With a year left on my massive loan, I can not wait. I can't imagine students these days coming out, and not having the luxury of being picked up right out of school to a well paying job. And god forbid they chose a less "desirable" concentration.
Paying off your debt early also builds really good financial habits which will help in the future. You learn to live below your means, make a budget, etc
If they're Federal loans with a often below-inflation interest rate, the actual good financial habit is often to not pay it off, and instead amass a) an emergency fund and b) sock the rest into retirement via an index fund or something similar.
That ignores risk and also financial burden. If you owe $2k every month to NelNet or another institution, it's much harder emotionally and financially to quit your job to travel the world or start your own company. We had Federal Loans and the interest rate was still 6.5%
Not having an emergency fund is about the riskiest thing you can do.
> If you owe $2k every month to NelNet or another institution, it's much harder emotionally and financially to quit your job to travel the world or start your own company.
The emergency fund helps with that. When built up, it should cover 6-12 months of zero income. Amassing it first means losing a job doesn't mean deferring payments on the student loans and winding up with years more payments to make as a result.
> We had Federal Loans and the interest rate was still 6.5%
One of my wife's student loans is at 2.5%. At 6.5%, it's not below inflation and paying it off makes more sense.
We took a slightly different approach. Have a 3 month emergency fund, then pay every extra dollar towards the student loan. Paid it off in 3.5 years instead of the 20year plan NelNet wanted. Now we are building out a 6-12month emergency fund and putting money into retirement. Maybe in the short term we are behind in retirement saving, but now we have a lot more cash every month to put into savings and investing. I would still recommend this approach because it emotionally feels wonderful to pay that last f*ing payment :)
But sometime emotions get in the way of financial strategy.
> it's much harder emotionally and financially to quit your job to travel the world or start your own company
Sorry, I have to laugh. This is the most HN thing I've read today. It's a tremendous privilege to have the option of quitting your job to travel the world, rather than the fear of being arbitrarily laid off, and failing to put food on the table or lose your house. My redneck might be sticking out this morning, though.
I didn't have student loans, have always had decent paying steady work (except for that time around 9/11), and have never felt financially secured enough to quit a job to travel the world.
I have moved around the country for work quite a bit, so I do feel fairly well-traveled. At least in the continental US.
At least colloquially, this term signifies one has been to other countries (or better, other continents) and visited other cultures, immersed in other languages, other governments, other ways of eating, etc. One who stays within a country would not (in my opinion) be "well-traveled", despite the country being enormous. My 2cents.
The US is about the same geographic size as all of Europe and includes many cultures, languages, styles of government, and foods. Hell, just wandering around different parts of NYC ticks your boxes.
I believe that definition has a bit of an elitist attitude about it. I don't know you, so I can't say it is your definition, but I have seen it before. I believe it is a totally unfair definition for most people.
I define well-traveled as someone who has traveled a significant distance based on their circumstances in life. By your definition a large portion of the people living in the EU are well-traveled just living their normal lives. Which is a far easier thing to accomplish than someone in the US. I have driven from Orlando FL to Las Vegas NV, a distance of around 2300 miles or so, twice. How many countries does that cover for that range in the EU? I have visited many locations around both cities and in-between. I have lived in four states in different areas of the country, each with their varying cultures. I can tell you for a fact that the Southeast and Southwest US do have different cultures, even though they both sort of speak the same language. Walking through downtown Los Angeles after growing up in small town Alabama is visiting a different culture.
I agree, there is a kind of snobby adherence to the term by some people, as they see the point of becoming "well-traveled" to have been able to afford it.
I politely disagree that the term -- or idea it was meant to abstract -- is to convey how much distance one has traveled, but rather how varied the places have been that one has lived in. Just a short quick visit, e.g. a many-hundred-mile 2-week scourge through Europe, robs you of the experience of living in a non-tourist area where the environment is nothing like what you are accustomed to.
The idea (phrased as "well-traveled" or otherwise) from my perspective is to learn that many countries have very different ways of life; some have better/free access to health care, or not at all; some have almost no diverse ethnicities (e.g. China), or that in the middle-east, you can have countries with a strong diverse mix of many religions (Lebanon); how foreign country governments treat you (no VISA, vs. register yourself with police everywhere); etc.
For those with hard lives, many can be some of the nicest people. Visit China, other south-east Asian countries, rural India, Africa, as well as the well-developed nations in Europe. The most important trait one should take away from travel is: first-hand experience at the range of life that exists on this planet, something which cannot be read from a book.
We take for granted many of the artifacts and ways we work in our lives; seeing others gives us perspective that becomes a useful skill. I wholeheartedly agree that these skills can be developed without leaving the country, among our own rich, poor; and we are fortunate to have all four climates within our borders, too!
I moved to Brazil with $2,000 and no job. Granted, I got lucky finding clients that would allow me to work remotely, but you don't need a fortune to drop out of the rat race. Things work out. If you have friends and family and aren't mentally ill, the chances of you ending up on the street are pretty low. You may have to eat fried flour to keep from going hungry, but it's never as bad as you think it will be (speaking from personal experience). The hardest part is taking the leap. I would have backed out if I hadn't already told everyone I knew that I was leaving, but here I am eight years later, still living abroad and making a comfortable living. If you are motivated and industrious you will find a way to thrive in any situation.
Edit: If you are supporting children, the above advice may not apply.
https://studentaid.ed.gov/sa/types/loans/interest-rates indicates direct undergrad loans are currently at 3.76%. At that rate, you're best off paying as slowly as possible and putting the rest of the money into an index fund.
Perhaps it shifted a lot in the last few years. I went back to school to get an EE degree, and it's mostly pretty high interest. Sadly I was pretty financially ignorant until maybe my senior year of my second degree. Plus since I was older, and already had a degree, the amount of money available goes down a lot. I don't know how much that effected my interest rates (though my private education loans were at 10% if you can believe it).
As others point out, it's really unusual to have federal loans as low as 2.5% (as you mention below). Most are considerably more. Are you sure that's a federal loan?
It's also worth noting that 2.5% is still higher than inflation in the last couple years.
Its nice that you earned your black-belt in self-discipline, but it doesn't benefit society much for you to become a miser to pay for a piece of paper. We are in a consumption economy...we need you spending money on things that create jobs for others, like homes and cars.
Same here! However, there is a line to draw on how much debt to put on someone. I know people who have tuition payments cutting into their living wages, affecting their ability to have even the basic necessities. There is nothing good about this unnecessary suffering, having to worry if you will still be able to afford a meal or a roof over your head.
> However, there is a line to draw on how much debt to put on someone.
Yes, people should decide how much debt they want to take on.
There are vast differences in the value of different degrees (cost and earnings). It's people's responsibility to educate themselves. The rest of us shouldn't have to subsidize someone's terrible decision to go into debt for a degree in basket-weaving.
Yes, we should. The average college freshman is 18 years old.
If you're old enough to drive a car, join the army, or be charged as an adult, you're old enough to realize that paying tens of thousands of dollars for a degree in musical theater isn't a great idea.
It's not rocket science. There are tons of resources online to help you figure out which degrees and schools are good value.
Yes, I agree it would be great if all 17/18 year-olds were able to sift through the marketing BS of school PR departments and the societal pressures to go to college, but it's increasingly obvious that they aren't making good decisions. I'm not convinced free college is the best solution either, but it seems you don't have much empathy for those without the same perception ability as you. I thought I was making the right decision, but now I'm stuck with 2k/mo for 8 years. I'm a bit bitter, yes...
> If this happens, do I get benefits on the debt I've already paid off? I would be pretty pissed if I didn't. I worked my ass off to pay my loans.
That's not going to happen because it's politically easier to continue to subsidize failure than to draw the line on this bullshit and reward sensible hard working people like you.
If it is a means-tested program, say a more expansive version of IBR where you have to pay an income-adjusted amount for a certain number of years to have the loan forgiven, I would be okay with that. If it were a straight up give away to everyone with loans regardless of whether they could afford to pay for it, I would be angry.
I understand that feeling... I'm nearing the end of my loans and dropped $3k on one of them yesterday. I would have rather had a vacation if it's just going to vanish!
...but don't get salty because the debt won't vanish. I have no doubt that if an education loan is forgiven, it WILL affect that persons credit rating. Much like when a debt is forgiven/charged-off. Also, charge-offs are typically treated as a form of taxable income... so these people will pay one way or the other, and likely take a long-time credit rating hit.
A vacation, or buying a house, or just about any other use of the money would also benefit the economy more than paying it back into loan accounts at some bank or gov't ledger.
I assume if forgiveness ever occurred, it would need to be respected as income for the debtor(so then IRS gets involved) simply to prevent fraud. Much in the same way that charge-offs are currently taxable income(1099-C).
There's simply no way that you will want to forgive the student debt... so pay them off if you can! The punishments of 'forgiveness' simply have to outweigh the benefits or the system will be gamed until broken.
You can pay back $100 or pay 40% tax on $100 of forgiveness, which is $40. The choice is clear here. The only wrinkle is that the $40 might be due all at once. But if that's a concern, saving up ahead of time to pay back the $40 is still better than paying off the $100.
I believe there was a short exemption window for income taxes on some mortgage defaults/forgiveness that Congress explicitly allowed. Otherwise debt forgiveness usually gets taxed as income and the amount would be due the tax year it is forgiven. The IRS does allow payment plans and I'm not certain how they would handle such a case as this. I would hope they don't tack on fees and interest but I could certainly seeing them do that. Granted your wages can be garnished to pay for student loans, I don't know who/what entity is chasing that money. Is it the IRS? With huge amounts of taxes due from a forgiveness, the IRS will be on your tail and now you have to choose, what's worse: owing more student loan debt or owing back taxes to the IRS (which if unpaid can lead to criminal proceedings)?
Of course a tax percentage of a value is going to be less than the value. The main penalty would be the tanking of your credit rating. The effect it would have on an interest rate for future loans would be very significant.
Just finished paying my student loans this month. 8 years at $500/month. Yeah, I overpaid to get rid of them faster, but if I could have gotten a reduction in year 2016+X I would have paid the minimum.
> Also, charge-offs are typically treated as a form of taxable income
That's not much consolation. I wouldn't be happy if the government decided to simply pay people for making poor financial decisions, even if we recovered x% of those payments through taxes.
I'd still be paying for it with my massively higher taxes.
Just get the government out of the student loan industry. Let the market signal which degrees are valuable and allow students to discharge through bankruptcy (but ruin their credit).
>"I wouldn't be happy if the government decided to simply pay people for making poor financial decisions"
Government already does that in a myriad of ways, some more morally accepted than others. It's almost part of the base definition of what we expect the government to do, if you really think about it. Paying for the poor that made bad life decisions and lost their job, the sick that didn't save for medical expenditure, the parent that had one-too-many kids and can't pay for their food/schooling, etc.
I would argue they are all very similar, buffering and protecting those that are incapable of providing for themselves, either by inability or conscious inaction/abuse. It's just that some people think this should be done by private efforts, instead of by government which uses it's power to force people to obey and pay.
I understand the sentiment, but "I had to do <thing that sucks>, therefore everybody has to do <thing that sucks>" isn't a great argument either, especially when it leads to a stagnant economy due to nearly an entire generation with no funds to spend. I'm not advocating for any particular solution, but don't react so quickly that you cut off your nose to spite your face.
It's a great argument, just not phrased correctly. It's more like "I had to work hard and make difficult decisions to succeed which included choosing a field that is guaranteed to pay and being obligated to pay back the money I borrowed. Therefore, everybody should have to do the same. If not, then I at least want to be treated fairly."
> Therefore, everybody should have to do the same.
Why, though? Depending on how the idea of debt relief shakes out, this might be one of those "sometimes life is unfair" moments that you just have to accept and move on as part of living in a society. The alternative is a massive contraction in buying power, which could certainly directly impact your livelihood. Is the spite worth that?
I came here to say something similar. Yes, you can be angry, but sometimes it's better (as an economy and as a country) to just let it go.
The selfish thinking that people shouldn't get anything for "free" (ie, shifting education burden from taxes to the student) and everyone should be accountable for every dollar is how we got here.
If I just finished paying off my student loans, and debt forgiveness happened, I would be annoyed and a bit jealous. But also happy that those who had their debt forgiven now have more money to do stuff and contribute to the economy. I would truly be happy for them. Why wouldn't I?
(Note: I don't believe debt forgiveness will ever happen)
I'm confused. We will transfer wealth from people without degrees to (typically much wealthier) people with degrees. How does this prevent economic stagnation? Could you explain the mechanics in detail?
The problem is that the rest of us have to pay for this forgiveness.
"I had to do <thing that sucks>, therefore everybody has to do <thing that sucks>" isn't a great argument, but "you had to do <think that sucks>, but I don't want to so I'm going to make you do <other thing that sucks> so I don't have to" is even worse. It's like forcing someone who just finally managed to rebuild their house after it burned down to share their house with another fire victim for free.
You'd get indirect benefits from the debt unloading. Things like economic stimulus from increased spending power, likely increased home values by bringing more buyers (but this is good debt! /s). That last point is probably controversial depending on if you own or rent, it would be a real killer if that student debt unloading was just converted into a different kind of debt that hit a diff. proportion of the population.
