I don’t know. I know how it sounds. But I can’t stop thinking that stuff isn’t adding up. And this article is one more to add to the pile of “how can this be happening if the economy is actually healthy, at least in a way that means people’s financial lives are healthy and prosperous?”
The question you have to ask is, who are you hearing this from? The answer is: people with a vested interest in making you believe the economy is doing great, or people fooled into believing this by those with a vested interest.
I suggest you closely examine the metrics used by those who claim the "economy is great". First these metrics are usually comparing year-over-year changes to point to "positive changes" in the economy. What they fail to announce is that the formulas they use to calculate these metrics are "adjusted" regularly to ensure that the numbers they seek are reflected. CPI is a perfect example. The FED claims that inflation has been very low, if not non-existent for years (good for workers, since their wages have fallen or remained stagnant for decades). Some have noted, however, that prices for most of the things people need to survive (food, rent, education, healthcare, insurance) continue to rise dramatically. How can this be? Well one way the FED lies with their numbers is through a mechanism called the "hedonic adjustment". If you paid $2 for a roll 60-sheet roll of toilet paper last year. This year you paid $3 for a 60-sheet roll this year, that's some serious inflation, right? Not according to the FED. The FED claims that the quality of the toilet paper is better now. Even though you are paying 50% more, the FED says the toilet paper is 50% better, so there is no inflation. How are these "hedonic adjustments" calculated? Arbitrarily by FED functionaries, in a black-box.
Rising debt, falling and stagnant wages, higher prices, consolidation of wealth - these are the real conditions we face and why our economy is lagging. Many will look at you as if you are wearing a tinfoil hat if you question the "official numbers", but even casual scrutiny of the methods and metrics used (the ones they do release) will raise substantial doubts about their worth.
y = rent, b = slope, x = sqft
y ~ b + x is the extent of the 'hedonic adjustment'
There don't really exist any control variables for 'better'. Nobody at CPI is subjectively saying toiler paper is better. What they will stochastically estimate is the per-unit price. So if for $10 you get 9 double roles, and last year you got 9 single roles for $10, then the price went down. But I assure you as someone who has looked at row-level data of what the CPI samples and does, there are no cases that are this extreme in the aggregate. They could drop the hedonic adjustments and it would make no practical difference. Private companies use similar sampling methods with better data and don't show wildly different headline inflation (see: Billion Prices Project http://www.thebillionpricesproject.com/)
There is no doubt however that the CPI data is inadequate, has a non-trivial lag, and does not capture true regional differences in prices. Just try using it to adjust your salary if you move from Birmingham to New York City and see how comfortable you'd be. But there is no conspiracy; that would presume far more competency than they have hired for.
The costs that are increasing for most Americans are housing, healthcare, and education costs. Yet over 40% of American households own their primary residence. Then you can factor in the lack of rent growth away from urban centers, and you see that this metric isn't as pronounced when it comes to the median American. The costs of many goods are falling. Commodity prices are low despite the fact there is a healthy demand for them. It's strange that you're calling out toilet paper. Its price has fallen [1].
The directors of the Federal Reserve, if they had some secret interest in tricking everyone, wouldn't be flatly admitting they consider why inflation isn't hitting targets a "mystery." [2]
The unemployment numbers being released should be viewed with skepticism, and there are plenty of good articles explaining why the main unemployment rate should be viewed in context with the other unemployment metrics, such as U6. (The idea is that there are many people who want to work who aren't counted in the main unemployment statistic.)
Furthermore, certain localities are experiencing extremely high price increases in housing, such as the Bay Area. Anyone in such a locality is going to feel the squeeze. The problem is that these statistics represent the nation, not individual localities.
1. https://www.bls.gov/news.release/pdf/cpi.pdf, page 12; table 2: Household paper products.
2. https://www.bloomberg.com/view/articles/2017-09-26/yellen-kn...
It could be they're taking home 95% of the income so capturing 85% of the growth is actually relatively low. I just don't know.
I feel like we're headed into a really deep economic downturn, but hey, at least we have plenty of golden parachutes for the rich!
I'm struggling to see the impact this has on economic reality. Could you expound?
Keep in mind, much of the hockey stick'ing happened under Obama, who was and still is perceived to be a green prez. Yet no one has really stopped to ask why is gasoline so cheap? Why would we sacrifice the planet for fossil fuel burning? The answer is simple: because we have to.
p.s. Low oil prices also puts the screws to the Russian economy. That probably isn't a hig deal but it's certainly for some a nice bonus.
Not to mention, I could have worked a 9 - 5, $25 / hr job, and bought a second or third...
Perhaps school isn't the best in many cases.
Now I pay $1k a month in student loan payments, on top of everything else. I'm in tech too, so it's not bad - but I can imagine the 95 / 100 who don't get a tech job are struggling
Eventually somebody will say "let them eat cake" and heads will start ending up on spikes.
It's been the same process throughout history: an aristocracy forms, they become blind to the suffering around them, heads on spikes.
Keep this in mind when you hear someone saying that unemployment is down.
U3 is the official measurement because it has a long history and it's useful for simplifying policy decisions. It's also fairly accurate because it's largely based on unemployment insurance claims forms, which have to be re-filled every 1-2 weeks.
U6 is also an BLS measurement[1] but it not as useful. It contains far more noise and is far harder to get an accurate count (because many of the constituent groups can't be surveyed without random samples). U3 will probably continue to be used as the "official" measurement so long as there are significant tradeoffs to moving to U6.
