
More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why - phiskk
https://www.bloomberg.com/news/articles/2017-09-28/more-americans-are-falling-behind-on-student-loans-and-nobody-quite-knows-why
======
1_2__4
I hate sounding both old and weird but I cannot shake the feeling that much of
the claims of economic health and growth in the US is... if not fake (I’m not
totally nuts) but not accurate. My most charitable interpretation if I’m right
is that we’re using the wrong metrics (possibly intentionally) that give a
distorted view of the economy. But I keep hearing employment is great,
productivity is great, stock market is great, and yet it seems like most
anecdotal evidence I see and read about suggest this is all hollow, and things
are actually really bad for the average American.

I don’t know. I know how it sounds. But I can’t stop thinking that stuff isn’t
adding up. And this article is one more to add to the pile of “how can this be
happening if the economy is actually healthy, at least in a way that means
people’s financial lives are healthy and prosperous?”

~~~
StanislavPetrov
>But I keep hearing employment is great, productivity is great, stock market
is great

The question you have to ask is, who are you hearing this from? The answer is:
people with a vested interest in making you believe the economy is doing
great, or people fooled into believing this by those with a vested interest.

I suggest you closely examine the metrics used by those who claim the "economy
is great". First these metrics are usually comparing year-over-year changes to
point to "positive changes" in the economy. What they fail to announce is that
the formulas they use to calculate these metrics are "adjusted" regularly to
ensure that the numbers they seek are reflected. CPI is a perfect example. The
FED claims that inflation has been very low, if not non-existent for years
(good for workers, since their wages have fallen or remained stagnant for
decades). Some have noted, however, that prices for most of the things people
need to survive (food, rent, education, healthcare, insurance) continue to
rise dramatically. How can this be? Well one way the FED lies with their
numbers is through a mechanism called the "hedonic adjustment". If you paid $2
for a roll 60-sheet roll of toilet paper last year. This year you paid $3 for
a 60-sheet roll this year, that's some serious inflation, right? Not according
to the FED. The FED claims that the quality of the toilet paper is better now.
Even though you are paying 50% more, the FED says the toilet paper is 50%
better, so there is no inflation. How are these "hedonic adjustments"
calculated? Arbitrarily by FED functionaries, in a black-box.

Rising debt, falling and stagnant wages, higher prices, consolidation of
wealth - these are the real conditions we face and why our economy is lagging.
Many will look at you as if you are wearing a tinfoil hat if you question the
"official numbers", but even casual scrutiny of the methods and metrics used
(the ones they do release) will raise substantial doubts about their worth.

~~~
trts
"Hedonic adjustment" is meant to control for the 'quality' of some (limited)
products sampled in the CPI such as rent, computers and automobiles. 'quality-
adjusted' means that they run a standard linear regression across the features
of sampled items to normalize the variation in the sample. For example, the
sampled rent of apartments would be modeled as (in the simplest example I can
think of) :

y = rent, b = slope, x = sqft

y ~ b + x is the extent of the 'hedonic adjustment'

There don't really exist any control variables for 'better'. Nobody at CPI is
subjectively saying toiler paper is better. What they will stochastically
estimate is the per-unit price. So if for $10 you get 9 double roles, and last
year you got 9 single roles for $10, then the price went down. But I assure
you as someone who has looked at row-level data of what the CPI samples and
does, there are no cases that are this extreme in the aggregate. They could
drop the hedonic adjustments and it would make no practical difference.
Private companies use similar sampling methods with better data and don't show
wildly different headline inflation (see: Billion Prices Project
[http://www.thebillionpricesproject.com/](http://www.thebillionpricesproject.com/))

