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U.S. Student Debt in ‘Serious Delinquency’ Tops $166B (bloombergquint.com)
169 points by spking 33 days ago | hide | past | web | favorite | 272 comments

From a European perspective I can only shake my head at this.

It doesn't seem like a good idea at all to indebt a significant part of the young population (which I presume creates a lot of avoidable stress) while the rich gain in wealth and power year after year. But I guess longer-term thinking has been thrown overboard in economic decision/policy making anyway, because that would make the numbers not grow fast enough.

Recently I'm under the impression that American society has been tearing itself apart more than is healthy, damaging social cohesion to a great deal. Good luck building an advanced society on distrust and inequality though...

American here who just went through this process. I returned to finish my undergrad at one of the most expensive schools, in one of the most expensive cities.

I think as others said, many students aren’t doing the ROI calculations.

For me, the government loans are 3.75% which is totally reasonable IMO. One could easily outpace this with an ETF fund.

The private loans are more expensive at 6% and up but the lower end is still totally reasonable.

The real issue is that people taking these loans lack the financial skills to pay them back. A friend who is out of school for 10 years has a near six figure loan debt that he refuses to pay down despite earning six figures. Learning to budget and live frugally is a required skill to escape the debt that many don’t have.

I also know very few that have visited financial aid to get a second look at their scholarships / grants. I went every semester and walked out with something. A friend walked out with $14k extra in financial aid from one meeting. Those in the worst positions financially also get vastly more aid. I had some savings going in but still paid a fraction of the tuition sticker price.

In all, the experience worked out well in my favor with a paid research position and other breaks along the way, but given any other situation I would recommend going the state school route which is often a tenth of the cost.

My federal loans from a few years ago ranged from 3.25% to 6.7%. My fiance had to stay an extra semester, which means she had to get a private loan for it. ~9% fixed.

My school wouldn't give anyone extra aid even if you went in in person and asked (the only case I know about is a student's mother passing away halfway through undergrad) and you'd get a little less every semester because tuition kept going up.

Top schools tend to be more generous despite the higher sticker price. My sister graduated from one with around 1/4 of the debt that I did. 2 years was with the same FAFSA for both of us.

Don’t mean to sound defensive (I’m not American), and I mostly agree with you.

But, from a non-European perspective, Europe doesn’t seem to be doing well? It seems the EU is slowly disintegrating, and the monetary union isn’t working. Also the political landscape seems to be in turmoil as well.

In politics things come and go in waves. Yes, there's populists but the Brexit chaos shows everyone that leaving the EU is a very stupid idea. Of course the Tories are ideal as they apparently love shoveling shit onto fans facing them. Unlike the unpopular US Congress, the EU parliament has members from 128 parties grouped into 8+1 fractions. I just wish we'd send our brightest minds into this parliament and stop member countries from abusing it as a semi-retirement for some of their politicians.

The EU is making progress every year: I grew up near a border which was gone by the time I was a teen and nowadays using my mobile phone in any of the EU28 will cost me extra. It's those small things that the people do love about the EU and would miss if they'd just think harder about it. It's also boost regions otherwise neglected by their respective country's government. No one in Westminster gives a fuck about the North or Wales, the EU does, with lots of money being invested.

I hope we see a decade of consolidation and more unification e.g. in the tax, finances and transparency. Junker's own blunders as Luxembourg's prime minister are unforgivable.

Also non-American and non-European here. My impression is that the EU is getting itself into a huge mess mainly due to abused good intentions taking in immigrants and as a byproduct of the GFC and Middle East’s proxy American x Russian war.

While the Americans seem to not be operating as a democracy for a while and are instead a Corporocracy. It became fairly obvious after the GFC. The three “super powers” in the world are not democracies.

First of all, a lot of those arriving and asking for asylum are sent back because they don't qualify.

Moving on, we Europeans are making a decent profit from selling weapons to the Middle East and African countries. We might as well take on those refugees driven out by the violence our weapons cause.

Europe's history, even the years since WWII, is full of migrations: Post-war displacement affected more than 10 million people, refugees from East to West Germany, Brits fleeing the rain for sunny France and Spain (they are a few hundred thousands), Hungary 1956 dispersed 200,000 hungarians of which 70,000 crossed this little bridge https://en.wikipedia.org/wiki/Br%C3%BCcke_von_Andau and the last decade saw a massive flow of young people from southern Europe to the north which causes long-lasting problems for the southern countries. The list goes and and will go on. Some EU countries have 10% or more of EU-nationals in their population which in my eyes will become a hot topic in terms of higher level elections as right now you are only allowed to participate in local elections if you are not a native.

Which are you three?

I make it US, EU and China - 4 if we count Russia for the 8000 nukes but not by most other measures.

This is a conversation about education. The EU, with all its faults, is leaps and bounds ahead of the US in the democratization of education, even though the US was the nation that pioneered the field in the first place. Goes to show how extreme the whole political spectrum of the US has gotten.

Aren't a lot of these European countries a lot more pragmatic (cut throat?) about who can go to college? For example in Germany, I was under the impression that around adolescence they start dividing people into the university path people and the non-university path people. I don't think this type of system would go over well in the US with its individualism/"control your own destiny" mindset.

I'm not saying the European countries have it wrong, but their systems seem far from free college for everybody (how it is often reported in the states) and much closer to free college for the worthy. Please correct me if I'm wrong.

We have this in Austria but if you are dedicated to take the lower school paths and later decided to get extra education to go the Uni, there's nothing that stops you. There's nothing unusual in a mid-20 taking evening school and going to uni two or three year. And not just that, if you dropped out with nothing at all, evening school allows you to get even the lowest ranking of the three paths: Hauptschulabschluss. The cost for you? Nothing!

When you have finished your Hauptschule or Realschule (lowest and mid path) you usually start a job but part-time you also go to a job-school (Berufsschule) where you learn more specific things that are useful for your job. This dual-education works great and is being exported to other countries where german manufacturers get active but don't find the skilled workers they are used to.

It's not as cut throat as you make it sound. People who go to "practical" schools can always switch back. I lived in Germany and have friends who got Bachelor's degree at 35+. Another good reason to make it affordable is that people will always have options.

> This is a conversation about education.

Actually, this particular part of the thread you're responding to is about wealth inequality, economic policy, short-term political thinking, whether the EU is doing well comparatively, and policies that create a large amount of potentially avoidable anxiety - among a few other topics.

Education is only a related topic for this specific comment chain.

Most Europeans do not associate themselves with the EU but rather with their nation state. Also - not all Europeans are in the EU to start with.

I don't see how that relates. Maybe you see something I don't?

> But, from a non-European perspective, Europe doesn’t seem to be doing well? It seems the EU is slowly disintegrating, and the monetary union isn’t working. Also the political landscape seems to be in turmoil as well.

The purpose of the EU is to prevent war. The EU hasn't had a war in 75 years. That is the longest that Europe hasn't been at war in its recorded history.

Are the balkans not part of what has traditionally been considered Europe? I seem to recall a little conflict involving ethnic cleansing back in the late 90's...

Also, I understand that Russia is considered less and less "European" with each passing year but the Ukraine and Russia (or at least all of its centers of power) are located within the European continent by definition. There's also the issue of the IRA's war against Northern Ireland and the UK as a whole, while that conflict doesn't meet the commonly agreed definition of "traditional warfare", it was the very template every modern insurgency bases itself upon. In a sense that was a war by any modern definition since traditional warfare seems to have become a relic of the past.

Balkans were not part of the EU when that conflict happened in the 90s.

The EU was a necessary prerequisite of the peace process in northern Ireland, as is being brought into sharp focus now With Brexit.

Is your take that the EU, and not nuclear weapons, is the driving force behind the European peace since 1945?

The EU didn't even formally exist until the early 1990s, before then it was just an overgrown trade federation.

The EU is if anything a force against peace, as it takes a totalitarian "you obey us on everything or we work with you on nothing" approach which may appear to create temporary peace, but only by suppressing dissent. The USSR was also by this approach very "peaceful".

I'd wager that even without nuclear weapons, dividing Germany in half and keeping half a million or so foreign soldiers there for 50 years would have been pretty effective at keeping the peace.

The feasibility of that depends on the stability brought about by nuclear weapons, though, no?

Perhaps. It's possible a cold stalemate between the two non-nuclear armies would have lasted a while, I don't think there was much enthusiasm for full-scale fighting.

Porque no los dos?

To be fair, there are plenty of state universities in the US that are considerably cheaper than private schools. Students entering college are generally making two bad decisions:

1. Selecting a very expensive, non-prestigious private school.

2. Selecting a major that has no ROI for the cost of tuition.

To give concrete examples:

Option 1.

   4 years at U of Texas at Austin.

      Tuition = $40k.
Option 2.

   2 Years at Tarrant County College.

   2 years at U of Texas at Austin.

      Tuition = $24k.
Option 3.

   4 years at Southern Methodist University.

      Tuition = $250k.
So a student could spend $24k versus $250k, and I would imagine most would consider the UT Austin degree more valuable, as well, though these two schools are ranked similarly for undergraduate.

And, while I would support further taxes to support state schools, I have no desire to support students who are personally selecting to attend a school that will cost 10x just because they want to. And I have no desire to forgive their loans, either.

The education bubble has nothing to do with the rich. It’s entirely a middle class phenomenon—a wealth transfer from young middle class people to older middle class people (professors and administrators). To the extent that state colleges aren’t more heavily tax subsidized, again its primarily the fault of the older middle class. (The biggest difference between US and European tax rates is for the vast middle class. Rich Germans pay somewhat more in taxes than rich Californians. Middle class Germans pay twice as much or more.)

> Middle class Germans pay twice as much or more

Citation needed. My personal experience paying taxes in both EU/NL and US/TX is that I pay slightly more in the US, in pretty much the same situation (family of four, two incomes)

You don't have to work this out from first principles; varying tax burdens in developed countries is intensively studied, and any analysis angle you come up with has already been come up with, long ago, by professionals paid to analyze this stuff. Germany's middle-class tax burden is significantly higher than that of the US.


US taxes on average-ish incomes are definitely among the lowest in the OECD (as expected): http://www.pewresearch.org/fact-tank/2017/10/24/among-develo...

