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

The Student Loan Bubble is Starting To Burst

cnbc.com

Post reply on HN
Print view View original

241–250 of 289 posts

Re: The Student Loan Bubble is Starting To Burst

#241

Post by kdragon »

jerf wrote: post #216
muzz wrote: post #181

Earlier quoted context omitted.

You are not contradicting my post. The savings of $70B comes from eliminating a profit layer that was enjoyed by the banks. The government insured the loans before and after the change in 2010. So the taxpayer was on the hook for losses. Now it is still on the hook for losses, but also benefits from profits. The $70B is simply from cutting out the middleman.

A profit layer that also prevented those other things from happening. These things can not be considered in isolation. People are more careful with their own money than the free money the government provides. We prevented the eeeeeviiil profit mongering bank bastards from making money, at the cost of encumbering millions upon millions with debt, and who knows what damage we're going to witness to the higher ed system…

Basically we are publicly subsidizing education. Will it be worth it? Well, history has shown education to be a better investment than subsidizing the risks of private institutions. I'm betting it will be.

Re: The Student Loan Bubble is Starting To Burst

#242

Post by moosehawk »

ctdonath wrote: post #230
kilroy123 wrote: post #34

Earlier quoted context omitted.

A large part of the problem is all the shitty for profit schools. They get students to take out large government backed loans, then are defaulting, since they can't actually get a job. I knew several people I grew up with who went to these schools. They took out huge loans, 10k plus, and they never landed any kind of job with their "certificates" / degrees. [1] Half of all defaults are from these kind of schools. [1]…

As a sometime prof at a for-profit school, may I observe that 1/3rd of my students (on average) failed - not for any guilt by the school (me included), but because they just didn't do the work . Really, they didn't even try; I can't grade what's not submitted. Methinks there's a significant correlation between your complaint and the reality I observed, a correlation which nobody is taking into account.

I believe the issue stems from a lack of education about the loans themselves that the student borrows. Very few high schools around the U.S. are teaching personal finance, and I also suspect the public high school I went to wasn't the only one not properly preparing their students for the financial part of higher education.

The process of getting accepted to a school and receiving financial aid may be long, but considering the student is borrowing tens (and sometimes hundreds) of thousands of dollars it's also incredibly simple.

Re: The Student Loan Bubble is Starting To Burst

#243

Post by dominotw »

kalleboo wrote: post #210
jack-r-abbit wrote: post #162

It is amazing the number of comments that talk about the problems of defaulting on loans and then place the blame in all sorts of places other than the people defaulting on loans. Unless you were forced at gun point to sign loan papers (or other scandalous things transpired), there isn't a lot that can convince me you are not solely responsible for your loan. I don't care if it is for an education, a house, a car or…

Because simply blaming it on the people signing the loans isn't productive, it's just a statement of the status-quo with no solutions (shaming people isn't going to change anything).

>shaming people isn't going to change anything

Wouldn't it dissuade people from taking $50,000 loan for a communications degree?

Re: The Student Loan Bubble is Starting To Burst

#244

Post by ctdonath »

beachstartup wrote: post #239
ctdonath wrote: post #230

Earlier quoted context omitted.

As a sometime prof at a for-profit school, may I observe that 1/3rd of my students (on average) failed - not for any guilt by the school (me included), but because they just didn't do the work . Really, they didn't even try; I can't grade what's not submitted. Methinks there's a significant correlation between your complaint and the reality I observed, a correlation which nobody is taking into account.

the charge is that the school management knows damn well that a full third won't do the work, and admit them anyway, getting their monies and putting them into debt. the issue is that public money is being used for this scheme, not that there's anything wrong with taking money from idiots in general.

Statistically you're correct, but objectively you can't identify which students won't do the work - ergo, you can't discriminate who to enroll (heavy on the consequences of involving the word "discriminate"). The government would come down hard on any school which says "you pass all the enrollment criteria, but we have a nagging feeling you won't complete the degree so we're not letting you in."

Hence the argument that public money[1] should not be involved. The school management can't say "no" to it (from any angle), and the would-be students think it's free; nobody, lender in particular, hammers home the point "if you don't do the work, you'll be in deep financial $#!^".

It's the borrower "putting them into debt". Society pressures kids into getting a degree, the school makes it easy to start the process, government makes it easy to borrow the money, but ultimately it's up to the enrollee to sign for the loan and do the work to make it pay off. Every self-appointed pundit is pointing fingers at the school (for "fleecing" students) or the government (for "wasting" public funds), but nobody is pointing at the students for not making the effort.

[1] - "public" insofar as it was legally confiscated from the public at implied gunpoint.

Re: The Student Loan Bubble is Starting To Burst

#245

Post by driverdan »

astrange wrote: post #130
rprospero wrote: post #35

Earlier quoted context omitted.

The best college advice I ever received was from my middle school history teacher: Go to the cheapest college you can. Harvard doesn't have a secret extra organ to teach you about. Just about everything in undergraduate education is well established enough that you'll learn the same material anywhere. You'll find variation in the material covered (e.g. Catullus versus Ovid), but it's mostly window dressing on the sam…

Harvard has need based financial aid for 100% of your tuition (aka, perfect price discrimination). If you can get in, you can afford it.

The problem with need-based aid is that the numbers they use don't make sense. When I went to college (not Harvard) the financial aid dept told my parents they made too much money to get assistance. My tuition was over 50% of their post tax income and I have a brother who was only 2 years behind me.

How are you supposed to afford spending that much on a single child's schooling and still have enough to afford the rest of the family, retirement, insurance, mortgage payments, etc? Sure they could have planned better and saved for 20 years but the reality is that a very small percentage of people do that.

