
Student Loan Debt Is Now as Big as the U.S. Junk Bond Market - rayuela
https://www.bloomberg.com/news/articles/2017-12-05/student-loans-raise-other-risks-as-debt-equals-u-s-junk-market
======
jedberg
There is definitely an education bubble. It's way too easy to get money for
college. You hear a lot of stories about the increasing costs of college and
crushing debt on graduation, but you don't hear a lot of stories of "I wanted
to go to college but couldn't get a loan". Almost everyone gets approved,
regardless of their future ability to pay it back.

We need a fundamental shift in the way college is paid for. Some (many?) would
like to see a government funded system, others would like to see the removal
of subsidized loans to bring prices back down (and leaving many unable to
afford college in its wake).

Another solution is to let you go to school for free and then pay a percent of
all your future earnings back to your college, or at least into a pool that
pays for the next generation's college. Of course with that system, colleges
would bias towards people who are pursuing profitable majors, so you'd
probably see a lot more STEM degrees and a lot fewer of everything else, until
it got oversaturated, but there is a very long lead time between "too many
degrees" and "no one studies this anymore".

In other words, the fundamental problem is that we tell kids that college is
the only path, creating insanely high demand for the product, when in reality
there would be plenty of people much better served learning a trade or skill
instead of four years doing something hate for a useless degree they'll never
use.

~~~
umbrellathorn
> for a useless degree they'll never use

I went to school for such a degree. While I don't use it in my day to day now,
I still consider it priceless. There's some inherent value added to a person
who pursues to study a bit of humanities, history, philosophy and art in
college apart from their major. Scholarly work really helps shape the way you
look at life for the better.

Part of this is that you really understand why you need to trust academic work
for general human advancement. We have too many people thinking it's okay to
discredit scientists and scholars because they don't understand how research
works.

~~~
cloakandswagger
> We have too many people thinking it's okay to discredit scientists and
> scholars because they don't understand how research works.

And a similar number of people who elevate science to the level of religion,
marching in its name and developing a brand of hero worship for scientists
when they too know nothing at all about the scientific process. Both are forms
of anti-intellectualism that are growing in our polarized political
environment.

~~~
smallnamespace
I've seen this form of scientism playing out frequently on Reddit and other
Internet forums lately. Discussion will be about some piece of controversial
research, e.g. GMOs or vaccines. People who want to discuss the merits of the
research are shouted down by what I can only describe as 'science fanbois' \--
anything that is 'against science' must be wrong.

They're missing the inherent tension in science between a received body of
knowledge and the skepticism it takes to produce new knowledge.

~~~
0xfeba
> Some piece of controversial research, e.g. GMOs or vaccines

Who or what determines what is controversial?

To me, vaccines are not controversial at all. You can pick and choose specific
ones to argue about, but the concept of vaccines is literally proven, beyond a
doubt.

As for GMOs, there's a lot more room but even still, the fundamentals are
nothing controversial. This is also proven in pretty much anything you can buy
in a grocery store today.

~~~
wutbrodo
Controversial literally just means that there's strong, polarizing
disagreement. It's fairly well-defined, and vaccines definitely qualify. This
doesn't mean that examining the actual positions of each side would lead you
to conclude that they're of equal worth: it just describes the significant
disagreement that exists. (As opposed to, say, the heliocentric model)

------
JonFish85
To me, this is another implementation of the housing bubble:

\- People see college graduates making a lot of money

\- Politicians make it a priority to make it easier for people to get loans to
go to college

\- More people take out loans to go to college

\- Colleges realize there is no downward pressure on price and raise tuition.

\- Politicians continue to make it easy for people to go to college

\- People take bigger loans to go to any school they wish

Until the music stops, things are sort of OK. People's kids can go to any
school they can get into, regardless of cost. Colleges can raise their tuition
with no consequences.

Politically it's a difficult problem, because the old solution of making more
money available is getting out of hand, but what politician wants to stand up
and tell people they can't go to the college of their dreams just because they
can't afford it?

During the housing bubble, it was the cycle of "people want to own a home" =>
"politicians say everyone should be able to own a home and make loans
available" => "companies make money packaging up these loans" => "prices go
up" => "people can't afford homes" => "politicians make more money available".
Until the music stops, everything is great -- everyone is making money,
everyone is getting what they want. Then it unravels...

~~~
mattmanser
The thing I don't understand is, how does it unravel?

