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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.

#41

Post by ultrasaurus »

sliverstorm wrote: post #10
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…

I'd say it's a combination of your #1 - I 'relearned' a LOT of stuff in my first year- and the same phenomenon inside the university, between classes . It's terrible, and eats a lot of time. Essentially, your professors can't completely count on what professors of pre-req classes have taught you, and often have to review some things. This problem is compounded when the school admits community college students, whose…

It's a shame that there aren't more half-courses. Running both a course on filters and "a tiny course on the stuff about filters you need to you for other courses" (that could maybe be as little as a few optional classes + a test) shouldn't be beyond our organizational skills.

Maybe what I want is more tests as pre-requisites rather than only full fledged courses (my alma mater had an English test that could be taken in lieu of one mandatory course)

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

#42

Post by muhfuhkuh »

dnsworks wrote: post #29
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…

"Degrees clearly are great revenue producing machines for the portion of the workforce currently unemployed with degrees."

The unemployment rate for degree-holders in the US is currently 4.5%, compared to 10.5% overall. The bulk of the unemployed are in blue-collar sectors and among those who have graduated with a high school diploma or less. We can argue about what is or isn't an "acceptable rate" of unemployment, but typically for America it's been 4-5% unemployment. That even in this Great Recession, degree-holding citizen unemployment sits within the "acceptable" range, tells you that there is tons of value to getting better educated in this country at this time, and even in this climate.

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

#43

Post by xutopia »

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…

Do you take into account the years that someone without a degree work?

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

#44

Post by billybob »

DenisM wrote: post #25
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 sak…

"Maybe they should make it so that degree can be legally reposessed by the bank ... and any future employer, seeing lack of degree would know to inquire about the details."

This wouldn't work. They can't repossess the knowledge in your head, or the fact that you did EARN a degree, even if you don't HAVE one. Employers are mainly interested in what people know and can do, not how their finances have been in the past (though that may come into play for questions of trust).

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

#45

Post by mikekarnj »

noodle wrote: post #31
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 then do you think that there will be a crash in this area, and if so, how bad do you think it will be? i imagine it wouldn't sneak up on us like the housing crash because of the nature of the loans, but that it could lead to a longer, lingering problem kicked off by the housing crash.

It might not be as bad as the housing market crash but keep in mind that more people will be going to college in the future and take out student loans. I think higher education loans will grow at a staggering rate which will ultimately crash. If it crashed on its own, it wouldn't be devastating. If it happened right after the housing market crash, it could destroy our economy.

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

#46

Post by sliverstorm »

ultrasaurus wrote: post #41
sliverstorm wrote: post #10

Earlier quoted context omitted.

I'd say it's a combination of your #1 - I 'relearned' a LOT of stuff in my first year- and the same phenomenon inside the university, between classes . It's terrible, and eats a lot of time. Essentially, your professors can't completely count on what professors of pre-req classes have taught you, and often have to review some things. This problem is compounded when the school admits community college students, whose…

It's a shame that there aren't more half-courses. Running both a course on filters and "a tiny course on the stuff about filters you need to you for other courses" (that could maybe be as little as a few optional classes + a test) shouldn't be beyond our organizational skills. Maybe what I want is more tests as pre-requisites rather than only full fledged courses (my alma mater had an English test that could be taken…

Tests as pre-reqs are pretty useless IMHO. I 'tested into' the second level of calculus before I had taken pre-calc, but I would not have been able to pass the class, not a chance.

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

#47

Post by hnal943 »

nkassis wrote: post #21
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?

The type of pressure universities will get from the government will only be the kind of pressure that is politically expedient. We have enough affirmative action university system as it is.

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

#48

Post by yummyfajitas »

jbooth wrote: post #35
yummyfajitas wrote: post #24

Earlier quoted context omitted.

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 libra…

Well, the CS education is available without the late fees, computer science is probably the easiest subject to learn from the internet. For one thing, NYU trades on their name as well as their education, that's a big chunk of the money you're talking about. But the more poignant question to me is whether you're getting less out of the liberal arts classes than you are out of the CS classes. I'm not sure that's clear,…

For one thing, NYU trades on their name as well as their education,...

If college is just an exercise in signalling, why bother with classes at all?

Why not just replace classes with final exams, give out the paper, host a few networking events and save billions of dollars?

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

#49

Post by muzz »

nkassis wrote: post #11
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…

Aren't the rates set by the government? At the very least, there should be ways for some of it to be forgiven for specific reasons, health reason would be on top. Also, there are some programs where people who work for the government can get loans forgiven after a set amount a years. Maybe a similar thing (through tax breaks) could be implemented to help employers pay student loans with the student. But the best solu…

> Harvard is now cheaper than some states schools, that's ridiculous.

Which schools would those be? And are you using out-of-state numbers?

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

#50

Post by muzz »

gsmaverick wrote: post #9
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…

I am currently going into my second year university in Canada, but we have a similar situation. 60%-75% of first year course material was largely useless and/or so basic I was surprised people didn't already know what was being taught. My four year degree could easily be a 3 year degree. I personally believe the best thing to pursue at university is a double major, because it cuts down on the "broadening your horizon…

Isn't there an equivalent of "Advanced Placement" in Canada? I.e. if you know the material of that freshman course, you can demonstrate it via an exam and be credited for the course.
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