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What's Really 'Immoral' About Student Loans (wsj.com)
72 points by lordgeek 1369 days ago | hide | past | web | 99 comments | favorite

It is criminal that serious student-loan reform isn't on the table. As a recent graduate making monthly payments towards a 5-figure principal, I say fuck capping the interest rates. Please cap tuition and fees.

Don't give me that BS about how universities need the money.

During undergrad, I squatted in a 600 sq. ft. apartment shared with 3 other people. I seriously doubt my health is unaffected by the mold, mildew, vermin, etc. I had to live with every day. Across the street was the president's mansion(!). He had a team of gardeners, fountains, a gilded mailbox, and some pretty nice carS in the driveway. His army of administrators never worked a minute after 5:00, as evidenced by the steady stream of Bimmers, Benzes, and Lexuses that poured out of the administrative building's parking lot every day at 5:01 pm. Oh BTW, their building was the only one on campus with glass doors, bronze handles, oak furniture, marble floors, etc.

Trim the fat, and make the university answer to a more sane market force.

Clearly, this is going to vary from one University to the next, but top-level administrator salaries have gone through the roof in almost every industry, including education, while most staff (and faculty, in the case of education) salaries have remained flat or even dropped.

The primary factor driving tuition rates up is reduced funding from State governments for State Universities and Colleges. Private Universities, of course, keep increasing their tuition rates to keep them at the same level relative to the State schools. Even the state schools (at least those trying to do something besides cut the quality of education and pass the costs on to the students) are getting a significant amount of their budget through private fund-raising.

Of course, when it comes to private funds, it's easy to get someone to pay for a building or renovations if you're willing to put their name on it. You may even get some scholarships for students, some equipment, extra funds for high-profile faculty (or high-profile administrators, in some cases), and many people are willing to donate their time to speak to students as guest lecturers. Good luck getting someone to pay for faculty & staff wages and benefits, though.

how about making academic debt dischargeable without question during bankruptcy - so that the school is 100% on the hook for the balance of the funds if it educates the student poorly and can't get them a job, instead of keeping them in (albeit voluntary) virtual slavery to service their debt?

Yes, interest rates would go up, to cover the risk of defaulters, but then only serious students would go to college.

Schools would immediately close departments that tend to graduate low-paid folks -- humanities, acting, psychology, history, anthropology, all gone. Not sure if it would be a problem for society because those who actually produce art tend to learn to do it before college and just spend their time in college refining, which they could as easily do in clubs and societies without the BS that goes along with college.

Based on that criteria, wouldn't universities also have to close math, biology, physics, foreign languages, environmental science, psychology, architecture, civil engineering, etc?

I'm sure there will be some rich people around who could pay for tuition in general up front, the departments that generate 'students that can get modest jobs' might become smaller. Of course, then the supply of educated mathematicians, biologists, physicists, would get smaller, too, and their pay will go up, and everything will reach a saner equilibrium.

Math, biology, and civil engineering are all on the high end of graduate pay.

or in select conservatories.

"Market forces" are you making a decision to go to that school and not one of the thousands of others that offer reasonable tuition. None of that describes the school I went to.

For an opposite view point, see the Salon article Tuition is too damn high. It argues for the vast majority of people tuition has increased because government has drastically cut funds to public education. Not because of Pell Grants or "easy money". The author has some interesting data, as well.

Here's a glimpse:

"The first step in grappling with the rise in the cost of higher education requires understanding where students go to school. There are three main categories — public schools (which include both four-year public universities and two-year community colleges), private nonprofits (the Ivys, most liberal arts colleges, etc.), and the for-profits (Kaplan, University of Phoenix, Corinthian Colleges, aka “career schools”). Here’s the key statistic: Fully 70 percent of the 19 million undergraduates and 3 million graduate students enrolled in post-secondary education in 2010 attended schools considered to be in the public sector — by which it is meant that some portion of their funding comes directly from government."

"The problem: The word “public” doesn’t mean as much as it used to. Direct state support for public colleges has cratered over the past 10 years, and really fell off the cliff after the financial crisis. Yes, tuitions have risen, but not by as much as state and local appropriations for higher education have fallen. Just between 2008 and 2009, for example, average tuition revenue at public research institutions increased by $369 per student, but the loss in state and local appropriations per student was $751. Similarly, at public community colleges, tuition revenue rose by $113 per student, while appropriations fell by $488. Since the recession of 2001, tuition hikes, as exorbitant as they have been, still haven’t kept pace with the fall in government support."


The article you link touches on it, but before you even consider where students go to school you must ask why they do. And that is a very vacuous answer most of the time. I got my CS degree only because my peers said it would be significantly easier to be consistently employed with a BS even when it cost me 20k to get.

In reality, young adults don't go to college to learn. They did that for ~15 years (even worse, they did for 15 years by compulsion without much say in the matter) and the vast majority want to do something else. Most of them are there for credentials, not knowledge, and that is the problem.

The most important problem here is the necessity to disconnect education from schooling. The intent of the latter is to cause the former, but the former is not dependent on being confined to the latter. You can apprentice, you can self-teach, you can dive in as a high risk newbie in an industry. None of those involve going to prohibitively expensive summer camps turned annual to get lectured at.

