I must say, it was not a pleasant undergraduate experience. On top of being expensive and working very long hours daily, it was immensely competitive and the social life was very poor for me. I have always had numerous friends in life, but I constantly felt lonely at that school, not to mention receiving MUCH worse marks due to grade deflation, which made medical school applications a nightmare.
In hindsight, I absolutely should have gone to my state school, and I'd be a Tesla and a Steinway piano richer for it if I had. I think these ridiculously expensive, 4 year educational vacations need to end...let's encourage our young, bright minds to stay local, to save money, and to use their brightness and talents to lead very productive and EFFICIENT lives.
I feel you, and had a very similar experience academically and socially. It's not easy to get by minimal GPA filters when math professors declared that a C would be a great grade worthy of a good recommendation to a PhD in math. There's no easy way to tell that to an HR screener! I also found to great sadness by the end of my first year that I had more online friends than classmate friends. Looking back, it seems this was the time when the university just started to realize that it needed to prepare students for practical work. And that sort of experience can be gained at a lot of different universities.
My parents didn't really know what to tell me because on one hand they felt like they were being punished for not making profligate decisions like going into debt for a fancy car or buying a bigger house, but on they other hand they didn't really want to outright tell me not to go somewhere like U of Chicago.
Made me feel like college admissions spiels saying not to worry about finances were a lip-service scam designed to make college look accessible while mostly benefiting the rich and very poor and screwing those in-between.
Went to a state university instead, but never really fit in there. Too much alcohol, greek life, and sports.
In any case, I don't mean to imply that my parents didn't have a decent income, just that the way things worked made them feel like they were being punished for trying to be financially responsible, and being asked to pay the equivalent of a 2nd mortgage for your kid's college only for them to be in debt on top of it anyway, and not knowing how things would work once they had a 2nd kid in college wasn't a strong sell. Even though they didn't say not to go there, I would have felt super super guilty about saying yes.
Fun fact: the scholarship U of Chicago offered would have covered the cost of attendance at each other college I got into and then some, but still didn't cover even half of the cost of attendance there.
100% feel you, as I my son just started UCSD. He was looking at a bunch of private colleges and I did the financial aid (for early decision) and it was really shitty. I felt that because I had so much equity in my house and no debt, I was screwed. And, when the numbers came back, it was true. Very little help.
I have a work friend who has a very close friend. They're both Dr's pulling down > $500k/yr, but with huge debt. Their kid got into Princeton and they paid $15k/yr. I was more than double that for some equivalent schools, but I make far, far less than $500k/yr.
Very glad he decided on UCSD.
EDIT: Looking at Princeton's financial needs calculator, assuming a constant income, to maximize your financial aid you should:
- Reduce your assets: Buy a really expensive house, have nothing in savings/investments/other equity
- Reduce your income: Pay a ton for private school tuition, medical expenses, or child support.
EDIT 2: Looking around some more, apparently FAFSA doesn't consider:
Your primary residence
A boat you may own or furniture in your home
Untaxed Social Security as income
Here comes my big house / Bugatti / yacht!
Not quite just the very poor: U Chicago gives free full tuition to students from families making under $125k.
But as for the very poor at nearly every other private college, the picture is more bleak: The average private is in the ballpark of $35k. Maximum grants from the feds and state of Illinois total about $16k. That's not enough. However, it is generally plenty for attending any public state school.
The most squeezed bracket financially are families making around $65k a year. They earn too much and so lose a large portion of need based grant eligibility, and have and "estimated family contribution" (EFC) 3 or 4 times higher than families making not too much less. Even state schools are difficult here. My recommendation to such families is to begin by getting an associate's degree for 1/3 the cost for those 2 years, then only pay the higher rate to finish the bachelor's degree in the last 2 years.
It's true families making > $100k a year are expected to contribute the lion's share, absent merit scholarships, but they also tend to be families with assets, including houses with equity they can leverage, to help pay. Yes, it sucks to have to do that, but many thousands of families in the $65k bracket are much worse off without even that option.
To be clear, I'm not really disputing what you said on that topic: I just wanted to add more detail and nuance.
Source: I work in Higher Ed analytics.
That said it sounds like the general situation I described is somewhat true overall.
