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The Student Loan Debt Crisis Is About to Get Worse

• slenk 8y ago
  I don't know why we keep reading Bloomberg after the Super Micro ordeal. I feel like they burned any credibility they had.
• bradenb 8y ago
  I was discussing student loans and value of a college education with friends the other day. We were discussing whether or not I would recommend college to someone today. My conclusion is that TODAY I would still as long as that person has the means to do so without any loans. But, then we started discussing whether I would push my children to go. My answer is that I hope I don't need to. Even though I have some amount of college savings for my kids, I don't think it will be enough to let them choose their school freely and I would much rather that money go towards starting them out in their career or family or whatever they choose. My hope is that when it is time for them to start their adult life that there will either be enough cheap or free alternative forms of education or that the stigma of not having a degree will have lessened. Realistically, I don't think the situation will have changed in that time. My own experience is complicated because I took out loans--which I greatly regret--but also likely have my career to thank for it. I had a full-tuition scholarship to the school of my choice, but opted to go to another school my parents wanted me at; when I eventually transferred back to my original choice I had lost the scholarship. If I had to do it again today I would definitely start with a 2 year local college education and then work hard through the remaining years to finish debt-free.
  • andrewmcwatters 8y ago
    > the stigma of not having a degree will have lessened. This is already the case in my eyes, where having a degree is a net negative unless in conversation I hear it's actually being used and is returning above median income. Statistically, that just isn't possible for all holders, meaning any time I hear someone has a degree, it's a coin flip whether or not that means anything at all. On a separate note, as far as the article is concern I think we're already beyond there. Anecdotally, all of the degree holders within my wife's circle don't have a plan to pay them off. Which means student loans are the new mortgage, and if and when they plan on obtaining a mortgage, they won't pay that off either. I have people very close to me that have no plans to pay off their mortgages, which means the loaners are just consuming payments indefinitely. The latest scare to me was learning that community colleges are catching up to universities in terms of the absurdity in cost. I was absolutely floored when I learned what it cost to just obtain a two-year degree.
    • wild_preference 8y ago
      There's more to university than 1:1 degree to salary analysis. Though there's definitely a failing to effectively double-down on this understanding early on in a student's career. For example, one aspect of university is that it's a four-year gauntlet that not everyone can finish. Another aspect is that there's more to life than work. I have a philosophy degree but also taught myself to program. I don't regret my degree, though easy to say when I have lucrative skills. But I have a problem people calling it worthless just because there is no obvious degree-to-job pipeline for philosophy. The key is that I knew that going in. Well, everyone does know these things going in to some level, but the end can seem so far away that it's hard to really internalize the consequences when you're still putting around university. The problem is coming out of uni with $60k debt which creates the, then, natural analysis of "so how did university equip you to deal with this burden?" And I think that's what leads us to scenarios where we're lopping off the heads of degrees that don't warrant the debt.
      • saint_fiasco 8y ago
        There is a big difference between "don't feel forced to get that luxury product, it's ok to go without if you can't afford it" and "the product is literally worthless". Nobody is saying the second thing.
    • hbosch 8y ago
      In all honestly, I went to a school of minor prestige (not ivy, but similar echelon in my field) and I have had a lot of opportunities come my way based on that. Not through alumni networking or word of mouth, just name checking the school and program has opened quite a few doors for me in my career. That being said, I don’t think the college experience itself made me uniquely better or more prepared than my peers... and in reality a lot of my peers who’ve skipped college all-together were perhaps MORE prepared for “real work” than me. All tallied up, I agree that I’d like a future where college isn’t a requirement like it seemed to be for me.
    • pc86 8y ago
      Who doesn't plan to pay off their mortgage? What does that even mean? It's a 10-30 year debt, not a car lease. You don't really have the option of not paying it off unless you want to get foreclosed on and have a really hard time finding a place to rent.
  • otachack 8y ago
    That's rough that your parents pushed you to go to a different college w/out that free tuition incentive. Budget was a huge factor for me in choosing a college and heavily influenced me to stay in-state and public, where tuition wasn't high and there were plenty of scholarships. If I were to do it again the only thing deterring me from going 2-year first was the group of colleagues I met in my first week of college, in which we're still friends to this day. I imagine it would have been harder to find friends coming in as a Junior.
    • bradenb 8y ago
      I shouldn't give my parents too hard of a time. I had a half-tuition scholarship to the other school. It was also a religious, private school and so there's that aspect as well. They would not have disowned me or been too upset had I made the choice to go to my first choice, but as a kid it's hard to not want to do everything you can to please your family. Ultimately, it was still painful to matriculate.
  • Aloha 8y ago
    I would suggest, that of you can obtain a college education with less than 30-40k in loans (ideally no more than 20k), its probably a fair value still. What the degree is in, is also a compounding factor - but almost any degree with some commercial or governmental value will make paying back 20k pretty easy. The issue is, its very hard to get a four year degree for that cost.
    • mcguire 8y ago
      The median for all borrowers was $17,000 in 2017; the median for bachelors was $25,000. (http://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans/ http://www.pewresearch.org/fact-tank/2017/08/24/5-facts-abou...) "Relatively few with student loan debt have six-figure balances. Only 7% of current borrowers have at least $100,000 in outstanding debt, which corresponds to 1% of the adult population. Balances of $100,000 or more are most common among postgraduate degree holders. Of those with a postgraduate degree and outstanding debt, 23% reported owing $100,000 or more."
      • Aloha 8y ago
        How many of them are failed students, or people going for a two year degree?
    • leetcrew 8y ago
      how is it hard? pretty much every state university costs $10-12k a year, so you're looking at $48k total if you somehow manage not to apply/qualify for any grants whatsoever. it's even cheaper if you go to community college for the first two years.
  • orev 8y ago
    The main reasons to get a degree are: -. To show you can complete a big, multi year project that’s full of doing stuff you don’t like -. To get past HR screenings -. If you ever want a chance to reach Executive level jobs, you need to have a degree, for the perception of nothing else. This debate has been going on for a long time, despite this being presented as a recent thing, and it always comes down to those things. While the tech-minded here might want to see it from a strictly educational standpoint, these are human/societal reasons that are quite important.
