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How America's universities became debt factories

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Re: How America's universities became debt factories

#61

Post by michelsedgh »

squidgedcricket wrote: post #34
michelsedgh wrote: post #5

I agree, and another way out is educating people who are about to enter university properly so they make an informed decision about the major they wanna choose more than their feelings and more on facts to see the outcome.

That's not a one-size-fits-all solution. Many 18 year olds will not be willing or capable of making a good financial long term decision regardless of education. Mortgaging yourself into decades of indentured servitude shouldn't be an option that's available to young adults.

I actually beg to differ, most people who go into STEM for example have a pretty good understanding of their path and they are very smart 18 year olds who make really good decisions, but I agree that mortgages shouldn’t be like candies giving them to any kid. I agree that If banks were worried of not getting payed back, then maybe they would screen better, but still the issue of universities with bad incentives still remains there.

Re: How America's universities became debt factories

#63

Post by dvh »

dachworker wrote: post #25

Meanwhile, I know of German and Dutch peers of mine who upon completing their masters in Europe, enrolled in California to do a second Masters ( at the time I believe they paid in the range of $100k) for the VISA and internship opportunities. And IIRC, the bet paid off because they all found employment in California, with salaries 3x to 4x what they could get here.

Let me guess, it wasn't Egyptology degree

Re: How America's universities became debt factories

#64

Post by anovikov »

ben_w wrote: post #56
anovikov wrote: post #26

Earlier quoted context omitted.

We shouldn't see the government as solution to too many problems. If we overdo on it, we get socialism. And we know how it always ends. Let the market forces decide. Eventually people will realise college doesn't work and will stop going there. Seriously problem is that too many people think they are smart and can benefit from a degree, when most can't. If 10% top graders go to college from school as it was in the bo…

> If we overdo on it, we get socialism. And we know how it always ends. First, no, we have some high-visibility examples of dictators claiming to be socialists , several of whom had purges of other internal opponents who said socialism was a different thing to what they were doing. We don't point to the "Democratic People's Republic of Korea"* or "The Democratic Republic of Congo" then say of Democracy (or of republi…

No, i mean EU socialist countries. To the tune of Sweden, Netherlands, etc. That are little but sleepy retirement community with no ways to make money. Why would anyone with any ambition want to live there? So they don't. They go to America in spite of all it's horrors and sins. Live there once they made they money? Also no, because taxes, they go to the likes of Cyprus or Malta, or since recently, Spain [1]. These countries are good only if you are a taker, or a tourist.

[1] https://en.wikipedia.org/wiki/Beckham_law

Re: How America's universities became debt factories

#65

Post by chii »

wood_spirit wrote: post #14
pelagicAustral wrote: post #2

I was lucky enough to get a grant, 100% of cost, with two caveats, you have to finish, and once you finish you HAVE to work in the country for 2 years. Overall an amazing compromise for government.

Guessing from your username that this was Australia? Is this normal? And was this for specific courses and entry grades etc?

It's not normal to have this in australia - these are probably scholarships.

Australia has similar loan system for tertiary education.

Re: How America's universities became debt factories

#66

Post by bilater »

The education-politician complex as we know it will face a dramatic reckoning in the next few years. Many mid-tier universities are likely to go under.

Perhaps, as a society, we will rethink how education is attained. In a world shaped by AI, maybe kids will take MOOCs just for fun.

Re: How America's universities became debt factories

#67

Post by thayne »

anovikov wrote: post #26
advael wrote: post #6

We should be way more willing to straight up kill multi-billion dollar industries. Without that willingness, most modern problems are impossible for governments to solve, and such industries and even their potential competitors are incentivised mostly to exacerbate the problem. I love a good market as much as anyone but there really are problems markets will never solve

We shouldn't see the government as solution to too many problems. If we overdo on it, we get socialism. And we know how it always ends. Let the market forces decide. Eventually people will realise college doesn't work and will stop going there. Seriously problem is that too many people think they are smart and can benefit from a degree, when most can't. If 10% top graders go to college from school as it was in the bo…

In this case, government intervention is what caused the problem, and removing that intervention is what would disrupt the multi-million dollar industry.

Specifically, the government made it so college loans can't be discharged in bankruptcy, and backs many student loans.

The solution is to remove the exception for student debt in bankruptcy, and either have the government stop backing student loans, or make stricter requirements for colleges to quailify for its students qualifying for federal loans. Like say, require that a certain percentage of students graduate, and get jobs within a year of graduating, having reasonable tuition, etc.

Re: How America's universities became debt factories

#68

Post by chii »

pj808 wrote: post #21

Human capital contracts are another partial solution that flips the incentives: instead of using loans to pay tuition up front, institutions are paid a % of your income for a fixed period of time, after which any remaining amount is forgiven. Typically this only applies to income over a base amount (such as 10% of income above a 40,000 base). Naturally this works great in fields with strong employment outcomes and te…

> a % of your income for a fixed period of time

why not a % until the cost of the degree is paid back? Why does there have to be a forgiveness component?

Re: How America's universities became debt factories

#69

Post by wood_spirit »

Many years ago I went to university in the uk. Entry required good grades but tuition was free and there was a reasonable grant to live on.

Twenty or so years ago the grant became a loan and, more recently, tuition fees were introduced.

Nowadays way more people go to uni but come out saddled with debt.

Presumably the incentives are the same as described in the article for the US: the uni wants as many students as possible because they get tuition fees and short term the administrators don’t care about graduation rate or job outcomes because it will be on some future administrators watch when the feedback loop stops new undergrads joining?

Re: How America's universities became debt factories

#70

Post by Cyph0n »

robertlagrant wrote: post #57
tway_GdBRwW wrote: post #48

Earlier quoted context omitted.

> Universities will have to start focusing on ROI. In Europe, they have a simpler system. Education is paid for from taxes. If a student does well, they pay for it via taxes. If they don't, then they aren't crippled by debt. The problem with the ROI approach is it still places too much burden on the student, and, well, life happens. Say you major in comp sci (or some other high-paying field) but shortly after graduat…

> Say you major in comp sci (or some other high-paying field) but shortly after graduation something happens which prevents you from working in the field. Sucks to be you. That's why the article's saying you should be able to declare bankruptcy. > And likewise it sets up universities to, as you say, "cut courses with poor returns." Like for example "teaching", because school teacher pay is crap, so it has a poor ROI.…

Teaching as in school teachers? In the US? Not even close to being well paid.
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