The Internet enables a lot here - where previously it was very hard to find like minded individuals interested in participatory group learning about a subject, now it is stupidly easy, a search away. Learning resources are also rampant online in what used to be confined to a tome from the local library or a prohibitively expensive book purchase.

So the third viewpoint is that the problem has nothing to do with how the government behaves here because it is symptomatic of a baby-boomer irrational quest to get pieces of paper saying "bachelors" on it for everyone currently under the age of 30. The solution is to get a significant chunk of the people currently attending college and accruing these insane debts into more productive and better directed paths to careers in the things that interest them without the cultural baggage touting a phd in some field writing on a chalkboard as the golden goose of learning.

The real, true, bottom of the barrel reason I think this entire debacle even exists or came about in the first place, and I think it is at the root of most societal shifts for 30 years, is that the ultra-concentration of capital and wealth into so few people has dramatically slowed down the productivity engine of the first world. There is little motivation when you already pull the strings of international business to invest in risky youth labor, and when you control a huge chunk of the economy your lack of risk taking on new talent means huge droves of the population are never given a chance to succeed. It is safer and (here is the key) more profitable to play games with rigged fiat money and banks or stocks of fortune 500ers than to actually create goods and services by growing productivity and creating value.

Universities are older than the printing press, older than telegraphs, older than fast & cheap mass transport, older than radio and television.

To be quite honest I don't see the internet usurping them either.

Are you being facetious? All of those things have been dramatically changed by the internet. Or are you saying because they are older, universities are impervious to change?

He's saying that universities have not been significantly changed by the numerous communication technologies that came after them, and implying that the Internet does not have a property distinct from those previous technologies.

Right. And I thought I said it pretty clearly:

> To be quite honest I don't see the internet usurping them either.

I mean, OK. The internet is a big damn deal. But it's not a quantum leap as the printing press, steam or telegraphs were. It has antecedents in all those three technological revolutions.

The printing press was the first time knowledge could be cheaply conveyed to masses of people without needing someone to manually sit there with the learner and communicate with voice. It totally upended the concept of how individuals could receive their education. It didn't replace the university.

Steam was the first time that production and transportation could happen faster than muscle power or wind could move objects. It didn't cause a meaningful change to the university model.

Telegraphs did to thought and knowledge what steam had wrought in the physical world. One could be anywhere on earth and communicate to anywhere else on Earth within the hour. Minutes in some cases. You could use it to form communities of like-minded learners, and people did exactly that. It didn't unseat the universities.

For some reason, the concept of a vertically-integrated, physically co-located community of scholars and students seems really, really hard to shift. Technologies come along and modify this or that part of it, but students plucked from Bologna in 1088, from Oxford in 1167, Harvard 1636, Sydney 1850 and so on and so forth would find that the modern experience is broadly the same beneath all the pizazz.

Students relocate to be near a community of scholars. They pay for access. The scholars read aloud. The students take notes. The scholars test the students and write letters of introduction that verify that the student knows the subject.

What has changed throughout that long string of technological revolutions -- technological revolutions that destroyed the universality of the Catholic Church in Europe, revolutions that destroyed feudalism and absolute monarchy, revolutions that totally upended the whole model of the entire world -- is almost nothing. Hardly any damn thing.

Given that the internet is new only in degree and not in kind, forgive me for being skeptical that it will do away with such resilient institutions.

I have wondered for a long time now where all the college tuition money goes.

Consider that: (1) the cost of tuition has grown FAR faster than inflation, and is now sky high, (2) A huge percentage of students need and get student loans, (3) student loans are one of the few types of liabilities that bankruptcy can't wipe out.

So "everyone" (speaking loosely) goes to college, and "everyone" gets a loan. The college gets its money up front, and bears no risk of having that money taken away. This represents a huge flow of money into universities. Where does it go from there?

How does college tuition revenue yearly compare to Apple's revenue from iphones yearly? In the case of Apple, I can see where the money goes ... Apple employs a huge number of people working on expensive ongoing operations.

What are colleges doing with all this money? Surely all of it is not being soaked up by overpaid administrators?? A money stream that large ought to have a big, obvious wake behind it, but I don't know where that money goes. Can anyone enlighten me?

The increases in spending are indeed soaked up by overpaid administrators and their teams, known as "institutional support." For state schools, budget information is public and you can see for yourself how the university spends its money. This opinion piece regarding the University of Minnesota distills some of that information: http://www.startribune.com/opinion/42550752.html

But in one category, expenditures have nearly doubled over the last five years. That category is "institutional support," which consists essentially of central administration. The 2008-09 budget plan increases expenditures for institutional support by more than $143 million, or 80 percent, over the figure for 2004-05. The spending increase in this category alone covers the amount by which the governor proposes to reduce the state’s annual appropriation to the university.

What has the university bought with all this additional money spent on "institutional support"? Among other things, a growing array of vice presidents and associate vice presidents. The university now employs 12 VPs, several of whose positions have been created during the last five years. Every occupant of such a position earns a six-figure salary, starting at around $250,000 per year. Multiply by twelve, add a number of associate VPs, then staff support, plus assorted expenses for everything from office supplies to travel — and the institution spends millions more each year on central administration

This same pattern can be seen at almost any state university in the United States.