There is no doubt however that the CPI data is inadequate, has a non-trivial
lag, and does not capture true regional differences in prices. Just try using
it to adjust your salary if you move from Birmingham to New York City and see
how comfortable you'd be. But there is no conspiracy; that would presume far
more competency than they have hired for.

~~~
StanislavPetrov
I'm not claiming a conspiracy, its more a confederacy of dunces staffed by
people who have a vested interest in reaching conclusions that affirm the
wishes of their bosses. Any such system that includes a bunch of very complex
algorithms filled with uncertain data and arbitrary variables that can be
tweaked by the people crunching the numbers you are going to come out with a
garbage result. The FED is literally engaged in voodoo economics. Scarily they
even acknowledge this simple fact, but still people take their tea-leaf
readings seriously.

[https://www.federalreserve.gov/econresdata/feds/2015/files/2...](https://www.federalreserve.gov/econresdata/feds/2015/files/2015083pap.pdf)

“It is difficult to get a man to understand something, when his salary depends
on his not understanding it.” - Upton Sinclair

~~~
jjoonathan
Difficult or not, you don't seem to be trying very hard. You didn't address
the concrete argument you were presented with.

------
jaclaz
In a nutshell, as a generic reasoning, say that a few years ago the student
loan was about US$ 100,000 and once you got the degree you had - on average -
a higher pay of around US$ 10,000 per year (net).

You could repay it in 10 years time while living at the _same level_ of your
non-graduated friends.

Now say that the student loan averages US$ 150,000 and - still on average -
the increase in annual wages is US$ 7,500 (net).

So you can either:

1) live as before BUT repay it in 20 years instead.

2) live at a 7,500 US$/year _lower_ level than your friends and still repay it
in 10 years.

3) live at a 7,500 US$/year (or 10,000 or 15,000) _higher_ level and never
repay it.

I suspect that besides the lessened "value" of the university degree on the
labour market, there is also an increased number of people that choose option
#3 over option #2 or #1 (whether out of _need_ or because of other reasons
doesn't really matter).

~~~
fhood
Speaking of lessened "value" of degrees, University's need to be held
accountable for some of the debt that they are encouraging students to take
on. For example, at my public university, STEM students were charges several
thousand dollars a year more than humanities students. STEM programs also did
their best to discourage enrollment. Meanwhile the anthropology department is
literally begging students to stay and get a masters or phd with them.

~~~
tyrw
Why should this be the case? They offer a service with hundreds of competing
options (other schools), so it's hard to argue they're not offering market
rate.

~~~
fhood
Do they though? Do public universities really have competition? Maryland has
College Park and not much else. All the other public schools are much much
smaller, and generally lower quality.

~~~
Godel_unicode
This isn't the 1850s, UMD essentially competes with at least the other east
coast public schools. So you have Penn State and UVA, as well as UD, Va Tech,
GA Tech, UNC, etc.

Add to that the negligible degree to which attending "the best school" effects
your outcomes (spoiler: virtually not at all. Being in the top 25% at your
school far outweighs how good your school is) and you'll realize that they
compete heavily. This totally leaves out all the private schools with which
they compete in the DC area.

~~~
rtkwe
Except not really because the cost for going to an out of state public school
is much larger for a student so any given school has a large leg up on cost in
competing for students in their state.

~~~
Godel_unicode
Except not really because most State schools on the East coast will give you
in-state tuition after you live in said State for one year. Take a year off
after highschool, make some money, then get in-state at whichever school you
chose.

Source: many of my friends graduated college a year behind me after doing
exactly what I'm suggesting.

------
valj
From the article: "Department of Education ticked up to 18.8 percent as of
June 30, up from 18.6 percent the same time last year, new federal data show."

There's your answer - 0.2pp is totally insubstantial, which makes the title
borderline clickbait. The economy doesn't uniformly grow or distribute wealth,
so a change so small could just be from the distribution of college leavers in
a particular year being overindexed towards sectors that aren't growing.

Further to that point, it typically takes years for people to adjust their
majors towards sectors of the economy that are particularly productive, so we
shouldn't expect to see such a quick change in the numbers.

~~~
tdeck
Here are more depressing statistics:

[https://www.cbpp.org/research/state-budget-and-
tax/funding-d...](https://www.cbpp.org/research/state-budget-and-tax/funding-
down-tuition-up)

tl;dr: States have been cutting back on funding public education even as it's
gotten much more expensive every year.

