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Student Loan Debt Is Now as Big as the U.S. Junk Bond Market (bloomberg.com)
360 points by rayuela 3 months ago | hide | past | web | favorite | 422 comments

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back.

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

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

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

> Another solution is to let you go to school for free and then pay a percent of all your future earnings back to your college, or at least into a pool that pays for the next generation's college.

We could call it income tax :)

The problem with subsidizing college in any way, including the current student loan system is that it encourages people to go to college whether it makes sense or not, and as several people have mentioned in this discussion, in a lot of cases, it doesn't make sense.

Anyone who is properly motivated should be able to go to college, but when I hear cries for a free college education, I can imagine that that would stimulate a huge influx of people who do that simply as an excuse to take a 4-year vacation (of sorts). People who are properly motivated and who have what it takes should be able to go to college, but it needs to cost something... just not as much as it does now.

Yeah, but isn't that also the "problem" with subsidizing K-12 public school? One doesn't need a high school education to wait tables or stock shelves, and most apprenticeships and trade schools could probably be started several years earlier without issue.

We used to have this Enlightenment ideal of a Liberal Arts Education. It served as job training, sure, but it also tried to make its recipients better citizens and more adept thinkers and more capable adults and, broadly speaking, more effective human beings in a bunch of socially and culturally important ways. I'm optimistic that free college tuition would be a net gain for the economy, but I also strongly suspect that it's worth doing even if it costs us some economic growth.

Besides, if someone wants to take a 4 year vacation, they're already well within their rights to just not get a job and do whatever they like with their early 20s right now, presuming they can cover their living expenses somehow. Free college tuition doesn't actually allow anyone who wouldn't otherwise be able to to slack off, but it does give them something socially positive to do with their slacking.

Was just talking with my boss about how they do it in Germany.

Essentially they do heavy tracking, if you can't cut it in the college track, you get put into blue collar training and apprentice programs. This is why they are such an industrial powerhouse still - they have a well prepared white collar and blue collar work force.

I went to school in Germany and live in the US now. I think every system has it's pros and cons. The German education system is interesting, because it's different from other countries. However, if it wasn't for the hefty price of education (including how important it is what school district you are in) I would prefer the US education system overall.

In Germany it's easy to be put on one of the two lower tracks which lead to apprenticeships [1], because you didn't do well in primary school. At that point is harder (but still possible) to go to college. It also leads to segregation because immigrants who don't speak German at home are unlikely to do well in primary school.

[1] Calling it blue collar is a bit of misnomer here because you can also do apprenticeships in white collar jobs, even software engineering.

Primary Schools offer additional help to bring immigrant children up to speed with their german, though I'm not sure how many families use this option.

You can also almost always switch tracks, the farther down you are one track the harder it gets to switch up. I went for the second lowest (Realschule) and then went to a tertiary school (Fachoberschule). With that I can study in a University for Applied Sciences (different from normal University).

The german education system has many options open, the general push in the lower two tracks is to get you into a job as early as possible (there are lots of job fairs I went to) but still permit you to pick any of the other 20 options.

Yup. I ended up in my apprenticeship because during elementary school I wanted to go to the school where all my friends went even though my scores were better. Stupid I know but I was a kid that wasn't able to make reasonable decisions.

Yet I ended up through a apprenticeship in Software Engineering and I could go back at any time and finish my 12 years then go to university. Part of me wants to go study and get a degree, but all universities I inquired at rejected me for not having 12 years despite working for 8 years now.

Could'nt you go to a Fachhochschule with your apprenticeship in Software Engineering?

You have to do 1 or 2 years of school (Fachoberschule) first. My friend did this, but it's a path that not many people will choose, because it's hard to go back to school for such a long time after you started to earn money.

It is true that it is too easy to be put on one of the two lower tracks during primary school. But there are multiple options (Fachhochschule, Berufsakademie) to go to university after you have finished your apprenticeship. Fachhochschule is free and in the case of the Berufsakademie you even get some money from a company while studying.

This is only functional if you have an equitable education system in K-12 that allows every child the preparation necessary to reach their potential. Speaking as the spouse of someone who's worked for a decade in urban education, we are very far from that reality.

Conceptually, it's nice to imagine a purely meritocratic system wherein everyone may ascertain the level of potential they desire, but the US is living through the hangover of centuries of systemic racism.

The only way this tracked solution could be truly fair is if access to education was universally available and equitable; in our current reality, what it actually would mean is that those who can afford the best education in K-12 will be highly over-represented in the college track and those who cannot will be under-represented.

So in the end it turns out to be an anti-meritocratic solution.

> Yeah, but isn't that also the "problem" with subsidizing K-12 public school?

Eh, 9-12 public school maybe. The dirty not-a-secret of K-8 is that it's effectively state-sponsored daycare as well as an educational system, so its role as a holding pen is a feature rather than a bug.

I find people who say things like this don't understand the great amount of good that elementary education provides. Basic literacy and mathematics skills are tough things to teach effectively. They're not at all difficult to provide if you have the time and resources to spend on your child, but many people do not (have the inclination or the time). Bad idea to punish the children of those people for their parents' decisions.

Until you've seen the difference a good elementary education can make for a kid growing up in The Bronx, I'd say hold off on the snap judgement.

I think I was unclear, or you're rounding my view off to a very different one that I admit is common.

I'm a child of teachers, and I know quite a lot of people who teach in inner cities or narrowly made it out of impoverished towns because of good education. There's a reason I said "as well as an educational system", and I definitely don't believe the daycare role of schools is a reason to cut budgets or cut schooling.

Educating kids is hard. Many people lack the time, knowledge, and resources to substantially educate their children themselves. Many students benefit from years of often-repetitive teaching to ensure information is available when they're developmentally and environmentally ready for it. I don't doubt any of this, and I absolutely think public schooling is a sensible solution to it.

My point was only that "you could say K-12 education acts as a state sponsored vacation" misunderstands the role of schools as daycares. Non-educational time at school isn't a vacation, it's a public service for two-income households that struggle to afford daycare. I'm not talking about teaching kids math. I'm talking about the existence of three-recesses-per-day kindergarten, or middle schoolers sitting in voluntary, teacher-run study hall after school.

The district I grew up in had a public debate about whether to move to half-day kindergarten, where the two sides were "it'll cut school costs" and "it'll cost parents more in daycare". No one even claimed it was an educational debate, because less than half the day was spent on education. None of this has anything to do with whether teaching literacy in the Bronx is important.

I'm simply asserting that "provides childcare for free" is an intentional benefit, not an accidental drawback, of public schooling.

Apologies for completely misreading your post. And I agree with everything you've said.

Not a problem - as I reread my own post I realized that it only made sense in a very narrow context.

To the extent that I'm upset by education-as-daycare, it's only because I think they ought to be separate public services so each one can be done more efficiently. But that's a serious pipe dream, so for now I'd rather just double the budget of what exists and trust that the people involved are well-meaning enough to use it sensibly.

I was homeschooled from 4th to 8th grade and doing a few hours a day of work I still finished by Christmas. By comparison most classses never seemed to finish their textbooks.

Going back for high school felt almost painfully slow. I don't think kids need to be crammed with as much information as possible, but you could probably double the content without leaving most people behind.

I agree, but only if everyone is motivated to be an active participant - looking back on my own high school days, the kids who had trouble mostly had no incentive to be there.

It's probably utopian, but I still think a lot of problems could be solved by paying kids for marks. There are lots of arguments made about intrinsic motivation to learn being enough, but learning is also difficult and uncomfortable. Some extrinsic motivation to develop a functional learning style might be exactly what those currently underachieving are missing.

Maybe where you grew up but that’s not what you’ll find in states/districts that take education seriously. 8th graders in the northeast are generally able to read at an adult level and understand basic arithmetic including algebra and geometry.

I don’t know if you understand how difficult it is to teach 12 year olds but that’s a miracle not daycare.

This is the second version of this reaction I got, so I think I made my point wrong.

I don't mean at all to say "it's not education". I did get educated in a northeastern public schools, I had a lot of excellent teachers who worked incredibly hard and committed their free time and money to education.

My point is that K-8 public schools are both source of education and - intentionally, explicitly - daycare alternatives. Not "school is useless, it's a holding pen", but "schools intentionally provide non-educational support for parents including childcare".

My public school had full-day kindergarten that was about 70% recess. When budget cuts hit, there was a public discussion of whether to go to half-day kindergarten, and the two sides were "it'll save money" and "parents will have to pay for childcare". My district had after-school activities with no real educational value to help keep kids occupied until ~4PM, and then another hour of unstructured study hall after that. The formal purpose of the thing was to provide a place for kids who didn't go to daycare or go home alone.

I don't even think this is a bad thing! The parent comments suggested "free college is a vacation" and "well by that light, so is K-12 education". My point was that children don't take vacations, and the daycare role of primary schooling is a benefit, not a hazard.

There's a lot of countries where it's not normal to keep going to school until you are 18.

In New Zealand, you can leave school when you're 16 and start an apprenticeship. I think that by 16, most people will know if they're definitely not going to be going to university, and I think that 11 years of schooling is enough to set people up with the basics for life. It's the point where (at least in New Zealand) you start specialising, picking specific subjects that are going to help you with, or be required for, university

Comparing a college education to K-12 public education doesn't make sense. In general, one needs to understand some mathematics up through Algebra and have some reading and writing abilities to be an employable, productive adult. Whether the public school system in the USA does a good job of providing a basic education is a different discussion.

I’m not the kind of engineer that has a STEM only mindset and I see a lot of value in good Liberal Arts education, but let’s be realistic -- whether it’s because of nature or nurture, there are plenty of college freshmen who are just not going to be intellectuals. Even if it was free (and it would never really be free), it's not a positive thing to encourage them to spend four years majoring in communications or the like.

>Comparing a college education to K-12 public education doesn't make sense. In general, one needs to understand some mathematics up through Algebra and have some reading and writing abilities to be an employable, productive adult. Whether the public school system in the USA does a good job of providing a basic education is a different discussion.

It does seem like this baseline understanding does shift with progress though. For example our ancestors did not need a lot of education to push a plow, but more education will be needed with the continued elimination of physical labor.

You need to be basically educated in algebra, literature and philosophy/civics to be a productive, contributing voter and citizen. Forget vocation.

I agree, but many college graduates (and for that matter some people with advanced degrees I've run into) have no or little understanding of philosophy/civics, history, literature, etc.

> People who are properly motivated and who have what it takes should be able to go to college, but it needs to cost something... just not as much as it does now.

In Spain there is a limited number of open position in different studies. You get an test and people is sorted by their grades. The people with higher grades get to the college they choose. It is not perfect as people in better neighborhoods get better education and can get more easily to college. But at least, it is closer to a meritocracy and costs less money.

> as an excuse to take a 4-year vacation

If you don't pass a minimum of credits the first year, you get kicked out. A lot of people doesn't pass this phase.

There is ways of solving the problems, but you need a government with willingness to do it.

>in a lot of cases, it doesn't make sense.

If you are right, what data can we rely on to determine when it makes sense for a person to go to college and when it does not make sense for a person to go to college?

"In a report released Monday, the Census Bureau said 33.4 percent of Americans 25 or older said they had completed a bachelor’s degree or higher. That’s a sharp rise from the 28 percent with a college degree a decade ago." [0]

66.6% of Americans don't have a bachelor's degree or higher. So what is the appropriate percentage of Americans to have a college degree? Which other countries in the world are too educated?

[0] http://thehill.com/homenews/state-watch/326995-census-more-a...

> I can imagine that that would stimulate a huge influx of people who do that simply as an excuse to take a 4-year vacation (of sorts).

The current trend is to run universities and colleges "like a business." In this model, students (and their parents) are the paying customers. The mantra of good customer service is "the customer is always right." This is ultimately the source of much of the grade inflation[1]. If you tell your customers that they are "wrong" by not giving them the grades they prefer or by making them work harder than they would like for those grades, they will react in ways that ultimately hit your bottom line. Undergraduate education should not be like a vacation. Any student who treats it that way should be flunked out after their first term.

Having taxpayer funded "free" (or dirt cheap) higher ed wouldn't fix these problems over night, but it would help remove some of the weird incentives that are currently undermining the core mission of actually educating people.

[1] https://www.insidehighered.com/news/2016/03/29/survey-finds-...

> I can imagine that that would stimulate a huge influx of people who do that simply as an excuse to take a 4-year vacation

In practice this isn't a problem, at least not in France where my partner studied. Students that qualify for free public education are in the top of their class for the year. In order to keep qualifying for free education they must keep their grades up. So this idea of students graduating high school, waltzing into a university, then screwing off for four years is pure fiction.

As another comment pointed out, in most of Europe your government funded "vacation" can last at most 1 year if you don't manage to pass a minimum number of exams, or rather collect a minimum number of ECTS points.

I'm going to say something that probably isn't that popular here... all education is a good thing and valuable. The problem is that the costs have made it such that the only education worth pursuing is STEM, which IMO is a travesty.

I just saw some really nuts justifications to prevent poor people going to university I can’t believe someone rationalised in their head.

How could this not be popular? Where will would be without the next generation of literature, teachers, artists? Society would start to suck.

I don't see any issue with that at all. Imagine how many potentially high achievers flounder away because they aren't surrounded by the right people and influences to succeed, because they couldn't get into university. Even freeloaders are going to learn something and be better people for it, and university might be free but everything else isn't, they will still need a job and be contributing to society.

Not to mention, money shouldn't be the barrier for entry to keep admissions in check if you want one. Viability should be. Universities already screen for good candidates. Change the screening to suit.