    • Aloha 8y ago
      You can get past HR screening without a degree, experience still often matters more - and in my opinion, a 22-23 year old proving they can do multi year projects is of dubious value - what it is useful for is showing that you know how to learn. I have no degree, but have a boat load of experience in my chosen field, with a couple of notable exceptions, this alone is enough to get my foot in the door. The notable exceptions are government roles, and government contracts with private companies, they want someone who has a degree in any engineering discipline.
      • flatline 8y ago
        I never had trouble finding tech work without a degree. I did however find the door to more interesting jobs was generally closed without one, and that door opened after I went back to school and finished a BS.
        • geggam 8y ago
          I find the doors which are closed by not having a degree to be ones I probably wouldn't have enjoyed. I have no degree and have had Phd's reporting to me, in Silicon Valley.
          • mywittyname 8y ago
            Some prefer to be the PhDs.
  • rossdavidh 8y ago
    My plan for my (13-year old) daughter is community college, then a state school for a four year degree, which I should have enough savings for. But, more important than the amount of debt, is which major, which is the great elephant in the room. There is a huge investment in degree programs that don't increase your salary, and this fact is routinely buried by doing the analysis on all majors combined. For some majors, taking out loans to get a degree is still a good deal, and for others it clearly is not. It's like asking if a mortgage is a good idea in order to buy a house, without reference to where the house is and what shape it's in.
  • jknz 8y ago
    The possibility to go to University in some European city for almost $0 in tuition is almost never discussed. Stay there 4-5 years, get the equivalent of a Bachelor+MSc and then come home in the US debt-free. Would you suggest your kids to think of that possibility? If not why? Language barriers? Far from Home?
    • larkost 8y ago
      The main problem is that if you are thinking of getting a job in the U.S., many employers don't have the experience in rating non-U.S. degrees, so will view them with suspicion at best. My wife had this experience when she tried to get jobs based on her Eastern-European degree (from a very reputable University there). That being said, we definitely are keeping that in mind for our kids (though we are financially planning for school here).
      • JBlue42 8y ago
        Also something to consider if you might go for a Master's or above in the US. I worked in admissions in a graduate-level only film school and there were definitely issues with someone's BA being "good enough" for the school. I didn't directly validate anything but I assume there was a master list somewhere for those whose jobs it was to qualify the degrees.
    • toasterlovin 8y ago
      It would probably be cheaper to just have the kid stay at home and pay the (relatively) nominal tuition for the local state university.
    • bradenb 8y ago
      I honestly had never considered this. Siblings to this comment make good points both ways, but regardless I think it could be a very interesting opportunity for my children to not only obtain an education at a low cost, but to also--and just as important, IMO--get another view of the world.
    • mcguire 8y ago
      A couple of questions: Is tuition really free for non-residents? How do they avoid getting flooded with students? How do you pay for living expenses? I don't believe they'll be able to work (at least, as a non-EU citizen) and living expenses aren't cheap.
  • hellogoodbyeeee 8y ago
    It's silly to say that a student should only go to college if they can afford to do it with no loans. I think a large part of the "student loan" problem is that we don't talk about income enough. It is completely reasonable for a comp sci major from a good school to graduate with $75k in loans ($900 payments). That will not be a burden for them. Likewise, a $20k student loan ($300 payments) should be manageable for someone who makes $40k a year. The issue is when the person who only real prospects pay $40k a year and they have $75k in loans.
    • paulpauper 8y ago
      agree. when you break-down the math, it's not that big of a big deal.
    • okmokmz 8y ago
      I was admitted to a relatively competitive university's (<10% acceptance rate) computer science program, but it would mean I would have to take on just over 100k of debt. After the first year I chose to transfer to a local community college to earn an associates, and then trasnfer to a state school. I was hired after my associates, got my bachelors paid for and completed it online, and graduated with no debt. I'm extremely happy I made the change, rather than paying 100k for a bachelor. Sure, I could've afforded it, but instead I was able to purchase a car in cash and buy a house pretty much straight out of school. I wouldn't recommend anyone go into debt for a bachelor; in my opinion the money could be better spent elsewhere, and it is unlikely to make a significant difference in position/pay having a name brand degree rather than something from a state school
      • hellogoodbyeeee 8y ago
        I take a lot of pride in my liberal arts education and how it shaped my world view. I would never in a thousand years trade it in for a car and a house... And it cost less too.
        • geggam 8y ago
          Cant live in a degree or drive it to work, how you feel about things and their actual value might need some perspective shifting.
  • adamredwoods 8y ago
    A college degree is used as a way to filter out applicants, the same as a high school diploma is sometimes used. It can be used to show some level of maturity and intelligence. It's not a golden standard, but for the amount of applicants per job, something needs to be a standard. Some higher paying jobs are asking for master's degrees. Also, my brother can directly attribute his income increase to obtaining an MBA. Is it worth it? An extra US$10k per year for X years of work? Better job stability? These are the decisions that need to be made, and not every career needs a degree.
    • H1Supreme 8y ago
      > It can be used to show some level of maturity and intelligence. In what measurable way? I'd argue that more intelligent person finds a way to learn something without it costing them.
      • adamredwoods 8y ago
        There are always exceptions to every rule, but what is your current process for hiring people? How to you take a list of 100-200 applicants and trim it down into a manageable list?
        • amanaplanacanal 8y ago
          I'm retired now, but in my previous career most jobs required minimum years of relevant experience, with a degree able to substitute for some or all of those years, depending.