Where does it go? Well, some universities apparently are tempted to put it in a nice slush fund. See the University of Wisconsin as one known example. http://pjmedia.com/instapundit/167425/

More reports on one university so far discovered to have a slush fund, the University of Wisconsin:

UW Slush Fund Exposes Hypocrisy of Liberal Group http://mediatrackers.org/wisconsin/2013/04/23/uw-slush-fund-...

UW slush fund insults citizens http://www.beloitdailyneaws.com/opinion/editorial-uw-slush-f...

Outrage grows as University of Wisconsin System admits it 'did not draw attention' to cash http://www.jsonline.com/news/education/outrage-grows-as-uw-a...

I wonder how many more state-run institutions of higher education will have similar scandals in the next few years.

Many universities now have 1 administrator for every professor or more.

Colleges have responded to the availability of easy federal money by doing what subsidized industries generally do: Raising prices to capture the subsidy.


This is an American problem though, the Europeans figured out many years ago that making tuition free for the students is a win-win for society. Everyone wants to go to college, so just make everyone pay for it, progressively, over time.

I was under the assumption that college is free for students in many European countries, assuming the student passed certain tests. If those tests aren't passed, no college. Is that not correct?

That is correct.

For example, if you want to study engineering you have to have certain math skills. Otherwise university won't let you in, no matter how much you pay.

Oh, free college no. But tuition is something like $700 annual in germany/france. There is no housing or anything.

this is all and good for something like engineering where it is possible and maybe desirable to set some reasonable, objective standards. What about something like political sciences? Almost all of the upper-level public servants in a country like France come from the same school (ecole sciences-po)... Doesn't this become dangerous? Who gets to be the gatekeeper?

Well the entrance tests for Faculty of Philosophy that my close friend attended have been in the form of interview and they mostly asked about what authors did you read, what were they trying to say and such. It's actually not that complicated for people invested in some area (of science, politics, culture) to spot good candidates when you give them a chance.

Sadly, the quality of education in Czech Republic have degraded significantly in capitalism. We have gotten rid of Marxism-Leninism but have also let significantly more people in and set the incentives to produce a lot of graduates with much less knowledge, with rest of the bulk being thrown out after 2 years so that the university gets maximum state support.

We are probably going to end up with student loans and lower government participation, which will ruin our education system completely.

This sounds like a mess. So If I've read the 'wrong authors' (say, bastiat for a right-wing critique of the government and bourdieu for a left-wing critique), I'm basically hosed in the interview. Can't have any radical changers in the public service, now can we...

"the quality of education in Czech Republic have degraded significantly in capitalism... so that the university gets maximum state support."

I wouldn't think 'university gets maximum state support' to be a shining example of (free-market) capitalism. If anything, it sounds exactly like what the original article complains, if only a bit more direct and less sneaky than channeling the mechanism of subsidy through a convoluted, corrupt, and rent-seeking banking system.

I don't understand: there's nothing stopping you from reading what you want.

so, I'll read "Harry Potter" and "see spot run", and be entitled to a position at the school? There have to be standards.

This question I can only answer for holland, where I live.

Basically you can apply to any university and they will let you in. Sometimes you need maths, but mostly it is open. If you don't score 50 out of 60 credits in your first year you're out. You fail a class if your grades are too low, which is more frequent than would happen in usa.

would never fly in the US. Students would sue for unfair (or worse, from a PR perspective, discriminatory) treatment. Education is a right, and by flunking those students, you are denying those students that right.

Nonsense. American students at public and private universities flunk out all the time.

Are you implying that not everyone sufficiently motivated cannot pass the necessary tests?

A question for a question ;)

>A 2010 study by the Goldwater Institute identified "administrative bloat" as a leading reason for higher costs. The study found that many American universities now have more salaried administrators than teaching faculty.

It's not just the number of administrators but also the pay. They tend to make many times that of actual professors. And there's no question which camp brings more value to students.

Any form of government subsidized education is immoral. The universe doesn't owe you an education, which, like all values, is inherently expensive, and must be produced. Neither does society; and neither do I.

This may seem cruel, but it's actually kind. Were it not for government control of education, education would have already undergone the same kind of massive transition that has happened to every free-market industry: much better, much cheaper, much more widely available.

If you want to see what happens to an economic sector as the government becomes more invasive, look at the finance sector, which is the most controlled sector in the US, or look at the "federal telecom bureaus" (AT&T, Time Warner and Verizon).

Having education available to everyone is a net gain for society, like having public roads. Also, the "lazy poors" "stealing" your money to educate their children have snatched up the slightest fraction of what the wealthy extract from the economy, so I don't see why that's the problem to focus on if your concern is "entitlements".

> Were it not for government control of education, education would have already undergone the same kind of massive transition that has happened to every free-market industry: much better, much cheaper, much more widely available.

Yes, like the for-profit prisons.

> Having education available to everyone is a net gain for society, like having public roads.

I completely agree. A better example is food, clothing and shelter. Those are available to most people without government coercion. We could easily handle the remainder with charity, if it weren't for government programs that breed endemic poverty.

> Also, the "lazy poors" "stealing" your money

I did not say any of that, and I definitely don't think about it that way. I don't think poverty is a problem of laziness, but of ignorance. And I don't think the poor are stealing from me. If anyone is, it's Republicans and Democrats, with broad support from the middle and upper "classes." But I don't even think of it that way.. it's more of a societal decision. And we have a much better society, in many ways, than most of those in the past, so overall, I'm pretty thankful.

