
Soaring Student Debt Prompts Calls for Relief - jstreebin
http://www.wsj.com/articles/soaring-student-debt-prompts-calls-for-relief-1473759003?mod=pls_whats_news_us_business_f
======
morgante
Am I the only one who hates the notion of being forced to pay for other
people's bad financial decisions?

I made the choice to go to a slightly less prestigious school so I wouldn't
have to go into debt for college. I also worked all through college to pay for
my expenses.

Should I now be punished for that decision? Why should we make people's
financial mistakes consequence-free?

I think the government should get out of the student loan industry entirely:
stop subsidizing them and making interest rates a political issue. Let the
market signal which degrees are valuable and which aren't. But also make them
dischargeable in bankruptcy. At least then there would be a _consequence_ for
people deciding to take out expensive loans for education.

~~~
jonahrd
You may be right that it's a poor financial decision, but I still hope to one
day live in a country where people can pursue education in any subject matter
(not just STEM/other money makers) for the pure purpose of educational
fulfillment. That can only be done with a system that helps pay for education
instead of letting the market decide which degrees are most valuable in terms
of pure capitalistic measures

~~~
outside1234
Let me know when you find the hole in the ground that is shooting money up
into the air that enables us to have luxuries like this.

Frankly, we have thousands of other problems, highlighted by basic health
care, that we should probably prioritize first.

~~~
white-flame
Note that this is literal in some cases. Norway, being one of the major neo-
socialist successes, is also a major oil exporter in the region. They have
holes in the ground shooting money up that help enable social programs.

~~~
friendlygrammar
>neo-socialist

This isn't a word and Norway isn't socialist.

~~~
the_watcher
It has a Wikipedia page, a Wiktionary page, and copious references to it by
well known publications.

~~~
friendlygrammar
[https://en.wikipedia.org/wiki/Neosocialism](https://en.wikipedia.org/wiki/Neosocialism)

Clearly the two "well known" publications (the most preeminent Marxist
journals) listed in that wikipedia article and the fact that the wikipedia
article's definition of neo socialism has absolutely nothing to do with
Norways economic model point to the fact that the parent comment definitely
didn't make up that word out of thin air.

Norway is not socialist, neosocialist, or whatever dumb made up "socialism"
you people try to come up with.

Also something having a wiki page on any website and being used in a couple of
journals does not make something a term/word. It only indicates that someone
wants it to be a term/word.

~~~
thatcat
It's interesting that Norway is ranked first on the democracy index, yet most
Americans view it's policies as 'socialist'.

~~~
friendlygrammar
The democracy index is bs and most Americans don't even know what the word
socialist means. So what is your point because you just stated two completely
unrelated facts to what is currently being discussed.

~~~
thatcat
My point was that some core values of democracy (equality and justice) are
incorrectly perceived as 'socialist' in current American linguistic usage. If
this were corrected, it is much more likely that American's would support a
more democratic, Norwegian governance model.

------
icehawk219
Part of the problem is that the last few generations have been told the same
thing: blue collar jobs aren't "good" jobs. You need to go to college so you
can get a "good" job sitting at a desk because those other jobs are below you.
If you take one of those blue collar jobs then you've failed and aren't
"achieving your potential".

The grand irony in all of this is that the people who did go on to become
plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the
ones that are currently in huge demand. And over the next 20 - 30 years
they're the ones that aren't going to be automated (well ... mechanics may
become less relevant with electric cars rising in popularity). As much as I'd
love to automate remodeling my kitchen I'm not holding my breath on seeing it
happen any time soon.

~~~
joesmo
They aren't good jobs. The average salary for plumbers is around $50-55k or
so, right around the median for the US. Ok, but certainly not good. For
roofers and mechanics, you're significantly below the median around $35k,
basically in poverty especially if you have a family. I don't think
encouraging people away from education is the problem when salaries are this
low (poverty levels).

~~~
gnarcoregrizz
Hah, i bet its way higher. Anyone that owns their own business like that is
probably fudging their income numbers and writing off as much as they can. I
wouldn't be surprised if the income was 2-20x higher for established self
employed people.

~~~
joesmo
The owners are a minor percentage of the workers in these fields and therefore
what they make is irrelevant.

------
Retric
IMO, a large chunk of this would be resolved if federal loans where limited
based on tuition not just need. If a school charges more than ~20k/year then
students can't apply for federal loans and private loans become dischargeable.

Note: Some schools still charage less than 10k/year.
[http://www.usnews.com/education/best-colleges/the-short-
list...](http://www.usnews.com/education/best-colleges/the-short-list-
college/articles/2015/09/09/10-private-colleges-and-universities-with-highest-
lowest-sticker-prices)

Instead, schools have a huge incentive to raise tuition endlessly and family's
are stuck playing a zero sum reputation game.

~~~
dman
Who sets those limits and how are they enforced over time? What if colleges
find other ways to charge you money (accomodation, usage fees for equipment
etc).

~~~
zo1
It'll be a never-ending cat and mouse game deciding those limits. I'd say
artificially skewing the market is unsustainable and shouldn't be done.

~~~
Retric
Government backed loans already skew the market. Stopping them is an option.

------
NikolaeVarius
If this happens, do I get benefits on the debt I've already paid off? I would
be pretty pissed if I didn't. I worked my ass off to pay my loans.

~~~
dragthor
My wife and I worked and sacrificed to pay our student loans off. Struggle
builds character, appreciation, and gratitude.

~~~
Salgat
Same here! However, there is a line to draw on how much debt to put on
someone. I know people who have tuition payments cutting into their living
wages, affecting their ability to have even the basic necessities. There is
nothing good about this unnecessary suffering, having to worry if you will
still be able to afford a meal or a roof over your head.

