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Student Loans Are A Drag On The Economy

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Re: Student Loans Are A Drag On The Economy

#101

Post by jkelsey »

redoacs wrote: post #82
tn13 wrote: post #77

The root of this problem is that the liberals have been paddling relatives good sounding notions such as "everyone needs to go to college" thing and the subsequent government moves to ensure that every tom dick and harry can go to college. This was about to happen.

I think everybody benefits from more education. And public higher education should be a cornerstone of a developed country. But sadly it appears that the USA does not agree.

I don't think it's fair to say that. We have a highly partisan divide right now that causes crippling inaction on some of our biggest problems (including the cost of education), but if you removed that partisan political framing and nailed down most American on the issue directly, I think you'd get an opinion that is in-line with what you said.

America's problem is that we treat our political parties like our favorite sports team, and the parties themselves react accordingly favoring electoral dominance over policy achievements. Case: health-care -- polling shows that most Americans are in favor of the sort of things that the Affordable Care Act basically accomplishes (universal coverage, everybody pays something, subsidization for poorer people). When it's framed as Obamacare or a Democratic Party program, the numbers change to reflect the partisan divide.

It's still stupid, but it's not the same thing as not wanting it.

Re: Student Loans Are A Drag On The Economy

#102

Post by drabiega »

aaron-lebo wrote: post #23
Glyptodon wrote: post #18

Meh. This is (mostly) the students' and the families' who abet their stupid decisions fault. If you go to an in-state community college and then matriculate to an in-state university in my state the total cost of college is (~$4500 for 2 years of CC living at home + ~$25000 for 2 years of closest to home in-state school) ~$30000 + the cost of living at home. Meanwhile people continue to whine about sending their kids…

You are absolutely right about the relative value of community college, but you pointed out the major problem: community colleges are not thought of highly at all, even though 2 years of CC credited to a bachelor's degree at a more prestigious university counts just the same. I'm not sure how CC's get over the stigma attached to them, but it really needs to happen. They are good value.

Maybe the community colleges in your area are different. I attend a state run college which gets a number of these types of transfer students from a few nearby community colleges. Even at my school the standard of education is not particularly high but the transfers from community colleges regularly drop out or need remedial classes because they paid half the price and got one tenth the education.

Re: Student Loans Are A Drag On The Economy

#103

Post by jvrossb »

nirnira wrote: post #81

Why are student loans so high, the market so ridden with defaults, and the price of education so high? I think (well, I'm a little more certain than that) the answer is basic economics. Here's my take: You (America) have a government that offers discount loans - i.e. loans with poor prospects/low interests rates - in the hope of driving a higher allocation of capital to education than would occur in a pure private le…

"The whole country just gave a shitload of money for nothing to university administrators and contractors."

Probably not. It is entirely possible that the shitload of money did improve standards of education and did benefit students, just not proportionally to the actual amount of money spent.

Re: Student Loans Are A Drag On The Economy

#104

Post by aaron-lebo »

drabiega wrote: post #102
aaron-lebo wrote: post #23

Earlier quoted context omitted.

You are absolutely right about the relative value of community college, but you pointed out the major problem: community colleges are not thought of highly at all, even though 2 years of CC credited to a bachelor's degree at a more prestigious university counts just the same. I'm not sure how CC's get over the stigma attached to them, but it really needs to happen. They are good value.

Maybe the community colleges in your area are different. I attend a state run college which gets a number of these types of transfer students from a few nearby community colleges. Even at my school the standard of education is not particularly high but the transfers from community colleges regularly drop out or need remedial classes because they paid half the price and got one tenth the education.

It probably isn't obvious from my original post, but I agree with you.

In my community college, there were a number of professors with incredibly low standards for academic work. However, I tend to think this is a reflection on the level of preparedness of students coming out of high school.

The issue is, and maybe it is sad that it is this way, but it is probably better for people to end up with 1/10th of the education at 1/2 of the price and end up with less debt overall due to what they end up doing with their degrees.

And if you apply yourself, you'll learn no matter where you go. Heck, you'll find plenty on YC who advocate skipping school entirely, so community is a step up from that.

Re: Student Loans Are A Drag On The Economy

#105

Post by Crake »

drabiega wrote: post #102
aaron-lebo wrote: post #23

Earlier quoted context omitted.

You are absolutely right about the relative value of community college, but you pointed out the major problem: community colleges are not thought of highly at all, even though 2 years of CC credited to a bachelor's degree at a more prestigious university counts just the same. I'm not sure how CC's get over the stigma attached to them, but it really needs to happen. They are good value.

Maybe the community colleges in your area are different. I attend a state run college which gets a number of these types of transfer students from a few nearby community colleges. Even at my school the standard of education is not particularly high but the transfers from community colleges regularly drop out or need remedial classes because they paid half the price and got one tenth the education.

It depends a lot on the field. At my community college, the STEM classes had standards. Totally incompetent people disappeared after a semester or two of going up the coursework chain. Meanwhile, the liberal arts professors had to deal with people that couldn't write a coherent sentence if their life depended on it, even in advanced classes. However, I constantly read similarly demented and completely mangled english sentences written by graduates of the local public four year university.

