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More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

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Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#181

Post by candiodari »

linkregister wrote: post #169
StanislavPetrov wrote: post #130

Earlier quoted context omitted.

>But I keep hearing employment is great, productivity is great, stock market is great The question you have to ask is, who are you hearing this from? The answer is: people with a vested interest in making you believe the economy is doing great, or people fooled into believing this by those with a vested interest. I suggest you closely examine the metrics used by those who claim the "economy is great". First these met…

That is an interesting anecdote, delivered with lots of confidence. However, despite the just-so manner you delivered it, I don't see a compelling argument. For starters, the CPI isn't calculated in an opaque manner; it's explained here: https://www.bls.gov/news.release/pdf/cpi.pdf . The costs that are increasing for most Americans are housing, healthcare, and education costs. Yet over 40% of American households own…

> The directors of the Federal Reserve, if they had some secret interest in tricking everyone, wouldn't be flatly admitting they consider why inflation isn't hitting targets a "mystery." [2]

So you're saying these people with all the humility required to announce they have solved economic crises for at least a lifetime [1] wouldn't lie or deceive themselves ?

I wouldn't make that point. Seems unlikely that hubris like that would be limited in any way.

Central banks have a long history of ... well, either outright lying or incredible self-deception, including the federal reserve under this chair. [2] No sane person at this point believes the FED's economic predictions.

To make the difference I would put forth this point: finding analyses that defend the point that the US government (and indeed almost all governments with pension obligations) would be bankrupt in 2 year with a 4% funds rate and 6% inflation is easy. In other words, the FEDs predictions, if implemented, would blow up governments, make them bankrupt. Not just the US government (in fact the US government can probably last longer than the EU or Eastern European governments). I agree with that assessment. Maybe they can make it 3-4 years, but certainly no more.

So in order to believe the FED's predictions and stated reasoning are honest (same with ECB) you have to believe that somehow it escaped the attention of these finance industry 4, 5 and 6 decade veterans that this would cause a financial disaster worldwide. I find it hard to believe that these people are this stupid. I also do not believe the FED would destroy the government it's part of.

So I present to you: they are lying. They are lying about their reasoning, they are lying about their models, they are lying about their predictions. I understand why they're lying, but they're still lying.

They are lying about the CPI too. European inflation measures are similar, as they directly influence pension increases, and "surprisingly" they're very low.

[1] https://www.reuters.com/article/us-usa-fed-yellen/feds-yelle...

[2] https://mises.org/sites/default/files/styles/full_width/publ...

http://www.investmentoffice.com/show_image.php?file_id=2151

http://ei.marketwatch.com//Multimedia/2016/09/28/Photos/NS/M...

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#182

Post by Fomite »

Kadin wrote: post #145
jogjayr wrote: post #127

Earlier quoted context omitted.

> STEM students were charges several thousand dollars a year more than humanities students. That actually seems more equitable to me than what happens at some other schools, where everyone pays the same credit-hour rate no matter what course they take. Teaching STEM courses, intuitively, seems like it should cost more. The pool of professors and TAs is smaller, a lot of courses call for lab equipment and the maintain…

The higher cost of delivering classes with a lab component is generally solved via lab fees. This seems a much better solution than raising the cost per credit hour. Also, some STEM-type departments get grants (public and private) at a rate that's much greater than liberal arts departments, and grant recipients have to tithe back a large portion to their parent institution in a way that defrays facilities costs, etc.…

Ironically, I have been in several research heavy departments that have been looking enviously at the teaching-heavy, undergraduate centric departments with steady and predictable funding streams.

Two things to keep in mind:

1. Grants are difficult to get. The pay lines at both the NIH and NSF have been decreasing for quite some time, and even successful departments don't have the feeling of swimming in cash.

2. Overhead rates (the "tithes" you mention) do not necessarily cover the full administrative cost of a research-heavy department (especially things like capital construction).