> So we chose to focus on a simple measure of tax burden: national-level income taxes plus mandatory social-insurance contributions as a percentage of gross income

I am not an American, nor that knowledgeable about their tax system, but my impression is that their system has a lot of layers (like state/county/local), which might make it unfair just to compare national level taxes.

Don't forget VAT is double. Property tax is higher. Employment tax (paid by employer, not part of gross pay) is a lot higher.

I always feel like tax should be measured in "if my employer pays 100 extra, how much more can I give another company for a good/service".

I don't know about US but for Germany the answer is between 25 and 40 depending on how low your income is and what your family situation is.

Right, this is a good measure. The national-level one is just proportion of GDP spent by the government, however they collect it, and IIRC the figures are about 25% in the US, vs. about 45-50% in Germany.

Not generally. The reason the middle class pay higher taxes in Europe is mostly because of contributions to public welfare systems. Society level concerns are usually still to a large degree paid for by taxes on high incomes and businesses.

No, the tax burden on the middle class in Germany is substantially higher than in the US after accounting for benefits, which, of course, tax policy analysts thought of doing long before we started arguing about it on HN.

You fail to account for student loan interest, which does not transfer to your academic boogeymen.

I think there is a balance to emphasize the psychological and physical impact that debt can have to individuals and incentives individuals need to make smarter decision (debt is an incentive, not forced on ppl 99% of the time). If folks know that they will be indebted after university, they have more reason to study something that will allow them to pay it off or that it is at least partially paid by grants/etc.

Long-term thinking may mean less burden in society by making the incentives based on debt

I also think people forget that the US is a superpower in part because of the brain power it has, that brain power in part comes from the folks coming out of university. When you look at Uni's top 100 rank, 58% is American & 22% is European. Although this might be a simple correlation vs. causation scenario, I think it is worth accounting for in conjunction with a variety of variables.

I still agree that the tuition $ in the US is exorbitant and that governments need to teach people the values, risks, etc of going to university just like I think everyone should have at least 1 personal finance class in high school, it would help a lot of people.

P.S. I am not American

I’m curious about the juxtaposition of the indebting of young people and the rich gaining in wealth and power. Is there a causal linkage between student loan debt and the rich getting richer? It’s true that we could levy higher taxes on the rich to pay for college, but as others have pointed out, part of the problem of spiraling costs is the heavy governmental subsidies. Or am I missing the point on how these two things go together?

The connection is that people who have debt out of college tend to need to take whatever job they can find. This worsens their negotiating position vs a situation where they don't have any obligations.

Wealthy people tend to be owners of businesses (directly or indirectly) that buy this labor, and they have a better negotiating position.

Young people with all the time in the world, an education, and no debt are also in a good position to establish new businesses. Having fewer of those reduces competition.

The secondary effects of this are definitely under-reported (and possible under-appreciated).

In essence, what we're talking about here is a massive wealth transfer from people seeking post-secondary education to those offering that education (sometimes public, sometimes private)... except (critically) the effects are future loaded.

We've indebted an entire generation, but it's an invisible anchor dragging on their economic aspirations.

If you ask me, we should do three things to fix this: (1) haircut absolute public loan amounts to a manageable amount in exchange for public service (more funding & new opportunities), (2) haircut private loans to a manageable amount (too bad, they shouldn't be able to offload risk to the public and keep their profits), funded by new taxes on underperforming (read: abnormally large numbers of deliquent loans) private loan vendors AND institutions generating said loans (both of whom benefited from originating poor quality loans), (3) continue efforts to tie government-guaranteed loan eligibility to positive outcomes (your graduates don't find jobs in their fields, your program(s) are no longer eligible for loan guarantees).

Note sure whether there's a (more or less evident) causal linkage and in retrospect that juxtaposition is somewhat artificial. I just thought that these two things seem inconsistent given the central importance of tertiary education in this day and age.

My thinking was more along the lines of: shouldn't the haves fund/enable the future success of the have nots instead of having them turn into (hopefully temporary) "have even less's"? In my mind it doesn't seem very sustainable to fuel education with debt even with government as creditor, especially in case should economic downturn occur...

I'm a university student myself and thanks to publicly funded universities I pay ~300 EUR per semester here (including an IMO quite generous public transit ticket). Obviously someone else is paying all the rest (plus the cost explosion is probably not nearly as bad here). The thought of having to personally indebt myself however, not knowing how things'll play out in this increasingly crazy world, seems quite scary. Looking at the situation of US students makes me all the more grateful to not be in their shoes.

I admit my original comment wasn't very well thought out, just something I wanted to vent (reading certain subreddits may have had something to do with this). There's obviously more forces at play concerning US higher education (and the welfare state in general), many of which I'm sure I can't see.

Who do you think decided that students need debt? And that some of the richest economies in the world "can't afford" to educate their citizens without it?

> Is there a causal linkage between student loan debt and the rich getting richer?

The lenders are rich. That's how lending works - you have money (are rich) so you lend it now for more later (get richer).

I pay taxes to fund public school and universities, using it myself or not, because I don't want to live among ignorants.

Yep, we are pretty hosed.

It's just a clever way for the government to spend less than it would. The idea is that it is cheaper to cover all the defaulted loans than it would be to pay for everyone's education upfront. And all the private insurance that will get defaulted on is actually free money the wealthy essentially donated to education. And dont forget that a chunk will be covered by inheritance when the younger generations parents pass away. I'm not saying I agree, but this isn't just a surprise. What is happening is kind of by design.

Beyond that don't trust what you read online about the US. It is all grossly exaggerated. Remember the US is a large country with a wide variety of people with different priorities.

> The idea is that it is cheaper to cover all the defaulted loans than it would be to pay for everyone's education upfront.

European here as well, but best I'm aware what you're saying is not how it works.

The US government is the student loan lender at the end of the day when you work through the insurance chain. And in contrast with mortgages, car loans, credit cards, etc. where you can declare bankruptcy to make the debt go away and start anew, you can't default on the US government.

The real story here is that an increasingly large number of US citizens are having or stand to have their wages garnished by the US government. Debt bondage comes to mind...

> wage garnishment

Exactly, it just becomes a deferred tax. There are also laws that cap how much a person's wages can get taken specifically with student loans. It maxes out at around 10%.

Again, I do not agree with it. But to pretend the sky is falling is false. That's also why, as you've noticed, laws have been adjusted in the wake of the abuses of the for profit university industry. As well as accreditation crack down on the organizations that accredited these for profit universities.

I'm not saying it's right or just. I'm only saying it's intentional and not some giant debt bomb surprise that the government is not expecting.

It's just kind of how the US tries to do things. By having loans they are trying to apply market forces. The idea is that students will do a better job as a whole deciding what schools and programs continue. And again again, I'm not saying I agree. Just relaying that there is an actual design behind it.

In the states, there are many non-profit Universities running for profit. That's why every one can get admitted to whatever major/program at some school. This is like non-profit hospitals ripping off people.

For the European model to work in the states, many schools need to be shut down, so as to reduce the freedom of picking whatever major at some school.

Education is important. Access to education is important. But our current system of giving out student loans with no regard to if the student will ever have a realistic ability to repay borders on predatory.

If we can't do anything to solve that portion of the problem, we should at least restrict the mandatory fees that are tacked on for non instructional purposes. No student should have to pay for decades to prop up with school's sports ambitions. For every Alabama that makes a profit off of sports, there are dozens of Georgia States that impose ridiculous mandatory fees on students to balance the budget of the athletics department.

Athletics are easy to pick on because they're the most visible but most schools have a whole list of these non instructional fees that students must pay, in most cases, go into debt to pay or be denied access to education.

After removing the mandatory fees, also limit how much of the tuition can be used for non instructional purposes. Every institution has overhead that must exist to keep things operational but there must be a limit to how much or we're once again either denying access to education or condemning students to an overwhelming debt burden.

Instruction of course isn't the only mission of most universities. Research is important. Extension is important. There are many worthwhile activities universities engage in that should continue but not at the expense of access to instruction.

edit: spacing

People have been fine with Medicade/Medicare spelling out costs for services and such they should be willing to accept the same in higher education to obtain a Federally backed loan.

Schools will trip over themselves to offer degree programs to meet Federal Assistance requirements. Each degree, each course credit leading to that degree, should all be subject to review on a periodic basis to insure that the needs of the country as a whole are being supported. Colleges which fall outside the loan guarantees will obviously find methods to insure students can attend, by steering endowment funds and sponsorships.

> each course credit ... should all be subject to review on a periodic basis ... needs of the country

This sounds horrifying. You want every change of a course to go via some central bureaucracy for approval? This bureaucracy will be staffed by ideologically neutral disinterested angels, regardless of which party is in power?

I think there's a much more free-market solution here. Cap student loan payments at 15% of taxable income, written off after 20 years. Then they can never be a crushing burden, and lenders will become very picky about who (and for what course, and where) they make loans to.

And 17-year-olds will be presented with highly relevant individualised information about the likely outcomes of different options. And it'll also create some jobs for the coming glut of machine-learning people, to make these predictions...

The predictable outcome will be a glut of professionals with high-prospect degrees which will actually drive wages down in those fields, while useful-but-low-prospect careers - nursing, the arts, teaching - will continue to be underfunded and underpaid.

There's already more than enough "ideologically neutral disinterested" distortion of social value created by so-called free markets everywhere else in the economy. If free markets were going to solve university education they'd have done it by now - just as they've been promising to for decades now.

> If free markets were going to solve university education they'd have done it by now - just as they've been promising to for decades now.

The market in university education is not free, though. There are significant distortions induced by the various loan and scholarship policies enforced at both the federal and state level.

Has "the free market" been promising to solve university education? Is such a thing even an entity capable of making a promise? As far as I can tell, it's totally uninterested in doing so. Most reputable educational institutions are not for profit. The for profit ones seem almost entirely taken with the problem of bilking students and taxpayers by providing shoddy goods at outrageous prices and exploiting the student loan regime and ignorant customers. The university education system and the free market are, as far as I can tell, basically uninvolved with one another.