> Yes, like the for-profit prisons.

That's a highly government-regulated industry, so it's not a valid counter-example. The prison system is corrupt for the same reasons the finance system is.

(I wouldn't have any problem with prisons being completely government run, since prisons are a function of law enforcement, which is a necessary and proper function of government.)

I misunderstood you, sorry.

I disagree that the problem is the government exactly. The problem tends to be administration is allowed to capture a great deal of government spending. That's the reason the free market does better in certain cases, it doesn't tolerate middlemen with no significant function (or overpriced function).

I'd like to have education be free for anyone that wants it well into the university level, but it's probably correct that having the government pass out checks isn't the right way to do it. But allowing it to be free market seems like it would exclude poor people from good opportunities, sacrificing them to improve it for the middle class.

I really, really wish all objectivists had been born (actually) underprivileged.

It is better to take cognizance of how things really are rather than how you really, really wish them to be.

Where you start in life doesn't matter, but how big a jump you make in improving your lot does, and that's something that's entirely up to you. Please lay off the Rawlsian stuff - it doesn't square with the things I've observed in my own life. Nor does it square with the experiences of many of my friends that started life out poor, and chose to make something of themselves.

At this point, some might say, "you didn't earn your brain/parent's money/etc." I say that's nonsense, because the entire idea of "earn" arises in order to distinguish real people who choose to act toward a goal from those that choose not to. To do that, we have to look at adults - lots of them, ranging from bums to billionaires, across time and professions, on and on. Then at young adults, then at small children (to fully see the contrast with adults). Choice is the crucial thing here: nobody could arrive at the idea of "earning" or "deserts" or "justice" by studying newborns or fetuses.

Relying on "earn" (which depends on the idea of choice and free will, as I've indicated above) in a statement intended to undermine the idea of choice and free will is bogus.

EDIT: I am making some serious points here. Disagree all you want in comments, but downvoting me reflexively does not refute my argument.

>>Where you start in life doesn't matter, but how big a jump you make in improving your lot does, and that's something that's entirely up to you.

How big a jump you can make in improving your lot is a function of where you start in life.

It is significantly more difficult for someone born into a poor, single-parent household to bootstrap and "choose to make something of themselves" compared to someone who is born into a white middle-class family.

"How big a jump you can make in improving your lot is a function of where you start in life."

Says you, but my experience contradicts it. You have not convinced me.

"It is significantly more difficult"

So? Why does that matter? None of us are equal in any way, and none of us ever will be. You might as well decry the fact that some people are taller, or have an eye color that you prefer, or keep a head full of hair into old age. In a just (my definition of that word, not necessarily yours) society, we are equal in one respect alone: equal before the law.

Before you rattle off a point about "justice," see my amended comments in the post above. The concept of justice pertains to choice, and applying it to situations where there is no choice involved (e.g., who your parents are, how much money they have) is not a valid use of the concept.

>>Says you, but my experience contradicts it.

Your experience is anecdotal. Surely you can understand why basing opinions and worldviews on pure anecdote is problematic, yes?

>>None of us are equal in any way, and none of us ever will be. You might as well decry the fact that some people are taller, or have an eye color that you prefer, or keep a head full of hair into old age. In a just (my definition of that word, not necessarily yours) society, we are equal in one respect alone: equal before the law.

Nobody argues that everyone is equal in terms of physical and personal characteristics. What is important however is for everyone to have equal opportunity. If you come from a well-off family who pays for your college, you are an order of magnitude better off than someone who had to take student loans. While you were studying for your classes and partying (or otherwise networking) in your spare time, they were working several minimum wage jobs. Similarly, after college, your job prospects will be better, not only because of higher grades (due to having had more time to study) but also parental connections, which may have landed you internships during summer breaks or full-time jobs after graduation.

If we move beyond anecdotes and look at the data, we see that it supports my argument. Do a Google search for social mobility in the USA and you will see that those who come from poor families are much less likely to proceed to middle class or higher throughout their lifetime. This is not because they are shorter or dumber or start balding at an early age, but because they did not have the same opportunities and therefore could not make as big of a jump as people who had better means.

"Says you, but my experience contradicts it. You have not convinced me."

Your experience is dependent on several factors including how willing you are to listen to and engage people with different lives than your own. I can close my eyes and shout that there are no colors, but that doesn't invalidate everyone else's experience. Don't pretend like you have an authoritative background to make general conclusions.

I'm not invalidating anything you've observed - I'm just challenging your conclusions.

One of my friends left home (when he was ~19) with little more than the shirt on his back, a pickup truck, and ruined credit. He managed to rebuild his life, and he did it all on his own. This was ~15 years ago. Great guy!

I don't want to get too autobiographical on you, but I didn't have the smoothest time myself: I bombed out of college before my first semester was up. I spent years working (and not on anything that you could call high-paying). I went back to school as an adult, graduated with distinction, and got a better job. I'm 32 now, and I've met enough people to know what I'm talking about.

That's your evidence against the statement made by enraged_camel. Does that mean that the statement is false? No.

What conclusions have I made? Next time make a new post instead of editing your previous one.

> It is better to take cognizance of how things really are rather than how you really, really wish them to be.

> it doesn't square with the things I've observed in my own life.