I absolutely understand the sentiment, but if there is legislation to forgive student loans it will not have actually hurt you. In other words, such anger at the forgiveness of student loans really just comes down to envy - namely that other people received a benefit you didn't.
Actually, probably not. That's part of it, but if student loan debts are forgiven, the banks aren't going to eat all of that cost - the government is going to step in and help recoup some of that cost. So not only did I have to pay for my own college education, I'll be taxed to help pay for thousands of others, as well.
Honestly, based on the interest rates, and their comparison to the market rates on other things, I assume we're already having to do that. I know a lot of people that choose to just not pay their loans, then people who do pay them get higher rates to cover that.
Okay, yes, but then everyone else is paying that too. I.e. as a society we're all chipping in to create a good. The fact is, the forgiveness of student loans is overall a good thing. Because of timing you didn't get to participate in that good thing. Should that make you pissed? In other words, if you had veto power over the loans being forgiven would do so since you had pay marginally higher taxes?
“The only time you look in your neighbor's bowl is to make sure that they have enough. You don't look in your neighbor's bowl to see if you have as much as them.”
I'm almost done paying off my student loans, and because of that, I don't want anyone else to have to endure paying for student loans, even if I myself don't get the benefit.
Is it really? What happens if you don't pay your taxes? Eventually you will be arrested. What if you resist arrest? Do the police ask you to come along nicely with an Especially Firm Voice the second time? Eventually, someone will deploy state-sanctioned violence in this situation.
Stop whistling past the grave yard. That is how government works. They have guns, and prefer that you don't, just in case you get all argumentative and pouty.
> What happens if you don't pay your taxes? Eventually you will be arrested.
At least where I'm from, no you won't. Your debt to the state will grow and eventually they'll try to repossess it (through e.g. wage garnishing). They can't arrest you for not paying taxes.
No, I didn't. OP is trying to make this a lovely cost-free dynamic, where all we have to do is let our brother crabs get out of the bucket without dragging them down, man.
That's bullshit. In reality OP proposes to transfer money from me to people who made investments in human capital that didn't pan out.
Maybe that's their fault, because they invested foolishly. Maybe it's nobody's fault, because they invested in a positive-expectation bet and got bit by the variance (it does suck when you take out a loan to go to nursing school, and the feds decide to import a bunch of Filipino nurses instead). Maybe they were the victim of fraud, and someone sold them a bill of goods.
But it does have to do with you?
All of this affects the world you live in, the world that you interact with directly every single day. The house you live in, the wage you're paid, the food you eat, the medicine you receive, everything in your life depends on other people. Whether you agree with the way your government is handling this or not, it all still has everything to do with you.
Rather more direct when they're taking my money to do so. This isn't an abstract "ask not for whom the bell tolls, it tolls for thee" scenario, and the alternative is not personal autarky. OP is proposing a direct transfer, from me to a stranger, to which I am opposed, and therefore one which must be imposed by force. The alternative is not imposing such a transfer. Cut a check yourself if you think it's a good idea. Bullshit about the universal brotherhood of man and unity of the volk does not excuse arbitrary impositions.
It's such a weight off of the shoulders to have paid my wife and my student loans off a few months ago. Instead of the 20 or 30yr plan we put every extra dollar towards it and paid it off in 3.5 years. It feels fantastic! It's bizarre that student debt has become the norm and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major.
> It's bizarre that student debt has become the norm and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major.
Not so bizarre when you consider that student loans are very difficult to get discharged via bankruptcy. The loan issuers don't need to worry so much about whether you'll be able to pay it back or not, because it's more a question of "when" than "if".
Yeah that's a very good point. Interesting how they aren't easily discharged via bankruptcy. I may have to do some research on how exactly that got put in place and who was behind it...
Thereby naturally solving the problem. Schools won't be able to raise their prices to pay for non academic garbage like stadiums and fancy buildings, they won't have to compete with other schools accepting as many kids as possible to make as much money as possible to keep up with the Joneses with their newest toys.
And society can have a discussion again on how much it values educating its populace.
I believe two Georgetown law students were the ones that exposed the hole. They took out loans for their law degrees, $xxx,xxx dollars in loans and then tried filing for bankruptcy to get a "fresh start" with no debt out of school. The court said no and refused to let them discharge that debt.
That's the problem. You add bankruptcy back in and the student loan problem will disappear. Banks will start assessing each person's ability to pay back loans before giving them a lifetime burden of debt.
Fix bankruptcy laws, fix the student loan problem.
>You ask them their major, which will probably change?
Sure. And if they change then their loan status/situation will change.
Just like my mortgage through my Credit Union. The terms of the mortgage when I refinanced was owner occupied for 12 months after the closing date. If I move out prior to the 12 months I'm technically in default and the holder of my note gets to choose what to do.
Also, one doesn't have to approve loans for the full education. Approve loans per semester. If major changes the creditor could choose not to extend anymore debt. Likewise, creditors could require transcripts as part of qualifying for loans beyond the first semester. A students grades would have weight in whether to continue extending credit (granted some [particularly for-profit] schools might cheat and inflate grades but accreditation of schools would also be factored in loan approval... much like banks rely on home appraisers for mortgages).
Rather than assuming and saying "did you read the article?" Perhaps rephrase your point to be: "According to the article..." or "The article says..."
I normally would down vote a comment that starts with DYRTA. I haven't this time, I wanted to use the opportunity to express how I think we can maintain HNs civility. Thank you.
> Banks will start assessing each person's ability to pay back loans before giving them a lifetime burden of debt.
17-18 year olds often aren't going to have much of a credit score, so you're basically winding up excluding folks from low-income areas/backgrounds from a college education.
Are you going to ban students from changing their major after a few weeks?
Why are you asking these things like they're hypothetical? The way we did student loans prior to 2005 worked just fine. Low income students weren't excluded back then were they? Just roll it back to that.
> The loan issuers don't need to worry so much about whether you'll be able to pay it back or not, because it's more a question of "when" than "if".
That wouldn't be true even with the limitations on discharge in bankruptcy, except that servicers have been actively steering people with trouble paying into deferments rather than the various income-based-and-discharged-in-N-years plans (where N is generally 20 or 25.)
I thought I could pay mine off in 2 or 3 years of graduating, but ended up taking about 5. I paid my car off about a month ago, so I have zero loans!
I've been entertaining the idea of buying a house in my neighborhood. This town never had real estate inflation and bubble, because of rust belt economics. $150,000 should buy a nice place.
Comparatively, teaching is a low-earning major on average, as are many that wind up in a government or public service job. Teaching, btw, is one of the options with a history degree. We need public defenders (and the funds to properly pay them), but that isn't generally a get-rich job either. Especially in a small county or cheap area. And we need these sorts of jobs.
It seems mighty unfair to limit the money simply because a degree doesn't earn so much. I think such a system would lead to sub-par schools for the 'lesser' degrees and better ones for those with better earning potential.
>It's bizarre that student debt has become the norm
Our generation has no solidarity. We should just strike or protest and demand lower tuition. Or just not pay back the loans en-masse.
How come with the internet and twitter etc, we can't organize whereas in the 60s and 70s they could get their act together?
>and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major
The corporations would love to turn universities into training grounds for the skills they need. Yet another example of them pushing an externality back onto the rest of us again.
Education is not the same as training. Education is more than training and expands your mind.
Next addition to HN: automatically inserting comments complaining about the paywall and then explaining how the "web" and google search tricks work when Wall Street Journal links are posted.
Part of the problem is that the last few generations have been told the same thing: blue collar jobs aren't "good" jobs. You need to go to college so you can get a "good" job sitting at a desk because those other jobs are below you. If you take one of those blue collar jobs then you've failed and aren't "achieving your potential".
The grand irony in all of this is that the people who did go on to become plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the ones that are currently in huge demand. And over the next 20 - 30 years they're the ones that aren't going to be automated (well ... mechanics may become less relevant with electric cars rising in popularity). As much as I'd love to automate remodeling my kitchen I'm not holding my breath on seeing it happen any time soon.
>> Part of the problem is that the last few generations have been told the same thing: blue collar jobs aren't "good" jobs. You need to go to college so you can get a "good" job sitting at a desk because those other jobs are below you. If you take one of those blue collar jobs then you've failed and aren't "achieving your potential".
I think another part of it is that even low level office jobs now require some sort of degree simply because everybody has one. It's no longer something unique to have on your CV hence why so many people seem to be going for Masters degrees too. I know so many people only getting out of education in their late 20's and many of them got a degree, struggled to find a job, so went back for the Masters to give them ad edge.
Another problem all this education causes is lack of experience. If you decide at 16 or 17 that you're going into a trade you can get an apprenticeship and build up experience. If you go to college 'because that's what people do' and struggle to find a job based on your degree when you come out it's hard to even get a job in retail or sales because you're 23 with no experience.
One solution might be to only offer loans for degrees that lead to a job (doctor, lawyer, architect etc.) and consider things like History or Music a luxury.
I'm skeptical of not allowing loans for degrees that don't lead to jobs. The fact that a statistical argument can be made, like "Only 30% of music majors have jobs out of school" totally obscures the fact that there are causal factors that determine career success out of school. I don't think the issue is degrees that don't lead to jobs. I think much of the issue is people beginning degrees that they have no business beginning. I suppose this is probably related to to many people going to college in the first place?
I majored in music. It's pretty easy to tell who will have a reasonable career after college. The people who are well prepared succeed. The people who aren't usually flounder and subsequently go on to flounder after school.
Should we be telling people who are likely to succeed in their field that they can't get loans to study something they will probably do well at because of all the asshats that apply to these programs with little preparation?
I can see your point. Let's take music for example seeing as you majored in it and I am also quite invested in it. I can't think of too many music jobs that require a degree. It tends to be an industry where you work hard, from the bottom and learn as you go or you teach yourself. There are legitimate reasons to study it as a degree but are you really getting $60-100k of value from it? Some people might but even a lot of the people prepared to succeed are not going to get that amount of value out of it and likely could have got the information they need for their future through an online course, on the job training, or a community college course.
My main point is that a lot of people are doing degrees when they can get the information they need elsewhere, much cheaper, and they are not getting value for money. Unless we can convince people college isn't something they have to do being more specific about which degree paths get loans is the only way I can see to prevent those people taking out loans they will never be able to pay back.
Continuing the example, I'd say that at the non top-tier level it's pretty important to have a degree if you want to make more than 60k a year. It's really hard to justify charging more than 20$ an hour to parents of prospective students if you don't have some sort of degree. I'm assuming that most music majors will go on to teach. Granted, this isn't the only thing you need to be successful, but it's a pretty important component. I doubt that anyone who is going to succeed at an instrument could get the information they need from a community college. It sounds elitist, but pedigree is very important in music. The community is not particularly open about sharing information, so very few people (relatively speaking) really know what they're doing. And they tend to keep it to themselves/students.
Additionally, music is pretty unique in that very few people study music in college without having already studied it seriously for 10+ years prior. Typically, if you've been playing that long, you've applied to specific schools with specific teachers in mind. I don't think anyone that plans on being successful in the field will be able to get much from whatever clown is teaching at the local community college.
Further, teaching can be surprisingly lucrative. Teachers that consistently put out competition winners at the state+ level can charge upwards of 100 dollars an hour. Top tier teachers in the LA area charge 300+. The most expensive I've ever seen was 700 /hr. (This is true for piano, which is my frame of reference. I'm not sure what music teachers in other instruments make.)
Continuing some of the above points, basically every really good pianist in the US comes from one of two "lineages" of pianists. Either they can trace their teachers back to Schnabel, or back to Josef and Rosina Lhevinne. I would be very surprised to hear of any 2nd generation student of Schnabel's or 1st generation student of the Lhevinne's teaching at a community college, much less online. I guess what I'm trying to say is that it's really not possible for the students who would succeed to get the information they need in a cheaper form.
But back to the initial point, I'm not convinced that cutting off entire paths of degrees from receiving support in the form of loans won't represent some sort of massive loss to society. Consider all of the potentially lost art/literature/music? At any rate, I feel like either college should just be subsidized by the state, or let people just be personally responsible for what they choose to study (which is what we already do.) I'm heavily in favor of the former.
Interesting points. I agree that having a degree is going to help you be able to charge a higher rate if you are teaching. I disagree with a few points though:
> Consider all of the potentially lost art/literature/music?
I don't think that would happen. Music degree != creativity. You could argue that the people not creating teach others who do create but I think the majority of people who go on to create great art are going to do that whether they get a degree or not.
> The community is not particularly open about sharing information
Maybe it's because we're talking about music in such abstract terms but this is certainly not my experience. I've been working towards a career in mixing for the last few years and there is an abundance of great teachers and communities online for a small monthly fee. Everybody is incredibly supportive, helpful, and even share work when certain people have more than they can handle. From another angle I've always found musicians more than helpful teaching each other new things (e.g. I see someone playing with a technique I don't know and ask them to show me how it's done).
> At any rate, I feel like either college should just be subsidized by the state
I agree with you here. I live in the UK and the most anyone pays for tuition is £9k per year. I actually looked into going to the US for college and the costs were incredible. However a lot of that is because students choose to go out of state and go to well known schools. Maybe that's where the change needs to happen. Big subsidies for studying in state.
