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How America's universities became debt factories

• pelagicAustral 2y ago
  I was lucky enough to get a grant, 100% of cost, with two caveats, you have to finish, and once you finish you HAVE to work in the country for 2 years. Overall an amazing compromise for government.
  • wood_spirit 2y ago
    Guessing from your username that this was Australia? Is this normal? And was this for specific courses and entry grades etc?
    • chii 2y ago
      It's not normal to have this in australia - these are probably scholarships. Australia has similar loan system for tertiary education.
    • pelagicAustral 2y ago
      Falkland Islands. It is normal, only requirement is to have permanent residence. It is wide open, any type of study...
• refulgentis 2y ago
  I agree entirely, made my college decision based on these factors at 18. However, these analyses miss the mark by stressing the map, instead of the territory. Ex. The graph about graduates being underemployed goes back to 1990, and there's no meaningful difference in the difference in the rate between then, and now. Ex. 41% graduating after 4 years doesn't mean it is necessary colleges need to Find A Better Way: that would affect ex. the complain around graduates being not prepared with no discernible skills
  • roywiggins 2y ago
    > The graph about graduates being underemployed goes back to 1990, and there's no meaningful difference in the difference in the rate between then, and now. this probably mattered less when the debt load was much lower
• johng 2y ago
  Even saying this a decade ago would have been labeled misinformation.
  • lordfrito 2y ago
    Not true... people were talking about this in the late 90's as being a bad idea because of misaligned incentives. Loans are supposed to be inherently risky to the bank issuing the loan. Managing that risk is their business, and the reward for doing it right is the interest payments. I remember people back then talking about "if the loans are non-dischargeable, then the bank is pretty much guaranteed it's money back, making it a no risk proposition to them. What's stopping them from becoming student loan mills? What's stopping colleges from asking for more and more money if the banks just lend it no risk?" These ideas were out there, but get drowned out by the voices of the big pocket companies that are proposing the legislation. Tons of articles talking about the risk being overblown, the results are wonderful, etc. Think about the kids, good for 'murica, etc. The big messages you hear over and over again in the media are being payed for by groups that aren't particularly interested in benefiting you. This is not a new problem, it's been this way for a long while. And here we are 25 years later. Wondering how we got here. When anyone with a brain at the time knew this was coming. The problem is only getting worse because of media consolidation and the vast reach of the internet into everyone's eyeballs. Be skeptical very of what you read.
• michelsedgh 2y ago
  I agree, and another way out is educating people who are about to enter university properly so they make an informed decision about the major they wanna choose more than their feelings and more on facts to see the outcome.
  • squidgedcricket 2y ago
    That's not a one-size-fits-all solution. Many 18 year olds will not be willing or capable of making a good financial long term decision regardless of education. Mortgaging yourself into decades of indentured servitude shouldn't be an option that's available to young adults.
    • michelsedgh 2y ago
      I actually beg to differ, most people who go into STEM for example have a pretty good understanding of their path and they are very smart 18 year olds who make really good decisions, but I agree that mortgages shouldn’t be like candies giving them to any kid. I agree that If banks were worried of not getting payed back, then maybe they would screen better, but still the issue of universities with bad incentives still remains there.
• advael 2y ago
  We should be way more willing to straight up kill multi-billion dollar industries. Without that willingness, most modern problems are impossible for governments to solve, and such industries and even their potential competitors are incentivised mostly to exacerbate the problem. I love a good market as much as anyone but there really are problems markets will never solve
  • WorkerBee28474 2y ago
    That's too disruptive, and there's too high a chance of unintended consequences. Instead of that what you'll see is a 'we'll kill this multi-billion dollar industry over the course of the next 30 years'
    • mrfox321 2y ago
      China does this, for better or for worse.
      • alephnerd 2y ago
        Not really. Entrenched and connected types tend to exit industries before the gavel hits, and enforcement from the CCDI isn't impartial, with plenty of bribery to remain off their radar. Truly Schumpterian creative destruction is good in a vacuum, but reality isn't a vacuum.
      • daedrdev 2y ago
        They are not a supportive example, their one child policy doomed their demographics and future economic growth.
        • ben_w 2y ago
          They stopped the one child policy nine years ago; they had it in the first place because demographic projections had them severely overpopulated if they didn't. During the period in which it was active, their GDP increased by a factor of about 62. Not percentage, multiple.
• alephnerd 2y ago
  It depends on the type of university tbh. Getting a BA in Underwater Basketweaving from your local commuter state university is much less financially damaging than at Duke or UChicago. I'm not a fan of the idea of "useful" and "useless" degrees (ime, the best predictor for success is critical thinking skills, not major), but I do find private universities don't make as much financial sense, especially given that well paying industries like Engineering, Accounting, etc don't place much weight on your initial Alma mater beyond your first job. Anecdotally, I had an alumni interview with a successful tech IB/PE/HF alum from CS@CMU years ago while I was applying to colleges, and he was very insistent about how he felt the RoI at SJSU or CalPoly is superior to CS@CMU. I didn't end up attended CMU (I was lured to a more "prestigious" LAC) but he was absolutely right.
  • rr808 2y ago
    > beyond your first job. That's the twist though. If your first job is better, the second job is likely better too. It took me a decade before I made it to a first class job, sitting next to people who worked there straight out of college.
    • alephnerd 2y ago
      The best jobs themselves have a regional bias. That's why Baruch has Ivy level representation in IB and High Finance, and SJSU plus CalPoly SLO has Stanford level representation in the tech industry at large. Just looking at the Linkedins of the most successful EMs, PMs, and SEs in my network, most attended a normal state flagship and worked at an "OK" company like Oracle or Splunk. This whole "FAANG"-or-bust or "Ivy"-or-bust mentality is legitimately divorced from reality, especially now that the market is legitimately horrid for new college grads. > It took me a decade before I made it to a first class job What do you define as a "first class job"? Where was your first job located? Were you open to moving to a major tech employment hub (eg. Bay Area, Seattle, Austin, NYC)? Did you start your career during a tech slowdown (eg. 01-04, 08-12, 20-21, 23-present)? "Meh" companies like Oracle or Cisco pay early-to-mid career employees roughly the same as similarly leveled employees at Google or Amazon. The main thing is, these employees need to be based in the Bay Area, Seattle, or Austin to justify those salaries. And if you start your career during a hiring slowdown, it doesn't matter if you went to Stanford or SJSU - you're screwed. I'm already seeing the desperation right now at on-campus recruiting events at Harvard/MIT as well as at regional publics.
• jackdaniel 2y ago
  I wonder why there's no mention of a free education as an alternative solution to the broken system
  • dwighttk 2y ago
    how does that help?
