [1] http://www.ccsf.edu/en/student-services/admissions-and-registration/registration/tuition-and-fees.html http://www.ccsf.edu/en/student-services/admissions-and-regis... [2] http://www.rit.edu/ritonline/course/2181-1-HCIN-660-01 http://www.rit.edu/ritonline/course/2181-1-HCIN-660-01
dantheman 8y ago
I've been in these 'advanced' societies, and often they have a lower rate of bachelors degrees (with lower requirements) than the US. They track individuals early on to non-college career paths. Also, the quality of the education is not the same.
skate22 8y ago
I really like CS don't get me wrong, but I would not have majored in it if I could get the same ROI on somthing I enjoyed more.
mkirklions 8y ago
This sounds like/is bad economics. Educated populace in video game history isnt value added like an engineering degree. You can educate yourself in anything, but society only values education in a few value-added sectors.
- sgroppino 8y ago
  It is pure economics, supply and demand.
zip1234 8y ago
Already done. Education is considered a public good. That is why K-12 education is paid for in the US. As far as a higher degree, the landscapers working across the street probably would not benefit from getting a degree and I do not see how the public would benefit from paying for a degree for those guys either. There are a significant number of jobs out there that would not benefit from people getting a degree. There are perhaps classes that might help in regards to those jobs but a degree is not something that would help. Also, the classes that would help are generally provided exceptionally reasonably priced at community colleges.
- gdubs 8y ago
  The degree might not matter for certain types of jobs, but the additional education could still enrich people’s lives — and a more educated populace could make for a better society in general.
  - zip1234 8y ago
    Did you read my comment? I mentioned that community colleges already provide additional, cheap, education that fulfill that additional education.
    - gdubs 8y ago
      Honestly missed / misread that last sentence!
  - jriot 8y ago
    Libraries are publicly funded places allowing you to enrich your educational needs. Yet, they have become a homeless shelter.
bytematic 8y ago
I wish this was auto-replied to every comment in this thread. Each tackling the "real" problem with education

jedberg 8y ago

That's how you get nothing but science and engineering majors, because most other majors don't have the ROI on average. But society is probably better off with some history and art majors too. We need to find a way to finance education that isn't based on future income.

tomglynch 8y ago
Well there's quite a few progressive European countries which it might be worth the USA having a look at
exclusiv 8y ago
Well it's also how you have a globally competitive workforce that can experience wage growth. We have a shortage and companies are outsourcing for good paying jobs because we aren't prepping enough people for the market. There are some that can't get scholarships or even into universities in their state for engineering because there aren't enough spots. The no return majors take up resources and funding and leave countless people in debt they can't pull out of for a long time. We don't have a shortage of history and art majors or lawyers and also, real artists would be a better investment than art majors anyway. No need for the debt. Just invest in the talent for society to thrive and be balanced. > We need to find a way to finance education that isn't based on future income. This already happens. One example - We have collegiate sports revenue financing no return liberal art degrees directly or indirectly via scholarships.
deleted 8y ago
[deleted]
gaius 8y ago
It’s OK for people to study the history of art, once they have already gained the STEM skills to support themselves
cm2012 8y ago
Studying things that don't make money has always been the privilege of the wealthy. Just because college was once only for the elite doesn't mean those same tedious sayings apply to our current world.

kazagistar 8y ago

Discrimination on major, quality, and completion happens through fintech refinancing already. All the good borowers get scooped away into lower rates leaving all the toxic loans on the state supported books, and it's only a matter of time til it comes crashing down.

murph-almighty 8y ago
I find this line of logic tempting, but this seems to not apply to my scenario at all- hear me out. Major: ECE Job: Software Engineer Debt: Some private variable rate, some public fixed rate. The highest private loans were originally around 100bp higher than my public, and eventually jumped to a 300bp gap, but by that point I had paid them off so it didn't impact me. Credit rating: Pretty high- no missed payments, multi-year-old account, has multiple lines of credit. All of my re-fi offers, for the most part, have advertised lower interest rates than my private loans and the lower bound of their advertised rate was slightly less (50-100 bp) than my public loans. However, when I'd start going through the process my offered interest rate would end up around the median of the rate window they were offering, and refinancing would have been a wash. This meant refinancing only would have made sense for my private loans, not public. By the time I had seen these offers, it didn't make sense for me to refinance because by that point I had paid off the highest interest private loans (as general debt repayment strategy suggests)! I don't think the incentive to refinance from a government loan is there because those interest rates are already pretty good. Obviously, someone might make a poor decision and refinance with a higher rate "because it's easier" but if my case generalizes I can only see private lenders suffering because of higher rates. On a side note, I also don't want to get rid of my government debt too soon in case some sort of policy change occurs in my favor. This isn't to say I'm not pursuing an aggressive debt strategy, just that my private loans are my higher priority.

deleted 8y ago

[deleted]

chrisseaton 8y ago

If you can default on education loans what are they going to take as collateral? Your knowledge? What would stop every new graduate defaulting? Do you think your idea might lead to greatly increased costs for everyone due to the risk?

bigmanwalter 8y ago
People like credit. The threat of losing it is more than enough reason to avoid bankruptcy.
- chrisseaton 8y ago
  My understanding of the current situation is that if you don't pay your federal student loans, they will take gradually money from your earnings or benefits instead. If you don't have earnings or benefits I guess they don't take anything? That seems like a better situation then permanently ruining someone's credit score, which seems like it's regressive and stops people getting out of the situation because it's harder to get back on track. This seems like a step backward not forward to me.
- scarface74 8y ago
  You can completely recover from bankruptcy within 7 years - a much shorter time than it takes to pay off a loan. More than likely though, it won’t come to bankruptcy. After not paying your credit card for awhile, you can usually negotiate a lower rate. There are all kind of ways to get around bad credit - co-signers, putting things in your spouses name, etc. You can also buy a house three years after a foreclosure with a government backed low interest FHA loan with only 3 percent down payment. I did a “strategic default” on two mortgages and had a short sale. I had an unofficial “pre-pre approval” for a mortgage 34 months afterwards and started the process of getting a house built. 36 months to the day, they started the loan process for an FHA mortgage. It’s really easy to get a secured loan. I also got a great interest rate on a car loan during those three years. I couldn’t get unsecured credit to save my life though.
  - chrisseaton 8y ago

kevindong 8y ago

My school, Purdue, offers a program (Income share agreement - ISA) where a borrower pledges a percentage of their future income for 10 years in exchange for tuition money. To me, the most "innovative" part of the program is that the percentage charged varies by major. The main conclusion from this program is that if you're income is going to be high (basically >=$70k/year starting salary), you're better off with a traditional loan. Main site: https://www.purdue.edu/backaboiler/ https://www.purdue.edu/backaboiler/ Tool for comparing ISA to traditional loans: https://www.purdue.edu/backaboiler/comparison/index.html https://www.purdue.edu/backaboiler/comparison/index.html

ryanworl 8y ago
Purdue also makes it simple to graduate in 3 years for certain majors (I did, 2015 MGMT) and in-state tuition is extremely affordable. I think my total tuition while I was there was less than $40,000, which included extra summer course tuition to facilitate that 3 year graduation.
secfirstmd 8y ago
In Europe we call that taxes.
- sidr 8y ago
  Where in Europe are the tax rates determined by your field of study?
  - keithwhor 8y ago
    Here's the wonderful part, "being a human being" is something we all study and strive to be good at!