I think the idea of offering loans only for 'vocational' degrees is extremely damaging. It leads to people taking 'Software Engineering' degrees rather than computer science or maths or physics when really these less directed degrees generally allow people to explore what they are really most passionate about.
The idea of a university is not a place where one goes to get a piece of paper that certifies one as competent to perform a job - that should merely be a side effect - university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual. I acknowledge this is a rather idealistic view of our higher education institutes but I think it's one we should strive to make a reality.
> university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual
As long as we continue to believe this, nothing will change.
Universities indoctrinate, lets not be naive. Most schools have little interest in widening the perspectives of students. They are on a mission to unify perspectives. Indeed I would say that universities are more responsible for our Idiocracy than television - graduates really believe they have become enlightened when in fact they have been programmed.
Looking at my daughter's textbook at a top-20 college in the US, I was stunned. She took a (core) class in philosophy/psychology. Very little time was spent on classics (ancient philosophers, Kant, Hegel, Freud, etc.) They were replaced by contemporary researchers (often from the same university), often with a VERY extreme, one-sided, politicized agenda (feminist, etc.). Pretty sad.
Those old ideas provide a very occicentric, and, by extension, biased framework for understanding the world.
There are plenty of old ideas that are excluded by what most universities define to be classical education - yet the complaints are about lack of coverage for Kant and Plato, rather then, say Confuscius, or Cornel West. (For examples both less, and more relevant to modern thought.)
The complaint was directed at a Philosophy education, not at a Western Philosophy education. If said top-20 college promised the latter, and ignored the classics, that would be reason to complain. Otherwise, it's like complaining that your History class didn't solely focus on America.
The other assumption that I call into question is that Freud, Kant, etc are 'apolitical' figures - whereas a feminist writer is 'political.' This is, quite plainly, nonsense.
Plato's views on government, and condemnation of democracy are quite clearly laid out in the Republic.
Kant writings have plenty to say about freedom vis-a-vis government, state power, rights of property, revolutions, warfare.
None of these great minds existed in an apolitical, unbiased vacuum, where they could devote themselves to nothing but free thought.
When it comes to education, my impression is that people use the term 'apolitical' to describe political opinions that happen to align with their own. Hence, Hobbes and Locke are apolitical - whereas feminist philosophy so frequently is. Adam Smith? Apolitical. Karl Marx? Political.
> None of these great minds existed in an apolitical, unbiased vacuum, where they could devote themselves to nothing but free thought.
If that is the claim, then I agree that it is wrong. The most common criticism of Marx that I have heard is not that he is political, but that he is wrong (and perhaps incoherent). Similarly, I think that any curriculum that wants to replace the highly influential writings of Plato with another philosopher should make a case for why we should do this... an argument beyond the "inclusion" of additional points of view. I can sit at my desk and come up with a dozen different points of view. I don't think that each of those should be included in a philosophy class, in place of Plato.
You seem to have a chip on your shoulder - I said ancient philosophers, the list of names was not meant to be exhaustive, just a few, to give the reader an idea. Of course one would include Confucius, Buddha, etc in that list. A short post cannot be as precise as a dissertation.
Students are already exposed to too many radical ideas (supported by current political interests), which REPLACED the basics/foundations - that was my point.
Can you think of a core class that would include Aristotle and Freud? It'd be a shitty survey class where people came out half-educated, using phrases like "begs the question" instead of "raises the question", which is ideally part of the problem philosophy core classes should solve. I don't think a survey of modern philosophers is any worse than this. Philosophy half-understood isn't very meaningful.
Also, modern philosophers have a lot to say. I still recommend de Beauvoir and Wittgenstein to anyone who cares to read.
I can see how you thought I was advocating loans for only vocational degrees. Something like Computer Science I think would be fine as a job path is very clear and well paid. I can't speak for Maths of Physics because I don't know much about jobs paths from those. I was more talking about degrees that have no clear job path and which could don't need to be studied at an institution where you are largely paying for the name. If someone wants a loan to study history - fine, give them enough to study in-state or at a community college.
>> university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual
This is the problem. That all sounds great but it is not worth $100k and there are many other ways to have that experience that do not cost that much.
> it is not worth $100k and there are many other ways to have that experience that do not cost that much
You can get an excellent education at a state school for less than $6k per year.
The person who gets a degree in music theory, philosophy, or art history may not get a job that ties in to their major, but these people all leave college with skills in critical thinking, writing, the ability to meet deadlines, skills in communicating complex ideas to others, public speaking, etc. Most importantly, they leave with proof that they know how to learn and improve themselves. There are jobs for people with these skills, and they will likely be far more rewarding than gutting chickens on the line all day or waiting tables at the Cheesecake Factory.
what state does that exist in? No state school here in NJ is under 10k a year, and none of them are ranked decently except for maybe Rutgers, Stevens, and NJIT's architecture program.
The University of Texas has in state tuition for below 6k a year, and in some cases out of state tuition can come in at below 10k as well. [1] This is just tuition and administrative fees and doesn't include housing and textbooks.
Right and also tuition doesn't mean cost of attendance where there are all kinds of additional fees, books, room and board, etc. Cost of attendance is easily double that of tuition. So it's actually in the vicinity of $25K per year for a state university.
State college and community college in particular can be a lot less, and it's possible to even split the difference and do 2 years community and then graduate from the university by transferring credits. Of course, you have to have your ducks in a row to pull that off.
In reply to jazzyk, very few community colleges require that and even if you don't include those, most state schools will waive that requirement if you are over a certain age I.e. you went back to school.
Room and board is just a cost of life. You're paying it whether you go to college or not and it's easily affordable with a part-time bar job (obviously it'll be a crappy room and you won't be having steak for dinner but still not something you should need loans for).
Colorado you can do two years in community college for less than $6k per year and then two years at a state school for just over $6k per year if you don't count room and board which you'd have to pay anyway.
- university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual.
Sounds like a fun luxury good. Why should we subsidize such a luxury good and encourage 25-50% of the population to consume it?
Should we also subsidize luxury goods enjoyed by other subcultures, e.g. video games, muscle cars or strip clubs? If not, why not?
Educatuion is a public good. We all benefit when society is highly educated. The benefits might not be obtained at an individual level. That is, there will be some people whose education does not end up benefitting us all.
If you want to claim education has positive externalities, then make that case. But that's a little hard to square with BenElgar's idea that subsidizing some degrees more than others is "damaging". His comment argued nothing about externalities.
After all, if it turns out that the public external benefits of a physics degree exceed those of a women's studies degree, then the former should be subsidized but not the latter.
In any case, what do you believe the external benefits of education are?
If the public benefits of a physics degree exceed those of a women's studies degree then the former should be subsidized but not the latter? What if the former's benefit exceeds the latter's benefit by an epsilon amount? By your reasoning only the most beneficial degree should be subsidized but not any others. Perhaps you typed in haste and did not mean what you wrote in a strict sense.
I don't believe one can really quantize which degree has more public benefits. Some benefits are hidden, in the sense that their benefit isn't so readily recognizable. The benefits of an educated populace are manifest and, I believe, clearly worth the expense of public financial support.
To be more precise, what I meant is that both should only be subsidize to whatever degree they create external benefits. I.e., if a physics degree has $5k external benefit and a women's studies degree $5, then the physics degree deserves 1000x more subsidies.
And once you factor in the harms caused by signalling, it's far from clear it's even a net positive.
The benefits of an educated populace are manifest and, I believe, clearly worth the expense of public financial support.
The external benefits are far from clear.
If a person is educated and becomes a doctor, and then fixes my spine in return for money, the benefit is clear. But that benefit is fully captured by myself and the doctor, and he factored the cost of education into the price he charged me.
Can you name what the external benefit (i.e. benefits captured by third parties) is, for both medical education, physics education and women's studies?
The external benefits are quite clear to me. That they are not clear to you suggests to me that nothing I write or say will change your mind. So what's the point of asking me to list them? Are you merely trying to see if I understand the concept of a external benefits or genuinely trying know what possible external benefit there could be with someone being provided a subsidized education? I think you can think of some.
Are you merely trying to see if I understand the concept of a external benefits or genuinely trying know what possible external benefit there could be with someone being provided a subsidized education?
I'm trying to know what external benefits you think exist and why you think they are uniform across all fields of study, which is a much stronger claim that you made. I cannot think of any such benefits.
E.g., one might hypothesize that people in college develop useful skills that benefit others in a manner they cannot capture as wages. But it's a little crazy to suggest that a women's studies major develops those skills to the same degree as a nurse.
There is a big elephant in the room here - the terrible state of high school education in the US. In many (advanced) countries in the world you can be reasonably educated/knowledgeable with a high school diploma - Kant and Hegel (and Confucius and Buddha :-)) are discussed in classes.
It leads to people taking 'Software Engineering' degrees rather than computer science or maths or physics when really these less directed degrees generally allow people to explore what they are really most passionate about.
I share your concerns; on the other hand, is signing up for a 3-to-5 year course really the best way to help people discover their passion? As an exploratory path, it sound expensive both in resources and in time wasted for the student.
Around here, we have something called "summer university" wherein high-school students can spend a week or two getting an high level overview of the college course. It's extra-curricular, so few attend, but seems like a similar approach introduced into the regular HS calendar (say, the last two months), getting everyone to try a few courses of their choice, could provide even more exploration for much lower costs.
>I think another part of it is that even low level office jobs now require some sort of degree simply because everybody has one.
This is the key problem - education is often positional good, since not every job seeker can be better educated than the others.
>One solution might be to only offer loans for degrees that lead to a job (doctor, lawyer, architect etc.) and consider things like History or Music a luxury.
Better is to make asking about and providing your college background illegal, with some exceptions for doctors/lawyers/engineers/etc.
I don't even think it goes that far. A lot of young kids go to school because they can. It's autopilot, basically no different than going middle school -> high school. Find a school that'll accept you, pick a major when they tell you to, and don't worry about the loans until after you've graduated.
I saw this first-hand -- I want to a very good school that wasn't _quite_ top-tier. My classes were full of kids who were only there because their parents had decided they should go to college, and then the parents fell in love with the school.
The trades are difficult to completely automate but there are similar impacts from deskilling and moving work into factories.
When I say deskilling, I'm talking about creating products that reduce the amount of skill required to do a task. This increases the pool of labor competing for the job. It also often increases how much a single person can get done in a given amount of time.
Yep, the laser cutter I operate can do in a day what it was taking 4 apprentices to do in a week. And it can do things no human could possibly do with hand tools.
The next thing we'd like to get us something like the Voortman V808[1], that thing should cut or labour input requirements by 50% or more.
That's the interesting thing. It's the opposite of deskilling that the parent was talking about.
Instead of removing skilled jobs and increasing a job pool of less skilled ones, tech can increase efficiency of master craftsman to the point where there is no need for the less skilled/experienced apprentices, thereby compressing the job pool instead of expanding it.
Not only that, but "tradespeople" start earning right after high school. That four-five year head start is more meaningful than people realize. You could be making a down payment on owning your residence while your friends are still undergrads. Nothing wins in investing like being early.
That depends on whether or not your trade requires some sort of qualifacation or not and whether your high school or surrounding area offers free courses in it. (Occasionally folks will pay to train you, if you meet minimum qualifacations, but you also must work for them for some years).
Otherwise, you wind up going to school a couple more years. You are still likely going to start work 2-3 years sooner than someone going for a 4 year degree.
Conversely, leverage allows you to make more money, and if you can use education as leverage to put you into a six-figure-a-year career trajectory, that's going to pay off.
Technically, some really need to go through an apprenticeship. Plumbers take a while. Most also need to go to a trade school. Your point about a head start stands though. Plus its very hard to ship those jobs overseas.
They aren't good jobs. The average salary for plumbers is around $50-55k or so, right around the median for the US. Ok, but certainly not good. For roofers and mechanics, you're significantly below the median around $35k, basically in poverty especially if you have a family. I don't think encouraging people away from education is the problem when salaries are this low (poverty levels).
Not too complicated an equation— one can find a basic room in a share for $1k a month uptown or in Chinatown, plus $110/month for a Metrocard or $10/month for Citibike, plus a reasonable amount of money for food like $300/month (cook a big pot of something a couple days a week, pack lunch from that, and have a few meals out for a $10/day diet).
That's about half of $35k for basic expenses while living in Manhattan, which leaves plenty of room for taxes/savings/going out/travel/etc. And there are a lot of great free events in NYC, too.
Almost exactly this. Cheapo room in a two bedroom up near the 125 A stop, monthly metro card, not eating out too much and once a week stocking up on staples from Trader Joe's. Left plenty of overhead for hitting up bars with friends on the weekends, travel for the holidays, etc. I wasn't living lavish by any means, but I also wasn't struggling to make rent.
Hah, i bet its way higher. Anyone that owns their own business like that is probably fudging their income numbers and writing off as much as they can. I wouldn't be surprised if the income was 2-20x higher for established self employed people.
Here is the thing: A lot of jobs after college are bad jobs if you go by income only. The average teacher's salary is around 40-45k, beginners make much less. Preschool teacher with degree? Barely over minimum wage if you are lucky. Sure, you get summers off, but you also don't have a paycheck during that time.
Business degree? You might be a retail store manager because that is what you found that you actually have experience in... because you worked retail through school.
