7 ms·

I think the writing on the wall is clear regarding student loans. The entire notion of taxpayer funded student loans is a scam on both taxpayers and students.

I think the writing on the wall is clear regarding student loans. The entire notion of taxpayer funded student loans is a scam on both taxpayers and students. It’s a system that allows the colleges/universities to charge any tuition they want and guarantees there will be an artificial demand. For about a decade at least 1M student loan holders default per year. Long before the defaults reached that high, everyone involved knew that student loans were far outpacing the economic value, and yet not a single college or university stepped up in goodfaith to blow the whistle, they continued to suckle at the tit to the detriment of their own students. Education is supposed to benefit students and the nation as a whole but the ridiculousness of loans has ensured it ruins lives and at >$1.5T in taxpayer funded debt that continues to grow exponentially it is a detriment to the country. Collapse of student loans will of course have an impact of the college/university landscape, but the industry as a whole will not collapse, rather tuition will “collapse”, or come down, to what students can actually afford out of pocket without going into debt. And if the universities/colleges somehow can’t survive on existing taxpayers subsidies from the Dept. of Educations $68B annual budget plus out of pocket tuition rates, then welcome to the real world your university/college is a failed business.

rkalla 5y ago
With the inflation we've seen in the last 24 months do you think the tuition will still come back to earth or just stay put for a decade or more?
- throwawaycities 5y ago
  Ideally inflation shouldn’t effect education as much as regular goods. For example if I have an apple and you want to buy my apple, at minimum I want to recover my costs because I will be left without an apple. However, if I have knowledge, I can share my knowledge with you freely and now we both have knowledge, I won’t lose my knowledge like the apple. If we don’t abandon the the system of guaranteed government (i.e. taxpayer) student loans, you can be sure their costs will continue to go up just like they went up when their was no inflation, and those costs will just be passed along to students and paid for with debt.
a257 5y ago
If government funded student loans are eliminated and as a result the demand goes down, will the price of education decrease by the same amount? If the demand is relatively inelastic, wouldn't it be the case that it wouldn't lower the price as much as expected? In other words, how elastic is the demand for education? How much of the current costs are resulting from taxpayer funded student loans?
- randcraw 5y ago
  If we would support and better standardize the offerings of community colleges (as some proposed recently), we could drive down the cost of a bachelor's degree by close to 50%, even if the current rates of tuition for the last two years went unchanged. Of course, there are numerous ways to reduce the tuition cost of the last two years too. I'd love to see the same standards established by community and junior colleges be extended to advanced courses as well as making those courses available online. The final degree could be granted by a the authority who governs the standards, like Britain's Open University. But there should be many alternative ways to do this well, to provide a technical education, a artistic or literate one, or simply help folks retrain as their careers evolve. We just need to quit making excuses and stop this merry-go-round to nowheresville NOW, before any more damage is done by the anticompetitive kleptocracy AKA the US university system.
scaramanga 5y ago
So you're saying that higher education is (yet another) public good that fails when turned in to a for-profit enterprise?
- erosenbe0 5y ago
  Correct, we can't realistically untether higher education from public dollars, so the public should get to exercise more oversight. Whether it is the loans or the reduced property taxes, the public is always footing part of the bill.
  - Loughla 5y ago
    >so the public should get to exercise more oversight. Every public institution has open board meetings, with board members who are either publicly elected, or appointed by an elected official. They also have constant and consistent reporting to the state and federal government about budget, student achievement, and various institutional and student based outcomes. I think maybe it's less that there needs to be more reporting, and maybe just put what we already have in a more accessible format?
    - erosenbe0 5y ago
      I mean private universities too. They take loan money and are also exempt from massive amounts of property and sales taxes. Administrators are getting wealthy financed through public debt at all levels.
- CityOfThrowaway 5y ago
  The exact opposite actually. It's a good for-profit enterprise that fails when it's narrative twists it into a public good. The problem isn't that university doesn't work. The problem is that the federal government has propped it up with so much poorly underwritten debt that the prices have ballooned beyond value delivered. That would be fine if the audience taking the debt was rational. But the discourse around university is itself irrational. And the people taking the loans have underdeveloped brains that are bad at long term thinking.
