Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ripping Off Young America: The College-Loan Scandal

rollingstone.com

Post reply on HN
Print view View original

191–200 of 277 posts

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

#191

Post by pradocchia »

JonFish85 wrote: post #126

Whatever happened to personal responsibility? You're 18, you can smoke, drive, join the army and take out gigantic loans you can't repay. It's a fine line between making it easy for everyone to go to college and making it easy for a mathematically disinclined person to take out a huge loan for a dumb reason. It would be great for everyone to have the chance to go to some college. For some reason, people seem to immed…

There have been laws, prohibitions and taboos against usury since time immemorial, and for good reason. It's a dangerous thing. "Personal responsibility" is manifestation of this same societal impetus to restrain debt, in this case as an internal constraint.

But with something as dangerous as debt, redundant constraints--internal and external, customary and statutory--are preferable to a single line of defense. I don't want a stable society predicated on the ability of 18 year olds to accurately predict their future circumstances 30 years out.

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

#192

Post by ominous_prime »

JonFish85 wrote: post #171
ruswick wrote: post #161

Earlier quoted context omitted.

Unlike the things you listed above, college isn't perceived as a choice. It's perceived as an obligation. Because of this, a myopia has set in among most students: "I need to go to the best possible college or kill myself trying." The decision is no longer theirs, it is the product of tremendous stigmatization, social pressure, and the nonstop inundation of students essentially from birth with platitudes about the ne…

I agree that college isn't perceived as a choice, but I do question why it's the fault of anyone but the student if they apply only to $50k/yr schools, ignoring whatever their state schools are. Is it the schools' fault for accepting students who can't afford it? Is it the loan companies' fault for trying to provide loans for students who likely can't pay them back? If so, should loan companies be able to discriminat…

Up until recently (at least I hope it's finally starting to change) students were told that money doesn't matter, just borrow as much as you need because college is always worth it.

After years of hearing this repeated to them, they do think they are making the responsible choice.

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

#193

Post by freyr »

7Figures2Commas wrote: post #143
danielweber wrote: post #132

Earlier quoted context omitted.

such action would become commonplace, a rite of passage at graduation Good. Then people will stop lending students tens or hundreds of thousands of dollars. Then schools will lower their prices.

> Then people will stop lending students tens or hundreds of thousands of dollars... Let's make your comment a little more accurate: Then the federal government, which is responsible for ~85% of the student loan market, will have to stop lending students tens or hundreds of thousands of dollars, and there will be no end to the cries that millions of young Americans are being denied a college education by well-to-do p…

> there will be no end to the cries that millions of young Americans are being denied a college education by well-to-do politicians who are out-of-touch with the economic realities of the average American.

I'm not convinced it would happen as you say, since the crippling burden of college loan debt described in this article is increasingly familiar to many Americans. Once it begins affecting us personally, it becomes significantly harder to sweep these things under the rug.

No doubt, they would try their best, perhaps suggesting that reduced loans will result in higher taxes for average Americans and will shift the financial burden onto the older generations. That would be much easier (and more desirable, to special interests) than attempting to tackle the underlying issues that have resulted in hyperinflated tuition costs.

If only there were a way to broadcast the views of an intelligent, non-partison, and informed demographic to the average American household. Though I'm not sure anybody would tune in, as people find Fox News' fear-mongering and political divisiveness so entertaining.

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

#194

Post by [deleted] »

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…

[deleted]

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

#195

Post by RougeFemme »

driverdan wrote: post #97
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.

College is not and should not be job training. If you want job training go to a trade school, get an internship / coop or apprenticeship. College is about learning how to think.

Hopefully, students arriving to college know how to think - though I realize that's somewhat rare, given the "teaching to the standardized test" mentality that so many students endured in school. And then college could help even more with learning how to think - and learn. But it's hard not to want some "job training" in there, especially given the amount of money being spent AND the fact that most of the graduates presumably need to start earning money almost as soon as they graduate.

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

#196

Post by 7Figures2Commas »

avenger123 wrote: post #168
7Figures2Commas wrote: post #127

Earlier quoted context omitted.

Exactly. It amazes me how many people seem to believe that the solution to the student loan debt problem is to allow for discharge in bankruptcy. Not only will this necessarily force lenders to increase the cost of these loans to borrowers, a lot of folks apparently don't understand that the biggest lender in this market is the federal government. Of the more than $1 trillion in student loans outstanding, about 85% h…

Why would this be a bad thing? if loans are able to be discharged the federal government wouldn't be handing them out like free candy to anyone that wants it. It's exactly that there is no downside for the government that the situation is the way it is.

The problem here is that we can't just use a magic wand to fix the situation. There is over $1 trillion in outstanding student debt that needs to be dealt with. Much of it is already going bad.

