Perhaps your intent was sincere, but the effect you had on the thread is indistinguishable from trolling. Please don't do this on HN.

Yeah, no. This is incredibly insulting.

I am not incapable of helping myself. I am working damn hard every single day to resolve my problems in the face of a hugely uphill battle that is compounded by sexism, housing designed solely for the rich and a whole bunch of other entrenched barriers to ordinary people making their lives work.

You may be able to pretend that the homeless (and other poor people) are a bunch of utter and complete losers who can't help themselves, but your reply means you either didn't really listen or didn't really understand.

As these problems deepen, larger numbers of people are being pushed out into the streets. Perhaps if homelessness hits 50%, the world will stop talking like it is merely a bunch of fringe losers who need our compassion and charity and realize that, no, actually, the system is deeply broken and actively screwing over a very high percentage of people and chewing them up and spitting them out.

Or perhaps all the rich assholes will continue to be all LA LA LA NOT LISTENING, you must just be defective as it cannot possibly be the shitty company/policies I created that is somehow at fault.

This just seems so wrong.

Optimising for vocational training means you're effectively tuning out the abstract arts and sciences and... oh, the humanities. These fields don't usually/directly translate into a financial success, but they broaden our perspective and deepen our experience. And in doing so provide the tools and language to more effectively analyse and engage with human culture.

And to a certain extent, "true" art is antithetical to capitalism, in a similar way that "true" journalism is antithetical to surveillance (honesty/transparency vs main-stream popularity), and I'd argue equally as important. For that reason these fields absolutely should be subsidised, otherwise art becomes about marketing, journalism becomes about propaganda, and science becomes about start-ups...

While the idea of helping people become more educated is obviously beneficial to both individuals and the society as a whole, government loans - which are supposed to "help" - are a huge factor fueling ever-raising costs. The loans, in effect, subsidize the higher-education complex, rather than students.

Many of us have been brainwashed to think that higher education has to cost a lot of money. But it need not: all that great education requires are wise, passionate teachers and a bit of infrastructure: a whiteboard, a few books, and a laptop computer (with a couple of outliers).

We don't need football/hockey teams with coaches paid $3-4M/year. We don't need armies of "Deans of Diversity & Inclusion" (and other phony administrative positions), who make $400K/year, we don't need manicured lawns and Olympics-quality sports facilities (these salaries are from the Univ of California - a state school!)

If a good private university cost < $20K/year and a state university < $10K, we would not have endless discussions wrt who should pay, who should study what, etc.

Why are interest free student loans never floated as an option? Here in New Zealand, our student loans are provided by the government and are interest free as long as we reside in New Zealand.

It means that people who don't do tertiary education, or who do a trade, don't subsidise those who go to university. It also means that there's a disincentive to go to university if you don't need to, which I think is a good thing, however everyone is able to go to university if they want to/need to, without worrying about how it's being paid for.

Our student loans are also paid off proportional to our income, I think at a rate of around 8% (and no repayments required if you earn less than $19k per year). This means that you only pay what you can, it's essentially another tax, rather than in the USA where you get people struggling to make payments on their student loan.

Obviously, we also have the advantage of cheaper tuition, although it is rising. It costs around NZ$7,000 (~US$5,000) per year to go to university, it's not cheap, but it's not cripplingly expensive.

Not the professors, let's get real. They have probably gotten sweet raises, but nowhere near the growth rate of tuition.

The armies of "administrators" are getting huge salaries, but the main point of the whole bubble is that it is a great way to proactively enslave a whole new generation before they even have a chance.

It's so obviously a "sold my soul to the company store" situation that I can't believe everyone doesn't see through it right away.

Plus every time the department of education gives out more money, colleges raise prices.

Imagine how much a television would cost if the government said everyone must have a television. They're older people who tell me back in their day they could work at a restaurant and pay for college debt free. Get the government out of the student loan business and let the free market decide.

If no money is being printed for students to go to colleges, fewer people will go to college and therefore the schools will be forced to compete for student's business. Therefore college will be much more affordable for the people who wish to go.