>>...fer instance: "Here's what 10$ an hour looks like! Had to put in my 2 weeks."
And pretty much every reply is "I make way more than that, what are you thinking??"
I'd imagine the guy either doesn't know how to show up consistently and on-time, or has such a severe lack of social skills that he can't properly interview for a job. If you can weld like that and can't find a job making more than $10/hr you are doing something SERIOUSLY wrong.
IIRC just this week the US Census released a median household income of $56,000k. Even traditionally poor-performing demographics are well above $40,000/year at median.
Most of my neighbors are "blue collar" entrepreneurs who started in trade jobs and eventually founded their own construction, electrical, or plumbing contracting companies. Most of them make way more money than software developers. Well into the six-figure scale.
My parents retired from teaching making roughly that both with masters degree plus max credits. Either that's a good wage or we grossly underpay our "overpaid" teachers.
Contracting trades (electrician, plumbing, HVAC, etc.) make great money. I helped a few friends get in the business; they couldn't find jobs with their ITT tech degrees, so I hooked them up with a few general contractors to make ends meet. Fast forward 10 years, and all three of them run their own crews (HVAC mostly) and easily make $200,000 each. They do work hard, 7 days per week, but love their job and take 30 days off between jobs during peak summer. Hanging around their group, I realize that those who succeed in this area have one thing in common: total commitment to hardwork. Very simple, and something many people have in spades but are applying it in dead end desk jobs.
> And over the next 20 - 30 years they're the ones that aren't going to be automated
Not true. Look at any construction site and labor-saving innovations abound. Plumbing comes in new materials like PEX, which takes less labor to install. Large parts of houses are fabricated off-site and shipped in on trucks. No job is immune from automation and increased efficiency.
Blue collar employment has been falling in this country, replaced by either knowledge work -- which usually requires further education -- or service industry jobs. If there were truly huge demand for many of these professions, pay would be skyrocketing, encouraging more and more people to go into these professions.
I agree that there are and will continue to be good skilled trade jobs and many people would be better served by pursuing these options, but there is tremendous value for the average American in a college degree. The problem is that a lot of Americans are unable to graduate college, and waste their time and money pursuing a degree instead of doing something more inline with their talents or their drive.
As it stands, automation will most likely continue to primarily affect blue collar workers before it hits knowledge workers. Long-haul truck driving will probably fall relatively soon and factories will continue to have more and more automation.
OTOH, I've been trying to get a bathroom remodel done for about 18 months at this point. (Hopefully about to start.) It's 1.) Not cheap and 2.) Isn't about to be done by a robot.
Not for everyone obviously and it's not big pay but I know what I pay contractors and it's nowhere near minimum wage.
> The grand irony in all of this is that the people who did go on to become plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the ones that are currently in huge demand.
Huge demand? Not in the US. Trades salary growth has been flat.
The demand for many of those trades largely follows the rises and falls of the housing market. I grew up with family in that industry and have seen both extremes of it. Right now, in this area, there is more demand than labor. Several years ago the opposite was true.
The problem with the jobs you're listing is that they are tied to the individual's physical health and capability. A 50 year old guy can sit at a desk and work, but many 50 year olds don't want to go fixing roofs.
Sure they can run a business and hire other plumbers/roofers, but then they are doing desk job again.
The other irony is that when college is paid for by taxes of the entire society, both those who went to college and those who didn't, the ones who didn't go to college end up paying for those who did. Net, it's literally a transfer from the non-college educated people to the college-educated people. Absolutely insane.
Even if they were not able to get a college education, their kids might. Also people who benefit the most for college will pay more. The productivity that society gains as a whole will offset the costs.
To me, the issue started when college became about securing a career over expanding / exploring intellectual horizons.
The result of this transition incentivizes the wrong output: instead of kids coming out of college able to freely think for themselves, now they come out begging for direction.
Non-salaried jobs are not stable, it's not about "good"ness. If you want to provide, find a salaried job. If you want to weather recessions, find a salaried job. If you want to have a career as opposed to a job, start with a salaried position and work your way up.
At least this is how I was raised. I don't think I have an opinion myself aside from enjoying the idea that I'll likely have the same job in a year I do now.
IMO, a large chunk of this would be resolved if federal loans where limited based on tuition not just need. If a school charges more than ~20k/year then students can't apply for federal loans and private loans become dischargeable.
This. You're also just looking at private schools there; whereas students could attend public universities in their state and realize benefits that their (or their parents) tax dollars have defrayed the cost of tuition. The amount of money that amounts to poor spending on "needing" to live on campus, "needing to go to your top pick school", etc. is a little astounding. Also astounding is the ability to finance things like living expenses / room & board, which are often a huge component of total cost
Who sets those limits and how are they enforced over time? What if colleges find other ways to charge you money (accomodation, usage fees for equipment etc).
The great majority of student debt holders owe less than $30,000.
I'd like to see more direct funding for schools and a shift of federal support to competitive grants, but those aren't huge numbers when you look at a degree bringing in hundreds of thousands of extra dollars over a career.
Grants aren't as egalitarian as giving anyone who wants it a loan, but they can be expected to distort the market less (because schools have to compete for people who don't get them).
They may not seem that large, but I suspect that compounding interest effects and the fact that the debt is there very early in peoples lifetimes make them very heavily weighted in terms of the effects on lives and economies.
The interest compounding on a $30,000-40,000 loan wouldn't really be a student loan issue, it would be a job issue.
The interest on the loan sizes I've mentioned is typically going to be less than $4000 a year, so if they pay $6000 a year the loan will go away quite quickly. That's a substantial amount of after tax income for a lot of jobs, but students should be looking at the debt in those sort of terms, that it is going to be one of their main payments for a while.
Not the interest of the student loan, the 'interest' of the opportunity cost of paying $4000-$6000 year instead of some other use (eg personal or retirement savings, or saving for a house). There is a huge forward cost in their financial quality of life because of these early debt payments.
As a college graduate, I'd be ok with student loan relief as long as it's funded by a tax on college graduates (and it has to be preceded by something preventing this occurring in the future, like making student loan debt dischargeable under certain circumstances)
Seems twisted to tax the rest of the country who decided not to or weren't able to participate in college in the first place
As someone who has never spent a dime on student loans, I would be happy to help bail out graduates with my tax dollars. What do I care? I've been paying for the trillions dollar war for 15 years now, so paying for something this would be a breath of fresh air.
Situation: Government guarantees student loans and forbids issuing of loans based on likelihood they'll be bad back.
Problem: Schools charge max loan value. Students can't pay them back.
Solution: Give away free money.
All the government has to do is nothing. Just stop doing things. Stop being involved. The problem will fix itself overnight if they did literally nothing.
The education market won't fix itself because students are not in a sufficiently secure bargaining position where they (collectively) can make an informed decision that corrects the market.
How is the education loan market any different than the automobile or home loan market with respect bargaining position and ability to make an informed decision?
Loan issuers are forced to issue loans without regard to the likelihood those loans will be paid back. Someone seeking a computer science degree from Stanford is treated the same as someone getting an English degree from a 4th tier state school. That's utterly insane.
Well with a car, if it always breaks down, you'll likely buy more cars through your lifetime, and the quality of the product has a feedback loop on the performance of the company. With a house, same thing. Worst case, if it's bad, sell it replace it with something else.
But with education, students have likely never bought a car, or a house, and don't have much background or life experience at this point in their lives and you want them to make a one-time, long-term, investment decision in a non-fungible asset?
Most students only make the decision once and whatever you learn about the school or career not meeting expectations isn't ever applied again. Worse, you don't find out first hand what quality your education really was until after leaving the college. Worst, the decision isn't really couched in terms of a ROI type investment decision (maybe thats changing), but that's certainly not the only factor at play in student school decision.
That's not a good basis for balancing a market.
> Loan issuers are forced to issue loans without regard to the likelihood those loans will be paid back.
Private loan issuers aren't forced to do anything. They can always leave the market and invest elsewhere if they cant figure out how the serve the market.
First of all, most education loans are handled by the government. Most students can't qualify for normal private loans due to little things like lack of credit history. There is really no way to tell if a 17-18 year old just legal enough to get a loan will be able to pay it back in 4-8 years after completing their education. This is why the government backed loans are issued in this manner. most middle to low income students need these loans to go to school. Private student loans, however, usually have a cosigner with good credit.
Second, students don't get much choice in loans with the government-backed loans. There really is no 'market' for the student to shop, nor does the student have bargaining power except for refusal to accept the loan. With automobile or home loans, one can do things like have a larger down payment, shop aroudn for interest rates, or improve their credit rating. Students have none of these options.
Third, informed decision? You get promised for years as a young person that college is the key to having a comfortable life. The university promises all sorts of possible careers with the degree, and quotes numbers that may or may not be true.
They should probably make general core classes free, but make students pay for anything specialized and solely related to their major. This would strike a balance between having an educated population, and having education focus on subjects that are in-demand and beneficial to society.
Many generations before now either had access to very low or free tuitions from public universities, or fairly low tuitions (relative to future earnings) for private schools. Society subsidized those costs because it was an excellent investment on future economic growth.
Somehow we got twisted into this track of thought that everything must be individually accounted, and student became individually loaded with the debt of their education. And because students as a group are in a poor bargaining position for tuitions - the inflation of education costs skyrocketed. I think they are the only life cost that gives healthcare a run for it's money in it's ability to exceed (by multiples) both the growth in the economy, let alone the growth in personal incomes. This cannot continue.
Plans to give student aid to income below a certain threshold will only serve to further cause tuition inflation. It is a case where individual allocation of cost/debts is much less efficient and harmful to our economy than social allocation of the cost. I think we need to go back to funding public universities out of direct state and federal budgets so that public institutions can offer low or no tuitions. This way, gov't organizations with the budget leverage, with much better visibility and oversight can keep costs down at public universities. Low public university costs will also help cap the excesses of private tuitions via market competition.
Unwinding the current mess of student debt is also a huge issue, but should be undertaken too (but I'll leave that to some other time...)
It really requires a rethinking of the need for college, how college should work, and how it should be paid for.
Most undergraduates have no real need to obtain a gold-plated degree. Undergraduate education in nearly all fields is well-understood and can be delivered adequately at low cost. This is why foreign countries that aren't wealthy still produce excellent undergrads. Only in the US do we believe you really can't get educated unless you went to an expensive and/or elite school.
I'd like to see something similar to the risk retention rule that was supposed to be put in place for mortgages by Dodd-Frank.* Colleges should only get 80 or 90 cents on the dollar from student loans and have to wait for the rest until the loans are repaid (if at all). Perhaps a sliding scale could be used depending on the amount borrowed, with more expensive schools bearing more of the risk.
* I say supposed to be because the rule was swallowed by an exception during the regulatory process and now only plays a minor role.
How about colleges and universities stop price gauging the population? Or, eliminate student loans, so the population will not be able to afford their ridiculous rates and force the cost down.
If it makes you feel any better, they will be the generation that will get to pick up the tab for climate change caused by yours (And the one before it.)
Not to mention that college was a lot more affordable two decades ago...
So, let's see, if you were a black person in 1863 who'd been enslaved but bought your freedom prior to the Emacipation Proclamation, you'd resent the Emancipation Proclamation since from then on other wouldn't have to buy their freedom?
Then instead of feeling bad that others got a benefit you didn't, perhaps be happy your college education was much, much less expensive than those that came after you.
This will impact every other aspect of our consumption economy...home sales and even car sales will be impacted as working adults have to dedicate more and more earning potential to paying off student loans...far in excess of any real economic value these degrees have provided.
I hate to get all "Zero Hedge", but this really does stink of some conspiracy to turn the middle class into lifelong renters instead of owners. The independence the middle class once had by achieving a debt-free existence and owning their own residence is being wiped out, and as a result, the middle class itself will effectively be destroyed.
Home ownership is a bubble created first by VA and then FHA subsidized financing.
Mortgages were sort of unusual - housing was simpler then and people just paid cash. Sears sold home kits - of 12,000 pieces they said could be finished in 90 days by the owner - and while they offered financing, they topped out @ 60K in 2016 dollars. I don't think the financing was a "mortgage" per say, closer to consumer credit. People pay $60k for cars on four and five year notes.
It doesn't need a conspiracy - macroeconomic forces and demographics are more than enough. On a societal and generational scale, it's basically impossible to make things now and have them be valuable in the future. Roads crumble, machines break down, inventions become obsolete, and in general what you did thirty years ago is of no particular value today. The one small exception to this is deciding to pump oil out of the ground later instead of today.
So if saving real goods and services doesn't work, what does? You can make things now, and sell them to people for dollars or some equivalent promise of future goods and services. Then you can later redeem these for the stuff you need later.
Oh, and did I mention the generational stuff? Small family sizes and aging Baby Boomers means that there's huge pressure to turn today's resources into promises to give people stuff later. Hence, debt.
I'd actually prefer if a conspiracy was responsible for this. Economic forces make a lot more people work a lot harder to push back against changes. Price controls are a great case in point for this.
I'm really torn on this for the same reason I'm torn on what to do with the people in jail for marijuana offenses:
On the one hand, yes what's happening is wrong. On the other hand, you CHOSE to go into debt knowing that you would have to repay it after you graduated. Just like people who CHOSE to deal marijuana KNEW it is illegal.