~~~
morgante
> However, there is a line to draw on how much debt to put on someone.

Yes, people should decide how much debt they want to take on.

There are vast differences in the value of different degrees (cost and
earnings). It's people's responsibility to educate themselves. The rest of us
shouldn't have to subsidize someone's terrible decision to go into debt for a
degree in basket-weaving.

~~~
chumich1
Should we be expecting the average 17-year old to be make sound financial
decisions? Especially given how much money is involved.

~~~
morgante
Yes, we should. The average college freshman is 18 years old.

If you're old enough to drive a car, join the army, or be charged as an adult,
you're old enough to realize that paying tens of thousands of dollars for a
degree in musical theater isn't a great idea.

It's not rocket science. There are tons of resources online to help you figure
out which degrees and schools are good value.

~~~
chumich1
Yes, I agree it would be great if all 17/18 year-olds were able to sift
through the marketing BS of school PR departments and the societal pressures
to go to college, but it's increasingly obvious that they aren't making good
decisions. I'm not convinced free college is the best solution either, but it
seems you don't have much empathy for those without the same perception
ability as you. I thought I was making the right decision, but now I'm stuck
with 2k/mo for 8 years. I'm a bit bitter, yes...

------
dv_dt
Many generations before now either had access to very low or free tuitions
from public universities, or fairly low tuitions (relative to future earnings)
for private schools. Society subsidized those costs because it was an
excellent investment on future economic growth.

Somehow we got twisted into this track of thought that everything must be
individually accounted, and student became individually loaded with the debt
of their education. And because students as a group are in a poor bargaining
position for tuitions - the inflation of education costs skyrocketed. I think
they are the only life cost that gives healthcare a run for it's money in it's
ability to exceed (by multiples) both the growth in the economy, let alone the
growth in personal incomes. This cannot continue.

Plans to give student aid to income below a certain threshold will only serve
to further cause tuition inflation. It is a case where individual allocation
of cost/debts is much less efficient and harmful to our economy than social
allocation of the cost. I think we need to go back to funding public
universities out of direct state and federal budgets so that public
institutions can offer low or no tuitions. This way, gov't organizations with
the budget leverage, with much better visibility and oversight can keep costs
down at public universities. Low public university costs will also help cap
the excesses of private tuitions via market competition.

Unwinding the current mess of student debt is also a huge issue, but should be
undertaken too (but I'll leave that to some other time...)

~~~
karma_vaccum123
It really requires a rethinking of the need for college, how college should
work, and how it should be paid for.

Most undergraduates have no real need to obtain a gold-plated degree.
Undergraduate education in nearly all fields is well-understood and can be
delivered adequately at low cost. This is why foreign countries that aren't
wealthy still produce excellent undergrads. Only in the US do we believe you
really can't get educated unless you went to an expensive and/or elite school.

------
grej
Am I the only one that thinks this is actually fairly simple? Change the rules
to allow the loans to be discharged by standard bankruptcy and limit the
percentage of federal backing.

All of the sudden the banks will actually care about doing due diligence and
the likelihood of being paid back, instead of throwing money at everyone
knowing they have a federal taxpayer backstop.

You want a loan for $60k to major in electrical engineering at NC State?
Approved. You want us to loan you $225k to major in Sociology at Sarah
Lawrence University? Denied.

\-- note - not to disparage anyone who went to Sarah Lawrence University.
Chosen purely because it was listed as the most expensive private school

~~~
michaelbuddy
Yup and another benefit is it will not set as many of our youth into debt just
when they are enjoying freedom for the first time in their life.

------
tswartz
It's such a weight off of the shoulders to have paid my wife and my student
loans off a few months ago. Instead of the 20 or 30yr plan we put every extra
dollar towards it and paid it off in 3.5 years. It feels fantastic! It's
bizarre that student debt has become the norm and students who have
potentially low-earning majors such as History are still given similar amounts
of money from banks as a CS major.

~~~
NickM
> It's bizarre that student debt has become the norm and students who have
> potentially low-earning majors such as History are still given similar
> amounts of money from banks as a CS major.

Not so bizarre when you consider that student loans are very difficult to get
discharged via bankruptcy. The loan issuers don't need to worry so much about
whether you'll be able to pay it back or not, because it's more a question of
"when" than "if".

~~~
tswartz
Yeah that's a very good point. Interesting how they aren't easily discharged
via bankruptcy. I may have to do some research on how exactly that got put in
place and who was behind it...

~~~
maxerickson
It got put into place because they are high risk loans given out to people
that have nothing to secure them with.

If you could discharge them in bankruptcy, no one would offer them because
huge percentages of people would go ahead and do so.

~~~
lotsofpulp
Thereby naturally solving the problem. Schools won't be able to raise their
prices to pay for non academic garbage like stadiums and fancy buildings, they
won't have to compete with other schools accepting as many kids as possible to
make as much money as possible to keep up with the Joneses with their newest
toys.

And society can have a discussion again on how much it values educating its
populace.

~~~
maxerickson
I think you have to have that discussion before you stop offering student
loans. Nothing else would create the political room needed to do it...

------
jknoepfler
Having deliberately attended the University of Minnesota - Twin Cities rather
than an expensive private college, and having paid for it with a combination
of savings, work, and some loans which I paid off immediately after
graduating, I find the idea of loan relief morally reprehensible.

Some ideas to improve the "situation on the ground":

\- reduce the demand for college education

\- reduce the cost of attending college by providing better material support
for students in the form of affordable room and board.