FWIW, I don't think the free market would solve university education either, for entirely foreseeable reasons. In a completely free market, universities and lenders would bet on the affluent, and the poor would be left out in the cold to an even greater extent than they currently are. But on the other hand, it's hard to blame the free market for the current state of affairs.

Nurses might be a good benchmark for setting this up -- google says "Registered Nurses made a median salary of $70,000" which sounds to me like they'd be a decent bet.

Training lots of people in currently high-wage jobs would be precisely the point -- those high wages are the signal that the economy could use more of them.

If there are professions which can't be funded this way (which means that right now, those employed in them never pay off their debt) which we would like to subsidise, then let's do that directly, give out music scholarships etc.

The "so-called free market" in education is responding to incentives we are providing it, which are really terrible.

> Schools will trip over themselves to offer degree programs to meet Federal Assistance requirements. Each degree, each course credit leading to that degree, should all be subject to review on a periodic basis to insure that the needs of the country as a whole are being supported.

Central planning of education? Do you really want such control ceded to a handful of unelected bureaucrats?

The Medicare/Medicaid system's costs have risen by leaps and bounds every year since their inception. That is not a model one would want to emulate for lowering education costs.

Education is important, but I sometimes wonder if there is a whole lot of correlation does not equal causation going on here. What I mean is, statistics say those with a four year or higher degree earn more than those without. A correlation. But you might say that those who are predisposed with the aptitude for higher earning power are more likely to pursue a higher degree in the first place.

It's this thought, that makes me wonder if government backed higher education is worth the money. I'm inclined to support government backed higher education, but I do think this is an important question to ask when determining specific policy. I'd think we'd only want to pay for STEM degrees where students were able to maintain a certain GPA.

With that said, yes, the system is predatory. It's disgusting the amount of interest I paid for ten years to these loan sharks.

I feel like so many of the incentives in modern society are rigged to approach the "problem" of what to do with your people from the wrong end.

You put them through public school to... train them to work in factories. Because that is the original and persistent intent of what a high school education leaves you capable of.

You then siphon them into university then because... they need the means to live, and the only way to get it is with specialized skills.

Like with many things the original functions of what these programs were meant to achieve (creating a capable working class for regimented jobs of the era) have been totally lent to obsolescence but the systems remain as if nothing changed.

Not even STEM justifies the cost of university. We could be collectively saving absurd amounts of time and money if 14 year olds were electing to pursue a STEM career and simply shadowed professionals for 4-8 years and learned through first hand experience while reading books and doing online regimented lecture learning about the subjects on their own or in collaborative groups of their peers. You wouldn't need extravagant institutions costing absurd amounts of upkeep to maintain just to fail to produce capable scientists and mathematicians because they graduate with often only a rote understanding of ten+ year outdated domain knowledge and no experience practically applying any of it.

> STEM career and simply shadowed professionals for 4-8 years and learned through first hand experience

I believe that's called a PhD :)

But I totally agree that much of the system we've invented is a mistake, basically from having the causality backwards. People who went to university did well, made more than those who worked in factories. So we decided that (after closing the factories) we should send the entire population there, so they can all do well! But it doesn't work like that...

I think basic educational theory would conclude that College/University should be an opportunity for people to 'learn how to learn', network, enjoy life while young, among other things. Whether everyone that goes to university actually does that is up to the individual.

Society/government can only do so much to push people towards success. I agree that a lot of people go to college without being prepared or able and that adds to the cost. It is the cost of failure that society has accepted up until today, we will see if it changes.

Agree. This is an option today if you home school your child.

You intuition is correct. If you dive into the behavioral genetics literature, you'll find that the school you go to and how long you go to school doesn't affect your life outcomes. Instead, both your life outcome as well your "quality" and duration of schooling are all driven by genetics and random stuff in the environment (actually, what is called non-shared environment, so stuff outside of your family, school, neighborhood, etc.).

I can observe a dillution of education systems. It used to be stricter with clear benefits for every party:

Students that got in would go through a dense cursur and be viewed as higher intellect for the work market. With years (at least in France) there was a desire to make everybody get a higher education degree, but often by relaxing barriers of entry. You get more students but less good ones, the market is saturated by mild masters degree, not enough jobs, they trickle down (sic) and cause degree inflation (post office summer positions required 2-3 years diplomas, not rare to see a 5y college student working there).

At the same time what used to be a simple way to absorb people's need for a job is a bit comatose, simpler hands on jobs (which value was seen as less at the era of Master's degree or nothing) were nice to let people find a salary without much hassle.

I remember a tv host saying he went to Paris without anything and got a job by almost knocking at the first door he saw..

If we are being honest, sports and minor non-instructional costs are minor vs the cost of small classrooms and professors.

We need to vastly cut costs and sports and non-instructional costs wont move the needle.

The fact that many universities have tenured masters of their domain still having to, even with as many grad students as can fill a lecture hall, oversee 100 level courses that would fit in better at middle school than university is ridiculous.

Good professors are an extremely expensive thing to have, and students of merit deserve time with such masters that maximizes knowledge transfer. That almost always means not having regimented, graded curriculum taught by lecture from one singular book, but that is how almost all university courses operate.

Any time a professor repeats themself or is forced to do something mechanical or routine is a failure of the system to take advantage of their ability.

I don't know what your experience was like in undergrad, but at the state school I went to, the 100-level "intro to this major" type courses were actually quite challenging. none of the individual pieces were that complicated, but the breadth of material and pace were simply too much for most high school students, let alone middle school.

I also dispute your claim that 100-level courses should just be assigned to grad students. of course any grad student should have a firm grasp of the intro material, but intro courses aren't _just_ about learning tools and building blocks for understanding advanced material. they are a department's first opportunity to get students excited about their discipline and get them to start thinking about how all the little pieces fit into a larger perspective. simply throwing grad students at these important courses is a great disservice, imo. to be fair, the current practice of shoving 200+ students into a huge lecture hall is not much better, no matter how good the instructor.

> Good professors are an extremely expensive thing to have

Are they? I left academia partially because compensation was so much better in industry. I remember doing the calculation that a tenured professor's salary was covered by 3-5 undergrads' tuition. At public universities, these salaries are public.

For many schools, sports are a profit center. Texas A&M for example, makes several hundred million per year from their sports. Schools like NYU with their insane tuition doesn’t even have big sports, yet it’s one of the most expensive schools around.

> Texas A&M for example, makes several hundred million per year from their sports.

A few schools earn direct profits of about $10 million per year from their athletic budgets. Texas A&M's increased revenue is related to stadium renovations.


> .. current system of giving out student loans with no regard to if the student will ever have a realistic ability to repay borders on predatory.

This morning my university sent me an email about a `Summer Funds & FAFSA Workshop` to `receive guided 2019-2020 FAFSA filing help.` In their words: `an open lab session to help you complete the FAFSA .`

Schools seem of the opinion that the money is already theirs; If they could file it without the students they would.

Just because it's systemic doesn't it's not predatory. With admins focused on the money and teachers focused on research, how are universities any more than glorified testing centers?

There is so much waste in universities: bloated admin/it staff , libraries filled with journals/magazines that no one reads, tenure system that doesn't allow you to downsize departments that have no students. Tuition can be reduced, however there is no incentive to do it since students can easily get loans.

Right. It’s become a government backed bubble. Somehow we need to pop it softly. I’m sympathetic to all the current student debt holders and providing relief to them but if we do that without putting and end to these guaranteed loans we’re just perpetuating (and making worse) the problem.

Doing something like making community college and trade school level degrees free and leaving everything else to private loans sorta makes sense. (Arguably 80% of university graduates really didn’t need their degree for their job.)

There is a rather simple way of stopping the ever growing tuition bubble, one that is employed in the Netherland, but I feel like it won't be popular in the US: Cap the tuition a college is allowed to charge and restrict them from charging additional fees.

Actually, the simplest way to put downward pressure on tuition in the US is to allow the loans to be dischargeable in bankruptcy.

Maybe make them dischargeable 10 years after graduation/disbursement? This might help avoid people from planning to declare bankruptcy immediately out of college to get rid of the debt, and 10 years later most people would have some assets to go after during bankruptcy proceedings

The upside is that lenders would still have to consider whether the borrower is actually likely to be able to pay back their loan

Won't people then plan to go bankrupt? Although perhaps that will allow a better equilibrium.

Here's another idea for a better equilibrium: Cap non-dischargeable loan payments at (say) 15% of taxable income, written off after 20 years. Then they can never become an impossible burden, and lenders will become very picky about what kinds of study they wish to fund. Which will in turn provide more useful information to those applying, instead of just glossy brochures.

Yes, which is exactly the point; so banks/gov will lend less, to people they think will pay it back. Which means schools will have to charge less, particularly for non-profitable majors.

No, being bankrupt is definitely not an enjoyable state to be in, even is your debts are discharged, though.

What is does mean, however, is that no sane entity will then continue giving out loans for someone to go $75k in debt to go to cooking school.

You mean culinary science !

Like you mention it'd simply create an equilibrium. People would declare bankruptcy when the discomfort of repaying the loans exceeded the discomfort of declaring bankruptcy. If I lend you an unsecured $10 which you then expend on something personal and materially intangible (such as an education) you're not going to declare bankruptcy to get rid of that $10 debt. If I lend you an unsecured $1,000,000, you almost certainly would declare bankruptcy to get rid of that debt. So we can say that my risk (as a lender) in lending you $10 would be 0%, while my risk in lending you $1,000,000 would be 100%. There's some curve there where I maximize my profit:risk in the middle that depends on the specifics. Like any loan it now becomes the job of the lender to assess that risk, determine eligibility, and profit off sound financial decisions - or, themselves, go bankrupt with poor financial decisions.

I think this would be a vastly better scenario simply because all interests would be aligned. Universities would have an incentive to keep prices reasonable because lenders would want to keep the total amount lent per individual relatively low. Universities would also have an incentive to ensure students would be likely to be able to comfortably provide for themselves after graduation because, once again, lenders would have an incentive to ensure that the people they're lending to will be able to comfortably pay back their loan once they graduate. And so forth and so on. In the end, we'd likely reach a scenario where it'd be relatively easy to obtain loans for majors likely to improve your ability to comfortably provide for yourself, and relatively difficult to obtain loans for majors likely to leave you with difficulties providing for yourself.