The stability factor is really the key - I know of few people that expect to be in the same job in 5 years, and everyone stretching for housing to try to get some longer term stability are on a knifes edge. That’s at least my perspective from where I’m standing.
Stock market and the incredible rebound of housing prices are great if you are older/wealthier and own assets.
There is no denying that if you were wealthy and an asset owner, you did incredibly well.
But if you are young with student loans or an average joe with a few thousand in the 401k, then it isn't going to affect you much.
The years since the financial crisis was primarily about bailing out the big banks and the wealthy asset owners.
If you are an young or an average person, you are doing even worse now since medical costs have increased. The ACA ( obamacare ) was about transferring the burden of medical costs from the elderly and sick to the young and healthy.
If you are older, wealthier and owned a lot of assets, the past 8 years have been the best years of your financial life. The S&P 500 rose from 600s to 2500s and looks to be headed to 3000. Everyone else has fallen behind. Stagnant wages and increasing medical insurance costs.
You can look up the statistics but the wealthy top 5% have been doing very VERY well these last 30 years and everything continues to be great.
People aren't wrong when they say how amazing it is that Trump managed to bankrupt himself.
http://www.npr.org/2017/06/02/531173429/understanding-the-pr...
https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-pro...
I'd be interested in playing with that data to see if the official numbers are reproducible. Also, it'd be cool to see how well one could predict future prices of certain goods, like toilet paper.
We probably also want data on the spending habits of various locations and demographics.
Why aren't we measuring how well the economy performs by measuring how healthy people are? Or levels of malnutrition? Or happiness? Or stress? Or education?
We should measure our economic progress by how well we're doing as people, not by how much extra shit rich people can buy.
You could repay it in 10 years time while living at the same level of your non-graduated friends.
Now say that the student loan averages US$ 150,000 and - still on average - the increase in annual wages is US$ 7,500 (net).
So you can either:
1) live as before BUT repay it in 20 years instead.
2) live at a 7,500 US$/year lower level than your friends and still repay it in 10 years.
3) live at a 7,500 US$/year (or 10,000 or 15,000) higher level and never repay it.
I suspect that besides the lessened "value" of the university degree on the labour market, there is also an increased number of people that choose option #3 over option #2 or #1 (whether out of need or because of other reasons doesn't really matter).
There's your answer - 0.2pp is totally insubstantial, which makes the title borderline clickbait. The economy doesn't uniformly grow or distribute wealth, so a change so small could just be from the distribution of college leavers in a particular year being overindexed towards sectors that aren't growing.
Further to that point, it typically takes years for people to adjust their majors towards sectors of the economy that are particularly productive, so we shouldn't expect to see such a quick change in the numbers.
https://www.cbpp.org/research/state-budget-and-tax/funding-d...
tl;dr: States have been cutting back on funding public education even as it's gotten much more expensive every year.
Student tuition is literally the only dial left that can be moved.
> Small business lending by the four largest banks fell sharply relative to others in 2008 and remained depressed through 2014. We explore the dynamic adjustment process following this credit supply shock. In counties where the largest banks had a high market share, the aggregate flow of small business credit fell, interest rates rose, fewer businesses expanded, unemployment rose, and wages fell from 2006 to 2010. While the flow of credit recovered after 2010 as other lenders slowly filled the void, interest rates remain elevated. Although unemployment returns to normal by 2014, the effect on wages persists in these areas.
Wages and benefits are too low, tuition is too high, cost of living is too high, and student loans are a scam. Tuition is a scam.
The rent is too damn high! ;)
Loans that are guaranteed by the government, for all students, that can't be discharged by bankruptcy, is an idea clearly put together by lenders.
If we wanted government subsidies for private education, there are plenty of alternatives. Here's one: government guaranteed loans for all students; but repayment of those loans is capped as a percentage of the person's income, and interest rate is capped well beneath that. This would allow the government to subsidize students to go to college, while providing market pressure against universities raising their tuition yearly. It would also allow students who went to expensive institutions to pursue careers that aren't at the top of the financial spectrum, like, say, teaching.
This is the same probably I have with the affordable healthcare act: it started off about healthcare, but became about healthcare insurance.
Depending on what you mean by this, it could be either a good idea or nothing would change. So can you clarify?
If you simply mean that the students would only have to pay back a portion of the loan, but the government would still have to fund the rest to the university, then nothing would change from how things work right now. The universities would keep raising the prices.
Social pressures are more complicated than that, and they come from many different directions. I mean, in the hip-hop world, "I Finished Paying Sally Mae Off!" is one of the top rated songs right now. And listening to that song, it's clear that the rapper had fallen behind on his loans from time to time.
So if that "pay it off" attitude has made it down to the hip-hop world, it must be prevalent in the larger society as well. And that's just one "for instance" when you're talking about social pressures around student loans other than the desire to walk away from them.
Are you referring to the efforts to correct down on Navient actively and often deceptively steering people into higher-cost paths when better existing legal options were availablel, or it's crackdown on predatory loans by fraudulent institutions? Or something else?
[1] https://www.bloomberg.com/view/articles/2017-09-27/it-should...
Yes, but many people have been designsted as "having stopped looking for work", which means the statistic doesn't count them.
Additionally, those who are employed perhaps are underemployed, working as an Uber driver or bartender or chipotle or etc.
>the economy has improved
For the top 6% of Americans that are millionaires, it absolutely has improved. Most of their income is from capital gains, dividends, and business equity.
The average person with student loans has almost none of these things. They are relying on a wage from a job that requires them usually to pay rent, own a car, buy a monthly transport card, and so on.
