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>they just lure students to the school helping them fill out student aid and loans and then give them subpar educations with curriculum being taught like it has

>they just lure students to the school helping them fill out student aid and loans and then give them subpar educations with curriculum being taught like it has been for years but they don’t care to change or innovate because the school has already been paid by an entity — the US education department who has deep pockets. Total tuition loans outstanding is around $1.5T. Total US Education Dept annual budget, 70B. Median length to pay off student loans is around 20 years. 30% of people graduate with no debt, and of the remaining, median debt is around $30k, the cost of a decent car, and a fraction of what the same people will pay for a house. Adding the entire Ed budget for the past 20 years is no where near the amount of loans outstanding. And in fact they lend only a fraction of their budget to student tuition. Thus your claim that the US Ed dept is paying at the end of the day is mathematically impossible. The debt is from private lenders, who do have incentive to ensure borrowers pay back.

gigatexal 8y ago
Loans are a mix of subsidized and unsubsidized, sure. But the issue is that the incentive is that of any loan owner: repayment of the loan. With Lambda School the incentive is making better, more employable, engineers and the loans will pay themselves off. What good does it do the person and the economy if a bunch of people are straddled with debt for 30 years for a degree they can’t use being hounded by creditors while the universities remain the same? In the end there’s a network of entities that all own debt that will never get paid back, debt that is for all intents and purposes subprime. Remind you of anything?
nateabele 8y ago
> The debt is from private lenders, who do have incentive to ensure borrowers pay back. Not necessarily. Private banks issuing federally-backed student loans want you to default, because then they double their money. See here: http://www.collegescholarships.org/research/student-loans/ http://www.collegescholarships.org/research/student-loans/
- JumpCrisscross 8y ago
  Your link doesn’t show how a defaulted loan is more valuable to a private bank than a performing loan. It would be more accurate to say private banks are relatively indifferent to the performance of a loan. (They’re actually marginally incentivised to collect performing loans, since that is a cross-selling opportunity.)
- dragonwriter 8y ago
  > Private banks issuing federally-backed student loans Don't exist. They used to, before 2010, though (the propagadagraphic you link obliquely alludes to that with it's reference to the “Obama changes” that it does not explain, perhaps because they render the flowchart entirely irrelevant.)
rayiner 8y ago
The DOE budget doesn’t include disbursed student loans. These days, the DOe disburses over $120 billion in loans per year. Almost all student debt ($1.33 trillion of $1.5 trillion) is Federal government issued.
- ChrisLomont 8y ago
  Do you have a source? Every one I find states the numbers I posted above, no where near your number. Total federal and non federal combined is currently around $100B annual.
  - rayiner 8y ago
    I guess my number is a bit dated. It's $95 billion in federal loans in the most recent year, but it peaked at $117 billion in 2010-2011. https://trends.collegeboard.org/sites/default/files/2017-trends-student-aid_0.pdf https://trends.collegeboard.org/sites/default/files/2017-tre... page 9. Still, the DOE budget cannot reflect that since it is much less. Non-federal loans account for 11% of loans: https://trends.collegeboard.org/student-aid/figures-tables/total-federal-and-nonfederal-loans-over-time https://trends.collegeboard.org/student-aid/figures-tables/t....

gigatexal 8y ago

Loans are a mix of subsidized and unsubsidized, sure. But the issue is that the incentive is that of any loan owner: repayment of the loan. With Lambda School the incentive is making better, more employable, engineers and the loans will pay themselves off. What good does it do the person and the economy if a bunch of people are straddled with debt for 30 years for a degree they can’t use being hounded by creditors while the universities remain the same? In the end there’s a network of entities that all own debt that will never get paid back, debt that is for all intents and purposes subprime. Remind you of anything?

nateabele 8y ago

> The debt is from private lenders, who do have incentive to ensure borrowers pay back. Not necessarily. Private banks issuing federally-backed student loans want you to default, because then they double their money. See here: http://www.collegescholarships.org/research/student-loans/ http://www.collegescholarships.org/research/student-loans/

JumpCrisscross 8y ago
Your link doesn’t show how a defaulted loan is more valuable to a private bank than a performing loan. It would be more accurate to say private banks are relatively indifferent to the performance of a loan. (They’re actually marginally incentivised to collect performing loans, since that is a cross-selling opportunity.)
dragonwriter 8y ago
> Private banks issuing federally-backed student loans Don't exist. They used to, before 2010, though (the propagadagraphic you link obliquely alludes to that with it's reference to the “Obama changes” that it does not explain, perhaps because they render the flowchart entirely irrelevant.)

rayiner 8y ago

The DOE budget doesn’t include disbursed student loans. These days, the DOe disburses over $120 billion in loans per year. Almost all student debt ($1.33 trillion of $1.5 trillion) is Federal government issued.

ChrisLomont 8y ago
Do you have a source? Every one I find states the numbers I posted above, no where near your number. Total federal and non federal combined is currently around $100B annual.
- rayiner 8y ago
  I guess my number is a bit dated. It's $95 billion in federal loans in the most recent year, but it peaked at $117 billion in 2010-2011. https://trends.collegeboard.org/sites/default/files/2017-trends-student-aid_0.pdf https://trends.collegeboard.org/sites/default/files/2017-tre... page 9. Still, the DOE budget cannot reflect that since it is much less. Non-federal loans account for 11% of loans: https://trends.collegeboard.org/student-aid/figures-tables/total-federal-and-nonfederal-loans-over-time https://trends.collegeboard.org/student-aid/figures-tables/t....