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What's Really 'Immoral' About Student Loans

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Re: What's Really 'Immoral' About Student Loans

#21

Post by rdouble »

charlieflowers wrote: post #18

I have wondered for a long time now where all the college tuition money goes. Consider that: (1) the cost of tuition has grown FAR faster than inflation, and is now sky high, (2) A huge percentage of students need and get student loans, (3) student loans are one of the few types of liabilities that bankruptcy can't wipe out. So "everyone" (speaking loosely) goes to college, and "everyone" gets a loan. The college get…

The increases in spending are indeed soaked up by overpaid administrators and their teams, known as "institutional support." For state schools, budget information is public and you can see for yourself how the university spends its money. This opinion piece regarding the University of Minnesota distills some of that information: http://www.startribune.com/opinion/42550752.html

But in one category, expenditures have nearly doubled over the last five years. That category is "institutional support," which consists essentially of central administration. The 2008-09 budget plan increases expenditures for institutional support by more than $143 million, or 80 percent, over the figure for 2004-05. The spending increase in this category alone covers the amount by which the governor proposes to reduce the state’s annual appropriation to the university.

What has the university bought with all this additional money spent on "institutional support"? Among other things, a growing array of vice presidents and associate vice presidents. The university now employs 12 VPs, several of whose positions have been created during the last five years. Every occupant of such a position earns a six-figure salary, starting at around $250,000 per year. Multiply by twelve, add a number of associate VPs, then staff support, plus assorted expenses for everything from office supplies to travel — and the institution spends millions more each year on central administration

This same pattern can be seen at almost any state university in the United States.

Re: What's Really 'Immoral' About Student Loans

#23

Post by purplelobster »

pnathan wrote: post #16

College is an interesting situation. It might be argued that collectively we all have an interest in seeing a more educated society, regardless of the earning power. It might also be argued that collectively we need to focus more on not "going to college" but instead focusing on things like "learning a sustainable trade". And, for an individual looking to maximize earnings & employment, a bachelor's in STEM/business…

About collectivizing costs, you speak as if it has never been tried and you discount the idea based on your own assumptions that it would be too expensive? As someone who has gone to university both at a free*(you actually get money to study) (~top) Scandinavian university as well as a (~top 10) US university, there is not much difference in the actual education from what I could tell. Where there's a real big difference though is research. US universities consistently outspends and outproduces European universities by a large factor. My theory is that the undergrads are paying for the professor's research and grad students, but I'm not sure. The money has to come from somewhere. Either way, neither I nor my parents would ever have been able afford US tuition + living costs. I took a loan for all the living costs that were not covered by subsidies, a loan with an interest of about 1.9%, so I can't even complain about that. My point is that in the US, I would probably not have been able to afford a decent college, and I think that's a broken system. Research and fancy campus gyms should not be funded by stepping on poor undergrads.

By the way, it also seems that student loans for US students mainly consists of tuition payments. There is rarely any mention of livings costs which I find curious. Do people just take it for granted that the parents will pay that part? Myself, after 5 years, I was roughly $50,000 in debt, all of it living expenses (note, that's only $10,000 a year in a country with high cost of living). My family didn't (and didn't have to) pay anything to put me through college. From what I can tell, this is the norm here, students take loans for their living expenses and parents are not expected to support them.

Re: What's Really 'Immoral' About Student Loans

#24

Post by javert »

Any form of government subsidized education is immoral. The universe doesn't owe you an education, which, like all values, is inherently expensive, and must be produced. Neither does society; and neither do I.

This may seem cruel, but it's actually kind. Were it not for government control of education, education would have already undergone the same kind of massive transition that has happened to every free-market industry: much better, much cheaper, much more widely available.

If you want to see what happens to an economic sector as the government becomes more invasive, look at the finance sector, which is the most controlled sector in the US, or look at the "federal telecom bureaus" (AT&T, Time Warner and Verizon).

Re: What's Really 'Immoral' About Student Loans

#25

Post by rubikscube »

charlieflowers wrote: post #18

I have wondered for a long time now where all the college tuition money goes. Consider that: (1) the cost of tuition has grown FAR faster than inflation, and is now sky high, (2) A huge percentage of students need and get student loans, (3) student loans are one of the few types of liabilities that bankruptcy can't wipe out. So "everyone" (speaking loosely) goes to college, and "everyone" gets a loan. The college get…

Where does it go? Well, some universities apparently are tempted to put it in a nice slush fund. See the University of Wisconsin as one known example. http://pjmedia.com/instapundit/167425/

Re: What's Really 'Immoral' About Student Loans

#26

Post by zanny »

eightyone wrote: post #19

For an opposite view point, see the Salon article Tuition is too damn high . It argues for the vast majority of people tuition has increased because government has drastically cut funds to public education. Not because of Pell Grants or "easy money". The author has some interesting data, as well. Here's a glimpse: "The first step in grappling with the rise in the cost of higher education requires understanding where…

The article you link touches on it, but before you even consider where students go to school you must ask why they do. And that is a very vacuous answer most of the time. I got my CS degree only because my peers said it would be significantly easier to be consistently employed with a BS even when it cost me 20k to get.

In reality, young adults don't go to college to learn. They did that for ~15 years (even worse, they did for 15 years by compulsion without much say in the matter) and the vast majority want to do something else. Most of them are there for credentials, not knowledge, and that is the problem.