  • mdorazio 8y ago
    I would personally recommend 4-year college to someone (assuming their family isn't rich) today if that person has a concrete plan for using the degree to enter a lucrative field. Engineering? Yes, go to college. Corporate-track marketing/accounting/finance/whatever? Yes, go to to college. History/English/I don't know what I want to do? No, you're wasting your money. For everyone else, trade schools, community college programs, and similar "alternatives" should be a starting place to get you pointed in the right direction, then you can decide if pursuing an expensive diploma is worth it later. Is this view counter to the original intent of college to create a class of people who are well-educated in the humanities as well as the sciences? Yes, but today's cost of education is just too out of control and salaries for most jobs too low for that noble idea to be practical.
  • pc86 8y ago
    > as long as that person has the means to do so without any loans Which is true for very, very few of the people actually going to college. Which means your advice is essentially "no" for the vast majority of people who would ask.
    • bradenb 8y ago
      Yes, that's a good point. I should probably be more flexible. I agree with many other that a very small student loan burden to close the gap between scholarships, grants, work, and going to affordable state schools is also totally reasonable in my mind.
• chasing 8y ago
  It is interesting to consider what we could be spending our money on instead of tax cuts for the wealthy and war: "Make public colleges and universities tuition-free for working families, cut student loan interest rates in half, and allow every American with student debt to refinance at the lowest interest rate possible. Estimated cost: $60 billion." https://www.budget.senate.gov/ranking-member/newsroom/press/report-if-not-for-republican-policies-the-federal-government-would-be-running-a-surplus https://www.budget.senate.gov/ranking-member/newsroom/press/...
  • gowld 8y ago
    There are 20million college students/yr. $3K/yr/capita seems an underestimate of the cost of their education, since high school costs >$5K/yr/capita.
    • black6 8y ago
      You are correct. Resident tuition and fees at most[0] public[1] universities[2] trends[3] between[4] $4000-5000 per semester. 0: https://irep.olemiss.edu/wp-content/uploads/sites/98/2017/09/Section-G-Annual-Expenses-2016-17.pdf https://irep.olemiss.edu/wp-content/uploads/sites/98/2017/09... 1: https://utexas.app.box.com/v/CDS2016 https://utexas.app.box.com/v/CDS2016 2: http://ir.uoregon.edu/sites/ir.uoregon.edu/files/CDS_2016-2017_final_for_web.pdf http://ir.uoregon.edu/sites/ir.uoregon.edu/files/CDS_2016-20... 3: http://www.ir.vt.edu/content/dam/ir_vt_edu/commondatasets/CDS_2015_G.xlsx http://www.ir.vt.edu/content/dam/ir_vt_edu/commondatasets/CD... 4: https://nces.ed.gov/programs/digest/d15/tables/xls/tabn330.10.xls https://nces.ed.gov/programs/digest/d15/tables/xls/tabn330.1...
    • lkbm 8y ago
      Drop ~5% of those as non-citizens[0]. Drop ?% of those as not falling under "working class". Adjust $??? billion for existing in-state subsidies, since only marginal cost is relevant. Of course, add $??? billion when quantity demand explodes when price drops. [0] https://www.bostonglobe.com/metro/2018/02/01/number-foreign-students-studying-drops/JHb6P59y3Ut0px2VM54JBN/story.html https://www.bostonglobe.com/metro/2018/02/01/number-foreign-...
  • 8y ago
• gowld 8y ago
  The main story is the overpriced underquality (and often criminal) for-profit "college" industry. This has been well-reported for over 10 years. Why are students STILL getting fooled by this? The increase in price and loans at real colleges is a relatively minor (but important) problem, and one that could get proper attention if the massive dreck of the for-profit college industry was cleared away. Do you know anyone who attended a for-profit college in the past 10 years? What fooled them into attending?
  • Shivetya 8y ago
    I look at it from a different perspective. If the Federal Government would limit loans to a set amount per course credit you can rest assure schools would scramble to have offerings that fit within the guidelines. there seems to be little issue with forcing health care prices upon those who provide the services so the same should be done for education. simply weight the course and apply costs appropriate. this could be used to encourage certain skill sets over others. The truth is, it was known the debt crisis was going to explode once the Federal Government got involved. Same happened to education as a whole let alone health care
    • Spooky23 8y ago
      Those type of controls are a big contributor to the health care price crisis. I’d suggest going back to the 90s model of having rate capped subsidized and partially subsidized loans, and eliminating the bankruptcy exclusion for student debt outside of that framework. If the law makes a debt non-dischargable, the risk premium should be very low. The problem is that reducing the firehose of capital would drive many universities out of business. They have 30 year bonds for luxury dorms and fitness centers to pay off.
    • sys_64738 8y ago
      Better yet, have the Federal Government exit the student loans business completely. I don't want my tax dollars used in this way.
      • 8y ago
• momentmaker 8y ago
  How will all these colleges survive without getting all these ill-educated students to come to their campuses?
• sovietmudkipz 8y ago
  This is pretty selfish but every time I see news about student loans I start to worry about having to pay for other people's student loans. I spent three years cutting everything out of my life that wasn't necessary so that I could pay off my $50,000 in loans because I didn't want to have the debt. It was a Spartan existence indeed. Now that I've made that sacrifice and come out the other side, it makes me mad to think that I may have to pay for others to pay off their debts as well. Why can't they pay it off themselves? No one forced them to take on the loans. Why is my paycheck being considered for looting? I would feel taken advantage of too. If I knew I could get someone else to pay off my student loans, I would have used my resources much differently. I would have lived more in the moment instead of hunkering down and paying it off. Like I said; selfish thoughts. But I can't help but feel a sense of injustice when considering a situation where I have to pay for other debtors student loans.
  • Retric 8y ago
    The people bailed out would be people making the loans not taking the loans.
    • jstanley 8y ago
      But the money to bail them out comes from tax payers.
      • Retric 8y ago
        That's the bailout or not bailout question. We can also just let people discharge the loans without bailing out the people making the loans. Currently, if someone dies broke after graduation the outstanding loans are paid back by the government. So, basically people are making risk free loans right now, changing that so they take some risk is an option. IMO, loans should be dischargeable in bankruptcy 20 years after graduation. That would slightly increase the loan interest rate, but not cost taxpayers a dime. We might also see things like higher interest rates for getting an art degree which IMO is a useful feature.