You need to do something about your “fixed” meritocratic society where your future is largely determined by your parents’ wealth.
You need tax reform, healthcare, cheaper education. I had a discussion with an American friend recently, he offered that the American society has produced marvels such as Google and Facebook and Tesla and countless others, fair point.
Can you imagine a new social media today competing with Facebook? A new search engine? Wanna open a retail online store? AWS will eat you alive.
I grew up thinking America was the greatest country on earth, truly. You know who also had some absolutely amazing achievements? The Egyptian pharaohs.
The education system is too expensive and a bit of a scam but does that cause the problems people think it does. Can you make it in the US without a degree?
It's also incredibly complex so perhaps it was a silly thing for me to comment on as I don't think it's that easy to define or measure.
I think the line commentators tend to use is “the American Dream is alive and well, in Denmark”
* This being HN, I should point you can make it in IT/software without a degree though you must start at the low-end and climb from there.
* Skilled blue collar work has its limits but provides an accessible career more than capable of supporting a family.
* Military service has its drawbacks but has quite cushy benefits.
* For the ambitious, service-based small businesses are easier than ever.
While it's possible to make it in the US without a degree, I'd recommend more of a middle ground of a 2 or 4-year degree from a local college or state school.
Arguably, not even the bottom 50%. Even a minor medical issue can tank middle-class families.
OTOH, you're in the top 30% of the bell curve there is nowhere else better than the US.
I've also lived in several different states. Haven't seen anything even close to 80% dog crap. Not even close.
Please travel or read about the world to get some perspective.
Seriously, if you were born in a country like the U.S. in modern times, you won the birth lottery.
Agreed. The lottery won is for starting position in a game where participation is not choosen and objective you choose determines position ranking.
> You need to do something about your “fixed” meritocratic society where your future is largely determined by your parents’ wealth.
> You need tax reform, healthcare, cheaper education.
Please continue your nuanced argument with a straw-man.
One question: I think a large part of the social experience for me was based around the house system. Even though I moved out of my house when I was a second-year, the house and dorm I was in provided a big chunk of my social network. Did you not have a good experience with your house? And if so, were you placed in the house you wanted to be in?
I went to the university with the hardest admissions score for EE, some of the brightest people I've met, graded on a curve, and yet for graduate admissions I'm competing with people who took much easier classes and ALL have much better marks. The GPA system is just insane really.
Barring that, having excellent rec letters and GRE scores, having been published or done research in a lab, having written an undergraduate thesis etc can all help provide signal that you'll make a good candidate for the department you're applying to. I don't know much about EE departments, but generally grad school admissions will be more holistic and thoughtful than undergrad admissions.
Each method has its pros and cons: the flat-rate method gives certainty, and the adjustable method is more appropriate if you don't know whether siblings will actually go to college. It seems the most important thing is for each institution to communicate which method they are using, so nobody gets a rude awakening.
caveat: my data points are 15 yrs old
I agree with your last line, but am unsure how we would best implement that as a practicality. Young people tend not to always think in the most efficient ways, and parents aren't always knowledgeable nor around to help.
Fretting about 'fit' keeps schools like u chicago alive. A radically unwise decision in pursuit of some romantic youthful ideal. Otherwise, everyone would just go to a state school, have largely the same college experience, end up with largely the same career outcomes, but with far less debt.
Professors usually draw something similar to a bell curve along the grade distribution and set the average to be a particular grade. Grade inflation would be setting the average to something high (as practiced at Harvard this is usually an A-).
Grade deflation which both U Chicago and my alma mater Johns Hopkins are notorious for has professors set the average grade to a B-/C+. In classrooms full of students who have excelled their entire life, where the average represents a pretty high standard of work and achievement, setting the average to a B- is grade deflation.
Student debt is a major issue in the US and the ever increasing costs of tuition are a MAJOR culprit in pushing this crisis. Where are these costs coming from? How can you politically espouse free college while ratcheting up tuition costs?
I think your impression is generally spot-on although there's nuances and it's more complicated than that.