\- reduce the cost of attending college by providing better public funding (by
an order of magnitude) for public universities, state schools, and community
colleges for students of proven ability (3rd/4th year students).

\- fail students who are wasting their money more quickly and aggressively.

\- make it easier to attend college part-time while working or while raising
kids (the idea of intensive four-year study with "Summer Breaks" is absurd in
the modern non-agrarian economy)

\- publish clear metrics on loan-repayment/income prospects after achieving a
4-year degree of <type> from <institution> with <gpa/perf metrics/etc> and use
these to gate loans (it is probably rational to take out loans to get a
philosophy degree from Harvard, it is probably not rational to take out loans
to get a philosophy degree from a random state school in Minnesota.

\- regulate predatory loan-lending even more aggressively.

\- offer insurance as part of loans to allow students to hedge against
catastrophic life/economic problems.

If you are a dead average intellect with dead average work-ethic and
ambitions, I see absolutely no reason to support your post-secondary education
beyond a year or so. That's throwing damp logs on a dead fire.

If you're a dead average intellect with dead average work-ethic and ambitions
and you take out tens of thousands of dollars in loans gambling on a future
that doesn't exist, I see no reason to treat you any differently than someone
who gambles and loses in the market.

~~~
x2398dh1
I also went to the University of Minnesota...same story. That being said - do
you remember those ads on daytime TV for ITT Technical Institute? Well it
turns out that they shut that school down last month, for basically being a
fraud school. The people who went to that school still owe federal debt. So,
it's more complicated than that. Also, by saying, "dead average intellect and
dead average work ethic," I think you're building a construct, which doesn't
really exist. There are all sorts of reasons why people may have chosen a
place like ITTTI - desperation, a family to support, lack of a proper
background information on what education can do, lack of information, etc. You
and I are lucky. Also, if you were presumably white, let's keep in mind that
there is a massive educational gap in the Twin Cities...the largest in the
nation. So we can get on our moral John Lockeian high horse about how
responsible we are, talk about property rights, etc, but there have been many
injustices perpetrated in all sorts of directions in the past, and we have a
duty as members of society to improve that society, by whatever means make the
most sense.

Source:
[https://en.wikipedia.org/wiki/ITT_Technical_Institute](https://en.wikipedia.org/wiki/ITT_Technical_Institute)

~~~
jknoepfler
I think you're absolutely right. I was trying to craft my suggestions in such
a way that we discourage fraudulent lending and provide (publicly, not
privately) insurance against not being able to pay future education debts
because of circumstances outside our control.

I want to increase the odds that someone who is willing and able can work
their way to where they want to be, and decrease the odds that fortune
dictates who wins and who loses.

(I vehemently support leveling the funding playing field for primary and
secondary public schools in Minnesota and dramatically increasing funding for
schools in poorer neighborhoods; also providing credits for child care,
preschool, public transportation, and safer streets. What I object to is the
idea that someone should go to Macalester College, get a degree in Psychology
with a C+ average, then complain because they aren't handed a job with a wage
high enough to cover $100k in student loans).

------
readhn
The only recent grads (within 5 years) with student debt in my circles who
could afford and have bought a house recently are:

1\. Doctor & Finance couple with combined income $400,000+/year 2\. Pharmacist
& Finance couple with combined income $200,000+/year 3\. Science Research &
Quant(finance) couple with combined income $300,000+/year

Interestingly - all have finance or medical field/science exposure..

The rest are renting forever paying of debt with no plans to buy soon (we are
in hot real estate area).

I dont see who will support real estate prices going forward.

~~~
phil21
While I agree with your sentiment in general, do you really think it's normal
to be in a house 5 years after graduating? That's still "first steps of my
career" phase. Completely unheard of even when I was growing up where I'm from
- you would have been seen as doing _very_ well to own a home in your
mid/late-20's.

~~~
flubert
Anyone have actual stats on homeownership vs. age? Here's one I was able to
dig up, maybe someone's got something better. This seems to say that 21% of
people under 25 own a house, and 32% of 25-29's own a house.

[http://thereformedbroker.com/wp-
content/uploads/2015/03/Scre...](http://thereformedbroker.com/wp-
content/uploads/2015/03/Screen-Shot-2015-03-11-at-12.02.42-PM.png)

~~~
nandemo
That can't be right. Perhaps it includes people who live in a house owned by
their family?

------
ctvo
You walked uphill through snow to get to your current position, with grit and
determination and those freeloaders, who majored in THEATER or LITERATURE,
spending their college days socializing while you studied for difficult
engineering exams shouldn't be allowed to escape without paying for their
crime of living in a country with a broken higher education system.

Eerily similar narrative to any other welfare debate in the US.

------
rvail2
How about colleges and universities stop price gauging the population? Or,
eliminate student loans, so the population will not be able to afford their
ridiculous rates and force the cost down.

~~~
boodm
>eliminate student loans

This will do nothing more than favor the rich and further suppress the poor.

------
bradleyjg
I'd like to see something similar to the risk retention rule that was supposed
to be put in place for mortgages by Dodd-Frank.* Colleges should only get 80
or 90 cents on the dollar from student loans and have to wait for the rest
until the loans are repaid (if at all). Perhaps a sliding scale could be used
depending on the amount borrowed, with more expensive schools bearing more of
the risk.

* I say supposed to be because the rule was swallowed by an exception during the regulatory process and now only plays a minor role.

------
maxerickson
The typical _new graduate_ owes less than $40,000.

The great majority of student debt holders owe less than $30,000.