Disagreeing with the law doesn't entitle you to break it. Similarly, disagreeing with your loan terms doesn't entitle you to not pay them.
I CHOSE to go to a cheap state school to avoid this fiasco. Now others who didn't choose prudently get "relief"?
At one point do we just say, hey, you made shitty choices, sorry. Where is that line? I'm not saying we shouldn't do something, just offering up a different point of view.
You are correct. Disagreeing with the law obligates you to break it. Or at least it does according to Thoreau, Jefferson, Gandhi, ML King Jr, et al.
But the difference between a law and a promissory note is that the legislature didn't get your explicit approval before passing the law. The promissory note has your signature on it, under a promise that you made to pay a certain amount at a certain time in exchange for valuable consideration.
The note is a contract, and you can make any contract you like. But we do have rules for the types of contracts that the state will help to enforce. The parties to the contract have to be competent, and the contract can't force anyone to do anything illegal, and everybody has to understand what they are agreeing to. If it was, indeed, a "shitty choice" to take a loan that you couldn't reasonably pay back, there may be an argument there that the contract was lopsided and unconscionable from the start, and being forced to repay it on the original terms would be rewarding bad behavior on the part of the lender.
Defaulting on a loan because you now disagree with the terms is less ethical than dealing weed because you disagree with cannabis prohibition. You should really support clemency for nonviolent drug offenses before considering forgiveness of student loan debts. One is a matter of being forced to live under the (somewhat arbitrary and capricious) edicts of the powerful, and the other is about breaking promises after already realizing the benefits from making them.
The problem is assuming that borrowers are fiscally competent. We know this to be false, even among home buyers. 18 year olds, who have every adult that they trust telling them they must go to college and take these loans, don't stand a chance.
The loan industry not only knows this, but they optimize the system to capitalize on it. I don't think the student was represented when laws were passed to prevent discharges in bankruptcy.
A professional loan officer just has to fool some kid one time, and closing that 15 minute deal often destroys that kid's entire adult life.
We provide Donald Fucking Trump more protections from financial disasters than well-meaning students who have never had a loan or investment in their life.
Coincidentally, he is one of the many who are exploiting this system, with Trump University existing for little other purpose than siphoning this taxpayer-guaranteed free money.
Then when the cards inevitably collapse, half of the population eats up the propaganda about "personal responsibility".
Personal Responsibility would be not taking idiotic risks and getting the government to pay for it.
I can assure you that approximately zero students took out loans thinking they wouldn't be able to repay them. But we know the lenders knew better, because they won't give out these loans without a cosigner and/or a government guarantee.
You might also be able to argue that debts that cannot be discharged in bankruptcy represent a form of indentured servitude. And that is illegal now in the US, thanks to the 13th Amendment.
In fact, indentures were a better deal, because the indenturee was guaranteed to have the job necessary to fulfill the contract. Student loan issuers don't have to accept work in lieu of cash.
You would seriously keep people in jail for marijuana charges after marijuana was legalized?
If a mistake is made, remedy the mistake. The government made a mistake in providing a glut of cheap money and prohibiting the borrowers from discharging the debt in bankruptcy. They need to fix their mistake by undoing that.
What you're proposing is like abolishing slavery, except for everyone who is currently a slave. "Sorry guys, there will be no NEW slaves, but you were slaves when it was legal, so, tough"
Your response doesn't make any sense. Throw a hissy fit all you want about your pot, but you KNOW it's illegal and if you choose to ignore that that's on you.
Same as with loans. You choose to take out the loan, that's on you.
If I choose to run my car into a crowd I suffer the consequences, not Chrysler. (And yes, I realize this analogy isn't perfect)
And comparing this to slavery is plain stupid. That is an issue much greater than this regarding equality for everyone. You didn't have a choice to be born a slave.
And here I don't even necessarily agree with not helping these people - I just want the issue addressed of where we draw the line between poor decision making and poor choices.
That description bears similarities to how slavery was constrained in the US: The international slave trade was abolished in 1800, but existing slaves, and their children, could still be kept, bought, and sold, until 1863.
Well, if you want to go there, technically slavery is still legal, but only as a punishment for a crime:
"Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
The point about 1865 is that 1863 refers to a military order that applied only to the states in rebellion. There were, IIRC, on the order of 50k permanent chattel slaves in the Union that were not affected by the application of the proclamation to rebel states as the Union secured control of them, and we're only freed by the ratification of the 13th Amendment.
The only recent grads (within 5 years) with student debt in my circles who could afford and have bought a house recently are:
1. Doctor & Finance couple with combined income $400,000+/year
2. Pharmacist & Finance couple with combined income $200,000+/year
3. Science Research & Quant(finance) couple with combined income $300,000+/year
Interestingly - all have finance or medical field/science exposure..
The rest are renting forever paying of debt with no plans to buy soon (we are in hot real estate area).
I dont see who will support real estate prices going forward.
"Sold as is-where is-no disclosures available-Seller has had no knowledge of property-no representations made as to a warranty-habitability,marketability.express or implied."
I guarantee you that the seller _DOES_ have a knowledge of the property, and that's why it's only $19,500.
And in real estate, where flowery language is the name of the game, the above is coded language for: "Bulldoze it and build" (come on, "no guarantee of habitability"?)
Likewise, your place in PA - did you look at the photos? There are entire exterior walls covered with (torn) Tyvek and tarps. There are unfinished walls, roofs and floors.
Another, a cinder block hoarder dwelling that is missing multiple windows.
I get that you're trying to make a point, but you're also picking out not just low end locations, but houses that are in some cases quite possibly condemned, or should be.
Only two of those looked remotely habitable (and not a matter of pleasantness, I mean from a health and/or safety perspective).
The one in KC is bad area of town, and don't even THINK about sending your kids to KCMO schools. Move across the state line to Kansas and you won't find anything for under $175k.
While I agree with your sentiment in general, do you really think it's normal to be in a house 5 years after graduating? That's still "first steps of my career" phase. Completely unheard of even when I was growing up where I'm from - you would have been seen as doing very well to own a home in your mid/late-20's.
Anyone have actual stats on homeownership vs. age? Here's one I was able to dig up, maybe someone's got something better. This seems to say that 21% of people under 25 own a house, and 32% of 25-29's own a house.
Weird, for boomers in NA it was normal to be in their own house immediately after graduating. Not many lived with their parents after the 18-22 range. Not having a place by 23 would have you defending your reputation.
No one said "should", I'm just saying what people did. It was very common for young, working class couples to get a starter home, even with only 1 partner working.
On the surface this seems hyperbolic but its true. The area I am at has seen wealthy Chinese investors buying up property in the new developments and then leaving it to their children to manage. It's almost impossible to buy a house here in the sub $300k range due to the rapid buy up and flipping they're doing. Most of them don't sell either - they rent, leaving people here in perpetual rent cycle without the ability to own property in a decent area.
Thanks to the new health care laws, states must (or will be) spending more money on Medicaid which takes money away from public higher education. As it is, the boomer generation is funding a far lower proportion of the state public universities than their parents' generation did for them, which is really unfair.
It is because of increased Medicaid costs and also because boomers aren't financing the proportion of state higher education that their parents did that many of today's young have higher student debt than it the past.
Doctors don't haven't to incur debt in medical school if they spend four years in the military as doctors.
That first point i'm not sure if it is true or not: My understanding was that the federal government was going to pay most of the money. Besides, if we as voters thought a little more and demanded better funding for schools - and say, cutting money spent on unwanted or unneeded military equipment - we could get it.
Your option for doctors to not incur medical debt is very hopeful. First, I doubt the military has enough positions for all the doctors to fill, and I doubt all doctors would be fit enough to qualify for military service. On top of that, that is 4-6 years longer before they can actually practice.
There should be a way that is much better than sending potential doctors and surgeons off to war. For instance, forgive loans to folks that work in general family practice for 7 or 8 years, less if they move and practice in an area that is in a high demand (poverty stricken area) - with the disclaimer that they must take all forms of government backed insurance.
My call is that we will have a student debt relief fund when enough government folks get scared (within 5 years my guess). So basically the printing press will turn on and we will bail out students. Watch out for all the controversy that's going to come with this bail out.
College is just all sorts of disgusting in the US right now. I support relief, but I'm sure that we're going to have to see a massive crash in the system before anything happens.
I managed to go to a small public university after the tuition hike but before the Great Fees Gouging. I'd probably have escaped with $5,000 less in debt if I had started with my state's (Georgia's Hope) merit based scholarship instead of having to build up 10 semester hours totally on Federal UnSubsidized Loans the first year.
At that point, used Ebay books could run you well past $1,000 a semester. Hope only gave you a $150 for books. Hope also did not cover fees. Those started at about $800 every semester when I enrolled. My 4th year, they had hit well past $2,500 per semester. Included in that was $150 to build a new student recreation center that I would never use since it wasn't even being built yet.
The amount of hustle I had to do just to escape that school with minimal debt was insane. My overloaded schedule (because semester hours past 12 didn't increase your tuition or fees) meant I needed a job that let me do study or homework while working. So typical service jobs off-campus were out of the question. My year basically was applying for summer retail jobs, lying my face off during the interview that I was going to stay on past the summer, and then of course quitting. I'm basically black-listed from several retailers for quitting for this reason. Christmas was always easier because those jobs are naturally seasonal.
During school, I'd tutor various core classes under the table. At my university, this was considered quasi-against-the-rules. Tutors were supposed to go through the Student Support Center. They'd pay you hourly minimum wage and set you up with other students for free. Tutors who were students caught not going this route were usually sanctioned by the university and threatened with all sorts of administrative punishments.
Naturally, this was unacceptable to tutors, so we all snuck around advertising by word of mouth and meeting off campus. I mean, when I can easily pull $100 a session as the only person willing to try to cram Plato into your brain, why would I go through the SSC? Calculus was a bit harder because there was more competition, so that usually ran about $60 to start. Once I had kids getting their B's and telling their friends, I was able to pull $100. I ran a group rate for a Fraternity that was a flat $350 a month.
I lived off campus, because rent on a 3 bedroom, 2 bath was $950/month plus utilities. Speaking of hustle, keeping those bedrooms stocked with roommates was it's own drama. Kicking roommates who fell behind was even worse. The lease was in my name, because most places I went to rent a room were on 6 month leases and headed home every summer. I wanted something more permanent since I was staying in town year round.
All said, I managed to escape with just over $30,000 in debt. That's tuition, fees, and about $10,000 a year to supplement all my other income. I hit a job immediately and started burning it down as fast as possible. I landed a better job with nice, $10,000 yearly bonuses and finished murdering it.
This was right as the next big wave of inflation hit higher education. Now? I went back and poked some of my social circle in that town. Getting out without $60,000 in debt is basically impossible. If you live outside of a 10 mile radius of the campus, you are required to live in the dorms your Freshman year. Literally every course uses some sort of book with an online component. To access that component, you have to buy the book new to get a code. The university regularly charges current students fees to raise money for buildings that won't be built for 5 years. They recently charged a parking fee, and then made all lots on campus hourly paid parking. The lot that parking fee is for? It's about a 4 minute walk off campus. Good luck i...
A good read, and I agree on your points. Like you, I worked my way through undergrad (including a period in the national guard and active army), and escaped with only a few thousand in debt thanks to that. Masters and PhD were free, but that's not too unusual in my area (applied math).
I'm teaching one class as a part-time instructor now back at my old university (basically for beer money on top of the day job), and it's blowing my mind how much more flashy the campus is. And naturally, how ridiculously expensive it is after only 10 years. The focus on "student life" facilities strikes me as an odd set of priorities considering how long hiring and pay raise freezes for faculty seem to last.
The mandatory online book thing is pretty insidious. We're required to use it by the department, and I can see how there is a kernel of a good idea there. It basically helps you run gigantic course sections while grading all homework for you, but while simultaneously killing the secondary textbook market (which is pretty evil). Worse, they are clearly implemented by the lowest bidder and break every web standard you could imagine.
Basically, with increased class sizes and mandatory online content, every core course is slowly turning into a weird online hybrid class. I think this is decreasing the difference between a traditional education and a MOOC bit by bit, which is eventually going to give a lot of universities a bit of an identity and marketing crisis.
Pearson, Wiley, Mcgraw-Hill et. al. are the entities that I would most like to see disappear when the college bubble pops. Free open-source community maintained textbooks seem like the obvious way forward to my software developer brain.
On the bright side, I do enjoy actual lecturing. It's a lot more fun when you can do it with few or no stakes, since I don't have to rely on it for a living. I'm literally on the exact opposite of the spectrum from a tenured professor, but I weirdly feel like I have to same level of freedom.
I would prefer an approach(I am a US citizen) in which if we are going to call college loans financial aid than every student should upon graduation get a 10% more money but in small business grant form so that they can form a small business.
532 comments
[ 1.1 ms ] story [ 385 ms ] threadhttps://en.wikipedia.org/wiki/Survivorship_bias
Struggle can also cause bankruptcy, violence, and misery.
Not having an emergency fund is about the riskiest thing you can do.
> If you owe $2k every month to NelNet or another institution, it's much harder emotionally and financially to quit your job to travel the world or start your own company.
The emergency fund helps with that. When built up, it should cover 6-12 months of zero income. Amassing it first means losing a job doesn't mean deferring payments on the student loans and winding up with years more payments to make as a result.
