

Student Loan Debt: Who Are the 1%? - mshafrir
http://economix.blogs.nytimes.com/2011/12/02/student-loan-debt-who-are-the-1/

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droithomme
Wow, the article's presentation of statistics is abysmal and certainly
intentionally misleading. The chart produced, by including each bar as all
persons that have greater than the level of debt, rather than into bins, means
everyone in bars to the right is also included in the count of bars to the
left. Sure, she explains this, but it is completely different than normal
convention, isn't going to be expected or realized but any but careful
readers, and the result is to support her assertion that debt levels are not
that high by massively misrepresenting the left side of the chart.

Then there is the issue that she is not even including anyone who graduated in
less than 6 years! It's hard to imagine that if we saw those numbers they
wouldn't skew the curve as well. The whole presentation reeks of cherry picked
data classification.

~~~
tzs
> by including each bar as all persons that have greater than the level of
> debt, rather than into bins, means everyone in bars to the right is also
> included in the count of bars to the left. Sure, she explains this, but it
> is completely different than normal convention

It's called "cumulative", and it is quite common, and not misleading. For this
kind of presentation it is what you want because most people are interested in
picking some particular debt level and saying "X% are above this debt level".
If you don't do a cumulative chart, then you have to take all the bins above
X% and add them up to get the number you want.

> Then there is the issue that she is not even including anyone who graduated
> in less than 6 years! It's hard to imagine that if we saw those numbers they
> wouldn't skew the curve as well. The whole presentation reeks of cherry
> picked data classification

Yes--it skews the numbers toward _more_ debt and away from the point she is
making it. This strengthens her point, not weakens it.

~~~
droithomme
I'd appreciate citations to use of this form of graph in reliable related
research that isn't clear propaganda. The graph clearly shows at a glance that
the vast majority of debtors have a very small level of debt. The large font
title of the chart "Percentage of Students with Different Levels of Debt" is
misleading. The term cumulative appears in much smaller print at the bottom.
Only careful thought reveals to most readers that the left most category is
not that level of debt 0-$10,000 that its measure of 64% of students have, but
it is that level of debt and all levels above it, (including $100,000, $1
million, etc) summed. The actual percentage of degree holders with 0-$10,000
debt, 64%-51% = 13%, is not shown directly at all. 13% is an extremely
different number from 64% and can only be extrapolated from the chart by
readers familiar with set theory.

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holograham
I believe the point of this article was not to trivialize college debt but to
criticize the media's frequent citation of college loans in excess of 100k for
an individual.

Part of the debt problem has been the dearth of students going into high
demand majors (mostly STEM). We on hacker news know the benefit of a
engineering/computer science degree and being even marginally good at it comes
with great rewards.

~~~
potatolicious
> _"Part of the debt problem has been the dearth of students going into high
> demand majors (mostly STEM)."_

STEM degrees are _expensive_ \- considerably moreso than, say, English
degrees. This is _especially_ true for professional degrees like engineering.

So yeah, your odds of employment out of school are much better than the
English major, but your debt load has increased significantly as well. Getting
a STEM degree can _mitigate_ the effects of our ludicrously overpriced
education system (i.e., you've got a shitload of debt, but at least you're
chipping away at it, as opposed to not making your payments at all), it does
not avoid it.

~~~
rdouble
The tuition is exactly the same at the state schools I'm familiar with. Books
were more expensive but were a small fraction of the tuition costs.

~~~
redrobot5050
This is not the case with all state schools. Mine, for example, was contrary
to that. Different colleges in the University had different tuition. Obviously
Art, Theater, Music, and Engineering have different costs -- why should they
all pay flat rates?

On top of that, majoring in something technical will also likely require more
fees -- lab fees, computer fees, etc.

Oh, and your book costs will be higher. Textbook prices have tripled in the
last ten years, so now an English Major is paying what I paid for Computer
Engineering back in 2000.

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zmitri
> Even among recipients of bachelor’s degrees, 90 percent manage to graduate
> with less than $40,000 of debt.

This seems inaccurate to me. I graduated from a Canadian University (which are
very cheap for the quality of education they provide) and accumulated ~30K in
student loans for tuition and living expenses.

If I went to a school of similar caliber in the US, I would need more than
that for a single year!

~~~
kooshball
> This seems inaccurate to me.

The article is talking about debt after graduation, not total cost of the
degree.

There are many ways to lower that debt, mostly by paying it off before
graduating with: student's money, parent's money, government financial aid,
school financial aid, school scholarships academic or otherwise, 3rd party
scholarships, etc.

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tibbon
I wrote a long reply to this, but it was too big for HN. Now on my Tumblr
instead.

[http://tibbon.tumblr.com/post/13839164804/i-am-the-1-of-
stud...](http://tibbon.tumblr.com/post/13839164804/i-am-the-1-of-student-debt)

Its the perspective from someone that is in well over 100K of student loan
debt- me.

~~~
redrobot5050
I'm now following you so I can read it later.

