7 ms·

Student Loan Debt: Who Are the 1%?

31 points by mshafrir 15y ago

cq 15y ago
Note that the first graph is "Six Years After College Entry". So that's 1-2 years after graduation. BARELY any time (if any) for interest to accumulate (as it doesn't while you're still a student). I'd like to see a graph of 5 or 10 years after college graduation. Edit: I was misinformed about college loans, please read the comments below this post. It is worse than I thought.
- matwood 15y ago
  Interest shouldn't accumulate as long as payments are being made. If people are leaving school and jobless, then any debt is going to be rough on them.
  - tcash21 15y ago
    This is not true. Interest does not start accruing on subsidized loans until repayment begins. Interest accrues WHILE you are still in school for unsubsidized loans. In both cases, interest is accruing as you are making regular payments.
    - matwood 15y ago
      That's correct. The original poster said lets look years out to see if someone had 100k in debt, but if they are repaying the loan the balance should not be getting bigger even with interest accruing (it's not accumulating since a payment should cover current interest plus some principle). I wasn't very clear with my wording.
- younata 15y ago
  Depends on the type of loan. I have friends with non-government loans, and for them, interest starts accumulating the instant they take the loan.
FreakLegion 15y ago
Always, always, always find a school that will pay your way. I racked up a "mere" $10,000 as an undergraduate (thank you, Bay Area, for your insane cost of living), and even that was too much. As a result, money ended up being a big part of the graduate program I chose. This allowed me to actually make money on graduate school. The lesson being: college is a system, and you should learn to game it.
- theorique 15y ago
  This: college is a system, and you should learn to game it. Same with graduate school. Hustle it.
- InnocentB 15y ago
  This is good advice to give to specific individuals, but it's unrelated to the systemic debt problem. Your strategy can't apply to the broad population, or the universities wouldn't have any money with which to pay your way.
  - FreakLegion 15y ago
    I'm not talking to individuals. I'm talking to a specific, highly motivated group of people, some of whom are pursuing undergraduate or graduate degrees, some of whom are considering pursuing undergraduate or graduate degrees. Downvote all you like, but I've learned a few things through three degrees at three different universities, and my advice remains the same -- particularly for anyone attending a for-profit school or graduate school: If you plan on going to college, learn to game the system.
- smackfu 15y ago
  $10,000 debt out of undergrad isn't really that big of a burden. $115 per month for 10 years, or $200 per month for 5 years.
- jf271 15y ago
  I used to work for a college and understand how what colleges call "enrollment management" works. I told my kids to sell their grades and SAT scores and go to the school that would give them the most money. All got decent educations with minimal debt and all went on to graduate school no matter what college they graduated from. I don't know if it is the egos of parents that want their kids to go to schools that wouldn't have taken the parents on a bet 25 years ago or something else. If it isn't a Ivy school is just isn't worth going into a lot of debt.
holograham 15y ago
I believe the point of this article was not to trivialize college debt but to criticize the media's frequent citation of college loans in excess of 100k for an individual. Part of the debt problem has been the dearth of students going into high demand majors (mostly STEM). We on hacker news know the benefit of a engineering/computer science degree and being even marginally good at it comes with great rewards.
- potatolicious 15y ago
  > "Part of the debt problem has been the dearth of students going into high demand majors (mostly STEM)." STEM degrees are expensive - considerably moreso than, say, English degrees. This is especially true for professional degrees like engineering. So yeah, your odds of employment out of school are much better than the English major, but your debt load has increased significantly as well. Getting a STEM degree can mitigate the effects of our ludicrously overpriced education system (i.e., you've got a shitload of debt, but at least you're chipping away at it, as opposed to not making your payments at all), it does not avoid it.
  - rdouble 15y ago
    The tuition is exactly the same at the state schools I'm familiar with. Books were more expensive but were a small fraction of the tuition costs.
    - kat 15y ago
      Simon Fraser University (Canada) charges more for engineering and cs courses. http://students.sfu.ca/calendar/for_students/undergrad_tuition_fees.html http://students.sfu.ca/calendar/for_students/undergrad_tuiti...
    - smackfu 15y ago
      And you actually pay cheaper per hour, because full-time tuition is invariably flat rate, but STEM majors (especially engineering) tend to have higher than normal credit hours per semester.
    - 15y ago
firefoxman1 15y ago
Maybe it's just old-fashioned thinking (you know, like Henry Ford or J.P. Morgan) but I had always been taught "Don't buy stuff you can't afford!" kind of like this SNL clip: http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-stuff http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-... It's really too bad that students are sandwiched between the "Gimme everything now!" attitude and such a grim employment outlook, but since when should you not have to repay what you borrowed? It's almost like such easily available credit of the past few decades has caused us to forget what exactly a loan is: borrowing money with the promise to repay it in the future.
- alphadogg 15y ago
  The flipside is how much talent is squandered, on a national level, when that talent is not buying what they can't afford? Layer in that there's a problem with the disproportionate rising costs of tuition; college in the US is now three times more expensive, in inflation-adjusted real dollars, than it was in the late seventies. But the average person isn’t earning three times more money than they did back then.
- lawnchair_larry 15y ago