I'd like to see more direct funding for schools and a shift of federal support
to competitive grants, but those aren't huge numbers when you look at a degree
bringing in hundreds of thousands of extra dollars over a career.

Grants aren't as egalitarian as giving anyone who wants it a loan, but they
can be expected to distort the market less (because schools have to compete
for people who don't get them).

~~~
dv_dt
They may not seem that large, but I suspect that compounding interest effects
and the fact that the debt is there very early in peoples lifetimes make them
very heavily weighted in terms of the effects on lives and economies.

~~~
maxerickson
The interest compounding on a $30,000-40,000 loan wouldn't really be a student
loan issue, it would be a job issue.

The interest on the loan sizes I've mentioned is typically going to be less
than $4000 a year, so if they pay $6000 a year the loan will go away quite
quickly. That's a substantial amount of after tax income for a lot of jobs,
but students should be looking at the debt in those sort of terms, that it is
going to be one of their main payments for a while.

~~~
dv_dt
Not the interest of the student loan, the 'interest' of the opportunity cost
of paying $4000-$6000 year instead of some other use (eg personal or
retirement savings, or saving for a house). There is a huge forward cost in
their financial quality of life because of these early debt payments.

------
h4nkoslo
If there is going to be any "debt relief", it should be accomplished by taxing
the schools & administrations that have immensely benefitted over the past 60
years from the massive subsidies granted to higher ed.

This just shows how incredibly stupid the right wing is in the US. They could
be using this as a cudgel to punish their intellectual opponents in the
universities (entirely justified, since their claims to be increasing the
human capital of their students in an economically productive way were
evidently false), and simultaneously break down a barrier used to exclude a
large number of their constituents (non-college-educated whites) from white
collar employment.

Instead it looks like they might be setting up to cut another check and
further solidify the role of colleges as ideologically hostile gatekeepers to
decent employment.

------
matt_wulfeck
I'm not sure why it has to be forgiveness. They should be be able to file for
bankruptcy just the same as if it was some other bad investment. All
investments should come with risks and rewards and be "priced" appropriately.

This will have a _drastic_ affect on the interest rate of student loans, but
perhaps a turn towards normal will be good for us. As of right now the
government gaurantees it 100% -- which is to say YOU guarantee it!

------
gregatragenet3
Why is shelling out six figures to go to college even a thing? Any of the
knowledge obtainable through a college course is available free on the
internet. Is it having the accountability of grades and adult supervision?
60k/yr/student seems like a lot of mark up for repackaging knowledge which is
free in a format consumable by the average high school grad. This this is a
market waiting to get disrupted.

~~~
branchless
Leaving aside whether degrees add value or not, the perception is that they do
and it absolves hiring managers some responsibility.

If you work for a big company and you have an ivy league grad and a guy from a
conference you met who seems promising do you:

a) hire the ivy guy and if he is crap mumble about youth today b) hire the
random guy who screws up and everyone blames you ?

Both get hired at low wages as starters, you might save a bit on the random
person but not _that_ much. Plus if he is good he'll want a rise.

Large corporations are about sitting nice and still and not messing up.

I'm not sure it's the market, it's the consumers of the product in our world
where managing perception in large companies which often have monopolies is
more important that cranking stuff out. Not always, but often.

~~~
gregatragenet3
Option 3, (which may not be a option at F500 Co) is bring him on as a
contractor and if he performs convert him to perm.

A college degree is this decades version of "nobody got fired for buying IBM"

------
surfmike
I wish we could switch to a system like Australia. Graduates take on no debt
but have to pay a few extra percentage points of taxes after.

------
shanacarp
I'm reminded of the U of C's Aims of Education Address when this discussion
comes up.

EG: [https://aims.uchicago.edu/node/83](https://aims.uchicago.edu/node/83)

I tend to think that many things that are now in college degree programs are
actually things that should be in trade programs - we've turned everything
into a degree, and in the process, stopped realizing what the value of a
degree is and/or what the purpose of a theory driven/liberal arts education
is.

(TL:DR if you don't end up reading the link - to think, to create the ability
to teach yourself, to encounter new ideas and figure out which ones are hot
air and which ones are not. To learn how to create good new ideas for
yourself! To become a better human being and citizen in order to better
participate in this world)

If we separated out the trade school aspect, well, it becomes very hard to
value an education in the traditional degree/liberal arts sense - and it
becomes easier to tell what's the value of that immediate trade school diploma
by market forces. In that, then the government could apply a limit on loans to
what is very knowable (market forces) and apply some other metric because of
the public good gained by aiming towards education in general

~~~
hyperion2010
Was there in person for that address (was that 10 years ago...). In my view if
you go to college today and don't get a real liberal education (distribution
requirements!) then you have waisted your time and probably your money.

~~~
shanacarp
you're lucky. My year didn't have nearly as entertaining a speech.

I still think his points hold (as do many of the speeches points, most of
which in some ways are similar).

However, attaching liberal education to everything may or may not be a good
idea - and with the trade-ism of college, liberal education is sort of
conceptually odd

------
overcast
With a year left on my massive loan, I can not wait. I can't imagine students
these days coming out, and not having the luxury of being picked up right out
of school to a well paying job. And god forbid they chose a less "desirable"
concentration.

------
davidf18
Thanks to the new health care laws, states must (or will be) spending more
money on Medicaid which takes money away from public higher education. As it
is, the boomer generation is funding a far lower proportion of the state
public universities than their parents' generation did for them, which is
really unfair.

It is because of increased Medicaid costs and also because boomers aren't
financing the proportion of state higher education that their parents did that
many of today's young have higher student debt than it the past.

Doctors don't haven't to incur debt in medical school if they spend four years
in the military as doctors.