On top of that, you still have to be succeeding in uni to stay in uni

If a few freeloaders get a degree they don't need. Would society have lost anything but money?

How would you define whether it makes sense ? Free market or some other metric ? From society's point of view, having an educated population arguably has more benefits besides the immediate economic one, much like having an universal health service, having a police force or permitting LLC's to exist. If it's spiraling out of control in the US, reducing costs per head would be far better than reducing the overall headcount.

I think this is just yet another symptom of outdated mindsets. I think people should have the ability to study advanced topics beyond the direct market benefits. Though maybe they also have to learn some core, marketable skills. It’s important for people to see there’s more to life than a paycheck and a cubicle. If society only ever studies the immediately financial, then we risk missing opportunities for short term gains.

One such would be computer science. Until computers came around the underlying algorithm and associated fields were pure math. If people hadn’t been able to study pure math then there wouldn’t have been an entire wing of mathematics available for CS.

Many countries provide free (you don't even have to buy overpriced books or any other scam) education on all levels (including PhD). Even the middling ones like Poland. You simply estimate your rough requirements for different specialties and fund that many students. Admissions can become somewhat cutthroat (50 applicants per slot are not unheard of), but that only works for the better.

Would you say that this is generally the type of model people are campaigning for in the U.S. when "free college" is mentioned? Years ago, I had initially assumed people were applying that phrase the to the current U.S. model, where almost anyone can get into somewhere, as long as they can pay (not just tuition, but living expenses and time as well), with some programs being very easy, and they wanted all of that covered.

I'm not familiar with the sentiments on the other side of the pond. But what you outline boils down to absolutely no requirements. If your government would also provide students with free/subsidized housing and food, you'd quickly see unsustainable numbers of students.

> Admissions can become somewhat cutthroat

This is what I've heard about a lot of places that provide good higher education. I would be concerned in the US that college readiness correlates a little bit too closely to familial wealth.

Atleast in germany, the only thing that matters is your grade.

When a course in a university has more applicants than slots, the required grades are lowered (1 or 15 being best, 6 or 1 worst depending on your previous education) until the number of applicants fits into the number of slots.

Since all previous education is free, family wealth matters little (though it still plays a role)

That's why you'd have the usual frat jocks as opposed to third-world public admissions where everyone ought to be dedicated.

Higher education is pretty cheap in France.

It is not like it was a vacation. In most cases, you still have to pay a rent, food, etc ...

And you commit several years of your life to it, that's the most precious resource you can give.

I can't believe I am discussing this to be honest, that's an insane argument.

Come on.

Poor people get scholarships, get dismissed from university cost even.

And aside from wealth, everyone can repeatedly enroll in classes for many years (although if you don't pass you have to payback what was given to you) and waste everyone's ressources for useless, unfinished degrees (hello first year of sociology or other bullshit).

Perhaps you should start charging for individual high school classes, in case people learn things out of curiosity rather than if it makes them a more valuable member of your workforce.

where did this concept of college as a 4 year vacation come from? You have to show up to class, study, be diligent, and apply effective time management skills. Otherwise, you'll be put on academic probation and then kicked out. Even for those people who seem to have a knack for finding lax professors and classes, coasting is not necessarily a college student thing.

>where did this concept of college as a 4 year vacation come from?

It seems to be something in the echo chamber of HN / startup world that has become common over the past 5-6 years. They seem to not understand that having a college degree is pretty much a requirement for any decent-paying job these days or hopes to have one that will in the future. From an economic standpoint, people with degrees have higher wages.

The real issue is the cost of colleges and the loans that people take out to attend. Rather than addressing that (though some commenters have made the attempt) they'd rather say for kids to not go at all and thus limit their future opportunities for work as well as intellectual growth.

I coasted through five years of college, graduating with a CS and Math joint-major, three internships, and 20 more credit-hours then I needed. I did the bare minimum of studying, and applied little to no time management skills (Unless you count the occasional half-assed assignment finished on Sunday night.) I spent more time worrying about World of Warcraft, then I did about the possibility of ending up on academic probation.

Compared to a 9-5 job, yeah, college was a five year vacation. There's no boss that will have nasty conversations with you, if your work isn't done, if you fall behind on assignments too much, you can just choose to not do them, and spend an extra hour or two cramming for the midterm + final. Nobody cares if you sleep through a class, or two, or seven.

... Obviously if you went to a difficult school, or don't have the social safety net of living with your parents, or you had to work full-time to pay for school, your experiences might be different.

I coasted through five years of college ... Compared to a 9-5 job, yeah, college was a five year vacation.

If you went to college voluntarily and did not care about neither the monetary constraints nor the opportunity costs, then sure that's a vacation. I suspect pretty much anything can be framed as such under those circumstances. For most people, this is not actually a realistic option.

No monetary constraints, because I borrowed from the bank of middle-class parents.

No opportunity costs because my earning potential after college was much higher then before. Not everyone can become a college dropout who founds a unicorn.

My situation is not unusual.

"the bank of middle-class parents" is not a real bank. It's your parents. You can pay them whenever (and you most likely never fully/really will, and that's ok). Your opportunity cost might be true and might be "I can't help support my family on a part time job".

Your situation might not be extremely rarefied, but I don't think you grasp the immensely insurmountable advantage you have in this scenario.

Subsidizing non-college career options would fix that, but really it would probably just be easier to expand college options to include non-degree career paths so that those options fall under the college umbrella.

Really though, people might choose to go to college to see what they are capable of and take on a challenge with the possibility of failure already planned. They might already know they can do an alternate career path as well.

The idea that everyone will have their life planned out before college is silly. I certainly have no idea how well I would do in every college degree program. I could be great, or I could suck.

Society benefits when people get more educated, period, including better voting decision, more civic engagement, and ability to build social ties across class, ethnic, and ideological lines.

Sure, but a modern day University is not a great model for education. All of the information from a 4 year degree can be found on the internet for free. Essentially you are buying accountability and for some majors getting past their barriers of entry.

It's not about information. It's about learning how to work with others in the context of a complex institution, critical thinking by interacting with others who have different viewpoints, and in the case of post graduate degrees creating new knowledge.

Those things cannot be done over the Internet easily.

An education doesn't just benefit the one getting the education. The entire society benefits.

Educated people are crucial to successfull companies, thereby creating more jobs.

Educated people are crucial to a healthy democracy, where populist politicians have less chance of getting elected.

I would argue that it's probably more important for the entire society for someone to get a good education than for the person himself. Therefor education should be subsidized.

what's wrong with a 4-year vacation where you enrich your mind?

That sounds perfectly healthy on an individual level, and tolerable on a societal level. Perhaps even necessary if you consider the deterioration of discourse in this country.

Also, It's not like food and housing becomes free when tuition is removed.

Perhaps we could make only the first time through college free. If you fail or drop out, the next time through, the student covers tuition themselves.

I have no real opinion on that idea, or any idea how effective it would be, so I'll say nothing more.

Someone would still have living expenses so it's not like they could just hang out at school the whole time. If someone really wants to work in restaurants and be a professional student who cares?

Realistically, having college remain free helps people who later in life want to change careers, but need some education to do so. We pay a lot of lip service in the US to retraining the workforce, yet do little to facilitate the training.

I reimburse my child per a formula: A = 100%, B = 80%, C = 60%, etc. 4.0 GPA = 120% (hasn't happened).

I will happily pay for everything, a full ride, as a parent or a taxpayer, if the student does the work.

You've just disincentivized your child to take organic chemistry.

Ya, that's a good point. As a taxpayer and a parent, I do want students to dabble. So maybe cover the first two years, no questions, no qualifications. Thereafter, I'd want any effort I'm paying for to be made in earnest.

Optimize for least amount of challenging classes, impose huge monetary penalty for risk taking. Sounds like you're doing a stand up job in parenting.

Thanks. I do my best. I'm glad you approve.

I am fully ok with government paid tuition. No problem. Not when the school is four years vacation. Not at all. I expect the students to sTudy in exchange of those money.

Considering the discourse in universities in this country with all the perceived victimhood and unending political correctness I am not sure they are producing enlightened minds.

That could have something to do with the character of people who can currently afford college. I've heard it called an echo chamber.

I tend to agree with you about the problem although I am not sure that it has been an issue in other countries with free college education. Maybe the solution would be to emulate some European countries and also pay for vocational training, or subsidized trade apprenticeships.

Another thing to note, here is that you could do free Community College which costs a lot less and is a pretty good indicator of future performance in 4 year college.

We don't have to pay tuition to Ivy League to get a better more educated workforce.

So if you can pay for it, you are welcome to take your AA classes at a state 4 year, if not, we'll get you a free transfer degree from a local community college and at that point, you can choose between trade, tech, or a major at a 4 year school.

If we detach, 'everyone gets free school' from the idea that we need a more educated workforce to maintain our standing in the world, we can work toward a solution that is a net positive in society and not just a panacea for people who feel they've been left behind.

can imagine that that would stimulate a huge influx of people who do that simply as an excuse to take a 4-year vacation (of sorts)*

If you just subsidize school and not living expenses, then it removes the incentive to treat college as a free vacation. Since if you have no desire to learn, you're not going to waste time taking classes (even if free) and scraping by on a part time job when you could just work full time and have a lot more free time since you're not "wasting" time in school.

Plenty of European countries have cheap or almost free higher education.

I think that we would simply end up with a better-trained, better-trained workforce if:

* We stopped educational subsidies for students with poor grades (ideally, gradually to give the student a chance to feel the pressure and correct)

* We equally subsidized trade schools (ideally, even college dropouts or older people could access these subsidies at least once)

The problem with maximizing efficiency is that it kills diversity and creativity. In my home country, Austria, everyone can study anything for free, and I think it has not had that negative impact either. Most people are reasonable and will study something they can make a living off.

Totally, utterly disagree! I used to think exactly like this. I am from Norway and when I was young I was full of disdain for the Norwegian system, where government pays for all sorts of stuff. I was completely convinced like you that if only things were like in the US, where people have to pay lots of money to go to University, tell will be super serious students.

Then I went to the US to study....

Boy was I wrong!!! Having to pay for university had zero influence on the seriousness of the students I met. In fact I'd claim it was much worse than my experience from different European countries with free University.

What I realized is that if it is not government money it is going to be somebody elses money and that is frequently American parents. American students did not seem to be any more concerned about wasting their parents money than Norwegian students are concerned about wasting government money.

Again I think it is worse. Over the years, looking at this in more detail I think we are completely overestimating the effects of financial incentives. People are not really optimizing homo economicus. A lot of other factors matter equally much or more.

It is also about what society promotes and values. American society offers no respectable vocational training programs, and does not promote or value that path. Look at Switzerland and Germany which values this and provide great vocational schools. A lot more people go down that route and get skills to get well paid jobs without burying themselves in debt.

It is actually half decent in Norway as well since our system is closely modeled on the German system, however we have suffered from being too heavily influenced by the American view on education. Luckily there has been a push to change this and promote vocational training, causing more people to take that route.

However you can't get people in America to make sensible educational choices, when private schools are shamelessly misguiding student to reap more profits and society is pushing the idea that you can't make a good wage without going to college. Never mind the unhealthy American habit of thinking "anybody can be anything." American optimism can be great for launching google and facebook but it can be poisonous to people of average skill and talent who are deluded into thinking they can be anything they want as long as they work hard enough.

I think you got to work both on attitudes, what the school system offers, the values promoted. Financial incentives can be structured in many ways which doesn't need to punish people severely.

E.g. here in Norway you don't pay for school but you have living expenses, so you get a government loan and stipend to deal with that. As you pass classes they convert increasingly larger part of your student loans to grants. This gives a carrot to anybody to attempt to finish the study in reasonable time.

I mean, as long as they're learning, so what? And if their GPA reflects that they're not, after a probationary period, they get kicked out.

You make it sound as if dedicating 4 years to studying say, latin art history, is a waste to society.

We have that in Uruguay, and it's no fun (I agree that getting into debt sucks as well).

State/national University here used to be 100% free, but now every graduate has to pay, starting 5 years after graduation, until they turn 65, if they make over U$ 1000 - irrespective of whether their employment has anything to do with their career.

So, a 25 year old graduate gets to pay for the next 35 years. Unlike student debt, you never pay it back, and the cost is also adjusted upwards every year - ostensibly according to inflation, but might be higher.

Students that elected to pay their tuition in a private university don't have to pay.

In a way it's more fair because impoverished people have a chance to do a degree, and they even get a scholarship that includes money for living expenses and textbooks, but OTOH most of the graduates don't earn much above U$ 1000 and they have to pay 5 to 8% of their salary for all their working lives - I'm not sure if that's a good deal.

Nah, let’s find some flashy Valley name for the concept and disrupt the market.

Personalized Education ICOs. Everyone gets their own token redeemable for a portion of lifetime earnings and tradable on an exchange. Traders can go long on an investment or short you if they forsee the market digesting an event decreasing your likely lifetime earnings.

You might enjoy (or have already read ;)) "The Incorporated Man", a fiction novel which has this basic premise: Everyone's a minority shareholder in their own personal corporation. (except the main character). It's pretty well written, and both the main character and the antagonist have points of view which make sense, IMO.

ILOs - Initial Life Offerings

yes, and make sure to include a blockchain.

Actually Singapore has a similar program. The Singaporean government pays tuition for some students for them to finish their higher education abroad. After graduation, they come back and work for the government full-time for a couple of years in exchange.

It would be similar, but it would be an additional tax that only college graduates pay and is entirely redirected back at the colleges.