It feels like politically acceptable short-termism of shunting education costs
onto future generations. No-one's going to 'lose' money over it. Who will
suffer? It doesn't look like it will be corporations that will suffer, save
some institutions will close when the endless supply of money suddenly dries
up. It looks to me like it will be governments, a political ticking time-bomb
much worse than the growth of numbers of pensioners vs number of workers. Is
it a potential social disaster where a lot of people will end up sent to a new
version of debtors prison for a bit? Or will it massively impact future GDP of
developed countries, as people won't be able to spend, they'll be paying back
this onerous loans. Having the exact opposite effect that it's supposed to,
instead of growing GDP by growing skills, it'll be killing it by curtailing
worker spending potential. Tax revenues might fall due to higher education
instead of grow.

Governments seems to be making these student loans rock-solid backed by
government assurances to the detriment of future generations.

I haven't looked into it enough to know and am lucky enough to have paid all
mine off as it was much smaller than today's crazy amounts.

~~~
dnadler
Yeah, as you say, it's not really a traditional "bubble".

From what I can tell, a few entities will suffer, but not in a spectacular
fashion.

1\. The government may be forced to forgive a lot of debt, thus taxpayers will
suffer.

2\. Those making whose student debt payments are not proportional to their
income will be an economic drag on the US.

So there is no "bubble" to "pop". Rather, it looks like it's going to be a
long-term economic drag on the country.

~~~
hkmurakami
iirc 1 is already happening, as more loans "than expected" (roll eyes) are
delinquent.

------
mikeokner
Typical shitty reporting from Bloomberg. Other than the dollar amount
outstanding, there's nothing else in the article that draws any similarities
to the junk bond market. It's about as meaningful as saying "Apple's market
cap approaches the size of the US junk bond market" or "Student Loan Debt
surpasses Apple's market cap in size." In fact, there isn't really any
interesting information in the article at all. There seems to be an
insinuation that the size is a bad thing, but even then they don't come out
and say why.

~~~
murph-almighty
At a minimum, a comparison of the default rate between the two would be nice.

~~~
jartelt
The article does compare them (albeit without much detail).

“Delinquency rates on student loans are much higher than those on auto loans
or mortgages, due to loose student loan underwriting standards, the unsecured
nature of student debt, and the inability to charge off non-performing student
loans in bankruptcy,” Goldman Sachs Group Inc. analysts Marty Young and Lotfi
Karoui wrote in a note Tuesday. “The substantial majority of student loan
default risk is borne by the U.S. Treasury.”

~~~
ktta
If the default risk is borne by the US Treasury, then what risk do we have in
general?

~~~
Raidion
The risk that the increased supply of money lowers the value of that money.
Not that this is the straw that's gonna break the camels back, but it's not
like there aren't consequences to the taxpayer for allowing the government to
allocate funds in a sub optimal manner.

~~~
linkregister
This money isn't unbounded; it's confined by the budget allocated to the
Department of Education and various government organizations (like Fannie Mae,
et. al.).

Ultimately the Department of Education is responsible for this money. The last
30 years are remarkable in the amount of controversy surrounding student loans
and the default of large education funds.

The following article describes this in greater detail:
[https://tcf.org/content/report/student-loan-guaranty-
agencie...](https://tcf.org/content/report/student-loan-guaranty-agencies-
lost-way/).

------
uptown
Mark Cuban has been writing about this since at least 2012:

[http://blogmaverick.com/2012/05/13/the-coming-meltdown-in-
co...](http://blogmaverick.com/2012/05/13/the-coming-meltdown-in-college-
education-why-the-economy-wont-get-better-any-time-soon/)

[https://www.inc.com/mark-cuban/video-student-loans-
bubble.ht...](https://www.inc.com/mark-cuban/video-student-loans-bubble.html)

------
orchard1931
The bottom line is the college loan system needs an overhaul.

As just one example, the founders of Collegeloan.com made close to a billion
dollars each prior to new laws passed in 2008. The founders have since left
daily roles but themselves and current execs are still raking in money off
student load debt.

This is just one of the founders houses that has been on market for 4+ years.
This house was paid for off the false hopes and high interest payment loans
the schlepped to kids who have long since graduated and still paying off debt.

[https://www.sandiegoreader.com/news/2013/feb/20/unreal-
casa-...](https://www.sandiegoreader.com/news/2013/feb/20/unreal-casa-piena/#)

[https://www.zillow.com/homedetails/14385-Cypress-Pt-Poway-
CA...](https://www.zillow.com/homedetails/14385-Cypress-Pt-Poway-
CA-92064/2112805772_zpid/?fullpage=true)

Another house he sold in Vegas.

[https://www.realtor.com/news/unique-homes/ceo-and-poker-
pro-...](https://www.realtor.com/news/unique-homes/ceo-and-poker-pro-cary-
katz-selling-las-vegas-mansion/)

He also likes million dollar buy in poker. How many interest payments did kids
make for him to afford this?

[http://www.pokerlistings.com/cary-katz-wsop-big-one-for-
one-...](http://www.pokerlistings.com/cary-katz-wsop-big-one-for-one-drop-q-
and-a-91548)

Do some research... this is just one company that was in the upper top 10
prior to 2008 shake up. Many more made far more of the backs of kids in this
country. After the shake up the companies adjusted and went back to lobbying
to gain back the insane profits they once saw. Obviously by the headline we
are back to all time highs.

------
nsporillo
As a current student and one who will graduate with roughly $60k in student
debt, after scholarships and grants - I often question the legitimacy of the
driving factors in increased tuition.

Most would say the volume of administrators has ballooned due to the
increasing number of services universities now provide for the students.
Better and more services offered to students _should_ benefit quality of life.

Does the economic impact of modern universities serve as a net positive for
society? When we have more and more university staff using their salary to
support their families they're contributing to the economy in a positive way.
When we have students graduating with tens of thousands of dollars of debt,
they're bound to repaying their loans. In order to do this, they must find a
career and become "productive" members of society.

This of course ignores the ethical and societal implications of expensive
tuition...