    • jackdaniel 2y ago
      You don't have "an industry" that hikes prices, and there is a central authority without ulterior motive that has an influence over what is funded. Not to mention that you don't put young people into debt from get go.
      • firejake308 2y ago
        My understanding of a free education is one that is 100% paid for by the government, since someone still has to pay the professor's salary. In that case, you still have an issue of an industry that can demand increased prices (from the government, of course) if university enrollment suddenly increases (and I think it would if students didnt have to pay tuition). So I think you still have to figure out how to handle the market forces, but you're right that shifting the burden from the students to the government lets people start off their lives with less debt, which is a benefit of its own.
        • grecy 2y ago
          Elementary and High Schools already solved all of this. No need to over complicate things.
  • atomicnumber3 2y ago
    I think in part because on the "buyer" side, there's often a problem of how to sort through 100 resumes for a position. Given that in any given pile of resumes, probably 70% are unqualified, filtering for "degree" is an easy way (though naturally not great, though how not great it is is hard to measure, which of course means we do it) to cut the work required in half or more.
• advael 2y ago
  I think it's really sad that we so reflexively consider universities vocational training that criticism of universities so often includes "offering degrees that won't get you a job" Actually academia predates the push to gate jobs behind undergraduate degrees, and trying to repurpose these institutions that mainly exist to train and employ researchers to be fully general vocational schools has been a disaster in every respect for everyone but the parasitic class of administrators it's spawned
  • hiddencost 2y ago
    At that time they were also incredibly exclusive and mostly the rich.
    • advael 2y ago
      Yea, and jobs that selected by university degree wanted to implicitly select for class Making the path to go to a university more accessible is admirable. Entrenching this hiring practice with policy designed to enforce its implications on universities was always ill-conceived and the consequences have mostly been negative, creating a class of permanent debtors, turning universities into dysfunctional and corrupt quasi-businesses, and not really causing a significant de-stratification of job opportunities on balance at all
      • ghaff 2y ago
        And some jobs do. As I've noted elsewhere if you want to go into Big Law, you go to a relative handful of law schools, which are heavily fed by undergrad Ivies, and clerk at a high federal level.
        • advael 2y ago
          Yes, like I said before, this hasn't de-stratified the job market. Jobs that want to select applicants by class can find plenty of ways to do so easily E.G.: More expensive vocational programs that haven't been subsidized, selecting among universities for especially "prestigious" (read "class-signaling") ones, baking cultural assumptions of the upper classes into the expectations surrounding "professionalism" in the interview process, etc
• andreyk 2y ago
  Seems like a good overview, but I do find this bit unclear: "But why don’t market forces correct these issues? The answer lies in the unique shield that non-dischargeable student loans provide to educational institutions and lenders. In a normal market, if a product consistently fails to deliver value, consumers stop buying it. Producers either improve or go out of business. But in the world of higher education, this feedback loop is broken. Colleges and universities, shielded by the guarantee of student loan money, have no real incentive to improve their product or direct students to majors that have an ability to pay back their loans. They can raise tuition year after year, even as the value of their degrees stagnates or declines. " Sure, colleges can charge a lot due to loans, but they are still competing with each other and differences in tuition could make a big difference. I went to Georgia Tech over other universities because it was in-state and Georgia has generous scholarships for students with good grades. So why does competition among schools not lower costs?
  • candiddevmike 2y ago
    I don't know about nationally but my local universities are having year over year enrollment decreases. I think there are some market forces in play, but they aren't reducing tuition, just making the universities ask for more state or local tax money.
  • tway_GdBRwW 2y ago
    > But why don’t market forces correct these issues? Another theory: The value creation is not linked to the value capture. So market forces make a bad feedback loop. Look, I'm totally pro business, but business is only "good" at allocating capital when value capture and creation are linked. Education isn't like that. The closest we have are the bootcamp schools, where they take a cut out of your first 2 year's salary if you find a job or nothing if you don't. When capture/creation are not linked, you need a different social organization method. "Government" or "Religion/non-profit" come to mind. Perhaps others have additional suggestions.
    • MarketingJason 2y ago
      I ran a coding bootcamp school that had both your typical pay-upfront and later added an option like you outline. I can't speak for all programs, but schools use an affiliate third party lender for those "free" loan programs. It was relatively new for us when I left, so I never saw the aftermath. I know it worked out well for some students, but my biggest concern was ensuring payments only kicked in if the job was "in-industry or field". My logic was the value isn't there if you go to a coding bootcamp only to not use the skills. I was still worried they'd basically ask "do you use a computer?" and consider it in-field. Another issue here is we had folks just looking to up-skill and the value return was harder to gauge if they were returning or continuing to work their job. This was mostly limited to our part-time program so we didn't offer the delayed-loan for it.
• jampekka 2y ago
  The profit motive at work.
  • ehvatum 2y ago
    The profit motive reliably exposes brokenness. What changed to make loans for useless activity profitable? Normally, a loan for useless activity wouldn’t be issued, because of the expectation that it wouldn’t be repaid.
  • brigadier132 2y ago
    The vast majority of universities are not for profit. As we clearly observe with all government guaranteed demand subsidies, prices sky rocket.
• oldpersonintx 2y ago
  but it makes a nice opportunity for Democrats to buy votes later with selective debt forgiveness debt forgiveness was a hot topic exactly one month before the midterms and it is already becoming a hot topic as we head in to the general election if these students were not in debt, there would be no debt to forgive and no votes to buy
  • jmyeet 2y ago
    > a nice opportunity for Democrats to buy votes That's exactly what political parties in a democracy should do. You know who never says no to handouts from the government? Wealthy people. In fact, they don't just say no, they demand handouts. It's only when the government gives money to poor people that it suddenly becomes a moral hazard. > debt forgiveness was a hot topic ... until a politicized Supreme Court killed it because it was giving money to poor people.
• pj808 2y ago
  Human capital contracts are another partial solution that flips the incentives: instead of using loans to pay tuition up front, institutions are paid a % of your income for a fixed period of time, after which any remaining amount is forgiven. Typically this only applies to income over a base amount (such as 10% of income above a 40,000 base). Naturally this works great in fields with strong employment outcomes and terribly everywhere else.
  • chii 2y ago
    > a % of your income for a fixed period of time why not a % until the cost of the degree is paid back? Why does there have to be a forgiveness component?
    • clcaev 2y ago
      The return window should be time limited so that the uni shoulders some of the risk - that their degree has market value. Masters programs can be particularly egregious, they are profit centers where only a small fraction of those getting the degree advance to a PhD program or some position where the degree matters. If the time is limited and one only need to pay a % over a threshold pay, the uni has some skin in the game and can lose on the gamble. In this market design they may be more careful about the promises they make and better guide our population towards programs that have better market value (and less personal debt).