    • bunderbunder 8y ago
• ProfessorLayton 8y ago
  Let’s talk some numbers, because while 1.5T sounds scary, something else is going on. I’ve posted this finding before, but it seems relevant to this article: The median defaulter does so with a loan of Just under 10k [1]. It is worth discussing why the median defaulter is unable to pay roughly $100 per month (assuming a 10y payment plan), and how to address that issue. When viewed from this perspective, the problem does not seem insurmountable. [1] https://www.americanprogress.org/issues/education-postsecondary/reports/2017/12/14/444011/student-loan-defaulters/ https://www.americanprogress.org/issues/education-postsecond...
• colonelpopcorn 8y ago
  I managed to work my way through a 4 year program at WGU without any debt. It's been great to be debt free, but the cynic in me wishes I'd have gone to a more prestigious university and taken on debt because I just know that any future political candidates are going to get hammered at the polls if student debt relief or forgiveness isn't one of their main policies.
• cletus 8y ago
  I still find the US attitude to college somewhat perplexing (I'm Australian). Australia had free university education until around ~1990 or so when it introduced HECS (Higher Education Contribution Scheme), which I believe later changed to HELP. The idea of this is that any tuition you receive will incur a cost that will be deducted from your salary (above a certain level) until its repaid. It has interest. Previously you could get a discount by repaying early but I'm told that went away. The key aspects of this system are: - You can't student loans for any expenses. This only covers tuition. I think this is a reform that's needed for the US system. - It isn't a loan. If you don't earn an income you don't pay anything. There's no getting crippled by loan repayments like seems to happen with US student debt. - It's largely impossible for 18 year olds to get into a situation where they owe hundreds of thousands of dollars (I saw a CNN report on millenials once that, as one example, had a young woman who worked as a waitress now who accrued >$100k in debt studying Theatre Arts at NYU). From working for large US tech companies (in the US) I see a prevailing attitude that some people who work for these companies feel like they're underpaid if they can't save up and pay for private college education for each of their children, which 10-20 years in the future, may well be >$500k _each_ (which is just crazy). There are actually lots of good options for getting a college education relatively inexpensively: - ROTC - Resident state college education. This may mean delaying your start a year to establish residency but can pay off big time. UT Austin has an excellent CS program an in-state tuition is quite affordable last time I looked. - Stopping when enough is enough. I see a lot of people getting pretty pointless Masters degrees, for example, which is fine if you can afford it. - Starting at cheaper (even community) colleges and transferring later. You'll miss out on some of the social aspects of the early years of college but your degree will still say Stanford or whatever. I wonder if it's not sending the wrong message to your children that they can go to Yale without paying a cent out of pocket. Like what happens when they can't provide that for their own children? College in the US more than Australia seems to be used as an artificial barrier to entry to a lot of jobs too.
  • mcguire 8y ago
    I agree with most of your comment, but I have a question about this: "You can't student loans for any expenses." Tuition is only a part of college expenses. How do students pay the rest?
• sntax 8y ago
  I really feel like the underlying problem is we expect people to be adverse to purchases that will be a net loss. Unfortunately, "shopping" for higher education is extremely confusing and to make matters worse your lender is guaranteed to be paid. So we have created an environment where people who are the most vulnerable are being taken advantage of. We need to find a way to better protect people from making terrible six-figure investments, whether that is through legislation or education something has to change. Even if there was a website that scraped data from LinkedIn to show where people from higher education institutions get hired and what positions they get would massively help consumers not make bad investments. I would have never paid the money for my degree knowing what I know now.
  • alistairSH 8y ago
    "shopping" for higher education is extremely confusing I'm interested in hearing more of your take on this statement. From my personal experience, as a first generation immigrant (though of Western European background), it wasn't overwhelmingly confusing. Sure, there were lots of options - R1 state schools, Ivies and other top-notch private schools, secondary state schools, etc. But, once I figured out which category of schools best suited my talents (in my case, R1 state school, because I was smart but no clue what I wanted to study), the set of choices was narrowed substantially. After that, it was really just a matter of looking at the costs, as in my limited experience at the time, all the big state schools were mostly interchangeable, or at least had enough to offer that I didn't fear not finding something to study and hobbies to pursue. Staying in state, at the time, was something like $16k/year (UVA, mid-90s). Leaving the state was roughly double. Pretty much a no-brainer to go to UVA, VT, or W&M. I ended up at UVA mostly because of ego - at the time, it had the better all-around reputation. Hind-sight being what it is, I might have thrived better at W&M, but I hardly failed to thrive (just wasted my first year partying too hard and not taking academic seriously).
    • chaosbutters 8y ago
      I agree with you more than OP. In-state for me was significantly cheaper than out of state so I applied to both in/out to see offers. I got my dream school with no support (would've been like $50k/yr) but also a good school offered me a huge scholarship that reduced it to lower than my in-state or their in-state so I went there. I basically said I got into these 5 good schools and there isn't likely a big difference to employers, so, who is giving me the most money?
• Kephael 8y ago
  College is very inexpensive but you must major in a degree that teaches you strong technical skills or at a school that signals that you are highly intelligent and socially adept. Racking up debt with out of state tuition at some unprestigious state school is a horrific idea. Loans should be priced according to the true risk presented by the loan recipient. Majoring in CS at Stanford should be very low risk, majoring in Sociology at Iowa State should be high risk. Free tuition just provides a job subsidy to professors in unscientific fields of dubious value. Liberal artists are royally screwed unless they graduate from Princeton or a similarly notable school. Most schools should probably just close.