~~~
Fomite
This. States slashed higher education spending during the recession, and it's
not coming back. At the same time, federal grant money got tighter.

Student tuition is literally the only dial left that can be moved.

~~~
pmorici
Have you considered that universities might be able to operate more cost
efficiently? Purdue University has manged to freeze tuition for the past 5
years for example.

[https://www.purdue.edu/newsroom/releases/2016/Q2/purdue-
plan...](https://www.purdue.edu/newsroom/releases/2016/Q2/purdue-plans-fifth-
straight-year-without-tuition-increase.html)

~~~
lovich
To add to your point. Schools have massive expenditures on things that have
nothing to do with learning _and_ do not bring in money. Its one thing to
spend money on something like basketball if you are UCONN and you routinely
bring in enough revenue to cover the costs or even post a profit.[1] Its
another thing to keep spending millions on your football team that does not
bring in that much money[1] These are just one example in a school system.
There's similar waste everywhere, like redoing the landscaping every few
months so prospective students always see a fantastic looking campus, or the
massive increase in administrative staff. The schools don't try to be more
efficient because they don't have to be. They don't have legally set budgets
and everyone can get students loans since they cannot be discharged so they
can just dial up tuition.

Our whole financial system is built around accurately accessing the risk that
an investment will be paid back and charging an interest rate commensurate to
that, but its thrown out the window once you can try and convince the least
experienced adults in the country to sign on the dotted line.

Until banks stop getting paid whether or not they made a good bet on someone's
college expenses, or the schools are given a limit on what they can spend, its
not going to change. My fear is that this won't happen in any way but a
massive amount of defaults that cause the whole system to collapse
unexpectedly and cause add on pain to the rest of the economy

[1][https://www.cbsnews.com/news/the-financial-impact-of-
champio...](https://www.cbsnews.com/news/the-financial-impact-of-championship-
basketball/)

------
lasermike026
Banging my head against the table.

Wages and benefits are too low, tuition is too high, cost of living is too
high, and student loans are a scam. Tuition is a scam.

[http://studentdebtcrisis.org/](http://studentdebtcrisis.org/)

The rent is too damn high! ;)

~~~
taw55
It's a rentier economy, by and for. Just don't actually tell anyone or you'll
be labeled a crank.

------
j_m_b
Due to government involvement, there is a lack of a true market pressure when
student loans are underwritten. Not surprising in the least that this bubble
is starting to pop.

~~~
ep103
This is such a silly meme. Its not "due to government involvement." Its "due
to the manner of government involvement."

Loans that are guaranteed by the government, for all students, that can't be
discharged by bankruptcy, is an idea clearly put together by lenders.

If we wanted government subsidies for private education, there are plenty of
alternatives. Here's one: government guaranteed loans for all students; but
repayment of those loans is capped as a percentage of the person's income, and
interest rate is capped well beneath that. This would allow the government to
subsidize students to go to college, while providing market pressure against
universities raising their tuition yearly. It would also allow students who
went to expensive institutions to pursue careers that aren't at the top of the
financial spectrum, like, say, teaching.

~~~
frgtpsswrdlame
Or we could make public college free, just like we did with high school.

~~~
13of40
Maybe the real problem is that we've developed this caste system over the last
50 years where people who don't get college degrees are excluded from careers
that can sustain a middle class lifestyle. What if free college just moves the
goal post and in a couple more decades nearly everyone has a Master's degree
and you need a PhD to earn a decent living? What happens if the most talented
segment of our work force ends up spending their most creative years trying to
achieve meaningless credentials instead of actually contributing to the GDP?

(Preemptive Edit: I know they have free college in some European countries,
but maybe they have the same problem.)

~~~
frgtpsswrdlame
Interesting, if you think that education is a race to the bottom in
credentialling though, what is your solution? If you were running a business
wouldn't you prefer a PhD to a MS to a BS holding everything else equal?