    • d0mine 2y ago
      So there would be an incentive for a university to actually teach marketable skills. Of cause it is all wishful thinking: big corrupt institutions exist not as if nobody can come up with better solutions
  • esafak 2y ago
    A bootcamp called Lambda School had an income sharing agreement (ISA) to that effect. They did not do well.
• wizerno 2y ago
  John Oliver discusses how so many people have come to take on student loan debt, why it’s so hard to pay off, and what we can do about it [1]. [1] https://youtu.be/zN2_0WC7UfU https://youtu.be/zN2_0WC7UfU
• honksillet 2y ago
  - the government should not be guaranteeing these loans - they should be dischargeable in bankruptcy That’s it.
  • jmoak 2y ago
    and if nobody is willing to lend to these students any longer because their field of study won't yield enough income to pay back a loan... well, mission accomplished
    • freshtake 2y ago
      this. you'll also need escrow, a notary, a co-signer, and 50 pages of signatures to secure the loan
• dachworker 2y ago
  Meanwhile, I know of German and Dutch peers of mine who upon completing their masters in Europe, enrolled in California to do a second Masters ( at the time I believe they paid in the range of $100k) for the VISA and internship opportunities. And IIRC, the bet paid off because they all found employment in California, with salaries 3x to 4x what they could get here.
  • thatfrenchguy 2y ago
    Masters in the US are essentially diploma mills for OPT work authorizations
  • dvh 2y ago
    Let me guess, it wasn't Egyptology degree
  • esafak 2y ago
    That just means they needed the degree to get an opportunity to work in the US. This is really a tax.
  • baq 2y ago
    This is also very unfair towards the Dutch and German taxpayer. These countries ended up donating their money and educator time to the US. If your constitution includes provisions for free education, it might also be super hard to fix. (E.g. Poland.)
    • dachworker 2y ago
      Their parents paid taxes like everyone else. If anything I would say it is unfair, that they are forced to move to the US, because the imbeciles in power mismanaged the economy so much that there are few adequate jobs for them, and the local Germany/Dutch economy is not competitive on the world stage.
      • user90131313 2y ago
        No but at least they have good bread.
• idunnoman1222 2y ago
  All other unsecured debt disappears after what seven years but this university debt is somehow guaranteed?? That’s why this happened.
  • rufus_foreman 2y ago
    Absent a government guarantee, what lender is going to lend to people with no job, assets, or income? Students' parents would need to co-sign, and if the parents were poor, the student would be out of luck.
• sweeter 2y ago
  It is genuinely insane that US Colleges are basically holdings companies at this point. They priority is investments. It seems hostile to the goal of students
• Yaina 2y ago
  It's somewhat besides the point of the piece and might be unfair, but I can't help to feel an immediate sense of distrust for any piece of writing that uses AI images. Anyways, tying lending terms to the value of the degree sounds like a horrible idea, because how do you even determine that? Seems to me the big issue is A) that the loans are managed b private companies with ridiculous terms and that even public state universities can basically behave like private companies by increasing prices this much. Why can't the government not just radioactive prices for their own universities
  • csa 2y ago
    > It's somewhat besides the point of the piece and might be unfair, but I can't help to feel an immediate sense of distrust for any piece of writing that uses AI images. Im guessing that you’re probably not representative of the target audience, or the author doesn’t know his audience well. The image is thematically appropriate. I don’t think the author is trying to bamboozle anyone with that image.
    • in_cahoots 2y ago
      My problem is that it’s extremely poorly-done. The chain seems to sprout from the first student’s hair. If the author couldn’t be bothered to pay attention to the first thing people see when they click on the webpage, how much thought is put into the rest of the article?
  • topheroo 2y ago
    Same here about distrusting pieces that use AI art. It’s like… a signifier of something hard to describe — values, qualities — that makes me want to listen to someone’s point of view less.
    • AnimalMuppet 2y ago
      It's a sign of low effort, maybe? If they're not putting much effort into the art, maybe they're not putting much into the writing, either. Maybe not even into the thinking.
• amadeuspagel 2y ago
  I think this is about intellectual power more then money. Academics, who benefit from this system, have an outsized influence on political discourse.
• jmyeet 2y ago
  It's bizarre to me how accepting we are of the idea that higher education should cost anything let alone be mind-bogglingly expensive. This is wildly successful propaganda. Student loan debt was an explicit political goal [1]: > "We are in danger of producing an educated proletariat," announced Reagan advisor Roger A. Freeman during a press conference on Oct. 29, 1970. Freeman, an economics professor at Stanford, was also an advisor to President Richard Nixon. > "We have to be selective on who we allow to go through [higher education]," Freeman added. Poverty is intentional and a necessary condition for capitalism. It creates a malleable and compliant labor force. Student debt, medical debt, housing debt. All of it only exists to make a handful of extremely wealthy people slightly more wealthy. Modern universities aren't really about education at all. They're simply hedge funds in a trenchcoat. Harvard, for example, makes what? Half a billion in tuition per year? But they have upwards of $50 billion in their endowment. The interest alone could fund the entire university. [1]: https://www.bestcolleges.com/news/analysis/threat-of-educated-proletariat-created-the-student-debt-crisis/ https://www.bestcolleges.com/news/analysis/threat-of-educate...
  • chii 2y ago
    > the idea that higher education should cost anything somebody has to pay it - whether it's the students themselves via loans, or via tax payers. > Harvard, for example so may be harvard, if they should so feel charitable, could pay for their student's costs via their endowment funds. But what about _every other uni_? Not to mention that the endownment's a private source of funds - you're just as well be asking why don't billionairs just fund more public costs?
  • deleted 2y ago
    [deleted]
  • blackhawkC17 2y ago
    Harvard's endowment is $50 billion, and its expenses in 2023 were $6.25 billion [1]. To fund that, the endowment will need 12.5% annual interest, which is impossible. Tuition revenue is not remotely suitable enough for Harvard's operational expenses. Again, people don't understand how endowments work. When endows a specific program at Harvard, their money must be used for that program alone. The funds can't be sent to the general pool for the entire university. There are many ways to criticize wealthy educational institutions, but calling them "hedge funds" makes no sense. Which hedge fund subsidizes their clients' expenses with donations? 1- https://projects.propublica.org/nonprofits/organizations/42103580 https://projects.propublica.org/nonprofits/organizations/421...