• paulpauper 8y ago
  Sigh..another one of these "X is about to get worse/is a crisis" type articles The media has been predicting this since 2012 and yet it refuses to pop. So maybe it's not a bubble, or if it is, the media really sucks at trying to time these things and should stop trying. https://www.google.com/search?q=student+loan+crisis+bubble&source=lnt&tbs=cdr%3A1%2Ccd_min%3A%2Ccd_max%3A1%2F1%2F2012&tbm= https://www.google.com/search?q=student+loan+crisis+bubble&s... A lot of the debt is secured by the fed govt. Only 8% student loan debt is private. Second, despite all the doom and gloom over student loan debt and grads not finding good jobs and , a college degree still has a good ROI in terms of higher wages, lower unemployment, and higher lifetimes wealth, versus having no degree. In spite of all the anti-college rhetoric in recent years promoted by the likes of James Altucher and others, this gap has only widened since 2009 in the aftermath of the recession and shows no signs of narrowing. https://qph.fs.quoracdn.net/main-qimg-c093e2248a8c4bc6902d9b80f1e8feeb https://qph.fs.quoracdn.net/main-qimg-c093e2248a8c4bc6902d9b... https://img.huffingtonpost.com/asset/5772d5ea1800001a00fa2e58.png?ops=scalefit_820_noupscale https://img.huffingtonpost.com/asset/5772d5ea1800001a00fa2e5... http://greyenlightenment.com/advice-that-you-should-ignore/ http://greyenlightenment.com/advice-that-you-should-ignore/ Real wages for non-graduates have plunged since 2008
  • savanaly 8y ago
    >Second, despite all the doom and gloom over student loan debt and grads not finding good jobs and , a college degree still has a good ROI in terms of higher wages, lower unemployment, and higher lifetimes wealth, versus having no degree. Does it change the framing of this fact if we assume a degree's main value to students is in its signaling power rather than what they learned? In which case ballooning debt is still a really problematic thing because it shows we're dumping money in an arms race which everyone would be better off if we could tone down.
    • paulpauper 8y ago
      whether it's signaling or not does not change the evidence that degree holders are way better-off by many metrics. This could be due to IQ or some other latent variable. In an ideal world there would be no arms race, less debt, fewer loans, and a greater emphasis on learning than credentials. But at the individual level, a degree pays off still.
• duxup 8y ago
  I have strong mixed feelings about the student loan situation. First I don't think you should have to incur a huge amount of debt to go to school, it's terrible. At the same time I worked with a lot of students at a past job where we did internships and gave them experience and I was kind of shocked by their attitude about them, mostly by how much a victim they were of it all... while incurring more and more debt. There was very much what I interpreted as a sort of "I was told I'd make a ton of money if I did X, and so I had to take out all these loans, and this sucks.". The level of victimization they felt was immense, like they had no choice but to sign on the dotted line.... and yet here were many of them seemingly choosing to keep at it incurring debt, not really curious about any other options / didn't want to do anything else. Many straight up didn't even have a job / many never had one ... this was kinda surprising to me as I never stopped working during school (to be clear I'm not saying anyone has to do it my way). There was another attitude that they felt life was like "If I push button X" (that would be go to school) "Then I get Y" (job, money, etc) and if it didn't work that easily then it was just terrible. Something needs to be done about the situation over all but it strikes me that many students perspective is way off as far as how the world works career wise (it's not push button get thing for most of us) and while they seem to feel they are victims... they also dive head long into the situation / debt and many don't acknowledge their own participation .... I worry that if participants aren't "participating" (with finances and even career) not much will change.
  • TallGuyShort 8y ago
    I recently discussed this with a person who was continuing to get student loans after already being under a mountain of debt and recognizing that their job prospects were not as lucrative as they hoped. I asked them why they were doubling down when it was obvious they were in a bad situation and making it worse. They said they had invested too much to choose another path. This person has a bachelor's in economics and is about to finish a master's in finance. We conflate "an education" with "being educated" far too much. I graduated 6 years ago with zero debt and no help from parents, because I actually looked into costs / benefits before starting school, picked a cheap school, and worked the whole time. I really don't know how we think it's acceptable for people to be 18 and not capable of making these decisions. You can vote and join the military, but you can't recognize financial servitude like this. They're being failed long before they get to college.
• JoeAltmaier 8y ago
  College became a checkbox item long ago because rich, successful people went to college. Turns out, many of them were rich and successful for other reasons (class, inheritance, old boy's network). So, now folks are asking "Why isn't college worth the money?" I would respond, it was never "worth the money", as it isn't technical school. Conflate that with, medicine and engineering are still attainable only through college and its a very confused situation.
• esotericn 8y ago
  It's unclear to me that student loans present meaningful systemic risk. Mortgage defaults rather obviously have a knock on effect in prices for homes, which huge numbers of people rely on (across the globe) for security, retirement, etc. By contrast, half of the country defaulting on student loans doesn't affect anyone other than the issuers of said loans. Are people indirectly investing in these issuers?
  • wgerard 8y ago
    The systemic risk is that those defaulters now lack capital to spend on other things, e.g. mortgages. There's a lot of concern already around millenial home-ownership rates, for example.
  • auiya 8y ago
    The problem is it's the federal government, thus you the taxpayer are responsible for defaults, which is a much larger swath of the population than just homeowners. The student loan crisis is going to be worse than the sub-prime mortgage issue because it won't be easy for our economy to recover from the downturn. The fall out will be both cultural and systemic. The course-corrective measures would be lenders locking out lower-income families from colleges, leading to a faster collapse of our middle class. Colleges will drop tuition rates slightly but tuition is largely sticky, unlike housing prices. This may even lead to some colleges going out of business. Loans will likely be under-written appropriately, but then degrees will be prioritized based on earnings potential, so only a narrow field of study (medical, lawyers, tech, etc) will be eligible for lending. Schools may price degrees differently, and only invest in those degree programs with the largest earnings potential, to the detriment of many other crucial programs. Ultimately college will become an institution to perpetuate a narrow focus of study, and only to those already in positions of wealth, which will further hasten the collapse of our middle class. We may not even be smart enough to realize what hit us until it does.
