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This is because of distortions in the student loan market. Risk is not being properly assessed and loans are being made when they should not be. Philosophy majo

This is because of distortions in the student loan market. Risk is not being properly assessed and loans are being made when they should not be. Philosophy majors at non-top schools should not be given loans since it is unlikely they will be able to pay them back and the philosophy majors are hurting themselves in the process. A fix to this distortion is unlikely since the end result would be the closure of hundreds of schools and thousands of faculty and staff being laid off as there would be significantly fewer students.

mschuster91 8y ago
The fix is to provide state funded education, like in Germany! Otherwise, subjects that do not create profits (e.g. philosophy, social studies, history, ...) in the later term will falter.
- madengr 8y ago
  How about the government provides zero loans or funding. The free-for-all in student loans is the cause of expensive tuition.
- dan-robertson 8y ago
  I think this implies that degrees in history or philosophy and such are always worth very little and a degree in eg mathematics is always worth a decent amount. For one thing there are plenty of people with such “low value” degrees who would be quite capable of repaying student loans. There is also the American system where many valuable degrees (eg Law, MBA) require an undergraduate degree as prerequisite, and these are typically in humanities subjects so it seems that to get the opportunity to have these degrees (where loans will likely be repaid), one must first do a low value degree (where a typical loan might be less likely to be repaid). Also as I understand it, in the German system the state basically sets the fees whereas in America the universities set the fees and the government has to somehow back loans for them. I think part of the problem is a follow-the-leader one: Harvard can set high fees (although poorer students wouldn’t have to pay them) and teach history or philosophy (where such a degree would likely be reasonably valuable, or rather those people who are accepted would be able to make a good living afterwards), and then many other universities will also want to set high fees (without being able to cut them much for poorer students), and want to teach philosophy or history (even though their students will likely not gain financially from the degree or achieve financially despite it). Perhaps the universities could be made to take on more of the risk of student loans not being repaid (eg student loans would have to be given out by organisations wholly owned by universities). But I’m not sure I really like the idea of universities having to only do things that will make money for their students. Then again, perhaps this is just the leftover of the idea of universities being somewhere that the wealthy sent their children to enrich their character rather than places where choose people go to to improve their earning prospects.
  - mschuster91 8y ago
    I think this implies that degrees in history or philosophy and such are always worth very little and a degree in eg mathematics is always worth a decent amount. In terms of the money the students earn in their later life, this is definitely correct. Society simply does not fund jobs not "contributing" to the economy in a sustainable way - for example, caregivers for both young and old people, teachers or social workers are paid shit, while a total dumbass can earn tons of money as a "consultant"...
    - dan-robertson 8y ago
      I think the key word is “always.” It is probably true that an average humanities graduate earns less than an average mathematics graduate (I chose this instead of engineering where there might be professional qualifications involved). However it is less clear that an average law or mba graduate would earn less than an average mmath graduate. And for those degrees an undergraduate in humanities is required so surely that degree must be considered worthwhile. There are also good government jobs which are full of people with humanities degrees, and plenty of people with mathematics degrees which they gain little from. I suppose the point I want to make is that if American universities all stopped offering courses in the humanities then there would likely be complaints from government departments or industry about not being able to find sufficiently educated candidates. I suspect that if half of universities stopped offering those courses the effect would be much smaller.
TazeTSchnitzel 8y ago
There's a lot of assumptions here about the value of degrees. It's not just liberal arts people who have trouble getting work, and no degree is a guaranteed ticket into work. Education shouldn't be treated as a problem to which the solution is free markets. If anything the US could learn from other countries and “distort” its loan “market” more.
- deleted 8y ago
  [deleted]
- bluedevil2k 8y ago
  His example is talking in aggregate, not specific students. Sure, you might have an art history major find a job quicker than an engineering student, but who will end up getting more jobs, 100,000 art history majors or 100,000 engineering students? The loan market in the US IS improperly distorted right now - it treats all loans as having the same repayment risk...which is absurd. What we need is a loan system that offers interest rates based on majors. Computer science major? 4% interest. Comparative women’s studies major? 25% down and 12% interest. “That will just make it MORE difficult for liberal arts majors to repay their loans!” — Yes, exactly. It’s a market signal to re-evaluate their decision, or skip college entirely.