Actually, it is already happening: holberton school, make school, lambda school, etc... :)

No, we couldn't, because people who don't go to college will be paying it.

Most people do not go to college and still pay for income tax.

Income tax covers way more than education.

Exactly, which is why this would be a special additional tax that is just for college graduates and just goes back to the colleges.

This is the system we have in the UK. The crucial differences between having it as an extra tier of income tax of 9% above £21k (going to £25k soon) are

1) Those that don't directly benefit from university (say you become an electrician) don't have to pay 2) Those that earn millions don't pay it - they pay their £50k loan off (40% of that is living costs), but then those people tend to avoid income tax anyway 3) Those that emmigrate still pay it

All in all it seems fine, but it's used as a political football by those that want to tax builders to pay for the education of stockbrokers (Labour)

There are a large number of people who will pay back multiples of their original loan amount (pay back ~£90k over 30 years on a £40k loan) if they earn moderately high salaries to start with and progress to high salaries within the last 15 years or so of their 30 year loan lifetime.

The extortionate interest keeps a middle tier of professionals paying well after they've cleared their original loan amount.

Not to mention - I have no doubt 30 years will be changed to 35, and then 40, when the day to write off the debt actually comes.

To pay back £90k would involve paying back £3k a year, or earning an average £33k over the threshold - currently that's £54k well into the top 10% of earners.

Currently income tax between £50k and £60k is 60% due to the wothdrqwal of child benefit, student loan increase this to 69%.

Personally I think we tax income - especially earned income, far too high. We have millionaire pensioners paying hardly any tax at all, yet people paying 70% who are unable to buy a house. Sickening, but it's not tuition fees to blame.

Also a special tax for sick people?

Heard of health insurance ?

We have that. It's called insurance.

That’s just slightly more transparent income tax.

Not sure why you are downvoted but this makes sense. If you want free education then you must promise to pay for it in future rest of your life.

> for a useless degree they'll never use

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

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

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

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

"A similar number of people" developing a brand of hero worship for scientists? Maybe I'm hugely biased but that doesn't really mirror what I see online and elsewhere.

Are you telling me that for every climate change denier, for every anti-vaxxer, for every creationist, for every chemtrail/tap water/moon landing/flat earth conspiracy theorist there's a rabid scientist who elevates the current scientific consensus to the level of religion?

That's borderline whataboutism IMO.

The "March for Science" that happened earlier this year had estimated attendance of 1.07 million.

Now go to Google Images and search for "March for Science". Nearly every sign I see is either political in nature, elevating science to a level of religion/infallibility, or casting science as a fashion/meme ("Scientific is the new chic", "Science isn't wrong", "In science we trust").

I'm not convinced, I haven't followed that particular event closely but as far as I know it was mostly about opposing the anti-science views of Trump and his administration. Given that he said multiple times that global warming was a chinese conspiracy I'm not sure this reaction is particularly extreme or uncalled for, regardless of your opinion on the topic. Using this to say that this million of people participating are adepts of scientism is a bit of a stretch IMO.

Using the same logic I could say that the 62+ millions of Americans who voted for Trump are climate change deniers but I don't think that would be fair either.

> opposing the anti-science views of Trump and his administration

> I'm not sure this reaction is particularly extreme or uncalled for

But opposition can easily veer into defining, and then rigorously defending, a 'pro-scientific' dogma that actually ends up opposing new, legitimate research.

As a complete hypothetical, what if an esteemed climate scientist discovers evidence that global temperature increase estimates actually are too high by, say, a factor of 2? Will people take that evidence seriously, or write it off as 'climate change denial'?

Similar to Twitter, it's hard to nuance a complex thought on a garish protest sign. With the example of a sign reading "Sciences isn't wrong", that's not literally a statement of science's infallibility, it's just something some guy wrote on a sign. If you had a conversation with the individual I'm sure they would espouse to you what they meant with their sign.

It feels like an act of willful ignorance to interpret the few words or catchy phrase on a protest sign and ascribe them as that person's core beliefs.

That's part of the problem now though, there's no room for nuance. You almost HAVE to take an extreme position in order to be heard.

For instance, the GP mentioned anti-vaxxers. There are many different kinds of "alternative" stances on vaccinations, and only one (very) extreme position is "vaccines cause autism". But if you mention anything about vaccines that isn't 100% of vaccines are amazing 100% of the time you are considered an "anti-vaxxer", lumped in with the vaccines-cause-autism crazies.

Consider: I haven't made a judgement on vaccines in this comment, yet I guarantee you have a feeling/judgement about what you think I believe. Like I said, no room for nuance.

You're not presenting your opinion on the subject of vaccines though, you're presenting your opinion on the subject of having opinions about vaccines. Give me your nuanced thoughts on vaccines if you want to have a productive discussion with someone.

I think we're seeing a completely different trend, spurred on by social media and the ability for people to broadcast their own messages/opinions about a topic, and that is, everyone has a loud, and often spurious, opinion about everything. This is something that's always been true, social media is just amplifying this aspect of human nature.

It's so wild how certain topics will trigger a response. Your comment was about nuance, and I replied with (what was meant to be) a mostly complimentary comment, expanding on that topic. But you latched on to the vaccine part of it that was meant only as an example. Something about that subject really gets people's blood pressure up; I notice my comment above was downvoted as I predicted - although not by you, as far as I could tell. (FWIW a nuanced discussion about vaccines isn't germane to this topic, so I will respectfully pass on that.)

Anyway, I think you're right about social media amplifying human nature, but I don't think it's about opinions. I think most people don't really care too deeply about most things -- one major reason why voting turnouts are so low! Sure, they care about one or two things passionately, but they're mostly moderate on most things. More universally though, people care about attention. They love attention. It's wired into our DNA; babies do everything they can for attention, because attention is survival.

But it turns out that having moderate views isn't really all that interesting. It doesn't demand attention the way having (or representing to have) extreme views does. So are the extreme views genuine, or just a show for attention?

My problem with your previous comment is that while on the surface it's perfectly reasonable, it's also unsubstantial and the type of fluff you hear as an introduction to a flat earther youtube video. The good old "show both sides of the issue" that's used by all fringe theorists ever to get people to discuss their side of the story.

Of course that's a complete strawman on my part here, you didn't say any of this. But consider this for instance:

> For instance, the GP mentioned young earthers. There are many different kinds of "alternative" stances on the age of the earth, and only one (very) extreme position is "earth is 6000 years old". But if you mention anything about the age of the earth that isn't exactly *the universe is 13.8 billion years old and the earth was formed around 4.5 billion years ago" you are considered a "young earther", lumped in with the creationist crazies.

I could do the same thing about flat earth or, if I wanted to heat up the discussion even more, the holocaust.

You can and you should question everything all the time, but at some point we have to reach a consensus and move on. We can't spend all of our time proving again and again and again that the earth is round, that Earth is not 10000 years old and that vaccines do not cause autism. If new evidence surfaces it should be reconsidered of course but the case for the anti-vaxxers is pretty weak as far as I can tell.

Not sure if memes are diagnostic here. Even a sane moment these days has to resort to low quality clickbaity stuff if they want to get social media (or real life) traction.

I would say that much of this is directly related to how anti-science many leaders are now.

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

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

>Discussion will be about some piece of controversial research, e.g. GMOs or vaccines. People who want to discuss the merits of the research are shouted down by what I can only describe as 'science fanbois' -- anything that is 'against science' must be wrong.

Discussions on reddit (and all sorts of other social platforms) are being influenced and manipulated by people who are being paid to do so, and anyone who denies that at this point is delusional.

Source: I know people who run firms that provide this service.

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

Who or what determines what is controversial?

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

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

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

I don't think it's really about science, it's more about reddit. You'll find the same thing on any discussion on any somewhat popular subreddit regardless of the subject. There's almost always a reddit hivemind sanctioned Good Answer to any issue and if you stray away from the Good Path you'll get buried in downvotes, regardless of how much effort you put into arguing your point. Conversely if you make a completely useless one-liner comment agreeing with the Good Answer then you'll be showered with upvotes and propelled to the top of the page.

Upvote/downvotes are de-facto agree/disagree buttons on reddit. As a forum it's completely useless to discuss anything beyond cat pictures and funny gifs.

HN isn't all that different, so it's probably about more than just reddit.

For example, you can post the same remarks criticizing functional programming in a post about C# or Java and get upvotes, while the same post in a Haskell discussion will be downvoted. You can try the experiment yourself to verify it.

This applies to companies as well - you will be upvoted for pro-Microsoft or anti-Google posts in a news topic about Microsoft, and the reverse in a news topic about Google. This is because people who use Microsoft products will be very interested in Microsoft news, but not interested enough in Google news to go and downvote opinions they disagree with there.

> For example, you can post the same remarks criticizing functional programming in a post about C# or Java and get upvotes, while the same post in a Haskell discussion will be downvoted.

It's simply unreasonsble to think that the value of a comment is independent of its context.

Certainly, although it's clear that the largest part of the context would be the audience that the comment is exposed to. And it also shows that the upvote and downvote feature is not used correctly here either - it's used to promote or hide comments that the viewer agrees or disagrees with.

Just the same as Reddit. It's a deeper issue than just being 'reddit', and it's more about online discussion in general.

It's significantly better in my experience. It's not perfect but you can actually have a plurality of opinions on a subject. I think the fact that the community is tighter and that low karma accounts can't actually downvote help massively. Also no visible scores which reduces the "gaming" aspect. I kind of wish HN would go a little further still and ration downvotes for everybody, it shouldn't be something you throw willy-nilly.

That's true. Maybe the issue is that when there's only a 'down' and an 'up' button, people infer everything into it. Maybe we should have an 'up' button for interesting posts, a 'flag' button for posts that don't add to the discussion, and 'agree' and 'disagree' buttons to make it clear that it's a different thing from upvoting a comment.

Then people could turn on or off some way to see which posts are heavily agreed or disagreed with without downvoting interesting posts just because you disagree. You could even have a system where you mark people you respect and then only see which posts they agreed with to get a more personal feel? Might be an interesting discussion board idea to pursue.

The community is smaller, the barrier to finding the place are higher.

There are several factors that ensure better Signal to Noise ratios in communities.

Protective Moats, specific technical subject matter, for example.

Essentially it boils down to difficulty to engage, or non trivial effort required to engage.

The factors you mentioned have little impact on the behavior of the sub, which is mostly influenced by the people and norms of behavior, over the UI.

It's always fascinating to me how little some of these people understand science. There was a forum I frequented where there was a prolific "scientism" poster, and pretty much every time several of the working scientists on the site, myself included, were like "Um...that's not how this works."

I was referring to the work one has to go through to get your research recognized in the scientific community, for example. I'm not "worshipping" science.

I had in mind people who go on planes to disprove the earth being round, who believe crystals have actual healing powers, or people who refuse proven cancer treatment.

Say what? I'd say a "propper scientist" will know about the "scientific process" pretty well.

Sure, there are plenty of pseudo scientists out there that promote their political or economic agendas, but you can't discredit all science because of that.

Right now "hard" science is the best way to explain things around us and the universe. Sure, often it is wrong as new science gets discovered, but that's how human knowledge evolves.

As for the "soft" sciences (anything social/psyc, etc), that's a completely different matter. They are more prone to trends, fads and more personal biases, hence I would put them in a different category.

> They are more prone to trends, fads and more personal biases

This is not necessarily true, and I would urge caution when making such generalizations. There is junk social science and there is also plenty of junk "hard" science. Examples of fake data, political and personal biases interfering with the scientific method, occur in all fields. Some "fads" eventually become accepted fact. It took 100 years before plate tectonics was accepted by the majority of the scientific community, there are many such examples.

Don't universally discount social science: it is just as important as physical science. We actually need more social scientists to help understand the reasons behind anti-science movements in the first place, and to help legitimize science as a process, critial thinking, and to debunk illogical arguments.

When you have prominent social scientists arguing that pointing out statistical errors in papers is "Methodological Terrorism" (http://andrewgelman.com/2016/09/21/what-has-happened-down-he...), I call that junk science.

And if social scientists want to "help legitimize science as a process, critial thinking, and to debunk illogical arguments.", they should start with fixing their own reproducibility crisis and p-hacking crisis before instructing other people on science as a process.

I completely side with Gelman on this issue, but you can't point to this one case to dismiss all of social science. One can find examples of p-hacking, irreproducible research, and fabricated data in any field, but the existence of such does not invalidate the entire discipline.

I am merely cautioning against over generalization that just because there are some high profile examples of bad social science, there is still a lot of very good social science happening and it would be a shame to ignore it.

That was poor wording. It was in reference to the science "cheerleaders" who, from my own observations, are often equally as clueless about science as there anti-science counterparts.

I think the sentence is meant as 'too many people who don't understand research and are therefore willing to discredit scientists'

One thing I noticed going to a major conference in my academic field last year (IDWeek for those interested). Each and every one of the plenary speakers had some reference in their talks that betrayed a classic liberal arts education.

The titans of a scientific field still valued arts, and history, and culture. And derived value from it.

Hell, I'm a working scientist and one of the most valuable classes I ever had for thinking about the world was a feminist art history class.

There is the problem. I have full respect for "useless" degrees. If people want one then they should get one. However since it is "useless" you should not be mortgaging your future to get it. Get a "real job" first and pay for the degree out of your pocket, perhaps taking night classes.

As a member of society I need you to take care of yourself. You are a burden on society if you don't have a productive job paying your own way. We provide a "safety net", but the less who use it the better. Too many people using the safety net will make society break down. We believe is education required to be productive, so we subsidize education to get more productive people in society.

