How America's universities became debt factories • Hacker News Board

Re: How America's universities became debt factories

#191

Post by jmyeet » Sat, Sep 14, 2024, 6:54 PM UTC

advael wrote: post #6

We should be way more willing to straight up kill multi-billion dollar industries. Without that willingness, most modern problems are impossible for governments to solve, and such industries and even their potential competitors are incentivised mostly to exacerbate the problem. I love a good market as much as anyone but there really are problems markets will never solve

We should do (at least) three things:

1. Provide a counterbalance to private industries by having the government player to be a significant player in that market. That means a free or near-free high-quality state higher education system like the California system used to be until it was made an explicit political goal to avoid an "educated proletariat" [1]. It also goes for housing, hospitals, banks, ISPs and so on;

2. Nationalize failing industries rather than providing them loans for no reason. Banks fail in 2008? Well, you belong to the state now. Just like the FDIC does with failing banks.

3. Federal dollars for pharma research should come with an equity stake in the private corporations that monetize it. Most drugs are developed with Federal grants.

> I love a good market as much as anyone

Just curious: where do you see markets actually working?

[1]: https://www.bestcolleges.com/news/analysis/threat-of-educate...

Re: How America's universities became debt factories

#192

Post by brigadier132 » Sat, Sep 14, 2024, 6:55 PM UTC

JoBrad wrote: post #169

brigadier132 wrote: post #151

Earlier quoted context omitted.

In your 4 step process where do you blame the not for profit schools for raising tuition by completely absurd and unsustainable amounts? If we are going to forgive student loans, tax payers should not be on the hook. The loan originators and most importantly the schools should pay since they are both the primary beneficiaries of this disastrous policy.

The cost of student loans is nothing compared to the value that those degree holders will provide. In my opinion, your first degree at a public university or community college should be paid for by the Federal government as long as you keep a certain grade average, and stick to a reasonable timeline. If it matters to anyone, I paid off my loans entirely, but also received Pell grants.

If your opinion were correct the degrees would pay for themselves and we wouldn't be having these discussions. We have people paying $160k a year to study in fields that are increasingly having their fundamental research completely debunked and exposed as fraudulent (see Political Science and Pyschology).

There is also absolutely 0 reason these degrees should cost so much. If we want to keep a guaranteed student loan program it should be restricted in the amount that can be borrowed and it should only be usable at local community colleges that cost under $5k a year. Nothing about education necessitates spending more than that.

Re: How America's universities became debt factories

#193

Post by giantg2 » Sat, Sep 14, 2024, 6:55 PM UTC

Avicebron wrote: post #147

paulcole wrote: post #139

Earlier quoted context omitted.

I took out around $20k in loans to study literature starting in 2001. Graduated in 2005. Rent was $150 a month. Played a lot of poker and disc golf. Studied and learned a bit. Had a 75% scholarship to help with tuition. Had a $300/semester book stipend as part of that and just bought penny books off Amazon (one of the benefits of an English degree) and pocketed the difference. Basically for 5-8% or so of my (estimate…

I'm trying to figure out if you missed a 0 at the end of your rent...

I remember rent was $1800 per semester for my friends, and they split that 3 ways. So about $600 for 4 months, or $150/month. To be fair, it was a bit of a dump. But that's less you have to worry about when having parties. I had a slightly nicer single room and closer to campus with parking and it was $1200 per semester, or $300 month. This was slightly over a decade ago. I was curious and did a quick check - seems the single rooms are about $600/mo and I saw a 3 bed for $800/mo. Still really cheap considering all the inflation that happened over the past decade.

Re: How America's universities became debt factories

#194

Post by davidgay » Sat, Sep 14, 2024, 6:58 PM UTC

kmeisthax wrote: post #177

mchusma wrote: post #41

Earlier quoted context omitted.

But…the whole point is that it is NOT a market. If student debt is dischargeable and the government guarantee is removed or dramatically reduced, pretty much all problems are “solved”. Universities will have to start focusing on ROI. Universities that provide a poor ROI will shut down. Universities will need to reduce costs for traditional coursework, cut courses with poor returns, add courses with higher returns. Th…

Yes, but this is also the preferred solution of the people who caused the current crisis with university cost inflation. Universities used to be expensive schools for rich people's failsons to "find themselves". That's why there's a lot of focus on "well-rounded" educations even today. Then western governments started offering taxpayer-funded tuition, which resulted in a new wave of educated kids who refused to belie…

> Universities used to be expensive schools for rich people's failsons to "find themselves". That's why there's a lot of focus on "well-rounded" educations even today. Then western governments started offering taxpayer-funded tuition

Replace western by "US" for "well-rounded". AFAIK, all European university degrees are focused on a single topic, and its requirement (so, lots of math if you're studying physics). No literature classes required (or even available in some cases) if you're, e.g., getting a computer science degree.

Re: How America's universities became debt factories

#195

Post by SpicyLemonZest » Sat, Sep 14, 2024, 6:58 PM UTC

jackdaniel wrote: post #8

I wonder why there's no mention of a free education as an alternative solution to the broken system

Many states do operate tuition-free programs for residents at their public colleges. But students with good grades often prefer to take a large amount of debt rather than go to the local state school, and it's not clear how you would go about changing that.