• lordnacho 2y ago
  I don't know if this is some kind of heresy, but here we go. I don't think universities provide much value at all to the common student who is not going to be a PhD. I went to a very well-known institution known for putting the students in a room with the professors, maybe two or three students, to one professor. My economics professor taught me one on one. I still think, in the end, the work is mostly done alone, in a pile of books, on your own time. Not with other students, and not in lectures, and not in tutorials. This is a bit different from school where you can actually learn the material in class because, let's face it, school doesn't have a very deep curriculum. So at university my impression is that they mainly tell you what to go and read about, and then you read about it yourself. The tutor is there to course correct you a bit, but they aren't going to do much other than save you a bit of time learning the orthodoxy of your subject. The lectures are a table of contents. At most, it's really just a guy telling you that you should know what an eigenvalue is, or you should have read about the ISLM model, and so on. For you to actually understand something, well, you have to have spent a lot of time in the books rearranging your mind. Given that this is what you actually do at university, why have it this way? Make an examination authority. "Here is the national linear algebra test. Anyone who wants to try it, sign up, and come to this hall on this date." Everyone who passes, whether they studied at home or went to fancy U, gets a paper that says they passed it. Do it as a 12 year old prodigy or a 75 year old grandma, you get a diploma. Now, maybe there is already an authority that does this, I don't know. But it isn't very well known or authoritative. The current incumbents are gatekeepers. Everybody thinks that smart kids go to the most prestigious universities, and that includes employers. It's a Schelling point that doesn't need to be there, and it allows the universities to extract a great deal of value from the kids. If you made this authority of examinations, many people could learn the material and show their competence without incurring huge costs. People could start working earlier. You could separate the coming-of-age experience from academic learning. Poor people could participate more.
  • dgfitz 2y ago
    > I still think, in the end, the work is mostly done alone, in a pile of books, on your own time. I feel compelled to link the quote from Good Will Hunting here, I will refrain. However I agree completely. I also went to a “great” school, and I learned everything from overpriced books on my own time. In fact, in my entire tenure of undergrad I never attended a full week of class, not even the first week.
• DataDive 2y ago
  The author forgets to mention yet another dimension of the problem - a direct political one. Loan forgiveness ... in essence, a form of vote-buying ... vote for me, and we'll forgive your loan (aka someone else will pay the loan). If there is a chance that, at some point, we forgive loans - why would the cost of education ever decrease?
• ndgold 2y ago
  I think that a student debt could be replaced by dischargeable debt if you churned $100,000 of credit card cash advances in the same month, paid down your student debts, and then after the one year zero interest period expires, declare bankruptcy on your credit card debts that replaced your student loan debts. Can anyone confirm?
  • tway_GdBRwW 2y ago
    Clever! with the challenge being getting a 100K credit limit and assuming your student debt is < 100K.
• oarla 2y ago
  As with other industries, there is a steady increase in demand but not enough supply. Make it easier for accredited universities to be setup and let the free market forces drive the cost of an undergraduate degree down.
  • firejake308 2y ago
    I actually think we should be decreasing demand rather than increasing supply. Not every job needs a college degree, and allowing more people to avoid college altogether would naturally drive prices down from the demand side. The hard part is that I don't know how to make employers accept non-degreed applicants, outside of having Peter Thiel shout at them to do so.
    • huuhee3 2y ago
      I agree. At least in my country degrees are commonly used to filter applicants for jobs that could easily be done by someone with way lower level of education. That's not a healthy system. A degree should teach you skills that you need and can actually utilize in the work you will do.
• bilater 2y ago
  The education-politician complex as we know it will face a dramatic reckoning in the next few years. Many mid-tier universities are likely to go under. Perhaps, as a society, we will rethink how education is attained. In a world shaped by AI, maybe kids will take MOOCs just for fun.
  • CatWChainsaw 2y ago
    Or maybe kids will have AI generate minecraft levels and porn of their classmates just for fun...
• wood_spirit 2y ago
  Many years ago I went to university in the uk. Entry required good grades but tuition was free and there was a reasonable grant to live on. Twenty or so years ago the grant became a loan and, more recently, tuition fees were introduced. Nowadays way more people go to uni but come out saddled with debt. Presumably the incentives are the same as described in the article for the US: the uni wants as many students as possible because they get tuition fees and short term the administrators don’t care about graduation rate or job outcomes because it will be on some future administrators watch when the feedback loop stops new undergrads joining?
  • hrnnnnnn 2y ago
    When I graduated in the UK in 2006, I had to pay an extra £3000 because I graduated.
• freshtake 2y ago
  Agreed with the overall consensus that we should let this market be guided by true market forces, but I also think people often assume the wrong outcome of this. Universities give students a ton of control over their education. Where do you live, what classes do you take, when can you unenroll, etc. Want higher graduation rates without lowering the grading bar? Simple, do not permit part time enrollment, even for one term. Sounds harsh. Want better job prospects on graduation? Simple, kill off 90% of majors (dance, sociology, etc.) The reality is that people generally think of college was a guarantee of success (it isn't). Many people would do better going to trade schools. Attending an elite university will always be expensive (in HCOL cities, high demand for students and professors, etc.) We need to stop treating college like a basic right, or a place for people to chase their dreams. Dream chasing is great, but if someone else has to pay for it, incentives will never align.
• lenerdenator 2y ago
  1) Move most good careers that do not require a college degree out of the country for the benefit of shareholders 2) Tell everyone born between 1980 and 1995 that they'll be unable to compete in the global marketplace if they don't get at least some post-high school education, and imply that the mere presence of a degree will help instead of having a specific type of degree 3) Have next-to-zero standards for public funds used in grant and loan programs for college education, meaning people can take out loans for any sort of degree program at almost any sort of institution 4) Hold these debtors to standards that aren't applied to other types of debtors. You cannot discharge them through bankruptcy, it's very difficult to renegotiate, and SCOTUS has said that the chief executive of the note-holding institution (in this case, the President of the United States) cannot use discretion in deciding who he gets to forgive for loans.
  • scoofy 2y ago
    You forgot the most important part. The people agreeing to these debts, by definition, do not have an education in complex debt instruments that cannot be discharged. Taking our a vast loan to study English literature might seem unwise, but it’s something I could definitely see a starry eyed 17 year old deciding to do.
    • paulcole 2y ago
      I took out around $20k in loans to study literature starting in 2001. Graduated in 2005. Rent was $150 a month. Played a lot of poker and disc golf. Studied and learned a bit. Had a 75% scholarship to help with tuition. Had a $300/semester book stipend as part of that and just bought penny books off Amazon (one of the benefits of an English degree) and pocketed the difference. Basically for 5-8% or so of my (estimated) lifetime I was completely free to goof around. Great value for someone who dislikes working. Consolidated the loans after I graduated at 1.5% interest. Finished paying them off in 2021 with the Biden Bucks. Pretty sure that kind of deal doesn’t exist anymore.
      • Avicebron 2y ago
        I'm trying to figure out if you missed a 0 at the end of your rent...