In general, universities are suffering from many of the same pressures as other fields. Nonprofits are being run as profit-generating centers, and the implicit promotion track goes from faculty to senior faculty to administration, if you're even on tenure track. The administration salaries are increasing, as are the number of administrative positions (deans, associate deans, vice associate deans, assistant deans, etc.), and the structures are becoming increasingly hierarchical. Things are very top-heavy and expensive to run because the salary budget is so disproportionately distributed.
I don't think that's all of it, though. The rest of it is harder to quantify, but is the flip side of the educational bubble coin. Students are rushing to go to college in record numbers, which then puts pressure on colleges to stand out to attract more students and more high-paying students who become high-donating alumni. Institutions that should be getting public funding are not, which then trickles down to students; other private institutions then benefit from the increased tuition norms etc.
It's a complicated problem that involves HR and administrative practices and norms, economic incentives within university funding structures, incentives coming from a broken employment system in the US, problematic incentives coming from federal grant structures, etc. etc. etc. etc.
1. Lack of workplace training - very few employers will pay for you to train/gain experience, partly because there's nothing preventing someone from jumping ship for better pay once the training is complete
2. Credentialism - the things that actually matter in hiring are either difficult or illegal to test for (conscientiousness, knowledge, intelligence), and so degrees are used as proxies instead
Yes and no.
Most HVAC shops will pay for technician's training.
Most dev shops pay for technical conferences.
Most managers have access to management seminars and training.
Expecting an employers to pay tens of thousands of dollars seems weird, but many employers do pay on a smaller scale for skills training.
> degrees are used as proxies instead
Though conventional wisdom is that a degree doesn't matter 5 years after graduation.
Nor does it seem that prestigious positions are even that picky in practice. Yes, there are a number of Harvard, Stanford, Yale alumni in Congress, but other seven of the top 10 colleges for Congress members are public state schools. 
It's why you see so many forums talking about sending out applications to hundreds of places for months when searching for their first job, then never having a problem again after.
I've also noticed that Canada and Australia place far more emphasis on formal credentials than US colleges. US Uni's will take you if you can demonstrate competency and can pay; Uni Melbourne won't talk to you unless you have the exact, specific kind of degree. Ditto for UBC, U Sydney, etc.
I've often thought it would be amazing if you could do the equivalent of professional football (soccer) lending of players. Lend a developer to another company for a few years with the expectation that they will come back. If they decide to stay then the borrowing company give some compensation. But it would mean having very strict contracts that limit the freedom of workers, so it's almost certainly a no go. I wish there was a way to make it work, though...
HR gets a million applications, people are evaluated on what boxes can be checked off rather than their skillset, etc.
With regard to the educational system, the problem is that degrees are seen as signals or credentials (to use the language of the article) rather than as a background. That's admittedly a fuzzy distinction, but it really reduces the degree to the degree per se rather than the host of courses and experiences the person during college. So, we talk about "useless degrees" without recognizing that someone might have had equivalent coursework and experience without majoring in something else per se. In the end it doesn't matter.
It never felt like a plan or conspiracy to make administration costs bigger. It's just very easy to do when you have more money coming in, year after year. In another economic environment, you'd get a "hard no" because the money isn't there. But when there is, expenditures become just another bargaining chip. Maybe you get your seventh librarian this year, and I get my fifth network guy next year.
New buildings (as you stated) aren't as big of a contributor as expected due to the convoluted role of donations, grants, etc. But another big factor for those buildings is that we were getting loans for them, too, and those were based on (big surprise) long term forecasts presuming this gravy train is going to keep on chugging for the next 30+ years. And even then we were getting projections of our "debt capacity" and always riding that line, so it's debt on top of debt all the way down.
I don't know about big schools, but for a smaller one like ours, there was no visible bad faith. These kind of things just happen when you can keep bringing in more and more money and so can your competitors.
Harvard got spectacularly burned by the genius planning of Larry Summers in that regard.
I think "diverted" is perhaps a strong word here. The way administrators see it, the administration is necessary to even reach the point where faculty can teach classes, and provides a significant role in empowering them to do so.
And there's some validity to it. Besides, students' expectations with regards to faculty haven't changed nearly as much over the last ~20 years when compared to administrative departments. Students absolutely expect good WiFi, good Internet speeds, Google Apps-quality e-mail, and that's just tech stuff. Colleges are implicitly competing with other colleges with things like on-campus events, residence halls, modern cafeterias, online course registration, athletics... all kinds of stuff. There's a lot of money involved in these expectations that has outpaced the faculty side.
