Brown University raising $120M to eliminate all student loans • Hacker News Board

Re: Brown University raising $120M to eliminate all student loans

#121

Post by [deleted] » Tue, Nov 28, 2017, 7:22 PM UTC

MikeTheGreat wrote: post #108

cphillips wrote: post #99

Earlier quoted context omitted.

Brown (and most likely all other Ivies) is need-blind (except for international students). So, unless you think they are lying, your point doesn't stand on limiting low-income students. You point on size of college is an altogether different issue. "Beginning with the Class of 2007, Brown implemented its need-blind admission policy. Need-blind admission simply means that an applicant's ability to pay for their educat…

I want to start by saying that it's awesome that Brown, Cornell, Yale, and whatever other Ivies are need-blind. That's awesome, and I applaud them for it. That said, economic status and academic performance correlate closely. A college that's very selective will necessarily filter out a lot of lower-income kids purely because it's hard to do extra-curriculars if you need to work after school and/or if you can't affor…

[deleted]

Re: Brown University raising $120M to eliminate all student loans

#122

Post by chimeracoder » Tue, Nov 28, 2017, 7:28 PM UTC

CalChris wrote: post #105

ams6110 wrote: post #89

Earlier quoted context omitted.

There's no collateral on a student loan.

None is necessary since they are both Federally guaranteed and they can’t be discharged by bankruptcy (which is the epitome of stupidity). Indeed, that ‘bargain’ is why Brown is doing this thing. No collateral is necessary for student debt since they can come after anything you or your cosigners have. Someone will have to explain to me what is special about this debt that it gets this special treatment.

> None is necessary since they are both Federally guaranteed and they can’t be discharged by bankruptcy (which is the epitome of stupidity). Indeed, that ‘bargain’ is why Brown is doing this thing.

Just because they can't be discharged in bankruptcy doesn't they're actually repaid. Student loans can and do default - an average rate of 15% a few years ago, though some schools have students that default at more than twice that rate.

External guarantees on loans (in this case federal guarantees) doesn't address the same issue that collateral is typical used for: namely, it doesn't solve the moral hazard problem.

(It's not that Brown has solved the moral hazard problem itself; it's that Brown's able to take on that risk themselves, because it's an incredibly selective, incredibly competitive, and fairly small[0] school).

[0] We're talking specifically about undergraduates

Re: Brown University raising $120M to eliminate all student loans

#123

Post by ultraluminous » Tue, Nov 28, 2017, 7:41 PM UTC

theseatoms wrote: post #91

rbcgerard wrote: post #57

Earlier quoted context omitted.

According to Bain between 1995 and 2010 universities are proportionately spending significantly less on instruction and more on admin and support, and many of the universities spending is unsustainable. https://news.ycombinator.com/item?id=11337193

This parallels the healthcare sector, where administrative costs have outpaced the cost of actual care. Both are markets heavily distorted by the federal government. I worry that there's no solution to these problems that won't displace very many workers. One man's cost is another man's salary.

Both are markets heavily distorted by the federal government.

That's one way to look at it. Another way to look at it is that those "markets" are fundamentally distorted by the in-elasticity of demand. People generally need education and healthcare.

Coincidentally, that's the way almost all of the non-US world chooses to look at it.

Re: Brown University raising $120M to eliminate all student loans

#124

Post by discreditable » Tue, Nov 28, 2017, 7:53 PM UTC

bmcusick wrote: post #120

onwardly wrote: post #24

Earlier quoted context omitted.

Because they still want people that can afford to pay $50k/year to pay it. Lowering tuition lowers it for everyone. If your parents make $300k+/year, then you'll still be paying full tuition. But as their income is lower, currently you'll get some need-based financial aid. The problem is that this aid is a combination of "scholarship" and "loans". The goal here is to remove the loan component. The problem still is th…

>> Because they still want people that can afford to pay $50k/year to pay it. That's not quite what I was getting at. My question is: Why are they making alumni find the $120M in grants, when they could just forgive the loan directly? There's nothing that says a lender has to collect on its debt. It can choose to forgive the debt. So it's possible for Brown to charge $50K/year generally, collect it from the rich kids…

> Why are they making alumni find the $120M in grants, when they could just forgive the loan directly?

They still want/need the money.

Re: Brown University raising $120M to eliminate all student loans

#125

Post by ams6110 » Tue, Nov 28, 2017, 7:55 PM UTC

pc86 wrote: post #38

elsherbini wrote: post #26

Earlier quoted context omitted.

Today's elite schools offer myriad resources to students that they didn't before. And today's elite schools are therefore able to serve a much more diverse group of students. I think administrative costs have gone up too much and have space to cut back. But when articles come out saying administrative costs have ballooned 500%, I don't want people to imagine that it's all wasted - most of the new positions represent…

I don't think anyone's saying it's all wasted, and I agree that a university in 2015 is going to offer a lot more to its students in terms of non-academic services than a university of 1985. But it's hard to argue that even half of that 500% is good spending. - The year I started my undergrad, there a mini-scandal where tuition was raised by over 10% with little warning and it leaked that the school President, having…

> never held a job outside of that college

This happens a lot at universities. They are great places to work if you're OK with an "adequate" salary (with generally very good benefits and time off) and not being held accountable for very much. So you have staff people who have worked there for decades, if not their entire careers. Often entire families (parents and eventually their children) will be working there. Those sorts of people have no understanding of what the "real world" or private sector is like, so the problem of low productivity and low accountability perpetuates itself. It's normal and they don't know anything else.

