Ripping Off Young America: The College-Loan Scandal • Hacker News Board

Re: Ripping Off Young America: The College-Loan Scandal

#71

Post by macspoofing » Fri, Aug 16, 2013, 5:52 PM UTC

ethanbond wrote: post #44

AnIrishDuck wrote: post #38

Earlier quoted context omitted.

> Loans aren't at the root of the problem Loans absolutely are at the root of the problem. Not the abstract concept of loaning money, but the current implementation. The student loans legally allowed today are borderline usary. They provide a convenient way for lenders to sidestep bankruptcy protection. This leaves students with exact same problems society had before bankruptcy: it's far too easy for the unwary to si…

The overall price of education is the root of the problem, and the price of education has little correlation to the availability of student loans (contrary to popular belief). > Maybe it's time to cap total outstanding student debt to some reasonable expectation of when they can be repaid. I think that's a good start. Kind of resembling a loan-forgiveness mechanism (which there are already a few). It falls into the s…

>and the price of education has little correlation to the availability of student loans (contrary to popular belief)...

That's just blatantly wrong. The easy availability of student loans is what's driving education costs. The fact that lenders are willing to lend enormous amounts of money to people who may not be able to pay them back, tells you right there that there is quite a bit of market-distortion going on. Couple this with a natural tendency to not consider future-risk by an 18-year old, strongly implies that colleges would be incentivized to exploit this, and in fact they do! I've read countless articles on private colleges charging insane amounts for tuition whose middle-class graduates end up with thousands in debt and no reasonable chance of making a salary to pay off those loans.

Think about it this way, in a normal reality, there is no chance a responsible bank would lend a middle-class kid $100,000-$200,000+ to do a 4 year liberal arts degree.

Re: Ripping Off Young America: The College-Loan Scandal

#72

Post by nawitus » Fri, Aug 16, 2013, 5:53 PM UTC

danielweber wrote: post #47

nawitus wrote: post #43

Earlier quoted context omitted.

Make the government pay for education.

You still need price pressure on the schools. If tuition keeps on going through the roof but no one cares because it's "free" we're still blowing a lot of money that could better be spent elsewhere.

I'm not sure how it's done in Scandinavia. I think the government can simply fund public universities with a lump sump (per student), and disallow any tuition charges. Universities could then raise additional private money to use as they see fit.

Re: Ripping Off Young America: The College-Loan Scandal

#73

Post by bradleyjg » Fri, Aug 16, 2013, 5:53 PM UTC

ethanbond wrote: post #12

gxs wrote: post #7

Amazing, perspective is everything. I don't deny that college kids are being taken advantage of. Graduating from a small liberal arts college in South Dakota that no one's ever heard of with a degree is Culture Studies and 80k in debt really is a rip off. The flipside of this coin however is someone like me. My parents are immigrants and I was the first to go to school. To my parents, the fact that someone would be e…

I agree. Loans aren't at the root of the problem, but they're also a bad solution. An even worse solution is getting rid of loans. The only solution worse than that? Blaming students. This is why, until there's some radical, radical change, I'll always vote for the people perpetuating student loans. I'm not going to be the one that screws an entire generation out of a worthwhile education in the name of "loans are ba…

Like so much else the baby boomers ruined this.

When they went to college it was inexpensive enough to work your way through and most of the faculty was full time moderately paid professors. Now tuition at many places is more than the national median household income, and the most of the faculty is made up of very poorly paid adjutants with a thin gerontocracy layer of tenured professors taking up most of the faculty salary pie. And they're all loaded to the gills with deanlets and deanlings.

Re: Ripping Off Young America: The College-Loan Scandal

#74

Post by nawitus » Fri, Aug 16, 2013, 5:54 PM UTC

rmk2 wrote: post #62

MisterWebz wrote: post #33

Earlier quoted context omitted.

In some countries, you don't even have the OPTION to take out a loan to go to school. That's because in some countries you won't be paying more than 5k to go to a decent college.