I can't really recommend community college for STEM, since at least in my original state, you had to start as a freshman at university even if you had an associate's degree in science that was "guaranteed" to transfer for credit. (The engineering department's justification was "we'll accept your credits, but you still have to take everything over again.") It's a good way to get screwed, and community colleges offer very few second year science and math classes. (The liberal arts people had much less difficulty transferring.)

However, I did learn my calculus and sciences very well because I had excellent teachers that I could ask questions of if I needed to. My physics professor had been teaching for over four decades--and with a small class size of around ~20, I had plenty of opportunity to absorb the material and understand it completely. As a result, I now find myself tutoring my buddy at a $60,000/year private tech college, because my knowledge of the subjects is sound and the quality of the teaching at his school is completely terrible. Interestingly, the homework assignments and test questions are near identical in terms of subject matter covered and difficulty--the main difference is that the private tech college curves, which my professors at my community college were explicitly forbidden from doing.

Re: Student Loans Are A Drag On The Economy

#106

Post by vacri »

tn13 wrote: post #77

The root of this problem is that the liberals have been paddling relatives good sounding notions such as "everyone needs to go to college" thing and the subsequent government moves to ensure that every tom dick and harry can go to college. This was about to happen.

Australia has been through the "everyone needs to go to college" phase, and what we ended up with was a shortage of tradesmen, not a massive student loan debt. 'Having everyone go to college' doesn't mean you need to have these ridiculous loans.

It doesn't automatically follow that a bolus of tertiary eduction has to result in that much debt.

Re: Student Loans Are A Drag On The Economy

#108

Post by vacri »

superJoy wrote: post #26
aaron-lebo wrote: post #19

Earlier quoted context omitted.

How many 18 years olds are making rational decisions about return on investment in 10-15 years time? I'm not sure how you go about adequately informing students about a major life decision they are making.

My high school counselors frequently came by classes and spoke about college---while they didn't talk about the financials in detail, they easily could have. It'd be as simple as doing a quick calculation on the board of how long it will take to pay off some amount of debt. Now whether that advice would stick in the students' heads, I don't know, but they should at least try. There's also high school economics classe…

Now whether that advice would stick in the students' heads

Certainly not all, by a long shot. Here in Australia, you get a couple of grand to help you out when you have a baby, helping cover various initial costs, purchasing prams or whatever.

A friend of mine mentioned that he'd heard his 17-year-old daughter talking with her friends about having a baby because then you get that baby money. They saw it as a huge windfall and don't understand that all that money and more is needed to set yourself up for a child, nor that a child significantly changes your lifestyle and activity choices, especially for someone around 20.

It's not to say that everyone at that age has no forethought, but as a demographic, they're not good at long-term planning.

Re: Student Loans Are A Drag On The Economy

#109

Post by ds9 »

nirnira wrote: post #81

Why are student loans so high, the market so ridden with defaults, and the price of education so high? I think (well, I'm a little more certain than that) the answer is basic economics. Here's my take: You (America) have a government that offers discount loans - i.e. loans with poor prospects/low interests rates - in the hope of driving a higher allocation of capital to education than would occur in a pure private le…

"the psychological effect of borrowing from the government - I think people tend to feel safer doing this than borrowing from an obviously competitive private firm. If you read the article, the casual attitude of student debtors to defaulting on their loans shows this - the government has no teeth. The private firm goes bankrupt if it doesn't get a return on investment. "

All of the above is incorrect.

(a) Student loans in the US are mostly not from the government in the first place, they are from private investors or banks that the schools have made deals with. The USG role is guaranteeing them.

(b) Generally, in classical capitalism, firms will go bankrupt if they don't get adequate returns on investment - but this situation has been distorted by the government guarantees. They get reimbursed if the debtor defaults, and carry on. By exploiting this subsidy they make big profits, that's why they're in it.

(c) I don't know about student-loan-borrower attitudes, but their debt and enforcement of it are not casual. The GSLs are not dischargeable in bankruptcy, so they are basically a lifelong burden unless paid off. And defaulters are subject to wage garnishment and other onerous court judgments.

Re: Student Loans Are A Drag On The Economy

#110

Post by Bahamut »

eropple wrote: post #55
Glyptodon wrote: post #38

Earlier quoted context omitted.

You exaggerate. Mostly it's people who don't do well at their colleges that have trouble. At Ivy Leagues it's fewer people because they have the worst grade inflation and don't accept many borderline students. For state schools there are lots of people at the margin - IE they don't do well enough to really reap a benefit from their degree. Maybe getting good grades at a public won't get you 6 figures in your first jo…

I have a degree from a cow college. I'm very good at what I do. But I'm at a disadvantage: my network doesn't include people who are valuable to know. The dudes who started Dropbox are dudes friends of mine knew in college. People like that aren't in my rolodex. That's what these colleges are for: social entry into that class of mover shaker, be it MIT for tech or an Ivy for politics. This stuff is the difference bet…

Hope is not lost in this situation - you just have to work at it more. I'm a stellar mind who also went to public schools for undergrad and grad, but I focused on self-development and networking after.

I went from $50k a year to likely over $120k (that is in negotiation) in the span of 1 1/2 years of hard effort &learning.

I too racked up lots of debt from school, about $200k total. I am forced to focus on money because of this. I made the decision to go all in on developing my career & making the decisions I deferred until after grad school.

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