When you are only making $1400-2000 per month after tax, and $1,000 of that is out the door on work-related expenses alone (rent, transport, insurance, phone), there isn't much left over for a $300 per month student loan payment.
Disclaimer: Don't shoot the messenger. These are merely my thoughts on what is happening. Please reply with criticism.
Is this newsworthy?
If the student fails to repay, a %age of the student loan debt should be paid for, by the edu institution where he/she graduated from.
Would be great if it is 50%. Even if university doubles the price, demand/supply economics will ensure universities cannot bump fees up at will.
Without holding the educational institutions and the students as equally responsible for the debt, edu institutions have no incentive to not-ripoff students.
Factor in the repayment history by graduates of a program at an institution to decide the percentage of debt the university is liable for.
If STEM grads are having lesser default, the school is responsible for 10% of the debt.
If a grads of <some esoteric program> have a higher default rate, school owes closer to 50%
Imagine you and I agree to a deal, both verbally and contractually (i.e. on paper). I give you 10 euros and you pay me back 11 euros in exactly 1 year.
Now 6 months into the deal you suddenly ask yourself: "Well who would lose out when this debt gets cancelled?"
Do you see now why I think it is a nonsensical question?
Time to switch to free high education system.
- What is the breakdown across for-profit vs traditional school graduates? Are University of Phoenix grads defaulting at the same rate as ivy league grads? (obviously no, but the disparity would be good to know)
- What are the statistics if you include SoFi (and other similar refinancers that cherry-pick borrowers most likely to repay) borrowers that get removed from the public numbers?
* Wage garnishment is limited, maybe the ruined the credit score and the max % of garnished monthly paycheck (%15) is less than what they are already paying?
* The type of majors and students background who graduated changed. Maybe universities 4 years ago decided to accept more students into majors which are having a hard time finding employment. Universities don't care, they just want more students with 6 figure approved loans to roll in.
* It is possibly there was a hint or signal of debt forgiveness being implemented. It doesn't have to be true, just a rumor but it can start to self-perpetuate because people really want to believe it.
* Also everyone is pretty connected these day via social media so maybe if someone bragged about not paying and "look a few months later, nothing happened to me" others might start thinking, hmm, well maybe it's ok. Certainly nobody wants to be left still paying like a fool if all their cool friend stopped and they still seem to be doing ok, kind of attitude.
You aren't entitled to 100,000 dollar education.
You aren't entitled to go down to Mexico every spring break.
you aren't entitled to eat pizza and hit the bar every weekend.
You aren't entitled to a college education.
Go learn a trade, get scholarships, join the military, work for a company that will pay for your education, start your own business.
Instate tuition at VA Tech is 13k for the year, if you live in Texas, UT is 4-5k a semester. While not cheap, this is far from unaffordable.
I have zero sympathy for junior who goes to some 150,000 a year liberal arts college and gets a degree that makes no money or requires another 2-4 years of school.
I even wonder if much will change with colleges and higher education by the time I have kids and they then are college age. A lot will change from now until ~20 years when my potential kids will be college bound. However, I'll definitely be looking at biggest potential on ROI for tuition costs etc.
That actually seems more equitable to me than what happens at some other schools, where everyone pays the same credit-hour rate no matter what course they take.
Teaching STEM courses, intuitively, seems like it should cost more. The pool of professors and TAs is smaller, a lot of courses call for lab equipment and the maintaining of labs and so on. And students have higher earning potential upon graduation and should, in theory, be willing to pay more.
Many humanities courses in contrast (literature, philosophy, sociology, political science, languages) can be taught quite cheaply, with labor being the only major expense. It seems unfair that humanities degrees (which are also worth less than STEM degrees on the job market) should be anywhere near as expensive as STEM degrees.
BUT you need also to compare what the labour market (outside the University) offers to a professor level mathematician, engineer or technologist and what it offers to a brilliant anthropologist.
Also, try remembering last time you saw an ad where someone was looking to hire an anthropologist (or an archeologist, a literature major, etc.).
Perhaps more and more students are simply refusing to pay, taking the free college they should have been given by economic force.
This is just another example of why I urge any young people I know (high school age) to think long and hard before choosing to go to a 4 year college. When I graduated high school in 99', we were primed to think "college degree == good job". Of course, that is anything but the truth. And, it only serves to put someone in serious debt without any guarantees.
Hands on technical jobs like electrician, plumber, welder, are many times more lucrative than some bullshit business degree. A friend of mine's son is 22 or 23, and making a hell of a living welding. Granted, he's exceptional at it. But, that doesn't change the fact that his 2-year trade school investment was a good one.
Or, teach yourself a skill. Like lots of us on here, I'm a self taught programmer. It took years of doing small projects in the evenings, but I make a living from it now with $0 in student loan debt.
The idea that trade school somehow is lower tier or oppressive is a staggering disservice. Just like every college-bound high schooler is not med school material, not every high schooler is college material. Put a wrench or saw or blowtorch in the hands of a doctor or engineer, and crummy is the likely result. Skilled trades are an honorable, respectable way to earn a good living. Forcing people into tracks for their own supposed good but where they feel hopeless is horrible social engineering.
A college degree is still worth a considerable bump in lifetime earnings.[1] Perhaps you should revise your advice to "think long and hard before choosing to go to an expensive 4 year college" or "consider spending the first two years of college at a local community college."
1 - https://trends.collegeboard.org/education-pays/figures-table...
Stories based on average numbers lose a great deal of the details that matter.