> We had Federal Loans and the interest rate was still 6.5%
One of my wife's student loans is at 2.5%. At 6.5%, it's not below inflation and paying it off makes more sense.
But sometime emotions get in the way of financial strategy.
Sorry, I have to laugh. This is the most HN thing I've read today. It's a tremendous privilege to have the option of quitting your job to travel the world, rather than the fear of being arbitrarily laid off, and failing to put food on the table or lose your house. My redneck might be sticking out this morning, though.
I have moved around the country for work quite a bit, so I do feel fairly well-traveled. At least in the continental US.
At least colloquially, this term signifies one has been to other countries (or better, other continents) and visited other cultures, immersed in other languages, other governments, other ways of eating, etc. One who stays within a country would not (in my opinion) be "well-traveled", despite the country being enormous. My 2cents.
I define well-traveled as someone who has traveled a significant distance based on their circumstances in life. By your definition a large portion of the people living in the EU are well-traveled just living their normal lives. Which is a far easier thing to accomplish than someone in the US. I have driven from Orlando FL to Las Vegas NV, a distance of around 2300 miles or so, twice. How many countries does that cover for that range in the EU? I have visited many locations around both cities and in-between. I have lived in four states in different areas of the country, each with their varying cultures. I can tell you for a fact that the Southeast and Southwest US do have different cultures, even though they both sort of speak the same language. Walking through downtown Los Angeles after growing up in small town Alabama is visiting a different culture.
Just my 2 cents.
I agree, there is a kind of snobby adherence to the term by some people, as they see the point of becoming "well-traveled" to have been able to afford it.
I politely disagree that the term -- or idea it was meant to abstract -- is to convey how much distance one has traveled, but rather how varied the places have been that one has lived in. Just a short quick visit, e.g. a many-hundred-mile 2-week scourge through Europe, robs you of the experience of living in a non-tourist area where the environment is nothing like what you are accustomed to.
The idea (phrased as "well-traveled" or otherwise) from my perspective is to learn that many countries have very different ways of life; some have better/free access to health care, or not at all; some have almost no diverse ethnicities (e.g. China), or that in the middle-east, you can have countries with a strong diverse mix of many religions (Lebanon); how foreign country governments treat you (no VISA, vs. register yourself with police everywhere); etc.
For those with hard lives, many can be some of the nicest people. Visit China, other south-east Asian countries, rural India, Africa, as well as the well-developed nations in Europe. The most important trait one should take away from travel is: first-hand experience at the range of life that exists on this planet, something which cannot be read from a book.
We take for granted many of the artifacts and ways we work in our lives; seeing others gives us perspective that becomes a useful skill. I wholeheartedly agree that these skills can be developed without leaving the country, among our own rich, poor; and we are fortunate to have all four climates within our borders, too!
Edit: If you are supporting children, the above advice may not apply.
Thank you for recognizing that.
It's also worth noting that 2.5% is still higher than inflation in the last couple years.
Yes, people should decide how much debt they want to take on.
There are vast differences in the value of different degrees (cost and earnings). It's people's responsibility to educate themselves. The rest of us shouldn't have to subsidize someone's terrible decision to go into debt for a degree in basket-weaving.
If you're old enough to drive a car, join the army, or be charged as an adult, you're old enough to realize that paying tens of thousands of dollars for a degree in musical theater isn't a great idea.
It's not rocket science. There are tons of resources online to help you figure out which degrees and schools are good value.
And how many finance courses would they have taken during high school?
That's not going to happen because it's politically easier to continue to subsidize failure than to draw the line on this bullshit and reward sensible hard working people like you.
...but don't get salty because the debt won't vanish. I have no doubt that if an education loan is forgiven, it WILL affect that persons credit rating. Much like when a debt is forgiven/charged-off. Also, charge-offs are typically treated as a form of taxable income... so these people will pay one way or the other, and likely take a long-time credit rating hit.
There's simply no way that you will want to forgive the student debt... so pay them off if you can! The punishments of 'forgiveness' simply have to outweigh the benefits or the system will be gamed until broken.
That's not much consolation. I wouldn't be happy if the government decided to simply pay people for making poor financial decisions, even if we recovered x% of those payments through taxes.
I'd still be paying for it with my massively higher taxes.
Just get the government out of the student loan industry. Let the market signal which degrees are valuable and allow students to discharge through bankruptcy (but ruin their credit).
Government already does that in a myriad of ways, some more morally accepted than others. It's almost part of the base definition of what we expect the government to do, if you really think about it. Paying for the poor that made bad life decisions and lost their job, the sick that didn't save for medical expenditure, the parent that had one-too-many kids and can't pay for their food/schooling, etc.
I would argue they are all very similar, buffering and protecting those that are incapable of providing for themselves, either by inability or conscious inaction/abuse. It's just that some people think this should be done by private efforts, instead of by government which uses it's power to force people to obey and pay.
Why, though? Depending on how the idea of debt relief shakes out, this might be one of those "sometimes life is unfair" moments that you just have to accept and move on as part of living in a society. The alternative is a massive contraction in buying power, which could certainly directly impact your livelihood. Is the spite worth that?
The selfish thinking that people shouldn't get anything for "free" (ie, shifting education burden from taxes to the student) and everyone should be accountable for every dollar is how we got here.
If I just finished paying off my student loans, and debt forgiveness happened, I would be annoyed and a bit jealous. But also happy that those who had their debt forgiven now have more money to do stuff and contribute to the economy. I would truly be happy for them. Why wouldn't I?
(Note: I don't believe debt forgiveness will ever happen)
"I had to do <thing that sucks>, therefore everybody has to do <thing that sucks>" isn't a great argument, but "you had to do <think that sucks>, but I don't want to so I'm going to make you do <other thing that sucks> so I don't have to" is even worse. It's like forcing someone who just finally managed to rebuild their house after it burned down to share their house with another fire victim for free.
Actually, probably not. That's part of it, but if student loan debts are forgiven, the banks aren't going to eat all of that cost - the government is going to step in and help recoup some of that cost. So not only did I have to pay for my own college education, I'll be taxed to help pay for thousands of others, as well.
Of course it will. That's money which the government loses.
I pay tens of thousands in taxes every year.
“The only time you look in your neighbor's bowl is to make sure that they have enough. You don't look in your neighbor's bowl to see if you have as much as them.”
I'm almost done paying off my student loans, and because of that, I don't want anyone else to have to endure paying for student loans, even if I myself don't get the benefit.
Stop whistling past the grave yard. That is how government works. They have guns, and prefer that you don't, just in case you get all argumentative and pouty.
At least where I'm from, no you won't. Your debt to the state will grow and eventually they'll try to repossess it (through e.g. wage garnishing). They can't arrest you for not paying taxes.
What happens if you go up and steal someone's car?
The same thing that happens if you break any other law.
"What if you resist arrest?"
The same thing that happens if you break any other law.
"Eventually, someone will deploy state-sanctioned violence in this situation."
And you get no sympathy from me, because in this case, you clearly broke the law.
That's bullshit. In reality OP proposes to transfer money from me to people who made investments in human capital that didn't pan out.
Maybe that's their fault, because they invested foolishly. Maybe it's nobody's fault, because they invested in a positive-expectation bet and got bit by the variance (it does suck when you take out a loan to go to nursing school, and the feds decide to import a bunch of Filipino nurses instead). Maybe they were the victim of fraud, and someone sold them a bill of goods.
In any case, it has nothing to do with me.
Rather more direct when they're taking my money to do so. This isn't an abstract "ask not for whom the bell tolls, it tolls for thee" scenario, and the alternative is not personal autarky. OP is proposing a direct transfer, from me to a stranger, to which I am opposed, and therefore one which must be imposed by force. The alternative is not imposing such a transfer. Cut a check yourself if you think it's a good idea. Bullshit about the universal brotherhood of man and unity of the volk does not excuse arbitrary impositions.
Not so bizarre when you consider that student loans are very difficult to get discharged via bankruptcy. The loan issuers don't need to worry so much about whether you'll be able to pay it back or not, because it's more a question of "when" than "if".
If you could discharge them in bankruptcy, no one would offer them because huge percentages of people would go ahead and do so.
And society can have a discussion again on how much it values educating its populace.
Fix bankruptcy laws, fix the student loan problem.
Sure. And if they change then their loan status/situation will change.
Just like my mortgage through my Credit Union. The terms of the mortgage when I refinanced was owner occupied for 12 months after the closing date. If I move out prior to the 12 months I'm technically in default and the holder of my note gets to choose what to do.
The problem is that people are graduating with huge debt and can't get jobs that pay well enough to pay off their debt.
A large number of the people who default on their debt never graduated.
I normally would down vote a comment that starts with DYRTA. I haven't this time, I wanted to use the opportunity to express how I think we can maintain HNs civility. Thank you.
"Federal figures show most people in default on student debt owe relatively little—under $10,000—because they dropped out of school"
17-18 year olds often aren't going to have much of a credit score, so you're basically winding up excluding folks from low-income areas/backgrounds from a college education.
Are you going to ban students from changing their major after a few weeks?
That wouldn't be true even with the limitations on discharge in bankruptcy, except that servicers have been actively steering people with trouble paying into deferments rather than the various income-based-and-discharged-in-N-years plans (where N is generally 20 or 25.)
FYI, Lloyd Blankfein was a History major, amongst other Billionaires: https://en.wikipedia.org/wiki/Lloyd_Blankfein
It's what you do with the degree.
I've been entertaining the idea of buying a house in my neighborhood. This town never had real estate inflation and bubble, because of rust belt economics. $150,000 should buy a nice place.
It seems mighty unfair to limit the money simply because a degree doesn't earn so much. I think such a system would lead to sub-par schools for the 'lesser' degrees and better ones for those with better earning potential.
Our generation has no solidarity. We should just strike or protest and demand lower tuition. Or just not pay back the loans en-masse.
How come with the internet and twitter etc, we can't organize whereas in the 60s and 70s they could get their act together?
>and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major
The corporations would love to turn universities into training grounds for the skills they need. Yet another example of them pushing an externality back onto the rest of us again.
Education is not the same as training. Education is more than training and expands your mind.
Training just teaches you a set of job skills.
The grand irony in all of this is that the people who did go on to become plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the ones that are currently in huge demand. And over the next 20 - 30 years they're the ones that aren't going to be automated (well ... mechanics may become less relevant with electric cars rising in popularity). As much as I'd love to automate remodeling my kitchen I'm not holding my breath on seeing it happen any time soon.
I think another part of it is that even low level office jobs now require some sort of degree simply because everybody has one. It's no longer something unique to have on your CV hence why so many people seem to be going for Masters degrees too. I know so many people only getting out of education in their late 20's and many of them got a degree, struggled to find a job, so went back for the Masters to give them ad edge.
Another problem all this education causes is lack of experience. If you decide at 16 or 17 that you're going into a trade you can get an apprenticeship and build up experience. If you go to college 'because that's what people do' and struggle to find a job based on your degree when you come out it's hard to even get a job in retail or sales because you're 23 with no experience.
One solution might be to only offer loans for degrees that lead to a job (doctor, lawyer, architect etc.) and consider things like History or Music a luxury.
I majored in music. It's pretty easy to tell who will have a reasonable career after college. The people who are well prepared succeed. The people who aren't usually flounder and subsequently go on to flounder after school.
Should we be telling people who are likely to succeed in their field that they can't get loans to study something they will probably do well at because of all the asshats that apply to these programs with little preparation?
My main point is that a lot of people are doing degrees when they can get the information they need elsewhere, much cheaper, and they are not getting value for money. Unless we can convince people college isn't something they have to do being more specific about which degree paths get loans is the only way I can see to prevent those people taking out loans they will never be able to pay back.
Additionally, music is pretty unique in that very few people study music in college without having already studied it seriously for 10+ years prior. Typically, if you've been playing that long, you've applied to specific schools with specific teachers in mind. I don't think anyone that plans on being successful in the field will be able to get much from whatever clown is teaching at the local community college.
Further, teaching can be surprisingly lucrative. Teachers that consistently put out competition winners at the state+ level can charge upwards of 100 dollars an hour. Top tier teachers in the LA area charge 300+. The most expensive I've ever seen was 700 /hr. (This is true for piano, which is my frame of reference. I'm not sure what music teachers in other instruments make.)
Continuing some of the above points, basically every really good pianist in the US comes from one of two "lineages" of pianists. Either they can trace their teachers back to Schnabel, or back to Josef and Rosina Lhevinne. I would be very surprised to hear of any 2nd generation student of Schnabel's or 1st generation student of the Lhevinne's teaching at a community college, much less online. I guess what I'm trying to say is that it's really not possible for the students who would succeed to get the information they need in a cheaper form.
But back to the initial point, I'm not convinced that cutting off entire paths of degrees from receiving support in the form of loans won't represent some sort of massive loss to society. Consider all of the potentially lost art/literature/music? At any rate, I feel like either college should just be subsidized by the state, or let people just be personally responsible for what they choose to study (which is what we already do.) I'm heavily in favor of the former.
> Consider all of the potentially lost art/literature/music?
I don't think that would happen. Music degree != creativity. You could argue that the people not creating teach others who do create but I think the majority of people who go on to create great art are going to do that whether they get a degree or not.
