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Tuition costs have risen 710% since 1983

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Re: Tuition costs have risen 710% since 1983

#331

Post by SoftTalker »

mrguyorama wrote: post #249
patrickthebold wrote: post #165

Earlier quoted context omitted.

"Able to pay", but where is the "Want to pay?" I feel you also need to argue: "18 year olds don't realize they are being ripped off", or "college is actually worth that much". It's probably a different answer for different students.

Society is better off as a whole with a well educated populace. We shouldn't optimize for college only for kids who can learn to program or whatever. Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend…

The education needed for a functioning society should be delivered by the end of high school. A few generations ago it was delivered by the end of 8th grade.

And yes, college sports on the whole does pay for itself. Those stadiums are built by donated money, and revenue from ticket sales. Yes taken in isolation there are a lot of sports that don't make money, but they are subsidized by those that do (chiefly football and basketball). Sports stadiums are not the reason tuition has inflated by 700%. They are two separate pools of money. If you got rid of sports entirely it would not affect the finances of the academic side of the university at all.

Re: Tuition costs have risen 710% since 1983

#332

Post by ars »

timfsu wrote: post #250
SamBam wrote: post #179

Earlier quoted context omitted.

Serious question: what would incentive anyone to lend to people who have any risk at all (i.e. everyone)?

The same incentive you'd have to do something for someone without receiving payment - a desire to help. I'd imagine the fact that people in that time had stronger familial ties to others in their village also helped increase payback rates.

And both religious created a way to indirectly pay interest by turning it into a business partnership.

i.e. when you are helping someone (a friend, relative) you don't pay interest. But when it's a business loaning the money that desire to help doesn't exist, and it becomes a business partnership instead.

https://en.wikipedia.org/wiki/Loans_and_interest_in_Judaism specifically: "Heter iska". And https://en.wikipedia.org/wiki/Murabaha for Muslims (I think there are other forms as well). A copy of a Heter Iska: http://www.jlaw.com/Forms/iska_d.html

Re: Tuition costs have risen 710% since 1983

#333

Post by gottorf »

za3faran wrote: post #149
eschulz wrote: post #10

Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees wit…

I hope to see the day where interest bearing loans are recognized by the rest of the world as the evil they are. Muslims and Jews know this fact quite well.

The fact that default risk and time value of money exist are immutable, irrespective of whether you think that's evil. Modern Islamic banks in Sharia jurisdictions still recoup that risk and time value through various means, irrespective of whether you call that interest. (Some forms of "Islamic mortgages" charge you "rent" based on LIBOR/SOFR, which is just interest with extra steps.)

Re: Tuition costs have risen 710% since 1983

#334

Post by ecshafer »

mrguyorama wrote: post #249
patrickthebold wrote: post #165

Earlier quoted context omitted.

"Able to pay", but where is the "Want to pay?" I feel you also need to argue: "18 year olds don't realize they are being ripped off", or "college is actually worth that much". It's probably a different answer for different students.

Society is better off as a whole with a well educated populace. We shouldn't optimize for college only for kids who can learn to program or whatever. Most other developed nations manage to send every smart kid to college for ten thousand dollars per kid or less. Once again, it is only the US that thinks it is a special butterfly that can't somehow manage to give kids college. Sure, most European colleges don't spend…

Define well educated populace.

Does this mean ability to read, write, and do arithmetic? Does this mean the ability to speak and read Latin with an understanding of the classics and the Bible? The ability to fix a car and build an engine? Program a computer?

One could argue that a university does very little to make a populace more educated, since they can already read, write and do basic math (or should be able to) to get into school. Is taking psychology making one better educated? Maybe? Maybe not.

Re: Tuition costs have risen 710% since 1983

#335

Post by gen220 »

taeric wrote: post #277
tylerhou wrote: post #193

Earlier quoted context omitted.

Student loans can be discharged through bankruptcy, if you pass hardship requirements. - https://studentaid.gov/manage-loans/forgiveness-cancellation... - https://www.consumerfinance.gov/about-us/blog/busting-myths-...

I'd love to see numbers on how many are actually discharged. My understanding is this is almost as akin to saying that the lottery does, in fact, pay out.

There's more paths to discharging than bankruptcy.

Somebody I know had a medical emergency while in their repayment period. They were unable to work and went on to disability insurance, and eventually had their loans forgiven. I think they had to be on disability for a certain period of time (measured in years, iirc) before they were discharged.

Eventually, they recovered sufficiently to be able to return to the work force debt-free. I'm not sure if the hurdle for loan forgiveness ought to be "you have to basically die", but it's at least that high for now.

There's also the well-known "public servant" path. I'm sure there's some ironic joke to be made comparing the two.

