
Study: Almost half of borrowers will default on student loans in coming years - SQL2219
http://www.wctrib.com/news/education/4523513-new-study-almost-half-borrowers-will-default-student-loans-coming-years
======
hopefulengineer
Guide to implement neo-feudalism:

1\. Remove all trade barriers, allowing corporations to outsource all low
skill manufacturing jobs and ship back the finished product with no
consequences

2\. Don't enforce border laws, allowing the remaining low skill jobs that
weren't offshored to be taken by illegal immigrants with no federal labor
protection, forcing native citizens to go for higher education if they don't
want to accept 3rd world wages

3\. Create a student loan program that doesn't allow debt to be discharged and
allows colleges to continually increase prices, resulting in skyrocketing
tuition costs, turning your citizens into debt slaves and driving down skilled
wages due to the flood of college graduates

4\. Enjoy your increased profits as the middle class dies and is replaced by a
two tier society of elites and plebes.

The current system has been created by corrupt politicians and the rich who
have bought them. Productivity has increased but all the wealth is going to
the rich because of current broken free trade laws allowing infinite labor
arbitrage.

Nobody wants to hear it but the only reason people vote for anti-establishment
candidates like Bernie Sanders and Donald Trump is because the establishment
is failing the people.

~~~
exabrial
#3 could also be solved by not having the government back student loans and
allow creditors to decide risk on things like your major, your GPA, or your
class attendance record, but that would be insanely politically incorrect.
Essentially you're either given an amount that your career will pay for, or
you have to choose a major that will pay for an amount that you desire.

~~~
nickthemagicman
Education is one of the most important things a country needs to keep a free
society, educated workforce, and booming economy...

Why capitalism is involved I have no idea.

Ignorant people favor simple political messages...which is one reason certain
groups of politicians put education immediately on the chopping block.

~~~
cinquemb
It will be great when individuals learn to not conflate institutionalized
schooling with education; they may overlap in the best of times, but stick you
with a raw deal if one is made to think they must take out a bunch of un-
dischargable debt in order to pursue knowledge…

Though that will never happen, masses of people will always seek the easy
solutions that fill the void, and opportunists will be willing to sell them it
along the way.

~~~
Retric
It’s really not about education it’s about credentials.

Workers who can decide to stop playing that game.

~~~
cinquemb
> It’s really not about education it’s about credentials.

Credentialisim, yes, even better…

The trite Robin Hanson argument goes "X is not actually about X", where here X
is education.[0]

>It’s really not workers who can decide to stop playing that game.

It's about people making choices. A lot of people choosing to go in debt
without realistic options to pay it off, a lot of people thinking un-
dishcharable debt by the federal government is a good thing, and a lot of
people thinking they must enforce the above because reasons.

[0] [http://www.overcomingbias.com/2016/04/who-wants-
school.html](http://www.overcomingbias.com/2016/04/who-wants-school.html)

~~~
Retric
Interesting, but it’s missing the human factor. People that gather credentials
have incentives to make them more important.

You can look at how quickly the MBA took off as a product of many things. But
a huge factor is MBA programs convincing people taking them to higher other
MBA’s.

Or how lawyers have made it illegal for people without the right credentials
from practicing law.

~~~
cinquemb
> missing the human factor.

 _because reasons_ addresses this, each individual reason given is not really
that important to understand what can come from it over time.

> Or how lawyers have made it illegal for people without the right credentials
> from practicing law.

This might be true now, and for when it comes to representing others that are
not yourself, but this does not have to remain true.

~~~
Retric
By human factor I mean: [https://en.m.wikipedia.org/wiki/Choice-
supportive_bias](https://en.m.wikipedia.org/wiki/Choice-supportive_bias)

If you get X degree you overestimate it’s importance and want to build a team
of others with X degree. Thus the bias moves the equilibrium point. Further
when asked you end up promoting the credentials to others considering getting
them.

~~~
cinquemb
Yes, I get that. What I am saying is that one will ultimately have to face
whatever downsides will be from engaging in what Hanson would call "Prestige-
Based Discretion" if one actually cares about X and not just the signals of X
[https://www.overcomingbias.com/2016/06/beware-prestige-
based...](https://www.overcomingbias.com/2016/06/beware-prestige-based-
discretion.html):

"In the rest of society, however, we often both try to hire people who seem to
show off the highest related abilities, and we let those most prestigious
people have a lot of discretion in how the job is structured. For example, we
let the most prestigious doctors tell us how medicine should be run, the most
prestigious lawyers tells us how law should be run, the most prestigious
finance professionals tell us how the financial system should work, and the
most prestigious academics tell us how to run schools and research.

This can go very wrong! Imagine that we wanted research progress, and that we
let the most prestigious researchers pick research topics and methods. To show
off their abilities, they may pick topics and methods that most reduce the
noise in estimating abilities. For example, they may pick mathematical
methods, and topics that are well suited to such methods. And many of them may
crowd around the same few topics, like runners at a race. These choices would
succeed in helping the most able researchers to show that they are in fact the
most able. But the actual research that results might not be very useful at
producing research progress.

Of course if we don’t really care about research progress, or students
learning, or medical effectiveness, etc., if what we mainly care about is just
affiliating with the most impressive folks, well then all this isn’t much of a
problem. But if we do care about these things, then unthinkingly presuming
that the most prestigious people are the best to tell us how to do things,
that can go very very wrong."