~~~
13of40
I think it really depends on the job. I've managed people who were in entry
level software jobs who had PhDs, and having the higher degree didn't
translate into better performance.

~~~
frgtpsswrdlame
Yeah but that's what I'm saying, once you've hired them then you might find
out different but purely within the hiring process a PhD is preferrable to a
BS. And the predicament may be tough but if there is no solution to it, why
even take it into consideration? That's why I asked what you would do about
it.

~~~
13of40
"All things being equal" is a very contrived situation. I think a better
question is whether you'd pick a PhD candidate over a BS who, for example,
could code a little bit better. (And for me the answer is I'd probably pick
the BS, but I'd have to justify it to the people above me, which could be a
challenge.)

~~~
frgtpsswrdlame
Well sure but "all thing being equal" is what someone who is considering
whether to go for further schooling is considering. I'm me, I have all my
qualities, would I be more likely to be hired (and get a higher wage) w/ a BS
or w/ a PhD? That's why I pose it that way and that's why I ask for what your
answer to this problem is, it's not about who you would pick, it's about what
drives people to "overachieve" in their credentialling in the first place.

------
Overtonwindow
Is it possible that some graduates are realizing that for all that money,
their education was not what they were promised, and a bit of resentment has
led them to make the decision not to pay?

~~~
mdorazio
I feel like it might actually be somewhat socially related as well. If people
see that their friends/coworkers with large student loans are simply deciding
not to pay and nothing horrible is happening to them while at the same time
they are living more extravagant lifestyles with the student loan money
they're not paying, that's an encouragement to not pay yourself as well. Pair
this with the last administration taking steps to limit student loan repayment
responsibilities (William D. Ford Direct Loan program), and it starts looking
like maybe not paying your loans off is a pretty decent option.

~~~
bilbo0s
I don't know man?

Social pressures are more complicated than that, and they come from many
different directions. I mean, in the hip-hop world, "I Finished Paying Sally
Mae Off!" is one of the top rated songs right now. And listening to that song,
it's clear that the rapper had fallen behind on his loans from time to time.

So if that "pay it off" attitude has made it down to the hip-hop world, it
must be prevalent in the larger society as well. And that's just one "for
instance" when you're talking about social pressures around student loans
other than the desire to walk away from them.

~~~
ssully
I hate to be pedantic, but think calling "I finished paying Sallie Mae Back" a
top rated songs in Hip Hop right now(or ever) is a big stretch. It's over a
year old, and its mainly just a good goof of a song that people shared around
on Facebook last year. I don't think I ever knew anyone who listened to it
outside of that context.

------
ghaff
As this other Bloomberg piece notes [1], it's probably useful to break out the
type of school and degree when looking at debt. It's not clear that basic
undergraduate degrees are an issue with ballooning debt as much as for-profit
schools and graduate degrees that don't do much for employment prospects. (The
latter not just being a case of "useless" degrees but professional degrees
like MBAs and JDs from low-tier or even just non-top-tier schools.)

[1] [https://www.bloomberg.com/view/articles/2017-09-27/it-
should...](https://www.bloomberg.com/view/articles/2017-09-27/it-shouldn-t-be-
so-easy-to-go-to-grad-school)

------
quuquuquu
>unemployment is low

Yes, but many people have been designsted as "having stopped looking for
work", which means the statistic doesn't count them.

Additionally, those who are employed perhaps are underemployed, working as an
Uber driver or bartender or chipotle or etc.

>the economy has improved

For the top 6% of Americans that are millionaires, it absolutely has improved.
Most of their income is from capital gains, dividends, and business equity.

The average person with student loans has almost none of these things. They
are relying on a wage from a job that requires them usually to pay rent, own a
car, buy a monthly transport card, and so on.