~~~
Broken_Hippo
That first point i'm not sure if it is true or not: My understanding was that
the federal government was going to pay most of the money. Besides, if we as
voters thought a little more and demanded better funding for schools - and
say, cutting money spent on unwanted or unneeded military equipment - we could
get it.

Your option for doctors to not incur medical debt is very hopeful. First, I
doubt the military has enough positions for all the doctors to fill, and I
doubt all doctors would be fit enough to qualify for military service. On top
of that, that is 4-6 years longer before they can actually practice.

There should be a way that is much better than sending potential doctors and
surgeons off to war. For instance, forgive loans to folks that work in general
family practice for 7 or 8 years, less if they move and practice in an area
that is in a high demand (poverty stricken area) - with the disclaimer that
they must take all forms of government backed insurance.

------
srhdmdndtjeyn
Since when did HN turn into an objectivist hellhole? It's like Ayn Rand
herself is trying to convince me to harm others for my own benefit.

------
talmand
Ah yes, the old "let's attempt to solve a problem by introducing more of what
caused the problem in the first place" solution.

------
hasbroslasher
Armchair marxist opinion: forgive the students debt, make the administrators
pay more taxes.

In all seriousness, though, there is a real sense in which students who go to
college are being scammed, in this sense I pity them. Their money isn't going
to better professors, who are still paid a pittance for a lifetime of devotion
to their field, even in the sciences. It's going to the administrators, whose
motives are not actually education, but gaming the already broken system of
academia.

In my eyes, this makes the case for socialized higher-ed even stronger. A
system which incurs financial ills so great is , by definition, a market
failure, one so vast that it begs the question why it is a market in the first
place. It'd be much more prudent to pay for students educations if they show
potential for success in the first place, rather than financing many of my
college peers who now work in coffee shops as compensation for their $200k
Anthropology degree. No system built on craftily selling economically useless
degrees as an "investment in one's future" will actually provide any benefit
to society.

So what's to be done? First, Provide students with scholarships, or the like,
to schools which limit administrative expenditures or those whose
administrative expenses pale in comparison to the money they spend on
qualified professors. Second, disqualify schools which do not produce a
threshold percentage of net-gain employees - if a school has a track record of
pumping out angsty coffee shop Lit majors, it has no business in taking
taxpayer dollars. Last, provide outlets for students who aren't destined for a
career in the sciences. Maybe trade schools that offer classes in academics
alongside chances to become electricians or plumbers, both careers face
workforce due to people's obsession with reading hundred-year-old books
instead of doing something meaningful with their time.

Rant complete

------
tuna-piano
Who should pay for college?

Should it be the individual receiving the education (either at present, or in
the future in the form of loans), or other people? Should people who don't go
to college be forced to pay for education of those who do?

Should we further tell students not to care what price colleges charge them?
If we forgive debt, we're telling students to go to a school regardless of the
costs, and telling schools to charge whatever they want.

We're then forcing non-college-educated plumbers to pay (through the tax
system) for the engineers college education.

This seems like a terrible idea.

I also see a huge problem with lumping all education together. There are some
colleges, degrees and people where college can be considered a wise
investment. That is, the expected value of the degree is more than the cost.
There are other times when it appears college is a consumption expense, like
just buying a four year vacation or a luxury car.

When someone graduates college with the same productive capacity they had
before college, but now with debt, that's sad to me. Working at $10 an hour in
a coffee shop isn't that bad. Working at $10 an hour with $50k in debt is very
bad. Many times people were just 18 year olds who were handed a blank check
(loan) for college, and didn't know better. But there was no checks or
balances on this ignorant 18 year old, as the lenders dont care that the
student was not increasing their productive capacity.

What we need is a system with no lender guarantees, with potential for percent
of income repayment (earning equity), and have it be unsecured like other
forms of debt. This will make lenders function properly, and only give loans
to those who it believes are improving their human potential at college- and
for whom college isn't the equivalent as buying a $100k luxury car.

------
twblalock
There are a few things that the government could do to help, without blanket
loan forgiveness:

1\. Allow people to pay off their loans with pre-tax dollars, just like 401k
investments.

2\. Cap interest rates. The high rates are a big problem for people with large
balances. The interest rates are a little lower now than the used to be --
6.8% was standard for Federal loans for many years, and private loans are even
higher.

3\. Limit the amount that can be borrowed in the first place. Colleges have
been raising tuition because they know students will be able to get the money.
Apparently there are already limits, but I know people with over $100k in debt
for a bachelor's degree, so clearly the limits aren't low enough. Limit what
students will borrow, and you limit what they can pay -- tuition increases
will become a lot harder to justify.

4\. Make it easier to discharge loans in bankruptcy. This will also reduce
lending, which is actually a good thing.

------
Mc_Big_G
America's student loan policy for the last 20 years: Reward bad decisions,
punish hard work and responsibility.

~~~
h4nkoslo
America's general policy for the last 80 years on any particular issue you can
name.

------
bcheung
Society has an over emphasis on going to college. So much education is
available for free in the Internet age.

s/college/youtube/g

Also, bring back the apprenticeships. Why not let someone learn for free or
even get paid a small amount? It's so much better than them going into debt.

College is such a racket.

------
readhn
My call is that we will have a student debt relief fund when enough government
folks get scared (within 5 years my guess). So basically the printing press
will turn on and we will bail out students. Watch out for all the controversy
that's going to come with this bail out.

------
h4nkoslo
The two proposals they explicitly call out, allowing employers to subsidize
the debt, and allowing farmers to write off their debts, are the exact kind of
special carve-outs that caused the damn problem in the first place (the
genesis being the non-dischargability & government guarantee of education
debts, which was an enormous give-away to the higher ed sector).

This is eerily reminiscent of the pre-revolution French or late Soviet Union
trying to keep their spinning plates of state obligations, onerous taxes, and
corrupt subsidies aloft.

------
clifanatic
I'm going to be so pissed off if a whole generation of students gets their
students loans forgiven two decades after I paid mine off.