A world where anyone could pursue education, on public dollar, on any topic they'd like, is an interesting idea. I look forward to seeing the outcomes now that such systems are truly starting to be put to the test. Many nations are facing substantial pressures on their social systems such as aging populations, increasing costs of medical care, reduced fertility rates, immigration of lower earning individuals, etc. At the same time, the face of the job market is constantly changing such that an ever larger share of all desirable careers require some degree of educational specialization to even get your foot in the door. These are relatively new problems and I'm not entirely convinced that utopic ideas of decades past will remain viable in the decades to come - though I certainly hope to be proven wrong!

The problem IMHO is that the "discomfort of declaring bankruptcy" is hard to predict. Right now it caries some social stigma I believe, but that could change. I don't think that's a great mechanism for deciding who pays back the loan and who doesn't... and my suggestion in all such threads is that this should be tied to future income, which the lender will then become very interested in predicting.

Does declaring bankruptcy increase interest rates for the debtor? That could be enough incentive for it to be discomfortable

That's a point. I bet it does right now.

But if it became commonly done after graduating, then I imagine it would not predict much about whether you will pay the mortgage on your house (which is anyway secured by the house) and so lenders would soon not care.

It works for our president, maybe the government will learn something when not only the wealthy can get away with it.

Probably - it would change the dynamics between pricing , companies providing the financing and universities.

How I’ve no idea. Right now it’s kinda risk free to give loans out so that would change. Maybe then less cash is made available and universities have extra capacity.

Yes, or, if you want to go even further, introduce a special bankruptcy after X years, just for tuition debts. Which is effectively the idea of the IBR (income-based repayment) scheme, as I understand it (I'm not US-American).


See the other comment:

Banks will lend less, to people they think will pay it back. Which means schools will have to charge less, particularly for non-profitable majors.

The govnement is the creditor, not the banks like they would be for a traditional loan.

Hmm, I didn't realize that federal loans were the overwhelming majority of the student loans (I guess the pseudo-governmental status of Sallie Mae and getting federal loans serviced by banks was a bit confusing). That does complicate matters, and suggests that universities are enjoying the government guarantee of funding to increase costs. Making them dischargeable in bankruptcy would mean the programs would have to change.

I agree, but I don't think it should be retroactive i.e. only new loans are covered. Banks will start pricing them like personal loans if they're dischargeable in bankruptcy, so it would not be fair that people with more favorable terms obtained earlier are able to take advantage.

I think part of the reason that the US is hesitant to take approaches that constrain universities' ability to operate based on other countries' actions is that no country has as many universities of as high quality as the US does, to the massive benefit of both the country and the world.

There's undoubtedly tons of waste in universities' functioning, but I don't blame policymakers for treading lightly when it comes to constraining their operations in any significant way for fear of killing the goose that lays the golden eggs, as opposed to simply the baseline ideological skew towards less direct regulation of businesses.

People may not have jobs that match their degrees, but in many cases you need a degree to get a job. It’s an HR hurdle you need to clear to prove you can manage your time and eventually reach a goal you set for yourself.

But this is a completely zero sum consideration, and as such from a policy point of view it makes no sense to make any allowances for this.

Here's an idea for 'slowly popping it':

Innovate in trade schools and start convincing high school students to take that path instead of University.

Somewhere in the early / mid 90's VO-TECH was changed to being a dirty word. I would even argue that some computer science related programs should take a vo-tech structure.

Why do you think community college and trade school level degrees should be free? It sounds like you think they're less wasteful somehow?

Community colleges have lower wages for their permanent faculty compared to universities and 4 year colleges. Community colleges usually have very little in terms of athletics. Athletics at most universities are a huge sink in terms of expenses. Very few universities generate enough money to pay for their athletic departments and none of them as far as I know generate enough money to pay for the buildings and stadiums they use. Community colleges mostly focus on teaching classes and lack the accoutrements that universities generally have.

On average, they must be less wasteful simply because their tuition is so much lower. There's lower margins so less room for waste. They are also not a luxury good (college is) so they are more subject to market pressures.

> making community college and trade school level degrees free

that's a tax on the non-attendees, why should they pay for your education when it significantly raises your earning potential?

potentially because the taxes tend to fall on those who benefit hugely from an educated workforce. Not sure I agree with this argument, but it's worth noting the justification so that it can be discussed seriously rather than more confusing arguments.

Universities in other first-world countries also have bloated administrations, libraries filled with journals/magazines that no one reads, and tenure. However, they do not have the affordability problem that universities have in the US, so those things must not be the cause.

The real difference is government funding for universities. No country in the world has made higher education affordable to the masses without high levels of government funding -- the US used to do this and stopped, with predictable results.

This is spot on. An anecdote from my undergrad studies and living in Madison, WI: the UW has a division of housing, which provides (shoddy) canvas carts to the students to use for moving in/out of the dorms. My student organization happened to "acquire" some of these carts, and when using one I was confronted by none other than the director of housing, who promptly called the police on me. In the end I was happy to return it and he asked the police not to press charges on the condition that I help him walk the cart back to the dorm where it belonged. He told me that people stealing the carts drives him crazy because they cost about $800 each because there's a complicated bidding process to even attempt to sell them to the school! I told him I'd be happy to go to the Home Depot and bang some together if he paid me half that for carts.

> there's a complicated bidding process to even attempt to sell them to the school!

Did he mean complicated process for the school to buy them, or was he making them and selling them to the school himself?

My understanding is that there was a bidding process wherein the school would publish a request for proposal and companies would win the contract through it. I'm sure such an approach would be valid in other contexts, but in this case it just speaks to the unnecessary bureaucracy surrounding the procurement of something that could realistically be bought off the shelf.

There is a reason those carts cost $800, and you definitely can’t make them from Home Depot materials for half that. Hotel owners don’t waste money on $2k and $3k luggage carts for no reason, google how much they cost.

Also, theft when you are an adult is not excused by claiming you were dumb kids in my opinion.

So your org stole carts from the university, then when you got caught, you proceeded to complain about how expensive they are?

We were dumb kids, and it's a story. The director was quite nice and we were making conversation on what would otherwise have been a boring walk across campus. He was clearly appalled at how expensive they are as well, but I got the impression even he didn't have much agency to change it.

Tenure does not prevent a department from being downsized. At least not any college I've worked at. The trend is to use untenured labor and I believe over half of all classes are taught using untenured labor.

> libraries filled with journals/magazines that no one reads

I appreciate both sides of this and I'm not sure where I currently am on the issue.

Libraries do purge from their shelves, and probably should as time progresses. It is interesting to me the figuring on what to purge, for obvious reasons. Likewise for what new material "should" be taken in to [re]fill the shelves.

Similarly, I once purchased a ~50-year-old book about "future" rocket science from a used book store. The clerk actually asked for clarification, "You understand this book is 50 years old, right?" ... yes I do, please take my money. This makes me wonder where libraries dispose of their discarded stock if not some gigantic shredder or similar.

Universities waste money in a lot of ways - library funding is not one of them.

Well, paying for journals more expensive than sci-hub is largely a waste. And I've seen lots of renovations of libraries which add a lot of pretty luxurious study space... although I'm not sure that was on the library budget.

Consider that if noone paid for their journals then Sci-Hub would not exist. Because noone would be able to share their accounts to log in to the content.

Sure, I don't mean that too literally. But the current system seems to syphon huge amounts of money to a few owners, and may well be replaced in the not-too-distant future. Websites do not cost $30/article to run.

> There is so much waste in universities

I agree, but you can hardly force low-performing students to quit and pursue apprenticeship instead?

As well as mandatory courses that have little to no practical value when you get a job..

Yet, at the same time, they also provide all those jobs. Is bloating and inefficiency all that bad if it provides good jobs and the jobs have a good work/life balance?

This is exactly the question that the parable of the broken window answers.


I wouldn't say exactly because over-staffing does not entail destruction like window smashing does. Overstaffing entails significant training and break time while on duty. Time to train, break and help other departments is considered a premium quality of creative working environments. Factory style production environments that are goal focused are a special case of keeping workers running, best when its to finish early.

"Creating jobs" is a silly argument. Literally anyone can create jobs if they are useless. Here's a shovel, go dig a hole then fill it back in.

> Here's a shovel, go dig a hole then fill it back in.

That's ... actually how it's done, yes. Besides dam construction the https://en.wikipedia.org/wiki/Maschsee is a nice example of literal hole digging.

Let it burn down. No one should pay back their student loan debt. Seriously, just stop. This is a scheme in which they've fucked over a large portion of the population with the skyrocketing prices of education. Further, this education is the regularly accepted means of increasing your production. Society says you have to do this, and then continuously increases the price, without reason.

The gist of this is; some shithead, many years ago decided to increase his bottom lines by fucking with future generations and our ability to output... when they started this whole fucking problem, and you know what? Let it burn to the ground.

You know who's not gonna lose a bunch of money? The people in student debt, we already fucking have.

This would be beautiful to see. Considering the scope of the population affected, there would be little to no recourse if everybody collectively decided to stop paying at the same time.

If you trash every millennials credit score, the scores would become worthless.

If it were ever going to be possible to orchestrate at scale, now’s the time. It would take a vast amount of people acting as a bloc.

I wonder if some sort of cloud sourced banking could be worked out to make it feasible. Trying to float a startup bank with student loans, for instance - but that’s clearly outlawed. Maybe some crowdfunding of a bank start up through small monthly contributions. Instead of needing a good credit score to be able to purchase things, buying into a monthly alternative to the credit market.

Flying by the seat of my pants here -

Maybe sell gamified returns for appropriate length investments. So the customer signs up at cost X. Every month they contribute X dollars. The company stores those funds in cash equivalents. At any time, the customer can pause or cash out their payments to that point. After a year, the company stores those funds in instruments that pay out in a year, maybe, or the company just keeps them in cash equivalents. After a year, the customer can qualify for a loan of 12*X+Y through the company. Y being 0 or some present value of the customers promised future payments.