• adreamingsoul 8y ago
  I was only able to afford a few college classed, and instead taught myself various skillsets and backgrounds. It helps that I have a mind for learning things on my own. I consider myself fairly successful, and have a respectable career. However, I do love learning and hope to surround myself with brilliant minds in the near future. I’m not interested in a degree on a single focus, but I do see value in working towards a ph.d or a doctorate.
• apo 8y ago
  A vicious cycle: easy student loan money inflates the cost of tuition, making college less affordable and increasing the demand for easy loan money. Breaking the cycle is as simple as it is counterintuitive. Abolish federal student loan guarantees and interest payment programs.
  • downrightmike 8y ago
    That or mandate tuition costs. Want federal money, you have to cap tuition and fees. The other thing to keep in mind is that universities have endowments that they could pull from, but the administrative bloat likes to keep raising costs and pushes tuition further.
• crwalker 8y ago
  If something can't go on, it won't. This crisis will resolve itself when: * Many colleges go bankrupt * We are honest with our kids about the learning and signaling consequences of their choices * Employers loosen their degree filters out of rational self interest Universities are not for job training. There are much more effective ways to get job training like apprenticeship.
  • wvenable 8y ago
    If you don't have a degree your resume is just binned along with the ones with spelling mistakes. To compete you just need that piece of paper; it has nothing to do with training.
  • coredog64 8y ago
    I'll make the same comment I make in all these threads: Requiring a college education is the last bastion of socially acceptable racism. If we can break that, then we have a shot at knocking that third item off the list.
    • geggam 8y ago
      Is there a term for using racism in a post online like hitler is to godwin ? Not everything can solve or be attributed to race. We are all the human race and the sooner everyone starts thinking like that the better
• anonymous5133 8y ago
  I think this is being caused by many factors: 1. Schools have failed to utilize technologies which allow quality to be maintained and costs lowered. 2. students fail to utilize existing programs which help to reduce the need to take traditional existing classroom-based college classes, such as, AP exams or CLEP exams. High schools need to do a better job of telling students about these programs, especially CLEP exams. 3. Employers have become obsessed with the traditional degrees being the signal of high-quality employee skills as a basis to make hiring decisions or to even give an interview.
  • zippidydooda 8y ago
    The average High School Student who can get into a State University usually doesn't have what it takes to take and get credit for an AP exam unfortunately.
• Teknoman117 8y ago
  I wish I understood the community college path when I went to school - as in get all your GEs and intro courses out of the way then finish at a 4 year university. It’d be a lie to say I hadn’t heard of it, but the high school I went to told all students that taking such a path would damage their career. Most of the trouble I had with college was me being a stupid 18/19 year old, and I wish I’d done in a place that wasn’t so expensive. Thankfully I got a fantastic job that lets me pay it off rather quickly, but it feels weird to be living more or less paycheck to paycheck working at a tech giant (‘emergency fund’ is mainly not spending any bonus money). I realize I’m damn lucky, and I worked (and still do work) damn hard, but I just can’t help but feel something is a bit wrong with the whole situation. My parents both went to college, but they were able to leave school, my dad being the only one to get a job of the two of them (at low pay for the time) in the economic recession of the early 90’s, and they managed to pay off their student loans and buy a house within two years of graduating. Yet here I am, nearly 3 years after graduating living paycheck to paycheck with my cat in my little studio apartment. Part of it is my choice, I didn’t have to elect to pay off my loans in 5 years, could’ve taken a longer note, but I hate being in debt. I hate the concept. Owing more money than I could reasonably produce at any given moment bothers the hell out of me.
  • rayvy 8y ago
    > I wish I understood the community college path when I went to school Same here. If you can't afford full 4 year tuition, it literally makes 0.0% sense to go to a university for 4 years, when you can go to a CC for 2, work, save some money, blow through your courses then transfer to a university. If I could do my collegiate career over again this would be my move.
  • bdcravens 8y ago
    The secret no one tells anyone: the name on the piece of paper at the end is all that matters, and even then, 98% of employers really don't give a damn about the school you went to, especially after you get that first post-graduation job.
    • ngngngng 8y ago
• SubiculumCode 8y ago
  I've been very lucky to get on a federal program to repay my loans for staying in research. Or perhaps I can leave research and earn more money. Ahh well, I still appreciate the 20k they payed off this year.
• zomg 8y ago
  Broadly, student loan debt is an economic supply/demand issue. The government keeps supplying loans and (of course!!) schools continue to raise "tuition" as the supply of monies is nearly endless. A good first step would be to reduce the supply of loan dollars, which would lower the number of students who can pay for college (however, no politician would sign up for that) and theoretically lower prices. There's also a stigma in the US about "blue collar" jobs, which is absolutely pathetic. Plenty of people in America support their families (quite well) working in blue collar industries. As an example, plumbers in my area (New England) can essentially demand their own rate and take on work as they desire. Don't want to pay their quote hourly rate? Well then, you can fuck right off and good luck finding another plumber in the next 2 weeks. We need to do away with the mentality that you HAVE to go to college, because you don't and the majority of those who do are attending are doing so because they are naive and don't know any better.
  • dv_dt 8y ago
    Or we can do as many other nations do, adequately fund public universities (with cost controls on extravagance) causing market forces on private universities to be more price competitive.
    • toasterlovin 8y ago
      In-state tuition at public universities is not very expensive. Student loans are being used to pay for other stuff (room and board, probably, or out of state tuition).
      • dv_dt 8y ago
        Then fund room and board to some degree too? For example Germany: https://handbookgermany.de/en/learn/student-finance.html https://handbookgermany.de/en/learn/student-finance.html tution, batchelors degree: free food, semester fee: 250 EUR avg basic student residence hall: 218 EUR/month (this looks like it goes higher as some students elect more than basic accommodations elsewhere..) In the equivalent public US university costs probably almost an order of magnitude higher. ~25-30k.
