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U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

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Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#241

Post by artimaeis »

Keverw wrote: post #21

I think the solution is ending loans for college. I don't think an 18-year-old with no assets, or even a stable job or no job at all should be given that much money for college. No bank would give them a loan for a house. At least you can foreclose on a house and take it back. You can't take back someone's education. Plus every time the department of education gives out more money, colleges raise prices. Imagine how…

> "I totally agree with our President-Elect about getting rid of the DoE, along with Common core. Let things be up to the states."

Okay, I'll bite. What? As is, with the DoE and Common Core, we struggle to get the poorer states to educate its students adequately compared to the wealthier states. Take a look at any metric you want about education in New Mexico, Louisiana, West Virginia and compare it to Massachusetts, New Jersey, or Virginia.

One of the things that makes the federal government so valuable is its ability to provide as even footing as possible for citizens of all states. Gutting the federal ability for that is going to ensure that those state which already struggle will struggle more and is going to lead to a larger set of divides within our country.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#242

Post by AlgorithmicTime »

chime wrote: post #33
krisroadruck wrote: post #13

I'm curious why we treat student loan debt as being special. We don't make a huge deal out of people taking on other debt and then being unable to pay for it. I think probably if anything, what we should have are better controls for what types of degrees you are allowed to take a loan out for. If your degree of choice is unlikely to yield the kind of return that will pay for it, then you should be required to save up…

> I'm curious why we treat student loan debt as being special. Because you can no longer declare bankruptcy to erase student debt. > If your degree of choice is unlikely to yield the kind of return that will pay for it, then you should be required to save up for it, rather than getting a loan, just like there are qualifications for other loans, like auto or mortgages which look at both the value of the asset vs its s…

>Now only the rich can send their kids to art school.

I'm not sure that's a bad thing?

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#243

Post by matwood »

giardini wrote: post #155
visarga wrote: post #121

Earlier quoted context omitted.

Natural selection at work. Some make the wrong choice to take too much debt.

Precisely! Visarga is bold enough to speak the obvious truth! Problem is many, if not most, incoming students are unable to understand the financial ramifications of student loans. This does not bode well for their futures, especially in technical fields. David Letterman once joked that "The lotto is a tax you pay for not paying attention in math class." One might say the same about college student loans.

As an aside, your lotto comment made me think of expected value (EV) and poker. At some point the pot of a lotto can become large enough where the EV demands you buy a ticket. Taxes I think make this number almost impossible to reach though.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#244

Post by tptacek »

formula1 wrote: post #49
rayiner wrote: post #25

We don't need student debt reform (and I say that as someone who has a lot of student debt). Student loan debt is a middle/upper middle class problem. 2/3 of millennials don't have a college degree, disproportionately in the lower and lower middle class. The majority have no student debt. Public money spent on college or debt reform would be a regressive benefit to those who are already better off than the median per…

I would argue that the problem isn't "if the poor are screwed, bad. If the rich are screwed, ok." I think the problem is eqch individual is pushed to go to college to find a good job which raises demand of college, which raises price. But those good jobs are barely out there for the graduates. And the college institutions didnt guide people down paths of success, instead gave enough freedom to find their own path to…

It's really hard to work through the framing you've created here, where it's supposed that going to college is a requirement to find a good job, the rich are "screwed" by college debt, and the poor are... what? Screwed from multiple directions simultaneously?

Further: if college is a necessity for a good job, and that's why students are going to college, and they're leaving college with a mountain of debt and no means to pay it off, then college is not achieving the promise of securing better jobs, and the answer isn't to plow even more money into the system but instead to stop sending kids to expensive colleges that have no positive impact on their financial futures.

It would be nice if college in the US was free. If one could wave a magic wand and reach that outcome, one certainly would.

But since we don't have magic wands, we have to prioritize, and we're generally not keen to prioritize the financial well-being of the wealthy before that of the less well-off. In matters other than finance, sure, we don't discriminate that way; we don't, for instance, send the rich off to wars first (we do rather the opposite).

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#245

Post by nickik »

charlesdm wrote: post #206
chrisseaton wrote: post #205

Earlier quoted context omitted.

> Fact 2: If you are loaned money to obtain a degree which is not economically valued then you will not be able to pay it back But for the vast majority of jobs people don't care what degree you have! In technology yes you often want someone with a particular degree. But if you're hiring a civil servant, a advertising executive, a business consultant, or any one of hundreds of other jobs, you can have any degree you…

And that is obviously ridiculous. > I have friends with theology degrees who work in business and earn more than I do in technology with my CS PhD. The companies that hire them value having people with a very wide range of academic backgrounds. That has nothing to do with their degree and everything with their ability. They would probably still get hired without the degree. Degrees only really matter in formal subjec…

Its actually not ridiculous at all.

There is a lot of study on the idea that the main value of education is not what you actually learn but much more signal that you are dedicated, motivated and have the ability to learn.

There is a huge argument going on right now about how much of the value is signal vs actual knowledge you need for the job. There is a lot of evidence that suggest that signal is a huge part of the value.

Network does not really apply as a expiation because the effect appears even when transition to a place that you have no relationship with it.

If you are interested consider listening to this: https://www.youtube.com/watch?v=bpk_u_VmPD4

(Be aware, this is a strong version of the argument, deliberately picked to break with the tradition view that many people have)

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#246

Post by trashtoss »

Lazare wrote: post #233
huxley wrote: post #210

Earlier quoted context omitted.