Or to put it simply: If you love art, get an art degree.

These discussions often become "either/or", ignoring the possibility of studying STEM and other pre-professional fields while also receiving a thorough introduction to the humanities.

You can study Computer Science while also learning a bit of art history, or architecture, or psychology, or the sciences, or business, or...

And doing so might even make you more valuable to your employer, to yourself/your family, and to society.

> You are a burden on society if you don't have a productive job paying your own way... We believe is education required to be productive, so we subsidize education to get more productive people in society.

This mode of thinking is a great way to churn out lots of well-behaved, competent corporate employees. From this viewpoint, it follows that the path to the upper class is reserved for the already-rich.

Having a computer science degree does not guarantee gainful employment.

Nothing guarantees gainful employment.

So what?

As another member of society, I think you need to rethink your position on what it means to be a burden on society.

You are not a burden just by not having a "productive job, paying your own way". You are a burden if you deny people their essential human dignity, by forcing them to conform to your vision of what they should be in order to eat. You are a burden if you take for yourself a surplus and do not use it to supply those with a dearth. You are a burden if you lie, cheat, steal, and assault. You are a burden if you do not respect and appreciate the hundreds of people working in harmony who helped each other to ensure you survived to adulthood with enough education to write your own opinions.

If all you do is sit on a couch with a cannabis vape and a game console, you're no burden to me. Some people keep house cats, and have no problem feeding them without getting much of anything in return. A "non-productive" human may yet do something. It might not be great, but could be at least marginally useful, if we allow them the time for their calling to mature and motivate them to action. Or they could just be a dud for their entire life. I don't really need to make a monkey dance in order to throw it a nut.

I don't particularly need you to take care of yourself. I may even be willing to pitch in with others to take care of you, on the conditions that you first do no harm to others, and then that you give back in whatever way you feel you are able. But that generosity only extends as far as what I think you may need. If you want something extra, you're going to need to give a little more before you get it.

We are way past the era of "no work; no eat" edicts. Thanks to our machines, we don't have a labor problem any more; we have an information problem. The systems in place for connecting creators with consumers, to everyone's mutual benefit, have never been entirely adequate, and haven't scaled very well to a world of 7.6 billion people.

I think it's also important to note that even people with useless degrees having higher earning potential simply by virtue of having a degree, and there is real social value in having someone who is educated in something for its own sake.

Sure, and the relationship you have with your dog is probably "priceless", too, but that doesn't mean it should be trivially easy to get a three-figure loan to bring one home, and that animal shelters should charge three figures per adoption.

I'm really not belittling your degree. I value such degrees highly. I also don't think they should cost so much, nor that the student-loan bubble should be allowed to facilitate charging you so much for it. Ideally fixing the system wouldn't eliminate such degrees, they would just decrease the cost to something reasonable.

In my case, I went to school to become a musician. Got a master's degree in music performance, but got tired of working hard and earning very little.

I self taught computer science and programming, so now I have a good salary and a much more comfortable life.

I feel my bachelor's was pretty special since it was a liberal arts degree and my employer seems to recognize the difference between me and someone who didn't go to school and/or just studied STEM exclusively.

I was very lucky to have scholarships, that made it easier on me when I was younger. But wanting to go back for CS made it impossible later in life without getting in debt. And I refuse to get a student loan. It's sad that when someone didn't get lucky with a well off household or scholarships, they have to cripple themselves into debt.

While I agree that one can gain a great deal of enrichment from studying non-lucrative majors, I think people should highly consider double majoring in this case. I majored in computer science AND philosophy as an undergraduate. Doing both took under 5 years.

I think a lot of people don't realize how little they will earn with their degrees compared to how high their debt load will be. That's not including people who fail to even finish their degrees.

My alma mater required engineering students to take a reasonable amount of credits in something other than engineering. Enough to be close to a minor, but more flexible.

I always thought this was an excellent idea.

Isn't a philosophy/CS double major kind of like a math/CS double major? In that it expands your knowledge in the same domain, rather than a completely new one would (like, for example, studying German literature or biology would).

I remember helping my sister with her philosophy home work, and being surprised by the amount of elementary logic and set theory being taught.

That depends in large part on the philosophy department. More analytic [1] departments will teach lots of courses that could just as well be cross-listed as theoretical computer science courses.

But some departments are less analytic (e.g. departments heavy on [2] and [3] aren't too difficult to find in the US). In those departments, the mode of thinking is very different from what you'll experience in a CS course.

And in both cases, taking a lot of humanity courses will teach you how to write well. Which is definitely a skill that a lot of CS majors lack.

(Also, a course of study in analytic philosophy can definitely help round out a CS major that's too light on the theory courses.)

[1] https://en.wikipedia.org/wiki/Analytic_philosophy

[2] https://en.wikipedia.org/wiki/Continental_philosophy

[3] https://en.wikipedia.org/wiki/Classics

Other than a class on logic, all of my other courses involved enormous amount of written argumentation, e.g., reasoning, ancient philosophy, modern philosophy, Asian philosophy, philosophy of mind, philosophy of science, philosophy of film, metaphysics, etc. I would say that only logic had a direction connection to computer science, although as a computer scientist, I would choose to write essays about the Turing test, philosophy of AI, etc. This was 15+ years ago, but I assume things are still the same in many philosophy departments.

I wouldn't say either of those expand your knowledge in the same domain. Related, sure.

In Australia we have the ability to do a double degree not just a double major.

It usually saves 2 years compared to doing them separately and you get 2 degrees on the final piece of testament.

I found it tremendously useful as my "humanity" was my Physics degree to complement the Comp Sci. Plenty of philosophy in the hard sciences when you learn the history and where we are going.

Not just nice for the people who personally went through that change, but it is also valuable for the general public to have such people around. But balanced against having more people with crushing debt I fear that the net effect is negative. A strong "background radiation" of humanities education can have a very positive effect on democracy, it is pretty much the defining difference between a working democracy and a populist nightmare. But if student loans leaved those who have the education no other option than to maximally leverage it to get ahead of others, it will likely have the opposite effect. (I felt tempted to write weaponize instead of leverage.) Maybe humanities education is only stabilizing "background radiation" when it is wasted, on the level of personal economics?

Maybe you could spend one year doing it instead of four.

Fortunately, our current education system is already set up to allow this. With a few AP credits, you can easily major in a STEM field and spend a year+ worth of time on courses outside of CS.

There are others who think it's okay to discredit scientists and scholars because they understand exactly how research works.

Apologies if I offended, I should have put "useless" in quotes. I meant degrees that society does not give as much value to as to what you paid to get them.

You can't sell soap to a pig.

Can't tell if you're enlightened or institutionalized.

> Scholarly work really helps shape the way you look at life for the better.

Like what? What scenario did you encounter and how did your studies help you? Otherwise it sounds like a vague claim that every religious institution would make.

> Like what? What scenario did you encounter and how did your studies help you? Otherwise it sounds like a vague claim that every religious institution would make.

Studying for a degree involves more than just reading a book. A good degree (no matter what major you choose) should leave you with the skills and capabilities to learn and teach yourself new skills. This - not the knowledge gained - is by far the most valuable takeaway that I have from my studies: Oh, I need to learn about the problem space X. How do I start, research, teach myself things about something previously unknown. School teaches knowledge, university learning skills.

This was not my experience. I think the University in this case matters; and thus we shall not conclude that all of them are useless or priceless.

My opinion is that many (I'd say most but I'm not certain) of the universities in the US are pretty good.

Degrees are cost prohibitive and there's no incentive to increase supply. Higher costs signal exclusivity and prestige - which I would argue is the true value of a degree. It's an item of luxury that is intended to open doors for you.

If we could objectively measure the tangible benefits of a degree and replicate it with a low cost alternative - it still wouldn't carry the same prestige because it's not exclusionary. I think the greatest barrier to truly accessible education is our status seeking behavior.

If I can steal your question for the parent comment and get more specific:

> the way you look at life for the better

Do you feel your outlook has improved, or are your life outcomes measurably better, and how?

Additional question: was it worth the $37,000 in debt, and do you think that perhaps we could achieve the same better-ness with less debt?

> Otherwise it sounds like a vague claim that every religious institution would make.

Yeah it's like when people defend hazing. "Oh it builds character!" No thanks please.

"There's some inherent value added to a person who pursues to study a bit of humanities, history, philosophy and art in college apart from their major. Scholarly work really helps shape the way you look at life for the better."

I dont feel this is the case, and I wouldnt say its priceless. its on average ~30k$ + 2 years of extra course work, and honestly, we are getting very little bang for our buck.

it has little impact on my career, but cutting my tuition nearly in half, and giving nearly 2 years back to me would be huge.

> you'd probably see a lot more STEM degrees and a lot fewer of everything else

I honestly think art schools are going to start running into problems convincing people it's a good idea to pay 60k a year for minimal ROI.

My cousin wants to go into stage drama, and I don't want to tell her to not pursue her dream, but I think it's a lot to ask her to put herself in debt for years for a piece of paper that says she can act.

FWIW I majored in ECE, got a job as a software engineer with 100k salary plus benefits, and I'm ~140k in debt. I definitely overpaid, but my salary gives me a way out. People who came from my alma mater who majored in drama can't say the same.

Same. My sister was looking at a $40k/yr private school photography degree. I sat her down and we discussed how much that was going to cost her when she graduated, what kind of job she'd need to pay it back in a reasonable time, etc. In the end, she started her own wedding photography company instead.

> In the end, she started her own wedding photography company instead.

That's awesome! I wish more people had smart person to sit down and explain these things to them.

What about some sort of state-funded guidance counselor that is required before you sign the paperwork to go to college? Or heck maybe force the colleges to pay for it.

> People who came from my alma mater who majored in drama can't say the same.

Don't worry, your salary gives them a way out too. And I'm not just saying that to be snarky, I think it's very likely what will end up happening: you'll end up paying for their poor choices one way or another. If it's not directly via taxes to pay off their student loans, it'll fund their retirement.

> Don't worry, your salary gives them a way out too. And I'm not just saying that to be snarky, I think it's very likely what will end up happening: you'll end up paying for their poor choices one way or another. If it's not directly via taxes to pay off their student loans, it'll fund their retirement.

Social Security benefits, without any other retirement savings, puts you right around poverty level. I would not consider that "retirement".

Being a software engineer, who makes more than many other professions, doesn't automatically make you better for doing so. It just means you've optimized for a specific system. Congrats! The world still needs plenty of professions where the pay sucks and college is required (teachers, civil engineers, LPNs), that are arguably far more useful/noble/whatever you want to call real value. Consider that when you're sending your kid(s) off to school, crossing a bridge on your way to work, or are in the hospital being cared for.

I'm not thinking just SS. Imagine in 30-40 years when SW engineers are retiring with their $5m 401k, but their neighbor is still barely making rent at their service-level job. I imagine there are many more people who have foregone retirement savings to pay off their massive college loans.

Politically, the story would be something like this: why should you, a multi-millionaire SW engineer who hasn't paid taxes on your 401k not pay your fair share so that these other folks can spend some time with their families? After all, they were the victims of predatory lending! Close the loophole that allowed your opulent lifestyle!

And remember, 401ks are a multi-trillion dollar market of untaxed dollars. Do you really think tomorrow's politician in 30-40 years is going to miss that, never mind their constituents?

Taxes are at historically low rates, and current governments have continually borrowed from the future to fund wars and tax cuts (outstanding US government obligations are in the trillions of dollars [1]).

Of course taxes are going to go up. Plan accordingly. If you've put millions of dollars in a pre-tax retirement account, you're a fool if you think it's coming out at anything near current tax rates. You're banking on a political climate that cannot exist existing. That's your fault.

And before blaming your average citizen, look how little anyone cares about what citizens want regarding net neutrality, a tax bill that is going to gut entitlements to support tax cuts for the top 1%, and so on.

[1] https://treasurydirect.gov/NP/debt/current (~20 trillion dollars in US gov outstanding debt obligations)

> Of course taxes are going to go up. Plan accordingly

They already did. The GOP tax bill specifically targeted our demographic as a way to finance tax cuts for the wealthy and businesses. The GOP doesn't even deny it.

Like it or not, we are the scapegoats for all the problems afflicting the poor. And it's not a stretch to believe the GOP is going to use popular support to extract every dime from us until we are homeless too.

Medicare cuts->Elderly dying off faster->Voter demographic change. Law of unintended consequences? Possibly. I can see the political winds shifting back hard over the next 3 years.

Enough Puerto Ricans might have moved to Florida already to turn the state blue. Won't know until next elections.

A lot of people Puerto Ricans are moving to traditionally blue Florida locations. SE Florida, Orlando, Tampa are the 3 most populous areas and all are strongly blue. Through gerrymandering they'll continue to get the same representation.

If these new residents makes the statewide elections close, things would be improved (because in general in close elections, candidates have to appeal to the tiny amount of voters on the other side that switch parties, so toning down extremism), plus as Puerto Ricans, they had pretty much no say in the federal government versus some say after they moved from the island to the mainland.

>>I'm not thinking just SS. Imagine in 30-40 years when SW engineers are retiring with their $5m 401k, but their neighbor is still barely making rent at their service-level job.

