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The Lasting Consequences of Student Debt

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Re: The Lasting Consequences of Student Debt

#61

Post by SnacksOnAPlane »

TheAdamAndChe wrote: post #23
uiri wrote: post #17

Earlier quoted context omitted.

How is "did exactly what they were told" different from "did not think for themselves" ? Any kind of large decision demands a cost-benefit analysis, including opportunity costs, time value of money, etc. The labour market does not change that much in 4-5 years (barring something like the 08-09 financial meltdown). It should be straightforward to check whether a degree is necessary in order to land a decent job - appl…

Assuming that 18 year olds should be capable of calculating cost-benefit analyses and execute long-term planning en masse is entirely too optimistic. Our schooling is way too bad to expect that, and our brains aren't even fully developed until the age of 25. The fact that so many young people feel the need to go to college to get a career in the first place is a sign that our economy is highly imbalanced right now. P…

Just a side note: I always take issue with the "brains aren't fully developed until 25" factoid. What does "fully developed" even mean? We certainly learn things after the age of 25...isn't learning brain development?

Re: The Lasting Consequences of Student Debt

#62

Post by cbr »

davidf18 wrote: post #13

A problem is that many of the higher paying jobs are in cities such as NYC, SF, LA, Boston, DC, (also London, ...) and the housing is expensive in these cities because of "rent-seeking" -- a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This harms renters and those starting out in life while benefiting wealthy landlords such as Presiden…

    in 2014 Tokyo built 140,000 homes
This isn't a net gain of 140k homes, but instead 140k "housing starts". In the US this would translate into about 140k new homes, because we normally reuse houses, but in Japan the culture is generally when you buy a house you tear it down and build a new one. So this 140k is a mixture of building new units and replacing old ones.

Re: The Lasting Consequences of Student Debt

#63

Post by pitt1980 »

davidf18 wrote: post #13

A problem is that many of the higher paying jobs are in cities such as NYC, SF, LA, Boston, DC, (also London, ...) and the housing is expensive in these cities because of "rent-seeking" -- a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This harms renters and those starting out in life while benefiting wealthy landlords such as Presiden…

Tokyo is a pretty distinct place

while turning our largest cities into Tokyo would have some advantages

I'm a little hesitant to want all cities to resemble it

Re: The Lasting Consequences of Student Debt

#64

Post by cbr »

contingencies wrote: post #9

graduating from college makes you almost as likely to own a home, by age 36, as someone from a high-income family. I assume they mean "own" in the sense "get a mortgage on" not "have fully paid for", no?

That's what "own" means with houses. You're a "homeowner" after closing, and you are the legal owner of the property, even though you still owe thousands to your bank.

Re: The Lasting Consequences of Student Debt

#65

Post by Berobero »

davidf18 wrote: post #13

A problem is that many of the higher paying jobs are in cities such as NYC, SF, LA, Boston, DC, (also London, ...) and the housing is expensive in these cities because of "rent-seeking" -- a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This harms renters and those starting out in life while benefiting wealthy landlords such as Presiden…

Re: Japan, I'd be curious how apples-to-apples that comparison is; I read the linked article, but it wasn't entirely clear. At any rate, it seems like NIMBYism would be relatively easier to combat in Japan given that it's generally accepted that houses will just get demoed and rebuilt, period; average house life expectancy, depending on how you calculate it, can be said to be under 30 years.

Looking around my neighborhood here in Portland, OR, though, the number of "no demo" and "stop infill" signs is a little maddening. I have empathy for difficulties caused by rapid development, but the "I don't ever want the neighborhood to change" mentality is horribly lacking in pragmatism. It's a bit difficult to imagine optimally practical political solutions for denser housing in this climate.

Re: The Lasting Consequences of Student Debt

#66

Post by austenallred »

crusso wrote: post #56
austenallred wrote: post #40

Earlier quoted context omitted.

100%. It's a broken system with misaligned incentives. The college doesn't have to care if you get a job, the loans are backed by the federal government so there's no risk there, and 100% of the risk is placed on the shoulders of the student. Even if we didn't have government sponsored education straight up, if any of the money involved were dependent upon a student's career success I believe we'd see a very differen…

Are you saying to get rid of the federal government backing of the loan? Let the banks making the loans sink or swim based upon the success of the students and their ability to pay it back?

In my ideal world (I'm trying to start a company that will eventually do this, but hard for obvious reasons) college would be a place where you "just show up," you learn what you need to, then you pay back the school with a percentage of income. The percentage piece aligns incentives, because the school is now invested in you earning the highest income, and it's now in part the school's responsibility to make sure it's providing skills that are in-demand in the workforce.

I also think a system like this would help a lot of the social divide; right now it's much more risky for poor people to go to college (or trade school), so many opt out. I'm obviously biased and could be wrong, it's just a problem that's been eating at me for a long time.

Re: The Lasting Consequences of Student Debt

#67

Post by pitt1980 »

adrianN wrote: post #35
TheAdamAndChe wrote: post #18

Earlier quoted context omitted.

> a market failure or market inefficiency caused by an politically induced scarcity of housing through zoning density restrictions. This is true, but it's also a failure of policies that have led to the majority of job growth being in the biggest cities in the country. If we could spread things out a bit and keep smaller cities a viable place to create jobs, the bigger cities wouldn't be impacted nearly as hard.

For a company it seems beneficial to draw from a bigger pool of potential workers by having their headquarters in a big city.

I mean, obviously there are tradeoffs here

your office RE costs are more

your talent costs are more

seems like a function of how price sensitive you are about the talent that exists at your headquarter, and the degree to which the headquarters are the profit generator

Re: The Lasting Consequences of Student Debt

#69

Post by ryandrake »

austenallred wrote: post #12

The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't p…

> The thing that irks me about this the most is how it's the people who were doing exactly what they were told that got hurt the most. The good kids who went to the best school they could get in to, studied whatever they were interested in, and if that thing happened to be literature or women's studies or a wide number of other things you might just spend the next 20 years figuring out how to live with debt you can't pay off.

Are they REALLY telling kids nowadays to go major in whatever interested them? Because when I went to college (nineties), nobody told me to just go major in women's studies or medieval history. They were telling me, "Study medicine or engineering because that's the only way it'll be worth the cost." The "what does a liberal arts major say" joke was very much a thing back then, as I assume it is today, now that job prospects for anyone not in STEM are even bleaker than when I went to school.

I don't think the guy who took out $100K in loans to study literature for 5 years was really doing exactly what they were told to do.

Re: The Lasting Consequences of Student Debt

#70

Post by winstonewert »

ep103 wrote: post #37
r_smart wrote: post #33

Earlier quoted context omitted.

Perhaps one of the silver linings of growing up poor was that I, and my friends, were conscious of money, or its lack. I wanted to pursue a writing degree and knew I shouldn't spend a ton of money on it, so I stayed local and worked to mostly pay my way through my first degree. My friends went to fancier schools, but did it in pursuit of business degrees, looking to get a good return on their education. The point bei…

You make a good point. Yet the entire time I'm reading it, the main thought going through my mind, is people shouldn't have to make choices like this about education. And definitely not in a democracy.

But choices like that are inevitable. There are only so many places available at the top schools. Somebody has to make the choice about which students get to go there. That somebody may be the students deciding whether the cost is worthwhile, or it may be the school deciding which students to accept, but the decision is inevitable.
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