But it's cyclical. We pump money into those things to keep retention up because we need to because the other schools are doing it.
My personal internet with Comcast is ~$60/month, so assuming universities have greater bargaining power due to scale that shouldn't make much of a dent in tuition. And my college email interface was clunky but I just set it up to forward everything to Gmail, which is free.
Yep. If appetite and available funding grow year after year, even the most honest of colleges will have a hard time not expanding costs.
Fortunately, it's still pretty easy to get a 4-year degree from a solid school for < $40,000 tuition not including scholarships.
Pricy, but still far less than the $1m extra lifetime earnings.
I lived at home, with my parents, and went to a state school and paid in-state tuition. Found online PDFs of all my textbooks, and I'm still just barely scraping in at under 40,000. This is from 2016 to 2020 (finishing up my last few courses over the next 6 months.) And the administration is still considering (aka going to pass) an 11% tuition increase, after a 9% increase just 2 years ago.
It's even worse for people who don't live near a university and need to live on campus, pay for meal plans, etc.
Rent, food, clothing, etc. will of course be more than that. $10,000/yr doesn't even clear the poverty line, college or otherwise. 
My number might have been a bit low, but average in-state public college is $10k/yr for tuition and fees. 
I went to college in Florida and Utah. Their top ranked public universities right now cost $6k/yr and $8k/yr respectively.
Colleges need dramatic, across the board cost cutting including professors, admins etc.
Colleges are in for a world of pain in the next 50 years.
For example if the salary is 100% from NIH grants and the prof makes 500k, more power to them.
If the prof makes 100k and all their salary is funded by student loans, then they should decide whether their livelihood is worth the externalities they are creating.
Its a moral choice
Average course load for a student is like 6 units a semester so using the back-of-the napkin math above it should cost roughly $6k/per semester for students to have a full course load of $150k professors. $12k/year + other expenses is a far cry away from $100k that is being charged.
Other costs are also unacceptable. Colleges charge $500+/month for shared rooms. And require freshman to stay in them.
Nevermind the fact that your math misses several major cost categories like building maintenance, fringe benefits for professors (+30% of salaries at least).
In your hypothetical example, students are paying $20k/year before getting ripped off on the cost of the dorm and meal plan.
If a prof is making 150k, class sizes need to be 300+ and they need to teach 1,000 kids a semester
Also, how much of your funding comes from unsavory sources like Jeffrey Epstein and the Saudi government.
> But that is a tangential problem, in that wealthy donors want to give big gifts for vanity projects rather than to, say, scholarship funds.
In the past I've felt quite motivated to give to scholarship funds. It resonates a lot if you yourself relied on scholarships to go to college. But I feel somewhat more cynical about this since I've seen costs spiraling out of control. The actual price of college can have anything bundled in there. I want to support students, but I feel less good about supporting ballooning costs that are twice inflation when I haven't heard a good reason for this.
Private Uni's are, well, private. They can charge what they want, and if the average Pell Grant or other DoE loans aren't enough that's not the Uni's problem.
And besides, no one wants to rely on the generosity of paternalistic college administrators. That's not safe. You don't want to wake up and suddenly find due to some technicality you again owe more money than both of your parents make in a year. And you don't want to feel like a charity case.
(If you think that's a remote possibility, think of the people who went into teaching with the promise of debt forgiveness, and found it revoked. They don't have any choice in the matter -- they're totally screwed.)
Better to go to the local city college. Your cousin went there and a few other people from your school go there, too. It's a safe choice, and there are people like you there.
It's weird you chose to make this comment on an article about the University of Chicago, the home of Milton Friedman, Supply-side economics, "no safe spaces" and so on.
It is effectively a sliding scale fee .
I don't consider a loan "aid". Especially since that loan has interest.
If its about the claim that this is an example of price discrimination:
that is an opinion I formed while I was at the University and spoke with some folks in the economics department about it. There is a class offered in econ about the economics of education, and that certainly hit the point home that financial aid is a type of price discrimination. I couldn't have paid for the tuition in full, so I myself received significant financial aid and supplemented with some student loans, so I got to see a bit of it first hand.