It's interesting that you believe people with $5M+ networth would have service workers as neighbors. :)

I live in the Peninsula (San Mateo County, CA). My side of the street is mostly rentals (2BR townhouse duplexes) costing about $4k/mo. The other side of the street is single homes, 3BRs that go for $1.6M. If you want good schools for your kids in the Peninsula, $4k/mo isn't a crazy rent, you might be able to go somewhere else in the area and pay $3k, but maybe you care enough about your kid's future to pay the extra $1k/mo for better schools... so you have a lot of people who are tradespeople or who are struggling to save much after they take care of their kids, but a lot of the homeowners are probably worth $5M at retirement.

My former next door neighbor had to move far away because she just couldn't afford it anymore, but probably at least a half-dozen families on my block could plausibly have net worths in the $5M range. In a neighborhood like this you see $70k and $10k cars parked next to each other.

Why is that interesting? After working for 40 years, saving religiously, it’s entirely possible that they’re living a solid middle class lifestyle not much different from someone else who also lives the same lifestyle but rents and doesn’t save money.

Strangely enough that proposal was floated around in earlier versions of the currently proposed tax bill: the 401(k) yearly contribution cap was going to drop from $18,000/year to $2,400/year. That would have driven savings into Roth 401(k)s/Roth IRAs so that the tax income would be realized sooner rather than later.

I currently save at a 50/50 mix of 401(k)/Roth 401(k) just in case the scenario you described comes true. I expect that as I age I'll contribute more post-tax dollars to my Roth and fewer to my 401(k).

I was a bit miffed to learn that the max contribution for an IRA and Roth IRA combined is only $5,500. I did some reading and understand the point of it but I would much prefer to be in control of my own money and where it is invested than some of the limited options given through an employer's 401k.

When you change jobs, you can rollover your 401(k) into an IRA, so if you're in an industry where change jobs every 3-5 years, the extra savings makes the difference pretty small (you can always put your money into a low-fee index fund in the 401(k) and then manage it more when you rollover).

Further, a lot of 401(k)s at larger companies that use Fidelity (at least, possibly others) have a feature where you can allocate money into a general brokerage sub-account, where you can invest in anything you could if you opened an IRA at Fidelity.

Yes, that's what I did after leaving my last job and read up more on IRAs. For retirement savings, the plan is for index funds. I was more annoyed by the max on IRAs since a lot of the companies I've worked for have either not offered 401ks or just had poor options.

This Bogleheads post had some good replies about why this is the way it is in terms of contribution max:


It is what it is and, until I find something decently high-paying, doesn't really matter in the short run.

Plus you cannot contribute at all to an IRA once your income is above a number (132,000? last year) that is way below valley software average salary. It's kind of a way to encourage one to work for a company that has a 401K I guess.

> Congrats! The world still needs plenty of professions where the pay sucks and college is required (teachers, civil engineers, LPNs), that are arguably far more useful/noble/whatever you want to call real value.

Shame on you for working in tech and not a more noble profession. I recommend that you resign from your job next week and become a high school math teacher.

(I got a job in tech because I feel it adds the most value to the world so I'm not a hypocrite)

>The world still needs plenty of professions where the pay sucks and college is required

Quite a self-contradictory statement. I mean, if the world was in such a dire need of said professions in such quantities, then their pay wouldn’t suck in the first place.

As if the world was a free market, and compensation was tied to value.

Everything you look at was built by engineers, don't be so quickly to dismiss your own people

>compensation was tied to value.

It is the definition of value. Value is the compensation others are willing to give you in exchange for your goods/services.

>Value is the compensation others are willing to give you in exchange for your goods/services.

Value includes far more than that. It includes all kinds of tangibles and intangibles, including compensation in exchange for absolutely nothing, such as in the case of nonworking shareholders being paid dividends, such dividends arising from the expropriation by owners of surplus value created by workers.

Nonworking shareholders are being paid for their investment risk. The company pays them for taking said risk instead of investing their capital somewhere else.

Workers are paid wages for creating said surplus value using the company’s capital. If the shareholders’ capital were indeed not necessary for producing said surplus value, then why wouldn’t the workers create it by themselves, thus avoiding the expropriation?

>Workers are paid wages for creating said surplus value using the company’s capital.

Workers are paid wages to produce. Wages, stagnant for the last forty-plus years, have proven unlinked to productivity, which has risen very sharply over the same time. Wages are also unlinked from investment risk, which compels no rise in wages when it retires.

> then why wouldn’t the workers create it by themselves, thus avoiding the expropriation?

They do - you have described cooperative ownership of an enterprise. To tie back to value: given the fundamental conflict of interest under capitalism in the apportioning of value between creators and expropriators, I think we should expect cooperative ownership to grow in popularity.

It's important to allow that value reasonably includes the satisfaction of workers, customers, neighbors, and the taxpayers who subsidize the enterprise. It's understandable that these things would escape the category of "value" under a system that enshrines the satisfaction of shareholders as the prime motive of the enterprise.

That's assuming a perfect, infallible market.

There's no other way in my opinion too. This is super stressful to me. I started working a few years ago, working my ass off with a full time job and part time one at night and I wonder if it's going to be of any worth someday or if I'm just working against my own later benefits by putting myself in the "too wealthy compared to my age class future average" fringe.

There are some art and design schools who graduate students with great career prospects. In general people with really good modeling and animation skills can find work in entertainment. Not many people will pursue a career in drama, but I have worked with many people with that background who had great presentation and communication skills. This is an engineering heavy forum, but look around the place you work. Is everybody in management an engineer or scientist?

Looking at current management may give you inaccurate data since the competitive environment for new grads has worsened compared to 20 years ago for humanities majors.

A better data point would be to look around entry level or mid level in non development roles (sales, marketing, HR/admin, etc.) and see what majors are represented there.

Education doesn't always need to have an ROI, sometimes it's just worth what you spend on it.

The vast majority of folks can't afford something that expensive without an ROI. What's being discussed here is how our current system encourages getting into debt for it and how that's negative for our society.

But American society as a whole encourages that behavior. It's not just education.

For sure, but the issue is whether you should borrow so much that it becomes a public policy issue.

Who fault is that really? The banks and gov for over extending risky loans? Or the people who borrow? Probably both, but if the banks do not know the risk of over extending risky loans Im not sure what will ever be done.

It does when it costs hundreds of thousands of dollars.

What is the EV for a drama degree? Some actors make millions in their 20s. Probably .01% of actors?

and now you could* likely pay for private stage lessons.

The problem I really see is that we've dug ourselves a big hole. The safety net created for the banks were done to ensure that everyone could get a loan. Banks were "worried" that people would default on their student loans and run away with the money, even though this hasn't happened or is really rare. There was an unfortunate side effect that this incentivized banks to give out riskier loans. Couple that with telling everyone to go to college, kids that don't know what they want to do, and schools that are also seeking a profit, and you get a pretty messed up system.

The unfortunate part about this, is that I believe that if you remove the protections on the loans, many students now WILL default, because they have too much debt and are incentivized to do so, if they are one of the larger loan carriers. I'd say "bite the bullet, and that's what banks get for giving out risky loans" but we know that's not going to play out that way, especially since the gov owns a fair portion.

Making tuition free is nice, but the generation that took out loans isn't helped AND this does not reduce the college price problem. The price was inflated and there is no reason for them to decrease it. Kind of a parallel to health care here. That's the cost. I like this idea, even if I have to pay back my large loans, but I think the fundamental price issue also needs to be solved.

Giving a portion of your earnings is a decent method, but you already bring up the problem with that. And this also doesn't solve the price problem, in fact it encourages the price to keep going up. (We can even tangent into how schools are over charging gov for research, but I'll leave that for another comment)

Whatever we do, somebody is going to lose. And that's the problem with bubbles. We need to, as a society and government, decide who is going to lose. Problem is I think the majority of people think the banks [gov] should lose, for giving out such risky loans. But I don't think many politicians would agree. I wonder what the economists say.

> I'd say "bite the bullet, and that's what banks get for giving out risky loans" but we know that's not going to play out that way, especially since the gov owns a fair portion.

> Making tuition free is nice...

I think it's funny that you have these two ideas so close together... The government owning most of the loans provides a very easy path to enabling free college retroactively: extinguish all the loans. The government doesn't have a profit incentive, so there's no reason that such a path should not be reasonable.

Because half of America doesn't want to do a buyback. Though I suspect, if done, it would end the same way as the 2009 bailout. People are upset, and then mostly forget about it. And in this case, would still be upset at banks and institutions instead of the people. But I think getting initial support would be difficult. Personally I'm fine with increased taxes for this. I think everyone should be educated. But again, we need to lower the cost of school and stop them from cheating companies and the gov on research money.

That punishes everyone who took out private loans or worked to put themselves through college. Not to mention it hurts those who worked to pay down their loans earlier.

There are a lot of ways of socializing the cost of education, doing it retroactively opens up a whole can of worms.

It's not "fair" but I think it's necessary. We are staring down the barrel of a loaded gun at this point.

I may be a little salty because I took the community-college-into-university approach to save on costs and made some sacrifices to send every extra penny I earned towards paying down debt.

But I also realize that the country is going to be much worse off if we continue to punish people for spending more than they could afford on university.

No. It doesn't punish those people who paid earlier because those people fare no differently in the world where we don't retroactively forgive loans and in the world where we do retroactively forgive loans. It doesn't benefit them either but unfortunately this is a society level problem, we need to move beyond individual level thinking to solve it.

I'd also like to point out that the later people went to school, the more they paid. On average, at least. The burden that debt brings is becoming more and more as time marches on and we don't fix this problem.

That's where a TARP-like buyback would come into play. Negotiate to buy private student loans and extinguish them also. I know there are charity-type groups that do this with mortgages, though I'm having trouble finding any links at this current moment.

But, honestly, I'm not a huge fan of logic lines that sound like, "We can't help everyone, so therefore we should help no one." We should absolutely strive to help everyone we can. And if there's still a population remaining afterwards which requires help, then we can talk about why they weren't helped before and figure out whether and how to reach them also.

Are you talking about things like Rolling Jubilee[1]? They focus on credit card debt. I heard about them YEARS ago, and they were trying to get on student loans back then and it looks like they still haven't been able to do it.

[1] http://rollingjubilee.org/

I definitely remember reading about them. They're a good example of the type. It looks like they are transitioning their focus to The Debt Collective, which looks like some sort of play on collective bargaining instead?


I'm working with an idea that you can go bankrupt on student loans, but in doing so you lose the degree - including all rights to a job that might use the degree.

There are a ton of things I haven't figure out (follow my post history for more detail on what I have)

How would you forbid someone from using their knowledge?

More importantly, how would you forbid someone from using their contacts?

While that is an interesting idea I see two major problems with that. 1) It doesn't really encourage colleges to decrease the price of college. 2) Degrees matter little when you compare to knowledge. You can clearly say on your application to a job that you graduated but your degree was revoked. What does the company care? You didn't lose the experience and education, only the paper.

It happens.


Seems bad for both the loan provider (at least in short term) and the student.

Truthfully, depending on your definition of majority, most college students ARE already pursuing more profitable majors.


The "underwater basketweaving" so to say, may be at most 10-15% of current college graduates.

I think the solution lies more with reducing the cost of college, open source textbooks, more elearning, etc. Regardless of government funding vs subsidized loans, the cat is already out of the hat on a lot of price increases around campuses nation wide. It isn't going to be just as easy to just change the funding source.

I also sympathize with the trade school argument, but I don't think everyone going to college is a bad idea by any means.

Psychology is effectively today's basket weaving. There is an excess number of students receiving those degrees with no intent to work in the field. It's widely perceived as an "easy" degree which makes it worthless unless you continue on and make it into the limited space for a graduate program.

So... I got an undergrad degree in psychology, but then went on to a doctoral program and got a PhD.

I'm not actually disputing your suggestion that a lot of students obtain the degree as a placeholder--it's a problem--but depending on the university, it's far from easy, and I know lots of students who obtain lots of degrees as placeholders. Students perceive that the degree is easy based on introductory psychology, but in a lot of programs, it quickly turns into statistics, neuroscience, and cognitive modeling with upper-level classes. Students coast for their first year or two and then sometime by their 3rd year start struggling.

Anyway, one of my frustrations after my doctoral degree is the stereotypes about the field. I've certainly had more experience with computer science, math, and statistics than most undergrads with those degrees (math might be different). I've worked with comp sci undergrads, and without meaning anything negative, I felt like I was teaching them about programming most of the time, rather than anything the other way around.

And yet, because of my degree, somehow people just assume that I'm interested in past lives therapy or something like that. What I do is closer to ML/AI/epidemiology than anything else. I've published papers in the areas of information theory and statistics, and coded in a large number of languages across various paradigms.

One shift that seems to have occurred since I was in undergrad is this idea that you are your degree. It's pernicious. The liberal arts philosophy is sort of along the lines of "get a degree in philosophy," take your advanced maths and statistics, and then learn more of it later, because the specific degree doesn't matter. But now we see college as an advanced job training program, and people assume that you are only qualified to do what you got your undergrad in. It's absurd.

I admit there's some limits--I'd wonder if an BFA could get deep experience in computer science, but who knows? I've seen all sorts of art projects that involve heavy coding, statistics / ML, and low-level hardware stuff, and know history faculty who are basically doing signal processing research. Coetzee, a nobel prize winner in literature, used to code.

At some level, the problem isn't these degrees all the time, it's the stereotypes about them and the people getting them.

Psychology is a superb background for both marketing and design. Possibly better than a marketing or design undergrad. It’s also a great lead-in to an MBA. Heck, I think it’s put you in good stead to get finance jobs. Have you studied psych before? I got a minor with my CS undergrad and all my psych classes were invaluable.