Last year according to credit Suisse, the median wealth of the typical American actually /decreased/! And if I remember correctly, it was by quite a sizeable chunk, from 49,000 usd to 45,000 usd.
And the median excludes children, so it is adults only.
I have all the statistics in the world to back up what I'm saying, but even more important for me is anecdotal stuff that inspires me to dig deeper.
When you see the sheer number of young kids working chipotle or retail; when you see the demographics of uber drivers vs big 5 software engineers; when you realize that so much of the wealth in the US is old money that continues to centralize, pool, and grow (much like gravity);
when you realize all that, at the very least, it makes you say "hmmm... I need to rethink and dig deeper into this topic on my own".
But here's a "nice" graph (the graph is nice, but the trend is worrying): https://fred.stlouisfed.org/series/LNS11327662. Labor force participation for college educated workers fell by 3.9 percent points since 2009. This is rather massive compared with the actual unemployment.
I really wish the people at statistics offices would come up with some new measure of unemployment. Sometimes I feel a scalar doesn't cut it.
It's always nagged me how we can say the economy has improved without taking the distribution into account. It's like saying one person gained five bucks and three people lost a dollar. Sure there is two more dollars but the community/society isn't necessarily better for it.
Yes. In most countries I know of, employment statistics are more about making economy/government look good and hitting targets, and less about giving any real numbers that people can use to understand the big picture.
I do agree that we have to look more at wealth equality to see what's going on.
They do, they're called "not in labor force" [0]
If you include the unemployed as well as those who want a job but aren't actively looking, it's around 5% which is considered low.
But the point of the article is that the unemployment rate is moving in the opposite direction to the arrears rate. Unless the basis for these figures has changed recently, this would require that an abnormal number of graduates aree becoming less emlpoyed while an abnormal, and larger, number of grads are becoming employed. Seems unlikely.
> ...perhaps are underemployed
Are you sure? I'm not totally familiar with the exact counting mechanism in the US but, in the UK, if someone is in part-time work but is looking for more hours or full-time work, then they count as unemployed, not employed.
e.g. http://www.cbc.ca/news/business/inflation-canada-outlook-1.4...
Why shouldn't the school take on some of the risk?
You'd need to cook up some sort of risk-pooling scheme if you wanted schools to extend that credit to anyone coming from a background that made payment statistically less-likely. And once you started doing that you'd have to be careful not to distort the market so much that the original intent -- to allow market forces to have more say on what majors college students go into, and who (and how many people) colleges admit -- would be totally lost.
It's a difficult problem and I don't know if it's better to have the schools/colleges trying to underwrite the loans. It might be better to leave that to specialists rather than force it onto schools (though forcing schools to release the data that an underwriter would need to rationally price loans for students to go there would be good).
If you didn't have the government backstopping student loans, and in some cases making them non-dischargeable in bankruptcy, that would probably have much the same effect. The government backing and unique legal treatment are what makes a "student loan" different than a giant personal loan. The justification has always been that without this treatment and guarantee, nobody would make a $100k+ personal loan to an 18-year-old, which is probably true. But I think we're starting to see the other side of the coin, which is that maybe there are some good reasons why that's the case.
Or are they in any way incentivized to take on financially less-well-off students? I'm pretty sure they'd always find some way to outsource any costs/risks like that straight back to the students.
Also: It's not that much of an open market, schools work very much on prestige, certain fields are de-facto monopolized by certain schools, it isn't an "open market" where some startup can just start a school and hope to have a meaningful impact in any short time.
(In this thought experiment we're ignoring insurance. Or you could imagine an uninsured asset being destroyed.)
But of course in reality, when universities were free in the past they weren't allowed to just raise their prices to whatever they felt like charging, as they basically do now.
> You aren't entitled...
While the person you describe probably exists, it's not all 18% of students struggling with payments. I'd just like to say that being aggressive helps nobody.
> Instate tuition at VA Tech is 13k for the year, if you live in Texas, UT is 4-5k a semester. While not cheap, this is far from unaffordable.
Are the people born away from the coasts out of luck then? There are dozens states in the Midwest with cheap tuition, but after graduation there aren't any jobs waiting.
The quality of education is usually poor when professors teach subjects for fields that they've never been a part of.
Students know these things, and feel it's worth taking on debt to get a better education and live somewhere with opportunities.
> Go learn a trade, get scholarships, join the military, work for a company that will pay for your education, start your own business.
I'm assuming you work in tech. Would your employer hire someone in their 30's with no relevant work history? I've worked at two of the large tech companies and two smaller companies, and I know they wouldn't consider it.
Apprenticeships are disappearing - low skill work gets automated now. Medium skill jobs are being outsourced or given to contractors. What you're suggesting isn't realistic.
An 18 year old assured by their parents this is the "right" move deserves sympathy when it all blows up in their face 150k down the road.
My Mother told me she would throw me out of the house if I took a job rather than going to graduate school. She also said all the loans I took out for undergrad that she claimed she'd pay she'd stop paying if I got a job rather than going to grad school.
The reality is some parents are so damn convinced that education is the magical key to a good life they'll go to some pretty intense lengths to get you to sign on the dotted line.
Blaming entitled kids for our debt-laden society and failed economy is not smart or useful. The truth is that there aren't enough jobs (let alone decent-paying jobs) for 1/4 of the tens of millions of kids who enter college every year. These kids weren't the ones who mismanaged society so that property taxes, mandated healthcare premiums, income taxes, and rents are so high.
You aren't entitled to having a loan repaid if the interest rate is too high.
...or if you loan too much money to someone who won't be able to afford it.