And then the government will step in. They will tell everybody that these companies are too big to fail, and hence the market rules don't apply to them. And eventually the government will bail them out--with tax payers money. https://www.youtube.com/watch?v=Bu2wNKlVRzE

“These companies” are the US Federal government, at least for undergraduate loans. The Department of Education took over all federally guaranteed loans (the vast majority of undergraduate loans) almost a decade ago. They’re only serviced by private companies, who wouldn’t need a bailout; it would only be the taxpayer on the hook.

Or, you know, you could just pay your debt, like any self-respecting person would.

When companies can't pay back a loan they declare bankruptcy without a second thought and face little societal judgment for doing so, but when individuals do the same thing is labeled not just as a financial shortcoming but as a moral weakness as well. I think that attitude causes a lot of harm. People subject themselves to a great deal of suffering to avoid having to say "I can't pay this back," when sometimes that is exactly what they should do.

> When companies can't pay back a loan they [...] face little societal judgment for doing so

Citation needed. At least where I'm from, the stereotype of the corner grocery store that declares bankruptcy every 7 years is still shared as a negative

If the worst I could do is get a bad reputation I would gladly discharge the $100,000 I owe... Because at the end of the day, maybe that store is viewed negatively, but guess what? They’re still not in debt anymore.

That's a different topic than the thread you replied to, but the answer is that you could never have gotten the loan if you could have gotten it discharged for free on graduation day.

Useless comment. I paid all my student debt and I don't feel like I gained any self-respect from it.

That would be the end of poor people going to college in this country, at least under the current legislative regime. The only reason anyone loans money to poor people to go to college right now is because they know the recipients can't get out from under the loans. A no-collateral loan to someone with few assets or prospects just wouldn't happen if that provision in the law didn't exist. Or the interest rate would be enormous. But if the interest rate were high then defaults would be high. So you'd probably have some sort of death spiral. No, I doubt such lending would happen any more.

Now, the legislative regime could change. But it would have to change quite a bit to get significant increases in funding for college. Or maybe it's better if poor people just don't go to college? That's questionable at best.

I think this problem is a lot harder than people on this thread are making it out to be. Making student loan debt bankruptcy proof is within the Overton window in this country. I guess not making it bankruptcy-proof with no other changes is also within that window. Free or reduced price college tuition for the vast swathes of people who need it to attend is just outside, so it's definitely a foreseeable outcome, but if we don't get there in the next two decades that wouldn't surprise me either.

> That would be the end of poor people going to college in this country, at least under the current legislative regime.

Or alternatively, end of the current university system. One thing that always confused me when looking at US and UK unis (both had prices rise a lot) and my home uni is how much extra stuff is added. I went there for technical education, and that's pretty much all my first University provided, and it was really cheap. It didn't have sports teams/events, on-campus clubs/entertainment, student union bars, fancy areas. It used soviet-era-style big slab buildings, and provided reasonable education. Yes, going to a UK uni was nicer. It also cost me ~200x more, to support all the extra things.

People who just want the degree should be able to get just that without the lifelong debt.

Sports teams are a money-maker for D1 (top-tier sports-wise) American universities. Both in an absolute sense, and also in terms of encouraging donations from alumni. The other things you mentioned are probably not a significant fraction of the costs of university. Rather, I'd guess that the main costs are salaries and building. Universities, especially private ones, are notorious for turning over relatively young buildings to build newer and shinier ones. I don't donate to my alma mater [1] precisely because I suspect that the vast majority of any donation will be spent on constructing new buildings that are not needed to satisfy the core educational mission that universities ought to embrace. I'd honestly rather donate it to the nearest state school.

[1]: https://campusnext.wustl.edu/items/landscape-architectural-p...

Yeah we'd have to do something crazy like say fund it....like we do K-12...

The US spends considerably more on K-12 than the rest of the developed world. It isn't obvious to me that this allows you to avoid the problem of unreasonable cost.

The U.S. also has one of the lowest tax rates on the rich and the biggest military budget in the world.

With the proper reshuffling all most Americans would see are new opportunities to better themselves, their families, and the economy

That's an option, but not one that most Americans would support today, and probably not tomorrow either. At least not after you tell them what it would mean for taxes. All the pithy internet retorts to the contrary won't change this fact.

"Not one Americans would support"

"Taxes would increase"

100% bonafide baseless claims.

Have some vision friend. There are alternatives even though you can't think of them.

I worry that you don't understand how hard it is to raise taxes in the States. It hasn't been done in a substantial way for close to half a century. The trend has been rather the opposite.

Taxes need to raise on the rich. That is all.

>No one should pay back their student loan debt. Seriously, just stop.

Sorry. But you took a debt, you pay it back. Integrity isn’t outdated.

I agree that the idea and industry behind “13th grade” is dumb. Obviously not every kid should be encouraged to take on debt to go to college. But “stop paying your debts” is a bad message imo.

Let's take the morality out of it. It's been injected in there for the benefit of the lenders.

They charge an interest rate to cover their risk. Right now, with the fact that debt holders cannot default, they are getting an unfair deal. Defaulting on the debt and refusing to pay effectively triggers the risk that they were charging interest on.

Like strikers refusing to work until better working conditions are provided, so too are debtors withholding payment doing something noble.

Just because loans cannot be discharged in bankruptcy doesn't mean they are risk free. Some people die before repaying their debts, some people leave the country or otherwise become impossible to track down. In these cases, the bank eats the cost of the loan and has to make it up on other loans. risk is limited not eliminated.

> It's been injected in there for the benefit of the lenders.

Whether that's true depends on your moral framework, doesn't it?

> They charge an interest rate to cover their risk.

That's not exactly correct. I mean, a portion of the interest rate is due to risk, but another portion of it is because lenders need a return on their investment, or they won't lend. Moreover, student loan debt is not totally risk free (as we can see by the fact that $150B of it is in serious default).

> Like strikers refusing to work until better working conditions are provided, so too are debtors withholding payment doing something noble.

There is a difference. A person's agreement to work must be continuously in effect. They can withdraw it at any time, with no consequences other than that the ongoing benefits of their employment should also terminate immediately. That is, most non-union workers are working without a prospective agreement in place that obligates them to provide future labor. And when union members strike, it's normally when they are without a contract. Not in the midst of an existing contract with management.

The same is not true of an agreement to pay back a debt. It is prospective: "in the future, I will pay back such and such amount, on such and so terms." You can argue a lot of different things about these notes -- whether they're fair, whether the people agreeing to them are capable of understanding them, etc. Should the age of majority be raised? Should people be required to take a test to ensure they understand contracts before they are allowed to enter into them? And you can also argue about policy that might ameliorate the situation. But there is little contractual similarity between refusing to repay a loan and striking.

agreed. If you cannot default, you should be charged more or less cost as interest.

You should look up usury. “Sorry, you sold yourself into slavery. Integrity isn’t outdated.” Some forms of lending are predatory, and most developed nations have rightly outlawed them. Somehow, though, loaning tens of thousands at 14% (yes, I took on a loan like that at the ripe old age of 18) isn’t seen as an issue.

People should absolutely refuse to pay unsustainable debts they can’t afford (but I have news for you: there are already people not paying... because they can’t).

I’m glad you’re secure enough to dispense such wisdom like this, but I fail to see how it’s going to help anyone pay their rent or buy a house, because at the end of the day, people simply cannot afford these loans. And if you’re going to suggest that people just shouldn’t borrow, them prepare to have a steadily diminishing college-educated population as only the increasingly wealthy can afford to actually get an education.

> But “stop paying your debts” is a bad message imo.

Not really.

- Do you own a debt to your parents with a interest rate of 25% because they gave birth to you ?

- Do you own rent to planet earth for living in it ?

Debt can be unreasonable, just like wealth can be unreasonable. Its why governments intervene to destroy large amount of concentrated wealth and Egyptian pharaohs used to periodically clear everybody's debt.

The culture of " Paying your debt " is created by the small number of creditors who historically have controlled information flow, because they understand that society in aggregate has strong bargaining power.

You don't choose to be born. You choose to take out the loan. You sign forms telling you exactly how much it will cost you in the end. It's a decision. I can't imagine anyone saying "Let's all stop paying our Auto loans! They were unfair and predatory."

You made the decision. Own up to it. If you can't do the math at 18 years old you shouldn't be going to university anyways.

This may happen automatically with another recession or X market collapse... But it's not like the borrowers will be completely unaffected in that case.

It sounds great but good luck. I’ve been struggling with my $97k student loan debt for 9 years and I’m finally on the downhill slide. There’s no way I’m wrecking all the work I’ve already put in at this point. I suspect many others would feel the same way.

A little hyperinflation would go a long way.

It's doing wonders in Venezuela.

Yeah...honestly student loans make the future feel bleak and pointless anyway. The amount of interest that gets put on every month makes paying it back fucking pointless as it is. Unless I like starving and not paying rent so I can do more than just stop the loan from getting bigger while paying it.

Meh...I figure maybe society will just collapse at some point and it won't matter anyway. Either that or a bunch of people are going to start going crazy because of this and things will get interesting.

You’re being downvoted for some reason, but you’re saying what I and other Millennials are feeling. Don’t feel bad. I too have an insane amount of debt. I can’t buy a house until my late 30s, if ever (why would I want another money sink, though?) We were just doing what everyone told us to do to be successful, and we got fucked.

At least we’ll all go down together.

If you add up the total cost of all education institutions in the US, multiply by 4 years, then build a payment structure based on that number, there is simply not enough income left over in the corhort of new grads (first 10 years out of school) to pay the debt service.

The problem has nothing to do with liberal art majors, or irresponsible borrowing.

The problem is entirely driven by an excessive cost structure of both public and private institutions.

People like the founder of Lambda School understand the problem and will be the solution.

Why can't it be both? Granted as anecdotal, I don't have enough fingers to count all the young people I know who got liberal arts degrees and are either floundering or working crap jobs that have nothing to do with their degrees. I'm not saying they are entirely responsible, as there is tons of pressure to go to college and pursue a major, but there's enough information available to determine what degrees pay and what degrees are worthless. If you borrow money for something inviable, that's a poor business decision.

Lambda School isn't exactly cheap. 17% of 2 years salary (edit) is capped at $30k. I paid less than that in tuition for 4 years of in-state tuition at a top 10 public school.