> To do that, we have to look at adults - lots of them, ranging from bums to billionaires, across time and professions, on and on. Then at young adults, then at small children (to fully see the contrast with adults).

I like that you've indicated your own confirmation bias right there.

He's actually doing it the right way: looking at lots of empirical evidence and forming the right abstractions from it. That's how science is done, and it's how philosophy should be done.

You are free to present contradictory evidence and conclusions if you think he's made a mistake.

He's not talking about evidence limited to his personal, one-on-one interactions. He's talking about all the evidence available to us, about people in society.

It is better to take cognizance of how things really are rather than how you really, really wish them to be.

Where you start in life matters. It squares with the things I've observed in my own life; hardworking people who spend every waking hour working for the betterment of their friends and family are nevertheless constantly battered by mischance and bad fortune. I've learned to differentiate the good luck that I possess in my own life from the bad luck that others have. Despite my continued work in supporting them with financial aid, useful contacts, and marketable skills, they are still forced by circumstance to end up destitute.

At this point, some might say, "you didn't earn your brain/parent's money/etc." I say that's nonsense, because the entire idea of "earn" arises in order to distinguish real people who choose to act toward a goal from those that choose not to. And of course, that is the point. None of these things were earned. This is a basic framing problem[1], and the entire basis of chaos theory[2]. Initial conditions matter. A proper scientific experiment includes a control group measured against an experimental group, and both of these groups are impossible to meaningfully distinguish at the beginning of the observation. If this is not the case, say because one group is more intelligent by some accepted measure of intelligent, then the measurement of a variable, say the application of choice to arrive at earnings, becomes utterly nonsensical. The causative agent could be either the initial difference or the experimental variable.

Using simplistic philosophical bases for one's beliefs is tantamount to unexamined religious dogma and in no way demonstrates any kind of empirical basis. Furthermore, claiming to have surveyed "bums to billionaires" without proof is merely, in the sophistic style of javert, a logical fallacy.

But it's cute you two believe you have any grasp of epistemology, rhetoric, or logic.

[1] http://en.wikipedia.org/wiki/Framing_(social_sciences)#Exper...

[2] http://en.wikipedia.org/wiki/Chaos_theory

Using simplistic philosophical bases for one's beliefs

Whoa there - why do you call what I've written "simplistic"?

But it's cute you two believe you have any grasp of epistemology, rhetoric, or logic.

And of course, that is the point. None of these things were earned.

That wasn't my point. Let me put it another way: it is not valid to apply the concept of "earn" as you do, in a situation where no choice exists. You can't say that a person has earned his brain, nor can you say that he hasn't. I've already explained why. This is not some minor epistemological issue that I'm going to simply let pass.

But it's cute you two believe you have any grasp of epistemology, rhetoric, or logic.

Please stop with the insults.

> Whoa there - why do you call what I've written "simplistic"?

Because it does not appreciate complexities. This is the danger of confirmation bias; it reduces a complex reality down to a simple explanation by dismissing contrary evidence.

> You can't say that a person has earned his brain, nor can you say that he hasn't. I've already explained why.

And you're wrong. Your central claim is this: "A person has earned any given X if and only if this person has made a choice." We can say "A person has earned any given X" is P and "A person has made a choice" is Q. Thus, the claim is a simple P <-> Q, which is shorthand for P -> Q AND Q -> P.

Your next claim, however, is "If a person has not made a choice, then this person has neither earned nor not-earned the given X." This looks like ~Q -> ~P, which is logically valid, but it's not. The claim depends on a statement which is completely new. You've defined a third category of existence.

> Please stop with the insults.

Earn my respect. That's a choice on your part, right?

> Earn my respect.

This is supposed to be a community where we all respect each other. There is no excuse to be disrespectful to other people here, especially over disagreements about politics and philosophy.

If you want to be part of a community where you are free to be disrespectful to people until they "earn" your respect, you should go somewhere else.

I'm not even commenting on how you made fun of me and maxharris, which is kind of irrelevant because it doesn't support your argument intellectually. I'm only talking about your explicit assertion that you don't have to be respectful as part of the bargain of being in this community.

Such an authoritarian. If you want me to be respectful, then make a choice and earn that respect from me. What is this, a pg-subsidized respect space? That's immoral.

> What is this, a pg-subsidized respect space?

Actually, yes, yes it is.

Yes, he agrees with you. I got that.

I like that you've indicated your own confirmation bias right there.

Does that really make any sense? Everyone, including you, has beliefs and hypotheses.

I've summarized some of what I've considered in coming up with my conclusion, and all you've done is to throw a convenient label on me. You'll have to try harder than that.

Since you look like you could use some support, I just wanted to drop in and say, that was a really, really good comment.

What I like is the focus on looking at empirical evidence and then forming the right abstractions based upon that evidence.


"Where you start in life doesn't matter"

How can you possibly say that?

I'm not the guy you're asking, but I'll weight in. I think happiness is much more related to self-esteem and self-efficacy than it is to how much money you have.

For this reason, I think it's common for people born at any station in life who are successful relative to that starting point, to be happier than people born at a higher station that are not successful or are motivated by the wrong things.

I'm calling you out. Attacking the arguer instead of the argument is a logical fallacy.