~~~
n72
So, let's see, if you were a black person in 1863 who'd been enslaved but
bought your freedom prior to the Emacipation Proclamation, you'd resent the
Emancipation Proclamation since from then on other wouldn't have to buy their
freedom?

~~~
clifanatic
Wow, did you seriously just compare your student loan debts that you entered
into freely and of your own will to slavery?

~~~
n72
Nope!

------
robohamburger
I got a 2-year degree from a community college and then went to a cheaper
university for CS. I would recommend it, especially if your grades are not the
best or you don't have a ton of money.

My wife, on the other hand, is in another boat. She is studying vet med and
has a pile of debt, and will likely be paying off her loans for most of her
career.

------
segmondy
This should be framed as call to increase tax on everyone for student debt
relief. I wonder if people will be happy then.

------
test6554
They should probably make general core classes free, but make students pay for
anything specialized and solely related to their major. This would strike a
balance between having an educated population, and having education focus on
subjects that are in-demand and beneficial to society.

------
throwawy91316
The solution seems simple: a few years of public service (infrastructure
repair, maintaining parks, teaching in inner-city schools, military, etc.) in
exchange for loan forgiveness.

Our taxes are the dues we pay to live in a civil society, but civic
responsibility doesn't end there.

------
krinchan
College is just all sorts of disgusting in the US right now. I support relief,
but I'm sure that we're going to have to see a massive crash in the system
before anything happens.

I managed to go to a small public university after the tuition hike but
_before_ the Great Fees Gouging. I'd probably have escaped with $5,000 less in
debt if I had started with my state's (Georgia's Hope) merit based scholarship
instead of having to build up 10 semester hours totally on Federal
UnSubsidized Loans the first year.

At that point, used Ebay books could run you well past $1,000 a semester. Hope
only gave you a $150 for books. Hope also did not cover fees. Those _started_
at about $800 every semester when I enrolled. My 4th year, they had hit well
past $2,500 per semester. Included in that was $150 to build a new student
recreation center that I would never use since it wasn't even being built yet.

The amount of hustle I had to do just to escape that school with minimal debt
was insane. My overloaded schedule (because semester hours past 12 didn't
increase your tuition or fees) meant I needed a job that let me do study or
homework while working. So typical service jobs off-campus were out of the
question. My year basically was applying for summer retail jobs, lying my face
off during the interview that I was going to stay on past the summer, and then
of course quitting. I'm basically black-listed from several retailers for
quitting for this reason. Christmas was always easier because those jobs are
naturally seasonal.

During school, I'd tutor various core classes under the table. At my
university, this was considered quasi-against-the-rules. Tutors were supposed
to go through the Student Support Center. They'd pay you hourly minimum wage
and set you up with other students for free. Tutors who were students caught
not going this route were usually sanctioned by the university and threatened
with all sorts of administrative punishments.

Naturally, this was unacceptable to tutors, so we all snuck around advertising
by word of mouth and meeting off campus. I mean, when I can easily pull $100 a
session as the only person willing to try to cram Plato into your brain, why
would I go through the SSC? Calculus was a bit harder because there was more
competition, so that usually ran about $60 to start. Once I had kids getting
their B's and telling their friends, I was able to pull $100. I ran a group
rate for a Fraternity that was a flat $350 a month.

I lived off campus, because rent on a 3 bedroom, 2 bath was $950/month plus
utilities. Speaking of hustle, keeping those bedrooms stocked with roommates
was it's own drama. Kicking roommates who fell behind was even worse. The
lease was in my name, because most places I went to rent a room were on 6
month leases and headed home every summer. I wanted something more permanent
since I was staying in town year round.

All said, I managed to escape with just over $30,000 in debt. That's tuition,
fees, and about $10,000 a year to supplement all my other income. I hit a job
immediately and started burning it down as fast as possible. I landed a better
job with nice, $10,000 yearly bonuses and finished murdering it.

This was right as the next big wave of inflation hit higher education. Now? I
went back and poked some of my social circle in that town. Getting out without
$60,000 in debt is basically impossible. If you live outside of a 10 mile
radius of the campus, you are _required to live in the dorms_ your Freshman
year. Literally every course uses some sort of book with an online component.
To access that component, you have to buy the book new to get a code. The
university regularly charges current students fees to raise money for
buildings that won't be built for 5 years. They recently charged a parking
fee, and then made all lots _on campus_ hourly paid parking. The lot that
parking fee is for? It's about a 4 minute walk off campus. Good luck if your
class is on the other side of the campus.

Part time students are actually charged the exact same fees, but are not
allowed access to several benefits of of the campus. This is disguised as
"discounts" for full time students at on campus food vendors, a higher co-pay
for health services (physical and mental), and being barred from the free
tutors (that no one can use because we won't work for them) Student Resource
Center.

The problem isn't just the loans, it's a deep cultural problem in the
administration of these universities. University presidents down to the
department chairs are held to metrics that lead to perverse incentives. They
must milk students of every dollar possible so they feed the enrollment
machine. This leads to admitting students that probably shouldn't be admitted.
This leads them to dumb down courses to graduate students who have no business
having a degree to feed the graduation rate.