  It's easy to think this way if you aren't an 18 year old naive kid in front of predatory lenders and everyone else around you telling you that this is the normal way things work and you are worthless without a college education. Unfortunately, you don't get a second chance. How many things did you have to sign at 18 years old that will haunt you to your grave? As for when you should not have to repay what you borrowed, well, that is pretty common in business and no one plays the deadbeat card.
  - firefoxman1 15y ago
    ...I am 18, well, almost 19. I chose community college for 2 years while I save up for the university I plan to attend. Yeah, people tend to judge when you don't choose a "real" college at first. It seems unambitious to everyone in my family except my grandfather (coincidentally he's the financial guru who got me into investing), but knowing I won't be in debt when I graduate is more than worth it. I completely agree that there is a lot of pressure to go straight into the most prestigious college you can. Between for-profit college TV ads pressing the importance of a degree, school counselors telling you to "aim high" and constant expectations of everyone around you it's much easier, socially at least, to go straight for the expensive university. It's nothing new, though; as Henry Ford put it, "Luring people into debt is an industry." Looks like that industry is still going strong. I didn't mean to come across as arrogant with my first comment. It's certainly hard to go against the current, and I think the main problem is schools and parents not encouraging an affordable college, at least for the first few years, as a viable option. People just tend to be blinded by hype and expectations, not wanting to disappoint the family name. There's certainly a lot of that attitude where I went to school.
droithomme 15y ago
Wow, the article's presentation of statistics is abysmal and certainly intentionally misleading. The chart produced, by including each bar as all persons that have greater than the level of debt, rather than into bins, means everyone in bars to the right is also included in the count of bars to the left. Sure, she explains this, but it is completely different than normal convention, isn't going to be expected or realized but any but careful readers, and the result is to support her assertion that debt levels are not that high by massively misrepresenting the left side of the chart. Then there is the issue that she is not even including anyone who graduated in less than 6 years! It's hard to imagine that if we saw those numbers they wouldn't skew the curve as well. The whole presentation reeks of cherry picked data classification.
- krschultz 15y ago
  That's actually a pretty standard way to show that kind of data. She both describes it in text and properly labeled the graph itself.
- thomaspaine 15y ago
  I think you may have misread that part, she includes people who graduated in less than 6 years. > The chart below shows the percentage of beginning undergraduate students who, six years later, had accumulated more than the indicated levels of debt.
- hmottestad 15y ago
  First thing I noticed. Thought about it for a second, then also recognized that the charts were made in a 5 year old excel version and promptly left the site.
- tzs 15y ago
  > by including each bar as all persons that have greater than the level of debt, rather than into bins, means everyone in bars to the right is also included in the count of bars to the left. Sure, she explains this, but it is completely different than normal convention It's called "cumulative", and it is quite common, and not misleading. For this kind of presentation it is what you want because most people are interested in picking some particular debt level and saying "X% are above this debt level". If you don't do a cumulative chart, then you have to take all the bins above X% and add them up to get the number you want. > Then there is the issue that she is not even including anyone who graduated in less than 6 years! It's hard to imagine that if we saw those numbers they wouldn't skew the curve as well. The whole presentation reeks of cherry picked data classification Yes--it skews the numbers toward more debt and away from the point she is making it. This strengthens her point, not weakens it.
zmitri 15y ago
> Even among recipients of bachelor’s degrees, 90 percent manage to graduate with less than $40,000 of debt. This seems inaccurate to me. I graduated from a Canadian University (which are very cheap for the quality of education they provide) and accumulated ~30K in student loans for tuition and living expenses. If I went to a school of similar caliber in the US, I would need more than that for a single year!
- kooshball 15y ago
  > This seems inaccurate to me. The article is talking about debt after graduation, not total cost of the degree. There are many ways to lower that debt, mostly by paying it off before graduating with: student's money, parent's money, government financial aid, school financial aid, school scholarships academic or otherwise, 3rd party scholarships, etc.
tibbon 15y ago
I wrote a long reply to this, but it was too big for HN. Now on my Tumblr instead. http://tibbon.tumblr.com/post/13839164804/i-am-the-1-of-student-debt http://tibbon.tumblr.com/post/13839164804/i-am-the-1-of-stud... Its the perspective from someone that is in well over 100K of student loan debt- me.
- redrobot5050 15y ago
  I'm now following you so I can read it later.
  - tibbon 15y ago
    Thanks. It is a bit of a wall of text, but I felt it best to offer a more complete picture over the simplification that some make of, "People go to school for stupid majors and take a ton of loans, then complain because they are stupid since they didn't go to school for engineering|law|cs"
    - tcash21 15y ago
      Thanks for this. I read it and posted to fb. Assuming you already posted to reddit. I am in a similar situation and am also the 1%.
      - tibbon 15y ago
        Thanks! I put up am AMA on Reddit, but no one has bit yet. http://www.reddit.com/r/IAmA/comments/n303s/i_have_over_150k_of_student_loan_debt_ama/ http://www.reddit.com/r/IAmA/comments/n303s/i_have_over_150k...
danielschonfeld 15y ago
If anyone wants to get a hold of her and let her know just how wrong and narrow minded she is: http://www.tc.columbia.edu/academics/?facid=js3676 http://www.tc.columbia.edu/academics/?facid=js3676