~~~
OliverJones
The article mentions "loose student loan underwriting standards." Here's
what's going on:

The people originating the loans have no skin in the game. So, they don't call
NYU or even Northern Essex Community College and say, "look, here's a student
who wants to be a social worker, asking for 100K in loans to get the degree.
We don't think they'll be able to repay that debt on a social worker's wages.
So, no loan."

If the lenders WERE calling the colleges saying that, the colleges would not
be escalating tuition as radically as they are.

It's not realistic to expect the kid who just got in to NYU or a community
college to play that kind of hardball in negotiating tuition rates. But when
the lenders don't play that hardball, it leaves higher-education executives
trucking to the bank on the proceeds of those loans.

~~~
tonysdg
To my understanding, the problem is that when the lenders WERE calling
colleges, it wasn't to say "this kid wants to borrow 100k in loans", it was to
say "here's 50k in goodies, send your students to us for loans!". Hence the
controversies over kickbacks and the like.

------
duncan-donuts
I wonder how educators are handling this. When I was set to graduate high
school a decade ago we spent a portion of our home room hour planning our
collegiate futures. I think I may have been the exception -- where my advisor
stressed that we had to do something. Too often I hear that, "college is the
only option." I personally never experienced that, but I wonder if educators
are stressing that 4 year universities aren't the only option, just one of the
many options. I think, with the lack of skilled workers, people can do really
well with a vocational degree in a trade. Then again, that type of work is
much more physically demanding than my job as a software engineer.

~~~
zjaffee
People neglect to realize that a master plumber can make just as much as a
software engineer should they have the skillset to be on the right kind of
projects.

~~~
cantankerous
FWIW: It's probably easier to become a software engineer than it is to become
a master plumber.

~~~
aaavl2821
For some people. Others just can't get their heads around programming

Though point taken about how hard it can be to get certified for some of those
trades

------
aloukissas
One statistic that's commonly left out of these discussions & articles is how
late parents save for college. According to Sallie Mae
([http://news.salliemae.com/publication/how-america-saves-
coll...](http://news.salliemae.com/publication/how-america-saves-
college-2016)), most families don't start saving before their oldest child
reaches 7 years old. This effectively robs 1/3 of the investment period's
growth potential.

Another one (as perhaps a consequence of the previous fact) is that the
average family ends up saving up ~$16K, while the average grad leaves colleges
with an average of ~37K in debt.

As most experts in the field agree, the key winning strategy is starting to
save as early as childbirth, even if it's a small amount.

~~~
Top19
Your point is interesting. That being said, ughh anyone who pushes this smacks
of neoliberalism. Wow now parents have to save from the birth of their child.

When will it start being considered “responsible” to save 10 years before a
child is born and if you don’t you’re irresponsible cuz you missed 10 years of
growth.

When will it start being considered “responsible” to save for your grandkids
college?

