US Household Debt Surpasses 2008 High

Yes, the student debt growth is unsustainable. It's up 10x in a bit over 10 years. Unbelievable!! There are only three things whose relative cost has gone up in the past 40 years: education, health care, and housing.

It's also amazing to me is that total household debt is 12.5 trillion, while the federal debt is just about $20 trillion.

In $12.5 trillion so many people have gotten an education and own a home. What exactly did anyone get with that $20 trillion the federal government has spent?

I don't understand why the cost of higher education has gone up so much. My grandparents paid for college via a job they only held in the summer and my parents paid for college working part time during the school year and full time in the summer - both of those jobs paying a little better than minimum wage. Yet I'm looking at 5 years of debt with a tech industry salary.

Having to paying for higher education wouldn't even be such a problem if it still cost what it did when my parents attended.

Although, maybe this whole thing is that the military budget has gone up by 80% since my grandparents attended college and education spending by the federal government has gone down 10 times. Also with the fact that there are five times as many Americans attending college than when my grandparents did, I definitely agree it's time we sat down as a nation and discussed whether we as a nation should pay for our children to be educated to the level necessary to excel in the modern economy.

I don't think the tax hike would even be that extreme. The reason tuition is what it costs right now is that it pays for the people who are getting free rides for various reasons. We got a letter from University of California once that among other things stated that only about 40% of tuition for someone who is paying to attend actually goes to education that student, the other 60% goes to paying for people the UC gave grants and scholarships to. [Warning - Napkin Math] If it actually cost something like $10k per year per american college student, of which there are 20.5 million students attending both public and private universities, we would need something like an addition $210 billion in tax revenue per year, or an addition 6.4% revenue. So your 25% federal tax bracket would turn into 26.6%. That's not all that much when you think about it. Or, the government renegotiates their military contracts to stop being price-gouged in order lower the defense budget. Then use the savings to help fund education...

Community College in the USA is so subsidized it costs maybe 1k a year to attend and they are strategically placed so 95% of the population can live at home and commute. Your expenses in the first 2 years where the content is exactly the same as a 4 year will be 0 living at home and if you do tutoring or a small part time job with all the free time you'll save a bit. Finish all your GEs, figure out what you want to do and go to a state college where In CA, 95% of the population can commute to again and tuition is 8-10k a year. Pick a good major you like AND can make ROI, get a summer internship and it is 100% possible to graduate with less than 10k in debt.

Instead, predatory colleges raise prices of room & board, add random extra charges, add useless admin, spend recklessly(see UC extravagant spending scandal) because of cost disease, poor understanding of personal finance and govt backed loans people keep going regardless of cost.

I may be missing something, but I don't see anything in either of those figures that rules out people who leave school after one or two semesters, or otherwise don't graduate for some reason.

Maybe that's intended, but I feel like it'd be useful to include the average amount of debt of students who graduate. For my state (PA), it's at almost $35k, but only 71% of them have any debt at all [1]. That means that $35k is calculated with 29% of the values being zeroes.

My degree wasn't in math, but I think that means that if you graduated with any debt at all in PA, you've likely got $50k or more.

Does that mean it's a bubble? I don't know. I do know when I was an employee of a private university in PA, we were told year after year of 4% tuition hikes while being told we should be patting ourselves on the back because it's below the national average. That definitely sounds unsustainable, but so far it's been working out pretty well for colleges.

[1] http://ticas.org/posd/map-state-data#overlay=posd/state_data...

Physical proximity doesn't need to be as expensive as it is, so there's still room for disruption.

Think about how University education should compare to high school education, in terms of costs. High school costs about $12k per student-year [0], which includes about 1200 hours of staff time [1].

My entire 4-year undergraduate course had less than 2000 hours of staff time, which was about half large lectures and half labs and tutorials. The lectures were always larger classes than high school, and the tutes and labs were about the same size, and mostly taught by later-year students who were paid less than high school teachers.

Facilities-wise, classrooms are classrooms, toilets are toilets, and offices are offices. I can't see any reason why university buildings should be more expensive than high school buildings, for a given number of students. Besides, high school capital outlay is less than 10% of total [0]. Universities can also have classes later in the day and at night, and so get more use out of the buildings.

Then there's equipment, particularly in the labs. The university had significantly more lab equipment than high school. However, there were also significantly more students using it. This wouldn't increase the cost of computer science, maths, business, etc, but might add to the costs of physics, chemistry, engineering. I'd need to see a real cost-breakdown to believe it would be much more expensive.

It should be possible to provide a similar level of education as current universities for less than $5k per year. That's disruption.

[0] https://nces.ed.gov/fastfacts/display.asp?id=66 [1] https://nces.ed.gov/surveys/sass/tables/sass0708_035_s1s.asp