I'm sure psychology might work great as a double major like you mention but as a pure major it is probably not beneficial to most in the job market.

Yes, when I first looked at this data I tried my best to lump it into categories. (Was in an discussion about ROI on "free" college)

about 65% of grads are in what I would consider, employable categories. STEM, Healthcare, Business, applied sciences (production/manufacturing type stuff), there are more but I cant remember now

about 25% of grads in what I would consider, employable but less so. Things like psychology, social sciences, histories, social work degrees, etc

then 10% are in the liberal arts/basketweaving area

While I will be the first to admit that degree is not necessarily an accurate predictor of success. I still think it is fair to say that even in the age of abundant student loans, in general most students ARE trying to pursue jobs that will make them employable. Even if they are misguided in some way, or don't hit the mark.

> The "underwater basketweaving" so to say, may be at most 10-15% of current college graduates.

What percentage of mortgages went into foreclosure in 2008? One source I found said 1/54.

You could do all those cost reduction things, but until you either decrease demand or decrease the supply of money, costs will never go down -- profits will just go up.

That is overly generic and not necessarily true.

Unless the public were given the means to more directly assert control over its public universities.

> Another solution is to let you go to school for free and then pay a percent of all your future earnings

In Australia we have a system somewhere between this and a loan.

You go to (heavily subsidized) university, tuition is paid for by the government with an automatic interest free loan.

Once you earn above a particular (somewhat generous) threshold, your employer automatically starts taking a percentage of your income (depends on income) and pays it towards the loan.

There's no interest but the loan amount is indexed against inflation.

I graduated from one of the country's top universities with $24k AUD (~$18k USD) debt to the government and paid it all off early voluntarily. It used to be that voluntary payments got you a 5% bonus but that's gone now.

question: why would you pay it off early? money (generally) gets cheaper over time and if interest is lower then inflation there is no reason to pay it off early as the debt becomes cheaper every year.

I no longer live in Australia and as long as you have this debt, you're required to file an Australian tax return. I paid it off to get rid of that hassle.

Also it used to be that voluntary payments got you a discount.

Most people don't - they just pay the minimum required out of their pay every year once they've reached the threshold.

But getting rid of it does make it easier to borrow more money for a house, etc.

We have a system like that. Its called taxes and free education. Everyone is offered free college education, including basic living expenses. In return everyone pays a litle more in taxes. And those who choose college, often earn more, and then pay more in taxes. (Im from Denmark)

And, I would think that running the system that way is actually cheaper and more efficient than the US way where we seem to be moving towards individually accounting for every dollar of education for payback - all while the overall system spirals out of cost controls. It's much simpler to supply gov't budgets direct to public schools with oversight for spending.

Vs open loans which little cost accountability. (well accountability via students for which this is the most extensive, longest term, financially complex, with highly variable ROI purchase they will have made in their life so far...)

If you think about it, there is absolutely no reason, for education beeing expensive, if priced by actual cost (books, materiel, professors) instead of beeing priced by perceived value (ie. What will my future earnings be, what will my financing look like, are my parents paying etc.)

I've never thought of it exactly that way - but it makes a lot of sense. One way to summarize that idea is "cost-of-goods" public budgeting are much more efficient to run vs "value-of-education" priced student loans.

Maybe you should focus on not falling too far behind Finland, the Netherlands and Sweden first. I don't think I've ever heard of a Danish tech company. Even tiny Iceland has EVE Online.

I am not Danish, but that is just super ignorant. One of the most widely used game engines, Unity3D is danish. They got several world beating companies making windmills. Creator of C++ programming language is danish.

Anyway it is a poor metric, especially compared to the US, because small countries are not well suited for consumer oriented tech companies such as Facebook. The home market is too small. Small Scandinavian countries tend to have tech companies in particular niches.

I am Norwegian myself and a lot of high tech here is related to the oil industry, making specialized software, hardware and instruments for it. Norway is world leader in this area, but few people outside the oil industry would know that.

Another problem for small countries is due to the small home market, our tech companies usually get bought by big American multinationals. That means a lot of tech done here happens under umbrella of some American company and doesn't show up as some independent Norwegian company.

Almost every single Norwegian tech company I have worked for has gotten bought out by some big American multinational. Video conferencing, secure authentication systems, 3D modeling of geology etc.

It is not unique to Scandinavian countries. Israel dubbed startup nation suffers the same problem. Few tech companies ever manage to get very big before they get bought by an American multinational. It is an issue that worries government there as being a country only made up of branches is not as profitable as having tech HQs.

EVEOnline? Are you kidding?

Denmark is the home of BlueTooth, ZenDesk, Skype, and a company called Danfoss which you've certainly never heard of but provided microchips and motherboards for a large percentage of the world's tractors, district heating plants, refrigeration centers, and industrial greenhouses. Denmark is a technology powerhouse with manufacturing capabilities that outrank countries a dozen times their size.

What a wierd comment? But Ill play along. Heard of Skype? Endomondo? Just Eat, Google V8 (the javascript engine in chrome and node.js)? And if you want games, heard of Hitman? Subway Surfers? Limbo?

> ... but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back.

This is absolutely not the case. Student loans have caps and they're incredibly easy to hit, especially if you go to a 5-year school where you're expected to pay tuition while doing 6-month internship blocks. Lots of people I knew in college (myself included) had to drop out in the first 2 quarters of year 5 because they couldn't get enough money to finish.

Edit: Just checked to see what the cap was at these days. Back when I was in school, the unsubsidized loan max was 27k. Now its 31k. https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsid...

I think the point of the parent comment was to say that people never get denied because of credit history, choice of major, etc. in the way that they might be denied for a credit card.

you describe a classic misattribution problem with the demand for higher ed. people use "college" as a synonym for "successful life", but those two things only have a loose correlation, which is only getting weaker with the swell of people getting degrees that they can't wield effectively.

we all want a successful life, and being good little free-market capitalists, we eagerly buy into the story that we can achieve success by simply buying a degree (hey, i bought three of 'em!) and letting the rest play out like our wildest dreams.

but of course it doesn't work that way because we didn't scrutinize the winding path between degree and successful life, because the shortcut between those two things doesn't actually exist (at least not any more).

colleges and universities have done a good job extracting most, if not all, of the value out of the higher education market, with the help of government distortions (guaranteed interest, unbankruptable debt). it's time to put to bed the idea that a degree equals success (it's also time to get rid of those market distortions). a few of us will get lucky of course, but pretty much everyone will need to create success the old-fashioned way: by working hard for it.

> It's way too easy to get money for college.

It'd be more correct to say that it's way too easy to get money while at college. An awful lot of college students believe that being in college means that they have a middle class lifestyle. It is cliche, but in my day (1989-1993) students were poor. You lived in a dormitory and ate in a cafeteria. Maybe you'd go to a bar once a month. And 99% of the time you walked everywhere.

I think easy of approvals for student loans combined with the 2008 recession and slow recovery led to a lot of people finding that student loans were a source of income rather than a way to pay for college.

> for a useless degree they'll never use

Another part of the problem is that there's really no such thing as a useless degree. A person may never use what they learned from that degree, but the fact that they were able to earn a degree is still used by employers as a bar to judge potential employees.

Which is a really frustrating thing. I have family members who didn't go to college who could not pursue certain careers (or, struggled to advance their careers) because they don't have piece of paper - even if it had nothing to do with the career itself. In tech it has become less of an issue but I would love to see this go away for everyone.

Being able to get a four year degree does not signal that a potential employee is better than someone that doesn't. Especially the way higher education has gone in my lifetime.

Not sure it's less of an issue in tech now. I got into the field when a degree wasn't needed (late 90's), just a pulse. Now it would be hard to get an entry level job without one, at least at my company.

> There is definitely an education bubble.

It can't really be a bubble because there are no assets to be bid up in a run away cycle or that can have a sudden collapse. Bloomberg tells you what you need to know in the article but doesn't do it right upfront. The overwhelming majority of this debt is held or guaranteed by the federal government.

A bubble is one way to get malinvestment, but it isn't the only one. Here we have malinvestment but no bubble.

> ...four years doing something hate for a useless degree they'll never use.

Or 4-5 years getting a piece of paper saying "Computer Science" when they can't do the work, because society says "CS makes money" and the CS department is happy to take it. If people with only a high school degree can't make a living, we need to either make college free, or make companies pay for it.

> learning a trade or skill instead of four years doing something hate for a useless degree they'll never use.

The two aren't mutually exclusive.

In a compassionate society, we'll encourage people to pursue art or music or mathematics or dance and plumbing or auto repair.

There are enough educational resources to go around; our economy just hasn't found the right shape to make good use of them.

>but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan".

I suspect that it's either because you're not listening or people aren't talking about it. I had 3 years of on the job engineering experience and an established, good credit history when I got denied a loan for my last year of undergrad at a state school. Mind you this was fairly recently and my only loan for school I applied for ever. I could be the freak accident but it doesn't seem all that probable.

>Another solution is to let you go to school for free and then pay a percent of all your future earnings back to your college, or at least in to a pool that pays for the next generation's college.

We basically already have that system. If you get federal loans (which most people who take out loans do--90% of all loan disbursements) you can sign up for an income based repayment plan.

You pay back 10% of your disposable income (income over 1.5x the federal poverty limit), for 20 years.

If you make less than 1.5x the poverty limit, you pay nothing.

Absent public service loan forgiveness (which we may very well soon be, if Republicans in Congress get their way), the number is actually 30 years and the forgiven amount is taxable income. Additionally, income-based plans often result in payments that don't even cover interest, so the debt continues to pile up quickly. Meaningfully different from the original suggestion.

>the number is actually 30 years

No. It's 20 years. https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...

>the forgiven amount is taxable income.

It's only taxable up to the point of solvency. If you have a sizeable loan forgiven and you haven't made enough money to pay it over 20 years, you likely won't have enough assets to end up owing very much.

Also it's very likely congress will intervene in 10-15 years or so when a huge percentage of voters have this problem.

>income-based plans often result in payments that don't even cover interest, so the debt continues to pile up quickly.

If that's the case, you will never pay it off and we're back to debt cancellation after 20 years.

You said: "...profitable majors, so you'd probably see a lot more STEM degrees and a lot fewer of everything else...". In terms of lifetime earnings, STEM is not necessarily a sure fire route:

"'Students and parents have a pretty good idea of what majors pay the most, but they have a poor sense of the magnitude of the differences within the major,' said Douglas A. Webber, an associate professor of economics at Temple University who studies earnings by academic field. He points to one example: The top quarter of earners who majored in English make more over their lifetimes than the bottom quarter of chemical engineers.

But what if you never make it to the top of the pay scale? Even English or history graduates who make just above the median lifetime earnings for their major do pretty well when compared to typical graduates in business or a STEM field."

See https://www.nytimes.com/2017/11/03/education/edlife/choosing...

That article seems to contradict itself. They claim the pay difference is not big between STEM and liberal arts, then goes on to present data that clearly shows there's a big pay difference.

But then goes onto say the reason for the gender wage gap is not enough women choose STEM majors.

> instead of four years doing something hate for a useless degree they'll never use

I think this comment here points to the issue of colleges -- most people have no clue what major they want to be or what type of career they want to pursue.

The result is that if they are pushed into a corner they do not want to be in, money would be spent and nothing of value would be gained.

What should be happening before college or at the earlier levels is people taking classes that allow them to explore but also teach them transferable skills.

Ideally, this is where G.E.'s should've worked. However, at the current state, they're just useless extra units that seemed be layed onto college students in order to keep them in school longer, and thus pay more tuition. In addition, most of the things they teach are not transferable - they're too specific / boring and after a semester, it's all forgotten.

Instead, the G.E. curriculum should focus on knowledge shared by every field, or that could be used in any career -- logic, data science, ethics, etc.

An improvement like this could justify the high-cost of a college education.

I would disagree that it is way too easy to get money for college. I co-founded a company that is aimed at giving loans to students who are often denied credit in the traditional market, primarily because they lack credit worthy cosigners. This amounts to about 2m students every year.

I wanted to go to college, but couldn't get a loan. Its easy for people who's parents already participate fully in the credit market-but for people like myself who's parents are poor and don't use credit for anything, it wasn't an option.

My parents were poor. I went to school for dirt cheap at a state school. My cousin went to Princeton for free because his parents didn’t make enough income (the income limit was quite generous, at less than $100k per household in NY).

Being poor, in hindsight, was a blessing.

There's a good midpoint of those two. Cap student loan payments at some fraction of your income for some fraction of your life. Those seem like reasonable restrictions for a loan that isn't dischargeable by bankruptcy.

Have you read The Unincorporated Man? It's a sci-fi novel about a society like the one you're suggesting, where "investors" in humans such as parents and educators own shares in the person's future earnings. The novel/series casts this in various lights, mostly negative but with undeniable fairness and benefits. One question is where these shareholder cross the line into slaveowners. What is a reasonable rate of taxation? What can be reasonably demanded from the indebted?

> Some (many?) would like to see a government funded system

Depending on how the debt situation falls out, we might already have that. :-\

You're being sardonic, but socialism-by-bailout seems like an interesting experiment.

Next, we automatically bail out everyone with medical debt -> universal healthcare!

I detected slight sarcasm, but you may be more right than you know. We'll see in 3 years, or less (please)

No sarcasm. I suspect this kind of bureaucratic sideloading might be the only way to get these changes done. One further: if the Fed starts an index fund and distributes the dividends equally to the American people, do we suddenly have UBI tied to the national GDP? If that index fund gets large enough that it owns a significant portion of the economy, do we have distributed control of the means of production?

