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Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

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Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#251

Post by Bartweiss »

vec wrote: post #198
ConceptJunkie wrote: post #155

Earlier quoted context omitted.

The problem with subsidizing college in any way, including the current student loan system is that it encourages people to go to college whether it makes sense or not, and as several people have mentioned in this discussion, in a lot of cases, it doesn't make sense. Anyone who is properly motivated should be able to go to college, but when I hear cries for a free college education, I can imagine that that would stimu…

Yeah, but isn't that also the "problem" with subsidizing K-12 public school? One doesn't need a high school education to wait tables or stock shelves, and most apprenticeships and trade schools could probably be started several years earlier without issue. We used to have this Enlightenment ideal of a Liberal Arts Education. It served as job training, sure, but it also tried to make its recipients better citizens and…

> Yeah, but isn't that also the "problem" with subsidizing K-12 public school?

Eh, 9-12 public school maybe. The dirty not-a-secret of K-8 is that it's effectively state-sponsored daycare as well as an educational system, so its role as a holding pen is a feature rather than a bug.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#252

Post by dv_dt »

mattmanser wrote: post #97
JonFish85 wrote: post #79

To me, this is another implementation of the housing bubble: - People see college graduates making a lot of money - Politicians make it a priority to make it easier for people to get loans to go to college - More people take out loans to go to college - Colleges realize there is no downward pressure on price and raise tuition. - Politicians continue to make it easy for people to go to college - People take bigger loa…

The thing I don't understand is, how does it unravel? It feels like politically acceptable short-termism of shunting education costs onto future generations. No-one's going to 'lose' money over it. Who will suffer? It doesn't look like it will be corporations that will suffer, save some institutions will close when the endless supply of money suddenly dries up. It looks to me like it will be governments, a political…

It unravels because it's one of many systematic cuts taking wealth out of the hands of the middle and lower classes. Income after graduation is routed back into the student loans instead of going into savings (and getting max compounding early on), or going into the economy (giving steam to GDP..). Will it the straw that breaks the back of our current economic expansion? Or will it combine with current tax cuts to pull so much money out of "main stream" economic circulation that we hit another recession? I'm not sure anyone really knows.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#253

Post by tzahola »

toomuchtodo wrote: post #125
tzahola wrote: post #117

Earlier quoted context omitted.

>The world still needs plenty of professions where the pay sucks and college is required Quite a self-contradictory statement. I mean, if the world was in such a dire need of said professions in such quantities, then their pay wouldn’t suck in the first place.

As if the world was a free market, and compensation was tied to value.

>compensation was tied to value.

It is the definition of value. Value is the compensation others are willing to give you in exchange for your goods/services.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#254

Post by intopieces »

ConceptJunkie wrote: post #155
jackweirdy wrote: post #68

Earlier quoted context omitted.

> Another solution is to let you go to school for free and then pay a percent of all your future earnings back to your college, or at least into a pool that pays for the next generation's college. We could call it income tax :)

The problem with subsidizing college in any way, including the current student loan system is that it encourages people to go to college whether it makes sense or not, and as several people have mentioned in this discussion, in a lot of cases, it doesn't make sense. Anyone who is properly motivated should be able to go to college, but when I hear cries for a free college education, I can imagine that that would stimu…

>in a lot of cases, it doesn't make sense.

If you are right, what data can we rely on to determine when it makes sense for a person to go to college and when it does not make sense for a person to go to college?

"In a report released Monday, the Census Bureau said 33.4 percent of Americans 25 or older said they had completed a bachelor’s degree or higher. That’s a sharp rise from the 28 percent with a college degree a decade ago." [0]

66.6% of Americans don't have a bachelor's degree or higher. So what is the appropriate percentage of Americans to have a college degree? Which other countries in the world are too educated?

[0] http://thehill.com/homenews/state-watch/326995-census-more-a...

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#255

Post by Celarnor »

jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

> ... but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back.

This is absolutely not the case. Student loans have caps and they're incredibly easy to hit, especially if you go to a 5-year school where you're expected to pay tuition while doing 6-month internship blocks. Lots of people I knew in college (myself included) had to drop out in the first 2 quarters of year 5 because they couldn't get enough money to finish.