...or if you expect someone in a lower income bracket to pay more than X% of their income.
Common-sense laws that loosened bankruptcy and regulations on repayment amounts would fix student loans, credit cards, bad mortgages, and payday lending. Why do we always blame the person taking out the loan? The lender should have the expertise to know if a person is capable of repayment and should bear the burden of making predatory loans.
1/ Student loans are not dischargeable in bankrupty.
2/ Today, the government IS the lender.
The government has created a system of incentives (even before the student loan industry was nationalized) that encourages lending large amounts of money to anybody by eliminating the risk on the part of student loan lenders.
People can basically never get out of the debt, so you can lend arbitrary sums of money to Feminist Dance Theory majors and other sorts of poor-ROI nonsense.
"Predatory loans" is a misnomer. Predatory government is far more accurate.
Then you're an asshole. Young people with zero real world life experience make poor choices often. Sometimes critically poor choices. It's a part of growing up to fail and the fact that you can't squeeze together an ounce of sympathy for these folks suggest you have a lot of growing up to do yourself.
Just like we know diamonds have no real value, and you shouldn't go into debt to buy an engagement ring or have a big wedding.
But try offering your fiance a $5,000 bond instead of a fancy ring. It doesn't go well.
Social pressure is a real thing, and colleges are taking advantage of all of us by setting up expectations for normal that we just can't afford.
This is why I never really got behind Bernie's free college plan. We don't need the government to help make college free. We need to change why these costs are getting so out of control in the first place.
How are people spending over 50k in the first two years of undergrad? Basically wherever you go the core requirements that first year or two are the same before you pick your major. We need to be leveraging the best teachers and online classes to bring these costs down, especially for your basic "Philosophy 101" class that you are just taking to test the waters.
You build egos the size of cathedrals.
Fiber-optically connect the world to every eager impulse.
Grease even the dullest dreams with these dollar-green gold-plated fantasies until every human becomes an aspiring emperor becomes his own god.
Where can you go from there?
As we're scrambling from one deal to the next who's got his eye on the planet? As the air thickens, the water sours, even bees' honey takes on the metallic taste of radioactivity and it just keeps coming, faster and faster. There's no chance to think, to prepare. It's buy futures, sell futures when there is no future. We got a runaway train, boy." 'The Devils Advocate'
But you are. We have a right to an education. My parents paid literally $0 for their education, because university was free, in a time with much lower productivity and less wealth. The state could afford it then, so it can certainly afford it now.
I finished college in 2014, worked in industry for three years, then came back to school for a PhD. I am now completely shocked that these undergrads are paying $60k/year to come here to listen to the same cookie-cutter lectures that are being given at thousands of other institutions across the country.
I almost feel embarrassed for the professors as well, having to act like they're doing something useful or valuable by giving this lecture, when in reality its just a mechanical performance.
I feel like you need 20-30 different MOOCs for each class. You need a tier 1 (MIT etc) level difficulty Physics I class, then a tier 2 class, and so on.
This would even be advantageous for students at 'top' schools (if they still exist), as it would be easier for a physics major to acquire cs skills if they don't have to go through their schools theoretically biased curriculum.
Its completely insane...
> According to a visualization of MOOC completion rates assembled by Katy Jordan (2013), the 50 investigated MOOCs have generated 50.000 enrollments on average, with the typical completion rate hovering below 10%. Put it somewhere around 7.5%, or 3.700 completions per 50.000 enrollments. Meyer (2012) reported that the dropout rates of MOOCs offered by Stanford, MIT and UC Berkley were 80-95%. For example, only 7% of the 50.000 students completed who took the Coursera-UC-Berkeley course in Software Engineering. There is a similar reported dropout rate in Coursera’s Social Network Analysis class where only 2% of participants earned a basic certificate and 0.17% earned the higher level programming with distinction certificate.
MOOCs are not the solution.
Matter of fact, MOOCs turned out to be the counterfactual that clearly illustrate the depth of problems we have with education - and more importantly re-training.
MOOCs are in so many ways ideal. When Khan academy lectures were first made available online, I had huge hopes for the future of education and therefore humanity.
Education/re-training is a critical lynch pin of the modern model of economic development.
Innovation -> job loss -> retraining -> people return to well paying jobs.
But it turns out, that this was not happening, and that education and training is a lot harder than anticipated.
MOOCs had it all - convenience (always on the net), not time constrained (you can read/watch classes whenever), accessible (taught by the good teachers), high quality (same teacher, able to use visual and other aids) and self-selected by people who wanted to finish the course.
They should have been a massive success.
The self-selected, interested student part should alone, have resulted in large numbers of newly trained students.
It hasn't. Which meant the importance of those factors in educational results was overstated.
This also means, that our current education system, may well be the better state of the art option we have.
OR worse, a large chunk of humanity may not be able to transition to new subjects, and therefore new roles.
This is a huge bloody problem, because that means if coal miners lose jobs, the economy will stall.
This in turn puts huge political pressure to avoid following economics, and instead fight for protectionism, which also doesn't work.
----
Side note/silver lining: Perhaps the intransingence of education is a good thing.
If it becomes easier to teach a person how to learn X details, perhaps it can become a lot easier to also indoctrinate a person in Y religion, or belief.
In the end, a technique which has a high success rate in teaching students X subject, could easily be used to teach any subject.
The difficulty in teaching people could well be a natural impediment to mass scale conversion, or invasion of ideas/propaganda.
> It's also fairly accurate because it's largely based on unemployment insurance claims forms, which have to be re-filled every 1-2 weeks.