> The community is not particularly open about sharing information
Maybe it's because we're talking about music in such abstract terms but this is certainly not my experience. I've been working towards a career in mixing for the last few years and there is an abundance of great teachers and communities online for a small monthly fee. Everybody is incredibly supportive, helpful, and even share work when certain people have more than they can handle. From another angle I've always found musicians more than helpful teaching each other new things (e.g. I see someone playing with a technique I don't know and ask them to show me how it's done).
> At any rate, I feel like either college should just be subsidized by the state
I agree with you here. I live in the UK and the most anyone pays for tuition is £9k per year. I actually looked into going to the US for college and the costs were incredible. However a lot of that is because students choose to go out of state and go to well known schools. Maybe that's where the change needs to happen. Big subsidies for studying in state.
The idea of a university is not a place where one goes to get a piece of paper that certifies one as competent to perform a job - that should merely be a side effect - university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual. I acknowledge this is a rather idealistic view of our higher education institutes but I think it's one we should strive to make a reality.
As long as we continue to believe this, nothing will change.
Universities indoctrinate, lets not be naive. Most schools have little interest in widening the perspectives of students. They are on a mission to unify perspectives. Indeed I would say that universities are more responsible for our Idiocracy than television - graduates really believe they have become enlightened when in fact they have been programmed.
It's almost as if there is more to the world than Central and Mediterranean Europe.
And heaven forbid, students get exposed to radical ideas in their philosophy classes. We can't have any of that, here.
There are plenty of old ideas that are excluded by what most universities define to be classical education - yet the complaints are about lack of coverage for Kant and Plato, rather then, say Confuscius, or Cornel West. (For examples both less, and more relevant to modern thought.)
The complaint was directed at a Philosophy education, not at a Western Philosophy education. If said top-20 college promised the latter, and ignored the classics, that would be reason to complain. Otherwise, it's like complaining that your History class didn't solely focus on America.
The other assumption that I call into question is that Freud, Kant, etc are 'apolitical' figures - whereas a feminist writer is 'political.' This is, quite plainly, nonsense.
Plato's views on government, and condemnation of democracy are quite clearly laid out in the Republic.
Kant writings have plenty to say about freedom vis-a-vis government, state power, rights of property, revolutions, warfare.
None of these great minds existed in an apolitical, unbiased vacuum, where they could devote themselves to nothing but free thought.
When it comes to education, my impression is that people use the term 'apolitical' to describe political opinions that happen to align with their own. Hence, Hobbes and Locke are apolitical - whereas feminist philosophy so frequently is. Adam Smith? Apolitical. Karl Marx? Political.
If that is the claim, then I agree that it is wrong. The most common criticism of Marx that I have heard is not that he is political, but that he is wrong (and perhaps incoherent). Similarly, I think that any curriculum that wants to replace the highly influential writings of Plato with another philosopher should make a case for why we should do this... an argument beyond the "inclusion" of additional points of view. I can sit at my desk and come up with a dozen different points of view. I don't think that each of those should be included in a philosophy class, in place of Plato.
Students are already exposed to too many radical ideas (supported by current political interests), which REPLACED the basics/foundations - that was my point.
Also, modern philosophers have a lot to say. I still recommend de Beauvoir and Wittgenstein to anyone who cares to read.
>> university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual
This is the problem. That all sounds great but it is not worth $100k and there are many other ways to have that experience that do not cost that much.
You can get an excellent education at a state school for less than $6k per year.
The person who gets a degree in music theory, philosophy, or art history may not get a job that ties in to their major, but these people all leave college with skills in critical thinking, writing, the ability to meet deadlines, skills in communicating complex ideas to others, public speaking, etc. Most importantly, they leave with proof that they know how to learn and improve themselves. There are jobs for people with these skills, and they will likely be far more rewarding than gutting chickens on the line all day or waiting tables at the Cheesecake Factory.
[1] https://admissions.utexas.edu/tuition/cost-of-attendance
Edit: Sorry I misread. These stats are by semester, not year.
State college and community college in particular can be a lot less, and it's possible to even split the difference and do 2 years community and then graduate from the university by transferring credits. Of course, you have to have your ducks in a row to pull that off.
You're paying for room and board regardless if you go to college or not. Or you can just live with your parents.
Sounds like a fun luxury good. Why should we subsidize such a luxury good and encourage 25-50% of the population to consume it?
Should we also subsidize luxury goods enjoyed by other subcultures, e.g. video games, muscle cars or strip clubs? If not, why not?
After all, if it turns out that the public external benefits of a physics degree exceed those of a women's studies degree, then the former should be subsidized but not the latter.
In any case, what do you believe the external benefits of education are?
I don't believe one can really quantize which degree has more public benefits. Some benefits are hidden, in the sense that their benefit isn't so readily recognizable. The benefits of an educated populace are manifest and, I believe, clearly worth the expense of public financial support.
And once you factor in the harms caused by signalling, it's far from clear it's even a net positive.
The benefits of an educated populace are manifest and, I believe, clearly worth the expense of public financial support.
The external benefits are far from clear.
If a person is educated and becomes a doctor, and then fixes my spine in return for money, the benefit is clear. But that benefit is fully captured by myself and the doctor, and he factored the cost of education into the price he charged me.
Can you name what the external benefit (i.e. benefits captured by third parties) is, for both medical education, physics education and women's studies?
I'm trying to know what external benefits you think exist and why you think they are uniform across all fields of study, which is a much stronger claim that you made. I cannot think of any such benefits.
E.g., one might hypothesize that people in college develop useful skills that benefit others in a manner they cannot capture as wages. But it's a little crazy to suggest that a women's studies major develops those skills to the same degree as a nurse.
Right. The point of contention is whether we should be paying $50-150k per person for this public good.
I mean, the benefits are clearly there, but the price has been skyrocketing and when the individual can't pay back their loans, we all suffer.
I share your concerns; on the other hand, is signing up for a 3-to-5 year course really the best way to help people discover their passion? As an exploratory path, it sound expensive both in resources and in time wasted for the student.
Around here, we have something called "summer university" wherein high-school students can spend a week or two getting an high level overview of the college course. It's extra-curricular, so few attend, but seems like a similar approach introduced into the regular HS calendar (say, the last two months), getting everyone to try a few courses of their choice, could provide even more exploration for much lower costs.
Comparing higher education to job training is especially damaging in a fast paced economy with new fields and jobs popping up all the time.
This is the key problem - education is often positional good, since not every job seeker can be better educated than the others.
>One solution might be to only offer loans for degrees that lead to a job (doctor, lawyer, architect etc.) and consider things like History or Music a luxury.
Better is to make asking about and providing your college background illegal, with some exceptions for doctors/lawyers/engineers/etc.
I saw this first-hand -- I want to a very good school that wasn't _quite_ top-tier. My classes were full of kids who were only there because their parents had decided they should go to college, and then the parents fell in love with the school.
When I say deskilling, I'm talking about creating products that reduce the amount of skill required to do a task. This increases the pool of labor competing for the job. It also often increases how much a single person can get done in a given amount of time.
Compare PEX and copper pipe fitting.
The next thing we'd like to get us something like the Voortman V808[1], that thing should cut or labour input requirements by 50% or more.
1. https://youtu.be/Tk1un34l81E
Instead of removing skilled jobs and increasing a job pool of less skilled ones, tech can increase efficiency of master craftsman to the point where there is no need for the less skilled/experienced apprentices, thereby compressing the job pool instead of expanding it.
Otherwise, you wind up going to school a couple more years. You are still likely going to start work 2-3 years sooner than someone going for a 4 year degree.
plumbers, electricians, and plenty of other blue collar vocations do pretty well imo.
That's about half of $35k for basic expenses while living in Manhattan, which leaves plenty of room for taxes/savings/going out/travel/etc. And there are a lot of great free events in NYC, too.
Business degree? You might be a retail store manager because that is what you found that you actually have experience in... because you worked retail through school.
It is bad all around.
...You might get a different picture of things if you hang out in some of the skill trades reddits:
https://www.reddit.com/r/SkilledTradesNetwork/wiki/community...
...fer instance: "Here's what 10$ an hour looks like! Had to put in my 2 weeks."
https://www.reddit.com/r/Welding/comments/52byky/heres_what_...
And pretty much every reply is "I make way more than that, what are you thinking??"
I'd imagine the guy either doesn't know how to show up consistently and on-time, or has such a severe lack of social skills that he can't properly interview for a job. If you can weld like that and can't find a job making more than $10/hr you are doing something SERIOUSLY wrong.
Way more than that being $30/hour = $60K per year.
Not arguing that we could consider it low, but providing more context.
Combine that in a household are you're getting close to $100K.
I think the point still stands, but it's good to have more accurate data.
I make much more than that and I only have an B.A. in English.
You can absolutely get a job as a web developer without a degree. I know many who have done so.
Not true. Look at any construction site and labor-saving innovations abound. Plumbing comes in new materials like PEX, which takes less labor to install. Large parts of houses are fabricated off-site and shipped in on trucks. No job is immune from automation and increased efficiency.
I agree that there are and will continue to be good skilled trade jobs and many people would be better served by pursuing these options, but there is tremendous value for the average American in a college degree. The problem is that a lot of Americans are unable to graduate college, and waste their time and money pursuing a degree instead of doing something more inline with their talents or their drive.
As it stands, automation will most likely continue to primarily affect blue collar workers before it hits knowledge workers. Long-haul truck driving will probably fall relatively soon and factories will continue to have more and more automation.
Not for everyone obviously and it's not big pay but I know what I pay contractors and it's nowhere near minimum wage.
Huge demand? Not in the US. Trades salary growth has been flat.
The result of this transition incentivizes the wrong output: instead of kids coming out of college able to freely think for themselves, now they come out begging for direction.
At least this is how I was raised. I don't think I have an opinion myself aside from enjoying the idea that I'll likely have the same job in a year I do now.
Note: Some schools still charage less than 10k/year. http://www.usnews.com/education/best-colleges/the-short-list...
Instead, schools have a huge incentive to raise tuition endlessly and family's are stuck playing a zero sum reputation game.
Shiny new buildings, Hotel-like dorms, Professors making 400k, Administrators making 700k, a moped for every football player ...
Not sure I can imagine a football player on a moped, though.
Also our dorms are pretty shit.
Better yet, how many professors get hired as non-adjuncts?
The great majority of student debt holders owe less than $30,000.
I'd like to see more direct funding for schools and a shift of federal support to competitive grants, but those aren't huge numbers when you look at a degree bringing in hundreds of thousands of extra dollars over a career.
Grants aren't as egalitarian as giving anyone who wants it a loan, but they can be expected to distort the market less (because schools have to compete for people who don't get them).
The interest on the loan sizes I've mentioned is typically going to be less than $4000 a year, so if they pay $6000 a year the loan will go away quite quickly. That's a substantial amount of after tax income for a lot of jobs, but students should be looking at the debt in those sort of terms, that it is going to be one of their main payments for a while.
Seems twisted to tax the rest of the country who decided not to or weren't able to participate in college in the first place
You folks are getting screwed.
Problem: Schools charge max loan value. Students can't pay them back.
Solution: Give away free money.
All the government has to do is nothing. Just stop doing things. Stop being involved. The problem will fix itself overnight if they did literally nothing.
Le sigh.
How is the education loan market any different than the automobile or home loan market with respect bargaining position and ability to make an informed decision?
Loan issuers are forced to issue loans without regard to the likelihood those loans will be paid back. Someone seeking a computer science degree from Stanford is treated the same as someone getting an English degree from a 4th tier state school. That's utterly insane.
But with education, students have likely never bought a car, or a house, and don't have much background or life experience at this point in their lives and you want them to make a one-time, long-term, investment decision in a non-fungible asset?
Most students only make the decision once and whatever you learn about the school or career not meeting expectations isn't ever applied again. Worse, you don't find out first hand what quality your education really was until after leaving the college. Worst, the decision isn't really couched in terms of a ROI type investment decision (maybe thats changing), but that's certainly not the only factor at play in student school decision.
That's not a good basis for balancing a market.
> Loan issuers are forced to issue loans without regard to the likelihood those loans will be paid back. Private loan issuers aren't forced to do anything. They can always leave the market and invest elsewhere if they cant figure out how the serve the market.
Second, students don't get much choice in loans with the government-backed loans. There really is no 'market' for the student to shop, nor does the student have bargaining power except for refusal to accept the loan. With automobile or home loans, one can do things like have a larger down payment, shop aroudn for interest rates, or improve their credit rating. Students have none of these options.
Third, informed decision? You get promised for years as a young person that college is the key to having a comfortable life. The university promises all sorts of possible careers with the degree, and quotes numbers that may or may not be true.
Somehow we got twisted into this track of thought that everything must be individually accounted, and student became individually loaded with the debt of their education. And because students as a group are in a poor bargaining position for tuitions - the inflation of education costs skyrocketed. I think they are the only life cost that gives healthcare a run for it's money in it's ability to exceed (by multiples) both the growth in the economy, let alone the growth in personal incomes. This cannot continue.