Re: Brown University raising $120M to eliminate all student loans

#126

Post by throwaway2312 » Tue, Nov 28, 2017, 8:04 PM UTC

MikeTheGreat wrote: post #108

cphillips wrote: post #99

Earlier quoted context omitted.

Brown (and most likely all other Ivies) is need-blind (except for international students). So, unless you think they are lying, your point doesn't stand on limiting low-income students. You point on size of college is an altogether different issue. "Beginning with the Class of 2007, Brown implemented its need-blind admission policy. Need-blind admission simply means that an applicant's ability to pay for their educat…

I want to start by saying that it's awesome that Brown, Cornell, Yale, and whatever other Ivies are need-blind. That's awesome, and I applaud them for it. That said, economic status and academic performance correlate closely. A college that's very selective will necessarily filter out a lot of lower-income kids purely because it's hard to do extra-curriculars if you need to work after school and/or if you can't affor…

>My point being that Brown can be both need blind and not have a lot of lower-income kids there.

This is a very hard problem to solve for a university alone. In India, there is affirmative action AKA "reservation" and trust me that system has it's own perils. I still think meritocracy is the way to go while having systems developed by the govt. to help the under privileged kids meet that bar.

Re: Brown University raising $120M to eliminate all student loans

#127

Post by ams6110 » Tue, Nov 28, 2017, 8:06 PM UTC

danaris wrote: post #53

dalbasal wrote: post #16

Earlier quoted context omitted.

The exploding cost of education over the last generation doesn't boil down to an increase in teaching or even research staff costs. These costs are stable, largely thanks to the very low cost of junior academics. In the US, "administration staff" (everyone else) has blown up by 500% or more, proportionally. There have also been increases in non staff related costs. University' are fancier, more expensive and more inc…

I continue to be very curious where all that "administration staff" spending is going. I grew up in the higher education sphere (both parents professors), and I work as a staff member at a university now. What I see here, at least, is a near-crippling lack of care for the staff, such that morale is constantly low and turnover is high. So where, exactly, is all that extra spending really going? Is it going to six or s…

You work at a university. Can you think of even one time that someone has been let go for incompetence? I've never seen it happen, and I've seen incompetence so blatant that it's undeniable.

In business, if two companies merge, the redundant positions are eliminated. In a university, if two schools or departments merge, everyone stays and a bunch of new titles are created.

Re: Brown University raising $120M to eliminate all student loans

#128

Post by CalChris » Tue, Nov 28, 2017, 8:15 PM UTC

chimeracoder wrote: post #122

CalChris wrote: post #105

Earlier quoted context omitted.

None is necessary since they are both Federally guaranteed and they can’t be discharged by bankruptcy (which is the epitome of stupidity). Indeed, that ‘bargain’ is why Brown is doing this thing. No collateral is necessary for student debt since they can come after anything you or your cosigners have. Someone will have to explain to me what is special about this debt that it gets this special treatment.

> None is necessary since they are both Federally guaranteed and they can’t be discharged by bankruptcy (which is the epitome of stupidity). Indeed, that ‘bargain’ is why Brown is doing this thing. Just because they can't be discharged in bankruptcy doesn't they're actually repaid. Student loans can and do default - an average rate of 15% a few years ago, though some schools have students that default at more than tw…

> Just because they can't be discharged in bankruptcy doesn't they're actually repaid.

Exactly. So instead that’s an albatross to be hung around a young person’s neck for all of eternity. Bankruptcy would share the burden between lender and borrower.

What we have now is a system where loans are Federally guaranteed and then not dischargeable through bankruptcy. That leads to $100k cooking schools that promise to turn you into a pro-chef, just sign here, here and here and you can even get a Federally guaranteed loan, sign here.

Re: Brown University raising $120M to eliminate all student loans

#129

Post by jeremyt » Tue, Nov 28, 2017, 8:21 PM UTC

If only they had $120M sitting somewhere they could use. I dunno, like a savings account or something. A really big savings account that's so big they have to hire asset managers to manage. It would be even better if this savings account was made up of money that good people donated to the institution with the intention that it be used to further education.

Yeah, that would be really nice.

Re: Brown University raising $120M to eliminate all student loans

#130

Post by goialoq » Tue, Nov 28, 2017, 8:26 PM UTC

cphillips wrote: post #99

geebee wrote: post #80

I feel somewhat ambivalent about this. I'm glad that Brown wants to eliminate student debt, and I'm glad that low income students at ivies often pay no tuition. However, this doesn't change their essential model, which is to enroll a very small number of undergrads[1], deny admission to the vast majority of applicants, and generally lean toward affluent students. Compare this with an elite public research university…

Brown (and most likely all other Ivies) is need-blind (except for international students). So, unless you think they are lying, your point doesn't stand on limiting low-income students. You point on size of college is an altogether different issue. "Beginning with the Class of 2007, Brown implemented its need-blind admission policy. Need-blind admission simply means that an applicant's ability to pay for their educat…

note that Brown was decade(s) later than other Ivies in implementing need-blind admission.

need-blind is great, but it's only useful if it's paired with a commitment to make attendance affordable -- which other Ivies have done, and Brown is now trying to do.