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Ripping Off Young America: The College-Loan Scandal

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

#241
post #85

Earlier quoted context omitted.

Every time this comes up... Every time, people have to be reminded that few people start out in communications degrees. Someone makes it to college, trying pre-med. Then they realize that, while not failing, they do not have the grades to make it into medical school, and they don't have an aptitude for the sciences. So, if they quit at this point, they will have no degree and 20k of debt. The marginal cost:benefit an…

It's great that you've used your communications studies in your career but you didn't have to get a communications degree to learn that. I feel that the anthropology, communications, biology, history, etc. classes I took in college were great and really opened my eyes to other things. However, I didn't pursue degrees in them because I knew it probably wasn't a good ROI (investment being time and money).

In my case, I had a bad semester where life crashed around me right before finals, which included two of the classes I needed to have a minimum GPA for admittance into the CS program. I had the option of losing a semester and retaking everything again, of course, but at the same time I had been involved with speech and debate during high school and loved the communications classes I was taking.

It worked out for me. If I hadn't had the option, I could have retaken a few math classes and been fine. I could have made it, but I return to the question: what happens when people aren't cut out for STEM? Do you charge 20k and say "thanks for trying,?"

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

#242
post #231

Earlier quoted context omitted.

> 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…

Fortunately, a more nuanced solution is possible. Want a STEM degree from an efficient school? Sign here for the loan. Want a degree in culture studies? No loan for you.

What's the lender's incentive to do that? Their goal is to extract as much profit as possible from the borrower (even when we're talking about the government as lender).

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

#243
post #70
post #13

Earlier quoted context omitted.

Commenting as an Oregonian, it isn't going to solve any problems it just makes college more accessible, allowing students to kick the can down the road. College is still too expensive and costs have risen for no reason. I went to state college in Washington (Washington State, go Cougs) and when I started there tuition was $1300 (semester system, so $2600 per year). My middle-class parents were easily able to cover my…

Wait a minute: Why won't it solve any problems??? If universities are funded by the salaries of their graduates, then 1) they have to ensure that graduates have decent earning potential, so bloated programs which are sending students to flooded markets (I'm looking at you Psychology) will have to shrink drastically while engineering, and god forbid, vocational education would grow, and 2) Colleges will no longer have…

The problem isn't that there are student loans - people take loans out for many other things and have no problem with those. The problem is that the repayments are killing the spending power of the middle-class.

Where does paying back a loan or paying back a fixed amount of income differ? Do you honestly think that the gov't is going to curb the costs of education? More than likely the gov't will just jack the repayment % on future students.

So, like I said, it just kicks the can down the road. No where in the Oregon plan is an outline of how to bringing state college costs back down to a reasonable level that doesn't require loans except in extreme cases (where it was in the 60s, 70s, 80s, and even 90s).

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

#244
post #226

Earlier quoted context omitted.

Yes, but it was an offer they couldn't refuse. Not quite that simple - students have tons of choices. They could choose a school with a lower tuition. They could stay in-state so as to avoid the much more "out of state tuition". They could opt for a degree with a higher chance of getting a job. They could opt for a degree with a higher average salary. They could work full-time to pay off the loans while they go to sc…

That would be fine and dandy, except employers discriminate against lower-tuition schools and even those are getting more expensive each year.

This is absolutely true. Graduating from a top tier (most of the time that means private) school will give the person a tremendous amount of leverage in their job search, and greatly increase their chances of landing a high-paying job.

What that means is that telling the students to "just go to a lower-tuition school" simply perpetuates the current class system and undermines social mobility.

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

#245

The major problem is that university administrations are becoming top heavy. Instead of hiring tenure-track faculty to teach real subjects like computer science or mechanical engineering (or even English lit, so as not to be prejudiced to the humanities), universities are creating $300K per year sinecure positions like "Vice-President and Associate Dean of Student Diversity". Guess who pays for this? Students and the…

Well they have to create these positions. The people who took out all that student debt in diversity studies have to pay off their loans somehow...