• fredgrott 2y ago
  What is missing from the debate.... The rise of Education Grants on Fed level and the decrease of state funds per student...classic economic game-ship gone wrong... What might have worked better is higher Fed grants per student handed over to states as match grant where it matches state funds in the same student. Anything else delves into false narratives around false facts.... And we do in fact have an example of said cure working...elementary education where no student has a debt...everyone forgets the 1-12th grade school system that works with no debt transferred to students....
• huuhee3 2y ago
  While the US system is particularly messed up, it's not that great in Europe either. In my country universities get paid by the government based on number of graduates. Things like quality of education and employability matter very little. So, the end result is a system where many young people spend 5 years of their life on a masters degree that doesn't give them any monetary benefit. The university gets their money, the government gets fancy stats about level of education, but many students end up just misled and wasting their time. Obviously this is better than graduating with massive debt, but it's still a major financial loss compared to working full time, or studying something employable. In my opinion, what we need is a change in mentality. People shouldn't tell their kids that it's okay to study just whatever you enjoy, at least not until you have some other means of earning a living you're happy with.
• SamuelAdams 2y ago
  > Make student loans dischargeable in bankruptcy again. I would like to see the author back this up with more considerations. Bankruptcy disappears from all credit reports after seven years. The average age of first time home buyers is 35. So if a new grad’s credit is trashed from the age of 23-30, it makes no difference to them - they are not planning on using credit for anything substantial anyways. What is going to stop every single student from declaring bankruptcy immediately after graduation?
  • hypeatei 2y ago
    > What is going to stop every single student from declaring bankruptcy immediately after graduation? The long and arduous process of going through bankruptcy proceedings. Have you or do you know someone who has gone through that? It's not fun nor is it a guaranteed ticket out of your debt.
  • Cerium 2y ago
    I would rather see us switch to an income based repayment schedule with discharge at 30 years, seems fair to the student and society.
    • imtringued 2y ago
      Yeah just make it dischargeable after X years. It would be fair even to current holders of student loans.
    • freshtake 2y ago
      This exists to an extent today. If you apply your profession to an area that the government deems a societal good (e.g. you work at a public university), it can be discharged after 10 years. This was status quo for decades.
  • imtringued 2y ago
    What's going to stop young people from declaring bankruptcy immediately after doing anything?
  • mezzie2 2y ago
• hinkley 2y ago
  <search page for “Reagan”>: 0 matches. They didn’t go far enough back or broad enough. “We” decided that cheap college was too socialist and his people cooked up a scheme to make it more expensive and push the underclass and PoC into the GI bill. “You people” only get an education once you survive the military. But it made things worse for the middle class as well, as almost every5ing from Reaganomics has, and things have only snowballed from there.
  • eschaton 2y ago
    It wasn’t even to push people to the military, but literally to ensure “the wrong people” had more difficulty getting a university education—Reagan’s people came up with it as a reaction to Vietnam War protests.
• peterweyand38 2y ago
  The problem here is the time value of money. If the world is based on a production function of compound interest then in a world of finite resources what becomes cheaper over time are cell phones and what becomes more expensive are people's time, because the per unit cost of clean water and housing goes up and technology makes virtualizable goods cheaper. This also has the added benefit of screwing with the Gini coefficient as returns to capital are always compounded where worker productivity at best goes up linearly. So people mortgage their future in a bad Nash equilibrium in a competition to increase their productivity at a slightly faster linear rate than other workers, by taking money from financiers. The same financiers that see an exponential return and are incentivized to shrink labor costs to keep maximizing compound returns. So students are stuck in a system in which they're borrowing from their ideological competition. It's not that universities are inherently evil or administrators are bad. It's a natural extension of how returns to investment work. Now I'm not a Marxist, but that's the way the math works. The only solution I can see is a social system in which the wealthy form investment vehicles that run as cooperatives owned by the workers and flatten the Gini coefficient as much as possible. If students bought shares in a university that they then owned for life similar to bonds, then the university system itself would self correct. Say you go to graduate school or had tenure - then you would have a higher share of bonds. You would no longer be paid in a linear way, but a compound one. If the returns didn't align with expected earnings the university would fail. Linear payments are essentially just an admittance of failure to believe that inflation won't destroy someone's earning potential unless they're able to become a shareholder faster than someone else. Which causes intergenerational disequilibria as we've seen where the old are incredibly wealthy and the young are too poor to start families. Unless economics is willing to confront the social problem of compound interest in a finite world accelerationist capitalism will end up destroying society. No, the solution is not to burn down academia. Ask the Cambodians how killing everyone with glasses worked out for them.
  • imtringued 2y ago
    Silvio Gesell essentially makes the argument that the return on mere ownership of real capital is negative in the real world. Positive interest can only exist in a world where demand for capital exceeds supply. Since capital produces capital, we reach the excess capital "regime" eventually. The holding costs of excess capital are negatively therefore people destroy the excess capital. In the positive interest range there is a tendency for the interest rate to drop. In the negative interest rate range there is a tendency for the interest rate to rise. Both lead to the equilibrium real interest rate being exactly 0% in the long run. But a 0% interest rate has some quite significant implications. The value of non-extracted rock in earth's crust and the mild steel it eventually becomes are equivalent, despite being separated in time. Capital requires energy to operate, which also comes from the earth's crust. In other words, everything that exists today is just a long winded transformation of one chunk of the universe into another. Nothing is ever "produced". All wealth is based on the direct or indirect ownership of land and its resources playing out over the ages. Mind you, in this framework, owning an expensive machine is equivalent to having the mining rights to dig out the materials and energy sources. It is not literal ownership of land that is important, but the access to its benefits. Basically, we will never escape feudalism.
• Anthony1321 2y ago
  [flagged]
• whatever1 2y ago
  I mean you are given a blank check to change your future for ever and the debt will be paid by your future, better self. Who would not take this lucrative deal, regardless of the number on that check?
• osigurdson 2y ago
  I think we are going to have an era of entrepreneurial maximalism coming soon. For a lot of young people, the employment deal is rather broken. Also, AI will benefit smaller companies far more than larger ones.
• blackeyeblitzar 2y ago
  One thing that really annoys me about universities is being forced to take random classes under the dubious banner of being well rounded. The incentives for the university are to make us spend more time and money on them. So of course, they want us to waste time in arbitrary forced requirements. My observation is that people are not actually well-rounded just because they went to a university. And I don’t think they’re even studying the fields that we need as a society. There are too many random fields that just seem like activism rather than something rigorous. Taxpayers should not be subsidizing those, and the government needs to be much smarter about managing the bad incentives for administration.
• big-green-man 2y ago
  I've been saying this to anyone who would listen for years. All the problems with higher education in the US are the direct result of student loans being unable to be discharged in bankruptcy. Usually complex problems have complex causes, usually if someone says "simple, just do this" it means they probably don't understand the problem. Not this one. This is one of those rare problems with a singular cause and a "simple" solution: allow student debt to be discharged in bankruptcy. I put quotes on simple because, while the solution is simple, it's easier said than done as the author points out, the regulation of the industry is captured and making it actually happen is very difficult due to incumbent institutions benefitting from the status quo. But we have to set the bone, it's going to hurt but there's no way around it. We are very fortunate that the solution is so simple.