~~~
tibbon
Thanks. It is a bit of a wall of text, but I felt it best to offer a more
complete picture over the simplification that some make of, "People go to
school for stupid majors and take a ton of loans, then complain because they
are stupid since they didn't go to school for engineering|law|cs"

~~~
tcash21
Thanks for this. I read it and posted to fb. Assuming you already posted to
reddit. I am in a similar situation and am also the 1%.

~~~
tibbon
Thanks! I put up am AMA on Reddit, but no one has bit yet.
[http://www.reddit.com/r/IAmA/comments/n303s/i_have_over_150k...](http://www.reddit.com/r/IAmA/comments/n303s/i_have_over_150k_of_student_loan_debt_ama/)

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firefoxman1
Maybe it's just old-fashioned thinking (you know, like Henry Ford or J.P.
Morgan) but I had always been taught "Don't buy stuff you can't afford!" kind
of like this SNL clip: [http://www.hulu.com/watch/1389/saturday-night-live-
dont-buy-...](http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-
stuff)

It's really too bad that students are sandwiched between the "Gimme everything
now!" attitude and such a grim employment outlook, but since when should you
not have to repay what you borrowed? It's almost like such easily available
credit of the past few decades has caused us to forget what exactly a loan is:
_borrowing_ money with the promise to repay it in the future.

~~~
lawnchair_larry
It's easy to think this way if you aren't an 18 year old naive kid in front of
predatory lenders and everyone else around you telling you that this is the
normal way things work and you are worthless without a college education.

Unfortunately, you don't get a second chance. How many things did you have to
sign at 18 years old that will haunt you to your grave?

As for when you should not have to repay what you borrowed, well, that is
pretty common in business and no one plays the deadbeat card.

~~~
firefoxman1
...I am 18, well, almost 19. I _chose_ community college for 2 years while I
save up for the university I plan to attend. Yeah, people tend to judge when
you don't choose a "real" college at first. It seems unambitious to everyone
in my family except my grandfather (coincidentally he's the financial guru who
got me into investing), but knowing I won't be in debt when I graduate is more
than worth it.

I completely agree that there is a lot of pressure to go straight into the
most prestigious college you can. Between for-profit college TV ads pressing
the importance of a degree, school counselors telling you to "aim high" and
constant expectations of everyone around you it's much easier, socially at
least, to go straight for the expensive university. It's nothing new, though;
as Henry Ford put it, "Luring people into debt is an industry." Looks like
that industry is still going strong.

I didn't mean to come across as arrogant with my first comment. It's certainly
hard to go against the current, and I think the main problem is schools and
parents not encouraging an affordable college, at least for the first few
years, as a viable option. People just tend to be blinded by hype and
expectations, not wanting to disappoint the family name. There's certainly a
lot of that attitude where I went to school.

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danielschonfeld
If anyone wants to get a hold of her and let her know just how wrong and
narrow minded she is:

<http://www.tc.columbia.edu/academics/?facid=js3676>

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cq
Note that the first graph is "Six Years After College Entry". So that's 1-2
years after graduation. BARELY any time (if any) for interest to accumulate
(as it doesn't while you're still a student).

I'd like to see a graph of 5 or 10 years after college graduation.

Edit: I was misinformed about college loans, please read the comments below
this post. It is worse than I thought.

~~~
matwood
Interest shouldn't accumulate as long as payments are being made.

If people are leaving school and jobless, then any debt is going to be rough
on them.

~~~
tcash21
This is not true. Interest does not start accruing on subsidized loans until
repayment begins. Interest accrues WHILE you are still in school for
unsubsidized loans. In both cases, interest is accruing as you are making
regular payments.

~~~
matwood
That's correct. The original poster said lets look years out to see if someone
had 100k in debt, but if they are repaying the loan the balance should not be
getting bigger even with interest accruing (it's not _accumulating_ since a
payment should cover current interest plus some principle). I wasn't very
clear with my wording.

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FreakLegion
Always, always, always find a school that will pay your way. I racked up a
"mere" $10,000 as an undergraduate (thank you, Bay Area, for your insane cost
of living), and even that was too much.

As a result, money ended up being a big part of the graduate program I chose.
This allowed me to actually _make money_ on graduate school. The lesson being:
college is a system, and you should learn to game it.

~~~
InnocentB
This is good advice to give to specific individuals, but it's unrelated to the
systemic debt problem. Your strategy can't apply to the broad population, or
the universities wouldn't have any money with which to pay your way.

~~~
FreakLegion
I'm not talking to individuals. I'm talking to a specific, highly motivated
group of people, some of whom are pursuing undergraduate or graduate degrees,
some of whom are _considering_ pursuing undergraduate or graduate degrees.

Downvote all you like, but I've learned a few things through three degrees at
three different universities, and my advice remains the same -- particularly
for anyone attending a for-profit school or graduate school:

If you plan on going to college, learn to game the system.

