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The College-Cost Calamity

economist.com

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Re: The College-Cost Calamity

#51

Post by jeltz »

pbiggar wrote: post #12
roarktoohey wrote: post #4

Indentured servitude is a pesky problem that keeps resurfacing in various forms though modern history.

Indentured servitude (defined by the UN to be slavery) is nothing like taking on debt to go to college. Two components of indentured servitude is that they do not permit you to leave your work until you have paid the debt, and secondly that they charge you so that you can never escape your debt. A final onerous part of real indentured servitude is that debt can be passed to your children, and many generations can be…

Actually the debt of indentured servitude was generally not passed on to children. That varies though between different places and times, and is not a key to indentured servitude. Not necessarily that you cannot escape due to the interest (though that was common). They key is the first part, that you cannot leave your work until the debt is paid.

Re: The College-Cost Calamity

#52

Post by hollerith »

mcherm wrote: post #43

College tuition is too high and rising too fast -- that's nothing new. But this article wasn't (primarily) about that, this article was about how borrowing by colleges and universities is shooting up. In their defense, I want to say that I think it is an example of wise financial management with a long-term view. Most institutions struggle to consider any time horizon beyond the current year (if not just the current…

The problem with your analysis is that eventually the loan comes due, and there's no guarantee that interest rates will still be low at that time.

Re: The College-Cost Calamity

#53

Post by rsheridan6 »

pbiggar wrote: post #12
roarktoohey wrote: post #4

Indentured servitude is a pesky problem that keeps resurfacing in various forms though modern history.

Indentured servitude (defined by the UN to be slavery) is nothing like taking on debt to go to college. Two components of indentured servitude is that they do not permit you to leave your work until you have paid the debt, and secondly that they charge you so that you can never escape your debt. A final onerous part of real indentured servitude is that debt can be passed to your children, and many generations can be…

I don't know what you're talking about, but it's not indentured servitude as the term was used in America. Indentured servitude was generally for a fixed period of time. The first sentence of the wiki article: "Indentured servitude refers to the historical practice of contracting to work for a fixed period of time, typically three to seven years, in exchange for transportation, food, clothing, lodging and other necessities during the term of indenture."

You could probably find millions of people, including me, who would gladly trade their student loans for several years of indentured servitude.

Re: The College-Cost Calamity

#54

Post by pbiggar »

jeltz wrote: post #51
pbiggar wrote: post #12

Earlier quoted context omitted.

Indentured servitude (defined by the UN to be slavery) is nothing like taking on debt to go to college. Two components of indentured servitude is that they do not permit you to leave your work until you have paid the debt, and secondly that they charge you so that you can never escape your debt. A final onerous part of real indentured servitude is that debt can be passed to your children, and many generations can be…

Actually the debt of indentured servitude was generally not passed on to children. That varies though between different places and times, and is not a key to indentured servitude. Not necessarily that you cannot escape due to the interest (though that was common). They key is the first part, that you cannot leave your work until the debt is paid.

Note that it _is_ common, not was.

Re: The College-Cost Calamity

#55

Post by pbiggar »

rsheridan6 wrote: post #53
pbiggar wrote: post #12

Earlier quoted context omitted.

Indentured servitude (defined by the UN to be slavery) is nothing like taking on debt to go to college. Two components of indentured servitude is that they do not permit you to leave your work until you have paid the debt, and secondly that they charge you so that you can never escape your debt. A final onerous part of real indentured servitude is that debt can be passed to your children, and many generations can be…

I don't know what you're talking about, but it's not indentured servitude as the term was used in America. Indentured servitude was generally for a fixed period of time. The first sentence of the wiki article: "Indentured servitude refers to the historical practice of contracting to work for a fixed period of time, typically three to seven years, in exchange for transportation, food, clothing, lodging and other neces…

I quoted my source above: Disposable People by Kevin Bales. It discusses 6 case studies of modern day slavery: sex slavery in thailand, kidnapping for farm workers in Brazil, "old timey" slave ownership in Mauritania, and indentured servitude in India and Pakistan.

My history is a little shaky on old American slavery, but I'm pretty sure that a large number of indentured servants brought to colonies in the Caribbean were disposable: they were worked til they died and never managed to leave their servitude.