• bilbo0s 8y ago
  I have a theory that this is one of the symptoms of the psychological fallacy that many Americans hold with respect to financial health. You've probably all heard the joke about poor and middle class Americans: "You never meet an American who's not wealthy. They're all just temporarily cash strapped." It's a joke, but there is some truth to it in that many poor or middle class Americans do think in this manner. So the average American is very well aware of the consequences of debt, and the costs associated with education. But they think the lack of well paying work is a very temporary situation. If you talk to an unemployed or under-employed person, they'll say that they just haven't found work YET. (The key word being "yet". Deep down, at an almost unconscious level, the average American believes they will find that job. Or they wouldn't use the word "yet".) This is not just an issue with college debt by the way. This same psychological quirk is what generates the abnormally high levels of consumption across nearly every sector of the American economy. It's the reason American's buy homes that are a bit more of a financial stretch than prudence would advise. We buy cars that are more pricey than we can really afford. Clothes, trips, consumer goods etc etc etc. On a sub conscious, or maybe even on a conscious- level, we believe our financial health will always get better over time. And, at least in the past, most of the times we've been right. So we can be forgiven for believing the same thing now. I'm honestly unsure how we would go about addressing that issue when it rears its head in college financing? Because it is deeply ingrained in us at this point. In my own case, I went to the University of Wisconsin for free. So while I know it's not a popular idea, I really do think we might be well served to look at how we might enable free bachelor's level education for people without requiring them to be freak athletes or super intelligent or whatever.
  • cirgue 8y ago
    > "You never meet an American who's not wealthy. They're all just temporarily cash strapped." Not that I disagree, but as a counterpoint: Nearly everyone I know who is financially successful (and didn't inherit any significant wealth) has spent a part of their post-college existence in this position. This is in no way representative or scientific, but the point is that "temporarily cash strapped" is a reality and not a fantasy for a nontrivial number of people, and the perception of unlimited upward mobility extends past your twenties. It's not just folk wisdom for many, it's supported by some degree of experience.
• ngngngng 8y ago
  The discussion in most of these comments gets even weirder when you throw BYU into the mix. Top 100 private school with less than $6000 in tuition and fees. Why isn't everyone clamoring to go there?
  • fetus8 8y ago
    Maybe because of it's tightly coupled religious association??
    • ngngngng 8y ago
      Sure, so then we throw virtually every other school in Utah into the mix. Utah Valley University, University of Utah, Utah State University. Each of these has comparable tuition and fees to BYU without the religious association. Each of these should be very affordable with a part time job and a small pell grant. It's not just Utah though. If you qualify for in state tuition (just go live somewhere for a year), Florida State is similar in cost. I assume there are many other schools scattered around the country that are similar. So my question remains, why the hell are people attending schools where tuition and fees are in excess of $40,000 a year? If Dads got that much money then sure, why not. But knowing you'll have to pay it all back? It doesn't make sense when there are many options for affordable schools.
  • kemayo 8y ago
    Mostly because of the whole Mormon thing, I'd imagine. Specifically, the honor code. Committing to 4 years of celibacy, sobriety, and giving up coffee? It's kinda harsh. https://en.wikipedia.org/wiki/Church_Educational_System_Honor_Code https://en.wikipedia.org/wiki/Church_Educational_System_Hono...
  • aetimmes 8y ago
    I imagine the chastity requirement dampens the enthusiasm some.
• 40acres 8y ago
  I wonder how pragmatic and realistic today's parents (and yes, I think it's mainly on the parents) and kids are with respect to college. My family was lower middle class, I used FAFSA and PELL to pay my way through college. I paid maybe a couple hundred dollars per semester for eligibility. I also rarely bought textbooks and instead would torrent them, all of these steps were taken because I knew my parents could not afford college and had already stretched their wallets to pay for my private high school. At the end of the day parents need to look at college in a similar way to how we purchase other things. Everyone would like a Tesla but an Accord will do for most. Are you really going to hamstring your kids, and possibly yourself (ParentPlus loans) to send your kids to an out of state, private school w/o scholarships? Universities and the government share equal blame but at some point we need to come to certain realizations about college.
• draw_down 8y ago
  We present 17-year-olds with a financial decision in the amount of dozens-hundreds of thousands of dollars, and we expect them to make a responsible decision. But we still don't yet trust them to vote, or smoke, or drink. Maybe they are not the only ones who are messing up.
• hourislate 8y ago
  There needs to be disruption in the whole Education System. It's a shame in this day and age you still have to pay a fortune for accreditation through traditional channels and can't really pursue it through an Online Education at a greatly reduced cost. I suppose AI will make it all irrelevant in the next 20 years or so anyway.
  • dragonwriter 8y ago
    > It's a shame in this day and age you still have to pay a fortune for accreditation through traditional channels and can't really pursue it through an Online Education at a greatly reduced cost. There are, in fact, fully accredited and reduced cost online degree-granting instititutions.
• Simulacra 8y ago
  Why don't we stop giving student loans to people who can't pay them back? Let's apply some actuarial analysis to all of the degrees a school offers. Based on the expected and realistic salary and job projections, use that to decide whether or not to give someone a loan. Student debt is a huge problem, but requiring student fiscal responsibility is even worse.
  • EpicEng 8y ago
    Because most of these loans are guaranteed by the fed and no politician is going to run on a "take away student loans" platform.
• lordnacho 8y ago
  The pressure to attend university is immense in certain places. I never thought of doing anything else, and none of my high school classmates did either. It just wasn't something to contemplate. And that's despite having many contemporaries who didn't attend university. Luckily, though I went in blind, relying just on what older people had told me about the working world, I ended up studying something interesting that got me a good career. Also quite luckily it cost me barely anything, since I'm European. For me the worst thing about the student debt story is that I might have been born somewhere with just as much pressure, where studying was expensive, and studied something with no prospect of ever paying back the loan. And in what sense have people truly decided for themselves? Only in a legal sense. An 18 year old knows nothing about even what it is they are ignorant of. How many 18 year olds are going to know how bankruptcy works? How many 18 year olds are going to tell their parents in a convincing way that they are better off doing a course in plumbing? The worst thing, though, is the whole education FOMO causes people to not be educated. You just do what you need to pass the exams. If you find out that you just need a certain equation, you just memorize that equation, plug in the numbers during the exam, and forget about how generations of scientists arrived at the equation. If you find out something isn't going to be examined, you will stay ignorant of it. And somehow (let's face it, it's obvious) people know that real life is not going to require you to know things in the way that exams do.