Read there ISA, there is a cap, it's at 30k. You only pay if you make a salary greater than 50k a year. It's also six months full time, intensive, and targeted. They feel it's their duty to help you find a job, and have found a job (>50k) for 100% of their first cohort. Find me a college with similar numbers.

[ISA FAQ](https://lambdaschool.com/faq/)

I believe Lambda School is effective, though something about being alone at home in front of my computer for 12-15 hours/day for 6 months straight, even with remote office hours and chatting with other students, makes me think I'd feel extremely lonely.

It's an 8 hour day with a lunch break. 11am-8pm ET, If you want people, you can always go to the local coffeeshop, library etc.

I agree colleges killer feature for a young person is networking, friendship, and dating. You just have to find alternative places to get it.

Many people attend commuter schools where you don't necessarily get the networking, friendship, and dating benefits. I think in Europe many students live at home which is part of the reason why educational costs are generally lower there.

8 hours of lectures? Then more time on computer for homework/project work?

It's an hour of reading/ a small code exercise, two hours of lecture, lunch, a small project and a brief meeting in a smaller group.

It's equivalent to a 40 hour work week.

What year did you pay $8k a year for a "top 10" public school?

I went to University of Washington and graduated in 2010. It's now $11,207/year. I think in my first year it was actually $6500 and rose to around $8k in 2010.

Ahh.. you're not counting room and board. $19k if you include that.


It is capped, at $30k.

It's irresponsible to borrow when you will not have the means to pay back the debt. Most college graduates end up underemployed or unemployed after earning a degree in a non-rigorous major from a mediocre school. With only a BS degree and ~$30k debt, a professional job can easily pay this off. If the market could price the loans properly, perhaps they'd be discouraged from taking out the loans. Realistically, a loan would not be made in the first place.

There are not enough 'professional jobs' in the United States to pay the total debt service created by the cost structure.

If everyone switched to business and engineering, there would still not be enough jobs to support the educational cost structure.

This is obvious, but people and loan issuers do not respond to this reality because the government guarantees the loans. Hence, the current situation continues.

> People like the founder of Lambda School understand the problem and will be the solution.

The solution is in plain sight and has been successful in other first-world countries for decades: government funding of higher education.

People who suggest a market-based solution need to explain why none of the first-world countries that have achieved affordable, high quality higher education have used a market solution. The only way it can be achieved is through high levels of government funding.

We already have a gov funded public education system. Its just that the gov doesnt pick up the tab until there is a default.

Very inefficient and expensive in every country including the US.

Auto loans are looking interesting, too.

* $1.27T of outstanding debt.

* Subprime share of that fell to 22% but because so many loans are being created, total number of subprime borrowers (SBPs) is now at all-time highs.

* 8% of SBPs are seriously delinquent. Cycle low was 6% in 2012. Peaked at 10% in 2010.

* Increasing share of prime loans is offsetting the deteriorating SBP picture.

* “Although rising overall delinquency rates remain below 2010 peak levels, there were over 7 million Americans with auto loans that were 90 or more days delinquent at the end of 2018. That is more than a million more troubled borrowers than there had been at the end of 2010 when the overall delinquency rates were at their worst since auto loans are now more prevalent. The substantial and growing number of distressed borrowers suggests that not all Americans have benefitted from the strong labor market and warrants continued monitoring and analysis of this sector.”


As someone who graduated from a top tier school, I'm constantly befuddled by society's expectation/belief that college degrees are useful.

I learned absolutely nothing during my 4 years of undergrad that is practically useful to my current vocation, and I can say the same is true for 90% of my peers.

For some areas of study, college IS worth the cost. For example, hard sciences. But, for the vast majority, it's not (think: business and administration, art, history, economics, etc.)

I would guess that in 90% of cases, graduates would be more valuable to companies and potential employers if they spend those 4 years and $300K (tuition + lost wages) learning/practicing their specific trade/industry.

So, when are we as a society going to realize that 90% of us are wasting 20% of our most productive years on useless learning? This really seems like a travesty to me.

I think the disconnect is that a university degree is NOT vocational training, and it never has been.

What happened is that for a long time, only a certain class of people got to go to a university, and that class of people were the same ones that got the best jobs. In fact, many companies used a university degree as a filtering mechanism to select that class of person.

Other classes saw this, and assumed that if they also got this degree, it would open up that other class. It worked for a bit, but soon there were simply too many people getting the degrees for it to work anymore as a way to select a limited group. It is no longer the gateway into a higher class lifestyle.

At the same time, though, I think it is a bit dismissive to call the education useless. I learned a ton studying philosophy at a university, even if it doesn't directly apply that often to my work. It helped me understand the world, its history, and how we think. I am very glad I did it.

However, it was not training me for a job. Not everything we do is for job training.

I totally agree that college is a useful path to building critical thinking skills and becoming a well-rounded individual, but I don't think that's why most people enroll.

Instead, I think if you surveyed people, the most prevalent reason for enrolling in college is the belief that it's a wise investment in their financial future. My belief is that this is just not true for 90% of potential graduates. And, wasting 4 years and $300K is a huge mistake when taken in the context of this college debt crisis.

I don't know what the short-term solution is, but I think the long-term solution is for companies to stop requiring college degrees and move towards evaluating the skills that actually correlate with job output. As a business owner, I've certainly done this, and I hope we can move in this direction quickly as a society.

From my CS Bachelor's degree I think 15% or less of classes made me a better programmer, 15% or less made me a more well rounded individual, and the remainder were a total waste of time. I did it because I felt like I had to play the game to succeed in the way I wanted to, and I think playing along makes me a small part of the problem.

There's going to be a bunch of comments about waste in universities, how people are irresponsible, trade schools, government alone guarantees that make it a crisis, no ability to discharge debt, etc.

The two big things that typically don't get brought up in these discussions is that government funding for college is way down and medical costs. All these state schools, which are pretty much the backbone of higher education in america are chronically underfunded. The last 40 years in america we have been borrowing against our future and higher education funding is just one aspect.

The second aspect is that higher education is fairly labor intensive, a large part of the labor cost is health care. When a pharmaceutical company acquires the rights to a rare drug and jacks up the cost 1000% that cost ultimately is passed on to students.

College students in the previous century had a remedy. It was removed in 2005.

Forbes: "In 2005, Congress passed, and President George W. Bush signed, the Bankruptcy Abuse Prevention and Consumer Protection Act, which exempted federal and private students loans from discharge."


IIRC correctly, the number and size of student loans grew greatly after this Act. College students who received advice which encouraged them to take on huge debt loads - on speculation - were essentially thrown into the water to see if they could learn to swim.

No creditor would give a loan to someone who doesn't have a chance of paying it back. There are kids going to school for music therapy that are taking $100K in debt. It's time to end government subsidized loans, at least in the current form. The private market does a great job of evaluating risk, the only thing that needs to be done is ensure there is ample competition so it self-regulates.

In principle I agree, but in practice, it seems like private lenders are empirically doing a bad job evaluating risk. Rates for private loans are so high they can only be explained by a high default rate, even among "low-risk" demographics. These rates are very high even for students that we'd view as a low credit risk (e.g. studying CS and not music therapy). I think this shows the private market is doing a poor job evaluating risk.

That said, it's probably still a good thing long-term to end government subsidized loans. But that doesn't mean the private market is healthy. I'm not an expert on this area, and I don't know why there aren't "smart" lenders that do a better job arbitraging this. It could be possible that it's inherently difficult to predict whether someone will default or not.

As other people have pointed out, the real problem is the incentive structure for colleges and the increase in administrative staff (and thus tuition) who are enriching themselves at the expense of everyone else.

Student loans don't go away in bankruptcy, even private ones. There is no risk even if you loan a poor student $150k to go to art school since you have the rest of their life to garnish wages from them.

It's called adverse selection: A lot talented students happen to have one or more wealthy family member (s) who will either lend or donate the money to them.

So commercial lenders receive a disproportionate number of applications from students who will have a difficult time finding a well paid job.

> In principle I agree, but in practice, it seems like private lenders are empirically doing a bad job evaluating risk. Rates for private loans are so high they can only be explained by a high default rate, even among "low-risk" demographics. These rates are very high even for students that we'd view as a low credit risk (e.g. studying CS and not music therapy). I think this shows the private market is doing a poor job evaluating risk.

Or that they know the risk, but also know people have to borrow so see a chance to profit more from it.

I think that the difficulty is future adverse selection. Four years after loan is made, we know whether or not the student graduated and got a good job. There is now a student loan refi market, and the risk of someone who now has a degree and a job is much lower. Almost everyone who graduates and finds a job will refi. The loan therefore has to be priced for college dropouts, because those are the only people who won't refi.

That's because they're not allowed legally to take those things as risk factors... Which is also hilarious. No creditor world finance a 19 year old male for a $120,000 high horsepower sports car at 6% interest. Yet government regularly does equivalent amount of money.

> The private market does a great job of evaluating risk

Like it did in 2007? One in a million voices might have even thought to bring up how spoiled the housing loan market was, but the markets kept singing the tune of growth until hundred year old banks were out of business from loan defaults. That was the government pushing bad loan policy on private banks who lopped them up like candy from a free money fountain until everyone involved got a taste of reality.

Private industry easily gets caught in its own deliriums in pursuit of endless profit.

What part of the private market remained to compete after government-sponsored-entity lenders enter the mortgage market during the housing crisis?

I don’t regret going to a public college at all. College is more than just a job factory. You make some of your strongest friendships, connections, potentially future partner in school. You learn a lot about yourself.

Private edu costs are out of control, but if we can figure out how to cut costs then I don’t think the institution of college/higher ed should go away.

You have the rest of your life to work...as a working adult I don’t particularly wish I had skipped college and taken a 6-month online class instead so I could start working earlier.

I think this is the strongest argument against student debt relief. I would certainly not pay for someone else to do this:

"You make some of your strongest friendships, connections, potentially future partner in school. You learn a lot about yourself."

I agree that taking out $200k+ for an undergrad degree is crazy. But what I paid at a public edu was completely reasonable and worth it in my opinion.