• graycat 2y ago
  Simple facts of life about education and (OP) student loans: (1) Liberal Arts and Sciences. If you have the money/smarts, can go for a Bachelor's degree at an Ivy League university, maybe also join a fraternity, and, thus, get some more understanding of history, civilization, and people and meet some people likely good to know for a good career/marriage. The Ivy professors are expected to publish a lot of research and, hopefully, get that research funded. The university may take 60% of the research funding for overhead. I'm shocked, shocked to find US National politics going on here. Here is your 60%, Sir. The universities like getting the 60%, e.g., for the white table cloth restaurant or the the President's limo. US politicians like funding education. Due to WWII with radar, sonar, the Bomb, the US government liked to fund research in the STEM fields and, soon, medicine, agriculture, etc. Due to the research, the profs stay bright, with brains active, but otherwise their research has not much to do with what is in the Bachelor's degree courses. (2) State Colleges. Could get a Bachelor's degree and also a Teaching Certificate which would enable a career in K-12 teaching that could be good for wives and mothers. Low tuition. (3) State Universities. Could continue and get a Ph.D. Could use that (A) as a union card for a career in college teaching that did not require research, (B) a career in research, maybe as an Assistant Professor trying to publish enough and build reputation enough to get promoted to tenure, (C) whatever else could use the work for. Can regard (C) as speculative with best results quite good for career, wealth, US national security. One academic direction: Get a good background in math (probability, statistics), physics, and chemistry, and then do research in some other field, e.g., what is happening on the floor of the Gulf of Maine. (4) Broadly, children need to grow up, and that can involve lots of inputs and experiences. Then they can go fourth into the great US society, lands, and economy and try to be successful. Some Bachelor's degrees might help. Bachelor's, ..., Ph.D. as job training -- has not been very popular, respected, or successful in the US. Broadly one effect for young people in the US economy is the economy might continue to grow and develop with new directions; so, ..., a young person can try to select a direction that is or promises growth, get a first job, and go ahead and grow. E.g., my education concentrated on math and physics. Early career was in US national security which liked math and physics. Soon there was also a lot of interest in computing, so got into that -- right, quick sort, heap sort, AVL trees, numerical issues in matrix inversion and curve fitting, .... At one point, the US Navy was HIGHLY concerned about the US labor force in computing, especially for work in math and physics, and I got well paid to sit, learn about computing, and do some on some Navy sonar data, the FFT (fast Fourier transform), power spectral estimation, etc. As US computing grew rapidly, so did my career. Now, doing a startup in computing using some original math -- that is, combining what I'd gotten like the novel ingredients for a popular new pizza. So, if job training, trade school, education with good "ROI" for good careers does not work well DIRECTLY, maybe (A) pick some of the best of what is in the libraries and (B) make what can with it -- yup, it's risky, speculative, etc. My recommendations: (A) If you can afford (1), fine. Otherwise, don't spend a lot of money on that Bachelor's ... Ph.D. education. I.e., for the OP here, don't take out student loans, and if go to state schools might not need the loans (might not apply to careers in law or medicine). By the way, for grad school, Master's and Ph.D., I never paid anything and did get paid for doing ugrad math teaching. (B) For a Ph.D., at some schools, courses are optional, the main point is the dissertation, the definition is "an original contribution to knowledge worth of publication", the main criteria for publication is "new, correct, and significant", a cheap way to get the background for such research is independent study, and might do enough of that on evenings and weekends before going for a Ph.D. E.g., not a lot of need for "student loans". (C) Get some basics, e.g., in the STEM fields, and then look for opportunities in the US economy. (D) Meet people, especially the right people: It can be better who you know than what you know. (E) If you are doing really good work as an employee, then maybe see if can do much the same work but for much more money as an owner.
• haberman 2y ago
  I agree with the article's diagnosis: the system is out of control, with no market forces are in place to keep costs in check. It's unsustainable for students to take on this level of debt. I'm not sure I agree with the solutions though. Making student loan debt dischargeable doesn't make a lot of economic sense. We're talking about 17-year-olds with no income and no collateral. Why would any lender want to be in this business? Who will lend to students if the debt is dischargeable? The article's solution is to essentially make the school the co-guarantor of the loan, such that the school absorbs part of the financial impact of student default. Ok, but now the school has a direct financial stake in the student's overall finances. Do you really want to have that kind of relationship with your school? Do you want an admissions process that is partially trying to decide if you're financially responsible? Do you want your school pressuring you to choose a more lucrative major? Do you want communications from your school reminding you that it's important to be making good financial decisions? If your school is co-guarantor of your loan, it's their business to make sure you're going to repay on time. There has to be an element of responsibility that falls to the borrowers themselves. It's true that a 17-year-old does not have the experience to know for themselves how much debt is reasonable, especially when they cannot necessarily predict their future earnings. But there has to be some incentive to borrow less. I don't think it's healthy if student can borrow with abandon, safe in knowing that they can just discharge the debt in a few years if it doesn't work out. Ideally students would be voting with their feet, and would make it clear to colleges that the cost of tuition is a significant factor in their decision. But I guess prestige and tradition are so powerful that people will want to go to name-brand colleges no matter the cost.
  • robswc 2y ago
    > Do you want an admissions process that is partially trying to decide if you're financially responsible? Do you want your school pressuring you to choose a more lucrative major? Do you want communications from your school reminding you that it's important to be making good financial decisions? If your school is co-guarantor of your loan, it's their business to make sure you're going to repay on time. I wouldn't particularly enjoy this... but at the same time, the alternative seems to be students that "don't know what they're doing" taking out loans over $100k to get degrees that are not in demand. These people will then claim they were ignorant of the true cost, job prospects, potential salary, etc. The elephant in the room is that many degrees simply don't leave students with a lot of earning potential. I never understand why the discussion seems to trend (not implying your comment did this) towards how we can pay for these degrees or make them affordable. It sounds harsh but I don't know how to see it any other way.
• next_xibalba 2y ago
  I’ve said it before on HN and I’ll say it again: I don’t support any reform with respect to student loans that doesn’t see the academic institutions participate in the pain. I’d like to see a large number of universities get bankrupted by assuming some portion of the student loan liabilities of their alums, then allow the alums to file bankruptcy if they can’t pay off any remaining balances. Did you know that federal student loans cannot be discharged via bankruptcy AND if you carry federal student loans into retirement, your social security income can be garnished?
