Ripping Off Young America: The College-Loan Scandal • Hacker News Board

Re: Ripping Off Young America: The College-Loan Scandal

#21

Post by gte910h » Fri, Aug 16, 2013, 5:17 PM UTC

Zimahl wrote: post #13

ihsw wrote: post #3

It will be interesting to see how Oregon's Pay-It-Forward will pan out, but it will take half a century to get any real data: http://www.huffingtonpost.com/2013/07/03/pay-it-forward-oreg... Ohio has also shown interest: http://www.huffingtonpost.com/2013/07/18/ohio-tuition-plan-o...

Commenting as an Oregonian, it isn't going to solve any problems it just makes college more accessible, allowing students to kick the can down the road. College is still too expensive and costs have risen for no reason. I went to state college in Washington (Washington State, go Cougs) and when I started there tuition was $1300 (semester system, so $2600 per year). My middle-class parents were easily able to cover my…

I'm fine if costs stay where they are....as long as there is a mandatory forgiveness 15 or so years past graduation.

Then lenders will discriminate based on major (as it should be) and not fund english degrees and other such things that we have a glut of.

Re: Ripping Off Young America: The College-Loan Scandal

#22

Post by qdpb » Fri, Aug 16, 2013, 5:18 PM UTC

gxs wrote: post #7

Amazing, perspective is everything. I don't deny that college kids are being taken advantage of. Graduating from a small liberal arts college in South Dakota that no one's ever heard of with a degree is Culture Studies and 80k in debt really is a rip off. The flipside of this coin however is someone like me. My parents are immigrants and I was the first to go to school. To my parents, the fact that someone would be e…

Perhaps it helps to clarify that the evil here is not that college loans exist, but how easy it is to get them to pay for any kind of education, how much you can borrow, and how impossible it is to get rid of this debt burden.

The choice between no loans or bad loans is fallacious.

Re: Ripping Off Young America: The College-Loan Scandal

#23

Post by NoPiece » Fri, Aug 16, 2013, 5:20 PM UTC

rayiner wrote: post #4

koppo wrote: post #2

sure there must be some wall street guys betting on a college-loan bubble like they did for the housing-loans.

Betting on what instrument? Loans are mostly federal. For what it's worth, the student loan program is solidly in the black for the federal government.

What about betting against for profit universities which, on the shadier side, seem to be using unqualified students to grab federal loan money? Seems like they could get hit hard if the loan money starts to dry up.

Re: Ripping Off Young America: The College-Loan Scandal

#24

Post by twoodfin » Fri, Aug 16, 2013, 5:21 PM UTC

ethanbond wrote: post #12

gxs wrote: post #7

Amazing, perspective is everything. I don't deny that college kids are being taken advantage of. Graduating from a small liberal arts college in South Dakota that no one's ever heard of with a degree is Culture Studies and 80k in debt really is a rip off. The flipside of this coin however is someone like me. My parents are immigrants and I was the first to go to school. To my parents, the fact that someone would be e…

I agree. Loans aren't at the root of the problem, but they're also a bad solution. An even worse solution is getting rid of loans. The only solution worse than that? Blaming students. This is why, until there's some radical, radical change, I'll always vote for the people perpetuating student loans. I'm not going to be the one that screws an entire generation out of a worthwhile education in the name of "loans are ba…

This is why, until there's some radical, radical change, I'll always vote for the people perpetuating student loans.

Loans for the sake of loans seem to be the key problem here: If students who intended to get a "degree in bullshit" at a gussied up diploma mill faced difficulty finding a loan for that purpose, they might reevaluate their decision.

And besides: Who's seriously advocating for the total elimination of student loans?

Re: Ripping Off Young America: The College-Loan Scandal

#25

Post by twoodfin » Fri, Aug 16, 2013, 5:23 PM UTC

graeme wrote: post #18

cliveowen wrote: post #5

You can tell Matt Taibbi's articles just by looking at the title.

Matt Taibbi isn't the author of that article. You saw an ad for one of his articles buried in the text of the article. Edit: Well, I was wrong. I realized that on my mobile, I read "By Victor Juhasz", referring to the photo credit.

No, he is the author. And if nothing else, it provided me with the pleasant knowledge that I think he's a terrible writer even when I agree with him.

Re: Ripping Off Young America: The College-Loan Scandal

#26

Post by johnchristopher » Fri, Aug 16, 2013, 5:23 PM UTC

gxs wrote: post #7

Amazing, perspective is everything. I don't deny that college kids are being taken advantage of. Graduating from a small liberal arts college in South Dakota that no one's ever heard of with a degree is Culture Studies and 80k in debt really is a rip off. The flipside of this coin however is someone like me. My parents are immigrants and I was the first to go to school. To my parents, the fact that someone would be e…

> In some countries, you don't even have the OPTION to take out a loan to go to school. You either have the money and you go, or you don't and it is that much harder to climb the social ladder.

> I'm not sure which evil is worse, but I'm damn glad I was offered those loans.

You are stacking only two options against each other. There are countries where there are no schools and countries where school is being paid by the community via taxes.

Of course between no school and school with loans the choice is clear (in an (post-)industrialized country, mind you).

Re: Ripping Off Young America: The College-Loan Scandal

#27

Post by nonchalance » Fri, Aug 16, 2013, 5:24 PM UTC

mbesto wrote: post #10

I am seriously interested in understanding how an individual would go about shorting college loan securities. I have no doubt in my mind that this the next big crisis just waiting to burst.

Unless you have the money to cut a deal with a major investment bank (like how paulson worked with GS to short MBS), you could just try to amass as much student loan debt as possible and wait for the government to force lenders to take a haircut. That way, you "win" insofar as the cash you have exceeds how much you have to pay back. But TBH it's a really really bad idea because if there is a 100% federal backstop you will end up losing.

You could also short servicers and lenders like Apollo Group (NASDAQ:APOL) and Nelnet (NYSE:NNI). If you asked me for a compelling short in the space, I would say DeVry (NYSE:DV), but do your own due diligence before entering a trade

Re: Ripping Off Young America: The College-Loan Scandal

#28

Post by johngalt » Fri, Aug 16, 2013, 5:24 PM UTC

I don't see how an obvious result could be considered a scandal. We beat the drum for 30 years that all HS students must go to college and pursue their dreams of being marine biologists. We offer loans that people are unqualified to repay; allowing costs to balloon without constraining demand.

Re: Ripping Off Young America: The College-Loan Scandal

#29

Post by itsybitsycoder » Fri, Aug 16, 2013, 5:27 PM UTC

vaadu wrote: post #19

A degree that provides the recipient with little foundation for income should not be underwritten with tax dollars. You want a teaching or nursing degree, I'm there. If you want a degree in puppetry, not happening.

In many parts of the English-speaking world, there is such a glut of teachers that a teaching degree doesn't give you a much bigger shot at a career than a puppetry degree. And of course, this all depends on supply/demand, which can change significantly and unpredictably over the course of a new graduate's working life. So how exactly are you going to make this call?

Re: Ripping Off Young America: The College-Loan Scandal

#30

Post by stygiansonic » Fri, Aug 16, 2013, 5:28 PM UTC

mbesto wrote: post #10

I am seriously interested in understanding how an individual would go about shorting college loan securities. I have no doubt in my mind that this the next big crisis just waiting to burst.

Well you could always take up a short position in Sallie Mae (SLM), however such an undertaking would be fraught with risk.

They are a GSE, though both Freddie and Fannie were as well.

And don't forget the timeless Kenyes quote: "Markets can remain irrational longer than you can remain solvent." (paraphrased)