There are certainly institutions that have built a great deal of monetary success on their research programs, but not as many as one might think. This is why, for example, in my field we're seeing a proliferation of MPH programs - student tuition is a more reliable income stream.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#183

Post by dajohnson89 »

1_2__4 wrote: post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

What is the trend of consumer spending? A possibility is that people are developing bad spending habits.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#184

Post by Fomite »

tdeck wrote: post #171
valj wrote: post #24

From the article: "Department of Education ticked up to 18.8 percent as of June 30, up from 18.6 percent the same time last year, new federal data show." There's your answer - 0.2pp is totally insubstantial, which makes the title borderline clickbait. The economy doesn't uniformly grow or distribute wealth, so a change so small could just be from the distribution of college leavers in a particular year being overinde…

Here are more depressing statistics: https://www.cbpp.org/research/state-budget-and-tax/funding-d... tl;dr: States have been cutting back on funding public education even as it's gotten much more expensive every year.

This. States slashed higher education spending during the recession, and it's not coming back. At the same time, federal grant money got tighter.

Student tuition is literally the only dial left that can be moved.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#185

Post by StanislavPetrov »

ElEmEnOhP wrote: post #158
StanislavPetrov wrote: post #137

Earlier quoted context omitted.

Our federal government is $20 trillion dollars in debt. We are trillions more on debt from every level from local to federal. Most of the states are on the verge of bankruptcy, if not bankrupt already (like Illinois). Countless millions who depend on pensions and other promised benefits from states and municipalities are about to be in for a rude surprise. Despite this crushing debt, we continue to spend trillions of…

Correlating government debt (which is primarily owed back to it's citizens) to household debt is extremely disingenuous.

>Correlating government debt (which is primarily owed back to it's citizens) to household debt is extremely disingenuous.

That's false for several reasons. First, government debt impacts citizens directly through higher taxes (income, property, sales, and others), fees, deprivation of services, ect. Second, government debt is not primarily owed back to it's citizens. The biggest holder of government debt is the Federal Reserve, which is a collection of private banks. The vast majority of debt not held by the federal reserve is held by banks, financiers, and the ultra-wealthy. Third, working people and those on fixed incomes are crushed by ZIRP (zero interest rate policy), which has been implemented by the FED in an effort to prevent the mountains of debt load on every governmental level from exploding. What it has done instead is prevented people from saving (since artificially low interest rates that don't match the rise in cost of living mean treasuries and savings accounts lose value) and further inflate the riches of the ultra-wealthy who borrow at 0% and buy stocks.

This doesn't even touch on the fact that millions of people who have worked their whole lives for pensions are about to get the shaft and become destitute when states and municipalities are overcome by their crushing debt and default on their payments.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#186

Post by Fomite »

Kadin wrote: post #150
AcerbicZero wrote: post #138

Earlier quoted context omitted.

I've never thought of it that way. I don't know if there wouldn't be some second or third order issues from something like this, but at first glance this seems like a good idea. Why shouldn't the school take on some of the risk?

The schools would undoubtedly respond that in doing so, they would necessarily have to stop educating people from anything less than the most privileged (and thus low-risk) backgrounds. You'd need to cook up some sort of risk-pooling scheme if you wanted schools to extend that credit to anyone coming from a background that made payment statistically less-likely. And once you started doing that you'd have to be carefu…

Indeed. The university where I'm currently faculty views it's mandate as making college more accessible to the state's population and supporting first generation college students.

If they're going to be left holding the bag for that, they're going to stop.

And to address the poster who thinks we can blind universities to a potential student's financial background...we have a very good statistics and computer science departments, and a massive data set of all our students. We can probably come up with a classification scheme in short order, "blinding" or not. Hell, I'm pretty sure you could get pretty far just from "What high school did you go to?" and the classes you took there.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#187

Post by nkozyra »

CaptSpify wrote: post #142
1_2__4 wrote: post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

Sure it's fake. Our economic models are so out of touch with reality, it's a wonder the system works at all. We treat digital goods the same as physical goods, we spend tons of money to prop up giant failing structures instead of letting them fall apart, we let those that make the most walk away without paying their fair share, we subsidize stuff that nobody wants and is harmful to us, and aren't even close to making…

> We treat digital goods the same as physical goods

I'm struggling to see the impact this has on economic reality. Could you expound?