That's even worse. You can only claim unemployment insurance for a few months after losing your job. Claiming that's more accurate because it's easier to measure is like the joke about the guy who lost his keys in the bushes, but is looking for them under the streetlamp because it's easier to see.
In a simplified model : Assume you give 100 dollar to five people with the intent to earn 5 dollar on interest of each (total 25 dollar interest income.) If now one of them can't pay back the 100 dollar you lose the 100 dollar and the five dollar interest income. So instead of 25 dollar income you get (20-100-5 = -85 dollar). To avoid this situation you start calling the guy (collections activities). Effecting your earnings again.
Of course one months in arrears is not immediately the road to immediate doom, but it is an early warning indicator. Especially if you look into trends to understand the behavior of the portfolio.
In this case the early-stage delinquencies have been improving since 2014 and starting 2017 reversed that trend. So if the trend continues this portfolio segment will grow again leading to more losses and collection activities.
I would argue that this song is more an anthem for those who understand how hard it is to live under the weight of these loans, and perhaps if you are fortunate enough to pay them off, it is a time of celebration, as you might be able to quit that second job.
It's like having an open wound next to a hungry tiger and being surprised when they try to eat you. The government should be setting price ceilings on schools that take Federal loans if we as a society have agreed that it's such a worthwhile goal as to ensure everyone can go and that we will pay for it
The truck (or student loans) was still paid for. I thought I'd get my money back, but I didn't and that is a risk in loaning money. I can write that off as a loss in my taxes, and recuperate some of the losses, but definitely not all.
So in our student loan case somebody still has to pay off that debt. Either it is by a massive loss to the companies that loaned the money (let's ignore the possibility of them being in the green) or the federal government purchases the loans and writes them off. And if the loan companies are forced to write them off then that is written off as an expense and can greatly change how their taxes are calculated (see Trump). Which the "pays for" is that purchase or tax deduction/rebate. And now the entire tax paying population pays for (which tbh I'm personally okay with). But it still gets paid by somebody. Somebody "loses" (maybe not in the long run, but in our short game).
That's false for several reasons. First, government debt impacts citizens directly through higher taxes (income, property, sales, and others), fees, deprivation of services, ect. Second, government debt is not primarily owed back to it's citizens. The biggest holder of government debt is the Federal Reserve, which is a collection of private banks. The vast majority of debt not held by the federal reserve is held by banks, financiers, and the ultra-wealthy. Third, working people and those on fixed incomes are crushed by ZIRP (zero interest rate policy), which has been implemented by the FED in an effort to prevent the mountains of debt load on every governmental level from exploding. What it has done instead is prevented people from saving (since artificially low interest rates that don't match the rise in cost of living mean treasuries and savings accounts lose value) and further inflate the riches of the ultra-wealthy who borrow at 0% and buy stocks.
This doesn't even touch on the fact that millions of people who have worked their whole lives for pensions are about to get the shaft and become destitute when states and municipalities are overcome by their crushing debt and default on their payments.
Pretty much the whole world economy is built on debt and creating more of it, that's because there is no such thing as "money" without debt, especially not with the US$ as the de-facto world currency.
In that regard, it's disingenuous to claim the whole problem only boils down to a couple of kids living above their standards, it's way more systemic than that.
This is a people issue.
That is totally fine. If student loans become hard to get, students and universities will take prudent decisions, which means, there wont be a bubble effect because of super easy / free availability of loans.
Basically, student loans in US is similar to mortgage crisis in 2008.
US will be better off with unemployable people with no degrees and no debt, than unemployable people with a useless degree and debt.
Without a feedback mechanism for universities to feel the effects of the job market on its graduates/alumni, there's no incentive for university to admit students into its "sub prime programs".
Let the government fund those esoteric programs that have no job prospects. That way the spending on those education programs is visible to the tax payer.
"not well off students" can always have the university take a bigger chunk of the responsibility. While ensuring that there is no bias in admissions, universities will have an even bigger incentive to ensure the success of this 'not well off' student. Such success rates can be tied to the Universities' credit rating. Higher the rating, lower %age risk the edu institution needs to take.
https://www.purdue.edu/newsroom/releases/2016/Q2/purdue-plan...
Our whole financial system is built around accurately accessing the risk that an investment will be paid back and charging an interest rate commensurate to that, but its thrown out the window once you can try and convince the least experienced adults in the country to sign on the dotted line.
Until banks stop getting paid whether or not they made a good bet on someone's college expenses, or the schools are given a limit on what they can spend, its not going to change. My fear is that this won't happen in any way but a massive amount of defaults that cause the whole system to collapse unexpectedly and cause add on pain to the rest of the economy
[1]https://www.cbsnews.com/news/the-financial-impact-of-champio...
Purdue also has a $2.443 billion endowment. The university I'm discussing is a public university with maybe a sixth of that after a major capital campaign.
But what actually happened? It's state allotment got slashed in half, capital improvements are no longer covered, and the per-capita payment per student has stalled while we've admitted more students.
2. We've already lowered faculty salaries - why do you think so much is done now by adjuncts that are pretty universally regarded as underpaid?
3. Student amenities have been shown not actually to be all that significant a contributor to rising costs, especially compared to the slashed state and federal budgets to support universities.
Many universities have already done a great deal to lower costs - putting aside needed infrastructure investments, not replacing both staff and faculty when they retire, the aforementioned reliance on adjuncts, and in some cases cutting or merging whole departments.