We already had that when the banks were bailed out.

Socialise the losses, privatise the profits.

>> Another solution is to let you go to school for free and then pay a percent of all your future earnings back to your college, or at least into a pool that pays for the next generation's college.

PBSNewsHour did a piece on this concept:

Purdue invests in students’ futures with new model of financing https://www.pbs.org/newshour/show/purdue-invests-students-fu...

"Unlike student debt, it shifts the burden — or the risk, I should say — entirely from the student to the investor."

"That’s because the terms of the agreement, called an ISA, are made well before students launch their careers. So, even if a student ends up in a low-paying job, the pay-back percentage stays the same."

College demand is insanely high because of education inflation. Employers require a college degree for most white-collar jobs. I think a better solution would be to rework college. It doesn't make sense that you need a four-year degree including a bunch of irrelevant classes to get your foot in the door at any white collar job. The standard for higher education should be probably leaner and more focused on useful skills for a particular area. And if hiring was based more on objective tests of knowledge and ability, you wouldn't have as many people spending lots of money to go to prestigious universities.

(I don't know how or if any of this could be accomplished.)

Make student loans dischargeable under bankruptcy like any other loans, including corporate loans. Then we'll see big changes. But since we punish the young, by not letting them off the hook, these loan sharks will continue to bite.

> Another solution is to let you go to school for free and then pay a percent of all your future earnings back to your college

This is just another way of wording how you're paying your debt and who you're paying it to.

I chose to take 6 years, held a job, paid my own tuition/rent/expenses, graduated with no debt. For me the reduced risk (debt) outweighed the opportunity cost (time).

I've always been prideful about money and don't like people paying for my stuff. So I wouldn't ask my parents to pay or co-sign, so I basically couldn't get a loan given those constraints (at the time, late 90s into early 00s).

"It's way too easy to get money for college."

I would go a bit further and say it is way to easy to get money for bad college. Looking at some of the ways for-profit colleges pitch pretty worthless degrees as a "path to higher pay" and simultaneously lay down the student loan application reminds me of the mortgage refinance market of 2007.

Some left leaning think tanks have tried to get this passed under the name "Pay it forward". I think Vermont got the furthest along, but does not seem like it has gotten much traction recently.

One of the problems with this legislation (this is now totally my opinion), is that it only addressed the funding side of things and not the spending side.

I'm still not convinced of the efficacy of the federal government guaranteeing loans to expensive private institutions (especially for-profit schools that prey on returning veterans and the poor). Instead, I think that they should only guarantee loans for cheaper public schools or for a specific dollar amount.

> There is definitely an education bubble.

Right, and people in poor countries stealing money to feed themselves is a "food bubble", with the solution being a reduction in food consumption.

How come there is no "education bubble" in countries where college is essentially free? That would be guaranteed to create the biggest bubble of all.

I thought the point of student loan is to grant it to anyone regardless of if they can repay? If the loan is granted by looking at the student's future potential to repay, students would prefer majors/colleges with higher chance of getting a student loan.

If the word "loan" is in the name of the financial product, you are expected to repay. At some point we need to be upfront with high school graduate and tell them it is a bad idea to go study art history at a $40k a year no-name private college.

If the choice is between not going to college vs. earning a degree, statistically you earn more simply by having a college degree, regardless of the major. Bachelor Degree holders, on average, earn a million dollars more during their life time than those who only have a high school diploma. Even if you are accounting for lost earning potential, cost of tuition, supplies etc... your still talking about hundreds of thousands of dollars more earned than if you were to not achieve a degree. If you are talking in relation to going to university for a STEM degree vs. going to school for art history, you could certainly argue that STEM will will always make more. But I would still recommend young people go to school over not. Even if it is something 'useless'. Either way you slice it, the data indicates that encouraging youth to go to college is still worth it. Even with how expensive college is.

Median Lifetime Earnings: https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...

Cost of School and Lost Earnings vs High School Grad: https://trends.collegeboard.org/sites/default/files/educatio...

BLS on Pay by Education https://www.bls.gov/opub/ted/2015/more-education-still-means...

Totally agree. If they want to do so, I would certainly recommend a young person get a degree regardless of whether it is STEM or not. I just wouldn't give someone a huge loan to study a low earning major at a expensive private college. That is just setting them up for a mountain of debt they are unlikely to be able to pay off.

That's not true at all. A loan has a priced in risk of default.

The National Mortgage Lenders Association defaulted on their mortgage. Many business and corporations, large and small, go bankrupt and discharge debts. Only individual consumers get trapped in non-dischargable debt.

>I thought the point of student loan is to grant it to anyone regardless of if they can repay?

No, the student is supposed to pay back his loan regardless of major.

The reason we have student loans is under the traditional credit system someone without a job and a credit history isn't going to get a loan at all.

Affordable education is easy to get: state and local public college.

The only problem is young people making poor choices (which is partially the fault of elders and predators) and taking out large loans to attend overpriced (for the value) schools/programs.

It's more of a capacity problem. The demand for four year degrees has increased exponentially, but there hasn't really been any increase in accredited colleges. So public money is being sucked up in the bidding war for open seats.

> Almost everyone gets approved, regardless of their future ability to pay it back.

Because student loans are the one kind of debt that can stick through bankruptcy, so it's a great investment!

my State, Indian does a partial free-2 year degree program in that the AP courses taken in HS qualify as a full 2-year degree if you take enough of them in HS and pass the exams..no college tuition payment required

That's an interesting solution to the problem of state funding. I wonder if they've done any studies on the educational effectiveness of the program.

I tend to lean libertarian, so that's my bias. I'll be upfront with that. That said, I'd be okay eliminating student loans both in government and even in private markets. Like private personal loans take over. I think it would work out over time.

I can't speak for the overall society, but I know personally I noticed locally amongst friends and family that when student loans became more widespread under Obama local private companies stopped paying for their employers to get nursing degrees, or other degrees. My sister got her RN and Masters degree through a program at the hospital she worked at, starting as a receptionist when 16. I knew someone who was a dishwasher at a michelin star restaurant and they paid for his culinary degree and worked to develop him. He's running his own joint now. It seems now not many employers are willing to pay the bill for education as the government is there to do that for them. I can't say this is perfect.. it seems any way you cut it people are going to get thrown under the bus.

Personally I paid upfront for college after years of working various jobs, I cherished every class a whole lot more I feel. Sure it's history and political science that I majored in, degrees many would view as useless. I think said studies are more vaulable when you're older, after you start building a life/career as they can certainly add compliment to one's understanding of reality. That said, I'm not advocating people not go into said fields at a younger age, it's a tricky issue. I know I would have hated studying STEM related stuff when younger and even when I went to college at an older age. Now I'm working on aquaculture stuff.. go figure.

This would exclude so many smart kids from college. People who work a ton of jobs but support disabled family members for example.

> “it seems any way you cut it people are going to get thrown under the bus.”

Incorrect, every other western country at least has a pretty workable system.

"people are going to get thrown under the bus", can include rich being over taxed to pay for free college for the masses. My statement was meant to be broad in that someone is going to get screwed, rich or poor.

The thing is the magnitudes are different. Calling them both "getting thrown under the bus" suggests they're equivalent.

The rich (myself included in that statement) are doing just fine, and could shoulder a little more without major setbacks. The poor are already dealing with a system that is bringing social mobility to a halt.

Future is iffy to predict, one could include overbudernsome regulations and heavier than expected taxes. Sort of depends on which way the politics shifts. Generally the pendulum ends up in the center after swinging left to right etc. So who knows what'll be like in 2030-2040. Getting thrown under the bus is simplistic term sure, however if I recall if half the population wants more and more, and the population that is sought after to pay for it is the rich, the burden will continue to grow. Thus we get into the same debate that is all over the net and media these days of paying fair share etc.

I was poor, now I'm above average. I would say maybe upper middle class now due to my business ventures, but before school which I paid for out of pocket through jobs I worked + having to pay for life's other nonsense things, so I'm not totally sympathetic to others in the same situation. By poor, I mean I was living in a house I bought for cheap as it was a foreclosure in a poor neighborhood, working two full time jobs and going to school part time/half time (9 credits per semester). Had to pay for my own health insurance, car insurance (1988 beretta's aren't the most reliable of transportations), plus two children, one with medical conditions. So to me idk, like I said I don't have much sympathy and think plenty should be able to adapt.

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

- People see college graduates making a lot of money

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

- More people take out loans to go to college

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

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

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

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

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

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

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

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

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

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

It unravels because it's one of many systematic cuts taking wealth out of the hands of the middle and lower classes. Income after graduation is routed back into the student loans instead of going into savings (and getting max compounding early on), or going into the economy (giving steam to GDP..). Will it the straw that breaks the back of our current economic expansion? Or will it combine with current tax cuts to pull so much money out of "main stream" economic circulation that we hit another recession? I'm not sure anyone really knows.

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

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

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

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

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

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

I think it unravels over time. The feedback loop is very long.

At some point, large amounts of young adults will accept loans that exceed the value-add of college by a significant amount. Then, those who chose not to attend college and pursued a trade will be more visibly affluent. The trend will swing the other way, universities will experience downward pressure on tuition, and trade schools will be inundated as universities are now.

Until there is a political solution, I don't see how the cycle rights itself.

Maybe better information dissemination will give young adults more ability to make the rational choice whether or not to get large loans (or what amount of loans to get). Until then, the feedback loop is too long. Furthermore, for those who chose wrongly, there's no remedy. It's a bad situation.

Man, what an interesting discussion, and a lot of good points here. As someone involved in education in US (research faculty at major private school in the South), and more recently, in Germany, I've become increasingly concerned with the large number of students graduating these days with bachelor and graduate degrees with little hope of employment, holding huge debt they have scant chance of paying off in any short time frame. This hobbles them severely. More and more I start to wonder if we could not accomplish more by shifting much of burden of instruction in all fields (arts, sciences, language, etc.), back to high school, rather than impoverishing students and loading them with college debt so early in life. Student Loan program seems to mostly be a way to transfer wealth from taxpayer to universities and of course the banks, but not necessarily producing a broadly educated populace. Agree with above comment that running education as a "business" with students as consumers produces a terrible result.

Agreed, having mandatory Physics and Chemistry classes seemed wasteful to me. I enjoyed them immensely, and I would have taken them as electives.

Most of my classmates didn’t get much out of them, and would have done better with personal finance classes or other practical classes instead.

For the time being, all but two or three college majors (zoology, social work, sadly enough) are still cost-effective over a lifetime, given the median undergraduate student loan amounts. This gap is closing however.

Trades shouldn’t be considered a complete panacea, pay varies widely by regions. Some trades only pay well in one or two places.

But as far as I know student loans aren't securitized and leveraged in the same way as mortgages were, so I'm not sure that the fall out will be as bad.

The root problem (as others have noted) is too many people are encouraged to go to college and even though most majors don't make economic sense students (rightly) feel that they need a college degree to be a competitive applicant for good jobs. Maybe I'm just in an ideological bubble, but it seems like there's pretty good agreement on this issue, but no real way to do anything about it.

They aren't securitized the way mortgages were, but you also can't walk away. Student loans are immune to bankruptcy so it follows you forever.

That is the major difference, mortgages had people underwater on actual physical things like property. They would go bankrupt and foreclose which would have a domino effect on other things.

Student loans are ignored in bankruptcy and there is no domino if they fail to pay since a degree isn't transferable to another person.

If there were to be a bubble burst, the people impacted are those that can't pay loans back and the institutions that handed out the loans. Sure there could be a backlash but a lot of those loans are from the Fed, right?

I'm not certain, but I believe they are backed by the fed, but issued by private lenders.

Any HNers currently in college? Is your loan from a federal institution or a private lender?

Right, and that doesn't seem good to me, but I don't think the fallout from student loans will be anywhere near the fallout from defaulted mortgages in 2008ish because they just aren't as as levered.

So it's terrible for the people involved, but not directly bad for society as a whole (but probably still bad in its second and third order consequences).

I'd say it's less bad for the people involved - it "only" trashes their credit. It makes life difficult, for sure. I'm sub-400 I believe. But a mortgage foreclosure trashes your credit and you lose your home. I /just/ need to come up with 12 months security, so I essentially can never move.

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

Presumably the same politicians that were around when foreclosure mania (a la 2008) occurred and ultimately were forced to change regulations that now make it much more difficult to get away with issuing subprime loans. Or in your line quoted above, substitute "college of their dreams" with "home of their dreams." The net effect, of course, is that those politicians are now telling people they can't get the home of their dreams because, gasp, they can't afford it.

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

At a minimum, a comparison of the default rate between the two would be nice.

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

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

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

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

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

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

The following article describes this in greater detail: https://tcf.org/content/report/student-loan-guaranty-agencie....

I think the main risk would be a deterioration in the government's finances since the government is expecting to get paid back and is factoring in those payments to the financial outlook. That could in turn lead to an increase in the government's borrowing costs, which could affect lots of other things negatively.

Classic case of moral hazard.

Just FYI the average default rate for the 2014 Cohort was 11.5% but that varies WIDELY depending upon the school from 0.10% to 56.20%.

Official numbers can be found at: https://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html

Default rates in good times can be very misleading (as the subprime crisis showed).

Can't you extrapolate default rates to when we don't have good times.

That's what banks do to manage their credit risk, they look at defaults rates "through the cycle", i.e. including the last downturn. But for new asset classes, like subprime in their time and like student loans now (if you look at chart in the article in term of growth), people have to make their own assumptions in term of how it will behave in a downturn. And that's where the credit markets can be really dangerous. These assumptions are what banks and rating agencies got wrong last time. And I think it is fair to assume that people under financial hardship will probably default on their student loan before they default on their mortgage (roof over their head) or their car.