mschuster91 8y ago

The fix is to provide state funded education, like in Germany! Otherwise, subjects that do not create profits (e.g. philosophy, social studies, history, ...) in the later term will falter.

madengr 8y ago
How about the government provides zero loans or funding. The free-for-all in student loans is the cause of expensive tuition.
dan-robertson 8y ago
I think this implies that degrees in history or philosophy and such are always worth very little and a degree in eg mathematics is always worth a decent amount. For one thing there are plenty of people with such “low value” degrees who would be quite capable of repaying student loans. There is also the American system where many valuable degrees (eg Law, MBA) require an undergraduate degree as prerequisite, and these are typically in humanities subjects so it seems that to get the opportunity to have these degrees (where loans will likely be repaid), one must first do a low value degree (where a typical loan might be less likely to be repaid). Also as I understand it, in the German system the state basically sets the fees whereas in America the universities set the fees and the government has to somehow back loans for them. I think part of the problem is a follow-the-leader one: Harvard can set high fees (although poorer students wouldn’t have to pay them) and teach history or philosophy (where such a degree would likely be reasonably valuable, or rather those people who are accepted would be able to make a good living afterwards), and then many other universities will also want to set high fees (without being able to cut them much for poorer students), and want to teach philosophy or history (even though their students will likely not gain financially from the degree or achieve financially despite it). Perhaps the universities could be made to take on more of the risk of student loans not being repaid (eg student loans would have to be given out by organisations wholly owned by universities). But I’m not sure I really like the idea of universities having to only do things that will make money for their students. Then again, perhaps this is just the leftover of the idea of universities being somewhere that the wealthy sent their children to enrich their character rather than places where choose people go to to improve their earning prospects.
- mschuster91 8y ago
  I think this implies that degrees in history or philosophy and such are always worth very little and a degree in eg mathematics is always worth a decent amount. In terms of the money the students earn in their later life, this is definitely correct. Society simply does not fund jobs not "contributing" to the economy in a sustainable way - for example, caregivers for both young and old people, teachers or social workers are paid shit, while a total dumbass can earn tons of money as a "consultant"...
  - dan-robertson 8y ago
    I think the key word is “always.” It is probably true that an average humanities graduate earns less than an average mathematics graduate (I chose this instead of engineering where there might be professional qualifications involved). However it is less clear that an average law or mba graduate would earn less than an average mmath graduate. And for those degrees an undergraduate in humanities is required so surely that degree must be considered worthwhile. There are also good government jobs which are full of people with humanities degrees, and plenty of people with mathematics degrees which they gain little from. I suppose the point I want to make is that if American universities all stopped offering courses in the humanities then there would likely be complaints from government departments or industry about not being able to find sufficiently educated candidates. I suspect that if half of universities stopped offering those courses the effect would be much smaller.

TazeTSchnitzel 8y ago

There's a lot of assumptions here about the value of degrees. It's not just liberal arts people who have trouble getting work, and no degree is a guaranteed ticket into work. Education shouldn't be treated as a problem to which the solution is free markets. If anything the US could learn from other countries and “distort” its loan “market” more.

deleted 8y ago
[deleted]
bluedevil2k 8y ago
His example is talking in aggregate, not specific students. Sure, you might have an art history major find a job quicker than an engineering student, but who will end up getting more jobs, 100,000 art history majors or 100,000 engineering students? The loan market in the US IS improperly distorted right now - it treats all loans as having the same repayment risk...which is absurd. What we need is a loan system that offers interest rates based on majors. Computer science major? 4% interest. Comparative women’s studies major? 25% down and 12% interest. “That will just make it MORE difficult for liberal arts majors to repay their loans!” — Yes, exactly. It’s a market signal to re-evaluate their decision, or skip college entirely.