Re: The Student Loan Bubble is Starting To Burst

#246

Post by ctdonath »

moosehawk wrote: post #242
ctdonath wrote: post #230

Earlier quoted context omitted.

As a sometime prof at a for-profit school, may I observe that 1/3rd of my students (on average) failed - not for any guilt by the school (me included), but because they just didn't do the work . Really, they didn't even try; I can't grade what's not submitted. Methinks there's a significant correlation between your complaint and the reality I observed, a correlation which nobody is taking into account.

I believe the issue stems from a lack of education about the loans themselves that the student borrows. Very few high schools around the U.S. are teaching personal finance, and I also suspect the public high school I went to wasn't the only one not properly preparing their students for the financial part of higher education. The process of getting accepted to a school and receiving financial aid may be long, but cons…

Very few high schools around the U.S. are teaching personal finance

If public schools are going to promote using public funds for continuing education, it's their responsibility to teach how to use those funds.

The for-profit schools being accused here have no way to not accept those monies. Public agencies advocate public school graduates use public funds for continuing education, but do not teach what not to do with those funds and punish any organization which does not accept those funds. Looks like it's the "public" at fault here.

Re: The Student Loan Bubble is Starting To Burst

#247

Post by dclowd9901 »

rnernento wrote: post #226
everettForth wrote: post #17

No, it's not. Not even close, and this is really terrible reporting. It's unfortunate that so many young people are carrying large amounts of student loan debt, but there is no sign of a "bubble" bursting any time soon. I don't even understand how the notion of a "student loan bubble" makes sense, since people don't "speculate" on college like they speculate on real estate. There are so many things wrong with the ide…

Actually it is. Easy credit and the sentiment that any degree will pay off in the long run have inflated tuition prices to the point where they are not necessarily worth the investment. Similar to the house that was worth 600k and is now worth 300k the degree that costs 200k doesn't meet that value. It could potentially be worse than the housing market because there is no asset, just a piece of paper. Just like you s…

The question is "what's the consumer -- and thus larger macroeconomic -- impact?" The impact is that if you "bought" your education at the "high time," you lost nothing. What were you supposed to do? Wait until the bubble burst and hope to "cash in" on a cheaper education?

Student loans are so cheap that the marginal impact of such a burst really only stands to impact greater lifetime earning potential of two distinct groups of the population: pre-poppers and post.

While that's unfortunate for the pre's, it's hardly comparable to the economic divide that has grown between the educated and uneducated classes.

Re: The Student Loan Bubble is Starting To Burst

#248

Post by snicklepuff »

ctdonath wrote: post #244
beachstartup wrote: post #239

Earlier quoted context omitted.

the charge is that the school management knows damn well that a full third won't do the work, and admit them anyway, getting their monies and putting them into debt. the issue is that public money is being used for this scheme, not that there's anything wrong with taking money from idiots in general.

Statistically you're correct, but objectively you can't identify which students won't do the work - ergo, you can't discriminate who to enroll (heavy on the consequences of involving the word "discriminate"). The government would come down hard on any school which says "you pass all the enrollment criteria, but we have a nagging feeling you won't complete the degree so we're not letting you in." Hence the argument th…

> but objectively you can't identify which students won't do the work - ergo, you can't discriminate who to enroll

I'm calling complete bullshit on this one: isn't that the very definition of admissions? Even if you claim it's not, I think that if you look at any student's previous grades / work experience / references, you can quite reliably determine who will do the work and who will not.

These schools simply don't want to: they want to admit everybody so they can take their money in exchange for basically nothing. I would fully support legislation to bar for-profit institutions from receiving any federal tuition aid (whether loans or grants).

> public money[1] should not be involved. The school management can't say "no" to it

This is false: schools are not required to accept federal loans.[1]

[1] http://www.deseretnews.com/article/865576111/No-more-student... to accept federal loans

Re: The Student Loan Bubble is Starting To Burst

#249

Post by jerf »

kdragon wrote: post #241
jerf wrote: post #216

Earlier quoted context omitted.

A profit layer that also prevented those other things from happening. These things can not be considered in isolation. People are more careful with their own money than the free money the government provides. We prevented the eeeeeviiil profit mongering bank bastards from making money, at the cost of encumbering millions upon millions with debt, and who knows what damage we're going to witness to the higher ed system…

Basically we are publicly subsidizing education. Will it be worth it? Well, history has shown education to be a better investment than subsidizing the risks of private institutions. I'm betting it will be.

We wouldn't behaving this discussion if we had not created a situation via government meddling in which education is frequently not a good investment.

Don't deal in the fuzzy-wuzzies of how wonderful education is in a perfect world. Deal with the world in front of you, the one on the news, the one generating a trillion dollars in crushing debt on those least able to pay it back. People are exploiting your willingness to hide in glib, pretty generalities.

Re: The Student Loan Bubble is Starting To Burst

#250

Post by jccooper »

nitrogen wrote: post #194
jobu wrote: post #40

Earlier quoted context omitted.

Always ask if the school is Regionally Accredited in the degree you intend to take: http://en.wikipedia.org/wiki/Regional_accreditation#Regional... If not, the credits are generally non-transferrable and many businesses will simply toss your resume.

The odd school here and there can get away without accreditation if their reputation allows it. For example, at least one of the founders of Pixar came from my former university, which has an unaccredited CS program (at least at the time I attended).

Dunno how old you are, but I think most CS programs up until about 2003 werent accredited because no such program existed. Any BS from before that is just backed by the reputation of the school--which is basically the case save for the bottom of the barrel for every subject. (Because if you have to ask...)
Post reply on HN