When you are only making $1400-2000 per month after tax, and $1,000 of that is
out the door on work-related expenses alone (rent, transport, insurance,
phone), there isn't much left over for a $300 per month student loan payment.

Disclaimer: Don't shoot the messenger. These are merely my thoughts on what is
happening. Please reply with criticism.

~~~
H1Supreme
The amount of people I know with degrees who work in retail, or something
completely unrelated is staggering. From my observations, I'd guess
"underemployment" is the biggest contributor to the late payments.

This is just another example of why I urge any young people I know (high
school age) to think long and hard before choosing to go to a 4 year college.
When I graduated high school in 99', we were primed to think "college degree
== good job". Of course, that is anything but the truth. And, it only serves
to put someone in serious debt without any guarantees.

Hands on technical jobs like electrician, plumber, welder, are many times more
lucrative than some bullshit business degree. A friend of mine's son is 22 or
23, and making a hell of a living welding. Granted, he's exceptional at it.
But, that doesn't change the fact that his 2-year trade school investment was
a good one.

Or, teach yourself a skill. Like lots of us on here, I'm a self taught
programmer. It took years of doing small projects in the evenings, but I make
a living from it now with $0 in student loan debt.

~~~
gbacon
The key is a _marketable_ college degree. In fields such as aerospace and
defense where the credential is the key to open the door, get the credential
as cheaply as possible. Do a couple of years at a community college and then
finish at a state school. Name-brand degrees bring no extra value. Oh yeah,
and get your master’s while you’re still in the zone.

The idea that trade school somehow is lower tier or oppressive is a staggering
disservice. Just like every college-bound high schooler is not med school
material, not every high schooler is college material. Put a wrench or saw or
blowtorch in the hands of a doctor or engineer, and crummy is the likely
result. Skilled trades are an honorable, respectable way to earn a _good_
living. Forcing people into tracks for their own supposed good but where they
feel hopeless is horrible social engineering.

~~~
bpicolo
There are plenty of fields where name-brand degrees mean a crap ton starting
out, e.g. finance, law.

~~~
ghaff
In fact, the conventional wisdom these days seems increasingly to be that you
should go to a top-tier law school or just not bother. And that seems to be
becoming fairly common advice for MBAs as well, although that's not as cut and
tried because MBAs cover a wider range of programs than law degrees do.

------
qntty
_The share of Americans at least 31 days late on loans from the U.S.
Department of Education ticked up to 18.8 percent as of June 30, up from 18.6
percent the same time last year_

Is this newsworthy?

~~~
bigheadpercoli
The uptick isn't. But if 1/5 student loans are more than 30 DPD, that will be
a problem.

~~~
tyrw
Honest question: why is 1/5 that much more of a problem than 18.8%?

~~~
bigheadpercoli
~18.8% is roughly 20% or every fifth student loan in the country. If 20% of
your portfolio can't repay it's debt that's usually a bad portfolio.

In a simplified model : Assume you give 100 dollar to five people with the
intent to earn 5 dollar on interest of each (total 25 dollar interest income.)
If now one of them can't pay back the 100 dollar you lose the 100 dollar and
the five dollar interest income. So instead of 25 dollar income you get
(20-100-5 = -85 dollar). To avoid this situation you start calling the guy
(collections activities). Effecting your earnings again.

Of course one months in arrears is not immediately the road to immediate doom,
but it is an early warning indicator. Especially if you look into trends to
understand the behavior of the portfolio.

In this case the early-stage delinquencies have been improving since 2014 and
starting 2017 reversed that trend. So if the trend continues this portfolio
segment will grow again leading to more losses and collection activities.

------
calvinbhai
Tie student loans to educational institutions where the study takes place.

If the student fails to repay, a %age of the student loan debt should be paid
for, by the edu institution where he/she graduated from.

Would be great if it is 50%. Even if university doubles the price,
demand/supply economics will ensure universities cannot bump fees up at will.

Without holding the educational institutions and the students as equally
responsible for the debt, edu institutions have no incentive to not-ripoff
students.

Factor in the repayment history by graduates of a program at an institution to
decide the percentage of debt the university is liable for.

If STEM grads are having lesser default, the school is responsible for 10% of
the debt.

If a grads of <some esoteric program> have a higher default rate, school owes
closer to 50%

~~~
AcerbicZero
I've never thought of it that way. I don't know if there wouldn't be some
second or third order issues from something like this, but at first glance
this seems like a good idea.