My daughter will be going to a small private school in a year; the total cost of tuition is around $7K. She'll be living at home since the school is within driving distance, and working summers to help pay for tuition and expenses. $30K for a BA is fine. Paying outrageous amounts to party on a student loan is what's nuts.

I wonder if the increase in serious delinquency is being disproportionately driven by loans to for-profit institutions.

This article addresses the issue directly:

"Student debt a harsh math lesson for US graduates as wages lag" - https://www.nola.com/education/index.ssf/2018/03/student_deb...

For instance:

> Compared to their peers at other colleges, students attending for-profit institutions -- mostly those classified as inclusive, part-time or two-year -- are falling behind in their debt repayments. Twenty-two percent at for-profit schools were behind on their academic loan payments compared with six percent of students at public institutions, according to a survey by the Federal Reserve.

So, one of my side hobbies is saving the world, and my conclusion is that any fiat frb system requires regular debt jubilees (Hammurabi did it first), and part of why our system is so fucked is because people ignore this fact. Any conversation about usurious debt without talking about jubilees is missing the bigger picture.

The entire credit system for education ends up combining government spending and market forces in the worst ways possible. The Federal Reserve Bank of NY drew some conclusions a few years ago to this extent.[0]

The Federal government provides an enormous amount of free/"free" credit, the schools get cash and the students take on the risk. Coupled with the role of academic institutions as gatekeepers of a shot at a better future, and we get the system we have. Hyperbolically, t only outcomes schools are incentivized to care about are applications (lower acceptance rates raise prestige) and attendance (money is transferred to the school only while the student is attending).

[0] https://www.newyorkfed.org/medialibrary/media/research/staff...

This is why keep pushing my daughter towards a trade school.

(Once you become immune to eye-rolling life gets easier.)

There's a lot of companies with unfilled skilled blue collar jobs. And despite self-driving trucks, semi drivers can make some serious money.

And HVAC projected job growth is 14% over the next 10 years. Thank you Global Warming!

There are a few trade jobs that are good money, but I find this idea that trade jobs overall are some overlooked gem completely preposterous. I work in the trades and while some jobs are decent, most trade jobs are still shit and pay shit for what you are doing. Especially when you factor in the high rates of injury and death, and the life long physical ailments that many of these jobs cause. Yeah you will make decent money laying brick, but what kind of physical shape are most 60 year old brick layers in? How much pain do they suffer and how much does that effect their total life span? You might look at a heavy equipment mechanic and think "Wow, they make a decent bit more than just a normal mechanic! What a good deal!" and not think about what kind of condition your hands are in after 40 years of wrenching on huge shit, a lot of the older mechanics have to get their wives to open jars because their hands are basically shot and can only hold a few clawed wrenching positions.

Now there are some real sweet positions and trade jobs out there, don't get me wrong, but there are a whole lot more shit positions beneath that and a whole lot of other factors other than just the hourly pay.

I highly recommend Marine Engineering at a maritime academy if mechanically or mathematically -inclined. You get a four-year engineering degree and a license from the US Coast Guard as an Engineering Officer.

You can easily pay off your student loans very quickly, you get to see the world, and if you do it right, you have little to no expenses while you're sailing and can bank that money for when you quit.

For most people though, I don't recommend making it a long-term career though. It can be dangerous, and I always felt like my life was on pause while many of my friends were getting married, having kids, etc. (And I worked with a lot of older men who did not have good family/wife situations.)

One can certainly get a desk job with a Marine Engineering degree, but one leaves so much on the table if they do.

Should you really be actively pushing your child in any direction? Would the best course of action not just be to make sure that trade schools are a completely viable choice, should she not be interested in an academic subject?

Basically everybody actively pushes their child in some direction. Assuming you have some wisdom to offer, that's basically what parenting is about. If the OP truly believes trade schools are a better choice, then I don't see why he shouldn't push them.

Besides in the circles I grew in this attitude would have brought some balance to things considering I was surrounded by people pushing deeply academic subjects beyond all else.

Expecting a 17 year old to make life long decisions is nuts, knowing what we do about brain development in young adults. If my daughter wants to study dolphin therapy, you bet I'm going to push her in a direction...

Parents should guide their children, you can argue about the level of guidance but the meme that you should give your child full control over what they choose to do isn't sensible

Honest question: what are the best two or three studies showing where all the extra money has gone over the last few decades?

If millions of people are losing, some set of people must be winning (by an amount roughly inversely proportional to their size). I understand economics is complex, feedback loops, etc., but with so much money flowing it must accumulate somewhere. And I’m sure people have studied it on a deeper than anecdotal level

There are many winners, probably some we'll never know. Real estate developers near universities are big winners. The living standard of the average student are much higher than they were in the days of shared bedrooms and a single large shared bathroom per floor. Apartments marketed to students are pretty upscale these days. For some students, their college years will be the peak as far as living standards go. There is a whole economic ecosystem that thrives off of student dollars that were nowhere as plentiful before easy federal student loans expanded.

The financial markets no doubt have some pretty big winners though the way all of that works is a bit convoluted and difficult to pin down individual winners. If there is no tsunami of default, the government itself (and hopefully taxpayers by extension) likely will come out a winner.

The money flowing through campuses flow out in many ways beyond student spending. New construction, salaries for professors and administrators, textbook companies, journal middlemen, and many others are all thriving off of the diversion of so much money into these institutions. In general it's good for the economy around the schools but a million little drags on the economy wherever the students live after graduation as their potential spending dollars are diverted to loan payments instead of the local economy.

Loans should be based on the earning potential of the degree.

The trend in American high schools is to push everyone to go to a college; regardless of what each student's interests are, how useful a college education would be in attaining the jobs that the major is applicable towards, the student's academic aptitude, etc.

My high school was thankfully somewhat resistant to this trend in that there was a very large vocational program that was somewhat popular amongst my graduating class.

I don't mean to offend people when I say this, but there are certain majors that very, VERY few people (if any) should actually pick as a matter of practicality (likelihood of getting a livable-wage job related to the major vs. getting saddled with debt for a degree that you won't use during your lifetime).

Law regarding repayment and non payment of student loan should be seriously relaxed. Increase risk factor will reduce the amount of float in the market, and supply and demand ultimately force institution to better manage and reduce the cost and price.

The system lacks check and balance to rein in the runaway college cost. Graduated students with crushing debt should start suing the schools to get back some of the money. The schools clearly jack up the overall tuition to push up the debt.

The problem is that for _many_ of jobs that 'require' a degree is they're not necessary at ALL! A good high school education is good enough for the vast majority of the jobs outside of STEM. Now we have diploma inflation because it makes them 'more productive'.

In an ideal world you world put them in a short boot camp to make sure they up to snuff for the job but atlas you have the gatekeeping going on with universities. I personally can't wait for the education bubble to pop.

If we run this number up hopefully they bail everyone out.

As someone who just paid his student loans off after 7 years out of college, I hope this turns out to be the case. I am fortunate. A confluence of factors outside the control of many borrowers keeps them saddled with debt for the foreseeable future. They deserve relief.

No coincidence that industries with misaligned incentives create massive debt bubbles. Education, health care, real estate.

Student debt is unsecured debt hedging against future earnings of the debtor. If you look at it through purely financial return then the degree earnings potential absolutely has to be means tested to reduce risk of default. The only way to make this happen is to have the federal government get out of the student loan business.

The graph of percentage of people in serious delinquency over the past 20 years doesn't seem to support the doom and gloom throughout the article. In fact it looks like there might even be a bit of a percentage-wise decline, even though the absolute total is increasing linearly.

Only things in our economy with no skin in the game get more expensive

medical and student loans cannot be bankrupted houses are mostly gov't supported and when they crash the gov't bails them out.

If you don't want high prices, tell the gov't to stop inflating the prices.

I would be interested to see this data scaled with the average price of attending college. That cost has 'surged' in recent years as well, most because colleges are so much better at teaching now!

Stuff like this is one of the reasons I like the idea of a basic income...because you could easily just divert the BI to pay for long term services in a situation like this.

Can’t pay student loans, your BI gets automatically directed to paying it off with no interest until the balance is clear.

Need to pay for school in the first place? Direct the monthly BI to the university to cover tuition/housing/meal plan (or a significant portion of it).

Commit a violent crime that will put you in jail, let your BI go to the prison to cover your stay.

Have a baby? The baby gets a basic income that can pay for daycare, baby supplies.

This makes 0 sense because that's not how UBI works. You can't just give free money to everyone and expect things to magically fix themselves. Where are you even getting all this money under modern constraints to just give to every single person? But that's beside the point because even with UBI, you'd still have to sacrifice QoL to pay back the loans for your education because of the inefficiencies that exist in our current system. The end result would you be slaving away at work with high taxes that go off to pay off your loans and whatever percentage goes to UBI.

The core idea is that every citizen is getting a monthly stipend of some basic amount. If that were to happen, it stands to reason that policy oriented side effects would kick in over time to work alongside such a stipend.

First among those, actually securing student loans against the BI.

I’ve never seen BI as being anything that would be desirable to live on though. Closer to survival level income in the area of $700 / month. You’d partially pay for it by reducing all other types of government service payouts (welfare, social security, disability, unemployment) by that amount. You’d likely see homeless shelters, rehab clinics, etc open that were designed to operate on a per person budget equaling the BI.

At the same time, you can potentially eliminate minimum wage discussions since it would immediately supplement those workers.

I think it’s doable at a low level as long as you partially address the costs with dents in the budgets of many of the other existing services.

Thanks for pointing this all out. I think it’s also worth noting that such a direct will facilitate discussion of just what kind of society we want to be with regards to the means of the common man.

The solution is straightforward. End the government sponsored loan program. This will cause tuitions to drop down to what the market can justify.

And earlier this week there was a report - from the NY Fed? - that the number of 90+ day delinquent car loans is also up.

i predict we’re going to have to bail these people out. once a critical mass of americans do something idiotic, it becomes politically expedient to bail them out and blame the companies for greed. this is a direct response of the government providing unlimited loans to anyone

Not to be too cynical, but I seriously doubt that the individual borrowers will be bailed out. The government will instead provide liquidity to the servicing companies so they can repackage and resell the loans. Nobody really cares about the borrowers; it's all about keeping the companies in business.

