I don't want to discharge my student loans. I just want to be able to refinance them again based on current market rates.
The student loan crisis will dwarf the housing market crash.
51–60 of 107 posts
Re: The student loan crisis will dwarf the housing market crash.
#52It 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…
You didn't factor in the very high possibility of someone dropping out.
Google "college dropout rates". Consensus figures seem to be around 40% of enrollees don't have a degree 6 years later.
Re: The student loan crisis will dwarf the housing market crash.
#53looking forward to my bailout
Re: The student loan crisis will dwarf the housing market crash.
#54Earlier quoted context omitted.
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?
Well I was really referring to students who's parents are making less then 120k if I remember correctly, tuition is now waved. Effectively making it cheaper. I do not know how many percent of their student body fits this but those who's parent make more than this should in effect be able to afford the tuition rate.
I meant it a tongue-in-cheek.
Re: The student loan crisis will dwarf the housing market crash.
#55Whatever happened to studying for the sake of it? You know, like learning new things & stuff. When did that shift from studying as exercise for the spirit to studying as a way of fattening your wallet come about?
Re: The student loan crisis will dwarf the housing market crash.
#56It 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…
Whoa, there! What discount rate are you using? For the median degree, I get an NPV less cost of $47K. Here are my assumptions: * Discount rate of 6% (we're talking about an asset with a 40-year lifespan and zero terminal value). * $25K in annual school costs. * $25K in annual opportunity costs. (May be conservative for people who are college material but didn't get a degree.) * Four years to complete the degree. Whic…
I think you're overestimating the annual cost of school. I know it doesn't cost $25k/yr for me to go. I pay around $6k/yr for tuition, plus another $1k or so for books. According to College Board [1], that's about $1k less than the average for a student going to a public school, in-state.
Your figure matches about what it costs to go to a private school, but, from my experience, public schools are also more likely to give scholarships [2]. Even still, no one is forced to go to a private school.
[1]: http://www.collegeboard.com/student/pay/add-it-up/4494.html
[2]: I went to a private school my first year. It was around $30k/yr, but I was also given a scholarship that cut that price to around $18k/yr. Most of the people I met on campus also received scholarships of some sort as well.
Re: The student loan crisis will dwarf the housing market crash.
#57One 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?
The Univ of California system adds a "professional fee" to certain graduate programs (MD, JD, MBA, etc) that expected to have higher earnings.
Re: The student loan crisis will dwarf the housing market crash.
#58It 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…
Whoa, there! What discount rate are you using? For the median degree, I get an NPV less cost of $47K. Here are my assumptions: * Discount rate of 6% (we're talking about an asset with a 40-year lifespan and zero terminal value). * $25K in annual school costs. * $25K in annual opportunity costs. (May be conservative for people who are college material but didn't get a degree.) * Four years to complete the degree. Whic…
I graduated in 3.5 years and school cost 17k/year. Also, opportunity costs is not 25K because you still have basic cost of living either way and you can work in the summer.
So run those numbers assuming school costs of 15K, opportunity costs of 5k, 23K earnings differential, and student loan costs of 3.5% tax deductable.
PS: A friend of mine worked his way through school making 7.50$ an hour as a cook at without student loans. He worked 80hours a week in the summer and 40 hours a week during school and graduated in 4.5 years. He also lived in a trailer with his wife and child and got an internship his senior year at 13$ an hour it was a major pay raise.
Re: The student loan crisis will dwarf the housing market crash.
#59Earlier quoted context omitted.
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?
Hey, you're the one who worked there :)
Personally, I value large chunks of the education I got in college, and think the majority of it had some value. I dunno how that value compares to the cost, and I've never seriously considered graduate school of any kind because the (tuition + lost earning) changes a bunch once you have a job.
I was mostly commenting that I thought a lot of the liberal arts education was just as valuable as the technology education, provided that I actually learned the tech so I could get a job. I learned a lot about music, literature and history that I'll have for my whole life, and that I really wouldn't have gotten off my duff to learn on my own.
Re: The student loan crisis will dwarf the housing market crash.
#60Earlier quoted context omitted.
Here's a vote for "interested".
I second the vote for the article. Would love to read it. I think most people got mortgages because it was a sure thing investment that appreciates over time. That didn't hold true. I'm arguing that a college education doesn't exactly equate to a higher salary these days.
Lifetime earnings should be a better predictor than median salary at a given point in one's career given the point made upthread about unemployment being lower for college graduates.
Even if diploma-wielding programmers can command high salaries in boom times, they have a tougher time getting jobs when there are unemployed programmers with degrees applying for the same jobs during a recession.