Why shouldn't the school take on some of the risk?

~~~
Kadin
The schools would undoubtedly respond that in doing so, they would necessarily
have to stop educating people from anything less than the most privileged (and
thus low-risk) backgrounds.

You'd need to cook up some sort of risk-pooling scheme if you wanted schools
to extend that credit to anyone coming from a background that made payment
statistically less-likely. And once you started doing that you'd have to be
careful not to distort the market so much that the original intent -- to allow
market forces to have more say on what majors college students go into, and
who (and how many people) colleges admit -- would be totally lost.

It's a difficult problem and I don't know if it's better to have the
schools/colleges trying to underwrite the loans. It might be better to leave
that to specialists rather than force it onto schools (though forcing schools
to release the data that an underwriter would need to rationally price loans
for students to go there would be good).

If you didn't have the government backstopping student loans, and in some
cases making them non-dischargeable in bankruptcy, that would probably have
much the same effect. The government backing and unique legal treatment are
what makes a "student loan" different than a giant personal loan. The
justification has always been that without this treatment and guarantee,
nobody would make a $100k+ personal loan to an 18-year-old, which is probably
true. But I think we're starting to see the other side of the coin, which is
that maybe there are some good reasons why that's the case.

~~~
nerfhammer
Find some way of blinding schools from the individual financial background of
applicants.

~~~
Kadin
You could do that, I suppose, but the ability to pay back the loan and the
downstream income potential of the graduate are likely to be very strongly
correlated to the student's financial background (really, their family's
financial background).

If you're wealthy enough, it basically doesn't matter what you major in while
in college. But if you don't have a rich family, then it matters a hell of a
lot. Students seem to already know this; at least when I was in school last,
there weren't a lot of first-generation college students or immigrants in the
liberal arts programs; the kids who were betting everything on their education
were in the business or engineering schools, mostly. (Or sometimes
preprofessional programs, pre-med was a big one.)

------
tbirrell
Serious question: Who loses out if all the student debt got canceled? Not the
colleges, I assume, because they already got the tuition. And not the
students. So would it be loan companies and the US government? Would such an
action be catastrophic?

~~~
Rainymood
I think this is kind of a nonsensical question but please feel free to correct
me if I'm wrong.

Imagine you and I agree to a deal, both verbally and contractually (i.e. on
paper). I give you 10 euros and you pay me back 11 euros in exactly 1 year.

Now 6 months into the deal you suddenly ask yourself: "Well who would lose out
when this debt gets cancelled?"

Do you see now why I think it is a nonsensical question?

~~~
tbirrell
Sure, it would seem obvious that the loaner is the one to lose out. The things
it, I'm not sure who all the various loaners are these days or how much the
economy itself would be affected by these people suddenly not having $1.3
trillion (or whatever the figure is these days) coming to them.

~~~
jononor
The question is can future students get any loans to finance their studies
then (or at what rates/conditions? Good chance they would lose out too.

------
shmerl
With constantly rising real estate prices, this is hardly surprising. Rent is
crazy.

Time to switch to free high education system.

~~~
Avshalom
Are there any recent studies that crunch the numbers on how much that would
cost? Because as a debt free college grad earning ~16000 pre tax I'm still
willing to commit a fair amount, call it 500 a year? but I have no idea if
that's even close to enough if we assume it's progressive at the same rate as
income tax.

~~~
dnautics
it may cost more than just dollars and cents. I worry that the adage of "you
get what you pay for" may start to apply.

~~~
Avshalom
I don't know if there are _many_ countries with fully subsidized college but
there are at least a few who don't seem to see any worse outcomes than the
US's existing partial subsidization by loans and grants.