~~~
Retric
Sure it’s a horrible waste of resources, but saying it’s bad has little to do
with why it’s spread.

------
ehvatum
Immediately fire nineteen out of twenty college administrators making more
than $125k/yr. The cost reductions would be immense, with negligible impact
otherwise. These hordes of millionaire administrators really don't serve any
useful purpose.

~~~
amluto
Try it at one college and watch the college fail. Also watch it save very
little money compared to the overall operating budget.

------
gersh
Many of these schools have run deceptive marketing campaigns to convince
students to get useless degrees. Meanwhile, many colleges have hired endless
useless administrators, while most classes get taught by underpaid adjuncts.
They should get rid of the loan guarantee and instead subsidize the cost of
education or just give young people money.

The whole student loans system just seems designed to enslave students to
debt. It is just a cruel way for elites to control people.

~~~
smegger001
I wonder if it would help college tuition prices if the government were to
institute a maximum bureaucrat/administrator to full time professor ratio for
federally funded colleges/universities.

~~~
706f6f70
Unfortunately those bureaucrats are actually doing work. A good chunk of it is
around Title IX since the consequences were so severe if you didn't have
enough bureaucrats to handle the extra-judicial pseudo-tribunals to handle any
sex-related allegations. Jump forward to the woke 2018s and now you need even
more bureaucrats because all of a sudden each group needs a bureaucrat from
it's own race/gender/religion/disability. And now we need even more processes
because #metoo and #believethesurvivors and how do you handle a scenario like
Mattress Girl which is basically a Kobayashi Maru for a university? So now we
also need a bigger legal department and consultants to help develop best
practices when there is no clear innocence or guilt, but if you don't assume
guilt it could go viral and your funding will get hit.

And then people wonder why education is more expensive despite teaching staff
getting paid less and less.

------
squirrelicus
It's easy to criticize federal student loan programs, but there's an even
bigger problem: people are choosing majors that aren't valuable in the market,
and are later somehow surprised they are worse off than when they started.
Weird.

~~~
devwastaken
There's another big problem: People who choose valuable majors end up with
classes that don't matter with professors that don't care, with a university
that puts more effort and money into advertising than quality of life.

The fact that you _have_ to spend 4 years to get a bachelors in something is
complete BS. Padded time. Universities really don't pander to the 'market',
they are their own market and you being prepared for the workforce is an
afterthought based upon how much your instructor cares about it.

The only times these becomes exceptions is in Engineering, Law, and Medicine.
Things that have dedicated schoolings for them. It's still padded but they
have an explicit direction that feeds into a market.

~~~
burfog
It's stuck this way because accreditation creates a cartel.

To issue an accreditation degree, time-wasting requirements must be satisfied.
Accreditation requirements are effectively controlled by the customers, which
are the universities that are already accredited. Those universities don't
want competition to be able to offer students a better deal, with a cheaper
degree or with a more-focused degree full of classes that are expensive to
operate.

For example, consider a 4-year BS in Computer Science. It contains about 1
year of Computer Science, 1 year of vaguely-related things (physics, calculus,
etc.) and 2 years of cheap filler nonsense that makes you less-educated than
when you started.

Accreditation blocks any attempt to offer a full 4 years of actual value.

------
_iyig
Fun fact: student loans comprise nearly half of the U.S. federal government's
balance sheet assets [0].

Of course, the federal government borrows much more than that each year in new
debt, though it's at best unclear if this is really a positive.

[0]
[https://www.advisorperspectives.com/dshort/commentaries/2018...](https://www.advisorperspectives.com/dshort/commentaries/2018/09/26/the-
fed-s-financial-accounts-what-is-uncle-sam-s-largest-asset)