TL;DR: The US higher education system is abusive and terrible. Avoid at all
costs.

~~~
thearn4
A good read, and I agree on your points. Like you, I worked my way through
undergrad (including a period in the national guard and active army), and
escaped with only a few thousand in debt thanks to that. Masters and PhD were
free, but that's not too unusual in my area (applied math).

I'm teaching one class as a part-time instructor now back at my old university
(basically for beer money on top of the day job), and it's blowing my mind how
much more flashy the campus is. And naturally, how ridiculously expensive it
is after only 10 years. The focus on "student life" facilities strikes me as
an odd set of priorities considering how long hiring and pay raise freezes for
faculty seem to last.

The mandatory online book thing is pretty insidious. We're required to use it
by the department, and I can see how there is a kernel of a good idea there.
It basically helps you run gigantic course sections while grading all homework
for you, but while simultaneously killing the secondary textbook market (which
is pretty evil). Worse, they are clearly implemented by the lowest bidder and
break every web standard you could imagine.

Basically, with increased class sizes and mandatory online content, every core
course is slowly turning into a weird online hybrid class. I think this is
decreasing the difference between a traditional education and a MOOC bit by
bit, which is eventually going to give a lot of universities a bit of an
identity and marketing crisis.

Pearson, Wiley, Mcgraw-Hill et. al. are the entities that I would most like to
see disappear when the college bubble pops. Free open-source community
maintained textbooks seem like the obvious way forward to my software
developer brain.

On the bright side, I do enjoy actual lecturing. It's a lot more fun when you
can do it with few or no stakes, since I don't have to rely on it for a
living. I'm literally on the exact opposite of the spectrum from a tenured
professor, but I weirdly feel like I have to same level of freedom.

------
fredgrott
I would prefer an approach(I am a US citizen) in which if we are going to call
college loans financial aid than every student should upon graduation get a
10% more money but in small business grant form so that they can form a small
business.

------
mark-r
So did all this free-flowing money actually result in more college grads, or
did it just allow the colleges to jack up their prices due to supply/demand?
How supply constrained is the market?

------
gxs
I'm really torn on this for the same reason I'm torn on what to do with the
people in jail for marijuana offenses:

On the one hand, yes what's happening is wrong. On the other hand, you CHOSE
to go into debt knowing that you would have to repay it after you graduated.
Just like people who CHOSE to deal marijuana KNEW it is illegal.

Disagreeing with the law doesn't entitle you to break it. Similarly,
disagreeing with your loan terms doesn't entitle you to not pay them.

I CHOSE to go to a cheap state school to avoid this fiasco. Now others who
didn't choose prudently get "relief"?

At one point do we just say, hey, you made shitty choices, sorry. Where is
that line? I'm not saying we shouldn't do something, just offering up a
different point of view.

~~~
logfromblammo
You are correct. Disagreeing with the law _obligates_ you to break it. Or at
least it does according to Thoreau, Jefferson, Gandhi, ML King Jr, et al.

But the difference between a law and a promissory note is that the legislature
didn't get your explicit approval before passing the law. The promissory note
has your signature on it, under a promise that you made to pay a certain
amount at a certain time in exchange for valuable consideration.

The note is a contract, and you can make any contract you like. But we do have
rules for the types of contracts that the state will help to enforce. The
parties to the contract have to be competent, and the contract can't force
anyone to do anything illegal, and everybody has to understand what they are
agreeing to. If it was, indeed, a "shitty choice" to take a loan that you
couldn't reasonably pay back, there may be an argument there that the contract
was lopsided and unconscionable from the start, and being forced to repay it
on the original terms would be rewarding bad behavior on the part of the
lender.

Defaulting on a loan because you now disagree with the terms is less ethical
than dealing weed because you disagree with cannabis prohibition. You should
really support clemency for nonviolent drug offenses before considering
forgiveness of student loan debts. One is a matter of being forced to live
under the (somewhat arbitrary and capricious) edicts of the powerful, and the
other is about breaking promises after already realizing the benefits from
making them.

~~~
lawnchair_larry
This is kind of bullshit.

The problem is assuming that borrowers are fiscally competent. We know this to
be false, even among home buyers. 18 year olds, who have every adult that they
trust telling them they must go to college and take these loans, don't stand a
chance.

The loan industry not only knows this, but they optimize the system to
capitalize on it. I don't think the student was represented when laws were
passed to prevent discharges in bankruptcy.

A professional loan officer just has to fool some kid one time, and closing
that 15 minute deal often destroys that kid's entire adult life.

We provide Donald Fucking Trump more protections from financial disasters than
well-meaning students who have never had a loan or investment in their life.

Coincidentally, he is one of the many who are exploiting this system, with
Trump University existing for little other purpose than siphoning this
taxpayer-guaranteed free money.

Then when the cards inevitably collapse, half of the population eats up the
propaganda about "personal responsibility".

Personal Responsibility would be not taking idiotic risks and getting the
government to pay for it.

I can assure you that approximately zero students took out loans thinking they
wouldn't be able to repay them. But we know the lenders knew better, because
they won't give out these loans without a cosigner and/or a government
guarantee.

~~~
logfromblammo
You might also be able to argue that debts that cannot be discharged in
bankruptcy represent a form of indentured servitude. And that is illegal now
in the US, thanks to the 13th Amendment.

In fact, indentures were a better deal, because the indenturee was guaranteed
to have the job necessary to fulfill the contract. Student loan issuers don't
have to accept work in lieu of cash.