AussieWog93 5y ago
>The entire notion of taxpayer funded student loans is a scam on both taxpayers and students. It’s a system that allows the colleges/universities to charge any tuition they want and guarantees there will be an artificial demand. Just for what it's worth, Australia has a taxpayer-funded student loan scheme (HECS) and the obscene fees you see in the US simply aren't a problem here. A full 4-year Electrical Engineering degree from Monash cost me about A$30k back in 2012. It looks like now they're around $40k. Even for an arts grad, this is something one could comfortably pay off in 2-3 years. I don't know the specifics as to why this is the case, but it's clearly something that can work with proper regulation.
- Nitrolo 5y ago
  I have to say those prices still seem very high to me, that's 10.000$ a year. Maybe salaries are just outrageously higher in Australia than where I live, but I find it hard to believe most artists can comfortably pay back 1000$ a month. At least in Germany that would be a big ask even for a fresh engineering graduate (source: I'm a fresh engineering graduate). For comparison, student loans are a problem in the UK as well to some extent, where tuition is ~9000£ a year. Student loans get forgiven after 30 years and most graduates will never pay backtheir loans in full because they won't be done after 3 decades.
  - AussieWog93 5y ago
    To clarify, most people don't pay off their student debt that quickly (we have a system where it's automatically rolled into your tax returns and paid off slowly). However, with typical grad wages here (you're looking at around 60k on average; a little more for engineering and a little less for arts), one very comfortably could.
- gruez 5y ago
  >Just for what it's worth, Australia has a taxpayer-funded student loan scheme (HECS) and the obscene fees you see in the US simply aren't a problem here. A full 4-year Electrical Engineering degree from Monash cost me about A$30k back in 2012. It looks like now they're around $40k. Even for an arts grad, this is something one could comfortably pay off in 2-3 years. What do you mean that "the obscene fees you see in the US simply aren't a problem here"? $40k across 4 years is $10k/year. The average in-state tuition in the US is $10,338k. Those are pretty close to each other. https://www.usnews.com/education/best-colleges/paying-for-college/articles/paying-for-college-infographic https://www.usnews.com/education/best-colleges/paying-for-co...
nvarsj 5y ago
I think you're being too optimistic. Collapse of student loan debt most certainly won't bring down tuition. What will happen is the government/taxpayer will shoulder it and everyone's quality of life will decrease overall. The same thing happened with the mortgage crisis of 2009 and the massive government bailouts - and look, the housing market is a giant bubble again, and completely unaffordable if you're not already on the property ladder, and western governments will preserve it at all costs (like, letting inflation drive everyone's cost of living up so that the mortgage/house market doesn't fall through by being forced to raise interest rates substantially). The system doesn't operate logically or fairly anymore.
- unicornmama 5y ago
  In the GFC the derivatives were the TNT that blew up the world. The amounts owed by the losers were orders of magnitude higher than the underlying. While the fuse may be set for student loans and housing, today’s banks are not levered to the level in the GFC, nor does there appear to be a vast derivatives bomb in waiting.
specialist 5y ago
> taxpayer funded student loans is a scam Today we have taxpayer underwritten student loans. The prior system of taxpayer funded tuition, with minimal student loans, was pretty terrific. We should go back to that.
stjohnswarts 5y ago
Student loans aren't a scam , they work just fine. Unlimited student loans are a scam. Unlimited tuition increases and colleges taking advantage of unaware students is a scam. Colleges don't seem to understand "no" or budgets to new, unfunded enterprises and try to go beyond their own means. They'll just raise tuition to compensate. The government has to cap student loans, just like it has to cap medical care costs or the cycle is just going to feed itself.
- mywittyname 5y ago
  Government-backed student loans for undergrad are capped. They are capped around $32k total and are distributed on a gradually-increasing schedule. They also have been capped for decades now. So clearly that isn't the solution to the problem.
  - tschwimmer 5y ago
    This is true but paints an incomplete picture. If your parents are eligible, they can borrow an unlimited amount of "PLUS Loan" money which is privately lent but government backed by virtue of the fact it can't be discharged even in bankruptcy. [0] [0]https://www.investopedia.com/student-loan-limits-how-much-can-you-get-4771312 https://www.investopedia.com/student-loan-limits-how-much-ca...
d7d7ectc 5y ago
If education were supposed to benefit the student then the educational systems wouldn't let them choose non-beneficial majors. Loans are fine if they lead to greater returns. The only writing that's on the wall is that society has to decide between propping up the useless subjects and students or subsidizing them so that they can keep producing cultural value instead of actual value.

