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How America's universities became debt factories

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Re: How America's universities became debt factories

#251

Post by TeaBrain »

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.

Plenty of parents do not know how to manage their finances any more than any other things that they do not know, which a school is supposed to be responsible for teaching. Financial literacy is one of the most important things that a person can learn. Society would surely benefit if classes were taught on the subject in high school.

Re: How America's universities became debt factories

#252

Post by bufferoverflow »

bigstrat2003 wrote: post #218
bufferoverflow wrote: post #114

Earlier quoted context omitted.

I would also add 5) Don't educate young people on what their degree would earn them. So many young people think their hobby can become their career and pay for a nice life style. Unfortunately, it's not the case for many majors.

> So many young people think their hobby can become their career and pay for a nice life style. Unfortunately, it's not the case for many majors. We (as a society) tell kids all the time that their hobby can't be a viable career. Kids are just headstrong and don't want to listen to their parents/other adults telling them unpleasant truths.

> We (as a society) tell kids all the time that their hobby can't be a viable career

That's absolutely 100% not true.

The bs message I see everywhere pushed on young people is "You can be anything you want to be".

We have a whole generation of kids who think they can be youtube stars, influencers, rap stars, etc.

Re: How America's universities became debt factories

#253

Post by lapcat »

TeaBrain wrote: post #246
zozbot234 wrote: post #200

Earlier quoted context omitted.

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 $7…

I think the OP is referring to the number of dollars rather than the number of students.

Re: How America's universities became debt factories

#254

Post by ghaff »

fallingknife wrote: post #229
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...)

If we stopped subsidizing the degrees less people would have them, but employers would still need the same number of employees. They would be forced to drop necessary degree requirements or go understaffed.

Who knows what would happen?

Maybe they'd do their own educational curricula with requirements that would require minimum tenures with payback requirements. (Not sure of all the US laws in this regard. There used to at least be relocation payback requirements.)

But I suspect a lot of people here wouldn't like 1 year bootcamps for jobs that included an extended employment commitment.

Re: How America's universities became debt factories

#255

Post by pc86 »

elashri wrote: post #235
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.

What if I lost my parents before they got the chance to teach me that? What if I was raised in a foster care and I never knew who my parents were? And what if my parents don't know these things themselves? There are many ways that this logic goes wrong. The school should teach that because it is very important lesson to engage in a society and be a good citizen. Edit: Sorry I meant people raised in orphanages not fos…

This kind of argument might hold water if there were an epidemic of 12 year olds aimlessly drifting across the countryside with no adults taking care of them. But there's not, and you're not really making any point.

If you are assuming a guardianship role over a child, however temporary, you have a responsibility to teach them things, full stop.

I've known several foster parents over my life who would be outraged at the implicated that they are somehow lesser to the children they raised and are raising.

Re: How America's universities became debt factories

#256

Post by downut »

paulcole wrote: post #161
Avicebron wrote: post #147

Earlier quoted context omitted.

I'm trying to figure out if you missed a 0 at the end of your rent...

Lol no it was $150. This was Gainesville, Florida and I split a horrible studio apartment with a friend of mine. It was located in a low lying area and once after a tropical storm we had to wade through hip-deep water to get to class (the apartment itself was miraculously high and dry). Coming home one night I saw a little gator swimming along near me as I trudged through it. After we graduated my roommate moved to M…

1985-87 my partner and I rented a just fine spacious 1 bdrm with a 10 min walk to the Math building on the East side of Gville for $200/month. We both had graduate school stipends. The 4 apartments all had cool tenants. Geckos in the stairwell. It was glorious, even w/o AC.

I ended up finishing at ASU. This highly educated ChE/Math imbecile took out a $12K student loan near the end because it was "free"[1]. Got to silicon valley and started learning the maths about house loans and income tax interactions and took a glance at the student loan interest payments (something like 6%? I don't remember) and freaked out. Paid it down immediately. Needless to say we advised the daughter different.

[1] The application was like: name, address, and school. Less than a page.

Re: How America's universities became debt factories

#257

Post by fardo »

eesmith wrote: post #107
fardo wrote: post #85

Earlier quoted context omitted.

Simpler isn’t always preferable: note that the key feature from the consumer perspective in that system is > you pay no matter what Meaning if it’s assumed “despite learning little, you still will be able to pay for it”, there’s no longer any motive force towards quality, as your payment is assured. Incentives on taxpayers thereafter who want to minimize their tax burden would therefore be optimizing primarily toward…

> there’s no longer any motive force towards quality, as your payment is assured There are many excellent European universities, including ones which have been around for centuries, telling me there are ways to handle your concerns. > A vigorous market for education How's that Corinthian Colleges degree working out? Costly and no quality. And exactly the life-crippling outcome we should expect in a 'vigorous market'.

This is non-responsive to my point. Pointing out that paid universities like Corinthian in a grossly distorted market predictably are not very competitive offerings, or that good offerings can nevertheless still exist in heavily distorted markets, both fail to address that

> Current educational incentives caused by how payment is handled in these all-pay systems mean there is very little or no pressure exerted towards promoting an educational arms race towards quality, rather than minimizing cost to service that education.

In a more competitive market, yes, I believe you'd both likely see better European offerings, as well as substantially more compelling American paid offerings than the current batch of cash grab for-profit universities. They exist in their current form almost exclusively because financial lenders in the US have no incentive not to issue loans to students - even if the program is bogus, they are guaranteed re-payment.

This is a commonality shared between both current European offerings (via taxation guaranteeing repayment), and American alternatives (via guaranteed load repayment).

Re: How America's universities became debt factories

#258

Post by pc86 »

Izikiel43 wrote: post #233
paulcole wrote: post #139

Earlier quoted context omitted.

I took out around $20k in loans to study literature starting in 2001. Graduated in 2005. Rent was $150 a month. Played a lot of poker and disc golf. Studied and learned a bit. Had a 75% scholarship to help with tuition. Had a $300/semester book stipend as part of that and just bought penny books off Amazon (one of the benefits of an English degree) and pocketed the difference. Basically for 5-8% or so of my (estimate…

20 years to pay 20k$?

Probably income-based repayment, based on the income of a job you could get in 2005 with a literature degree.

Re: How America's universities became debt factories

#259

Post by zozbot234 »

lapcat wrote: post #247
zozbot234 wrote: post #200

Earlier quoted context omitted.

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…

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

That's a pipeline problem. What the U.S. actually has is a severe bottleneck in available places at medical schools and for residency training.

Re: How America's universities became debt factories

#260

Post by ayewo »

pc86 wrote: post #250
ayewo wrote: post #241

Earlier quoted context omitted.

> 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.

I hear you.

In a situation where the person's parents are hoping their child will be the first to be university educated with the hope that their education would help them break the cycle of poverty (i.e. they are not university educated themselves or that they don't have enough high school education to be able to teach their child about the pitfalls of taking an interest-bearing loan), what happens?

There's this famous saying that: "You cannot teach what you do not know".

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