What a Student Loan 'Bubble' Bursting Might Look Like • Hacker News Board

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#71

Post by the_antipode » Thu, Jan 03, 2019, 4:37 AM UTC

Unrelated to the topic of the student debt bubble, the opening paragraph left a bad taste in my mouth:

> I hated the film adaptation of The Big Short. The acting was good and it did have a surprising amount of energy for a story that centers around men in suits doing math. But I felt condescended to. Maybe director Adam McKay tested an original cut—one minus Margot Robbie—and realized a good amount of the audience couldn't follow the plot without having a sexy lady in a bathtub break the fourth wall to explain subprime mortgages and the financial crisis.

Sounds awfully pompous, like it came from r/iamverysmart. Much of the impetus behind The Big Short certainly was to break down the 2008 financial crisis to those that aren't economics/finance wonks, or for whom a narrative holds more weight than a several-hundred page non-fiction book about it.

It's not that I want journalists to coddle their audience, I just think it's a bad look to completely dump on other creators to inflate one's ego while trying to make a point.

How about this, which still includes a bit of criticism of the director (but milder):

"While the film adaptation of The Big Short had good acting and a surprising amount of energy for a story that centers around men in suits doing math, it wasn't exactly my cup of tea. Perhaps it's because I felt Adam McKay didn't trust his audience quite enough to understand the ins-and-outs of complex subprime mortgages and the financial crisis, instead falling back on gimmicks like having Margot Robbie in a bathtub break the fourth wall to explain it all.

"In some ways, America's student-debt crisis is a lot simpler than all that."

I don't know, maybe that's not any better: and maybe by criticizing the author I've become the thing I set out to...criticize. Whatever.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#72

Post by godelski » Thu, Jan 03, 2019, 4:50 AM UTC

gbear605 wrote: post #10

AnimalMuppet wrote: post #9

Earlier quoted context omitted.

Could you explain a bit about the rules for discharges?

I'm not an expert (or OP), but this is probably the information you're looking for: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell... My (possibly inaccurate) summary is that they can be discharged if it would be impossible to live with a minimal standard of living while still paying off the loan.

Note that this says you can only get out if you file bankruptcy and can show that any form of repayment will cause undue hardship.

More realistically you're going to get one of the other two options.

> Your loan may be partially discharged, and you will still be required to repay some portion of your loan.

> You may be required to repay your loan, but with different terms, such as a lower interest rate.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#73

Post by nightski » Thu, Jan 03, 2019, 8:06 AM UTC

ajtaylor wrote: post #62

konaraddio wrote: post #46

> Meanwhile, some people are more than happy to spend $100,000 on a graphic design degree that may get them a job paying roughly $40,000 a year > A lot of that has to do with what Goldfarb likes to call the narrative—one that convinced kids that the only route to middle-class respectability was to get a college degree and that suggested failing to do so meant having failed at the American dream of upward mobility. To…

Or you could go into the "blue collar" trades like plumbing, electrical work, etc. After you get some experience, the trades can be a very lucrative line of work. Albeit you have to sweat and get your hands dirty. Mike Rowe has a few very persuasive thoughts on the subject as well, and can do it much more eloquently than I can.

It's also dooming yourself to a life of little mental stimulation and lots of repetition. I have no problem with physical labor (love house projects and hobbies), but these jobs would suck the life out of me for that reason.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#74

Post by JamesBarney » Thu, Jan 03, 2019, 9:02 AM UTC

exabrial wrote: post #60

JamesBarney wrote: post #37

Earlier quoted context omitted.

I don't think GPA has very much of any effect on lifetime earnings except by being a proxy for IQ and conscientiousness. Same with missing class, they don't reduce someone's lifetime earnings, they just tell you how conscientious they are. But extroversion is actually one of biggest contributors to lifetime earnings. Maybe if they miss a party we should increase their interest rate too.

Well the difference between a 3.0 and 4.4 isn't likely much, but a gpa of 1.5 would very much indicate failure to focus

If you control for IQ and conscientiousness then it's probably what classes they took, how motivated are they by school, whether they found a girlfriend they really liked that semester and decided to blow off class, founded a company, decided to teach themselves french.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#75

Post by JamesBarney » Thu, Jan 03, 2019, 9:21 AM UTC

qihqi wrote: post #38

JamesBarney wrote: post #36

Earlier quoted context omitted.