The most important problem here is the necessity to disconnect education from schooling. The intent of the latter is to cause the former, but the former is not dependent on being confined to the latter. You can apprentice, you can self-teach, you can dive in as a high risk newbie in an industry. None of those involve going to prohibitively expensive summer camps turned annual to get lectured at.

The Internet enables a lot here - where previously it was very hard to find like minded individuals interested in participatory group learning about a subject, now it is stupidly easy, a search away. Learning resources are also rampant online in what used to be confined to a tome from the local library or a prohibitively expensive book purchase.

So the third viewpoint is that the problem has nothing to do with how the government behaves here because it is symptomatic of a baby-boomer irrational quest to get pieces of paper saying "bachelors" on it for everyone currently under the age of 30. The solution is to get a significant chunk of the people currently attending college and accruing these insane debts into more productive and better directed paths to careers in the things that interest them without the cultural baggage touting a phd in some field writing on a chalkboard as the golden goose of learning.

The real, true, bottom of the barrel reason I think this entire debacle even exists or came about in the first place, and I think it is at the root of most societal shifts for 30 years, is that the ultra-concentration of capital and wealth into so few people has dramatically slowed down the productivity engine of the first world. There is little motivation when you already pull the strings of international business to invest in risky youth labor, and when you control a huge chunk of the economy your lack of risk taking on new talent means huge droves of the population are never given a chance to succeed. It is safer and (here is the key) more profitable to play games with rigged fiat money and banks or stocks of fortune 500ers than to actually create goods and services by growing productivity and creating value.

Re: What's Really 'Immoral' About Student Loans

#27

Post by vizeroth »

purplelobster wrote: post #23
pnathan wrote: post #16

College is an interesting situation. It might be argued that collectively we all have an interest in seeing a more educated society, regardless of the earning power. It might also be argued that collectively we need to focus more on not "going to college" but instead focusing on things like "learning a sustainable trade". And, for an individual looking to maximize earnings & employment, a bachelor's in STEM/business…

About collectivizing costs, you speak as if it has never been tried and you discount the idea based on your own assumptions that it would be too expensive? As someone who has gone to university both at a free*(you actually get money to study) (~top) Scandinavian university as well as a (~top 10) US university, there is not much difference in the actual education from what I could tell. Where there's a real big differ…

The formulas used to calculate eligibility for various forms of financial aid as a US student include an assumption (up until the age of 25 if I remember correctly) that the parents will be paying a certain amount, based on their income. My parents' expected contribution was not within the realm of their economic reality, especially with 4 kids graduating from high school in 3 years.

My wife went straight from putting her parents' income on her student aid forms to my income, so nearly all of her higher education not paid by her parents is on student loans (because by the time we got married my expected contribution to her education was outside the realm of our financial reality).

These calculations do include the estimated costs of room, board, & books, though, and student loan eligibility is largely based on those numbers. Of course, the room & board costs are often based on living in dorms and eating entirely on campus meal plans, each of which, depending on where you go to school, can be significantly different from the cost of living off-campus.

Re: What's Really 'Immoral' About Student Loans

#28

Post by rubikscube »

rubikscube wrote: post #25
charlieflowers wrote: post #18

I have wondered for a long time now where all the college tuition money goes. Consider that: (1) the cost of tuition has grown FAR faster than inflation, and is now sky high, (2) A huge percentage of students need and get student loans, (3) student loans are one of the few types of liabilities that bankruptcy can't wipe out. So "everyone" (speaking loosely) goes to college, and "everyone" gets a loan. The college get…

Where does it go? Well, some universities apparently are tempted to put it in a nice slush fund. See the University of Wisconsin as one known example. http://pjmedia.com/instapundit/167425/

More reports on one university so far discovered to have a slush fund, the University of Wisconsin:

UW Slush Fund Exposes Hypocrisy of Liberal Group http://mediatrackers.org/wisconsin/2013/04/23/uw-slush-fund-...

UW slush fund insults citizens http://www.beloitdailyneaws.com/opinion/editorial-uw-slush-f...

Outrage grows as University of Wisconsin System admits it 'did not draw attention' to cash http://www.jsonline.com/news/education/outrage-grows-as-uw-a...

I wonder how many more state-run institutions of higher education will have similar scandals in the next few years.

Re: What's Really 'Immoral' About Student Loans

#29

Post by chrisrhoden »

javert wrote: post #24

Any form of government subsidized education is immoral. The universe doesn't owe you an education, which, like all values, is inherently expensive, and must be produced. Neither does society; and neither do I. This may seem cruel, but it's actually kind. Were it not for government control of education, education would have already undergone the same kind of massive transition that has happened to every free-market in…

I really, really wish all objectivists had been born (actually) underprivileged.

Re: What's Really 'Immoral' About Student Loans

#30

Post by jacques_chester »

zanny wrote: post #26
eightyone wrote: post #19

For an opposite view point, see the Salon article Tuition is too damn high . It argues for the vast majority of people tuition has increased because government has drastically cut funds to public education. Not because of Pell Grants or "easy money". The author has some interesting data, as well. Here's a glimpse: "The first step in grappling with the rise in the cost of higher education requires understanding where…

The article you link touches on it, but before you even consider where students go to school you must ask why they do. And that is a very vacuous answer most of the time. I got my CS degree only because my peers said it would be significantly easier to be consistently employed with a BS even when it cost me 20k to get. In reality, young adults don't go to college to learn. They did that for ~15 years (even worse, the…

Universities are older than the printing press, older than telegraphs, older than fast & cheap mass transport, older than radio and television.

To be quite honest I don't see the internet usurping them either.

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