Re: How America's universities became debt factories

#196

Post by jancsika » Sat, Sep 14, 2024, 6:59 PM UTC

scoofy wrote: post #110

lenerdenator wrote: post #89

1) Move most good careers that do not require a college degree out of the country for the benefit of shareholders 2) Tell everyone born between 1980 and 1995 that they'll be unable to compete in the global marketplace if they don't get at least some post-high school education, and imply that the mere presence of a degree will help instead of having a specific type of degree 3) Have next-to-zero standards for public f…

You forgot the most important part. The people agreeing to these debts, by definition , do not have an education in complex debt instruments that cannot be discharged. Taking our a vast loan to study English literature might seem unwise, but it’s something I could definitely see a starry eyed 17 year old deciding to do.

> The people agreeing to these debts, by definition, do not have an education in complex debt instruments that cannot be discharged.

I guarantee you that law/med school students have an education in "complex debt instruments that cannot be discharged."

Because before the current law was passed, they were the ones abusing the old "complex debt instruments" to discharge debt they knew they'd be able to pay back once they started making bank. The law was passed because they were doing this in large numbers. For these serious med/law students, the old system was free money. The new system is a reasonable risk.

Did you know this? If so, why did you write "by definition?" And why go off on a tangent about English literature students?

Re: How America's universities became debt factories

#197

Post by NemoNobody » Sat, Sep 14, 2024, 7:01 PM UTC

lordnacho wrote: post #47

I don't know if this is some kind of heresy, but here we go. I don't think universities provide much value at all to the common student who is not going to be a PhD. I went to a very well-known institution known for putting the students in a room with the professors, maybe two or three students, to one professor. My economics professor taught me one on one. I still think, in the end, the work is mostly done alone, in…

That's the truest sounding heresy I've ever heard.

Re: How America's universities became debt factories

#198

Post by big-green-man » Sat, Sep 14, 2024, 7:03 PM UTC

I've been saying this to anyone who would listen for years. All the problems with higher education in the US are the direct result of student loans being unable to be discharged in bankruptcy. Usually complex problems have complex causes, usually if someone says "simple, just do this" it means they probably don't understand the problem. Not this one. This is one of those rare problems with a singular cause and a "simple" solution: allow student debt to be discharged in bankruptcy. I put quotes on simple because, while the solution is simple, it's easier said than done as the author points out, the regulation of the industry is captured and making it actually happen is very difficult due to incumbent institutions benefitting from the status quo. But we have to set the bone, it's going to hurt but there's no way around it. We are very fortunate that the solution is so simple.

Re: How America's universities became debt factories

#199

Post by foobazgt » Sat, Sep 14, 2024, 7:04 PM UTC

kraussvonespy wrote: post #132

bufferoverflow wrote: post #114

Earlier quoted context omitted.

I would also add 5) Don't educate young people on what their degree would earn them. So many young people think their hobby can become their career and pay for a nice life style. Unfortunately, it's not the case for many majors.

Which is bad too because if you turn your hobby into your career, you end up not having a hobby anymore. In order to have a happy life, you have to have a vocation and an avocation that are separate from each other.

> In order to have a happy life, you have to have a vocation and an avocation that are separate from each other.

This reads to me as your career shouldn't involve doing something you enjoy. I think this mostly happens in situations where people are doing exactly at work what they'd do at home, and they don't like their job for any vast number of reasons. Usually that's only a problem if you don't have the security to find another job.

My personal experience is that it really helps to be able to be passionate about your work. It's fulfilling. You will perform better at your job, because you will be multiplying your experience from work with your experience at home. Sometimes my hobbies and my work have been literally exactly the same, e.g. I've been able to open source projects from work (which I then work on as a hobby).

The advice I'd give people instead:

Like your job. Get a degree in a field that you both enjoy and that pays well. That sounds glib, but so many people don't think about this at all (part of the focus of the article). You probably won't be able to align your career and the exact activity you enjoy the most, but you should shoot for them being in the same ballpark. Where they don't align? Sure, that's opportunity for a hobby.

Re: How America's universities became debt factories

#200

Post by zozbot234 » Sat, Sep 14, 2024, 7:06 PM UTC

scoofy wrote: post #110

lenerdenator wrote: post #89

1) Move most good careers that do not require a college degree out of the country for the benefit of shareholders 2) Tell everyone born between 1980 and 1995 that they'll be unable to compete in the global marketplace if they don't get at least some post-high school education, and imply that the mere presence of a degree will help instead of having a specific type of degree 3) Have next-to-zero standards for public f…

You forgot the most important part. The people agreeing to these debts, by definition , do not have an education in complex debt instruments that cannot be discharged. Taking our a vast loan to study English literature might seem unwise, but it’s something I could definitely see a starry eyed 17 year old deciding to do.

The bulk of education debt in the U.S. is not about undergrad degrees in English literature or the like. By and large, it gets incurred either for lucrative postgrad degrees (MBA, law, medical etc.) or for earning degrees at "non-traditional" for-profit colleges.