~~~
WkndTriathlete
I think the real point is how parents can help their children win the game
according to its current rules, not what post-secondary education finance
policy is or should be.

Personally, I think the economy would benefit from appropriate government-
financed post-secondary education for those students that show an aptitude for
it. However, I suspect that a test-based system similar to that employed in
Europe or elsewhere is politically untenable here ("I should have the freedom
to choose to go $336k* into debt at an elite photography school!")

(*NB: I wish I was making that number up but there was someone that actually
made this choice a number of years back.)

------
danaliv
I highly recommend Matthew Crawford's _Shop Class as Soulcraft_ , which
includes a discussion of how kids are railroaded into college even though it
makes no sense for everyone to go. The destruction of vocational schools is a
real problem here. And in a world where any work that doesn't require physical
presence is ripe for offshoring, the loss of the vocations is problematic
indeed.

You can read the essay that started the book here:
[http://www.thenewatlantis.com/publications/shop-class-as-
sou...](http://www.thenewatlantis.com/publications/shop-class-as-soulcraft)

~~~
stochastic_monk
Reminds me of this old SMBC Comic.[1] "The easier college gets, the dumber you
look for not having a degree."

Having hoops for discriminating simplifies hiring and other decisions. Simple
ones like these are going to stick around as long as people think degrees
matter more than how a person produces.

[1] [https://www.smbc-
comics.com/index.php?db=comics&id=2729#comi...](https://www.smbc-
comics.com/index.php?db=comics&id=2729#comic)

------
CalChris
The fundamental problem here is that student loans have been declared a
_special_ debt not dischargeable through bankruptcy. At the same time, these
loans can be Federally guaranteed through FFEL. This leads to $100K cooking
schools promising to turn a recent dischargee from the Army into a pro-chef,
sign here, here and here.

If student loans were subject to bankruptcy banks would be more careful.
Instead we have a political system making bank from banks for ruining young
people's lives.

Any libertarians care to wade in here and tell me this is a small price to pay
for freedom?

~~~
OliverJones
Exactly. The lenders don't have enough skin in the game to make it worth
negotiating with the colleges / universities to keep tuition down. The article
mentions "loose student loan underwriting standards". That means the
underwriters don't call the colleges on the carpet about grossly overpriced
degree programs. So tuition spirals.

~~~
CalChris
I blame the lenders as well but I get there differently.

With or without the threat of lendee bankruptcy, it isn’t in the interests of
lenders to negotiate lower tuition. This doesn’t happen with houses. It’d
never happen with tuition.

Instead this is just free money for the banks. Since it guaranteed they risk
nothing.

Your _no skin in the game_ is their lack of risk. I blame the lenders because
they lobbied for this gift.

------
ransom1538
Easy solution. _LET the students default._ Seriously, if students could
default like they can buying a used car there would be lower tuition and
better attention to whom you give a loan to.

~~~
ajross
No offense, but that's ridiculous. There's money owed here. The schools
already got it, the banks are owed it. Someone needs to make that right, you
can't just "forgive" debt without some party taking a huge hit. Which one?

I'm guessing the developed version of your proposal would be for the
government to step in and make the payments to the banks. But.. that's
ridiculous. If you want to throw around government money to reduce education
burden, what you do is pay the schools directly by offering grants. You don't
prop up the imbalanced loan system by making loan payments with tax dollars.

~~~
mdorazio
I think you misunderstood. He/she said "default", not "forgive". As in, the
people with the loans walk away from them and take the massive credit hit that
comes with that, likely by filing for bankruptcy. The issue is that student
loans are uniquely sticky, so a person with student loans today basically
can't get out of them.

If it were possible, many people would choose to file for bankruptcy to
release the loans, take the temporary hit, and start again. This would burn
the treasury and banks who hold the loans, just like they get burned when they
loan mortgage money to people who can't afford one and later default on it.

~~~
ajross
Bankruptcy is yet another thing though. And I agree, by the way, the laws as
written are unfair and don't help anyone.

