6 ms·

Unlike in Europe, in the US going to university or college requires huge amounts of money and usually require students to take loans. And unlike other types of

by iddan 6y ago

Unlike in Europe, in the US going to university or college requires huge amounts of money and usually require students to take loans. And unlike other types of loans it is nearly impossible to declare bankruptcy for student loans. There is a great summarising it: https://youtu.be/pVKEsiNMPNc https://youtu.be/pVKEsiNMPNc

riffraff 6y ago
while not the norm, there are places in Europe where student loans are relatively common, e.g. Norway[0] and Sweden[1]. Just mentioning because I was very surprised when I discovered it, and it offers an interesting alternative on how student loans could work. [0] https://en.wikipedia.org/wiki/Student_loans_in_Norway https://en.wikipedia.org/wiki/Student_loans_in_Norway [1] https://www.collegefinancinggroup.com/student-loan-repayment/free-college-in-sweden-high-student-debt/ https://www.collegefinancinggroup.com/student-loan-repayment...
- lb1lf 6y ago
  -But those loans do not cover tuition (which is basically free), but your living expenses while studying, which you would have incurred anyway.
- bberrry 6y ago
  There is literally no tuition in Sweden. The loans are for rent and general cost of living. You can have literally zero means and still go to university in another city.
  - bberrry 6y ago
    What's more, the interest rate is practically free and you can take 25 years to pay them off if you want. Students are not seen as desperate marks to be exploited.
  - emteycz 6y ago
    False. It's subsidized to zero for citizens, but many schools are not free for foreigners either from EU or outside of it. Same in most EU countries.
    - dtech 6y ago
      Yes, so for EU citizens, there is no/low tuition in the EU, making the statement true. This works this way for most social programs in most countries. E.g. to can't migrate to a country and then claim unemployment benefits. That doesn't mean the statement "the country has an unemployment program" is false.
      - emteycz 6y ago
        Unemployement is something different, you can't compare apples to oranges. Nobody is paying for getting unemployment, you're not eligible at worst. There are dozens (maybe hundreds) of thousands of people paying for universities in the European countries with public schools (most of paying students are of second/third-world background in a country that is acting passively aggressively to them because of their non-resident/non-citizen status [that causes issues e. g. with banking services], btw), and many of them in Sweden, that's why I feel the statement is false. Also note that I'm not judging, merely stating a fact; I don't see anything wrong with both funding approaches, and think they should be combined (like in Czechia).
  - studius 6y ago
    When you say literally, what do you mean? Almost or absolutely? Because I get confused, since, literally, literally doesn't mean literally with some people, literally.
    - antiterra 6y ago
      Do you encounter similar confusion with ‘really’, ‘very’, and ‘truly’?
  - jeegsy 6y ago
    There is no such thing as 'no tuition'. In Sweden's case, the public is paying the tuition
- kzrdude 6y ago
  And here (Sweden, Norway) the student loan is used for living costs: rent, food, books, and nothing goes to the university.
  - Snild 6y ago
    ...meaning they end up pretty small: my debt was about 250 000 SEK -- very roughly $25k -- after 5 years of university. Combined with the monthly stipend that everyone gets, I was "self-supporting"; my parents didn't have to (and wouldn't have been able to) pay any money out of pocket for my education or living expenses during that time. And now I pay around $1k total on that loan every year. I could pay it off faster, but the terms are so good that I'd rather use it to lower my mortgage, or invest it. Thanks to this system, I got the opportunity to do what I wanted, and society gets another well-paid software engineer that can pay lots of taxes. Win-win! (Edit: corrected debt from 300 000 SEK to 250 000 after checking)
- IkmoIkmo 6y ago
  There are student loans in virtually every country, including Europe, and I'd say they're quite commonly used. The difference is whether they're required to pay for tuition or not. For example, in Norway public universities (which are most, including the best ones) are tuition-free. In countries like the Netherlands, there is tuition, but heavily subsidised. Fees are about 2k per year, and low (and partially to middle-income) households get a government stipend that is more than double that fee per year. In short, people in these countries have to pay living expenses, tuition is pretty much covered. And a lot of these countries are quite small and have people living near the university, with decent public transportation, which is often free for students as well. As such lots of students live at home instead of on-campus, moving out for lifestyle reasons as soon as they can (often taking out loans to supplement a parttime job), rather than for the logistics of having to move to a place near the university. In the US there's a lot of subsidies, state programs, scholarships etc as well. But many people still end up paying way