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

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 made that money, he should be able to default on that loan. As he does that, colleges have a strong incentive to keep tuition matched with the income produced by that degree.

My understanding is that college loans have a special protection by the government that makes them undefaultable. Dont subsidy college loans! Dont take more money from all(including under represented poor people) to put it in the pockets of colleges. Just make the loans defaultable, and you will see such a massive movement of defaults that colleges will never put unpayable debt ever again.

TL;DR - When handing out student loans, we should consider aptitude (how likely is the person to graduate) & the career potential of the degree as qualifiers.

There was an interesting episode on Planet Money why college textbooks cost a ton but not high or middle school.

[1] https://studentloanhero.com/student-loan-debt-statistics/ [2] https://fred.stlouisfed.org/series/DRSFRMACBS

The gov sponsors universities almost to 100%. The means going to university is almost free for me as a student - about $2500 per year. I can acquire a law degree and become a lawyer for less than $8000. The government is involved in the way the public universities are run so as to keep the subsidies manageable. Total government funding for university education in Israel is about $1.5B [1]. Since universities have high admission standards, many colleges have sprouted to service those who can't or don't want to go to one of the public universities. However, since university prices are so low, even private colleges are forced to operate with tuition fees of roughly $5000 per year, which means they are also very manageable for students. Even so, the quality of education in Israel is amongst of the highest in the world, especially when considering its tiny population. Hebrew University, Israel's best institution, has been ranked 26th in the world [2].

This system has attracted a lot of snark here in Israel, but from what I gather it's actually pretty effective. Israel is the 2nd most educated country in the world, with 46% of its population possessing a university degree [3]. :-)

Sorry for the Hebrew sources!

[1] Hebrew: https://he.wikipedia.org/wiki/אוניברסיטאות_בישראל#.D7.9E.D7....

[2] Hebrew: http://www.calcalist.co.il/world/articles/0,7340,L-3693018,0...

[3] Hebrew: http://mako.co.il/special-mako-news/Article-6489f432bb2f9310...

If we bailed out real estate speculators, I wouldn't be surprised if something happened with college grads.

Unfortunately. I hate assuming responsibly for monetary decisions other than mine, but judging the trend, that's where we're headed.

It had a disastrous unintended consequence, by completely shifting the risk of an uncollectable loan away from the lender and onto the borrower. How so?

When a lender carries risk, they underwrite those loans. That means they study them before making them. They pay attention to all kinds of things, including the borrower's ability to pay and the value of the thing being bought with the borrowed money. Underwriters are (usually) knowledgeable about the field they work in. They understand the value of both vocational and liberal education. Some of them even understand the value of giving under-served people a chance.

So, when a school gets calls from underwriters saying "we're having a hard time justifying loans of US$100K to your students taking bachelor's degrees" the school takes notice. They restrain growth in tuition and fees. Maybe they even offer discounts, also known as "scholarships." Those calls, coming from skilled underwriters, are far more effective than student demonstrations against tuition increases.

The 2005 reform made it possible for the lenders to be much lazier. Their underwriting is much more sloppy. The reform freed up a lot of tuition money that the educational institutions were happy to soak up. And their students are stuck with the bill for a lifetime.

I'm aware of the libertarian view which emphasizes individual responsibility, and I have a lot of sympathy for it. I have a young friend who looked at the cost of her first-choice college (Syracuse, it was) a few years back, and wrote them a letter saying "sorry, you're too expensive. I regret that I must decline your offer of admission." That too puts downward pressure on educational costs. But she's rare: she has great presence of mind and forward-thinking parents. Plus, she listened to me. -:)

Most high-school seniors get caught up in the mostly fake competitive admissions system. They aren't in a position to behave like hard-nosed underwriters.

So, let's put some of the loan risk back on the lenders, and bring back the underwriters.

This situation is analogous to the mortgage crisis, which shifted the risk of bad loans away from the mortgage originators. In that case the risk got shifted onto anonymous buyers of securitized mortgages, and onto AIG. In the case of educational loans the risk gets shifted onto the poor schlemiel who wants to be a schoolteacher.