But bankruptcy isn't the ability to "walk away" from a loan. You literally
need to be bankrupt: you can't hold any other assets beyond the statutory
minums. Most people suffering with student debt aren't literally destitute
(obviously some are), they just have a cash flow problem. Bankruptcy won't
help them.

~~~
8note
I doubt that Drumpf was ever destitute when declaring bankruptcy.

Students get off easy as far as assets go. they don't have any yet, so there's
nothing to get rid of.

~~~
linkregister
You probably get this a lot, but here is one more data point.

Almost nobody who uses the term "Drumpf" is taken seriously. It's the 2017
equivalent of using M$ to refer to Microsoft. It's a way to immediately get
your opinion written off.

------
howard941
These should be low yield non junk but for some reason they're high risk/high
yield in spite of the principle being backed by the full faith and credit of
the US Govt. and bankruptcy non-dischargability. There's a strange disconnect
between the risk and the yield.

~~~
stevenwoo
This non-dischargeability of the student loan changes made by Congress baffles
me and strikes me as terribly unfair, and I'll never be using a student loan.

I guess we should follow the money and ask whom does the bankruptcy non-
dischargeability benefit?

~~~
rhino369
It benefits people who can pay back students loans and people who need
students loans to make extra money.

Before loans were non-dischargeable, you'd have students run up their debts
and declare bankruptcy. This sort of fraudulent activity had no consequences
since student loans are unsecured.

The result was that the private student loan market was small. Nobody was
going to loan money they'd never get paid back.

~~~
stevenwoo
Doesn't it also benefit universities who can then keep upping costs because
the loans will rise to match the costs no matter what?

Prior to the change was there a shortage of student loans (with a lot less
people choosing university) or did we just shift the loan balance from the
government to private industry?

------
code4tee
A lot of that debt is funding bloated administrative costs and other overhead
that doesn’t directly make for a “better” education, just a “more expensive”
education. Fixing this problem starts with getting costs at universities under
control.

Taking on debt to fund education isn’t inherently bad, but having that debt
back a bloated higher education sector is terrible.

~~~
wmeredith
As I posted elsewhere in this thread...

The majority cost increase (65%)[1] of higher education in the US over the
last couple decades is due to a systematic defunding of government support for
schools. It would be nice if we started investing in our country's education
again. [1]2015 Study by the New York Federal Reserve -
[https://www.newyorkfed.org/medialibrary/media/research/staff...](https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr733.pdf)

~~~
sorrymate
Unfortunately this is only the start. It seems Republicans have started a war
on education.

"a majority (58%) of Republicans say colleges and universities are having a
negative effect on the way things are going in the country"

We should be continuing to encourage higher education in addition to trade
schools. Bachelor Degree holders, on average, earn a million dollars more
during their life time than those who only have a high school diploma. Even if
you are accounting for lost earning potential, cost of tuition, supplies
etc... your still talking about hundreds of thousands of dollars more earned
than if you were to not achieve a degree.

Pew Research Poll [http://www.people-press.org/2017/07/10/sharp-partisan-
divisi...](http://www.people-press.org/2017/07/10/sharp-partisan-divisions-in-
views-of-national-institutions/)

Figure 2A Lifetime Net Earnings by Education
[https://trends.collegeboard.org/sites/default/files/educatio...](https://trends.collegeboard.org/sites/default/files/education-
pays-2016-full-report.pdf)

Figure 1 Lifetime Earnings by Education
[https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...](https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/collegepayoff.pdf)

~~~
robocat
> hundreds of thousands of dollars more earned than if you were to not achieve
> a degree.

But will that still hold as the percentage of people getting degrees rises?

In the limit everyone gets a degree, and the average wage for a degree holder
is the average wage.

------
monkseal
What feels so deceptive about the panic around student debt is the devil is
the details. I think if you drill in median student loan debt for an
UNDERGRADUATE is like $12k. That's less than a car loan and we don't have a
panic about that.

Most of the debt is for graduate, PHDs, law and MDs or undergrads who attend
expensive private universities. These people should make more money from that
investment.

My point is overall average student loan debt or the overall outstanding
amount owed is horrible way to look at it and talk about it. It creates an
unnecessary panic.

~~~
lazypenguin
It's also deceptive to downplay the situation by only looking at the debt in
students' names. Many parents take out loans on behalf of their children. E.g.
Parent Plus Loans:
[https://en.wikipedia.org/wiki/PLUS_Loan](https://en.wikipedia.org/wiki/PLUS_Loan)

~~~
kpwagner
Well over half of my student loan balance is in parent loans. I pay my parents
monthly to pay for the loan payment. My younger two siblings are oblivious to
what kind of debt they have. Now, my parents are a few years away from
retirement--at least they hope--and they will be burdened with paying my
siblings student loan debt on a fixed income.