31 points by mshafrir 15y ago

cq 15y ago

Note that the first graph is "Six Years After College Entry". So that's 1-2 years after graduation. BARELY any time (if any) for interest to accumulate (as it doesn't while you're still a student). I'd like to see a graph of 5 or 10 years after college graduation. Edit: I was misinformed about college loans, please read the comments below this post. It is worse than I thought.

matwood 15y ago
Interest shouldn't accumulate as long as payments are being made. If people are leaving school and jobless, then any debt is going to be rough on them.
- tcash21 15y ago
  This is not true. Interest does not start accruing on subsidized loans until repayment begins. Interest accrues WHILE you are still in school for unsubsidized loans. In both cases, interest is accruing as you are making regular payments.
  - matwood 15y ago
    That's correct. The original poster said lets look years out to see if someone had 100k in debt, but if they are repaying the loan the balance should not be getting bigger even with interest accruing (it's not accumulating since a payment should cover current interest plus some principle). I wasn't very clear with my wording.
younata 15y ago
Depends on the type of loan. I have friends with non-government loans, and for them, interest starts accumulating the instant they take the loan.

FreakLegion 15y ago

Always, always, always find a school that will pay your way. I racked up a "mere" $10,000 as an undergraduate (thank you, Bay Area, for your insane cost of living), and even that was too much. As a result, money ended up being a big part of the graduate program I chose. This allowed me to actually make money on graduate school. The lesson being: college is a system, and you should learn to game it.