~~~
zunzun
If you think the US government borrows money, look at the total amount and
ask: who had that much money to loan? That much money did not exist to be
borrowed.

~~~
jjeaff
It's pretty well accounted for. The money is borrowed from primarily the
American people and American businesses in the from of treasury bills, notes,
and securities.

Printing money does not increase the national debt (I'm assuming that is what
you are referring to.)

[https://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm](https://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm)

------
bradleyjg
For federal loans, which are the overwhelming majority of student loans the
REPAYE plan allows borrowers to pay 10% of their income after 150% of the
federal poverty line for their household size.

As a worked example a single person making $35,000 a year will owe $140/month
regardless of total federal debt. After 20 years the remaining balance is
forgiven (though the forgiven amount is taxable income).

There are certainly situations where ends can simply not be met, but in
general it is not a good idea to default on those loans.

~~~
burfog
Nobody should be in that situation. You can make way more than $35,000 a year
without even going to college. Doing that after college means that the college
degree provided negative value.

One can look up jobs that don't need education past high school at
[https://www.bls.gov/ooh/](https://www.bls.gov/ooh/) and see that there are 9
occupations with income of $75,000 or more, and numerous additional ones in
the $55,000 to $74,999 range.

You could break $35,000 per year easily in the military. An E-1, the lowest
rank, can do that if they get the housing allowance and submarine pay. An E-5,
which is mid-level enlisted, can do it on base pay alone.

Smokejumpers get about $35,000 per year.

The national average for a truck driver is $43,464 or $75,672 per year,
depending on who is counting. Either way, it beats $35,000 by quite a bit.
Plumbers are about the same. Lots of trades people are doing way better than
$35,000 per year.

So the answer it seems is to hide the worthless degree. For some of the really
nonsense degrees, it might be better to let employers think you spent those
years in prison. You'd get paid more if you didn't have the degree.

~~~
thebooktocome
Both my father-in-law and an uncle ruined their health by truck driving. It
seems to be common for truck drivers to not carry health insurance, as well.
Therefore, medical bills have seriously eaten into their income.

I'd heavily discourage people from choosing the profession.

------
panabee
Assuming the study is accurate, can anyone shed insight on the repercussions
and ripple effects if so many people default on student loans?

------
echevil
As a foreigner, it sounds to me the root of the problem is still university
being way too expensive. Also, shouldn't the government provide direct
financial assistance to low income people being admitted to good colleges
without needing them to ever pay back?

~~~
graeme
In reverse: unlimited loans are give that cannot be waived in university. This
bids up the cost of university and has schools compete on features rather than
price.

------
goldcd
Wouldn't the sensible solution be to say exchange your tertiary education for
say 25% of your income over the next 20 years? Would seem sensible to align
the interests of both the provider and the consumer to the common goal of
making you worth more on the market. But then there's the obvious next step of
cutting out the middle-man and the government paying for the education and
clawing it back with progressive taxation.

~~~
nextweek2
Maybe, maybe not. You'd then see universities working with employers to get
you in the workplace on day one after graduation. Sounds great you say.

But, now you have someone else involved in your career and choices. They'll be
mapping out your career for the next 20 years and your education will be
tailored to just that employers practices.

Sure you'll be consulted and made to feel part of the process, but there would
be a whole set of administration from the university making sure that you sit
at a desk and bring in that money. It would be like HR for your life.

------
kennyggn
Why is this a problem though? They are legally obligated to pay off their
loan.

~~~
crawfordcomeaux
What happens when people peacefully revoke their consent to be governed in
such a manner?

Or leave the country?

Or simply the economy?

I'm no longer participating in the traditional workforce, choosing instead to
meet my needs primarily through decentralized communities founded around
giving or trading. I have no wages to garnish. What are they going to do? Jail
me? Pretty sure that's no longer considered legal.

Even if I'm wrong, what happens when a large collective of people do this? How
will investors respond?

~~~
mac01021
> meet my needs primarily through decentralized communities founded around
> giving or trading.

Care to share any more details? This sounds like an unusual and interesting
lifestyle.

~~~
crawfordcomeaux
The Buy Nothing Project is awesome. Most recent things my wife and I have
gotten: a slightly queen mattress, a cosleeper for our 2 week old, a
breastfeeding pillow, baby clothes to fit our slightly smaller-than-most-
newborn-clothes newborn. We got these things in the past 2 weeks for free.

[https://buynothingproject.org](https://buynothingproject.org)

When it comes to our friends, we all offer support in various ways to each
other, including mediating conflicts between couples or groups. Most of us
practice nonviolent communication to various degrees. We orient ourselves
around mutual aid and practice asking/offering help on a near-daily basis.

Edit: I'll add more later. I'm exhausted and falling asleep trying to type.

