Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US Household Debt Surpasses 2008 High

nytimes.com

Post reply on HN
Print view View original

191–200 of 436 posts

Re: US Household Debt Surpasses 2008 High

#191

Post by iamacynic »

ryandrake wrote: post #104
austenallred wrote: post #70

Earlier quoted context omitted.

It sure feels like a bubble to me. I don't know how many friends I have with six figures of student loans and no career, but it's a lot. Considering that those loans don't even go away with bankruptcy, it's waaaay too many. I've noticed that younger students are starting to realize how much risk there is in something like that and shy away when my generation didn't. Maybe it's that I grew up in a "striving" middle cl…

I don't know, maybe it's different now, but my generation (went to school in the mid 90s) was not told to "just go to the best college no matter what": We were also advised to consider the cost and carefully choose a major so as to produce a positive expected ROI. Obviously nobody has a crystal ball and you can never tell when huge, industry-wrecking changes are coming, but it was well understood that majoring in Und…

i'm in my mid 30s and my generation was taught that a good option might be going to community college for 2 years and then transferring, because of the reduction in cost by basically 50%, and to keep loans to a minimum if possible.

this recommendation was always weighed against the 'freshmen experience'.

i think the demographics and expectations of the college-bound is what has changed, not necessarily the advice. getting a good paying job after school was an amazing achievement, even for top schools like university of california's top campuses, not something expected as normal.

Re: US Household Debt Surpasses 2008 High

#192

Post by lr4444lr »

lz400 wrote: post #187
lr4444lr wrote: post #170

Earlier quoted context omitted.

Free for everybody, regardless of ability, who wants it, and in any course of study?

When I studied you had to pass an exam. Certain subjects had a very high bar. For example civil engineering. Can't get it without top grades and top results in the exam. Apart from that, some degrees had very low acceptance scores and many people tended to study some humanities or economics degree that largely won't use afterwards, just for the social pressure of being an uni graduate. It's arguably how much you want…

All of which are worthy considerations in making a judgment on the "better" system. I was just making an important qualification: the U.S. system has wider opportunities for pretty much anyone to attend somewhere and study anything. Now I will be the first to say that the sheer numbers attending universities in the U.S. beggar belief that they many or all of the increased enrollment allow the schools to maintain the same standards. But the point remains that our access may in fact be better than in "free" European countries.

Re: US Household Debt Surpasses 2008 High

#193

Post by diogenescynic »

ryandrake wrote: post #104
austenallred wrote: post #70

Earlier quoted context omitted.

It sure feels like a bubble to me. I don't know how many friends I have with six figures of student loans and no career, but it's a lot. Considering that those loans don't even go away with bankruptcy, it's waaaay too many. I've noticed that younger students are starting to realize how much risk there is in something like that and shy away when my generation didn't. Maybe it's that I grew up in a "striving" middle cl…

I don't know, maybe it's different now, but my generation (went to school in the mid 90s) was not told to "just go to the best college no matter what": We were also advised to consider the cost and carefully choose a major so as to produce a positive expected ROI. Obviously nobody has a crystal ball and you can never tell when huge, industry-wrecking changes are coming, but it was well understood that majoring in Und…

>went to school in the mid 90s

>but it was well understood that majoring in Underwater Basket Weaving

The way you make such a condescending argument and blame the victim takes away any credibility in your comment. The issue is that tuition has ballooned since the 90s. Tuition is outpacing income/inflation and most else, so regardless of what school or major, the ROI is going down for most. Also, even if you went to a top-tier school and had student loans in the 1990s, you could discharge them in bankruptcy--until Bush changed that in 2005. Things really have gotten harder, it's not as you falsely claim that people are picking useless majors.

Re: US Household Debt Surpasses 2008 High

#194

Post by axaxs »

lz400 wrote: post #178
axaxs wrote: post #165

Earlier quoted context omitted.

