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Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

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Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#31

Post by jedberg »

fredgrott wrote: post #24
jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

my State, Indian does a partial free-2 year degree program in that the AP courses taken in HS qualify as a full 2-year degree if you take enough of them in HS and pass the exams..no college tuition payment required

That's an interesting solution to the problem of state funding. I wonder if they've done any studies on the educational effectiveness of the program.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#32

Post by anonemouse145 »

aloukissas wrote: post #18

One statistic that's commonly left out of these discussions & articles is how late parents save for college. According to Sallie Mae ( http://news.salliemae.com/publication/how-america-saves-coll... ), most families don't start saving before their oldest child reaches 7 years old. This effectively robs 1/3 of the investment period's growth potential. Another one (as perhaps a consequence of the previous fact) is that…

You sound like a cigarette executive. "The real problem is we don't start em smoking before they leave the hospital. We could increase our profits 33% if every baby was exposed to nicotine before they leave the hospital."

Maybe not all people in society should be socially required to purchase an expensive good, thus causing demand to be infinite, meaning price can only skyrocket.

Given the number of Masters degrees working minimum wage or starting jobs now maybe we should admit we have a problem.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#33

Post by danaliv »

I highly recommend Matthew Crawford's Shop Class as Soulcraft, which includes a discussion of how kids are railroaded into college even though it makes no sense for everyone to go. The destruction of vocational schools is a real problem here. And in a world where any work that doesn't require physical presence is ripe for offshoring, the loss of the vocations is problematic indeed.

You can read the essay that started the book here: http://www.thenewatlantis.com/publications/shop-class-as-sou...

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#34

Post by PatientTrades »

lallysingh wrote: post #11
PatientTrades wrote: post #4

There is plenty of blame to go around here. However a major cause of this has been the push by the left that college is the only path to success. Trade and vocational schools as well as military service are all great options for young adults who may not know exactly what they want to do with their life right away. Spending 4 years of your life taking on debt, simply because society tells you college is the path to su…

Huh? http://www.washingtonpost.com/wp-dyn/content/article/2007/09... seems pretty bipartisan. But I agree trade schools need more respect. The kinds of work taught there is necessary and pays well.

> seems pretty bipartisan

That's 10 years old, plus I wouldn't call those voting numbers overwhelming bipartisan support. It passed, but many Republicans voted against it. All democrats voted for it...

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#35

Post by code4tee »

A lot of that debt is funding bloated administrative costs and other overhead that doesn’t directly make for a “better” education, just a “more expensive” education. Fixing this problem starts with getting costs at universities under control.

Taking on debt to fund education isn’t inherently bad, but having that debt back a bloated higher education sector is terrible.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#36

Post by jobu »

jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

> for a useless degree they'll never use

Another part of the problem is that there's really no such thing as a useless degree. A person may never use what they learned from that degree, but the fact that they were able to earn a degree is still used by employers as a bar to judge potential employees.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#37

Post by legitster »

jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

It's more of a capacity problem. The demand for four year degrees has increased exponentially, but there hasn't really been any increase in accredited colleges. So public money is being sucked up in the bidding war for open seats.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#38

Post by murph-almighty »

jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

> you'd probably see a lot more STEM degrees and a lot fewer of everything else

I honestly think art schools are going to start running into problems convincing people it's a good idea to pay 60k a year for minimal ROI.

My cousin wants to go into stage drama, and I don't want to tell her to not pursue her dream, but I think it's a lot to ask her to put herself in debt for years for a piece of paper that says she can act.

FWIW I majored in ECE, got a job as a software engineer with 100k salary plus benefits, and I'm ~140k in debt. I definitely overpaid, but my salary gives me a way out. People who came from my alma mater who majored in drama can't say the same.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#39

Post by hfourm »

jedberg wrote: post #22

There is definitely an education bubble. It's way too easy to get money for college. You hear a lot of stories about the increasing costs of college and crushing debt on graduation, but you don't hear a lot of stories of "I wanted to go to college but couldn't get a loan". Almost everyone gets approved, regardless of their future ability to pay it back. We need a fundamental shift in the way college is paid for. Some…

Truthfully, depending on your definition of majority, most college students ARE already pursuing more profitable majors.

https://nces.ed.gov/programs/digest/d16/tables/dt16_322.10.a...

The "underwater basketweaving" so to say, may be at most 10-15% of current college graduates.

I think the solution lies more with reducing the cost of college, open source textbooks, more elearning, etc. Regardless of government funding vs subsidized loans, the cat is already out of the hat on a lot of price increases around campuses nation wide. It isn't going to be just as easy to just change the funding source.

I also sympathize with the trade school argument, but I don't think everyone going to college is a bad idea by any means.

Re: Student Loan Debt Is Now as Big as the U.S. Junk Bond Market

#40

Post by randomdata »

aloukissas wrote: post #18

One statistic that's commonly left out of these discussions & articles is how late parents save for college. According to Sallie Mae ( http://news.salliemae.com/publication/how-america-saves-coll... ), most families don't start saving before their oldest child reaches 7 years old. This effectively robs 1/3 of the investment period's growth potential. Another one (as perhaps a consequence of the previous fact) is that…

Wouldn't the winning strategy be for the child to wait to go to college until they can afford it? It is not something you need to rush into. If it is worth doing, it will still be there to do down the road.
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