Edit: Just checked to see what the cap was at these days. Back when I was in school, the unsubsidized loan max was 27k. Now its 31k. https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsid...

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#256

Post by Florin_Andrei »

jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

> There is definitely an education bubble.

Right, and people in poor countries stealing money to feed themselves is a "food bubble", with the solution being a reduction in food consumption.

How come there is no "education bubble" in countries where college is essentially free? That would be guaranteed to create the biggest bubble of all.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#257

Post by mcfunk »

learc83 wrote: post #132
jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

>Another solution is to let you go to school for free and then pay a percent of all your future earnings back to your college, or at least in to a pool that pays for the next generation's college. We basically already have that system. If you get federal loans (which most people who take out loans do--90% of all loan disbursements) you can sign up for an income based repayment plan. You pay back 10% of your disposabl…

Absent public service loan forgiveness (which we may very well soon be, if Republicans in Congress get their way), the number is actually 30 years and the forgiven amount is taxable income. Additionally, income-based plans often result in payments that don't even cover interest, so the debt continues to pile up quickly. Meaningfully different from the original suggestion.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#258

Post by hfourm »

kevin_thibedeau wrote: post #50
hfourm wrote: post #39

Earlier quoted context omitted.

Truthfully, depending on your definition of majority, most college students ARE already pursuing more profitable majors. https://nces.ed.gov/programs/digest/d16/tables/dt16_322.10.a... The "underwater basketweaving" so to say, may be at most 10-15% of current college graduates. I think the solution lies more with reducing the cost of college, open source textbooks, more elearning, etc. Regardless of government fundin…

Psychology is effectively today's basket weaving. There is an excess number of students receiving those degrees with no intent to work in the field. It's widely perceived as an "easy" degree which makes it worthless unless you continue on and make it into the limited space for a graduate program.

Yes, when I first looked at this data I tried my best to lump it into categories. (Was in an discussion about ROI on "free" college)

about 65% of grads are in what I would consider, employable categories. STEM, Healthcare, Business, applied sciences (production/manufacturing type stuff), there are more but I cant remember now

about 25% of grads in what I would consider, employable but less so. Things like psychology, social sciences, histories, social work degrees, etc

then 10% are in the liberal arts/basketweaving area

While I will be the first to admit that degree is not necessarily an accurate predictor of success. I still think it is fair to say that even in the age of abundant student loans, in general most students ARE trying to pursue jobs that will make them employable. Even if they are misguided in some way, or don't hit the mark.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#259

Post by ithilglin909 »

unethical_ban wrote: post #248
throwawayaway12 wrote: post #237

Earlier quoted context omitted.

>Comparing a college education to K-12 public education doesn't make sense. In general, one needs to understand some mathematics up through Algebra and have some reading and writing abilities to be an employable, productive adult. Whether the public school system in the USA does a good job of providing a basic education is a different discussion. It does seem like this baseline understanding does shift with progress…

You need to be basically educated in algebra, literature and philosophy/civics to be a productive, contributing voter and citizen. Forget vocation.

I agree, but many college graduates (and for that matter some people with advanced degrees I've run into) have no or little understanding of philosophy/civics, history, literature, etc.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#260

Post by weeksie »

Bartweiss wrote: post #251
vec wrote: post #198

Earlier quoted context omitted.

Yeah, but isn't that also the "problem" with subsidizing K-12 public school? One doesn't need a high school education to wait tables or stock shelves, and most apprenticeships and trade schools could probably be started several years earlier without issue. We used to have this Enlightenment ideal of a Liberal Arts Education. It served as job training, sure, but it also tried to make its recipients better citizens and…

> Yeah, but isn't that also the "problem" with subsidizing K-12 public school? Eh, 9-12 public school maybe. The dirty not-a-secret of K-8 is that it's effectively state-sponsored daycare as well as an educational system, so its role as a holding pen is a feature rather than a bug.

I find people who say things like this don't understand the great amount of good that elementary education provides. Basic literacy and mathematics skills are tough things to teach effectively. They're not at all difficult to provide if you have the time and resources to spend on your child, but many people do not (have the inclination or the time). Bad idea to punish the children of those people for their parents' decisions.

Until you've seen the difference a good elementary education can make for a kid growing up in The Bronx, I'd say hold off on the snap judgement.

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