From a cost perspective it doesn't cost that much more to educate an English major than an engineering major.

I am not sure if that is true. English professors are paid less than Eng ones and does not require expensive lab and equipment.

English professors make maybe 70% of the salary of an engineering professor. With benefits that's probably closer to 85%. And the cost of faculty is less than half the cost of education. You also have administration, buildings, sports, etc. So that ends up being maybe a 7-8% difference. Plus lab equipment, but the expensive lab equipment is probably mostly paid by research, and the other stuff probably isn't very expensive on a per student basis.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#76

Post by zeusk » Thu, Jan 03, 2019, 11:08 AM UTC

dragonwriter wrote: post #19

acover wrote: post #16

Earlier quoted context omitted.

I believe this does not include most of the mortgages. For example, Fannie Mae has 3.35 trillion in assets, which dwarfs total student loans. https://en.wikipedia.org/wiki/Fannie_Mae

> I believe this does not include most of the mortgages. For example, Fannie Mae has 3.35 trillion in assets, which dwarfs total student loans. Fannie Mae is a publicly-traded, privately-owned corporation, despite being federally chartered for a public mission. So, yes, their holdings are not counted in government holdings, because they aren't the government.

Fannie Mae and Freddie Mac are currently under the authority of the Treasury, since the TARP program.

Which is why, their stock is worth a lot less than even their own book value.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#77

Post by sys_64738 » Thu, Jan 03, 2019, 1:08 PM UTC

lesss365 wrote: post #70

sys_64738 wrote: post #20

Earlier quoted context omitted.

The govt shouldn’t guarantee any student loans. My tax dollars shouldn’t be an ATM for student tuition.

And what do you say to public elementary, junior high, and high schools?

K-12 is generally funded from property taxes at the local town level. It's not a loan system as there's nothing to pay back.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#78

Post by wmeredith » Thu, Jan 03, 2019, 1:08 PM UTC

cddotdotslash wrote: post #49

konaraddio wrote: post #46

> Meanwhile, some people are more than happy to spend $100,000 on a graphic design degree that may get them a job paying roughly $40,000 a year > A lot of that has to do with what Goldfarb likes to call the narrative—one that convinced kids that the only route to middle-class respectability was to get a college degree and that suggested failing to do so meant having failed at the American dream of upward mobility. To…

> Let's talk about the alternative: You don't get a degree and now you're resume gets automatically thrown out of most applications. The decision to get a degree is not a binary one. It's possible to get a degree in a higher-paying field. Or, go to a community college for 2 years and then transfer. Or pick a state school over a $60k/yr private school. Or choose your second choice school that offers more scholarships.…

Can we dispel with the “pick a state school” wisdom? The universities in my state have been systematically defunded over the last two decades (and the trend continues). It costs $25k/year to attend The University of Missouri. $100k+ of debt for any four year degree from Art History to Engineering.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#79

Post by zomg » Thu, Jan 03, 2019, 1:38 PM UTC

At it's core, this is an economic problem. When there's an "endless" supply of money, prices go up.

Combined with the newfound belief that, you must, and in fact, are entitled to go to college, "demand" goes up too.

The result is students racking up needless debt when they probably shouldn't have gone to college to begin with. College is NOT the only option to build a successful career, but in America, with no degree, you're seemingly sub-par in the eyes of our backwards society.

So, who wins? All these "Not-for-profit Universities" whose profit margins (non-profit, doesn't mean that aren't profit-ABLE) are probably better than many Fortune 500 companies.

The solution is to dry up the source of loan money, reduce the pumped up demand for bogus degrees kids are getting and encourage young people to consider other career options. You don't need a piece of paper to be successful.

Re: What a Student Loan 'Bubble' Bursting Might Look Like

#80

Post by sadris » Thu, Jan 03, 2019, 1:42 PM UTC

JamesBarney wrote: post #36

rmason wrote: post #28

Earlier quoted context omitted.

Why shouldn't it cost less for an English or a philosophy degree than an engineering degree? The job prospects are not only worse but so are your lifetime earnings. Or looking at it another way the English and philosophy majors are subsidizing the cost of an engineering degree.

From a cost perspective it doesn't cost that much more to educate an English major than an engineering major.

Not true. Engineering students actually use expensive equipment like nuclear reactors and radioisotopes.