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

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

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



Another house he sold in Vegas.


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


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

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

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

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

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

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

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

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

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

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

So ultimately, it's the same core issue as the 2008 housing collapse. When lenders don't have to give half a crap about the borrower's ability to repay a loan, they just keep issuing bigger and bigger loans.

"Legitimacy" is not really a factor when it comes to prices. Underlying production cost will put a floor on the price, absent subsidies, but the final dollar amount offered to the customer is a response to supply and demand. Universities are charging more because people will pay more — easy up-front money through loans is part of the reason why.

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

In upstate Western NY there's definitely a big push towards offering kids the option of vocational school. Kids I work with generally have their minds made up about it by 11th grade, but there are two interesting phenomena. Many students don't want to study for exams, and so make the choice to go vocational out of laziness, being unaware of the professional certification regime. I also see many students whose parents want them to go vocational, but they've been sold on the college experience so relentlessly that they will go anyways.

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

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

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

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

But quality of life is much higher for the software engineer, so assuming it's just as easy to be both, pay would need to be much higher for the plumber to incentivize people to do it.

Is it? I had some plumbers doing work in my house last year. They were pretty happy guys. Playing music on the radio, singing while they were at work. Meanwhile i'm here sitting at a desk all day.

A huge potential loss is in the marriage market, where being a plumber isn't as marketable as doctor/engineer/lawyer/financier. Also, big loss is wear and tear on your body from manual work, higher risks due to driving all the time, variable hours due to emergency nature of work, and finally, it doesn't scale well. Plumbers are well compensated, but is it enough to give up the chance to earn much more in businesses that scale up much easier?

The primary difference is the time it takes your salary to ramp up before it plateaus. Far fewer plumbers will not be making six figures (real world money, not StupidValley monopoly bucks) after five years or so in the workforce. That said, the work environment might be worth the money IMO.

I never experienced the "only option" talk, either. My high school put forth alternative vocational tracks pretty often. Also the military, among other things. This was in the early 2000's. I'm skeptical that educators force this as the "only way" as much as it's a culturally ingrained thing now. People hear it, even if it goes unspoken.

My son just started Mountain View High School here in Silicon Valley, not too far away from the Googleplex.

I'll simply say that in all of the relevant words I've read from that school, nowhere was there any allowance for NOT going for some kind of college. It was kind of spooky.

To a significant degree, you're mainly buying precisely that culture of "you're (we're, i.e. the students themselves reinforce the culture, which is vital) gonna prep for the SAT, do well in school, and so on, because you (we) are going to college, period, and... oh, you're not applying there, are you? No no no, my grandpa's name is on a building at [more presigious school], apply there, I'll talk to a couple people. Oh, and come volunteer at [charity] with me a couple weekends, looks great, my mom's on the board and can get you something that looks more important on an application than what most people do there. Do you have an internship for the Summer? We'll talk to my dad next time you're over playing xbox, probably can hook you up" when you pay (through housing costs) for top-end public schools, or mid-tier-and-higher private schools.

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

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

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

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

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

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

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

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

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

What does neoliberalism have anything to do with it?

On the one hand, yes that's late. On the other hand it's sort of insane how you need to start putting money away for a child's education when they're only seven years old! You have no idea if the child will even want to go to college, how much their college of choice will cost, etc.

It's good in theory, but most new parents don't have the spare cash to start saving at birth, unless they are already fairly well off.

I was lucky enough to have kids late in life and I can afford to put money in their college fund now, but most new parents sadly can't.

Another statistic is that in quite a few places in the world families don't have to save money for kids' education at all. Looking from Europe, it looks like a weird cultural artefact. If someone I knew did this, my reaction would be "wtf, why don't you pay off your mortgage or go on vacation?".

Why would you save? So the school can take it all?

Better to stuff your retirement accounts full of as much money as you can, buy some gold bars to bury and take a job for a nonprofit that pays peanuts 2-ish tax years before your kids need to go to college.

Wouldn't the winning strategy be for the child to wait to go to college until they can afford it? It is not something you need to rush into. If it is worth doing, it will still be there to do down the road.

You sound like a cigarette executive. "The real problem is we don't start em smoking before they leave the hospital. We could increase our profits 33% if every baby was exposed to nicotine before they leave the hospital."

Maybe not all people in society should be socially required to purchase an expensive good, thus causing demand to be infinite, meaning price can only skyrocket.

Given the number of Masters degrees working minimum wage or starting jobs now maybe we should admit we have a problem.

Those are two separate issues and it is only prudent that parents relive their children of crushing debt. Would you rather parents piss away their wealth on frivolities?

Passing on wealth is the hallmark of a wealthy society and it's rocket fuel that elevates us beyond destitution. Whether it is debt relief, real estate property, or arcane financial instruments -- passing on wealth to their children is the right of every parent.

The efficacy of master's degrees is unrelated to the social responsibility of post-secondary education funding. You might as well argue we all starve ourselves to pressure the government to do something about it.

The real issue behind student debt growth is payment, and with the US Government as a guarantor then growth potential is effectively infinite. Colleges will continue to feast unabated.

Ok. Let's replace "saving for college" with "saving for the child's introduction to adult life". If you bring children into the world, it's your responsibility to do whatever possible to plan for their future as early as possible. If we've decided that people can't contribute to society until they're 23, they're going to need some investment for their early adulthood, whether it's college, vocational school, doing art and working minimum wage in a big city.

Wages have stagnated while CoL has gone up but yes the problem is parents aren't saving enough.

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

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

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

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

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

For most people it's still the best bet to go to college if you want a career. Even in Germany with its strong vocational programs there is a long term trend of jobs going more and more to college graduates. My sister is "Bankkaufmann" and did OK when she started 25 years ago. Now the same job is only for people with a bachelors minimum.

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

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

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

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

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

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

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

Your no skin in the game is their lack of risk. I blame the lenders because they lobbied for this gift.

I agree. Why is it that banks are able to charge 6.8% interest for student loans, but the government will provide banks with that same student loan money for 0.03% interest. The middle man adds no value.

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

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

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

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

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

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

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

I think you might be overestimating the requirements for filing Chapter 7 bankruptcy. In many cases it's a strategic choice much more than a need due to being destitute. Take a look here [1].

In general, if your income is below the state median (which most recent grads' income will be), your debt is more than half your income (easily the case for most recent grads), it would take more than 5 years to pay off (again, easily the case), and your disposable income is low, you can file for Chapter 7.

[1] http://bankruptcy.findlaw.com/chapter-7/who-can-file-for-cha...

I doubt that Drumpf was ever destitute when declaring bankruptcy.

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

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

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

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

No offense, but the banks should take on risk if they're charging interest. Right now, they can have their cake and eat it, too, which is stupid - no offense.

> No offense, but the banks should take on risk if they're charging interest. Right now, they can have their cake and eat it, too, which is stupid - no offense.

i'll skip the faux politeness of "no offense" and just point out that this is foolish.

even if payback is literally guaranteed, interest is still required, because money now is worth more than money later, due to opportunity costs. the US federal government, which everyone considers the pinnacle of credit worthiness, still has to pay interest.

further, just because the debt can't be discharged doesn't mean its paid off in a timely fashion. the interest rate has to be further increased to account for folks who just don't make payments for years at a time.

My argument is not that the banks shouldn't collect interest; my argument is that they should accept risk.

>You'd think a surefire bailout would decrease resistance to debtor relief. But investors want timely payments; they fear federal relief programs might slow cash flow from an otherwise "bulletproof asset class." This creates twisted incentives, especially for SLABS players involved in loan servicing: They often have a stake in borrowers defaulting rather than paying smaller amounts over a longer period of time.

It's perverse policy — bankers are pampered because student debtors are hounded and pounded. To help borrowers, the government should facilitate bankruptcy reform and expand federal relief programs. But we have deeper problems: Lenders, servicers, collectors and investors prosper while students suffer because schools increasingly rely on private tuition rather than public funding.


> interest is still required, because money now is worth more than money later, due to opportunity costs

But where can I get the kinds of returns that banks get from student loans? Especially without doing any real work?

Wait. Isn't that how investing works? You invest hoping to get a return - but sometimes you don't. A loan in which students (or anyone) can't default is getting close to debtors prison. Whoever invested without caring who they gave the money to should, well, get those returns: $0.

Having the government step in and pick up the tab isn't as ridiculous as you think. The majority cost increase (65%)[1] of higher education in the US over the last couple decades is due to a systematic defunding of government support for schools. It would be nice if we started investing in our country's education again.

[1]2015 Study by the New York Federal Reserve - https://www.newyorkfed.org/medialibrary/media/research/staff...

How about the government lets the banks pick up the tab? Why should taxpayers bail out (wealthy, educated, intelligent) bankers who made bad loans?

Maybe it should be a problem for both the banks and the government. The banks have undoubtedly mixed in the student loans with the rest of their portfolios which back the returns of numerous investment and retirement accounts held by US citizens.

Why shouldn't Americans bail out Americans for the collective decisions of Americans?

> ... better attention to whom you give a loan to.

which translates to "fewer people getting loans". i'm fine with that, but a huge chunk of the population and >=51% of politicians thought it was terrible that there were people who were denied loans.

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

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

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

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

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

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

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

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

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

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

As I posted elsewhere in this thread...

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

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

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

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

Pew Research Poll http://www.people-press.org/2017/07/10/sharp-partisan-divisi...

Figure 2A Lifetime Net Earnings by Education https://trends.collegeboard.org/sites/default/files/educatio...

Figure 1 Lifetime Earnings by Education https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...

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

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

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

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

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

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

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

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

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

[1] http://money.cnn.com/2017/11/15/pf/college/tax-reform-paying... [2] https://www.cnbc.com/2017/08/17/student-loan-debt-why-employ...

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

There are two relevant things to realize about this:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Instead of the corporate universities drowning students in debt.

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

Drowning students in debt so they are basically forced to work for evil corporations who do evil things.

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

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

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

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

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

_The Economist_ has had several articles on countries that have experimented (temporarily) with negative interest rates and concluded those experiments didn't have much of an effect on those countries' respective economies.

Whatever your view of the Fed is they are generally smart and well-read people who have probably also read those articles or the research papers backing them, so I think it's unlikely that interest rates will ever go negative.

Japan already has negative interest rates - what's more the japanese central bank is literally buying up their stock market (a far far more inflationary version of qe than buying long term gov bonds which are basically equivalent to cash at this point anyway)... Now there is one question left to you... with all that going on, what is Japan's inflation rate?

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

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

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

When the next recession strikes, people will attempt to liquidate their Bitcoin to pay their bills and find out that no one really wants to buy them.

There's two unknowns in this statement. 1) How does bitcoin behave during a recession and 2) What will the next recession look like?

If the next recession takes the form of significant inflation -- resulting in effectively negative interest rates -- you will see flow into bitcoin.

If the next recession is caused by significant defaults on debt, well, bitcoin is also the safe haven asset there.

Bitcoin came into existence as a response to 2008. It's primary purpose is to protect peoples savings from central banks foolishness.

I agree no one knows for sure what will happen. IMO, bitcoin is a reasonable hedge against the monetary policy we have today.

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

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

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

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

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

One could essentially sign up to be a librarian (bit of an exaggeration but there are active duty members who work at libraries). Same goes for Coast Guard which doesn’t get deployed in the traditional sense and are more like water police.

Ceteribus paribus, the military provides stable job, income, and a generous scholarship.

The scholarship is roughly $70-$100k depending on school and a monthly housing stipend. For SF area, that stipend is $4.2k/month

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

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

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

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

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

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

OP didn't say to join the military to get an education he said to do it as an alternative to college. It's a good career path that teaches useful skills. Most people in the military aren't employed in combat roles.

Uhm.. apparently you have little to no experience with the US military.

This worked out fine for me, no shooting involved: https://en.wikipedia.org/wiki/35T

There are plenty of jobs more hazardous than "soldier". I believe there's a guy who made a show about such "dirty jobs"? Mining, oil fields, and commercial fishing come to mind.

If by "the left" you also mean every prominent suburban area in America, then yes!

It's right to bring up the military and the trades as viable options, but let's not oversell that stuff. The trades aren't just a shoo-in easy crack at six figures like folks spout off. You gotta work for that master-tradesman slot. It'd probably take you 10+ years to get there if you're good enough. The trades are designed to limit the number of people entering them...it's part of why they make so much money. It's also incredibly hard work and tears up your body as you age.

I think the drawbacks to joining the military are pretty obvious and go without saying.

Huh? http://www.washingtonpost.com/wp-dyn/content/article/2007/09... seems pretty bipartisan.

But I agree trade schools need more respect. The kinds of work taught there is necessary and pays well.

> seems pretty bipartisan

That's 10 years old, plus I wouldn't call those voting numbers overwhelming bipartisan support. It passed, but many Republicans voted against it. All democrats voted for it...

It's a shame you're getting downvoted, since you make good points. For many people the expected value of college is negative. I also think HN is unnecessarily critical of the military. I work with lots of people who served in the military for a few years after high school before eventually going back to college and they seem happy with the decision.

It would be hard to justify serving in the US military in terms of morality, personal risk, and long term health consequences.

Maybe ask the people who've served in it? Most people I know who were in the military don't regret it.

My grandfather served, my father served, a good friend of mine served then died in Iraq, another is still serving.

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