------
awqrre
Allow student loans to be dischargeable in bankruptcy (don't forgive them all)
and for all future public college & university students, let them go tuition-
free...

------
madengr
How do all the foreign nationals afford it? In engineering, the majority are
Asian paying full tuition.

------
Paperweight
Why doesn't competition bring down the prices of university degrees?

~~~
imtringued
Can they compete with prestige?

~~~
Paperweight
Why can't a new college have prestige?

------
karma_vaccum123
This will impact every other aspect of our consumption economy...home sales
and even car sales will be impacted as working adults have to dedicate more
and more earning potential to paying off student loans...far in excess of any
real economic value these degrees have provided.

I hate to get all "Zero Hedge", but this really does stink of some conspiracy
to turn the middle class into lifelong renters instead of owners. The
independence the middle class once had by achieving a debt-free existence and
owning their own residence is being wiped out, and as a result, the middle
class itself will effectively be destroyed.

~~~
ThrustVectoring
It doesn't need a conspiracy - macroeconomic forces and demographics are more
than enough. On a societal and generational scale, it's basically impossible
to make things now and have them be valuable in the future. Roads crumble,
machines break down, inventions become obsolete, and in general what you did
thirty years ago is of no particular value today. The one small exception to
this is deciding to pump oil out of the ground later instead of today.

So if saving real goods and services doesn't work, what does? You can make
things now, and sell them to people for dollars or some equivalent promise of
future goods and services. Then you can later redeem these for the stuff you
need later.

Oh, and did I mention the generational stuff? Small family sizes and aging
Baby Boomers means that there's huge pressure to turn today's resources into
promises to give people stuff later. Hence, debt.

I'd actually prefer if a conspiracy was responsible for this. Economic forces
make a lot more people work a lot harder to push back against changes. Price
controls are a great case in point for this.

------
idsout
Can't read the article without signing in or subscribing.

~~~
ceejayoz
You can Google the headline of any WSJ article, click the result, and it'll
let you through.

~~~
idsout
That works, thanks.

------
up_and_up
As you are paying off your loans remember the high price of your education
helped pay for not just a fancy diploma but also:

Shiny new buildings, Hotel-like dorms, Professors making 400k, Administrators
making 700k, a moped for every football player ...

~~~
Ar-Curunir
Lol in which world do professors get paid 400k? Even at Berkeley CS mis career
pay is roughly 150k. Administrators have ballooned.

Also our dorms are pretty shit.

~~~
up_and_up
Business school professors even at Michigan make 200-600k. I know one of them.

~~~
vkou
How much do European history professors get paid?

Better yet, how many professors get hired as non-adjuncts?

~~~
up_and_up
Not sure, but I know a full professor in Philosophy at a top public University
that makes 70k

~~~
vkou
For the amount of education, and filters you have to go through to get to that
point, that doesn't sound like a lot.

------
forrestthewoods
Situation: Government guarantees student loans and forbids issuing of loans
based on likelihood they'll be bad back.

Problem: Schools charge max loan value. Students can't pay them back.

Solution: Give away free money.

All the government has to do is nothing. Just stop doing things. Stop being
involved. The problem will fix itself overnight if they did literally nothing.

Le sigh.

~~~
dv_dt
The education market won't fix itself because students are not in a
sufficiently secure bargaining position where they (collectively) can make an
informed decision that corrects the market.

~~~
forrestthewoods
What?

How is the education loan market any different than the automobile or home
loan market with respect bargaining position and ability to make an informed
decision?

Loan issuers are forced to issue loans without regard to the likelihood those
loans will be paid back. Someone seeking a computer science degree from
Stanford is treated the same as someone getting an English degree from a 4th
tier state school. That's utterly insane.

~~~
dv_dt
Well with a car, if it always breaks down, you'll likely buy more cars through
your lifetime, and the quality of the product has a feedback loop on the
performance of the company. With a house, same thing. Worst case, if it's bad,
sell it replace it with something else.

But with education, students have likely never bought a car, or a house, and
don't have much background or life experience at this point in their lives and
you want them to make a one-time, long-term, investment decision in a non-
fungible asset?

Most students only make the decision once and whatever you learn about the
school or career not meeting expectations isn't ever applied again. Worse, you
don't find out first hand what quality your education really was until after
leaving the college. Worst, the decision isn't really couched in terms of a
ROI type investment decision (maybe thats changing), but that's certainly not
the only factor at play in student school decision.

That's not a good basis for balancing a market.

> Loan issuers are forced to issue loans without regard to the likelihood
> those loans will be paid back. Private loan issuers aren't forced to do
> anything. They can always leave the market and invest elsewhere if they cant
> figure out how the serve the market.

------
JustUhThought
The comments,,, so,,, ignorant. As if, all in one place, all the reasons I
needed to stop reading social commentary in HN comments. The ignorance, the
abundance of it, the diversity of it, Trump would be unable to stop himself
from jizzing over the cornucopia of bigotry. Trump bigotry jizz, everywhere.

------
no_wave
As a college graduate, I'd be ok with student loan relief as long as it's
funded by a tax on college graduates (and it has to be preceded by something
preventing this occurring in the future, like making student loan debt
dischargeable under certain circumstances)

Seems twisted to tax the rest of the country who decided not to or weren't
able to participate in college in the first place

~~~
lawnchair_larry
As someone who has never spent a dime on student loans, I would be happy to
help bail out graduates with my tax dollars. What do I care? I've been paying
for the trillions dollar war for 15 years now, so paying for something this
would be a breath of fresh air.

You folks are getting screwed.