rkalla 5y ago

With the inflation we've seen in the last 24 months do you think the tuition will still come back to earth or just stay put for a decade or more?

throwawaycities 5y ago
Ideally inflation shouldn’t effect education as much as regular goods. For example if I have an apple and you want to buy my apple, at minimum I want to recover my costs because I will be left without an apple. However, if I have knowledge, I can share my knowledge with you freely and now we both have knowledge, I won’t lose my knowledge like the apple. If we don’t abandon the the system of guaranteed government (i.e. taxpayer) student loans, you can be sure their costs will continue to go up just like they went up when their was no inflation, and those costs will just be passed along to students and paid for with debt.

a257 5y ago

If government funded student loans are eliminated and as a result the demand goes down, will the price of education decrease by the same amount? If the demand is relatively inelastic, wouldn't it be the case that it wouldn't lower the price as much as expected? In other words, how elastic is the demand for education? How much of the current costs are resulting from taxpayer funded student loans?

randcraw 5y ago
If we would support and better standardize the offerings of community colleges (as some proposed recently), we could drive down the cost of a bachelor's degree by close to 50%, even if the current rates of tuition for the last two years went unchanged. Of course, there are numerous ways to reduce the tuition cost of the last two years too. I'd love to see the same standards established by community and junior colleges be extended to advanced courses as well as making those courses available online. The final degree could be granted by a the authority who governs the standards, like Britain's Open University. But there should be many alternative ways to do this well, to provide a technical education, a artistic or literate one, or simply help folks retrain as their careers evolve. We just need to quit making excuses and stop this merry-go-round to nowheresville NOW, before any more damage is done by the anticompetitive kleptocracy AKA the US university system.

scaramanga 5y ago

So you're saying that higher education is (yet another) public good that fails when turned in to a for-profit enterprise?

erosenbe0 5y ago
Correct, we can't realistically untether higher education from public dollars, so the public should get to exercise more oversight. Whether it is the loans or the reduced property taxes, the public is always footing part of the bill.
- Loughla 5y ago
  >so the public should get to exercise more oversight. Every public institution has open board meetings, with board members who are either publicly elected, or appointed by an elected official. They also have constant and consistent reporting to the state and federal government about budget, student achievement, and various institutional and student based outcomes. I think maybe it's less that there needs to be more reporting, and maybe just put what we already have in a more accessible format?
  - erosenbe0 5y ago
    I mean private universities too. They take loan money and are also exempt from massive amounts of property and sales taxes. Administrators are getting wealthy financed through public debt at all levels.
CityOfThrowaway 5y ago
The exact opposite actually. It's a good for-profit enterprise that fails when it's narrative twists it into a public good. The problem isn't that university doesn't work. The problem is that the federal government has propped it up with so much poorly underwritten debt that the prices have ballooned beyond value delivered. That would be fine if the audience taking the debt was rational. But the discourse around university is itself irrational. And the people taking the loans have underdeveloped brains that are bad at long term thinking.

AussieWog93 5y ago

>The entire notion of taxpayer funded student loans is a scam on both taxpayers and students. It’s a system that allows the colleges/universities to charge any tuition they want and guarantees there will be an artificial demand. Just for what it's worth, Australia has a taxpayer-funded student loan scheme (HECS) and the obscene fees you see in the US simply aren't a problem here. A full 4-year Electrical Engineering degree from Monash cost me about A$30k back in 2012. It looks like now they're around $40k. Even for an arts grad, this is something one could comfortably pay off in 2-3 years. I don't know the specifics as to why this is the case, but it's clearly something that can work with proper regulation.