I understand your sentiment, but realize even if we wanted to, swinging anything to government subsidy would tax us to death. Our healthcare AND university prices are ridiculous by any standards. You can't switch that to government controlled overnight. Where do you even start? Prices HAVE to come way down before the conversation happens, and those profiting ensure those conversations never happen. To put another way…

Certainly not overnight but you can start somewhere . Look, it works in most of the first world. Many comments are trying so hard to convince us that "in America is different" from their armchairs. It's like people try to convince themselves it's impossible. I truly think both for education and healthcare (both a disaster in the world's first economy vs the rest of the first world) if because those systems in the US…

Your last couple sentences sum it up nicely. Anything is possible, but not in our political climate. The two sides think of each other as mentally ill, and are to the point of violence. I hope it calms down, but in my lifetime it's only gotten worse. That needs to be fixed before we can get anything good for the nation done.

Re: US Household Debt Surpasses 2008 High

#195

Post by dba7dba »

austenallred wrote: post #70
manacit wrote: post #10

I don't know if it's a "bubble" (I am not qualified to say that), but I can't imagine that the current trend with student loans will continue. Looking at the numbers for someone entering college in 2017, it feels nearly predatory what a good portion of private and out of state colleges are charging. Even with financial aid, $30-40k a year for 4-5 years is insane. I was fortunate enough to have parents who made saving…

It sure feels like a bubble to me. I don't know how many friends I have with six figures of student loans and no career, but it's a lot. Considering that those loans don't even go away with bankruptcy, it's waaaay too many. I've noticed that younger students are starting to realize how much risk there is in something like that and shy away when my generation didn't. Maybe it's that I grew up in a "striving" middle cl…

Hm, lambdauniversity.com seems real interesting. Too bad I'm way past the point of applying for a college.

Re: US Household Debt Surpasses 2008 High

#196

Post by TheOtherHobbes »

diogenescynic wrote: post #193
ryandrake wrote: post #104

Earlier quoted context omitted.

I don't know, maybe it's different now, but my generation (went to school in the mid 90s) was not told to "just go to the best college no matter what": We were also advised to consider the cost and carefully choose a major so as to produce a positive expected ROI. Obviously nobody has a crystal ball and you can never tell when huge, industry-wrecking changes are coming, but it was well understood that majoring in Und…

>went to school in the mid 90s >but it was well understood that majoring in Underwater Basket Weaving The way you make such a condescending argument and blame the victim takes away any credibility in your comment. The issue is that tuition has ballooned since the 90s. Tuition is outpacing income/inflation and most else, so regardless of what school or major, the ROI is going down for most. Also, even if you went to a…

Student loans are one of the biggest and most self-destructively predatory idiocies the "financial industry" has ever invented.

Ballooning tuition was an inevitable outcome, as was the speculative financialisation of educational institutions, and the relative loss of value of student teaching and post-grad research.

It's really just a form of compulsory loan sharking, and it's politically and economically cancerous.

Not only does it have immensely toxic second order effects, it's almost guaranteed to kill, or at least seriously damage, its host economy.

As for "useless majors" - one of the foundations of any civilised society is personal freedom, and that includes the freedom for cultural and intellectual exploration.

Forcing all activities to compete economically and sweat a profit is not freedom - it's the opposite.

Re: US Household Debt Surpasses 2008 High

#197

Post by yannickt »

dmix wrote: post #27
ryandamm wrote: post #20

An alternative view, and one I happen to subscribe to: a balance sheet analysis shows that US debt must go up over time to support exogenous capital flows. Whether US debt grows in the housing sector, student loans, revolving debt, etc is a function of internal, domestic dynamics (including laws, local economic structure, etc). But the total capital flow into the US exceeds the outflow; that money ends up on a balanc…

It's just as likely the moral hazards of yesterday were never properly dealth with, market corrections didn't properly happen during the downturn, and we're seeing a continuation of misplaced capital. ie, far too much going into residential real estate and student loans, not enough being invested in business. I remember reading that small/medium business growth and capitalization has flatlined as the housing market f…

Our household debt levels in Canada put the US to shame. Our household debt-to-income ratio is at 169%. And our household debt is something like 2.5x our GDP.

Re: US Household Debt Surpasses 2008 High

#198

Post by wiremine »

martalist wrote: post #112
wiremine wrote: post #61

Earlier quoted context omitted.

