4 ms·

College costs are just like any other bubble: they rose and continue to rise due to the ease of financing. Why we allow 18-year olds to blissfully sign up for

College costs are just like any other bubble: they rose and continue to rise due to the ease of financing. Why we allow 18-year olds to blissfully sign up for a lifetime of crippling six-figure debt is beyond me. At least make them get an engineering or business degree from a public college. In-demand colleges can keep raising tuition because students will just get bigger loans to get the name on the degree.

watty 15y ago
They're adults and aren't being forced to sign up for an out of state private school that costs 40k a year. Intelligent adults will pursue scholarships and go to school in state for for a reasonable price.
- tghw 15y ago
  While it is true that they are (or almost are) adults and should be able to make their own decisions, I think you'd be hard pressed to say that there is nothing wrong with a bank giving a $200,000 dollar loan to someone with absolutely no income. Because you can't get out of student debt, the banks are more than happy to make loans to people who shouldn't really be taking them. Eventually, the bank will get its money back. For the education bubble to be popped, there's going to have to be a change in legislation allowing people to be protected from student loans if they go into bankruptcy. Once that's the case, banks will start being more careful with the loans they make, there will be less cheap money available, and people will have to start making more rational decisions about which college they attend.
  - gte910h 15y ago
    >change in legislation allowing people to be protected from student loans if they go into bankruptcy. I think there is a balance there, but that is the huge deal: no one should be able to co-sign, and you should be able to go into bankruptcy after a long period of trying to make it work and drop the student loan dept too. I don't want to swing the other way and see chapter 7 bankruptcies right after school driving rates up to absurd levels.
- jwingy 15y ago
  The problem is that even intelligent adults can be easily led astray without the proper information to arm themselves to make proper decisions. There's a lot of misinformation out there and pre-collegiate education isn't always up to snuff for performing this task. * WARNING - ANECDOTAL EVIDENCE AHEAD - PROCEED WITH CAUTION! * After I graduated high school (~ 8 years ago), I realized how little information I got from the school about college and my post-high school options. Most of what I had learned was from doing my own research and what my family had told me. Perhaps all the college counseling went to the gifted and talented group (yes, there actually was such a group in the school for each year). The public school education system probably sucks in this regard for the same reason why most public schools don't teach anything about personal finance: there is none. No good reason whatsoever. It's quite baffling really.
- knieveltech 15y ago
  I don't think any rational individual over the age of 30 is going to agree with your assessment that 18 yr olds are adults. Maybe adults-with-training-wheels...
  - gte910h 15y ago
    http://www.hhs.gov/opa/familylife/tech_assistance/etraining/adolescent_brain/Development/prefrontal_cortex/index.html http://www.hhs.gov/opa/familylife/tech_assistance/etraining/...
- gte910h 15y ago
  They're legally adults, however they don't know the difference between getting an engineering degree from Georgia Tech (best lifetime earning to cost ratio in the country for Georgia residents, equal ratio for out of state students as Harvard) and an English degree from Notre Dame. Additionally, you don't get the "judgement" part of your brain until after you're partially through/done with college: http://www.hhs.gov/opa/familylife/tech_assistance/etraining/adolescent_brain/Development/prefrontal_cortex/index.html http://www.hhs.gov/opa/familylife/tech_assistance/etraining/...
  - sadawi 15y ago
    Is lifetime earning to cost a useful metric, though? There are costs outside of college that won't scale with that ratio. Extreme example: a 1000:1 ratio isn't much good if your lifetime earning is $1000, and a 2:1 ratio could mean you come out ahead by a few million dollars.
    - gte910h 15y ago
      http://www.bursar.gatech.edu/student/tuition/Fall_2011/Fall11-all_fees.pdf http://www.bursar.gatech.edu/student/tuition/Fall_2011/Fall1... I get your argument, but the cost is far past $1. $11,110 per semester out of state for guaranteed tuition plan and $1,185 in fees. in state is $1,185 in fees and $2,248 per semester. So here are starting and mid-career salaries (medians) for different colleges: http://www.payscale.com/best-colleges/best-engineering-colleges.asp http://www.payscale.com/best-colleges/best-engineering-colle... And I guarantee you 100k a year buys you a MUCH nicer house in Atlanta than in LA (further skewing the value).
- pnathan 15y ago
  The problem is, if you're not in the know, it's hard to get in the know. Most college advice books orient on the Ivies- or did circa 1999 or so. Scholarship markets in my family's experience are atrocious, they might as well not exist for certain demographics/majors.