That one of the richest countries in the world should shy away from this responsibility is a bit galling, more so because it seems to be purely so that bankers can make some money.

You can't have a country purely of corporations and workers and the US has been moving in this dubious and dystopic direction for decades now. You need to build a society or everyone loses, eventually.

The nation doesn't owe anything, I would rather said past students who still have loans owe this money.

We have basic tuition in Uruguay, and, while people don't leave university with crippling debt, we still have the problem of people spending 4 or 5 years of their lives and leaving with a worthless degree (as in, they cannot get a job in what they studied). And they do end up in debt because they have to pay for food and housing while they study.

I feel very sad whenever I see a working class family breaking their backs to send their child to become an architect or a psychologist, because I know they won't be able to get a decent job (there's one architect per 400 citizens, and one in twelve in the workforce is a psychologist, they usually end up earning less than a store clerk if they don't set up a succesful practice).

Another problem is the strain on infrastructure, in the Engineering faculty they only have capacity to train about 300 to 400 students but over 2000 enter each year. The solution is to have extremely hard and cruel first year courses so at least half drop out in the first year and another half in the second year (I dropped out in second year and enrolled in a private university).

Another country with free university is Venezuela, and a problem I've noticed is that the quality of education is very uneven, there are graduates with titles that aren't worth the paper they're printed on. This doesn't happen in Uruguay that much because they force them to drop out (not a great solution either).

(1) here in Uruguay it's not entirely free, it's deferred - graduates from the public university have to pay about half a normal salary each year from 5 years after they graduate until they retire, so it often ends up more expensive than a private university.

He who works with his hands and his head is a craftsman.

He who works with his hands and his head and his heart is an artist.”

— American trial lawyer, Louis Nizer [1]

[1] https://lawlessstruggle.wordpress.com/2014/11/13/a-laborer-a...

I can think of a lot of problems and reasons why this won't work...which makes it interesting :) Apart from "won't work for not highly competitive degrees" and "figuring out who to sponsor is as hard or harder than just hiring" and "how do you grantee the people actually stay with the company and are motivated" there's probably a lot more. I think the principle of reciprocality can make it work in principle though.

It's funny that a lot of the outliers are the degrees that can actually help you with financial stability later. Universities love humanity courses, exactly for the reasons you point out. It's easy to shoehorn a couple more undergrads into a literature or philosophy class, all you need to do is buy a few more chairs, and the books sort of buy themselves, and you're paying the TAs starvation wages anyways, what's a few more students between friends.

Whereas in a material science lab, you need a rockwell brinell hardness tester. For a computer science lab, you need some heavy iron if you're going to be doing heavy algorithms (might have changed lately, it's been going on 20 years for me). For electrical engineering, you need the CAD workstations with licenses for VHDL programs and the hardware to reprogram FPGAs.

So that's kind of interesting

No one put in sane cost controls. No one told the universities that federal money wouldn't just increase to their whims. No one told students what its really like in real life to payback a 50k or 100k or even 150+k loan for a 4 year degree. What that means as an opportunity cost compared to cheaper schooling. My relatively modest loan is like making car payments on a decent car everything month... for 20 years. So 4 lower-end Lexus's if you consider interest. Or less to put in retirement.

I have no idea how people with large loans get by. I imagine the recent Obama rules regarding loan repayment as percentage of salary helps with an 20 year payment forgiveness plan. Not sure if the new business friendly administration is going to keep that in place.

The "phony administrative positions", lawns, and student facilties you dismiss as pork are the school's way of competing for the piles of grant money replacement known as undergrads.

Then further more, prices are already in the ball park of your supposed ideal. An instate student can go to a school like Georgia Tech (ranked 5 or so in engineering nationally depending on the year) for 12k before scholarships, essentially free if they don't piss away their grades. Private top tier schools cost more, but tend to offer more scholarships and grants so that's harder to compare between institutions. It's not that schools are expensive, it's that students are choosing to not go to the inexpensive schools, usually to get out of their state, or to be in an institution that specializes in their major, or go someplace with better student institutions.

