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The student loan crisis will dwarf the housing market crash.

mikekarnj.com

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Re: The student loan crisis will dwarf the housing market crash.

#21

Post by nkassis »

Lendal wrote: post #6

This crisis won't be the same at all, because you can't discharge student loan debt. There is currently no reason for a lender to bother examining the loan because repayment is virtually guaranteed. Having the federal government take over the loans will only make the problem worse. Educational institutions are able to raise their prices precisely because they know that with a combination of federal and state grants a…

I agree that gov backed student loans are making the situation worse but removing them would be disastrous. Maybe and I can't prove this but maybe, if the gov was the sole lender, they could pressure universities into reducing tuition?

Re: The student loan crisis will dwarf the housing market crash.

#23

Post by pchristensen »

patio11 wrote: post #20

It isn't going to be as bad as the housing market crash, because degrees are revenue producing assets for the overwhelming majority of people and houses are costs for the overwhelming majority of people. Also, student loans do not have any mechanisms in them which are designed to induce payment shock, like ARM resets are. (I am only half sardonic there.) If your loan repayments are $700 a month when you graduate, the…

Here's a vote for "interested".

Re: The student loan crisis will dwarf the housing market crash.

#24

Post by yummyfajitas »

jbooth wrote: post #5
powrtoch wrote: post #3

Earlier quoted context omitted.

I graduated from a major US university, and was going to reply to the 2-year idea anyway. I think, while many students do take jobs, most of them are happy (for now) just to amass loans and bank on (increasingly difficult to secure) future employment. For some the vicious cycle you propose might be an actual improvement. What I'd like to see is major Universities taking some of the ideas used in technical colleges: g…

Well, you don't have to take dance appreciation or basket-weaving, but there is some value to liberal arts education in addition to vocational training.

At NYU (where I used to work), a CS major requires 12 courses in CS and 32 courses total. The degree costs just short of $93,000.

Do you really believe that a liberal arts education is worth $62,000 tuition + 2 years of lost wages (roughly another $140,000)? Particularly when, to borrow a phrase from Good Will Hunting, that liberal arts education is available to anyone for about $4.25 in late fees at the public library?

http://cs.nyu.edu/webapps/content/academic/undergrad/majors

http://webcache.googleusercontent.com/search?q=cache:CS5fT5z...

http://www.nyu.edu/bursar/tuition.fees/rates10/ugcas.html

Re: The student loan crisis will dwarf the housing market crash.

#25

Post by DenisM »

krschultz wrote: post #4

"3. College Loan Repayment Reform: If anyone files for bankruptcy, the student loan should go along with it." No, no, no, no. This penalizes the people who pay back their loans far too much. Who wouldn't just go into bankruptcy if they couldn't pay back the loan? Unlike other loans, the bank can't take your degree back. Interest rates will go up for everyone as it becomes a riskier loan. Suddenly people who had fully…

Well, maybe they should make it so that degree can be legally reposessed by the bank - even if they can't resell it, that would still be a deterrent. Stating that you have a degree while you don't should be then treated like criminal fraud, and any future employer, seeing lack of degree would know to inquire about the details.

Now that I look at my plan, it looks rather evil. But I will publish it anyway, for the sake of discussion.

Re: The student loan crisis will dwarf the housing market crash.

#26

Post by powrtoch »

kiba wrote: post #17
jbooth wrote: post #5

Earlier quoted context omitted.

Well, you don't have to take dance appreciation or basket-weaving, but there is some value to liberal arts education in addition to vocational training.

This is a meme " I learn this, and you should learn it too!" There are alway value to an education, in anything . The question is if it is really worth learning about? Beside, people can learn to appreciate basket-weaving and dance appreciation in their own time. All they need to do is get rid of their TV and get a hobby. People don't need an overly expensive course to do that.

This was exactly my point. I think there really is value in learning the arts, and in learning other unrelated fields. I'm a big music enthusiast, and sociology was one of the best classes I took. But that doesn't change the fact that they are totally unnecessary to a programming career. If you're interested in them, you'll find your way to them, and you'll probably do it a lot cheaper.

Re: The student loan crisis will dwarf the housing market crash.

#27

Post by brown9-2 »

nkassis wrote: post #22

One thing no one talks about, why do all degrees virtually cost the same in most universities. Why would a engineer pay the same as a liberal arts student. The reason I saying this is maybe the cost should be proportional to the expected earnings?

Well, what is the university charging students for - the services that they produce to give you your education, or the expected value of your salary after graduation?

In theory, universities are not for-profit.

Is there something about an engineering school education that is inherently more expensive than a liberal arts education?

Re: The student loan crisis will dwarf the housing market crash.

#28

Post by startuprules »

Actually, the commercial real estate market crash will dwarf both the student loan and the housing market crash.

"Over the next five years, about $1.4 trillion in commercial real estate loans will reach the end of their terms and require new financing"

Elizabeth Warren Warns About Commercial Real Estate Crisis, 'Downward Spiral' For Small Businesses, Local Banks http://www.huffingtonpost.com/2010/02/11/commercial-real-est...

Re: The student loan crisis will dwarf the housing market crash.

#29

Post by dnsworks »

patio11 wrote: post #20

It isn't going to be as bad as the housing market crash, because degrees are revenue producing assets for the overwhelming majority of people and houses are costs for the overwhelming majority of people. Also, student loans do not have any mechanisms in them which are designed to induce payment shock, like ARM resets are. (I am only half sardonic there.) If your loan repayments are $700 a month when you graduate, the…

"It isn't going to be as bad as the housing market crash, because degrees are revenue producing assets for the overwhelming majority of people and houses are costs for the overwhelming majority of people. Also, student loans do not have any mechanisms in them which are designed to induce payment shock, like ARM resets are. (I am only half sardonic there.)"

Degrees clearly are great revenue producing machines for the portion of the workforce currently unemployed with degrees. I remember a few years ago, "The housing market can't crash, it's impossible, it's the only safe investment vehicle after all of those silly tech stocks".

Re: The student loan crisis will dwarf the housing market crash.

#30

Post by frossie »

evgen wrote: post #14
frossie wrote: post #2

Interesting article. 2-year Universities: Who made up the rule that we have to attend college for 4 years? Tertiary education does take a hell of a long time in the US. In my field, and in my generation, most UK students got their PhDs around 24-25 years of age; for the US students it was more like 27-28. Yes, if that is a real effect that would definitely be a problem. I can think of two factors that may be affectin…

> in my generation, most UK students got their PhDs around 24-25 years of age; for the US students it was more like 27-28 The programs were not quite equivalent. US Ph.D. programs have traditionally included more courses and include a comprehensive examination in addition to a dissertation. A US Ph.D. candidate must demonstrate a broader understanding of the field and cannot just jump into thesis work upon starting t…

The programs were not quite equivalent.

Sure, they may not be identical but they were teleologically equivalent. Newly minted PhDs from both countries proceeded to compete for the same jobs on a seemingly equal footing.

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