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How America's universities became debt factories

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Re: How America's universities became debt factories

#91

Post by firejake308 »

jackdaniel wrote: post #39
dwighttk wrote: post #20

Earlier quoted context omitted.

how does that help?

You don't have "an industry" that hikes prices, and there is a central authority without ulterior motive that has an influence over what is funded. Not to mention that you don't put young people into debt from get go.

My understanding of a free education is one that is 100% paid for by the government, since someone still has to pay the professor's salary. In that case, you still have an issue of an industry that can demand increased prices (from the government, of course) if university enrollment suddenly increases (and I think it would if students didnt have to pay tuition). So I think you still have to figure out how to handle the market forces, but you're right that shifting the burden from the students to the government lets people start off their lives with less debt, which is a benefit of its own.

Re: How America's universities became debt factories

#92

Post by MarketingJason »

tway_GdBRwW wrote: post #58
andreyk wrote: post #13

Seems like a good overview, but I do find this bit unclear: "But why don’t market forces correct these issues? The answer lies in the unique shield that non-dischargeable student loans provide to educational institutions and lenders. In a normal market, if a product consistently fails to deliver value, consumers stop buying it. Producers either improve or go out of business. But in the world of higher education, this…

> But why don’t market forces correct these issues? Another theory: The value creation is not linked to the value capture. So market forces make a bad feedback loop. Look, I'm totally pro business, but business is only "good" at allocating capital when value capture and creation are linked. Education isn't like that. The closest we have are the bootcamp schools, where they take a cut out of your first 2 year's salary…

I ran a coding bootcamp school that had both your typical pay-upfront and later added an option like you outline. I can't speak for all programs, but schools use an affiliate third party lender for those "free" loan programs.

It was relatively new for us when I left, so I never saw the aftermath. I know it worked out well for some students, but my biggest concern was ensuring payments only kicked in if the job was "in-industry or field". My logic was the value isn't there if you go to a coding bootcamp only to not use the skills.

I was still worried they'd basically ask "do you use a computer?" and consider it in-field.

Another issue here is we had folks just looking to up-skill and the value return was harder to gauge if they were returning or continuing to work their job. This was mostly limited to our part-time program so we didn't offer the delayed-loan for it.

Re: How America's universities became debt factories

#93

Post by screcth »

tway_GdBRwW wrote: post #48
mchusma wrote: post #41

Earlier quoted context omitted.

But…the whole point is that it is NOT a market. If student debt is dischargeable and the government guarantee is removed or dramatically reduced, pretty much all problems are “solved”. Universities will have to start focusing on ROI. Universities that provide a poor ROI will shut down. Universities will need to reduce costs for traditional coursework, cut courses with poor returns, add courses with higher returns. Th…

> 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…

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Re: How America's universities became debt factories

#94

Post by closeparen »

mchusma wrote: post #41
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

But…the whole point is that it is NOT a market. If student debt is dischargeable and the government guarantee is removed or dramatically reduced, pretty much all problems are “solved”. Universities will have to start focusing on ROI. Universities that provide a poor ROI will shut down. Universities will need to reduce costs for traditional coursework, cut courses with poor returns, add courses with higher returns. Th…

Trade schools should definitely focus on ROI, and a lot more people should attend them. The idea of the public university is to bring a traditionally aristocratic practice - the devotion of several years of one’s young life to not-necessarily-practical intellectual pursuits - to the middle class. I think our civilization would lose something worthwhile by returning this practice to the exclusive domain of rich families. Much the same as if we sold off all our public parks for development.

The issue is that we have democratized not only the class background part but also the “intellectual pursuits” part. College should be a lot more selective and a lot more rigorous; only a small minority of students have any business attending. The rest can get their credentialing and coming-of-age ceremony in an ROI focused trade school.

Re: How America's universities became debt factories

#95

Post by ThrowawayR2 »

lordnacho wrote: post #47

I don't know if this is some kind of heresy, but here we go. I don't think universities provide much value at all to the common student who is not going to be a PhD. I went to a very well-known institution known for putting the students in a room with the professors, maybe two or three students, to one professor. My economics professor taught me one on one. I still think, in the end, the work is mostly done alone, in…

Except for medical students, who require a teaching hospital and all its equipment.for their education

Except for EE and other engineering students, who require lab and other equipment for their education

Except for chemistry, biology, and other science students, who require chemistry equipment, etc. for their education. You get the idea.

Even for fields that require no specialized facilities, frankly, I don't see any Fields Medal or Turing Award winners that are self-taught nor do I have any reason to expect to see any in my lifetime.

Re: How America's universities became debt factories

#96

Post by screcth »

mchusma wrote: post #41
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

But…the whole point is that it is NOT a market. If student debt is dischargeable and the government guarantee is removed or dramatically reduced, pretty much all problems are “solved”. Universities will have to start focusing on ROI. Universities that provide a poor ROI will shut down. Universities will need to reduce costs for traditional coursework, cut courses with poor returns, add courses with higher returns. Th…

[dead]

Re: How America's universities became debt factories

#97

Post by AndyKelley »

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

You seem to imply that a general willingness is what would allow this to happen when the article spells it out pretty clearly: it's powerful organizations clinging to power. Your sentiment amounts to nothing more than wishful thinking.

It's tempting to just agree with your sentiment, but I think that day dreaming about an unrealistic solution sucks energy away from more effective actions. The main challenge of solving a difficult puzzle is to avoid dead ends and red herrings.

A more promising plan involves explicitly strategizing against the agents who have the opposite agenda.

Re: How America's universities became debt factories

#98

Post by firejake308 »

oarla wrote: post #62

As with other industries, there is a steady increase in demand but not enough supply. Make it easier for accredited universities to be setup and let the free market forces drive the cost of an undergraduate degree down.

I actually think we should be decreasing demand rather than increasing supply. Not every job needs a college degree, and allowing more people to avoid college altogether would naturally drive prices down from the demand side. The hard part is that I don't know how to make employers accept non-degreed applicants, outside of having Peter Thiel shout at them to do so.

Re: How America's universities became debt factories

#99

Post by dachworker »

lordnacho wrote: post #47

I don't know if this is some kind of heresy, but here we go. I don't think universities provide much value at all to the common student who is not going to be a PhD. I went to a very well-known institution known for putting the students in a room with the professors, maybe two or three students, to one professor. My economics professor taught me one on one. I still think, in the end, the work is mostly done alone, in…

University is too rushed. That's why you feel like the work is done on your own. Cause of course you have to acquaint yourself with the subject at your own pace. Once you become acquainted, that's when it becomes useful to have access to a leader in the field. But by that time you are writing your finals and preparing for the next semester.

Re: How America's universities became debt factories

#100

Post by freshtake »

lordnacho wrote: post #47

I don't know if this is some kind of heresy, but here we go. I don't think universities provide much value at all to the common student who is not going to be a PhD. I went to a very well-known institution known for putting the students in a room with the professors, maybe two or three students, to one professor. My economics professor taught me one on one. I still think, in the end, the work is mostly done alone, in…

Online education ftw?

If you can drop 90% of administrators and real estate by moving online, student loans become a thing of the past. College becomes a halfway house commune for young people to who want to leave their parents nest.

So the way you fix a broken system is to replace it with something cheaper and better. The issue of course is that 99% of people who start online courses don't finish them. Universities provide motivation for learning, which is required for many learners.

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