US research is what makes our schools the top in the world, and the actual education gained from an undergrad degree isn't the drive for most people. It's the networking, the exposure, and the certification, none of which can be duplicated in a dinky classroom with a whiteboard and an underpaid teacher. Just look at American High Schools if you want to see how that turns out.

[0] http://www.forbes.com/sites/jasonbelzer/2016/02/24/the-unive...

A cynical person might say it is an intended consequence. Higher prices raise the barrier to entry for lower classes.

Imagine what would happen if the US government made student loans interest free. Who would gain, and who would lose?

(1) Students could afford to take out larger loans (as the repayments would be more affordable with 0% interest vs. 4.66% interest)

(2) As a result of (1) colleges could charge higher tuition fees, without reducing the number of students would could afford to pay

(3) The government would pay interest to the banks (interest that's paid by students under the current system).

Based on what we've seen in the past, increasing access to credit for students mostly benefits colleges. Students end up paying the same monthly payments. Just like how lower interest rates make house prices go up.

This is indeed a sad situation. I'm generally in favour of free-market solutions, but most 18-year-olds don't have sufficient information or ability to act as a rational market participant. So the situation in the UK, where undergraduate education is mostly funded by the government, and prices are centrally capped, seems much better for students.

(Yes, the exceptions immediately leap to your mind, I'm sure. But I went to University too, and I remember that I just described an awful lot of courses, even as I too remember the exceptions.)

Universities are valuable, yes, but they acquired that reputation in a time where we weren't shoving everyone through them. It is completely unclear to me that 19th century attitudes about the values of Universities are appropriate to our 21st century reality. If you take a hard-headed business-type look at a university and look at the product it is producing vs. the overhead it requires to produce that cost, not to mention the opportunity cost being foisted off on the students, it's not hard to think that we could pare this down a bit for the vast bulk of students, with the result that they still get the vast majority of benefits and either not having any debt, or having an order of magnitude less of it. Leave those who still need the full experience to it, don't make everyone pay for it.

Well, an interest-free loan is certainly a significant subsidy, as is the direct government support of NZ universities. But I agree this is less subsidy than some European countries where higher education is essentially given away for free.

I don't expect (or want, actually) for my education to be free. I knew I was racking up debt and knew it would have to be paid. Being able to refinance, though, was a huge help.

[1] https://marklyon.org/2016/05/refinancing-student-loans/

The idea of linking repayment to income is called an "income-contingent loan". It's a great idea for University tuition, because it reduces the loan to a system for reclaiming a proportion of the private benefits that accrue to the student from the additional education. This removes some of the risk faced by the student that they might put a lot of resources into education but then fail to realise the expected benefits (eg. through serious illness, a broader economic collapse etc).

It seems like American students are willing to pay higher and higher tuitions. This is the root of the problem.

If we had 0% interest loans, we might have students paying even more for college than now.

Why can't these kids just think about the debt they're getting into?

[1] https://studentaid.ed.gov/sa/repay-loans/understand/plans [2] https://studentloans.gov/myDirectLoan/mobile/repayment/repay...

- The government stops guaranteeing student debt to banks

- Students are allowed to declare bankruptcy and discharge their debt after N number of years, if they can prove that they're financially unable to pay & the market will not bear a salary high enough to service their debt for someone with their degree

- (optionally) The government stops subsidizing student loan interest

Why?

- If banks are liable to lose the capital in the loan, they will have incentive to make sure that the money is being spent wisely. This does mean that they'll no longer give out $100k for a hypothetical finger painting degree.

- It's a societal norm that debt can be discharged in bankruptcy if a person has no assets and no income, and student loans shouldn't be straight-up exception. We have to tighten this up a little bit to make sure people don't go to college, default, and then reap all the benefits ... but disallowing bankruptcy entirely seems extreme. Optionally, we could also consider revoking their degree if they default (rough equivalent of repossession of a physical good).

- College is extremely expensive right now because a flood of guaranteed, subsidize money has created fairly inelastic demand -- many students have little price sensitivity. This drives prices up. If loans are harder to get, smaller, and not subsidized, college prices come down.

