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How America's universities became debt factories

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Re: How America's universities became debt factories

#491

Post by nobodyandproud »

Perhaps one compromise is to discharge any interest and prevent interest accrual on bankruptcy-claimed loans.

Removing any risk to debtors is what set-up this perverse incentive; and breaks the market.

I’d still prefer what the author proposed, but the status quo is broken.

Background: I graduated in the 1990s with virtually no debt attending a third tier public school as I had to pay my own way.

But only because I didn’t want to declare bankruptcy and don’t like being in debt; yet it was never clear that bankruptcy wasn’t a real option.

What kids have to go through today is outrageous.

Re: How America's universities became debt factories

#492

Post by mezzie2 »

pixodaros wrote: post #232
mezzie2 wrote: post #176

Earlier quoted context omitted.

I feel like allowing bankruptcy in certain situations would make sense. For example, I took out undergraduate and graduate loans to train for a career that, due to a freak health event (I got MS) in my last semester of grad school, I couldn't actually do . Currently, the disability discharge works in a way where if you can do any work at all you're on the hook for the full amount. So someone who went to school to bec…

Think of people who started a Computer Science degree in 2019 or 2020 (yes, individuals can maximize their chances of getting a software development job after university, but as a collective many of them will have to do something else for the foreseeable future).

Yeah, I'd consider the COVID kids to be in a similar boat to those of us who were in college for the GFC. The only reason interest rates were raised as suddenly and drastically as they were is because of COVID, which is a freak event. (Albeit one we should have been planning for as a country.)

There are ways to get student loans discharged in bankruptcy now, and one of the criteria that can be used is essentially that you were sold a bait and switch. (e.g. if the school majorly misrepresented what graduates from certain majors earned) I'd argue that there are cohorts who had that happen on essentially a societal scale, and we should modify the existing legal principle to include deception by the government/industry and not just by educational institutions.

I also think there might be societal stability benefits to this - one of the biggest black pills I've ever encountered was that in the GFC, people could lose their houses/go bankrupt and be allowed to start over even if they took out a NINJA mortgage, that the mortgage brokers/sellers individually saw no punishment, and almost all the high up people who caused/exacerbated the issues got off scot free or were eligible for new starts. If an adult in their 30s-50s makes a bad choice, we have to bail them out or help or not hold them accountable? But the kids who made bad decisions at 17 should be held to them for life? It was just a clear case of shitting on people without the power to push back that it made me revile a lot of American 'values'.

Re: How America's universities became debt factories

#493

Post by dahart »

luckylion wrote: post #311
magnoliakobus wrote: post #86

Earlier quoted context omitted.

I think most people would agree with me in saying the European model sounds pretty swell compared to forcing people into declaring bankruptcy because of economic/personal factors potentially out of their control, while also inserting an incredible amount of volatility into the entire university system that would make long term institutional planning much less possible.

Many will agree, but that's part of the reason why the US has a 50% higher GDP with 30% lower population. Focusing on well-beeing, fun and experience comes at a price.

The U.S. GDP per capita is behind Norway, Ireland, Switzerland, and these countries are known for low cost and excellent education.

What do you mean about 30% lower population? How is that relevant? You’re quoting a per-capita stat, the population was already factored out. And you’re comparing a single country to 27 countries. Makes zero sense.

Re: How America's universities became debt factories

#494

Post by ghaff »

pixodaros wrote: post #391
ghaff wrote: post #264

Earlier quoted context omitted.

To your specific example, there are a lot of jobs that involve content marketing and other types of writing that aren't exactly hitting the pavement journalism but probably pay a lot better, are more reliable employment, and may be close enough. As you say, it's about finding the intersection. If I were looking for a writing job today--which I did a lot of over the past 10 years--I wouldn't be looking to the New York…

Your example of having engineering degrees but spending much of your working life writing is a good example of how income and academic degree don't necessarily go together. If you get training rather than an education you have a clear path but if the job you trained for is not hiring when you need a job you can be SOL.

Basically no one has cared what degrees or certifications I have in decades.

(The one caveat is the fact that I went to the same school as the ultimate hiring manager probably didn't hurt. But the decision had probably already been made at a higher level.)

Re: How America's universities became debt factories

#495

Post by chrisweekly »

schaefer wrote: post #389
chrisweekly wrote: post #103

Earlier quoted context omitted.