So? Where do these "5k" come from? And where do you get money to live and eat? Either you have parents who can help, then it doesn't really matter whether we are talking about 5k, 25k or 50k (from a structural perspective), or you don't. If you don't have anybody who can help, it doesn't matter whether you cannot come up with 5k, 25k or 50k. One of the reasons German students protested 600€ a term (1200€ a year) fees…

You can have no fees, affordable student loans and social security (e.g. student 'credit', ~500e/month in Finland).

Re: Ripping Off Young America: The College-Loan Scandal

#75

Post by jseliger » Fri, Aug 16, 2013, 5:55 PM UTC

danielweber wrote: post #46

gxs wrote: post #7

Amazing, perspective is everything. I don't deny that college kids are being taken advantage of. Graduating from a small liberal arts college in South Dakota that no one's ever heard of with a degree is Culture Studies and 80k in debt really is a rip off. The flipside of this coin however is someone like me. My parents are immigrants and I was the first to go to school. To my parents, the fact that someone would be e…

Part of the reason prices have gone up so much is that credit has become so easy. 50 years ago, if you wanted to go to college, you went, and the prices were reasonable because people could not afford a lot of money for it, and no one would lend it to them. There is almost no downward price pressure on college costs, and there is upward price pressure: since the students don't care about the price, they always want t…

Part of the reason prices have gone up so much is that credit has become so easy.

"Part of the reason," yes, but take a look at Why Does College Cost so Much? by Archibald and Feldman (http://www.amazon.com/Why-Does-College-Cost-Much/dp/01997445...). Their short answer is "Baumol's cost disease. The long answer is the book.

Re: Ripping Off Young America: The College-Loan Scandal

#76

Post by bradleyjg » Fri, Aug 16, 2013, 5:57 PM UTC

ethanbond wrote: post #36

twoodfin wrote: post #24

Earlier quoted context omitted.

This is why, until there's some radical, radical change, I'll always vote for the people perpetuating student loans. Loans for the sake of loans seem to be the key problem here: If students who intended to get a "degree in bullshit" at a gussied up diploma mill faced difficulty finding a loan for that purpose, they might reevaluate their decision. And besides: Who's seriously advocating for the total elimination of s…

And who is going to decide what's a "degree in bullshit" and what's a "gussied up diploma mill?" What metrics would they use? Libertarians tend to like the idea. But short of that, it's difficult to vote for reform that lands between perpetuate-the-problem and screw-an-entire-generation. We can fix the problem of paying for education, but that solution isn't going to be found anywhere near the student loan debate.

The schools are in the best position to underwrite loans. They should be the ones loaning out educations. That also has the advantage of giving the schools a stake in the marketability of their graduates.

Re: Ripping Off Young America: The College-Loan Scandal

#77

Post by at-fates-hands » Fri, Aug 16, 2013, 5:57 PM UTC

Zimahl wrote: post #35

gte910h wrote: post #21

Earlier quoted context omitted.

I'm fine if costs stay where they are....as long as there is a mandatory forgiveness 15 or so years past graduation. Then lenders will discriminate based on major (as it should be) and not fund english degrees and other such things that we have a glut of.

The problem is costs won't stay where they are, they just keep climbing for no reason. The quality is only marginally better, if that. It is one thing if the states are covering less tuition for their constituents that would make the cost rise make sense, but out-of-state tuition has almost doubled since I started college back in the mid-90s. Here's the problem. My alma mater is Washington State. They want to be a 'w…

>> It's not Harvard or Stanford but it's accessible and it allows for upward mobility.

Agreed. I came from a state university as well. It wasn't MIT or CalTech, but I had plenty of roommates with engineering degrees who landed gigs at LockHeed Martin, 3M, and BP. They used to tell me straight up they didn't care about their pedigree, they wanted an affordable, solid education.

Once they were hired, they convinced their employers to let them go back and get their masters, all paid for of course by the company. Something a LOT of people forget about and take for granted.

But it all starts with an affordable state university education.