The big problem with the American system right now is that we've written the educational institutions a blank check. If suddenly we put even a little economic pressure on the system, costs will come down.

Many of these changes couldn't be made retroactive -- loans were given out under a set of conditions agreed upon by all parties, and these determined the amount of the loans, so they shouldn't be changed. These changes could, however, improve things for future generations.

One last note -- as someone who spent 5 years paying off $100k in student loans, and who now makes enough money that I'd be excluded from the 'free' (AKA 'paid by everyone else') tuition plans for my own kids, I do admit that I'm not real excited about that idea. I would be pretty ticked off if I had to pay for my own tuition, my children's tuition, and also everyone else's kids tuition.

I suspect because then no one could make money. In the current system, they certainly make money. In a "free tuition" state, they'd still make money; it'd just come direct from the government rather than being filtered through the population and economy first.

If you give interest free loans there is a strong incentive from the universities to increase their fees. How do you fix that issue?

The general attitude in the US is more like "Everything is a choice" rather than "The Government should do things that are broadly good for everyone". So anything that gives relief to students as whole will be deeply unpopular, but universities charging exorbitant rates and employers using college degrees as a filter for jobs that don't need them are okay, because it's your choice to get into student debt for a degree, or because it's your choice as an employer to use whatever filter you want.

This attitude is really hard to change because practically anyone in the US who is admired or famous is so because of their wealth. All the parents think that their kid is going to be good enough to go to Harvard and become a millionaire. And that is why they pony up the ridiculous fees that keep their child in facilities that are ridiculously good for some petulant 18-year olds.

Until employers start scrutinizing education in terms other than "No degree? No thanks.", then we will continue to have this problem, in my opinion.

Actually, at most institutions, professors' raises barely match the rate of inflation, and the majority of teaching has been moved onto adjunct faculty who have no job security.

so, do the taxpayers see the money as reduced sales and property tax?

In the UK the professors are lucky to have a permanent contract, nevermind sweet raises!!

Apparently back in the old days you could work a part time job, and pay for college at night debt free. If the gov keeps handing out loans, then what incentive do schools have to keep their prices low and compete with each other?

Oh and then the presidents of some colleges are paid more than the president of the United States. I guess appointing 4,000 people, managing the military, a bunch of departments across the country, etc is easier than managing a bunch of kids by their logic. Oh and don't forget we gotta build a nice stadium so I can put my name on it too!

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 sale price, and your ability to pay.

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

> TL;DR - When handing out student loans, we should consider aptitude (how likely is the person to graduate) & the career potential of the degree as qualifiers.

So people like my wife who didn't do that great in high school because of poor family environment would never be able to prove their true abilities in college. She was the valedictorian of her masters program. Without student loans, she'd be making 1/5th of her salary but you couldn't tell that a decade ago.

Because it is. If student loan debt was treated exactly the same way as every other form of debt, 95% of rational students would declare bankruptcy as soon as they graduated, since their financial wealth at that point would be negative and their intangible wealth -- primarily the education they've received -- can't be repossessed and sold off. Obviously no lender would want to issue loans under such conditions; so treating student loan debt the same way as other debt would simply result in student loans not existing.

But as a society we're better off if students can borrow money to get training which significantly increases their future earnings[1], so the government steps in with regulations to prevent strategic defaults on student loans. Unfortunately, it's very hard to distinguish between strategic and non-strategic defaults... and so we get the current situation, where some people have large amounts of "zombie" student loan debt.

Ultimately what is needed is a system which doesn't allow for strategic defaults but simultaneously avoids having punitive repayments; many countries around the world are moving to income-based repayments for this reason -- that is, you can't get rid of your student debt by declaring bankruptcy, but your minimum payments won't exceed a formula based on your income (e.g., $5 out of every $100 you earn past $15k/year).

[1] Not all degrees do increase students' future earnings, but academic institutions are very good at misleading students about this. We need stronger regulations here, and not just for the benefit of students taking loans; I think the best approach would be to add questions to the Census about the specific academic qualifications individuals have and then report -- and require institutions to republish -- the average incomes of graduates of particular programs. This would not be perfect, since students entering higher education are biased towards higher incomes whether they get that higher education or not; but it would be better than the present complete lack of information.