Those aren't facts, they are premises It is as likely that tying a university degree as the minimum pre-requisite for a decently paying career is driving the price upwards. Increased competition for desirable placements is the classic limited supply high demand scenario. The problem isn't the availability of loans which are just a side effect but the focus of education as a gate to future success. BTW from ancient ti…

Alright. Can you dispute them though? > Increased competition for desirable placements is the classic limited supply high demand scenario. I would suggest that if you believe the issue facing the US higher education system is a limited supply of places, you may not understand the US higher education system. In fact, if you look globally you'll find that the countries with low tuition are the ones who ruthlessly contr…

You misunderstand the point about limited "places" (or at least the point I believe is intended).

For sake of argument, assume 90% of jobs out there are "bad jobs"--no prospect of real wage growth, declining stability, decreasing benefits--and the remaining 10% of jobs are "good jobs" (with some wage growth, stability, and benefits).

Assume also that it is widely believed that in general, to have a chance at landing a "good job" you need at least an undergraduate degree (necessary, not sufficient!).

In such a situation, will you not see everyone throw as many resources as they can into getting their kids a better chance of making it into one of those good jobs?

There's a lot you can quibble with but that's the "limited places" of significance, with demand for university education a byproduct of that more fundamental demand (for better positioning vis-a-vis the "good jobs").

This is thus more of a race to establish relative position vis-a-vis other entrants, so IMHO looking at tournament theory (etc.) is helpful for understanding the overall dynamics.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#247

Post by saint_fiasco »

vacri wrote: post #123
School-Cotton wrote: post #51

Earlier quoted context omitted.

It's true only the rich could send their kids to art school, but there are lots of things only the rich can do. What makes you define art school in particular as something we should pay for everyone to do, rather than a luxury? Keep in mind that resources are limited -- for a given level of taxation, everything the State spends money on means either cutting something else or increasing the debt (thereby making debt s…

Anglo societies value art much more than they're willing to fork over cash for. Remove all art and tools, and life would be bleak (no movies, no music, etc), but we're sort of blind to that fact.

Then demand for art would increase and art would be profitable again!

Seriously, you guys make way too much art right now. Supply is much greater then demand.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#248

Post by tptacek »

alextheparrot wrote: post #72
rayiner wrote: post #25

We don't need student debt reform (and I say that as someone who has a lot of student debt). Student loan debt is a middle/upper middle class problem. 2/3 of millennials don't have a college degree, disproportionately in the lower and lower middle class. The majority have no student debt. Public money spent on college or debt reform would be a regressive benefit to those who are already better off than the median per…

I very much doubted this assertion (Regarding 2/3rds of millennial not having a college degree) given that I'm a millennial who grew up in a relatively rural area where nearly everyone from my high school still either went on to either a technical or 4-year school. The census [1] (Table 1) clearly contradicts my intuition. I would like to note that while 2/3 of millennials don't have a bachelor's degree, 2/3 of mille…

High-income high school graduates are 30% more likely to enroll in a 2- or 4-year college program than low-income high school graduates.

But of course, that statistic conceals a much bigger gap:

* It measures only those who complete high school. In most of the US, the completion rate for low-income students is between 65% and 80%. In nine states it's below 65%.

* It captures vocational and community colleges which cost as little as $1000 a year alongside Bowdoin, which costs $50,000 a year. Obviously, it's the low-income students going to community college.

* It measures only enrollment rate and not completion rate, where there is another giant structural gap (for instance: high-income students can afford to take more than 4 years to see a degree to completion).

Student debt financing assistance is a benefit that accrues mostly to the higher end of the income spectrum.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#249

Post by aninhumer »

chronic6l wrote: post #213
laughfactory wrote: post #113

Earlier quoted context omitted.

You're right on the money. In fact, I'd argue that almost no one is smart enough (or wise enough) to only borrow what they really need. I went to college when I was 30. I thought I was smart. I knew that new graduates typically make, maybe, $40K. Yet, I signed up for the full boat...taking every last cent they'd loan me. Consequently, my wife and I are now $250K in debt--and have just bachelor's degrees (plus incompl…

> Basically, I've come to the conclusion that college is not for all. Of course college is not for all. It is not something everyone just "does" because of "jobs". High schoolers and college students feel entitled. The vast majority should not be in college nor do they need a college education. If you are an 18-20 year old and cannot see this, then you sure as hell should not be in college. Intellectual exploration?…

Well sure, it's easy to say that in hindsight, but that's not what these students were told growing up.

A generation was told that if they got into university and did well, they'd get much better jobs and be set for life. And it's easy to understand why, because this was true for their parents' generation. Educated employees were in much shorter supply, and thus in a much better position to capture the increased wealth of a booming economy.

Is it any wonder people feel entitled when they were told constantly that they would be rewarded for what they were doing?

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#250

Post by andorov »

conanbatt wrote: post #217

Speaking from a purely market-driven position, the Student Loan Debt market has one issue that prevents colleges from not raising tuition prices: its the incapacity to default on loans. Its obvious a huge part of the loans are used for careers that will never make its money back, and the loans only collateral are the person itself(not his parents assets). So if someone had an arts degree that cost him 150k, and never…

What if the schools were required to underwrite the loans on behalf of each student? Incentives would be more in line.
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