Plans to give student aid to income below a certain threshold will only serve to further cause tuition inflation. It is a case where individual allocation of cost/debts is much less efficient and harmful to our economy than social allocation of the cost. I think we need to go back to funding public universities out of direct state and federal budgets so that public institutions can offer low or no tuitions. This way, gov't organizations with the budget leverage, with much better visibility and oversight can keep costs down at public universities. Low public university costs will also help cap the excesses of private tuitions via market competition.
Unwinding the current mess of student debt is also a huge issue, but should be undertaken too (but I'll leave that to some other time...)
Most undergraduates have no real need to obtain a gold-plated degree. Undergraduate education in nearly all fields is well-understood and can be delivered adequately at low cost. This is why foreign countries that aren't wealthy still produce excellent undergrads. Only in the US do we believe you really can't get educated unless you went to an expensive and/or elite school.
* I say supposed to be because the rule was swallowed by an exception during the regulatory process and now only plays a minor role.
This will do nothing more than favor the rich and further suppress the poor.
Not to mention that college was a lot more affordable two decades ago...
I hate to get all "Zero Hedge", but this really does stink of some conspiracy to turn the middle class into lifelong renters instead of owners. The independence the middle class once had by achieving a debt-free existence and owning their own residence is being wiped out, and as a result, the middle class itself will effectively be destroyed.
Mortgages were sort of unusual - housing was simpler then and people just paid cash. Sears sold home kits - of 12,000 pieces they said could be finished in 90 days by the owner - and while they offered financing, they topped out @ 60K in 2016 dollars. I don't think the financing was a "mortgage" per say, closer to consumer credit. People pay $60k for cars on four and five year notes.
So if saving real goods and services doesn't work, what does? You can make things now, and sell them to people for dollars or some equivalent promise of future goods and services. Then you can later redeem these for the stuff you need later.
Oh, and did I mention the generational stuff? Small family sizes and aging Baby Boomers means that there's huge pressure to turn today's resources into promises to give people stuff later. Hence, debt.
I'd actually prefer if a conspiracy was responsible for this. Economic forces make a lot more people work a lot harder to push back against changes. Price controls are a great case in point for this.
On the one hand, yes what's happening is wrong. On the other hand, you CHOSE to go into debt knowing that you would have to repay it after you graduated. Just like people who CHOSE to deal marijuana KNEW it is illegal.
Disagreeing with the law doesn't entitle you to break it. Similarly, disagreeing with your loan terms doesn't entitle you to not pay them.
I CHOSE to go to a cheap state school to avoid this fiasco. Now others who didn't choose prudently get "relief"?
At one point do we just say, hey, you made shitty choices, sorry. Where is that line? I'm not saying we shouldn't do something, just offering up a different point of view.
But the difference between a law and a promissory note is that the legislature didn't get your explicit approval before passing the law. The promissory note has your signature on it, under a promise that you made to pay a certain amount at a certain time in exchange for valuable consideration.
The note is a contract, and you can make any contract you like. But we do have rules for the types of contracts that the state will help to enforce. The parties to the contract have to be competent, and the contract can't force anyone to do anything illegal, and everybody has to understand what they are agreeing to. If it was, indeed, a "shitty choice" to take a loan that you couldn't reasonably pay back, there may be an argument there that the contract was lopsided and unconscionable from the start, and being forced to repay it on the original terms would be rewarding bad behavior on the part of the lender.
Defaulting on a loan because you now disagree with the terms is less ethical than dealing weed because you disagree with cannabis prohibition. You should really support clemency for nonviolent drug offenses before considering forgiveness of student loan debts. One is a matter of being forced to live under the (somewhat arbitrary and capricious) edicts of the powerful, and the other is about breaking promises after already realizing the benefits from making them.
The problem is assuming that borrowers are fiscally competent. We know this to be false, even among home buyers. 18 year olds, who have every adult that they trust telling them they must go to college and take these loans, don't stand a chance.
The loan industry not only knows this, but they optimize the system to capitalize on it. I don't think the student was represented when laws were passed to prevent discharges in bankruptcy.
A professional loan officer just has to fool some kid one time, and closing that 15 minute deal often destroys that kid's entire adult life.
We provide Donald Fucking Trump more protections from financial disasters than well-meaning students who have never had a loan or investment in their life.
Coincidentally, he is one of the many who are exploiting this system, with Trump University existing for little other purpose than siphoning this taxpayer-guaranteed free money.
Then when the cards inevitably collapse, half of the population eats up the propaganda about "personal responsibility".
Personal Responsibility would be not taking idiotic risks and getting the government to pay for it.
I can assure you that approximately zero students took out loans thinking they wouldn't be able to repay them. But we know the lenders knew better, because they won't give out these loans without a cosigner and/or a government guarantee.
In fact, indentures were a better deal, because the indenturee was guaranteed to have the job necessary to fulfill the contract. Student loan issuers don't have to accept work in lieu of cash.
If a mistake is made, remedy the mistake. The government made a mistake in providing a glut of cheap money and prohibiting the borrowers from discharging the debt in bankruptcy. They need to fix their mistake by undoing that.
What you're proposing is like abolishing slavery, except for everyone who is currently a slave. "Sorry guys, there will be no NEW slaves, but you were slaves when it was legal, so, tough"
Same as with loans. You choose to take out the loan, that's on you.
If I choose to run my car into a crowd I suffer the consequences, not Chrysler. (And yes, I realize this analogy isn't perfect)
And comparing this to slavery is plain stupid. That is an issue much greater than this regarding equality for everyone. You didn't have a choice to be born a slave.
And here I don't even necessarily agree with not helping these people - I just want the issue addressed of where we draw the line between poor decision making and poor choices.
1865 (with the ratification of the 13th Amendment), actually.
"Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
1. Doctor & Finance couple with combined income $400,000+/year 2. Pharmacist & Finance couple with combined income $200,000+/year 3. Science Research & Quant(finance) couple with combined income $300,000+/year
Interestingly - all have finance or medical field/science exposure..
The rest are renting forever paying of debt with no plans to buy soon (we are in hot real estate area).
I dont see who will support real estate prices going forward.
$124/mo, 840 sq. ft: http://www.zillow.com/homedetails/1204-Via-Seville-Cathedral...
$93/mo, 1190 sq. ft: http://www.zillow.com/homedetails/617-NW-8th-Ave-UNIT-11-Mil...
$70/mo, 832 sq. ft: http://www.zillow.com/homedetails/1745-35th-St-NW-Winter-Hav...
$72/mo: http://www.zillow.com/homedetails/8528-Highland-Ave-Kansas-C...
$92/mo, 2302 sq. ft.:http://www.zillow.com/homedetails/122-Cheyenne-Rd-Shohola-PA...
"Sold as is-where is-no disclosures available-Seller has had no knowledge of property-no representations made as to a warranty-habitability,marketability.express or implied."
I guarantee you that the seller _DOES_ have a knowledge of the property, and that's why it's only $19,500.
And in real estate, where flowery language is the name of the game, the above is coded language for: "Bulldoze it and build" (come on, "no guarantee of habitability"?)
Likewise, your place in PA - did you look at the photos? There are entire exterior walls covered with (torn) Tyvek and tarps. There are unfinished walls, roofs and floors.
Another, a cinder block hoarder dwelling that is missing multiple windows.
I get that you're trying to make a point, but you're also picking out not just low end locations, but houses that are in some cases quite possibly condemned, or should be.
Only two of those looked remotely habitable (and not a matter of pleasantness, I mean from a health and/or safety perspective).
http://www.zillow.com/homedetails/152-Sagamore-St-San-Franci...
http://www.zillow.com/homedetails/1055-Gilman-Ave-San-Franci...
http://www.zillow.com/homedetails/15320-Swan-Ct-Gulfport-MS-...
...(one of those homes is not like the others).
The one near Palm Springs may be a close second, but I can't image what the commute from there to to some job in the LA or SD area is.
http://thereformedbroker.com/wp-content/uploads/2015/03/Scre...
There's this amazing thing called "renting." Not owning your home doesn't mean you live with your parents.
The notion that you should be able to immediately buy a house at the beginning of your career is ridiculously entitled.
Finance - MS followed by work followed by MBA takes you to 30 years + 5 years again close to mid 30's
So no, im not talking 25 year olds.
China.
On the surface this seems hyperbolic but its true. The area I am at has seen wealthy Chinese investors buying up property in the new developments and then leaving it to their children to manage. It's almost impossible to buy a house here in the sub $300k range due to the rapid buy up and flipping they're doing. Most of them don't sell either - they rent, leaving people here in perpetual rent cycle without the ability to own property in a decent area.
It is because of increased Medicaid costs and also because boomers aren't financing the proportion of state higher education that their parents did that many of today's young have higher student debt than it the past.
Doctors don't haven't to incur debt in medical school if they spend four years in the military as doctors.
Your option for doctors to not incur medical debt is very hopeful. First, I doubt the military has enough positions for all the doctors to fill, and I doubt all doctors would be fit enough to qualify for military service. On top of that, that is 4-6 years longer before they can actually practice.
There should be a way that is much better than sending potential doctors and surgeons off to war. For instance, forgive loans to folks that work in general family practice for 7 or 8 years, less if they move and practice in an area that is in a high demand (poverty stricken area) - with the disclaimer that they must take all forms of government backed insurance.
I managed to go to a small public university after the tuition hike but before the Great Fees Gouging. I'd probably have escaped with $5,000 less in debt if I had started with my state's (Georgia's Hope) merit based scholarship instead of having to build up 10 semester hours totally on Federal UnSubsidized Loans the first year.
At that point, used Ebay books could run you well past $1,000 a semester. Hope only gave you a $150 for books. Hope also did not cover fees. Those started at about $800 every semester when I enrolled. My 4th year, they had hit well past $2,500 per semester. Included in that was $150 to build a new student recreation center that I would never use since it wasn't even being built yet.
The amount of hustle I had to do just to escape that school with minimal debt was insane. My overloaded schedule (because semester hours past 12 didn't increase your tuition or fees) meant I needed a job that let me do study or homework while working. So typical service jobs off-campus were out of the question. My year basically was applying for summer retail jobs, lying my face off during the interview that I was going to stay on past the summer, and then of course quitting. I'm basically black-listed from several retailers for quitting for this reason. Christmas was always easier because those jobs are naturally seasonal.
During school, I'd tutor various core classes under the table. At my university, this was considered quasi-against-the-rules. Tutors were supposed to go through the Student Support Center. They'd pay you hourly minimum wage and set you up with other students for free. Tutors who were students caught not going this route were usually sanctioned by the university and threatened with all sorts of administrative punishments.
Naturally, this was unacceptable to tutors, so we all snuck around advertising by word of mouth and meeting off campus. I mean, when I can easily pull $100 a session as the only person willing to try to cram Plato into your brain, why would I go through the SSC? Calculus was a bit harder because there was more competition, so that usually ran about $60 to start. Once I had kids getting their B's and telling their friends, I was able to pull $100. I ran a group rate for a Fraternity that was a flat $350 a month.
I lived off campus, because rent on a 3 bedroom, 2 bath was $950/month plus utilities. Speaking of hustle, keeping those bedrooms stocked with roommates was it's own drama. Kicking roommates who fell behind was even worse. The lease was in my name, because most places I went to rent a room were on 6 month leases and headed home every summer. I wanted something more permanent since I was staying in town year round.
All said, I managed to escape with just over $30,000 in debt. That's tuition, fees, and about $10,000 a year to supplement all my other income. I hit a job immediately and started burning it down as fast as possible. I landed a better job with nice, $10,000 yearly bonuses and finished murdering it.
This was right as the next big wave of inflation hit higher education. Now? I went back and poked some of my social circle in that town. Getting out without $60,000 in debt is basically impossible. If you live outside of a 10 mile radius of the campus, you are required to live in the dorms your Freshman year. Literally every course uses some sort of book with an online component. To access that component, you have to buy the book new to get a code. The university regularly charges current students fees to raise money for buildings that won't be built for 5 years. They recently charged a parking fee, and then made all lots on campus hourly paid parking. The lot that parking fee is for? It's about a 4 minute walk off campus. Good luck i...
I'm teaching one class as a part-time instructor now back at my old university (basically for beer money on top of the day job), and it's blowing my mind how much more flashy the campus is. And naturally, how ridiculously expensive it is after only 10 years. The focus on "student life" facilities strikes me as an odd set of priorities considering how long hiring and pay raise freezes for faculty seem to last.
The mandatory online book thing is pretty insidious. We're required to use it by the department, and I can see how there is a kernel of a good idea there. It basically helps you run gigantic course sections while grading all homework for you, but while simultaneously killing the secondary textbook market (which is pretty evil). Worse, they are clearly implemented by the lowest bidder and break every web standard you could imagine.
Basically, with increased class sizes and mandatory online content, every core course is slowly turning into a weird online hybrid class. I think this is decreasing the difference between a traditional education and a MOOC bit by bit, which is eventually going to give a lot of universities a bit of an identity and marketing crisis.
Pearson, Wiley, Mcgraw-Hill et. al. are the entities that I would most like to see disappear when the college bubble pops. Free open-source community maintained textbooks seem like the obvious way forward to my software developer brain.
On the bright side, I do enjoy actual lecturing. It's a lot more fun when you can do it with few or no stakes, since I don't have to rely on it for a living. I'm literally on the exact opposite of the spectrum from a tenured professor, but I weirdly feel like I have to same level of freedom.