Everyone thinks they're in the middle class.
Seems generous for middle class. (the median US household income is only 61k)
Eh...the UChicago economics department and the people of Chile would like a word with you on that.
>With over $159 million in financial aid distributed this year, UChicago is committed to ensuring that its students graduate debt-free and prepared for lifelong success, no matter their chosen major or background prior to enrolling in The College. UChicago is a need-blind institution, which means we make admissions decisions independent of a family’s financial circumstances
That seems like a hallmark move of progressivism, no?
No, especially at well-funded not-for-profit private universities, “financial aid” often includes generous need-based grants (not scholarships, which are merit-based) that reduce the amount that must be met from student/family resources (including loans) substantially for non-wealthy students (not unheard of for it to be down to $0 for the poorest who manage to get admitted, and that's not just tuition but sometimes housing, books, etc.).
I guess it depends on the school.
At many of the high-stocker-price elite schools, grants are also a very real part of financial aid.
Grants effectively look like a scholarship but are typically need-based rather than merit-based.
Looked at another way, grants can be used as a discount on the tuition sticker price.
- Building architecturally impressive (but questionably prudent) faculty buildings/dorms/libraries/etc. in hopes of luring prospective students, many funded by alumni looking to stroke their ego via their name on the structure (reminds me of that scene from House of Cards when Kevin Spacey's character does this very thing)
- Federal government showing no signs of abating the giving out free money to attend college, which enables the entire cycle to continue
These schools are price discriminating, which means only the richest families are paying the full price. This kind of heavily graduated pricing where the wealthy pay for most of the cost of the school is very much in line with their principles.
Consider also that a large amount of student loans are already from the government, so in a default...
There are plenty of liberal schools whose sticker price is going sky high.
1. Sanders/Warren get elected and somehow forgive 1.5 trillion in student loans and make education free going forward.
2. 2008 level crisis
with (2) is the more probable
I think universities tuition is way too expensive in our country, but I'm against (1) currently because I don't think retroactively forgiving debt is a good policy. The students took those loans out, signed the docs, and knew (or should have known) what they were getting themselves into. I think forgiving all of the debt would be obviously ridiculously expensive (1.5 trillion is a lot of money) but also possibly creates moral hazard.
I would be more supportive of (1) if the government took more of a "Canadian pharma industry" approach and just said "this is how much we will pay for this citizen to go to Harvard, take it or leave it". I have no faith that any of the current presidential candidates will be able to negotiate and pass that type of law, so I currently cant support (1).
Is my line of thinking wrong here? I think education should be more affordable but have no faith we have leaders that can get us there.
But if they are going to forgive them, certainly the students who prided themselves on being the best and the brightest should have known better! Therefore, anyone in the top 10% of SAT scores or at the top 100 schools should not be eligible for discharge. If you're smart enough to get into Chicago or Harvard, you're smart enough to know how loans work.
Also, my perspective as the kind of frugal guy that everyone else calls cheap is that we live in the most rampantly consumerist society that has ever existed on the planet earth and we think we need all kinds of things that we really don't.
I just can't stomach the idea of throwing money to people who knew what they signed up for but then decided paying back what they owed was too hard.
For the record, I didn't suffer. I felt fine and did plenty of fun things. I think the biggest mistake Americans make as a society is confusing convenience with happiness.
I would in fact be in favor of free college for everyone, but I hate this victim mindset floating around, and I think the largest benefits should go to the most prudent and responsible, instead of taxing people who withheld in their younger years to pay for people who didn't.
I graduated with no debt.
I don't think others should also suffer. That's why, I want the government to stop backing student loans, and make new non-government loans like any other loan, including bk discharge.
Tuitions would drop rapidly, and nobody "in perpetuity" will have to suffer.
Most people who are against forgiveness are also against continuing to write new loans!
populist emotional arguments are good when there is the populus to empathize with it. the vast majority of people won't care for such "plight".
Be wary of populist urges to tear down people you perceive to be "better" than you because maybe they're really not, or they're not the cause of the problem. Do things that will improve society, not just satiate your urge for blood.