What you're actually implying, which wouldn't be a logical fallacy, is that my view is subjective, because of the circumstances of my (middle class) upbringing.

I don't think that argument holds water. The subjectivity or not of things is probably too big of a discussion to really tackle on hacker news, though.

a) I wasn't attacking you. An ad-hominem attack in this case would be, "Javert is an idiot, therefore this viewpoint is wrong." I don't believe that you're an idiot. On the contrary, I believe that you are probably a smart person who has had a particular set of experiences.

b) The statement was made to draw attention to what I perceive as weakness in your argument.

c) Notwithstanding the points made by others in the comments below, it should be said that I completely understand how and why people are objectivists. If, as I proposed, all (or even most (or even a significant number of)) objectivists had been born underprivileged, I think that I might be more inclined to agree with it.

d) > If you want to see what happens to an economic sector as the government becomes more invasive, look at the finance sector, which is the most controlled sector in the US, or look at the "federal telecom bureaus" (AT&T, Time Warner and Verizon).

In the finance sector, people broke the rules or rushed to fill in spaces where the rules were rolled back. Then things went really bad.

In the telecoms, they are breaking the rules but not being held accountable by the government.

In both cases, the fact that they are not following the rules is the actual problem. I'm not sure how this supports your claim.

The universe doesn't owe you K-12 education, and neither does society, but society has decided it is worth the expense to have a populace that knows how to read, write, and do arithmetic- skills that most people simply did not have two hundred years ago.

You don't need 12 years of education to learn reading, writing and arithmetic. K-12 does teach a lot more, but most students seem unwilling/unable/disinterested in more than the basic stuff (in my experience). Do we really want to throw money at educating people who aren't interested?

It's wrong to think that without publicly-subsidized education, most people would not get any education.

But will all people who can be educated get education?

Will all people who can benefit from a romantic relationship find their ideal mate? Will everyone (regardless of who they are, where they are, and what else they're doing) that wants an ice cream sandwich have one?

This is boil-the-ocean, god's-eye-view thinking. Moral ideals cooked up in this style are unreal and utterly unachievable as practical goals.

I'm surprised the absolute nondischargeability of student loans is not brought up in the article. This is, ultimately immoral, because that is exactly (fractional, voluntary, nonchattel) slavery.

The US, to Obama and congress's credit (those who know me know I'm not a huge fan) engaged in some credit reform in the wake of the 2008-2009 economic crisis. Credit cards firms were required to allow their customers to restructure their loans and became obligated to outline the loan payments afterward, and rotating credit became dischargeable in bankruptcy proceedings. One wonders why college credit hasn't undergone such reforms. Does academia have that powerful of a lobby?

Good grief, I always forget how misleading the WSJ is.

"Gov'ment causes those poor helpless colleges to overcharge."


The growth in the cost of college is tied to big fat administrator salaries. It is control fraud pure and simple. To paraphrase, the best way to rob a college is to run one.

That's precisely what he argued though: "A 2010 study by the Goldwater Institute identified "administrative bloat" as a leading reason for higher costs. The study found that many American universities now have more salaried administrators than teaching faculty."

What's more he doesn't propose eliminating federal aid or loan guarantees, he advocates letting you discharge student loan debt in bankruptcy and putting colleges on the hook for some percentage of that default.

Sounds like a great idea to me. Schools that equip their students for well-paying jobs have nothing to fear, but diploma mills out for easy loan money will suffer.

So you're saying if we didn't have government guarantees on student loans or any other form of government subsidy, banks would just give 20somethings who want art degrees $200,000 completely unsecured?

> banks would just give 20somethings who want art degrees $200,000 completely unsecured?

Of course they wouldn't. That's the idea though. Back-pressure. The idea is that it would then become unrealistic for institutions to try and charge 200k for an arts degree which no one can afford, even with loans. This should lead to lower tuition.

Bear in mind that that what any institution wants to charge is the absolute maximum the student can borrow, plus any government subsidies or fees they can extract.

The demand for college education is still elastic. College loans merely allow colleges to extract values greater than the student's ability to pay.

and since college loans aren't dischargeable, you get to keep the student in hock for the rest of their life!

Colleges responded to the availability of easy federal money by raising prices to capture the subsidy (ie. big fat administrator salaries).

This is the only answer in this thread that is accurate.

Despite its best efforts, economic law is the only one that the government can't find a way to violate.

You're not really refuting the article's point, and you're not making a very good argument that school administrators are committing control fraud. Where is the evidence for control fraud?

The article makes a good point, IMO. Schools can pay "big fat administrator salaries" because students have practically unlimited access to money via student loans. Give everybody a 10% raise, and tell students to take out 10% more loans. If the student can't pay the loans then it's not the school's problem, but maybe it should be.

What do you think control fraud is?

It is not just giving your deans a big loan to buy a house and the forgiving it. It includes paying yourself excessively.

If someone is stealing from you, the answer is not to make them share the risk.

I like how you agree with the premise of the article while simultaneously calling it "bullshit". Big Brother is proud of your doublethink.

So.. We make it so that only people likely to pay the loan back get student loans. Then, we watch as the actuaries figure out that students frompoor families are the ones who disproportionately pay their loans (since they don't have the same familial support during and after college.)

So, poor students are disproportionately denied loans, and we continue to see generational wealth inequality expand.