~~~
dnautics
those countries typically also have entrance requirements to college that
would not sit well with the US, which values the perception of egalitarianism.

------
curun1r
A couple of question with answers we'll never get:

\- What is the breakdown across for-profit vs traditional school graduates?
Are University of Phoenix grads defaulting at the same rate as ivy league
grads? (obviously no, but the disparity would be good to know)

\- What are the statistics if you include SoFi (and other similar refinancers
that cherry-pick borrowers most likely to repay) borrowers that get removed
from the public numbers?

------
empath75
The reason is that people have been spending absurd amounts of money on
worthless degrees and can’t afford to pay them back.

~~~
cwkoss
Would be interesting to see a breakdown of repayment rate by major

~~~
maxk42
And also graduation rate.

------
user68858788
There are some pretty hostile laws against borrowers. A relatively recent one
caps the tax write-off on interest at $2,500. Anyone who went to a private or
out of state college will hit that cap easily.

------
mikeash
Have they actually investigated? I see a lot of speculation in this article,
but if it's actually important to know, shouldn't they go find out?

------
jaunkst
All good points, but the only real answer is... Paying for an education is a
gamble and gambling with our future is dumb. If we pay taxes for anything,
anything at all the number 1 priority should be to provide an education to
anyone. That doesn't mean pay for their housing, or anything else. One has to
invest their time into an education, its already very expensive.

------
rdtsc
A few reasons I can think of:

* Wage garnishment is limited, maybe the ruined the credit score and the max % of garnished monthly paycheck (%15) is less than what they are already paying?

* The type of majors and students background who graduated changed. Maybe universities 4 years ago decided to accept more students into majors which are having a hard time finding employment. Universities don't care, they just want more students with 6 figure approved loans to roll in.

* It is possibly there was a hint or signal of debt forgiveness being implemented. It doesn't have to be true, just a rumor but it can start to self-perpetuate because people really want to believe it.

* Also everyone is pretty connected these day via social media so maybe if someone bragged about not paying and "look a few months later, nothing happened to me" others might start thinking, hmm, well maybe it's ok. Certainly nobody wants to be left still paying like a fool if all their cool friend stopped and they still seem to be doing ok, kind of attitude.

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cprayingmantis
Purely anecdotal but I have several friends who have told me they don't worry
about paying their student loans on time due to the fact that they feel like
they'll never go away. They feel like they'll never pay them off, and they can
never get them discharged. So there's no motivation for them to pay them off.

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didip
I will forever wonder why Americans don’t go to Europe to study higher
education. I heard its much cheaper, if not free, there.

~~~
Mediterraneo10
Take Finland, a country has free education. Entering a university from the
total beginning in Finland requires taking a highly competitive entrance exam,
and the exam is in Finnish. How many 18-year-old Americans do you think can
manage that?

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AutomationTool
This one is easy. People are buying things that they can't afford. Throwing it
into a loan and then partying their way through school. Since that worked out
so well, then they do that with their car, house, furniture, cell phones, and
car rims.

You aren't entitled to 100,000 dollar education.

You aren't entitled to go down to Mexico every spring break.

you aren't entitled to eat pizza and hit the bar every weekend.

You aren't entitled to a college education.

Go learn a trade, get scholarships, join the military, work for a company that
will pay for your education, start your own business.

Instate tuition at VA Tech is 13k for the year, if you live in Texas, UT is
4-5k a semester. While not cheap, this is far from unaffordable.

I have zero sympathy for junior who goes to some 150,000 a year liberal arts
college and gets a degree that makes no money or requires another 2-4 years of
school.

~~~
StanislavPetrov
Our federal government is $20 trillion dollars in debt. We are trillions more
on debt from every level from local to federal. Most of the states are on the
verge of bankruptcy, if not bankrupt already (like Illinois). Countless
millions who depend on pensions and other promised benefits from states and
municipalities are about to be in for a rude surprise. Despite this crushing
debt, we continue to spend trillions of dollars to bomb and invade countries
around the world.