------
mschip
The current tax reform discussions look to make it even worse be removing some
of the current breaks for students paying off debt [1]. There was some talk
last summer about extending the current $5200 tuition exemption as an employer
benefit to include tuition repayment [2]. I guess that's now off the table. I
haven't seen the math anywhere, but it sure seems like it would be cheaper to
give tax breaks for paying off loans then to allow them to be defaulted on on
forgiven in the case of government workers.

[1] [http://money.cnn.com/2017/11/15/pf/college/tax-reform-
paying...](http://money.cnn.com/2017/11/15/pf/college/tax-reform-paying-for-
college/index.html) [2] [https://www.cnbc.com/2017/08/17/student-loan-debt-
why-employ...](https://www.cnbc.com/2017/08/17/student-loan-debt-why-
employers-may-want-to-help-pay-off-college-loans.html)

------
pobo
We just hired a self made developer who doesn't have a college degree. Oh Boy,
everybody think he is some sort of code clown. College is nothing, but humans
like to judge based on vanity values.

------
grandalf
There are two relevant things to realize about this:

1) Student debt is _much_ different than normal consumer debt in that it is
not dischargeable if the holder declares bankruptcy.

2) For years, many politicians have been calling for the massive increases in
the issuance of student loans, presenting the issue as though the only hope
for many people to obtain education is to take on massive amounts of debt.

If there weren't lots of bankers, politicians, and lobbyists getting rich off
of this bubble, it might be possible to believe that they genuinely think that
saddling teenagers with massive amounts of non-dischargeable debt was a good
thing for society.

Student loans are the biggest handout to the financial services industry in
decades, and both parties are reaping the spoils of these deals.

~~~
cinquemb
Only reason why I think there is much press about this is because it would
make sense to me that increasing delinquency/amount of student loans will
bleed into mortgage asset valuations and feed a long term bearish (inflation-
adjusted) trend[0] (after all, these debts cannot be discharged[1] and
negatively affect credit when not serviced, which factors into getting
approved for mortgages, even after setting aside how stagnant wages have been
for decades on avg), and I'm not too sure how banks would feel that if people
are no longer opting to taking out 30year + mortgages that I'm sure compromise
a significant part of their "assets".

[0]
[https://fred.stlouisfed.org/series/ASHMA](https://fred.stlouisfed.org/series/ASHMA)

[1] Well outside of some political student loan debt jubilee that will
probably leave a lot of universities holding the bag, not to mention other
private entities that have attached themselves to the student loan system.

------
Overtonwindow
I majored in PolySci, so definitely non-stem. It was tough at first to manage
my student loans, but with experience and pay increase, it got better until it
was paid off. I knew going into this field that it's not always lucrative, and
I would have to follow specific pathways to make a good living. I worry that
universities don't teach students the true value of their degrees, and
emphasize enough the average and typical salary expectations. There are too
many college graduates saddled with enormous debt, but lacking a degree that
will allow them to earn enough to pay it back, let alone develop a successful,
and rewarding career.

------
jernfrost
Good thing Trump and the republicans are tackling the problem then by giving
students a tax break, oh wait... they gave them a tax hike. I guess those poor
rich people in the US who have gotten the bulk of wealth creation since the
80s, where in desperate need of some tax cuts.

Got to give it to the republicans. Get poor people focused on muslims,
Mexicans, blacks, gays etc while they let the rich empty their pockets.

A winning formula. You would have thought people had caught on to it by now.

------
GoRudy
How come no one is talking about the actual costs of schools? Why are they so
expensive? Perhaps bloated budgets, systemic mismanagement across the
country...?

~~~
CaptSpify
The thing that everyone hates the most about schools is the administration.
The most expensive part of schools is the administration.

Seems pretty obvious to me which part of schools needs slimming down.

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jswizzy
With a little planing you can get a college education without putting yourself
in debt. I did it. Sure you might have to go to community college for the
first two years and eat a lot of ramen noddles but it's more than possible
with all the grants, scholarships, and employer matching. Most people have no
will power and just take the easy way out not thinking about the long term
debt they will have.