Where does it end?
I’m not against free college, or debt forgiveness, but sometimes even if you have a goal
there’s no regulatory framework that can meet it.
If I wanted to prohibit abortions, while discouraging birth control, and ensuring victims of abuse get to control their bodies... well, sorry. There’s just no regulatory framework that can achieve that. Doesn’t matter what I think is “right”.
How is "debt forgiveness" solving the problem in perpetuity?
Debt forgiveness applies only to past debt, not future debt, unless I am misunderstanding the words.
I don't think it's right to let people who sacrificed go high and dry while the people who abused the system get a break, though that is often how it plays out.
But it seems like there would be ways to lessen the burden for people who did take big loans without it being a complete handout.
Low cost universities don't just pop out of thin air and neither do the professors that staff them.
Yes, they can, though it's harder than other unsecured debt.
We have around $1.5T in student debt currently, at its peak in 2008, there was around $12.7T in housing debt (there's more now, interestingly). Like 2008 era mortgages, student debt is securitized and sold in the form of SLABS (Student Loan Backed AssetS; ). However, to my knowledge, there are no derivative securities trades on these SLABS, whereas in 2008, nth derivative securities were trades on mortgage-backed securities (MBSs; when I say nth, I mean derivatives were traded on derivative were traded on derivatives, increasing leverage). In Q2 '08, around 4.5% of mortgages were "seriously deliquent" (i.e. were over 90 days past due). This figure jumped to over 21.0% in July '08 . In contrast, serious delinquency for SLABS is around 0.254% . This is different by a full two orders of magnitude (a little less) from the crisis levels.
While I get why you might be led to believe that (2) is possible, the data doesn't back it up at all. Remember that almost everyone takes out a mortgage, but only around 50% of relatively young people take out student loans.
: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (pages 2 and 3, use ctrl+F and "delinquent")
: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (page 5)
: https://www.salliemae.com/assets/investors/asset-backed-secu... (page 4; I'm taking this security to be representative, sue me)
I think we should stop offering government backed loans to all institutions that aren’t in-state public. Then, tie them to a graduation period. The moral hazard of taking out hundreds of thousands of debt that may never be paid back is (Ideally) gone.
Is there an issue to doing this?
Yes, because I dont want to live in a world or a country where someone can go bankrupt and/or end up in poverty because of medical problem - this is still possible in the US unfortunately (though I suspect vastly over stated), Regardless, I would never support forgiving of debts for elected/vanity surgeries.
No because I would not want to just forgive all medical debt without fixing the system, which currently seems impossible in the US, politically. Because of lobbying, big pharma, etc. , free heath care would just be too expensive to implement. Obama changed some things, Trump repealed some things. It's a political hot potato.
Fixing our system is like trying to turn the titanic at this point, and any changes we make alienate a large portion of the population.
A more plausible outcome is that the law changes to allows student to end after bankruptcy.
Maybe lenders are made whole by the government; maybe not.
That provides relief to extreme cases, while not shifting an entire $1T+ of debt.
TBF my biggest problem with scenario 1 happening would be if scenario 2 DIDN'T happen first. Colleges have too long been promoting degrees that they knew students would never be able to pay off reasonably.
The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook). Colleges are incentivized to drive up costs of tuition b/c tons of free money.
It's a classic moral hazard created by .gov guaranteeing the loans. Same thing we saw in the housing crisis.
Make student loans dischargeable in bankruptcy or take away the .gov guarantee and watch the market for student loans for worthless degrees dry up and tuition costs plummet.
Correct. There was also no IT, counseling, healthcare, Title IX, and secondary public education was functional. Things are different now.
Also there might be scale correlated to market demand. So if doctors are in high demand the gov backs it more, if it’s something with little market demand, back it less.
The school can really only improve the education they provide or make their admissions more stringent. If they are going to do the latter, we might as well go back to direct government support, no need to have a loans process and all that noise.
Even the part when it relies on private lending behavior being driven by security provided to lenders by federal loan guarantees that haven't been available to private lenders since July 1, 2010?
In any event, congrats, you just made a whole set of degrees inaccessible to anyone except the wealthy. The progressives are really going to love you for that.