Nitrolo 5y ago
I have to say those prices still seem very high to me, that's 10.000$ a year. Maybe salaries are just outrageously higher in Australia than where I live, but I find it hard to believe most artists can comfortably pay back 1000$ a month. At least in Germany that would be a big ask even for a fresh engineering graduate (source: I'm a fresh engineering graduate). For comparison, student loans are a problem in the UK as well to some extent, where tuition is ~9000£ a year. Student loans get forgiven after 30 years and most graduates will never pay backtheir loans in full because they won't be done after 3 decades.
- AussieWog93 5y ago
  To clarify, most people don't pay off their student debt that quickly (we have a system where it's automatically rolled into your tax returns and paid off slowly). However, with typical grad wages here (you're looking at around 60k on average; a little more for engineering and a little less for arts), one very comfortably could.
gruez 5y ago
>Just for what it's worth, Australia has a taxpayer-funded student loan scheme (HECS) and the obscene fees you see in the US simply aren't a problem here. A full 4-year Electrical Engineering degree from Monash cost me about A$30k back in 2012. It looks like now they're around $40k. Even for an arts grad, this is something one could comfortably pay off in 2-3 years. What do you mean that "the obscene fees you see in the US simply aren't a problem here"? $40k across 4 years is $10k/year. The average in-state tuition in the US is $10,338k. Those are pretty close to each other. https://www.usnews.com/education/best-colleges/paying-for-college/articles/paying-for-college-infographic https://www.usnews.com/education/best-colleges/paying-for-co...

nvarsj 5y ago

I think you're being too optimistic. Collapse of student loan debt most certainly won't bring down tuition. What will happen is the government/taxpayer will shoulder it and everyone's quality of life will decrease overall. The same thing happened with the mortgage crisis of 2009 and the massive government bailouts - and look, the housing market is a giant bubble again, and completely unaffordable if you're not already on the property ladder, and western governments will preserve it at all costs (like, letting inflation drive everyone's cost of living up so that the mortgage/house market doesn't fall through by being forced to raise interest rates substantially). The system doesn't operate logically or fairly anymore.

unicornmama 5y ago
In the GFC the derivatives were the TNT that blew up the world. The amounts owed by the losers were orders of magnitude higher than the underlying. While the fuse may be set for student loans and housing, today’s banks are not levered to the level in the GFC, nor does there appear to be a vast derivatives bomb in waiting.

specialist 5y ago

> taxpayer funded student loans is a scam Today we have taxpayer underwritten student loans. The prior system of taxpayer funded tuition, with minimal student loans, was pretty terrific. We should go back to that.

stjohnswarts 5y ago

Student loans aren't a scam , they work just fine. Unlimited student loans are a scam. Unlimited tuition increases and colleges taking advantage of unaware students is a scam. Colleges don't seem to understand "no" or budgets to new, unfunded enterprises and try to go beyond their own means. They'll just raise tuition to compensate. The government has to cap student loans, just like it has to cap medical care costs or the cycle is just going to feed itself.

mywittyname 5y ago
Government-backed student loans for undergrad are capped. They are capped around $32k total and are distributed on a gradually-increasing schedule. They also have been capped for decades now. So clearly that isn't the solution to the problem.
- tschwimmer 5y ago
  This is true but paints an incomplete picture. If your parents are eligible, they can borrow an unlimited amount of "PLUS Loan" money which is privately lent but government backed by virtue of the fact it can't be discharged even in bankruptcy. [0] [0]https://www.investopedia.com/student-loan-limits-how-much-can-you-get-4771312 https://www.investopedia.com/student-loan-limits-how-much-ca...

d7d7ectc 5y ago

If education were supposed to benefit the student then the educational systems wouldn't let them choose non-beneficial majors. Loans are fine if they lead to greater returns. The only writing that's on the wall is that society has to decide between propping up the useless subjects and students or subsidizing them so that they can keep producing cultural value instead of actual value.