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The Lasting Consequences of Student Debt

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Re: The Lasting Consequences of Student Debt

#11

Post by agalarza »

kudokatz wrote: post #6
lovich wrote: post #3

Earlier quoted context omitted.

Yea, at this point I'd only get a home if I was comfortable with severely limiting my job prospects. Even in the same metro area I've moved apartments after getting a new job so that my commute is around 30 minutes rather than the 1-1.5 hour commutes a lot of my home owning coworkers have had

I'm in the same boat ... except I ended up buying to insulate myself from a ridiculous housing market since there are lots of jobs within a 30min trip of my place. The glorification of home ownership really baffles me, although I still ended up purchasing after careful consideration of things like: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrib...

This is the situation my wife and I are looking at as well. We don't have kids yet, we want to put down roots and barring another housing market collapse, the area we currently live in is getting expensive.

Re: The Lasting Consequences of Student Debt

#12

Post by austenallred »

The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't pay off.

I was brought up under the faulty assumption that if you graduate from college you get a promising career, so pay whatever that takes. Full stop. My entire generation was. Not one teacher or counselor or advisor ever mentioned anything about cost relative to career prospects, and now it's my smart friends who are getting kicked in the teeth, while the kids like me who didn't listen and dropped out and played with computers are richly rewarded.

I can't even count the number of friends with six figures of student debt and no career on both hands.

I think Peter Thiel was right: for some time Americans believed in a college education so fully, so completely that we ignored the cost, even as it skyrocketed. Couple that with federally-backed loans, and no one even considered the risk. 100% of the risk was put on 18-year-old kids, many of whom had never seen a day in the workforce, paid a bill, or had a job.

A lot of people will make it out unscathed, but for those that don't we lived through (or are living in) a giant secondary education bubble. But this time it's one that you can't bankrupt your way out of.

Re: The Lasting Consequences of Student Debt

#13

Post by davidf18 »

A problem is that many of the higher paying jobs are in cities such as NYC, SF, LA, Boston, DC, (also London, ...) and the housing is expensive in these cities because of "rent-seeking" -- a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This harms renters and those starting out in life while benefiting wealthy landlords such as President Trump. The fix is a simple one which is to overturn the zoning density restrictions.

In 2002 Japan passed a federal law that gave the federal government control of housing density restrictions: the result is that in 2014 Tokyo built 140,000 homes vs. 20,000 for NYC and less than 90,000 for all of California.

The local politicians are bought off by the wealthy landlords and those just trying to make their life after graduating from college and poor people are paying for it.

I wrote more about this today at: https://news.ycombinator.com/item?id=14032591

Re: The Lasting Consequences of Student Debt

#14

Post by jMyles »

austenallred wrote: post #12

The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't p…

I'm part of that generation and made that mistake for sure.

> The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most.

The takeaway here is, in part: don't do something just because you're told to. If our generation stops doing what we're told (which seems to be the case), then this will be a small price.

Re: The Lasting Consequences of Student Debt

#15

Post by icebraining »

John23832 wrote: post #7
ourmandave wrote: post #2

So, is college still worth it? In the most simplistic terms, yes. Let's look back at homeownership. Attending a four-year college — even if you borrow, and even if you do not graduate — still increases your chances of owning a home, compared to people who never enroll. But if the new economy demands that workers have the ability to flow to job opportunities (like dragging-n-dropping them on a spreadsheet) then home o…

I agree. Most of the high earning young people I hang with basically have to be willing to uproot for opportunity. However, owning a house (I think the term home is something distinctly different) could be used to facilitate moves though. I don't have to be in the same state/country as my rental property (though countries are starting to crack down on foreign rental property ownership).

Is property management cheap in your area? We rent a couple of apartments, and hiring a property management company would be ruinous, unless both the rent and our personal time was very expensive.

Re: The Lasting Consequences of Student Debt

#16

Post by pitt1980 »

austenallred wrote: post #12

The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't p…

yeah, it was an expensive lesson in the downsides of uncritically accepting large scale social narratives

Re: The Lasting Consequences of Student Debt

#17

Post by uiri »

austenallred wrote: post #12

The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't p…

How is "did exactly what they were told" different from "did not think for themselves" ? Any kind of large decision demands a cost-benefit analysis, including opportunity costs, time value of money, etc.

The labour market does not change that much in 4-5 years (barring something like the 08-09 financial meltdown). It should be straightforward to check whether a degree is necessary in order to land a decent job - apply to those jobs without a degree and see what they say.

Re: The Lasting Consequences of Student Debt

#18

Post by TheAdamAndChe »

davidf18 wrote: post #13

A problem is that many of the higher paying jobs are in cities such as NYC, SF, LA, Boston, DC, (also London, ...) and the housing is expensive in these cities because of "rent-seeking" -- a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This harms renters and those starting out in life while benefiting wealthy landlords such as Presiden…

> a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions.

This is true, but it's also a failure of policies that have led to the majority of job growth being in the biggest cities in the country. If we could spread things out a bit and keep smaller cities a viable place to create jobs, the bigger cities wouldn't be impacted nearly as hard.

Re: The Lasting Consequences of Student Debt

#19

Post by rplst8 »

CodeCube wrote: post #8
ourmandave wrote: post #2

So, is college still worth it? In the most simplistic terms, yes. Let's look back at homeownership. Attending a four-year college — even if you borrow, and even if you do not graduate — still increases your chances of owning a home, compared to people who never enroll. But if the new economy demands that workers have the ability to flow to job opportunities (like dragging-n-dropping them on a spreadsheet) then home o…

Remote working needs to become a standard practice. It's the only way to escape the neverending rise in housing in places like SF, and give people the ability and stability to settle down in a place they love, raise a family, and invest in their housing. Think about all of the coming job losses to automation ... what if high earning tech workers could stay in their communities, and spread some of that SV economy arou…

More people need to realize this. Not only does it allow people to put down roots and let local economies everywhere grow, think of the benefit of getting all those cars off the roads. Less CO2, less traffic, less need for new roads (a big CO2 producer on it's own).

If policy makers really wanted to make a dent in fixing our problems, subsidizing remote work positions (within US borders) would be a huge benefit.

Re: The Lasting Consequences of Student Debt

#20

Post by austenallred »

uiri wrote: post #17
austenallred wrote: post #12

The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't p…

How is "did exactly what they were told" different from "did not think for themselves" ? Any kind of large decision demands a cost-benefit analysis, including opportunity costs, time value of money, etc. The labour market does not change that much in 4-5 years (barring something like the 08-09 financial meltdown). It should be straightforward to check whether a degree is necessary in order to land a decent job - appl…

That's easy to say in retrospect. But when you're a naive and scared 18-year-old trying to navigate a life you don't understand you may not be thinking quite so clearly.

For example I have one friend who was an immigrant. First generation college graduate, parents don't speak English, and his parents take home more working construction than he does. That wasn't what was sold to him, but he bears all of the risk and all of the responsibility.

For those that aren't immigrants your most likely source is parents or counselors or advisors, nearly all of which were encouraging the same thing.

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