It's interesting that economics doesn't usually factor in how much value is created by things that has a transactional value near zero, such as:
* a housewife maintaining a household,
* a person who quits work to care for a dependent family member, or
* open source software.So let's say I took in $1000 before taxes this month. The highest my minimum monthly payment can be on my student loans (total) is $100.
That puts pressure back on the university to keep their tuition rates in line with what can actually be repaid, ie, the actual financial value of the degree itself.
Not saying this is the ideal solution, it just shows how much of a canard the parent poster's answer is. There are plenty of solutions to this issue, depending on what we want to do.
If private loan repayment rates were capped, then private institutions would have a very, very strong incentive not to loan student loan rates larger than a certain amount to students, depending on the major and university. Quite frankly, a student asking for 200k for an english degree at Drexel would be denied. Why? Because Drexel isn't known for its english program. Average salary of a Drexel graduating English major is, let's guestimate, 50k a year for the majority of their lifetime. At 50k a year, at a 10% rate, the bank isn't going to get its funds back for 40 years, before interest. If the average age of death/retirement in this country is in the early 70s, the student will literally die of old age or retire before finishing repaying the loan.
Now students will be unable to attend financial unviable options. The university will understand that if it raises its tuition beyond a certain level, it will be unable to support its english department, because no sane bank would back the loans required to graduate.
Again, the above is a very contrived example with BS numbers. And I'm not suggesting that the above is the way we would want to fix the issue. But it could work, and it certainly puts pressure on the universities.
Also, some STEM-type departments get grants (public and private) at a rate that's much greater than liberal arts departments, and grant recipients have to tithe back a large portion to their parent institution in a way that defrays facilities costs, etc. So there are other sources of income besides student tuition.
If you started treating departments as P&L centers, I don't know that I'd want to be in Anthropology vs. MechE.
Two things to keep in mind:
1. Grants are difficult to get. The pay lines at both the NIH and NSF have been decreasing for quite some time, and even successful departments don't have the feeling of swimming in cash.
2. Overhead rates (the "tithes" you mention) do not necessarily cover the full administrative cost of a research-heavy department (especially things like capital construction).
There are certainly institutions that have built a great deal of monetary success on their research programs, but not as many as one might think. This is why, for example, in my field we're seeing a proliferation of MPH programs - student tuition is a more reliable income stream.
That's fair. Just that (again, my experience) you were charged a fixed amount in lab fees every semester regardless of courses. It's probably varies between unis.
> If you started treating departments as P&L centers, I don't know that I'd want to be in Anthropology vs. MechE.
I don't know if you need to treat each department as a P&L center. There are bound to be departments that are important but perennially loss-making and knowledge shouldn't be reduced to just dollars and cents. But there does need to be more fairness in the money charged to students. The alternative is that humanities students (with lower earning potential) are subsidizing STEM students (higher earning potential). I know which one I prefer from a fairness point-of-view (speaking as a former STEM student).
This seems to be the case almost universally, but I guess it's easier to jump to the 'malice' conclusion than to attribute it to lack of competency.
Perhaps more succinctly: if you think the world is out to get you, then it is.
People want structure and simplicity in the world. They want to believe someone is in control, even if that someone is harming them.
Therefore if something is wrong, someone is responsible.
https://www.federalreserve.gov/econresdata/feds/2015/files/2...
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” - Upton Sinclair
This feature also makes the entire for profit education industry quite predatory. I realize public institutions are ostensibly not for profit. At the same time, when you have higher executives taking salaries in the millions of dollars, and layer upon layer of redundant administrators with comparably bloated salaries, that they then regularly adjust upwards as "their revenue" increases, that belies the intuition of 'not for profit.' So forgive my colloquial nature.
[1] - http://news.gallup.com/poll/7981/Half-Young-People-Expect-St...
[2] - http://www.bankrate.com/banking/savings/do-you-think-you-wil...
Add to that the negligible degree to which attending "the best school" effects your outcomes (spoiler: virtually not at all. Being in the top 25% at your school far outweighs how good your school is) and you'll realize that they compete heavily. This totally leaves out all the private schools with which they compete in the DC area.
The universities were required to enter these agreements by state law. In an attempt to bring in more out of state tuition dollars some have started to voluntarily enter similar agreements with CC systems in other states.
Do some research and see if there are similar arrangements between CCs and public universities in your state or with out of state universities.
Locally (VA), students are guaranteed admission to the state university system if they meet a published GPA threshold. That threshold varies by school. The one big caveat - students are not guaranteed placement within specific programs. So, at GMU, an overall GPA of 2.85 is required to transfer, however that is might not be high enough to guarantee placement in their Computer Science program (which is highly competitive and close to fully enrolled).
I don't know how this applies to transferring to an Ivy (or other top-tier private). For the Ivies, I assume the caliber of student who can gain admission is going to figure out the finances (for better or worse). I also assume (big assumption here) that even a "useless" liberal arts degree from Harvard makes one employable at a reasonable salary (vs the same degree from a 2-tier school).
Edit - one "local" private school (Shepherd U, WV) also has a guaranteed transfer program from the local (Northern VA) CC system. They offer a tuition discount to those transfers. http://www.shepherd.edu/nova-transfer-admissions/
I graduated in the mid-90s with $20k in debt. That wasn't fun but it was manageable. I can't imagine graduating with a mortgage's worth of debt.
It is also completely useless to lump together all college degrees from all schools.
Source: many of my friends graduated college a year behind me after doing exactly what I'm suggesting.
If they're going to be left holding the bag for that, they're going to stop.
