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How America's universities became debt factories

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Re: How America's universities became debt factories

#241

Post by ayewo »

bigstrat2003 wrote: post #216
NemoNobody wrote: post #182

Earlier quoted context omitted.

Exactly - 12 years of education to get children ready to be citizens and not single class on how to manage a bank account, or even the most basic education about investments or actual wealth building. Instead, all I was told was to go to college. So... the people that made me woefully sheep like and "financially innocent" then sent me to the wolves because they believed in me. Seriously, they made huge changes to the…

> not single class on how to manage a bank account, or even the most basic education about investments or actual wealth building. Not everything can be, or is supposed to be, taught by schools. Your parents should've taught you those things, and if they didn't do that they failed you.

> Your parents should've taught you those things, and if they didn't do that they failed you.

Please be charitable. Your comment is unnecessarily mean. Unless you know the commenter personally, I don't think anyone can diagnose the commenter's upbringing from a single Internet comment.

Re: How America's universities became debt factories

#242

Post by jltsiren »

gruez wrote: post #143
crazygringo wrote: post #88

Earlier quoted context omitted.

> That's all well and good for the student, but what about for taxpayers/governments who's funding that education? We can say the same thing about K-12 education -- it's just something we choose to fund collectively, because that's the kind of society we want to be. But also, progressive taxation means that the rich fund it more than the poor. So the general idea is that if law school and medical school are expensive…

>We can say the same thing about K-12 education -- it's just something we choose to fund collectively, because that's the kind of society we want to be. But in K-12 education, the taxpayer/state has strong control over what's taught. In the last few years there's some latitude by the students, but nothing close the panoply of programs offered by universities. If education is state funded, but only for programs with p…

When the state pays, what matters is the ROI to the state. There is a need for teachers, social workers, and people familiar with various cultures, but the market will never pay them well.

Public funding models often have incentives for delivering the degrees the state wants. For example, there could be field-specific quotas for degrees. The university gets paid for each degree up to the quota, but not for exceeding the quota. That can have interesting effects in fields that are popular but in low demand. For example, the acceptance rate to psychology can be as low as 2-3%.

Re: How America's universities became debt factories

#243

Post by next_xibalba »

I’ve said it before on HN and I’ll say it again: I don’t support any reform with respect to student loans that doesn’t see the academic institutions participate in the pain. I’d like to see a large number of universities get bankrupted by assuming some portion of the student loan liabilities of their alums, then allow the alums to file bankruptcy if they can’t pay off any remaining balances.

Did you know that federal student loans cannot be discharged via bankruptcy AND if you carry federal student loans into retirement, your social security income can be garnished?

Re: How America's universities became debt factories

#244

Post by Shekelphile »

VirusNewbie wrote: post #234
spamizbad wrote: post #190

Earlier quoted context omitted.

I feel like the key thing missing from this discussion are the employers who still demand these degrees. Let's say we reformed both higher education and student loans - does that have any meaningful impact on the demand side beyond pushing the salaries of degree holders up (thus increasing the value of a degree, thus making larger loan values easier to justify, thus...)

Most good employers, especially in tech, don't require degrees these days.

the vast majority of employers will not work with you without a degree, its viewed almost equivalently to being a felon.

Re: How America's universities became debt factories

#245

Post by SpicyLemonZest »

brigadier132 wrote: post #237
SpicyLemonZest wrote: post #231

Earlier quoted context omitted.

This kind of "fact" always raises alarm bells for me. Did you hear it because it's true, or because it sounds compelling while being impractical to disprove?

Here is a source I found and repayment rates tanked after 2009 https://www.mckinsey.com/industries/education/our-insights/t...

This source strongly suggests that the original claim is not true. I don't understand exactly what the X axis is meant to be, but if we assume the 2012 number is meant to represent 2009 graduates, it seems incredibly unlikely that the median graduate has made no progress after 12 years if ~62% of them began making progress after 3 years.

(Can you come up with a story where the two numbers might be consistent? Probably, yeah. Thus the impracticality of disproving weird conditional statistics like this.)

Re: How America's universities became debt factories

#246

Post by TeaBrain »

zozbot234 wrote: post #200
scoofy wrote: post #110

Earlier quoted context omitted.

You forgot the most important part. The people agreeing to these debts, by definition , do not have an education in complex debt instruments that cannot be discharged. Taking our a vast loan to study English literature might seem unwise, but it’s something I could definitely see a starry eyed 17 year old deciding to do.