Re: The College-Cost Calamity

#56

Post by Daniel_Newby »

pbiggar wrote: post #12
roarktoohey wrote: post #4

Indentured servitude is a pesky problem that keeps resurfacing in various forms though modern history.

Indentured servitude (defined by the UN to be slavery) is nothing like taking on debt to go to college. Two components of indentured servitude is that they do not permit you to leave your work until you have paid the debt, and secondly that they charge you so that you can never escape your debt. A final onerous part of real indentured servitude is that debt can be passed to your children, and many generations can be…

You are badly misinformed. Indentured servitude is a contract to serve for a fixed term in exchange for large up-front compensation. It is not a financial debt but a performance obligation, and cannot be inherited.

Re: The College-Cost Calamity

#57

Post by TimGebhardt »

redwood wrote: post #31
trop wrote: post #5

I have a hard time imaging a world is with a huge crash in education. Does this mean fewer colleges and more students going into trades? Radically lower tuition? Fewer tenured professors, and more adjuncts and visiting professors with three-year contracts? Speaking of the latter, there is the disruption of online course offerings. These are creeping in from the bottom, replacing introductory lectures, and working the…

It's very easy for me to imagine a massive societal shift from traditional ivory tower education toward self-learning and online education and a skills-focused employment race. Of course there will always be ivory towers that provide elites with a way of distinguishing themselves for a very small, reserved portion of the population. Harvard et al's degrees will always set you apart... but for the bulk of the middle c…

Or you "need" to buy a house now (circa 2006) before all the good ones are bought up and you're out of the housing market boom.

Man, if I could go back in time...

Re: The College-Cost Calamity

#58

Post by TimGebhardt »

cafard wrote: post #39

Back when Mark Edmundson wrote a piece for the NY Times saying that one should attend college for the joy of it, not as a vocational school, I had a look at the University of Virginia tuition about the time he started teaching there, and at the minimum wage. At the end of the 1970s, a summer of minimum wage work would pretty much cover U.Va. tuition and fees, though not room and board. At the moment, the equivalent n…

I remember reading an article (can't find a link, it was the local paper) that highlighted that when my mom and dad when to college (1975) the average college student could pay approximately 44% of all their college costs by working part time and during the summer. That figure has dropped to 17% now, and that's why students are taking on more and more debt.

The problem is that colleges know that magic statistic that on average people with a college degree earn about 1 million dollars more than those without. So they can raise costs because it still pays to go to college and they're taking a bigger share of that future 1 million dollars in income.

Re: The College-Cost Calamity

#59

Post by tom_b »

SideburnsOfDoom wrote: post #44
cpunks wrote: post #42

My hope is that programs like Khan, edX, and Udacity will address this.

The article hardly even mentions a very real risk to Ivy league Universities - that they will be challenged from below by Khan, Coursera, and Udacity and the like. Ivy-covered buildings and in-person lectures cost a lot to keep going. As the article states, Universities are typically in debt and student fees are rising. "Disruption" is an overused buzzword but it may apply in this case. Universities trade of the fact…

The Ivies are actually selling exclusivity by attendance along with acting a filter for employers: only the absolute top students have any chance of being admitted and physically attending.

The quality of education obtained at the Ivies is not part of that.

An interesting question to consider is whether admissions to Ivies followed by independent, autodidact study can work around the actual attendance. "Here is my online coursework portfolio, research, and my admission acceptance letters to Yale and MIT . . . "

Re: The College-Cost Calamity

#60

Post by maxerickson »

hollerith wrote: post #52
mcherm wrote: post #43

College tuition is too high and rising too fast -- that's nothing new. But this article wasn't (primarily) about that, this article was about how borrowing by colleges and universities is shooting up. In their defense, I want to say that I think it is an example of wise financial management with a long-term view. Most institutions struggle to consider any time horizon beyond the current year (if not just the current…

The problem with your analysis is that eventually the loan comes due, and there's no guarantee that interest rates will still be low at that time.

Who knows what restrictions are placed upon it, but the spendthrift example from the article, the University of Chicago, has a $6.5 billion endowment. Lots of bigger private and public universities have similarly large financial resources.

I haven't looked, but I doubt U of Chicago have that much debt. I would guess that they can mostly service their debt on income from the endowment.

To the extent that individuals and businesses are using college degrees as signals, it does seem reasonable to expect lots of attempts at cheaper alternatives.

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