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EasyTiger_
Is it just me or are Bloomberg and WashPo really over-represented on this
site?

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posterboy
The headline is sensational. The mere use of the word junk, although quite a
few places apart, incures a mental relation of student loans to junk. The
error here is that comparison between debt and market are a type mismatch and
creativity is needed to resolve the actual meaning.

Just look at the top comment concuring, "There is definitely an education
bubble".

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LeoJiWoo
We need to cut student loans,and at the same time force tuition back down
(probably by putting federal and state pressure on them by threatening to cut
grants or taxing them higher).

Universities need to return to their core purpose teaching young minds,
furthering science, or preparing them for jobs.

Instead of the corporate universities drowning students in debt.

~~~
Overtonwindow
The basketball coach at my alma matter is paid double what the university
president makes. I think that's wrong. I am deeply in the minority, but I
think universities should focus less money on athletics, and more on
academics.

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taobility
The root problem here isn't US college charged too much for tuition? Education
is a basic human right, and everyone should have chance to be educated. So the
government should subsidize the education, including the undergraduate
education.

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fixermark
That's at least one thing junk bonds and college degrees have in common.

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c141charlie
This fiasco is mostly on the government. The unlimited supply of student loan
$ has enabled universities to not have to control costs like they would have
had to if these $ were not as freely available.

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etr-strike
When the next recession strikes, interest rates have no place to go but into
negative territory. The rates will be either explicitly negative, or
effectively negative (inflation higher than interest rates).

When that happens, bitcoin will be the only safe haven in the world to protect
your wealth. The bubble people will be changing their tune very quick.

~~~
raphaelj
What a wonderful idea, putting your savings in an highly volatile currency!
Have you ever heard about people buying gold to store value?

~~~
etr-strike
The gold market can be manipulated as most people never take physical delivery
of gold. There's no mechanism to audit everyone's holdings. Additionally, I'm
of the opinion volatility will decrease as bitcoin matures. Do you really
expect a currency bootstrapped from the ground up to not be volatile in its
uptake?

We'll see if you're singing the same tune when you're finally confronted with
the certain depreciation of your USD holdings. (Will you still reject bitcoin
when USD is depreciating at a rate of 5% per year?)

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thescriptkiddie
Easy solution: Make college free and forgive the student loans.

~~~
kdamken
So then who pays for the money that was already borrowed?

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PatientTrades
There is plenty of blame to go around here. However a major cause of this has
been the push by the left that college is the only path to success. Trade and
vocational schools as well as military service are all great options for young
adults who may not know exactly what they want to do with their life right
away. Spending 4 years of your life taking on debt, simply because society
tells you college is the path to success is wrong. Also, colleges themselves
need to be held accountable here. Most universities are sitting on billions in
tax free endowments and not using that money in useful ways. How about use
some of that money to help offset some of these debts?

~~~
lawlessone
>as well as military service are all great options for young adults

Getting shot at for an education doesn't seem that great. Better off just
moving to a better country.

~~~
latencyloser
Anecdotal, but my mother was a mechanic, my uncle a cryptographer, another
uncle was some type of police on base, my cousin is a drone pilot and just
sits in an office like building despite technically being involved in combat I
suppose. Several former colleagues mostly did admin-type work while enlisted.
The last person I know to have actually seen combat was my grandfather in
Korea--but he knew what he signed up for and it was fairly deliberate at the
time, he had wanted to be like his cousin that had fought on Iwo Jima years
prior who was also a volunteer. All used their GI bill to get an education.

My point being, there's tons of military jobs that don't involve violence. For
each job that does require violence, dozens more auxiliary positions are
required to support that job.

~~~
runako
>> my mother was a mechanic, my uncle a cryptographer, another uncle was some
type of police on base, my cousin is a drone pilot

They have been fortunate. Obviously, in some conflicts, some people in all of
those roles end up in postings where they are in hazardous areas. (Also: IIRC
drone pilots stationed far from conflict still experience combat-induced
PTSD.)

The other feature of the armed services is that in general, once you enlist
you don't always get to choose your posting. It's great that some people get
to choose plum jobs away from war zones, but (most?) others don't (and this
can change for anyone in the military, at any time). A defining feature of a
military is orders, and following them.

Military careers can be rewarding for some people. But just as it's wrong to
say college is for everyone, it's not correct to suggest that one can embark
on a military career without adding additional personal safety risk.