Markets provided some balance here, but were taken out of the picture. No thoughtful lender provides equal capital at equal interest rates to a poetry and a business major. This is reasonable, as the business major has a significantly higher lifetime earning potential. Making more capital available at lower rates to higher-earning majors is a good strategy because it helps to push people into higher-earning jobs. The invisible hand seems better-equipped to do this than a central planner.
I haven't seen ISAs (income-share agreements) mentioned much here, which is a pity. The obvious solution is to modify the incentive structure such that colleges have a strong financial interest in the success of their students, which ISAs accomplish. If you want to read more, I recommend this article: https://reason.org/commentary/a-better-path-to-dealing-with-...
Purdue is currently offering them, so we'll hopefully get some real-world data on how they work, but they seem very promising on paprer.
So if they give someone $250k for a basketweaving degree, they are unlikely to ever see that money fully repaid.
No one serious thinks private universities that cost $60k+ a year should be free btw.
Also most STEM degrees are about as economically viable as liberal arts degrees if you don't go to grad school. Computer Science and any degree that can get you into CS are outliers.
Got any recommended references?
The relevant paragraph:
> Prior to 2010, Federal loans included both direct loans—originated and funded directly by the United States Department of Education—and guaranteed loans—originated and funded by private investors, but guaranteed by the federal government. Guaranteed loans were eliminated in 2010 through the Student Aid and Fiscal Responsibility Act and replaced with direct loans because of a belief that guaranteed loans benefited private student loan companies at taxpayers expense, but did not reduce costs for students.
To be clear, I agree with you, rip out the loan guarantees and let the private market deal. But progressives would never allow this.
Immediately yes, fortunately, there is a supply and demand curve, so if you cut the demand for a bunch of colleges that already exist; then the price should find a new equilibrium. Of course, as is the science of economics, time and outside influences matter.
Fortunately, in a low unemployment world, also means that hiring should be very elastic to this change.
You could apply that argument to anything. "Good luck with that, now people can't afford mansions, Good luck with that now people can't afford private jets".
Should everybody be able to afford mansions or private jets? No.
College should either be free, thus directly paid for by the government, or not everybody should go to college, you can't have it both ways, or that's how you'll get your big next financial crisis. The government should not back private loans, period.
Cost of education has skyrocketed BECAUSE banks started to loan crazy amounts of money to every students. This is free money for the banks.
It's a good thing they don't, then.
People have a different emotional response to predatory lending like payday loans, but not those same practices in student loans.
You have a cost of production.
The risks can be managed.
So my nephew is getting his degree in "expeditionary studies":
I also have a few on staff who do not have a degree but perform solid work and manage the same tasks as my degreed team members. There are options with college or military.
Essentially a cautionary tale about taking on debt for something unlikely to be able to pay off that debt.
It's a sacrifice. I love art and music and spent many years pursuing both. I'm an old man now and many friends spent years seeking that out and unable to ensure their own survival years later.
But English, psychology, history, music, etc. are in fact very real.
The wealthy can pay for a degree that doesn't pay them back. That's fine. They can study whatever they want with no regard for practicality.
Same in college vs university, you can continue from the lower level program into a masters degree as long as you pass the acceptance test or have the required grades.
Imagine trying to do this in the US. I wonder to what extent colleges are free in places where there is stricter criteria to get into college.
Based on the success of bootcamps etc.... I do wonder if software engineering would be better as a trade skill rather than university
There's plenty of data plumbers (myself included) who are writing a check a month to pay for skills they don't use but a lot of them don't have degrees in the first place. That blurry line between corporate IT and software development is where people would probably benefit most from trade programs.
Edit: Apparently a lot of people took offense at this comment and I'm not sure why. Please explain.
There doesn't seem to be much difference between how it grew before government backed loans and after them. Somewhere I've got a spreadsheet where I compared the growth rate to the inflation rate. I can't find that right now, but if I remember correctly the tuition growth rate was about twice the inflation rate.
It would be interesting to get this kind of data for a variety of schools, but I couldn't find it.
Trying to correlate the two and say it's because of government loans is just plain ignorant. Or are government loans also to explain why people can't save money, or afford rent, or survive off of a single 40h job etc.