There are no great solutions, and there are tradeoffs everywhere. However, leaving it to the market seems immoral too.

why is 'leaving it to the market' immoral? If you think the poor should be granted preferential financial treatment, then you should reach into your own pocket and help pay for them. Or help scholarship funds raise money. Or at least pressure your alma mater to set aside some funds for the economically underprivileged. If you don't do any of the above, then you don't really believe in it, do you?

It's also kind of insulting for you to assume 'the poor are the ones who won't be able to pay back'. In my experience (and it's possible that I had a unique college experience) it was the students who came from tougher backgrounds that buckled down, didn't get stupid degrees, or even if they did, managed to pull decent, well-paying jobs out of college, because they used their education, and it was the upper class students that were loafers or chose their degrees in a silly fashion, so in a way, the good education of the less privileged was subsidized by the poor choices of the rich.

should clarify, my 'unique college experience' was that I went to a fairly expensive private research university in the US; I strongly suspect that the waste of time in college cuts across socioeconomic lines at many big box state schools.

> ... generational wealth inequality expand.

People automatically assume economic inequality is bad, though here's an argument for its merits: http://www.paulgraham.com/inequality.html

I'm more concerned about the wealth floor in a society going down, which is at odds with the general trend over the past centuries of it going up, even if not at the same rate as the wealth ceiling.

I'm not worried about economic inequality in and of itself, but rather a lack of class mobility.

You should only be able to use the "principal" pun once per article.

I just realized my earlier comment on the WSJ being misleading did not really clear.

He has the facts right but, to get published in the WSJ, he can't point at the real issue. It is same problems we have the with banks. These institutions have tons of hidden subsidies. They always will. Subsidized industries behave differently from non-subsidized ones in general but the WSJ approved solution is to pretend that it is possible to remove the subsidy.

For public goods (utilities, parts of finance, education), you have to have government intervention and deal with the side-effects. That means regulation and rules about what you do with the money.

I don't think the author would disagree when I say that the administrator are stealing from the taxpayers. But what is 'bullshit' is saying that we just have to accept it. When people are stealing from you, you deal with it head on. If they were employees, you would fire them.

I don't have a great answer for colleges but you need to at least let the administrators know that they are acting immorally. It is not the loan process that is immoral -- it is the people who are running the colleges.

College is an interesting situation. It might be argued that collectively we all have an interest in seeing a more educated society, regardless of the earning power. It might also be argued that collectively we need to focus more on not "going to college" but instead focusing on things like "learning a sustainable trade".

And, for an individual looking to maximize earnings & employment, a bachelor's in STEM/business is still a really good buy, supposing you didn't go to $$$ SLAC/Ivy League. Whereas subjects that are less fiscally shiny lead their students into a dark hole of debt.

One solution is to simply collectivize the cost: everyone gets free college. That's really expensive and without good cost controls, well, is susceptible to being taken advantage of.

Another solution is to go at colleges with the dieting plan. That's the current one. IMHO, that's exactly the wrong way to go about it.

Another solution is to aggressively force state schools to cut overhead; i.e. cut the administrator staff. Well, asking people to fire themselves is sort of utopian, doncha think? :)


I don't really buy any of the solutions that I currently know about in the US. My thought is that there are far too many colleges in the US. Too many states trying to stretch too few dollars over too many campuses. I instead think that federal funding should go to a select few - perhaps three or four - in the US. These colleges would be fully free and fully funded by the feds. Professors would be encouraged to congregate there and focus on having huge departments where all sorts of research could go on. The overhead per college is so high; it's considerably more scalable to focus on having a few large campuses than the small ones everywhere. Each campus requires a mini admin to be set up. Worse, the larger a department is, the more interesting collisions can happen: small departments work against this by not having that interesting person to run into(they are in the other state).

Anyway, that's my undercooked idea to help college education.

Education in the US is, I think, a wreck, and it has a variety of causes. Among them, the historic anti-intellectualism of Americans, the loss of historic mission, the rank foolishness of levelling egalitarians, the shrinking dollars for defense research, etc. More causes could be added.

About collectivizing costs, you speak as if it has never been tried and you discount the idea based on your own assumptions that it would be too expensive? As someone who has gone to university both at a free*(you actually get money to study) (~top) Scandinavian university as well as a (~top 10) US university, there is not much difference in the actual education from what I could tell. Where there's a real big difference though is research. US universities consistently outspends and outproduces European universities by a large factor. My theory is that the undergrads are paying for the professor's research and grad students, but I'm not sure. The money has to come from somewhere. Either way, neither I nor my parents would ever have been able afford US tuition + living costs. I took a loan for all the living costs that were not covered by subsidies, a loan with an interest of about 1.9%, so I can't even complain about that. My point is that in the US, I would probably not have been able to afford a decent college, and I think that's a broken system. Research and fancy campus gyms should not be funded by stepping on poor undergrads.

By the way, it also seems that student loans for US students mainly consists of tuition payments. There is rarely any mention of livings costs which I find curious. Do people just take it for granted that the parents will pay that part? Myself, after 5 years, I was roughly $50,000 in debt, all of it living expenses (note, that's only $10,000 a year in a country with high cost of living). My family didn't (and didn't have to) pay anything to put me through college. From what I can tell, this is the norm here, students take loans for their living expenses and parents are not expected to support them.