theorique 15y ago
This: college is a system, and you should learn to game it. Same with graduate school. Hustle it.
InnocentB 15y ago
This is good advice to give to specific individuals, but it's unrelated to the systemic debt problem. Your strategy can't apply to the broad population, or the universities wouldn't have any money with which to pay your way.
- FreakLegion 15y ago
  I'm not talking to individuals. I'm talking to a specific, highly motivated group of people, some of whom are pursuing undergraduate or graduate degrees, some of whom are considering pursuing undergraduate or graduate degrees. Downvote all you like, but I've learned a few things through three degrees at three different universities, and my advice remains the same -- particularly for anyone attending a for-profit school or graduate school: If you plan on going to college, learn to game the system.
smackfu 15y ago
$10,000 debt out of undergrad isn't really that big of a burden. $115 per month for 10 years, or $200 per month for 5 years.
jf271 15y ago
I used to work for a college and understand how what colleges call "enrollment management" works. I told my kids to sell their grades and SAT scores and go to the school that would give them the most money. All got decent educations with minimal debt and all went on to graduate school no matter what college they graduated from. I don't know if it is the egos of parents that want their kids to go to schools that wouldn't have taken the parents on a bet 25 years ago or something else. If it isn't a Ivy school is just isn't worth going into a lot of debt.

holograham 15y ago

I believe the point of this article was not to trivialize college debt but to criticize the media's frequent citation of college loans in excess of 100k for an individual. Part of the debt problem has been the dearth of students going into high demand majors (mostly STEM). We on hacker news know the benefit of a engineering/computer science degree and being even marginally good at it comes with great rewards.

potatolicious 15y ago
> "Part of the debt problem has been the dearth of students going into high demand majors (mostly STEM)." STEM degrees are expensive - considerably moreso than, say, English degrees. This is especially true for professional degrees like engineering. So yeah, your odds of employment out of school are much better than the English major, but your debt load has increased significantly as well. Getting a STEM degree can mitigate the effects of our ludicrously overpriced education system (i.e., you've got a shitload of debt, but at least you're chipping away at it, as opposed to not making your payments at all), it does not avoid it.
- rdouble 15y ago
  The tuition is exactly the same at the state schools I'm familiar with. Books were more expensive but were a small fraction of the tuition costs.
  - kat 15y ago
    Simon Fraser University (Canada) charges more for engineering and cs courses. http://students.sfu.ca/calendar/for_students/undergrad_tuition_fees.html http://students.sfu.ca/calendar/for_students/undergrad_tuiti...
  - smackfu 15y ago
    And you actually pay cheaper per hour, because full-time tuition is invariably flat rate, but STEM majors (especially engineering) tend to have higher than normal credit hours per semester.
  - 15y ago

firefoxman1 15y ago

Maybe it's just old-fashioned thinking (you know, like Henry Ford or J.P. Morgan) but I had always been taught "Don't buy stuff you can't afford!" kind of like this SNL clip: http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-stuff http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-... It's really too bad that students are sandwiched between the "Gimme everything now!" attitude and such a grim employment outlook, but since when should you not have to repay what you borrowed? It's almost like such easily available credit of the past few decades has caused us to forget what exactly a loan is: borrowing money with the promise to repay it in the future.

alphadogg 15y ago
The flipside is how much talent is squandered, on a national level, when that talent is not buying what they can't afford? Layer in that there's a problem with the disproportionate rising costs of tuition; college in the US is now three times more expensive, in inflation-adjusted real dollars, than it was in the late seventies. But the average person isn’t earning three times more money than they did back then.
lawnchair_larry 15y ago
It's easy to think this way if you aren't an 18 year old naive kid in front of predatory lenders and everyone else around you telling you that this is the normal way things work and you are worthless without a college education. Unfortunately, you don't get a second chance. How many things did you have to sign at 18 years old that will haunt you to your grave? As for when you should not have to repay what you borrowed, well, that is pretty common in business and no one plays the deadbeat card.
- firefoxman1 15y ago
  ...I am 18, well, almost 19. I chose community college for 2 years while I save up for the university I plan to attend. Yeah, people tend to judge when you don't choose a "real" college at first. It seems unambitious to everyone in my family except my grandfather (coincidentally he's the financial guru who got me into investing), but knowing I won't be in debt when I graduate is more than worth it. I completely agree that there is a lot of pressure to go straight into the most prestigious college you can. Between for-profit college TV ads pressing the importance of a degree, school counselors telling you to "aim high" and constant expectations of everyone around you it's much easier, socially at least, to go straight for the expensive university. It's nothing new, though; as Henry Ford put it, "Luring people into debt is an industry." Looks like that industry is still going strong. I didn't mean to come across as arrogant with my first comment. It's certainly hard to go against the current, and I think the main problem is schools and parents not encouraging an affordable college, at least for the first few years, as a viable option. People just tend to be blinded by hype and expectations, not wanting to disappoint the family name. There's certainly a lot of that attitude where I went to school.