The bulk of education debt in the U.S. is not about undergrad degrees in English literature or the like. By and large, it gets incurred either for lucrative postgrad degrees (MBA, law, medical etc.) or for earning degrees at "non-traditional" for-profit colleges.

Almost 60% of U.S. undergraduate students take out either federal or private loans and there are 5x as many undergraduate students as graduate students in the U.S.

For those downvoting: 54% of US graduate students take out student loans, while around 55% of US undergraduate students take out loans. The average undergraduate student loan debt is around $29000, while the average debt for graduate school borrowers is $71000. Given that there are five times as many undergraduate students as graduate students and given that a greater number of undergraduate students take out loans, the average graduate school debt would have to be nearly $150k to be greater than the undergraduate debt.

https://www.nerdwallet.com/article/loans/student-loans/avera...

https://www.forbes.com/advisor/student-loans/average-student...

https://www.cnn.com/cnn-underscored/money/average-student-lo...

https://www.nerdwallet.com/article/loans/student-loans/avera...

Re: How America's universities became debt factories

#247

Post by lapcat »

zozbot234 wrote: post #200
scoofy wrote: post #110

Earlier quoted context omitted.

You forgot the most important part. The people agreeing to these debts, by definition , do not have an education in complex debt instruments that cannot be discharged. Taking our a vast loan to study English literature might seem unwise, but it’s something I could definitely see a starry eyed 17 year old deciding to do.

The bulk of education debt in the U.S. is not about undergrad degrees in English literature or the like. By and large, it gets incurred either for lucrative postgrad degrees (MBA, law, medical etc.) or for earning degrees at "non-traditional" for-profit colleges.

You're correct except for one word: "lucrative".

To this day, almost two decades after I left my philosophy PhD program (without a PhD), I still have massive student loan debt.

Even if I had completed my degree, though, philosophy PhDs aren't particularly lucrative. Tenured professors at major universities do ok, but the road to getting tenure-track jobs and then tenure is littered with the bodies of grad students.

I don't think starry-eyed 21 year olds deciding what to do are much different from starry-eyed 17 year olds deciding what to do.

It's worth noting, by the way, that the United States has a shortage of medical doctors.

Re: How America's universities became debt factories

#248

Post by next_xibalba »

haberman wrote: post #227

I agree with the article's diagnosis: the system is out of control, with no market forces are in place to keep costs in check. It's unsustainable for students to take on this level of debt. I'm not sure I agree with the solutions though. Making student loan debt dischargeable doesn't make a lot of economic sense. We're talking about 17-year-olds with no income and no collateral. Why would any lender want to be in thi…

> Do you really want to have that kind of relationship with your school? Do you want an admissions process that is partially trying to decide if you're financially responsible? Do you want your school pressuring you to choose a more lucrative major?

Yes. These schools need to eliminate or drastically reduce the economically useless degrees that they have produced in such grotesque surplus for the past 40 years. They should absolutely have an incentive to produce an education that is useful to society. They’ve miseducated Americans for generations on the lie that all education is inherently good.

Re: How America's universities became debt factories

#249

Post by decremental »

bigstrat2003 wrote: post #216
NemoNobody wrote: post #182

Earlier quoted context omitted.

Exactly - 12 years of education to get children ready to be citizens and not single class on how to manage a bank account, or even the most basic education about investments or actual wealth building. Instead, all I was told was to go to college. So... the people that made me woefully sheep like and "financially innocent" then sent me to the wolves because they believed in me. Seriously, they made huge changes to the…

> not single class on how to manage a bank account, or even the most basic education about investments or actual wealth building. Not everything can be, or is supposed to be, taught by schools. Your parents should've taught you those things, and if they didn't do that they failed you.

[dead]

Re: How America's universities became debt factories

#250

Post by pc86 »

ayewo wrote: post #241
bigstrat2003 wrote: post #216

Earlier quoted context omitted.

> not single class on how to manage a bank account, or even the most basic education about investments or actual wealth building. Not everything can be, or is supposed to be, taught by schools. Your parents should've taught you those things, and if they didn't do that they failed you.

> Your parents should've taught you those things, and if they didn't do that they failed you. Please be charitable. Your comment is unnecessarily mean. Unless you know the commenter personally, I don't think anyone can diagnose the commenter's upbringing from a single Internet comment.

I don't think they're referring to GP and his/her parents specifically. Until very, very recently, it was well accepted that there were a lot of things it your parents' responsibility to teach you. Expecting parents to teach their children things is not even remotely mean or unreasonable.
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