more, especially if they're going out of state. And there's lots of people who end up having to move city to study somewhere, which means paying for room and board are very much a requisite part of their studies. As such the loan amounts are nowhere near as large. Second, loans tend to be government issued, the cost-of-capital essentially tracking the interest on state bonds (e.g. treasury bills in the US) with a cap of 0%. This means in the Netherlands for example interest rates for student loans have been 0% for years and will likely remain at 0% for many years. This presents a wildly different outlook for students because borrowing $30k today isn't going to turn into having to pay back $100k over the course of the loan the coming decades, but just $30k, which is depreciating due to inflation in real terms over time.
- pjc50 6y ago
  And the UK. Although it's not a normal loan in that repayments are linked to income and there is a promise that it will be "forgiven" at retirement (which I'm a little skeptical of)
  - orobinson 6y ago
    Not even retirement, 30 years after graduating. I do wonder how the government managed to sell so many of those loans on when I expect a small minority will ever end up getting fully repaid, given the high-ish interest and earning threshold for starting repayment.
  - headmelted 6y ago
    The UK loans are actually a good deal if you really understand them, which students here inevitably don’t. It makes demanding government to pay for tuition here pretty abhorrent imho. I know a lot of working class/blue-collar families here, and talking with them, it really becomes clear how incredibly selfish and unreasonable it is to expect their taxes to buy someone wealthier than them an education that they themselves are denied by virtue of being raised in harsher circumstances.
    - Ntrails 6y ago
      I think that the modern loans are a far less amicable deal than I had just a few years ago. Interest rates far higher despite an incredibly low rate environment. But. The repayment thresholds and the loan forgiveness period do massively reduce the onerousness, especially on those in lower paid roles who would otherwise never repay. My main complaint about the system is really how it drags on the middle. The successful graduates pay off their loans in 6-7 years, or less. If you're earning 40-50k, you'll take more like 20 years to pay off the loan which feels like a long hard slog. I still think graduate tax would have been the right call.
      - IanCal 6y ago
        6-7 years on standard repayments would require a salary of around £100k straight out of uni. On £40k you'd end up with them cancelled and likely repay less than you borrowed (45k typical borrowing, £38k repaid over 30 years).
RickJWagner 6y ago
Father of 3 here, one recently graduated and one about to start US college. With reasonable preparation, college is very affordable. Scholarships are easily obtained with a good ACT or SAT score. Both of these are well documented, a few months of self-study practically guarantees a good score. My experience has been that good preparation puts out of pocket costs below $10k per year. (I think that's actually on the high side.)
- paulryanrogers 6y ago
  Family income bracket, natural talent, and pressures of high school are also factors.
- riskable 6y ago
  > Scholarships are easily obtained with a good ACT or SAT score. For the children of people that read Hacker News, I could see that. For normal American kids? No way. Not even close. The average american kid is not going to be able to get an SAT or ACT score good enough to get a scholarship. It's just not going to happen. You're vastly overestimating how smart and committed they are. How much effort do you expect a kid to put into something that has no immediate benefit and no guarantee it'll ever pay off? To get to that level of delayed gratification requires a very special sort of upbringing.
  - RickJWagner 6y ago
    You raise an excellent point. My kids (and others like them) are being raised in a 2-parent household. We encourage the kids to study, and help them where needed. It's a form of privilege, but I don't feel guilty about it. We take part in programs that help other kids outside the family (including after-school homework help for ELS kids). IMHO, we all should become 'privilege factories', helping first our own kids and then other kids. It advances quality of life for everyone involved.
- deleted 6y ago
  [deleted]
- jeegsy 6y ago
gwd 6y ago
Yeah, this was the most messed up part of the whole article: > I got back into housing a few weeks after I made my last student loan payment. I graduated undergrad with $4k in student loans. The fact that there are people becoming homeless due to student loan debt is insane.
- trastknast 6y ago
  In a different post[1], the author writes: > As my finances tanked due to a combination of divorce and medical crisis [1] https://streetlifesolutions.blogspot.com/2020/07/independently-poor-twist-on-fu-money.html https://streetlifesolutions.blogspot.com/2020/07/independent...
  - gwd 6y ago
    That makes it sound like [divorce + medical crisis] would maybe have "reset" their finances, but not kept them in on the street for so long if it hadn't been for the student loan which couldn't be discharged through bankruptcy.