Traditionally[1], I believe US universities have been funded by the government to a large degree. The defunding of the universities I believe corresponds to the ceasing of the Cold War and the dropping of heavy DoD/DoE funding.

My understanding of collectivizing costs is that it's proved extremely expensive for countries such as Germany and the UK, which are moving towards a paying model (last I heard). There's also a pyschological effect when you're paying for your own way vs. someone else paying for it. I'll let someone else more learned in physchology & motivation research comment on the details, but the change in mindset does exist. My gut feeling is that its entirely reasonable for society to generally pay the bulk of the cost of college in exchange for getting the benefit of an educated society.

If you examine the historical cost of education in the US, the tuition began its upwards run around 1980 and has not ceased. So did healthcare. I don't know if there's a connection; and, if so, why. I do know that educational costs have gone wildly up beyond inflation.

To your aside; my student loans were designed to cover the cost of housing & life in general.

I'm very sorry that you did have to go into such steep debt for college. I don't think it's right that higher education costs so very much either. I do want it reformed, but I don't want it done in ways that simply funnel money into someone's pockets without lots of people getting a quality benefit.

[1] between 1945 and ~2000

You don't need to feel sorry for me, that loan is a government loan that every student is eligible for. The interest is 1.9%, so the government is actually losing money on it. I pay roughly $900 a year in interest, which is very manageable with a near 6-figure salary that this education gave me.

I think it's a pretty good system, it's good both for the students and their parents. Students don't have to rely on their parents (if they are rich enough to support their children anyway) and parents don't have to save up for years for tuition and living expenses. It still hurts though, it's not like it's free to get an education even without tuition and with subsidies and favorable loans. You also have to think about opportunity cost, you could be making money for 5 years, but instead you're in school. So I don't think you need the additional expenses to feel motivated.

The formulas used to calculate eligibility for various forms of financial aid as a US student include an assumption (up until the age of 25 if I remember correctly) that the parents will be paying a certain amount, based on their income. My parents' expected contribution was not within the realm of their economic reality, especially with 4 kids graduating from high school in 3 years.

My wife went straight from putting her parents' income on her student aid forms to my income, so nearly all of her higher education not paid by her parents is on student loans (because by the time we got married my expected contribution to her education was outside the realm of our financial reality).

These calculations do include the estimated costs of room, board, & books, though, and student loan eligibility is largely based on those numbers. Of course, the room & board costs are often based on living in dorms and eating entirely on campus meal plans, each of which, depending on where you go to school, can be significantly different from the cost of living off-campus.

Just a slight country point: The US is actually quite low in number of articles published per million citizens.[1] Now that doesn't say anything about the quality or distribution of research areas of course. Switzerland is in a clear lead with Sweden second.

Does US universities really outpace European ones? I don't know if that statistic means anything in reality. I guess it also depends on the percentage of the population with a degree.

[1] http://www.conferenceboard.ca/hcp/details/innovation/scienti...

Maybe my perceptions were wrong. I went to a Swedish university, and I suppose there is a lot of research going on, but I would guess there's not nearly the same amount of money in it. The US also tends to attract the smartest people, while Sweden is less attractive (not being an English language country) and with less money for doctoral students. Also, international rankings seems to favor US universities, probably because they produce good research, not that the education is in any way superior.

"I instead think that federal funding should go to a select few - perhaps three or four - in the US. These colleges would be fully free and fully funded by the feds. "

We have those. West Point, Annapolis, USAFA, USCGA, and the Merchant Marine academies.

Not everyone cares to go to a military academy...

>>Anyway, that's my undercooked idea to help college education.

So undercooked, in fact, that consuming it would make everyone sick.

That's not very constructive, but let me engage in a metacomment.

Good ideas are born out of bad ideas sharpened and the bad bits thrown out over time. I am not a professional administrator in college, but I did spend time at a variety of institutions of higher ed and wound up with a Master's degree and experience teaching, researching, and studenting. I think my thoughts are not entirely worthless. But they are not taking into account the full picture, as I've not been a professor, support staff, or an admin. However, if experienced people from each side of the University structure contribute their ideas, perhaps out of the pool of undercooked ingredients will be the parts for some really great pieces; and those ideas would be truly awsome.

So. Yes. My idea is undercooked. But maybe it can help contribute to a better solution. Maybe. :-)

Your own comment was not very constructive. You listed three existing proposed solutions, and dismissed them prematurely with minimal explanation. For example, you said free college for everyone would be taken advantage of, yet it seems to have worked wonderfully for Europe. The second solution you listed, you also dismissed, saying it is the "wrong way to go about it" but did not explain why. And for the third solution you said forcing schools to cut overhead would require administrators to fire themselves, which is not true. But you dismissed it too.

The rest of your comment assumes that we can actually find a solution to the mess that is US college education - or education in general. That is unlikely to happen. Despite the fact that most people here on HN are very smart, we are overwhelmingly technologists and don't know much about the problem domain (education) to begin with. We may have participated in it as clients (i.e. students) but that's the extent of most people's exposure to it. This is why everyone has different opinions on what the root cause of the issues are. Debating them might be interesting, but a solution is unlikely to emerge in a medium like this due to the sheer complexity of the problem.

Why not just cap the annual payout of federal loans to a reasonable level? This would surely put downward pressure on tuition.

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