And so the cycle continues...

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

#246
post #231

Earlier quoted context omitted.

Fortunately, a more nuanced solution is possible. Want a STEM degree from an efficient school? Sign here for the loan. Want a degree in culture studies? No loan for you.

What's the lender's incentive to do that? Their goal is to extract as much profit as possible from the borrower (even when we're talking about the government as lender).

I would say morality, but I realize that's an invalid argument. It seems like the government shouldn't be allowed to profit from issuing student loans (especially bad ones).

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

#247

The NY Times did a seven-part series last year that I felt was a much more thorough and nuanced treatment of the topic: http://www.nytimes.com/2012/05/13/business/student-loans-wei...

Also, "For Poor, Leap to College Often Ends in a Hard Fall": http://www.nytimes.com/2012/12/23/education/poor-students-st...

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

#248
post #231

Earlier quoted context omitted.

Fortunately, a more nuanced solution is possible. Want a STEM degree from an efficient school? Sign here for the loan. Want a degree in culture studies? No loan for you.

That's better, but what you will end up with is colleges pricing their "good" degrees higher and higher until they have captured almost all of the wage surplus that workers get from going to college.

Then people will stop getting that degree, and the competitive salary for that degree will get higher.

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

#249
post #103

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…

the core problem with college loans is that they are non-dischargeable. this means that no matter what the student's ultimate financial situation (long term unemployed, finances wiped out, etc) they still have to pay down the debt, and it can't be wiped out in bankruptcy. This stands in contrast to virtually every kind of loan out there, which can be discharged (written off). As a result, there is less risk for the l…

I would be interested to see if an App Academy model for a credentialed institution could work. Small deposit payment upfront, and a period of return dependent on salary. Definitely changes the incentive structure for the better.

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

#250
Great article, and many good comments so far.

Let's take a look at the core issue - the new core issue really: lack of jobs, which was touched on in the article. If we were in a situation where jobs were truly plentiful for everyone, we would likely not be having many of these conversations (or at least we'd be doing so with less urgency.) Aside from the fact that the costs at many schools are exorbitant, the simple fact is that degree or no, you're still (and likely will continue to be) facing a job market with little on offer. Income-based repayment is a great step, but that does not help if somone remains unemployed - and even if they do get something - do these people study for 4-6 years in order to be a Barista?

About the suggestions that these people studied useless subjects: true, many of them did. What, however, would happen if they all decided to go into STEM instead? Assuming they all did amazing, we'd wind up with a glut of people with degrees in "good" subjects, which does nothing to magically create jobs (having a STEM degree does NOT mean you're going to start a company!) - it only helps where there are shortages. Once those are filled, we're back where we started (and wages may get pushed down due to a talent glut.) That's the best case scenario, too. What would be worse? What would the reality likely be? If everyone did rush into STEM, a good portion would fail out (not everyone is cut out for it. Really, some people just do not have the attitude, mindset, demeanor, worldview, interest, etc.) and be left with no degree (or they'd switch to one of those useless ones) and still be debt - right back where we started again. For some real world examples, just look through some other discussions on HN about this subject about people in countries who DO exactly this and they're stuck with unemployed and underemployed STEM grads up the wazoo.

So lowering tuition is great. Initiatives that allow income-based repayment or schemes to just make it free at the point of service and pay for it out of taxes are great, but lack of jobs as the core issue remains. For those of you who believe college should not be considered a job training program, that's wonderful; it means, however, that people going into debt for a great education that does not get them a job is a terrible idea (and we should either move to a free system or tell people to just use MOOC and books.)

Either college is a job training program with high costs and horrible returns (and degrees are first-line filtering mechanisms for jobs), or it's purely for edification and should be free. This world where we pretend it's the latter, but know it's the former continues to end for so many in nothing but tears.

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