by iddan 6y ago

riffraff 6y ago

while not the norm, there are places in Europe where student loans are relatively common, e.g. Norway[0] and Sweden[1]. Just mentioning because I was very surprised when I discovered it, and it offers an interesting alternative on how student loans could work. [0] https://en.wikipedia.org/wiki/Student_loans_in_Norway https://en.wikipedia.org/wiki/Student_loans_in_Norway [1] https://www.collegefinancinggroup.com/student-loan-repayment/free-college-in-sweden-high-student-debt/ https://www.collegefinancinggroup.com/student-loan-repayment...

lb1lf 6y ago
-But those loans do not cover tuition (which is basically free), but your living expenses while studying, which you would have incurred anyway.
bberrry 6y ago
There is literally no tuition in Sweden. The loans are for rent and general cost of living. You can have literally zero means and still go to university in another city.
- bberrry 6y ago
  What's more, the interest rate is practically free and you can take 25 years to pay them off if you want. Students are not seen as desperate marks to be exploited.
- emteycz 6y ago
  False. It's subsidized to zero for citizens, but many schools are not free for foreigners either from EU or outside of it. Same in most EU countries.
  - dtech 6y ago
    Yes, so for EU citizens, there is no/low tuition in the EU, making the statement true. This works this way for most social programs in most countries. E.g. to can't migrate to a country and then claim unemployment benefits. That doesn't mean the statement "the country has an unemployment program" is false.
    - emteycz 6y ago
      Unemployement is something different, you can't compare apples to oranges. Nobody is paying for getting unemployment, you're not eligible at worst. There are dozens (maybe hundreds) of thousands of people paying for universities in the European countries with public schools (most of paying students are of second/third-world background in a country that is acting passively aggressively to them because of their non-resident/non-citizen status [that causes issues e. g. with banking services], btw), and many of them in Sweden, that's why I feel the statement is false. Also note that I'm not judging, merely stating a fact; I don't see anything wrong with both funding approaches, and think they should be combined (like in Czechia).
- studius 6y ago
  When you say literally, what do you mean? Almost or absolutely? Because I get confused, since, literally, literally doesn't mean literally with some people, literally.
  - antiterra 6y ago
    Do you encounter similar confusion with ‘really’, ‘very’, and ‘truly’?
- jeegsy 6y ago
  There is no such thing as 'no tuition'. In Sweden's case, the public is paying the tuition
kzrdude 6y ago
And here (Sweden, Norway) the student loan is used for living costs: rent, food, books, and nothing goes to the university.
- Snild 6y ago
  ...meaning they end up pretty small: my debt was about 250 000 SEK -- very roughly $25k -- after 5 years of university. Combined with the monthly stipend that everyone gets, I was "self-supporting"; my parents didn't have to (and wouldn't have been able to) pay any money out of pocket for my education or living expenses during that time. And now I pay around $1k total on that loan every year. I could pay it off faster, but the terms are so good that I'd rather use it to lower my mortgage, or invest it. Thanks to this system, I got the opportunity to do what I wanted, and society gets another well-paid software engineer that can pay lots of taxes. Win-win! (Edit: corrected debt from 300 000 SEK to 250 000 after checking)
IkmoIkmo 6y ago
There are student loans in virtually every country, including Europe, and I'd say they're quite commonly used. The difference is whether they're required to pay for tuition or not. For example, in Norway public universities (which are most, including the best ones) are tuition-free. In countries like the Netherlands, there is tuition, but heavily subsidised. Fees are about 2k per year, and low (and partially to middle-income) households get a government stipend that is more than double that fee per year. In short, people in these countries have to pay living expenses, tuition is pretty much covered. And a lot of these countries are quite small and have people living near the university, with decent public transportation, which is often free for students as well. As such lots of students live at home instead of on-campus, moving out for lifestyle reasons as soon as they can (often taking out loans to supplement a parttime job), rather than for the logistics of having to move to a place near the university. In the US there's a lot of subsidies, state programs, scholarships etc as well. But many people still end up paying way more, especially if they're going out of state. And there's lots of people who end up having to move city to study somewhere, which means paying for room and board are very much a requisite part of their studies. As such the loan amounts are nowhere near as large. Second, loans tend to be government issued, the cost-of-capital essentially tracking the interest on state bonds (e.g. treasury bills in the US) with a cap of 0%. This means in the Netherlands for example interest rates for student loans have been 0% for years and will likely remain at 0% for many years. This presents a wildly different outlook for students because borrowing $30k today isn't going to turn into having to pay back $100k over the course of the loan the coming decades, but just $30k, which is depreciating due to inflation in real terms over time.
pjc50 6y ago
And the UK. Although it's not a normal loan in that repayments are linked to income and there is a promise that it will be "forgiven" at retirement (which I'm a little skeptical of)
- orobinson 6y ago
  Not even retirement, 30 years after graduating. I do wonder how the government managed to sell so many of those loans on when I expect a small minority will ever end up getting fully repaid, given the high-ish interest and earning threshold for starting repayment.
- headmelted 6y ago
  The UK loans are actually a good deal if you really understand them, which students here inevitably don’t. It makes demanding government to pay for tuition here pretty abhorrent imho. I know a lot of working class/blue-collar families here, and talking with them, it really becomes clear how incredibly selfish and unreasonable it is to expect their taxes to buy someone wealthier than them an education that they themselves are denied by virtue of being raised in harsher circumstances.
  - Ntrails 6y ago
    I think that the modern loans are a far less amicable deal than I had just a few years ago. Interest rates far higher despite an incredibly low rate environment. But. The repayment thresholds and the loan forgiveness period do massively reduce the onerousness, especially on those in lower paid roles who would otherwise never repay. My main complaint about the system is really how it drags on the middle. The successful graduates pay off their loans in 6-7 years, or less. If you're earning 40-50k, you'll take more like 20 years to pay off the loan which feels like a long hard slog. I still think graduate tax would have been the right call.
    - IanCal 6y ago
      6-7 years on standard repayments would require a salary of around £100k straight out of uni. On £40k you'd end up with them cancelled and likely repay less than you borrowed (45k typical borrowing, £38k repaid over 30 years).