  • seizethecheese 2y ago
    1) I do not agree with applying this retroactively. You shouldn’t change the rules in the middle of the game. 2) it would be unfair to make universities participate in the downside but not the upside. Perhaps the federal government should also turn the interest earned over to universities. This could actually go some way towards lessening resistance.
    • next_xibalba 2y ago
      1) The game has been rigged since the beginning and the unis have been the biggest beneficiaries and the most malignant actors. You don't think they knew damn well what they were doing by charging $100k+ in tuition for an English degree to an 18 year with no hope of paying back the loans used to pay the tuition? 2) The universities have already gorged themselves at the greed-pig trough. How is it you think they can afford to pay all those $100k+ salaries to liberal arts profs, have a 1:1 ratio of admins to students, and pay their chancellors and presidents $500k+? All of it is funded by indebting students to the tune of $10s or $100s of thousands while granting useless degrees. Let them suffocate under the weight of their sins. They are the worst actors in the entire ecosystem. Worse than the naive student borrows. Worse than the predatory lenders. Worse than the traitorous legislators. Why? Because they know they're in a position of trust. They wrap themselves in the clothing of the teacher and the philosopher while picking the pockets of naive teenagers who were told they're following the path to prosperity.
      • 2y ago
• mbostleman 2y ago
  I’m not sure that the impact on the debtors is even the worse part. The removal of any apparent consequence for the cost of education also seemed to remove an incentive for the university to provide a quality product.
• hindsightbias 2y ago
  When will the Stanford and Ivy leaguers making $400K at FANGMAs lead by example and burn their diplomas?
  • rr808 2y ago
    Yeah that's the twist. If you can make FANG salaries the full cost of Private education is quickly paid back.
• sergiobeluti 2y ago
  [flagged]
• CaffeinatedDev 2y ago
  I like the system that some coding bootcamps employ where they take a percentage of the first years of working wages. This would be a way to discern the value of your degree quite accurately. It would align the universities' and students' interests. Besides this, I also agree to the 200+ upvotes, system is broken y'all!
• seizethecheese 2y ago
  The premise that 17 year olds cannot make this kind of decision seems widely accepted here. Yet, I remember clearly understanding that since I was paying for college with debt, I must study engineering. Perhaps college has expanded to select too many people? I wonder if this could be solve by simply restricting college admissions to 20% of graduating seniors.
  • TechDebtDevin 2y ago
    This is how "cultural revolutions" begin
• rr808 2y ago
  I'm not convinced American universities are unusually expensive. Its an costly business. Does anyone have good figures for what the cost/student is globally? I can see: https://nces.ed.gov/programs/coe/indicator/cmd/education-expenditures-by-country https://nces.ed.gov/programs/coe/indicator/cmd/education-exp... looks like the US is 20-30% more expensive than other developed countries but that isn't a huge difference.
  • baby_souffle 2y ago
    A quarter isn’t a huge difference? When I think not huge, I think low single digits. Not “most of the way to a third”
    • rr808 2y ago
      I think most of the discourse is about fees students pay, so $$$ for US vs free for Europe. When you see $38k for US vs $32k for UK then its a different problem.
  • impossiblefork 2y ago
    They are unusually expensive. Here in Sweden university education costs less per head than highschool education (we of course pay for research separately). In Russia there's even one university, the Independent University of Moscow, which is just a bunch of mathematicians who give courses. University education can be made into something really hardcore but simultaneously incredibly cheap. For example, I think the IUM has exactly zero administrators.
• kachurovskiy 2y ago
  There's a certain point in time for any industry where it has a chance to capture both the user and the legislator. Once that happens, prices for consumers start to grow faster than wages because the industry has more money for lobbying, it's a positive feedback loop. https://www.abi.org/newsroom/chart-of-the-day/price-changes-for-select-us-consumer-goods-and-services-and-wages https://www.abi.org/newsroom/chart-of-the-day/price-changes-... Political solution to this is very unlikely unless there's a major stress in the system that, at least temporarily, takes out the one piece of the price growth puzzle.
• AlbertCory 2y ago
  > So, what’s the solution? It’s simple, but not easy: "Make student loans dischargeable in bankruptcy again. Tie lending terms to the value of the degree. Impose risk-sharing requirements on educational institutions – Schools would face financial penalties or need to contribute to a risk-sharing pool if their graduates default at high rates." ================= Sounds reasonable. Making people who were either faithful repayers or non-borrowers in the first place, pay for the bad or unlucky choices of a few is obvious bad and unfair policy. There are always situations where people who make mistakes have them forgiven but pay a price. I think the public would accept something like that, but not a program where the debts are forgiven outright. Schools need to take a haircut and repay some of the bad debt themselves, just like a bond default does not result in the bondholders receiving 100% of what's owed them.
• bachmeier 2y ago
  This is an important topic, but I wouldn't recommend reading this post to learn about it. There are numerous flaws and jumps in the logic. However, without getting into all that (time is too valuable to comment on the 50,000th iteration of the same points) I will just point out that the solution is much simpler than the author's. Make the maximum repayment of student loans a percentage of income over a period of time. For example, you have to repay a maximum of 7% of your income per year for 15 years. No need to get into complicated issues of bankruptcy law. If you want universities to align their incentives more than they already are, make them cover some or all of the unpaid loan balances after the repayment period ends.
• glurmokiq 2y ago
  The problem starts at the point where people think the purpose of universities is to qualify people for jobs. I wonder what happens to the Humboldtian ideal.
• NickC25 2y ago
  Why has nobody mentioned for-profit entities allowed to run roughshod over our country's students? textbook publishers, for one, are guilty of this. professors get kickbacks to assign a new edition of a textbook each year or few years, so archived or older versions don't work. don't get me started on those books that come with a 1-time code that you have to use to do online work. its a racket.
• globalnode 2y ago
  how do you get the system to change itself when it benefits so greatly from the status quo. massive protests? vote them out? those would require organisation and cooperation from people that can easily be turned against each other. no, the system stays as it is or gets worse. sorry to be a downer has there ever been a situation where massive self interest like this have been overcome?
• victor106 2y ago
  > In 2003, total student loan debt was around $250 billion. Today? It’s over $1.7 trillion. > That’s not growth; that’s an explosion. That's about 9.5% CAGR. About the same as the return of S&P 500 over the long term. https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp https://www.investopedia.com/ask/answers/042415/what-average...
• geomark 2y ago
  If everywhere you see "free university" you could replace it with "taxpayer funded university" that would be great.