We will bail them out when enough voters vote for candidates who support zeroing out this debt, and write it off as a policy mistake.

We’ve wasted trillions on unproductive military initiatives in the Middle East, this would be relatively minor in comparison. The economic productivity realized by these debtors able to be full economic participants instead of having student loan drag for a lifetime outweighs the moral hazard.

I can see two distinct groups of people who would take issue with this, not that they'll necessarily have their way:

- people who were realistic about their finances and did not take on debt to "drag for a lifetime" in the first place. Why should the "rich" and/or reckless kids who lived in overpriced dorms with unnecessary amenities get bailed out when "I was smart and didn't screw myself from the start"?

- people who were able to afford a university education out the gate and were not burdened by any or much debt in the first place (and their parents!). Why should the "poor" and/or reckless kids who reached for something they couldn't & shouldn't have been able to afford get bailed out when "I worked hard to provide for myself / my family from the start"?

As a member of the first group, I agree with you. I really don't like the idea of subsidizing what I consider other people's bad decisions. I was able to make financially reasonable decisions, which often involved sacrifice, and chose to focus on a viable career. I don't want to spend my hard earned money supporting people who didn't do that.

I did not come from money and came from a pretty awful environment so I know this is a possible outcome for most people.

Also a member of the first group and I disagree with the conclusion. I'd be very happy to see all current student debt forgiven and subsidies to university programs improved. Good on you, though, for getting through an education without debt. That's a real accomplishment. There are for sure a good number of people who get an education for a viable career and wind up with loans that spiral out of control, especially in a country with spotty healthcare or perhaps because they exited school during the Great Recession and got stuck in intern-hell. Point being, there's a good number of folks with student loan debt they can't easily manage who made all the right decisions but got a bad break somewhere. Also, this doesn't even consider people who do civically valuable work but having extremely low earning potential.

Are there some people who took out great quantities of loans with no concern for their future? Absolutely. Should such people be hounded by this lack of foresight at the age of 19 into their old age? I'd argue no. Even if you can't find sympathy for the indebted, I'd also argue that very few societies in history have managed to stay cohesive with a large, indebted underclass, let alone prosperous and achieving their potential.

Actually, I don't have a degree. That's sort of my point. It's very possible to just enter the labor market and make money if you work hard and smart. I'm a developer but I know plenty of people I grew up with who went on to be: military people, plumbers, cops...

> there's a good number of folks with student loan debt they can't easily manage who made all the right decisions but got a bad break somewhere.

I don't think it's ever the right decision to take out a massive amount of debt. Even to study something you love. You can't fight against the real world economics of that decision. I saw the option to get what I considered to be a lifetime's worth of debt and looked for alternatives. Lots of people who come from lower class backgrounds do the same.

I think it's going to be very hard to get those people on board with paying off other people's student debt.

What makes the student debt such a crappy situation is the fact that we're dealing with young people and families who may not necessarily have all the information to do an educated cost/benefit analysis. Students are pressured from very early on to plan to go to college. Teachers, guidance counselors, administrators, and often parents all fall into the narrative of "yes, college is a good decision and will pay for itself". It is completely taboo to tell a student that there are other options because that can be construed as telling the student they have less potential than others.

right but if someone like that came to you and asked for 200k in loans you’d laugh in their face. But now instead the govt decided to back student loans and these people got them like candy

I think we should also consider the pressures and advertising from all sides that pushed many kids into taking loans of quantities they didn't truly comprehend with potential consequences that weren't all that well explained to them. We know advertising works great on young people and when someone comes and tells them "Come here, you will make $120K a year out of college, you are the perfect candidate! You can pay off your loans in 2-3 years if you want and still have tons of money!" And then everyone around them jumps on board "OMG thats so great! Of course you need to jump on that now!", but then in reality it is a completely unprepared student with no idea what they are getting into, middling grades at best, signing their name over on documents that can barely decipher, to get a degree in either something incredibly hard or incredibly useless.

We know advertising works well and makes people do and buy shit they don't need or want, and in this case it was primarily targeted at kids during and immediately after highschool who are especially vulnerable.

> Actually, I don't have a degree. That's sort of my point.

Apologies, you didn't state that and I assumed.

> It's very possible to just enter the labor market and make money if you work hard and smart. I'm a developer but I know plenty of people I grew up with who went on to be: military people, plumbers, cops...

Then again, it's also not. Some fields absolutely require credentials and long-term education and we, as a society, need those jobs to be filled: social work, doctoring, teaching, plant management, accounting, licensed engineering etc. Some of these jobs have high potential -- medicine, if you choose the right sub-field -- and others not so much. In fact, the reason why we have a shortage of GPs in the US is a result of medical students looking at their debt burden and deciding they need to move into cosmetics or other high-paid fields. This strikes me as bass ackwards.

> I don't think it's ever the right decision to take out a massive amount of debt. Even to study something you love. You can't fight against the real world economics of that decision.

Well, the consequence of this stance is that only the rich will ever be credentialed, or the rich and the fortunate. Societies in which this is the rule haven't tended to fare well over the long-term.

> I saw the option to get what I considered to be a lifetime's worth of debt and looked for alternatives. Lots of people who come from lower class backgrounds do the same.

Well, good on you; that's quite an accomplishment. It used to be the case that people from lower class backgrounds, in the US, could go get an education without taking on debt loads, gambling that they'd be able to pay it off once their salaries kicked in. We, as a nation, used to subsidize schools and apprentice programs. My argument, essentially, is that 40 years ago we chose to make schools subject to market forces and this has been one of the main movers of rising inequality in the population and we have proof that it doesn't have to be this way from prior experience. We should consider this a failed policy experiment and reverse course in the most direct manner possible.

An individual can only swim so hard against the tide. Even if some do happen to make it to shore that doesn't mean there's no tide.

> I think it's going to be very hard to get those people on board with paying off other people's student debt.

Which people, sorry?

I actually agree with you. We need to rethink how education works and is funded. I also think education is valuable and needed in lots of fields.

I just don't think we should excuse people's existing debt. We should look to fix things in the future. Some of that is the realization that there's value to be created outside of credentialed fields. Some of that is also probably the removal of credentials as a requirement for many fields as well.

> I actually agree with you. We need to rethink how education works and is funded. I also think education is valuable and needed in lots of fields. > > I just don't think we should excuse people's existing debt. We should look to fix things in the future.

Ah, okay, there's the difference. I tend to think that solutions to issues that don't address defects in the present moment are partial at best. Maybe, also, I don't imagine that most people with student debt were profligate, and, even of those that were, I don't think they ought to be held to account in perpetuity for that, especially if we end up settling on the notion that the root cause was a failure to properly value education as a society.

It would be easier to get the public to agree to this once the root cause is corrected. Getting loan forgiveness while continuing to issue loans that too often end up in default status is going to be a difficult sell. Writing off as a policy mistake might be possible but only if the policy mistake is corrected first or simultaneously.

the only way i’d support that is if the government gets out of the loan game and if we get rid of the provisions that prevent people from filing bankruptcy on the loans.

Yes, I would agree with this, along with government providing for free community college as well as subsidizing trade schools.

Fresh slate and we start over as a country on the right foot for education delivery.

I am a fiscal conservative, but I absolutely can get behind the free community college idea. It would be a net gain for the economy in my opinion as we could significantly reduce student loans to strictly means-tested criteria.

There's also a lot of jobs that don't really need degrees, either. One of the main ones I'm thinking of is teachers. Anyone can learn to teach, and an apprenticeship program might be better at actually getting good teachers (plus, it would let them see a few years in the classroom, meaning that they can decide if it's for them early on, and then leave before they start, hopefully decreasing teacher turnover rate). Then you could add specialization at all levels for subject area, and so they do their apprenticeship in the area they want to teach. Oh, and stop elementary school teachers from being generalists while we're at it; that's where a lot of the problem with basic math ability lies, from my experience as a high school math teacher. These teachers honestly have to take the state-mandated tests multiple times because of basic high school level math, yet we expect them to teach kids well...

In California, community college is $46/unit. Typical full time enrollment is 12-15 units. And low income individuals get that fully covered. They are in the process of making the first year of community college fully subsidized for all residents.

Won't it backfire in some way ? Banks and house sellers rising their prices because these debt free people now can get better credit ?

If the system provides easy access to cash backed by the US government without disambiguating loan candidates from those who are high risk vs lower risk, how is greed not a factor?

capitalism is built on greed. it’s like a simple AI with an optimization function for money. the problem is when the govt steps in and aligns incentives such that the greedy/profitable thing to do is to saddle people with debt because its zero risk for the lender

Who are be baling out? The middlemen?

Aren't these loans almost all government backed? Meaning if the loan defaults the government pays the creditor?

Not all of them, but a good chunk of them are. A lot of student debt is sold to big banks without the students every really knowing. Banks then package them together and sell them again, allowing themselves to make even more loans. The same people that tanked the economy in 2007-2008, and then got bailed out by the taxpayer, are now the primary debt holders of many student loans. The difference is that people with student loans have no way out. We punish those trying to educate themselves and reward those who exploited uninformed borrowers.

> Meaning if the loan defaults the government pays the creditor?

Yes. And therein lies the problem insofar as I'm aware, because you then owe the money to the US government and you cannot declare bankruptcy on the US government. You can escape paying a ludicrous mortgage or car loan or what have you by declaring bankruptcy. You cannot do the same with the US government, which will garner your wages for all you're worth for the rest of your life if you don't pay back your student loan.

Too educated to fail. :-)

cancel the debt, and move towards free colleges.

Not unless the budgets of these schools are brought under control first. A pipeline of seemingly free money is at least partially responsible for creating the current mess. Making it "free" with no restriction on how much will be spent on "free" is going to lead to even more runaway growth in the cost of providing education.

They could easily set a limit based on headcount, similar to public schools. The only problem I see with that is people purposefully defunding the system and turning it into a bigger bureaucratic hell like many public schools have become.

I paid off my student loans. If people who didn't pay off their loans get forgiveness, I should be entitled to a refund.

Can I add my mortgage debt to this please? I want in on the free stuff too!

Now sure why you are downvoted. This is by far the best option.

yeah, weird right?

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