> "Teaching is relatively well paid" Compared to what? In the US, teachers are absolutely underpaid relative to their similarly-educated and -skilled peers in other professions.

You forgot to mention teachers in the US are also overworked.

Sure -- though that's almost just two ways of describing the same thing. If teachers were paid $500k, few would describe them as overworked, and if they only had to work 4-hour days (with current salaries and benefits), they might be fairly compensated.

Re: How America's universities became debt factories

#496

Post by impossiblefork »

rr808 wrote: post #331

I'm not convinced American universities are unusually expensive. Its an costly business. Does anyone have good figures for what the cost/student is globally? I can see: https://nces.ed.gov/programs/coe/indicator/cmd/education-exp... looks like the US is 20-30% more expensive than other developed countries but that isn't a huge difference.

They are unusually expensive.

Here in Sweden university education costs less per head than highschool education (we of course pay for research separately). In Russia there's even one university, the Independent University of Moscow, which is just a bunch of mathematicians who give courses.

University education can be made into something really hardcore but simultaneously incredibly cheap.

For example, I think the IUM has exactly zero administrators.

Re: How America's universities became debt factories

#497

Post by freshtake »

mezzie2 wrote: post #176
SamuelAdams wrote: post #125

> Make student loans dischargeable in bankruptcy again. I would like to see the author back this up with more considerations. Bankruptcy disappears from all credit reports after seven years. The average age of first time home buyers is 35. So if a new grad’s credit is trashed from the age of 23-30, it makes no difference to them - they are not planning on using credit for anything substantial anyways. What is going t…

I feel like allowing bankruptcy in certain situations would make sense. For example, I took out undergraduate and graduate loans to train for a career that, due to a freak health event (I got MS) in my last semester of grad school, I couldn't actually do . Currently, the disability discharge works in a way where if you can do any work at all you're on the hook for the full amount. So someone who went to school to bec…

Yep, and I think most reasonable people would agree with this.

Re: How America's universities became debt factories

#498

Post by freshtake »

Cerium wrote: post #136
SamuelAdams wrote: post #125

> Make student loans dischargeable in bankruptcy again. I would like to see the author back this up with more considerations. Bankruptcy disappears from all credit reports after seven years. The average age of first time home buyers is 35. So if a new grad’s credit is trashed from the age of 23-30, it makes no difference to them - they are not planning on using credit for anything substantial anyways. What is going t…

I would rather see us switch to an income based repayment schedule with discharge at 30 years, seems fair to the student and society.

This exists to an extent today. If you apply your profession to an area that the government deems a societal good (e.g. you work at a public university), it can be discharged after 10 years. This was status quo for decades.

Re: How America's universities became debt factories

#499

Post by thayne »

anovikov wrote: post #460
penguin1029 wrote: post #214

Earlier quoted context omitted.

Agree, but the result will be that far fewer kids get to go to college, or get to go to the best college that they can get into. Loans will only be granted to students who have a track record of high achievement, parents willing to co-sign, and going into majors that make economic sense. Enrollment will drop, universities will stop offering passion majors, mass layoffs in library science, academia, and college admini…

But isn't it the goal? To make sure only the kids who have the brains and the right class to make value out of a degree (or don't care about value because their parents have cash), will go to study, not "just about everyone" as now. Working class kids without outstanding abilities should go to trade schools/apprenticeships and do blue collar labor. It pays decent bucks, and brings value to society too.

I think therec would also need to be a cultural shift to make trade schools and apprenticeships more acceptable, and make financial assistance for them more accessible.

And for that matter, I think it could make since to have trade schools for white colllar jobs too. In some sense that is what coding camps are, although I'd like to see them be a little more rigorous and include things like security, software design, algorithms, etc.

As for passion subjects and arts, maybe have more, and higher quality community classes available that people can go to when they already have a decent job and can pay for them outright instead of accruing massive debt.

Re: How America's universities became debt factories

#500

Post by berniedurfee »

Regulation should allow students to forgo their tuition payments if they can’t land a good job in their field of study.

That’d help align incentives.

Schools would compete on placement rates and quality. They’d need robust post-graduation placement services and would need strong partnerships with industry players to stay in alignment with required skills.

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