Where is the collateral? You buy a house, don't pay... you lose the house.

You buy an education, don't pay... you... lose the education?

No bank is going to give money for degrees without a realistic change of getting paid back. They have no fear of getting paid back because you CANT remove the debt via bankruptcy.

I think there needs to be a different approach because it IS different... but the "you can never remove this debt" is too much.

My personal opinion:

Give some sort of limit - 10/20/30 years? - and some sort of max% of income - 10%?. If the loan isn't paid off by the end of the limit at a max % of income, then the loan can then be discharged by bankruptcy.

That would remove loans for "crap" courses (finger painting) except for those that pay for it out of pocket. Banks would still give loans for courses that lead to real jobs. Kids could still take shit degrees if they can pay for them (although, those would dry up).

No risk to lenders.

If you run into extreme hardship, I can't repossess and sell your 4 years of education/partying for a market rate of its value.

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 failure.

Now, you have a lot of intelligent hardworking (college is not easy) people who are in debt with a very abysmal perspective on their future. Their debt makes them worse off than working poor because any low income job would simply put them in the black. And the gov has their habds tied because america is a great believer in the free market yet a huge group of hardworking young people are effectively worthless and the coming generations are likely to fall in the same trap.

I would like to note that while 2/3 of millennials don't have a bachelor's degree, 2/3 of millennials did go to college. The argument, then, that the median person would not benefit, then, is not substantiated given that some college does still afford some cost. I do wonder why 19% of millennials did not complete college to any degree and if less debt would have aided them.

I would like to question a central premise of your comment, which appears to indicate that regressive benefits are less useful than progressive benefits (Please, correct my assertion if you think otherwise, I'm referring to the sentiment of your last two sentences). Given that measures such as these, which would likely allow more students to graduate (I assume a subset of the people who did not finish were for financial reasons) and to better focus on their studies (Working one to two jobs during the school year, like I did, can definitely be a distraction). The investment may be worthwhile in the long run, given that education is linked with earnings (And, by the transitive property, taxes paid). Additionally, it may make careers that are more focused on a "collective good", such as social work and teaching, more tractable (Even though debt forgiveness plans do exist in some situations in these fields).

[1] http://www.census.gov/content/dam/Census/library/publication...

Why work so hard when your discretionary income is barely higher than those on welfare?

We need a great deal more genuinely affordable housing in this country. That would be an excellent start.

You comment basically boils down to "not too many people even go to college, let's not do anything to improve that".

What a shame, you really don't want to improve anything.

US culture, as a whole, does not value education for its own sake. We value education only as a business. And much of that business is to suck money from the pockets of those who do value education as intrinsically beneficial, and blow it along to those who provide the illusion of education at the lowest operating cost. If a greater proportion of the population valued real learning, the focus would be on making high school graduates more relevant and useful in the modern workforce, rather than using bachelor's degrees as an arbitrary qualification for jobs that clearly do not require them.

If >25% of kids think they need to go to university to get a "good" job--or even to just not be considered a low-status, ignorant loser--it is not the university system that has failed, but the 12-13 years of public education that usually precedes it.

The largest negative effect of all this debt will be the drag it puts on consumption. Young people are already delaying major purchases like cars and houses due to all their student debt.

(Hard to find a solid number, seems to be around $40,000 for new grads. This is a lot of money, but those grads are typically going to earn quite a lot over their career)

The generation or two who paid off their student loans instead of making a down-payment on a house will be screwed.

Here's a Mother Jones article that takes this position:

http://www.motherjones.com/politics/2009/12/behind-real-size...

Can someone with more knowledge break down whether or not this is accurate?

https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Progra...

There are no exams that need to be passed, no essays need to be written or anything of the sort.

Getting into your first choice program at your first choice university often requires a lot of effort, and the people who graduate from those programs are often part of a somewhat exclusive group. It's just that the effort required is entirely on your academic and intellectual qualifications rather than financial and persona connections.