watty 15y ago

They're adults and aren't being forced to sign up for an out of state private school that costs 40k a year. Intelligent adults will pursue scholarships and go to school in state for for a reasonable price.

tghw 15y ago
While it is true that they are (or almost are) adults and should be able to make their own decisions, I think you'd be hard pressed to say that there is nothing wrong with a bank giving a $200,000 dollar loan to someone with absolutely no income. Because you can't get out of student debt, the banks are more than happy to make loans to people who shouldn't really be taking them. Eventually, the bank will get its money back. For the education bubble to be popped, there's going to have to be a change in legislation allowing people to be protected from student loans if they go into bankruptcy. Once that's the case, banks will start being more careful with the loans they make, there will be less cheap money available, and people will have to start making more rational decisions about which college they attend.
- gte910h 15y ago
  >change in legislation allowing people to be protected from student loans if they go into bankruptcy. I think there is a balance there, but that is the huge deal: no one should be able to co-sign, and you should be able to go into bankruptcy after a long period of trying to make it work and drop the student loan dept too. I don't want to swing the other way and see chapter 7 bankruptcies right after school driving rates up to absurd levels.
jwingy 15y ago
The problem is that even intelligent adults can be easily led astray without the proper information to arm themselves to make proper decisions. There's a lot of misinformation out there and pre-collegiate education isn't always up to snuff for performing this task. * WARNING - ANECDOTAL EVIDENCE AHEAD - PROCEED WITH CAUTION! * After I graduated high school (~ 8 years ago), I realized how little information I got from the school about college and my post-high school options. Most of what I had learned was from doing my own research and what my family had told me. Perhaps all the college counseling went to the gifted and talented group (yes, there actually was such a group in the school for each year). The public school education system probably sucks in this regard for the same reason why most public schools don't teach anything about personal finance: there is none. No good reason whatsoever. It's quite baffling really.
knieveltech 15y ago
I don't think any rational individual over the age of 30 is going to agree with your assessment that 18 yr olds are adults. Maybe adults-with-training-wheels...
- gte910h 15y ago
  http://www.hhs.gov/opa/familylife/tech_assistance/etraining/adolescent_brain/Development/prefrontal_cortex/index.html http://www.hhs.gov/opa/familylife/tech_assistance/etraining/...
gte910h 15y ago
They're legally adults, however they don't know the difference between getting an engineering degree from Georgia Tech (best lifetime earning to cost ratio in the country for Georgia residents, equal ratio for out of state students as Harvard) and an English degree from Notre Dame. Additionally, you don't get the "judgement" part of your brain until after you're partially through/done with college: http://www.hhs.gov/opa/familylife/tech_assistance/etraining/adolescent_brain/Development/prefrontal_cortex/index.html http://www.hhs.gov/opa/familylife/tech_assistance/etraining/...
- sadawi 15y ago
  Is lifetime earning to cost a useful metric, though? There are costs outside of college that won't scale with that ratio. Extreme example: a 1000:1 ratio isn't much good if your lifetime earning is $1000, and a 2:1 ratio could mean you come out ahead by a few million dollars.
  - gte910h 15y ago
    http://www.bursar.gatech.edu/student/tuition/Fall_2011/Fall11-all_fees.pdf http://www.bursar.gatech.edu/student/tuition/Fall_2011/Fall1... I get your argument, but the cost is far past $1. $11,110 per semester out of state for guaranteed tuition plan and $1,185 in fees. in state is $1,185 in fees and $2,248 per semester. So here are starting and mid-career salaries (medians) for different colleges: http://www.payscale.com/best-colleges/best-engineering-colleges.asp http://www.payscale.com/best-colleges/best-engineering-colle... And I guarantee you 100k a year buys you a MUCH nicer house in Atlanta than in LA (further skewing the value).
pnathan 15y ago
The problem is, if you're not in the know, it's hard to get in the know. Most college advice books orient on the Ivies- or did circa 1999 or so. Scholarship markets in my family's experience are atrocious, they might as well not exist for certain demographics/majors.