I'd rather the debt we incur as a society be spent on infrastructure and engineers than wicker baskets. Wicker baskets don't last very long. Roads and bridges do. Engineers do.
Not everyone should go to college. We shouldn't enable everyone to go to college. If you shouldn't go to college, going to college won't change that. You'll struggle and fail out or get a worthless degree because it's the only one you can pass enough classes to get.
We have trade schools. We have apprenticeships and on the job training. Lots of folks for home those paths are better, are turned off to them by social pressure, not logic. I've taken welding classes and vehicle maintenance classes and they have shown themselves to be valuable assets to me. I can connect steel at the atomic level. I can keep my vehicles safe for me and my family and friends.
There's no one-size-fits all approach to human evolution and we need all of us. Maybe I'm idealistic.
We need to stop doing stuff that only makes sense to the banks. They are entirely self-interested and provide negative value back to society. We are squandering our futures to the fat cats.
We should abolish teaching degrees and just teach software engineering at college.
My sister is a 3rd-grade teacher and I'm not sure I would be equipped to handle 30 children without lots of training. Teaching someone how to teach 3rd-grade math is not that difficult. Teaching someone to start building positive learning habits with 8-9-year-olds sounds incredibly complicated.
I might be reading into your post too much but it seems like you think STEM grads are superior to non-stem grads. I don't buy that. STEM grads have a specialty that is in demand in the labor market. It doesn't make STEM grads better then non-STEM grads.
Only one of my high school math teachers seemed to have any idea what math was about (not just regurgitating formulas, but deriving them and proving them from a set of axioms and only then using those formulas to solve free-form real-world problems).
My High School CS teacher was a geography teacher who just read one chapter ahead in the CS textbook and had no idea what he was talking about.
Being good at teaching seems kind of useless when you don't know anything to teach.
If you're asserting that teachers are as valuable as software engineers to society, then the question becomes: why doesn't society compensate them accordingly?
You should take a moment and read that individuals post. It is well researched. Just because it’s from r/conspiracy doesn’t mean you should skip it.
Moral hazard may or may not be a simple, good solution but your argument for it, as presented, disincentivizes me from even considering it, since so much seemed to be missed in the argument, the same was probably true for consideration of the solution.
The only lender who is allowed to issue government-backed student loans for many years is the federal government, and their policy on what loans they’ll issue and on what terms are set in law, not a response to market incentives.
I don't see how any degree LAC, Computer Science, Math etc is worth risking a dischargeable loan for from a bank's perspective. There's no reason to single out LAC degrees, which by the way can be pretty useful.
The smartest thing for any student to do is declare bankruptcy right away after college when they have nothing and risk losing nothing. That makes no loan worth giving, which is the problem.
And watch default rates rise, and interest rates on these unsecured loans skyrocket, so that very few can go to college, and even more people get screwed by them due to higher rates.
Or people will simply not get loans, since they'd become too risky, and less people will get college skills, likely hurting the entire economy over time.
Educating people is a good national goal. Balancing the various pieces is much harder than simplistic changes to the current system.
Its the worst kind of half assed capitalism, that only benefits the political class. Kinda like our healthcare system, among others.
Where I live we just passed a minimum wage increase. A fairly substantial one that keeps up with the rest of the country by increasing every year until we hit 15 an hour in a few years. It's been a couple of years into it and someone asked why local restaurants are ending services, closing some locations, increasing prices, shrinking their menus, and basically cutting costs. I saw a lot of answers that boiled down to "greed" and my favorite was "labor costs are increasing" because of "late stage capitalism".
I wouldn't be surprised if a lot of answers you see in the wild involves doing exactly what we've been doing but on a larger scale.
Really, I think this site underestimates the value of "Go fuck yourself" when someone says stuff like that. Being polite isn't going to help them pull their head out of their ass.
Really, my point is that there is too much effort to engage assholerly as if it is actually reasoned conversation, when it is just assholery. Maybe we could go with the milder "This is ridiculous" as a reply or something.
If you're going to reply, it's better to give the uninformed reader some idea why it's ridiculous, rather than just the bare claim that it is. But hey, I just told someone that their post was "paranoid drivel", so I'm maybe not the best one to talk...