• alexpotato 8y ago
  Every time this comes up, I think about this statistic: You used to be able to work for minimum wage for a summer and afford college but that is no longer true (https://www.buzzfeednews.com/article/gregschoofs/how-much-college-did-your-summer-job-pay-for https://www.buzzfeednews.com/article/gregschoofs/how-much-co...)
• yhavr 8y ago
  But still, it seems that the choice to "suffer to repay student loans, but work in the US" is better than "obtain a free/cheap education abroad and miss your relatives if you can't find a job in the US after it" edit: "suffer to repay student loans and probably doom your children for even worse circumstances"
• mcguire 8y ago
  There's an issue that nobody seems to discuss here: where you go is at least as important as that you go for higher education. The numbers for for-profit colleges are rather dismal: higher costs, higher student loan rates, lower graduation rates, lower salaries[1]. And in my personal experience, I've never met anyone with a degree from a for-profit college that was particularly exceptional. An anecdote: I know someone who recently graduated from a for-profit college on a GI bill. Someone miscalculated how much money he had in benefits there, and when they realized he was out of money, Bam! He graduated. They did have a requirement for an internship deal, apparently supposed to lead to permanent employment, but they placed him with a local company repairing industrial electronics for $10/hr; for someone in his mid-30s with 8 years in the Navy and several years of experience as an insurance claims adjuster. I am personally a big fan of higher education. It's the one opportunity in anyone's life to learn and experience things you cannot get anywhere else, to meet people who can expand your horizons beyond your specific, small bubble. I'm also not a big fan of "everyone should get a STEM degree, 'cause that's where the money is"; I've met too many people in my career who didn't have the aptitude or interest and it's never led to a particularly pretty result. So, a purely financial viewpoint does not impress me much. But even from a financial viewpoint, for-profit institutions are spectacularly bad. [1] https://capseecenter.org/research/by-the-numbers/for-profit-college-infographic/ https://capseecenter.org/research/by-the-numbers/for-profit-...
• korethr 8y ago
  As mentioned down-thread, this is a supply/demand issue. The government loans effectively create an infinite supply of money, so of course tuition goes up to capture all that money. I have a radical proposition: End student loans. Get rid of the program outright; don't issue any more loans. Take the money being spent on issuing student loans and instead earmark it to issuing to the states to fund their colleges with the condition that tuition costs lower proportionally. End bankruptcy protection for private student loans, and authorize banks to factor the degree/major into their underwriting. I'm fully aware that this will take an act of Congress, both figuratively and literally, not to mention likely be politically unpopular. But student loans didn't arrive out of thin air, one or more of acts of Congress created the mess we're in today. It will take them acting again to begin the process of cleaning up. In the spirit of debate, let's hear why this cannot possibly work or what the problems with it are.
  • mjevans 8y ago
    You're on the correct track but haven't quite hit the mark. The condition must be that the cost to a student / family of a student attending for a basic bachelors degree is zero, and that re-taking classes/classes for any unfunded (IE out of state/country) student is up to the actual "production" cost for a funded student. The balance sheets should be open to the public for audit and inspection.
• nothingtodo 8y ago
  All these comments, and not one word about automated HR screenings that drop your resume unless you have an "advanced degree" or from a "top school". It's all fine and good to tell people they don't need something, but let's be honest about what you're doing: preventing those people from being as competitive as you when they apply to the same jobs. As long as jobs require degrees, people will keep chasing them because at the end of the day it's not about knowledge or ability (as the automated algorithms seems to prove), but about the stamp of degree. And notice how the post talks about degrees after college? Because that's the reality of the job market right now, you need more than a college degree or else you are shit out of luck.
• francisofascii 8y ago
  Imagine if the Equal Opportunity act was modified to forbid employers from discriminating based on college education credentials. Then imagine how employers and students would act differently. Employers would have to find other ways to determine if employees could do the jobs. Maybe elaborate tests or prior job experience. Most students would probably would stop going to college.
• csense 8y ago
  > the next generation of graduates could default on their loans I always thought student loans COULDN'T go into default. If they just don't pay, the taxpayers will make the loss good. And the government's able to come after your income and assets for the rest of your life, regardless of bankruptcy. Do I not understand how student loans work?
  • dlp211 8y ago
    They can go into default, they can't be discharged in bankruptcy. Default just means not being paid in full and on time.
    • dragonwriter 8y ago
      > They can go into default, they can't be discharged in bankruptcy. Yes, they can, there is just a higher bar than other unsecured debt to do so.
• qubax 8y ago
  We think that 18 year olds are too irresponsible to drink alcohol, but they are wise and responsible enough to take out $50K in student loans. If that isn't pure evil, I don't know what is. Adam Smith said debt is slavery for a reason. Can't imagine a just society saddling so much young people with so much debt at such an early age. But then again, public utilities are now peddling gambling ads and the US has never been a just nation like we pretended to be.
• mark_l_watson 8y ago
  And then the failing empire, now controlled by special interests, started to eat its young. I would bet a lot of money that if our population was surveyed, over 70% would strongly support dismantling “big business education” and go back to the system we had 30 years ago. I am in my 60s, and when I think about the entrapment of our youth in student loans with false information and promises, it makes me furious.
• fredgrott 8y ago
  What seems to be missed... 1. We still do not know how to teach B and C students...lectures always are geared and favor A students. 2. Most ED loans are to B and C students 3. Fed sponsor loans ALWAYS act to defund state ed programs by over stressing the state public university systems
• wpdev_63 8y ago
  wait you don't need to get that college degree <insert liberal arts degree> to work in barista? Shocker! Responsible employers should be looking to high out of high school and train them instead of requiring a undergrad degree. This education for the sake of education is a cancer.