Blaming entitled kids for our debt-laden society and failed economy is not
smart or useful. The truth is that there aren't enough jobs (let alone decent-
paying jobs) for 1/4 of the tens of millions of kids who enter college every
year. These kids weren't the ones who mismanaged society so that property
taxes, mandated healthcare premiums, income taxes, and rents are so high.

~~~
ElEmEnOhP
Correlating government debt (which is primarily owed back to it's citizens) to
household debt is extremely disingenuous.

~~~
StanislavPetrov
>Correlating government debt (which is primarily owed back to it's citizens)
to household debt is extremely disingenuous.

That's false for several reasons. First, government debt impacts citizens
directly through higher taxes (income, property, sales, and others), fees,
deprivation of services, ect. Second, government debt is not primarily owed
back to it's citizens. The biggest holder of government debt is the Federal
Reserve, which is a collection of private banks. The vast majority of debt not
held by the federal reserve is held by banks, financiers, and the ultra-
wealthy. Third, working people and those on fixed incomes are crushed by ZIRP
(zero interest rate policy), which has been implemented by the FED in an
effort to prevent the mountains of debt load on every governmental level from
exploding. What it has done instead is prevented people from saving (since
artificially low interest rates that don't match the rise in cost of living
mean treasuries and savings accounts lose value) and further inflate the
riches of the ultra-wealthy who borrow at 0% and buy stocks.

This doesn't even touch on the fact that millions of people who have worked
their whole lives for pensions are about to get the shaft and become destitute
when states and municipalities are overcome by their crushing debt and default
on their payments.

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olalonde
I firmly believe that university is way, way overpriced in a world of free,
high quality MOOCs. It just makes zero economic sense and I believe the market
will correct this sooner or later. Think about how utterly inefficient it all
is: you have hundreds of professors around the world, each mechanically
teaching the same subject semester after semester to new students (I know,
they do a bit more than that). Some will say it is about signaling but in a
free market, smart companies will eventually start to pick up on better
signals. People who attempt to justify the cost of university really just seem
unimaginative.

~~~
almano
Christ, I've been struggling with this all month.

I finished college in 2014, worked in industry for three years, then came back
to school for a PhD. I am now _completely shocked_ that these undergrads are
paying $60k/year to come here to listen to the same cookie-cutter lectures
that are being given at thousands of other institutions across the country.

I almost feel embarrassed for the professors as well, having to act like
they're doing something useful or valuable by giving this lecture, when in
reality its just a mechanical performance.

I feel like you need 20-30 different MOOCs for each class. You need a tier 1
(MIT etc) level difficulty Physics I class, then a tier 2 class, and so on.

This would even be advantageous for students at 'top' schools (if they still
exist), as it would be easier for a physics major to acquire cs skills if they
don't have to go through their schools theoretically biased curriculum.

Its completely insane...

~~~
olalonde
Yep, agreed. It's not really that universities are bad, just that they're
outrageously overpriced and inefficient. And from my personal experience, most
professors don't seem that passionate about educating (many of them rightfully
think their time would be better spent elsewhere). I think the two missing
pieces for university alternatives to pick up steam are industry acceptance
and a more curriculum based format (vs single courses).

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bluetwo
Why have MOOCs provided no real competition?

~~~
ticviking
Turns out that accountability is easier on a campus than remotely.

~~~
taw55
Well, that and the fact that the lower barrier to entry might incentivize
trying-out of subjects. I know I have.

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eighthnate
Have they looked at the ACA and people having to pay a lot more for insurance
now? And service industry moving more towards part-time jobs since they don't
deal with full-time employees given the push towards increasing hourly wages
to $15?

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skc
They probably still have the latest Apple gear though.

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jhoechtl
They are busy paying their bills to netflix, amazon prime and other
distractions