Re: Tuition costs have risen 710% since 1983

#336

Post by [deleted] »

Xeronate wrote: post #292
pixelatedindex wrote: post #282

Earlier quoted context omitted.

Presumably you have enough money now to switch to something that makes you happy? Personally, if you’re going to be miserable anyway (as most Americans are these days), it’s probably better to be miserable with money than without money, lol

I'm 29 and have 500k saved up (live in Santa Monica which is quite expensive), but yes I think I will quit my next stock vest which is Friday. And idk. My best friend from high school moved out here with me and he's a waiter making 40k a year and seems totally happy. Works like 30 hours a week, no mental stress, able to work out and work on himself. I think money is highly overrated.

[deleted]

Re: Tuition costs have risen 710% since 1983

#337

Post by HWR_14 »

pixelatedindex wrote: post #213
TheRealDunkirk wrote: post #135

Earlier quoted context omitted.

Now I read that Wall Street is creating CDO's based on these loans, like they (continue to) do on mortgages. Some people die "early" without paying back these loans, and sometimes, they will owe more than they took out. Given the mounting problems with the numbers here, it seems a whole generation of people in the middle of this bubble are going to go to the grave while still owing on these loans. What happens to the…

I’m a newbie, what’s a CDO?

It's a combination of loans. The idea is let's say I have 100 identical loans I made (in reality, there are averages). Further, we agree 5-15% are likely to default. I'm going to get paid 85-95% of the interest + principle. But I want that money now. You want to invest in future cashflow, so I want to sell you a loan. Buying one from me is kinda risky, you may get back 100% or 0% of the interest + principle you expect. So instead I sell all 100 as a lump sum, and you and 99 other people each get 1%.

But, CDOs go a step further. You may have more or less risk tolerance. So we chop it up. You can buy something that gets paid back if 70% of the loans are good, or only if over 70% or over 80%, or even over 90%. The less likely you are to get paid back, the more you make.

So the person who absolutely wants to get paid back gets a small interest rate. The person who only gets paid back if literally every loan pays off gets a much higher rate.

In 2008, what happened is all those people buying the "very safe" 75-85% failure rate sections also were getting wiped out.

Re: Tuition costs have risen 710% since 1983

#338

Post by RyanShook »

jurassic wrote: post #44

Government lending and a lack of price controls are the ultimate root cause. The government extends near-unlimited credit to student borrowers that goes way beyond their credit-worthiness, academic performance, graduation rates for the school, prospects for employment based on field of study, etc. And universities have clued into the fact that students who can pay any price, will pay any price. The ceiling of what st…

The main reason correction is needed is a matter of economic and national strength. Increasingly we see students opt out of college because the cost benefit to them doesn’t make any sense.

You can argue that those people will learn skilled trades or online but university has always been and will continue to play an important role in economic output in the US. When only those in the highest tax bracket can afford college it exacerbates instability and undermines the economy.

Re: Tuition costs have risen 710% since 1983

#339

Post by gameman144 »

jedberg wrote: post #271
gameman144 wrote: post #259

Earlier quoted context omitted.

This seems fine to me. If someone has no assets and no reasonable prospects to pay back $100,000 of debt, then saddling them with $100,000 of debt is a bad idea. Additionally, discharging student loans in bankruptcy should absolutely not be a way to get off scot-free, it's meant as an escape valve. If your options are the terrible downsides of declaring bankruptcy and the terrible downsides of a life in extreme debt,…

Right but see the problem is how does a really smart poor person get an education so they can become a really smart rich person?

They study in a field which has a high likelihood of loan repayment, or study at a less expensive school.

If a really smart poor person wants to become a really smart rich person by pursuing a degree in film studies, it's reasonable (in my opinion) for a bank to say "borrowers whose only education is a bachelors in film studies tend to have trouble paying back loans, so we won't lend you very much".

If that very smart poor person is pursuing a degree in accounting or engineering, though, most banks can do the actuarial work to determine that the likelihood of payment is pretty good.

This all seems totally fine and fair to me. And if the really smart person does have trouble paying back their loan, bankruptcy can be the absolute last option they resort to, just as it is with most other loans.

Re: Tuition costs have risen 710% since 1983

#340

Post by jeron »

gumby wrote: post #326

As a single datapoint, in 1983 MIT tuition hit $10K -- highest in the nation according to a cartoon in the paper. It's currently $60K (total cost estimated $80K) so 7X is about right. However there's another way to look at it: over the summer I would earn over $10K so roughly covered my tuition. Admittedly that was at the high end of summer job compensation due to the AI boom, but gives you a rough idea of where that…

>These days I doubt anyone is getting $50K for a summer job.

Enter Citadel: https://fortune.com/2023/06/28/wall-street-citadel-summer-in...

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