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#188

Post by StanislavPetrov »

linkregister wrote: post #169
StanislavPetrov wrote: post #130

Earlier quoted context omitted.

>But I keep hearing employment is great, productivity is great, stock market is great The question you have to ask is, who are you hearing this from? The answer is: people with a vested interest in making you believe the economy is doing great, or people fooled into believing this by those with a vested interest. I suggest you closely examine the metrics used by those who claim the "economy is great". First these met…

That is an interesting anecdote, delivered with lots of confidence. However, despite the just-so manner you delivered it, I don't see a compelling argument. For starters, the CPI isn't calculated in an opaque manner; it's explained here: https://www.bls.gov/news.release/pdf/cpi.pdf . The costs that are increasing for most Americans are housing, healthcare, and education costs. Yet over 40% of American households own…

Did you even read CPI information from the link you posted? Literally every page is riddled with opaque reference to arbitrarily defined values and modifiers inserted by the FED.

>In calculating the index, price changes for the various items in each location are aggregated using weights, which represent their importance in the spending of the appropriate population group.

What do you think "aggregated using weights" means? How does the FED determine what those weights are? Who decides how how much these "weights" should factor in deciding the proper "spending of the appropriate population group"? Where's a description of their formula? There is none - its made up.

> The CP I-U and CP I-W are considered final when released, but the C-CP I-U is issued in preliminary form and subject to three subsequent quarterly revisions.

In other words, they revise their ridiculous assertions months after the headlines to look less ridiculous in retrospect.

>Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-SEATS seasonal adjustment method. These factors are updated each February, and the new factors are used to revise the previous 5 years of seasonally adjusted data.

More arbitrary "seasonal adjustments". How would the IRS feel if you reported your taxes but you said that you reserved the right to adjust them up to 5 years later?

>Seasonally adjusted data, including the U.S. city average all items index levels, are subject to revision for up to 5 years after their original release.

Which they change up to 5 years later!

That's just from one page of their nonsense! Read the footnotes beneath each chart of "data" to see a slew of arbitrary adjustments that are made for every "calculation".

How many invented variables do you think it takes to invalidate their formulas? 1? 2? or the dozens they have?

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#189

Post by kiliantics »

lettergram wrote: post #180
1_2__4 wrote: post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

Alternatively, student loans are rediculously high. Every adult I know always pushes college, but had I been given a $100k loan to buy a rental unit at 18, I'd have turned that into $250k by the time I finished 5 years of school. Not to mention, I could have worked a 9 - 5, $25 / hr job, and bought a second or third... Perhaps school isn't the best in many cases. Now I pay $1k a month in student loan payments, on top…

Where do you get a 9-5 job that pays $25/hr without going to college? I know adjunct professors that get paid less than that.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#190

Post by StanislavPetrov »

candiodari wrote: post #181
linkregister wrote: post #169

Earlier quoted context omitted.

That is an interesting anecdote, delivered with lots of confidence. However, despite the just-so manner you delivered it, I don't see a compelling argument. For starters, the CPI isn't calculated in an opaque manner; it's explained here: https://www.bls.gov/news.release/pdf/cpi.pdf . The costs that are increasing for most Americans are housing, healthcare, and education costs. Yet over 40% of American households own…

> The directors of the Federal Reserve, if they had some secret interest in tricking everyone, wouldn't be flatly admitting they consider why inflation isn't hitting targets a "mystery." [2] So you're saying these people with all the humility required to announce they have solved economic crises for at least a lifetime [1] wouldn't lie or deceive themselves ? I wouldn't make that point. Seems unlikely that hubris lik…

>So I present to you: they are lying. They are lying about their reasoning, they are lying about their models, they are lying about their predictions. I understand why they're lying, but they're still lying.

Some are no doubt lying, but never underestimate one's ability to delude themself.

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