But the problem is bigger than the trillion dollars in debt you and I are already on the hook for. A lot of people like free candy, and if you take it away here, we'll go from "Tuition costs are too high, and I have too much debt!" to "Washington politicians are denying me an education!" The education lobby is strong and too many people are dependent on federal student loans for this to be "fixed" in a logical fashion. Everybody has been sold the idea that a college degree is a prerequisite for access to the middle class, and government-subsidized student loans are practically seen as an entitlement.

As much as one can hope for a better system, it isn't likely to come. We're well beyond the point of no return.

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

#197

Post by macspoofing »

ethanbond wrote: post #131
macspoofing wrote: post #71

Earlier quoted context omitted.

>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. Co…

http://www.washingtonpost.com/blogs/answer-sheet/post/the-ur... Lots of sources down at the bottom. EDIT: Also, I've yet to actually see any study that concludes direct causation between availability of loans and tuition prices. Yet somehow the burden of proof is on the naysayers?

The writer is the president of the National Association of Independent Colleges and Universities, which has a vested and financial interest in keeping the status-quo. The fact that this organization is pushing so hard for federally backed student loans should ring some warning bells that its members may benefit. I don't have the will nor energy nor need nor the time to research this topic extensively, but because of the clear conflict of interest that the writer has, I cannot just accept what she argues. Interestingly she doesn't say what is the cause of tuition increase.

Here's what paints a picture for me:

- Tuition since the 1980s has increased by an order of magnitude. Out pacing inflation, cost of living, and medical costs (http://en.wikipedia.org/wiki/College_tuition_in_the_United_S...)

- Federally backed student loans are non-dischargeable and are available to nearly all students (regardless of credit score or financial issues).

- Student loans total around $1.2 trillion dollars (50% increase from 2008!)

- US has the highest tuition costs in the developed world.

Whether or not you think tuition is too high or is correlated to federal aid is almost incidental to the issue. There's a big fuckin problem with the amount of student loan debt out there, and if the federal government isn't to blame for this with the way they structure student aid (i.e. guaranteed, non-discharable loans to anybody that wants one), who the hell is? It's also hard to imagine that this much available cash for post-secondary education wouldn't have an affect on demand.

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

#198

Post by klenwell »

ChuckMcM wrote: post #133
danielweber wrote: post #46

Earlier quoted context omitted.

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…

I think it is even worse than simply "easy credit", I think the rewards built in encourage exploitation. Allow me to explain. 1) You have capital seeking a return. 2) There exists a basic need that can be facilitated by the application of capital (a degree for a "good job"). 3) You remove all the risk out of providing capital for filling the need through government guarantees. 4) You provide a rate of return that is…

#4 has also been abetted by the decline in state investment in higher education. A generation ago, I felt I got a great a deal paying $1000/quarter at a UC school. Registration for community college, where I started, was capped (capped!) at $50/semester and served a much more broader segment of society.

What's UC tuition nowadays? $3700 for resident tuition. $4900 when you include all the fees (which my $1000 figure did). Push everything forward 20 years and my parents would have no expectation to be making much more money now than they did then. I would be carrying more debt.

Pick your narrative for explaining what happened in the meantime. "Rich people demanding higher returns, enslave unsuspecting youth through their loan seller proxies" works for me.

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

#199

Post by ridicter »

apsec112 wrote: post #107
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…

Not to belittle your accomplishment, but you were very lucky to have parents who lived in California, which still has the best public colleges in the US. People whose parents lived in the other 49 states had to either go to a worse (sometimes much worse) school than Cal, or shell out $250K for a private degree.

Yup. I grew up in Arkansas. Our highest--and only ranked university--is ranked #138. The smartest students leave the state, as you can see from the SAT/ACT score ranges at in-state schools. I went to a top university and took out many loans to do so... had I lived in a state like Texas or California, I would have had access to a fantastic state school and not need to do so.

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

#200

Post by kipple »

JonFish85 wrote: post #126

Whatever happened to personal responsibility? You're 18, you can smoke, drive, join the army and take out gigantic loans you can't repay. It's a fine line between making it easy for everyone to go to college and making it easy for a mathematically disinclined person to take out a huge loan for a dumb reason. It would be great for everyone to have the chance to go to some college. For some reason, people seem to immed…

> No one forced them to go to college, especially not one that leaves them $40k in debt.

Have you looked at college tuition recently? In-state school will bring you $40k of debt. Private school is more like $160k. It's not a matter of students choosing expensive college over cheap college. They're all expensive.

Take a look at http://trends.collegeboard.org/college-pricing/figures-table...

For 2012-13 the average tuition for public in-state education is $8,655. Then add school fees and student housing & food and you can get to $10-15k per year.

Kids aren't out there shopping for luxury cars, they're buying whatever gets them on the road. And it can still bring crippling debt.

Post reply on HN