droithomme 15y ago

Wow, the article's presentation of statistics is abysmal and certainly intentionally misleading. The chart produced, by including each bar as all persons that have greater than the level of debt, rather than into bins, means everyone in bars to the right is also included in the count of bars to the left. Sure, she explains this, but it is completely different than normal convention, isn't going to be expected or realized but any but careful readers, and the result is to support her assertion that debt levels are not that high by massively misrepresenting the left side of the chart. Then there is the issue that she is not even including anyone who graduated in less than 6 years! It's hard to imagine that if we saw those numbers they wouldn't skew the curve as well. The whole presentation reeks of cherry picked data classification.

krschultz 15y ago
That's actually a pretty standard way to show that kind of data. She both describes it in text and properly labeled the graph itself.
thomaspaine 15y ago
I think you may have misread that part, she includes people who graduated in less than 6 years. > The chart below shows the percentage of beginning undergraduate students who, six years later, had accumulated more than the indicated levels of debt.
hmottestad 15y ago
First thing I noticed. Thought about it for a second, then also recognized that the charts were made in a 5 year old excel version and promptly left the site.
tzs 15y ago
> by including each bar as all persons that have greater than the level of debt, rather than into bins, means everyone in bars to the right is also included in the count of bars to the left. Sure, she explains this, but it is completely different than normal convention It's called "cumulative", and it is quite common, and not misleading. For this kind of presentation it is what you want because most people are interested in picking some particular debt level and saying "X% are above this debt level". If you don't do a cumulative chart, then you have to take all the bins above X% and add them up to get the number you want. > Then there is the issue that she is not even including anyone who graduated in less than 6 years! It's hard to imagine that if we saw those numbers they wouldn't skew the curve as well. The whole presentation reeks of cherry picked data classification Yes--it skews the numbers toward more debt and away from the point she is making it. This strengthens her point, not weakens it.

zmitri 15y ago

> Even among recipients of bachelor’s degrees, 90 percent manage to graduate with less than $40,000 of debt. This seems inaccurate to me. I graduated from a Canadian University (which are very cheap for the quality of education they provide) and accumulated ~30K in student loans for tuition and living expenses. If I went to a school of similar caliber in the US, I would need more than that for a single year!

kooshball 15y ago
> This seems inaccurate to me. The article is talking about debt after graduation, not total cost of the degree. There are many ways to lower that debt, mostly by paying it off before graduating with: student's money, parent's money, government financial aid, school financial aid, school scholarships academic or otherwise, 3rd party scholarships, etc.

tibbon 15y ago

I wrote a long reply to this, but it was too big for HN. Now on my Tumblr instead. http://tibbon.tumblr.com/post/13839164804/i-am-the-1-of-student-debt http://tibbon.tumblr.com/post/13839164804/i-am-the-1-of-stud... Its the perspective from someone that is in well over 100K of student loan debt- me.

redrobot5050 15y ago
I'm now following you so I can read it later.
- tibbon 15y ago
  Thanks. It is a bit of a wall of text, but I felt it best to offer a more complete picture over the simplification that some make of, "People go to school for stupid majors and take a ton of loans, then complain because they are stupid since they didn't go to school for engineering|law|cs"
  - tcash21 15y ago
    Thanks for this. I read it and posted to fb. Assuming you already posted to reddit. I am in a similar situation and am also the 1%.
    - tibbon 15y ago
      Thanks! I put up am AMA on Reddit, but no one has bit yet. http://www.reddit.com/r/IAmA/comments/n303s/i_have_over_150k_of_student_loan_debt_ama/ http://www.reddit.com/r/IAmA/comments/n303s/i_have_over_150k...

danielschonfeld 15y ago

If anyone wants to get a hold of her and let her know just how wrong and narrow minded she is: http://www.tc.columbia.edu/academics/?facid=js3676 http://www.tc.columbia.edu/academics/?facid=js3676