• analyte123 2y ago
  A big thing that he didn't mention: Income-based repayment programs (particularly the new SAVE plan) and Public Service Loan Forgiveness (PSLF), while certainly well-intended, make the cost of college essentially irrelevant for people who can reasonably expect to benefit from those programs. And so the colleges up the bill. His 3 proposed solutions don't really deal with this. Obviously people on IDR or PSLF don't need to declare bankruptcy just because of the loans. And if the colleges had to carry the risk, the risk would be far less than imagined if these programs still exist in the same way as today: the federal government guarantees it will write off the loan of anyone who works in non-profits (which are about 10% of all jobs) for 10 years, or anyone who makes a small minimum payment for 20-25 years with SAVE. The SAVE income-driven repayment plan is a big deal that will make the cost of college far worse. What you have to pay is 5% of income above 225% of the poverty line. A family of 3 making $80k pays $104 a month - it doesn't matter if they had $10,000, $100,000 or $1,000,000 in loans. If you are not planning to be in a very high-earning field, why wouldn't you borrow the maximum? Why wouldn't the colleges charge the maximum? This amounts to a giant subsidy.
• theendisney4 2y ago
  Aligators eat their own babies. (I'll let myself out) Edit: the fix could be to fill it under national security hazard(?)
• j_timberlake 2y ago
  Don't worry, if AI starts hitting the labor market like a wrecking ball, almost nobody's gonna be signing up for 4 years of busywork anymore. The only people joining will be the few people who actually WANT to learn subjects or join academia, and they'll get rock-bottom tuition prices. What happens to all the existing student debt? Debt is just a number on a computer, I'm sure they'll figure something out...
• morpheuskafka 2y ago
  I think Americans need to start very seriously considering working in another country after college. Student loans can't be discharged in bankruptcy, but it is extremely unlikely they will be legally enforced overseas. For that matter, some serious thought should be given to going to college overseas. I don't care that "American universities are always more prestigious," there are some countries that are handing out full ride scholarships to internationals and some where the full sticker cost is as little or less than a US in-state public school. Most high school counselors know nothing about this and most students don't even consider it. Ironically, many American study abroad programs probably cost more than just enrolling in the foreign institution directly for a semester (whereas the same is never true in reverse).
  • dh2022 2y ago
    A friend of mine did exactly that. Entered U of Waterloo on math scholarship. Lost the scholarship in the first year because of bad grades. Second year transferred from Honirs Math t9 General Math. Third year transferred from Math to film studies. Fourth year transferred from film studies to Independent studies. Fifth year a lot of drinking and soccer - Independent studies did not require any classes just some sort of progress towards some type of essay. I think in sixth year Ontario government cut his student loans. He was on the hook for something like 50,000 CAD. Left to teach English in Seoul. Been there since 2000
• nojvek 2y ago
  Great article. This is why am not too excited about elections. Both side promise a lot but execution is lax. While credit is due to Biden admin for infrastructure and Chips bill, his handling on forgiving student loan was a mess. It was a one time shoddy fix. May as well make all loans the Same - based on risk, be discardable and the punishment is credit score ding if it’s not paid. Non-dischargeable loans are a drain on the economy.
• prirun 2y ago
  IMO, the US govt should stop all student loans and make the universities fund the loans. Then the universities would have an incentive to make sure students graduate with degrees & skills that will allow them to pay back the loan. THey'd also have an incentive to make their own operation run efficiently, ie, fewer high-paid administrators who do nothing and higher pay (and tenure) for professors who do all the work.
• nobodyandproud 2y ago
  Perhaps one compromise is to discharge any interest and prevent interest accrual on bankruptcy-claimed loans. Removing any risk to debtors is what set-up this perverse incentive; and breaks the market. I’d still prefer what the author proposed, but the status quo is broken. Background: I graduated in the 1990s with virtually no debt attending a third tier public school as I had to pay my own way. But only because I didn’t want to declare bankruptcy and don’t like being in debt; yet it was never clear that bankruptcy wasn’t a real option. What kids have to go through today is outrageous.
• berniedurfee 2y ago
  Regulation should allow students to forgo their tuition payments if they can’t land a good job in their field of study. That’d help align incentives. Schools would compete on placement rates and quality. They’d need robust post-graduation placement services and would need strong partnerships with industry players to stay in alignment with required skills.
• silexia 2y ago
  Excellent article, I think it goes too easy on the actual corrupt people who are the real culprits: the huge bloated administrations collecting big paychecks at the expense of poor kids who don't know any better.
• dennis_jeeves2 2y ago
  Why merely target universities? Think of high school, while most people do not pay fees directly while in high school your taxes pay for it. Most people for most occupations only require perhaps 5 years of staggered high school education. One can have an (extended) apprentice or higher degrees for others.
• _heimdall 2y ago
  > The solutions are surprisingly straightforward – make loans dischargeable, tie lending to degree value, hold institutions accountable This really over complicates it in my opinion. Student loans should be treated like any other debt. Yes, it should be able to be discharged as part of bankruptcy. From there we just need the government getting out of the way, save for a (hopefully) rare case of predatory lending or collusion. Lenders will decide what value a degree is worth because lenders themselves should own the loans rather than governments. Banks and financial institutions have very skilled actuaries who would make pretty easy work of calculating the acceptable cost for a given degree from a given school, factoring in the lender's acceptable level of defaults. Institutions can be very directly accountable when students can't get loans to go there. If a school charges too much, or the education they provide doesn't lead to careers that can pay back the loans, the schools lose.
• 39896880 2y ago
  This was one of the worst articles on the topic I’ve ever read. Full of faulty assumptions, ill-defined terms, and just flat out misleading statistics. Numerators without denominator. The list goes on.
• ivansavz 2y ago
  I believe a decade from now we'll see the "unbundling" of the three types of value universities provide: /1/ employability signal, /2/ knowledge, /3/ social. I don't know what will replace /1/ and /3/, but I look forward the future where /2/ can be made more widely accessible (without the debt). Imagine a future where everyone knows 101-level concepts in chemistry, biology, physics, etc. and able to function in society informed by all this knowledge, rather than defer to "experts."
• gojak 2y ago
  As an European this sounds lunatic. I pay +-600€ a year for my masters (bachelor coasts the same) and this 600€ also include a train ticket for all local trains in Germany. Idk why there are so few US people coming here. Honestly our universities have their weaknesses as well but I think they can definitely compete with the average US university. You have to account for something like 1k living cost per month if you are a bit lucky and don’t eat in restaurants every day. By working part time u can easily live of your salary. I think the us is famous for its student loan system and it’s a way of separating poor people from people with better situated parents. We do this in Europe too but here we do it a bit more “hidden” and mostly in Highschool.
• silent_cal 2y ago
  How hard is it to just go to the public university in most states? Where I live, you can get your tuition completely covered if you keep a B average. Young people can get whatever degree they want without having to worry about debt as long as they have decent academic ability.
• EricE 2y ago
  This is by far the most honest and accurate assessment of the current situation I have seen. And the solutions are spot on, and sadly his assessments for how likely they are to happen.