Re: Ripping Off Young America: The College-Loan Scandal

#78

Post by minikites » Fri, Aug 16, 2013, 5:58 PM UTC

vaadu wrote: post #19

A degree that provides the recipient with little foundation for income should not be underwritten with tax dollars. You want a teaching or nursing degree, I'm there. If you want a degree in puppetry, not happening.

http://press.princeton.edu/titles/9112.html

> Historically, the humanities have been central to education because they have rightly been seen as essential for creating competent democratic citizens. But recently, Nussbaum argues, thinking about the aims of education has gone disturbingly awry both in the United States and abroad. Anxiously focused on national economic growth, we increasingly treat education as though its primary goal were to teach students to be economically productive rather than to think critically and become knowledgeable and empathetic citizens. This shortsighted focus on profitable skills has eroded our ability to criticize authority, reduced our sympathy with the marginalized and different, and damaged our competence to deal with complex global problems. And the loss of these basic capacities jeopardizes the health of democracies and the hope of a decent world.

I know this is Hacker News and any non-STEM field is generally disrespected, but the liberal arts are quite important.

Re: Ripping Off Young America: The College-Loan Scandal

#79

Post by cko » Fri, Aug 16, 2013, 6:00 PM UTC

It's just strange to me that "technology" is improving yet costs of "education" is increasing at rates that cannot be explained by inflation (and also "medical care" but I digress). Fifteen years ago I remember wanting an encyclopedia set to read and my computer was ten times crappier than any entry level smartphone on the market.

> The New York Times did a story earlier this year declaring the college degree to be the "new high school diploma"

I have developed this view from reading links from Hacker News, that every reader/contributor taught themselves how to code from the age of ten and subsequently freelance/consult/sold their startups for decent money, and would therefore find that statement laughable.

Yet in my experience this view is so entrenched within the middle class - that in order to learn a skill you have to have information spoon fed to you, that people who are self-taught anything are geniuses. I'm a pharmacist learning how to code and when I tell my coworkers that I would someday like to be an entrepreneur web developer, they say "but you have to go to school for that... "

Yet most knowledge is a few Google searches away. Maybe the first few searches you don't really know what you're even looking for, but as you read and gain familiarity with the vocabulary of your subject of interest, it's all there.

So the idea of a college diploma as a surrogate marker for aptitude/potential/diligence is very much the perspective of my family and coworkers.

There's got to be a better way of finding data, ranking it in terms of credibility/robustness, and testing for knowledge (startup idea?). With all the stuff that's available out there shouldn't we all be building solar-powered Arduino robots that can produce food and defend our family? Information is more accessible now than ever with more powerful tools to gather them, and many people still buy into showing up physically to a lecture hall and then filling in bubbles on a narrow strip of paper for four years for a beautiful piece of parchment.

Re: Ripping Off Young America: The College-Loan Scandal

#80

Post by leknarf » Fri, Aug 16, 2013, 6:01 PM UTC

gxs wrote: post #7

Amazing, perspective is everything. I don't deny that college kids are being taken advantage of. Graduating from a small liberal arts college in South Dakota that no one's ever heard of with a degree is Culture Studies and 80k in debt really is a rip off. The flipside of this coin however is someone like me. My parents are immigrants and I was the first to go to school. To my parents, the fact that someone would be e…

There's another side to need-based financial aid that tends to be ignored. For you to attend an expensive college for less than the average rate, someone else had to pay more than the average. That is, your discounted tuition increased the sticker price for someone else.

That's inherently unfair. It may sound reasonable to ask wealthy families to pay more in order to subsidise poor families, but there's no reasonable method to actually determine a family's wealth.

The usual practice is to look at the parents' savings. If a family has saved $200,000, they will be asked to pay a higher tuition rate than a family that only saved $20,000. But that's crazy: it penalizes families that save for higher education.

That's particularly harmful to middle class families. If you don't have any money, then you can go to an Ivy League school for free (via financial aid). If you have a great deal of money, then you can pay the full tuition rate and still have assets left over. But if you only have some savings, then a college bill can easily wipe out everything you have.