> The problem is the career value of a degree has not diminished, it's a bit of a network effect really. Maybe people can get hired from Coursera certificates, I would certainly consider it if I was a hiring manager. A university degree tells me three things a Coursera certificate doesn't: 1. A graduate have more breadth and depth in a given major. Standford's CS course includes math, physics, engineering, programmin…

I can't argue with #3 - some MOOC graders are particularly terrible, too. However, there's nothing to stop a person studying just as many topics/subjects online, and to cover them in about as much depth.

I agree. However, there's not a good way to compare apples to apples like there is with a university education. Maybe that's the next step: having these MOOCs come up with some competing standards...

Re: US Household Debt Surpasses 2008 High

#199

Post by mcguire »

lz400 wrote: post #139
manacit wrote: post #10

I don't know if it's a "bubble" (I am not qualified to say that), but I can't imagine that the current trend with student loans will continue. Looking at the numbers for someone entering college in 2017, it feels nearly predatory what a good portion of private and out of state colleges are charging. Even with financial aid, $30-40k a year for 4-5 years is insane. I was fortunate enough to have parents who made saving…

I truly don't understand the USA sometimes. Don't you guys know that in Europe higher education is free? Well where I'm from there was a very low nominal cost but my father was a public servant so cost was waived, I literally studied CS for 0 cost. And these countries are able to afford it all! Magic! I don't understand how people in USA are not aware of this and literally rioting in the streets. At the very least sw…

Out of curiosity, what are the requirements for getting into a university there?

http://www.businessinsider.com/how-do-european-countries-aff...

"For all countries, with the exception of Finland, the US has a much higher percentage of students who have enrolled in post-high school education."

Re: US Household Debt Surpasses 2008 High

#200

Post by nerfhammer »

austenallred wrote: post #70
manacit wrote: post #10

I don't know if it's a "bubble" (I am not qualified to say that), but I can't imagine that the current trend with student loans will continue. Looking at the numbers for someone entering college in 2017, it feels nearly predatory what a good portion of private and out of state colleges are charging. Even with financial aid, $30-40k a year for 4-5 years is insane. I was fortunate enough to have parents who made saving…

It sure feels like a bubble to me. I don't know how many friends I have with six figures of student loans and no career, but it's a lot. Considering that those loans don't even go away with bankruptcy, it's waaaay too many. I've noticed that younger students are starting to realize how much risk there is in something like that and shy away when my generation didn't. Maybe it's that I grew up in a "striving" middle cl…

Bubbles are caused by speculation, often by unsophisticated investors. Since an education is a non-transferrable asset it's difficult to conceive how it could be classified as a "bubble".

Speculators buy assets that they aren't going to use themselves purely to sell it to someone else. If speculators are selling to mostly to other speculators and transactions between speculators starts taking up the bulk of the active market and it starts driving prices up... that's a bubble. What happens is that at some point speculators will panic when other speculators stop buying the asset, and they race to cash out of the asset before everyone else does, except there's mostly other speculators who are also trying to dump the asset on the market...

Those Dutch tulips or 2000-era dot-com stocks are examples of this type of asset. These are assets that didn't have much value except to speculators. (Cf. you can live in or rent out a house, or collect dividends from other categories of stock, or melt down gold, etc.) As soon as there's a price drop... every speculator is terrified of being the last one holding the bag and sees every other speculator thinking the same thing and accurately see speculators as controlling the price and they all race like hell to dump the asset as quickly as possible. The price drops to near zero.

With an education it's difficult to imagine how this sort of thing could happen. In short, it's an exceedingly difficult asset to transfer. You can't sell your education. There doesn't seem to be a conceivable way that everyone would "sell" their education all at once. Also the process of buying an education takes many years to carry out and so doesn't seem so compatible with overnight frenzies. And the value of previously acquired educations doesn't drop if people buy fewer or cheaper ones; it might actually go up instead.

If people collectively decide Ivy league educations aren't worth buying anymore... it will probably be a trend that occurs over a matter of decades.

Just because something feels dumbfoundingly "expensive" doesn't mean that it's a "bubble".

Post reply on HN