RickJWagner 6y ago

Father of 3 here, one recently graduated and one about to start US college. With reasonable preparation, college is very affordable. Scholarships are easily obtained with a good ACT or SAT score. Both of these are well documented, a few months of self-study practically guarantees a good score. My experience has been that good preparation puts out of pocket costs below $10k per year. (I think that's actually on the high side.)

paulryanrogers 6y ago
Family income bracket, natural talent, and pressures of high school are also factors.
riskable 6y ago
> Scholarships are easily obtained with a good ACT or SAT score. For the children of people that read Hacker News, I could see that. For normal American kids? No way. Not even close. The average american kid is not going to be able to get an SAT or ACT score good enough to get a scholarship. It's just not going to happen. You're vastly overestimating how smart and committed they are. How much effort do you expect a kid to put into something that has no immediate benefit and no guarantee it'll ever pay off? To get to that level of delayed gratification requires a very special sort of upbringing.
- RickJWagner 6y ago
  You raise an excellent point. My kids (and others like them) are being raised in a 2-parent household. We encourage the kids to study, and help them where needed. It's a form of privilege, but I don't feel guilty about it. We take part in programs that help other kids outside the family (including after-school homework help for ELS kids). IMHO, we all should become 'privilege factories', helping first our own kids and then other kids. It advances quality of life for everyone involved.
deleted 6y ago
[deleted]
jeegsy 6y ago

gwd 6y ago

Yeah, this was the most messed up part of the whole article: > I got back into housing a few weeks after I made my last student loan payment. I graduated undergrad with $4k in student loans. The fact that there are people becoming homeless due to student loan debt is insane.

trastknast 6y ago
In a different post[1], the author writes: > As my finances tanked due to a combination of divorce and medical crisis [1] https://streetlifesolutions.blogspot.com/2020/07/independently-poor-twist-on-fu-money.html https://streetlifesolutions.blogspot.com/2020/07/independent...
- gwd 6y ago
  That makes it sound like [divorce + medical crisis] would maybe have "reset" their finances, but not kept them in on the street for so long if it hadn't been for the student loan which couldn't be discharged through bankruptcy.