And to address the poster who thinks we can blind universities to a potential student's financial background...we have a very good statistics and computer science departments, and a massive data set of all our students. We can probably come up with a classification scheme in short order, "blinding" or not. Hell, I'm pretty sure you could get pretty far just from "What high school did you go to?" and the classes you took there.
The only deciding factor needs to be the outcome which is the employability or ability to make money to repay debts.
If the Outcome Rating for a program at a university is high, it means lower risk, and the university is responsible only for, say 10% of unpaid debt.
If the Outcome Rating for a program at a university is low, it means higher risk, and the university takes a much higher responsibility for ~ 50% of unpaid debt.
For example, the use of Classics as a major for many people who go into banking as essentially a status signifier. That only applies to some classics majors.
If you're wealthy enough, it basically doesn't matter what you major in while in college. But if you don't have a rich family, then it matters a hell of a lot. Students seem to already know this; at least when I was in school last, there weren't a lot of first-generation college students or immigrants in the liberal arts programs; the kids who were betting everything on their education were in the business or engineering schools, mostly. (Or sometimes preprofessional programs, pre-med was a big one.)
At least at some points in the past, this was a significant funding source for universities. (In the US, not sure about outside of it.) The number of engineering schools founded by American industrialists is probably not coincidental, either.
That companies no longer feel the need to invest in universities in order to ensure a steady supply of workers suggests one of two things: (1) either the planning horizon of private companies has contracted to such an extent that they are no longer willing to make such a long-term investment, or (2) they believe they can just hire sufficiently skilled graduates without investing in the "supply chain" that produces them.
Argument 1 is largely a financial question, because it hinges on the long term discount rate; Argument 2 is essentially political, in that it assumes the ability to hire graduates from a large, slack labor pool outside of its immediate community in which it might otherwise invest. My guess is that both of these have played a role in declining private-sector funding of educational institutions vs. the early 20th century and prior.
They do, in a way, by paying higher salaries for the graduates they really want. Some companies also pay tuition for employees going to school.
> Since that is unrealistic, the ultimate solution would seem to be making higher education free, like the rest of the civilized world.
Great Britain doesn't have free higher education.
"Make higher education free" is certainly a worthy goal. But there needs to be some debate for how to get there. "The government pays your tuition" is unlikely to find much support outside of a certain age bracket.
Something to consider: German universities are free to everyone who passes an entrance exam [1]. But German universities also spend half the amount per student per year as US universities[2]. $10,164 vs $23,064. They also spend more on R&D proportionally, and in absolute terms per student-year.
1. https://en.wikipedia.org/wiki/Education_in_Germany#Tertiary_...
2. https://www.oecd.org/edu/EAG2014-Indicator%20B1%20(eng).pdf (page 215)
Seriously?
> "The government pays your tuition" is unlikely to find much support outside of a certain age bracket.
"I've got mine, fuck you Jack" is a popular sentiment across all age brackets, but charity and compassion are also not age-restricted.
>In calculating the index, price changes for the various items in each location are aggregated using weights, which represent their importance in the spending of the appropriate population group.
What do you think "aggregated using weights" means? How does the FED determine what those weights are? Who decides how how much these "weights" should factor in deciding the proper "spending of the appropriate population group"? Where's a description of their formula? There is none - its made up.
> The CP I-U and CP I-W are considered final when released, but the C-CP I-U is issued in preliminary form and subject to three subsequent quarterly revisions.
In other words, they revise their ridiculous assertions months after the headlines to look less ridiculous in retrospect.
>Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-SEATS seasonal adjustment method. These factors are updated each February, and the new factors are used to revise the previous 5 years of seasonally adjusted data.
More arbitrary "seasonal adjustments". How would the IRS feel if you reported your taxes but you said that you reserved the right to adjust them up to 5 years later?
>Seasonally adjusted data, including the U.S. city average all items index levels, are subject to revision for up to 5 years after their original release.
Which they change up to 5 years later!
That's just from one page of their nonsense! Read the footnotes beneath each chart of "data" to see a slew of arbitrary adjustments that are made for every "calculation".
How many invented variables do you think it takes to invalidate their formulas? 1? 2? or the dozens they have?
I think to support the argument that CPI is cooked you need to show that you have some reasonable sampling of prices of some reasonable basket across the entire country. You can search online for rent prices, you can see real estate prices, you can see product/produce prices... You can find out what % of the population rents vs. owns and factor that in. Let's see that data that shows us that CPI is really wrong and not some anecdotes. I think there's enough data in the public domain to be able to form a pretty good estimate. Also we need to see that over a long period since some prices go through big cycles, real-estate can crash 40% and then go up, so we may want to reduce the impact of that...
The idea that the Federal Reserve lies to the populace to keep them productive is absurd. Every recession has been addressed (eventually) by the Federal Reserve. There have been catastrophic blunders, such as the tightening of credit after the sustained bank failures in 1929-1933, and the vastly too-late raising of interest rates at the height of the housing bubble in 2007.
However, the directors were rightly castigated for their failures; Alan Greenspan is still mocked for failing to address reality. The Fed is blamed as a major cause of the severity of the Great Depression. Yellen et. al. have been criticized for their caution (financial news calls it "dovish" behavior). The Federal Reserve have every motivation to tell it like it is, lest they end up like Alan Greenspan.
So you're saying these people with all the humility required to announce they have solved economic crises for at least a lifetime [1] wouldn't lie or deceive themselves ?
I wouldn't make that point. Seems unlikely that hubris like that would be limited in any way.
Central banks have a long history of ... well, either outright lying or incredible self-deception, including the federal reserve under this chair. [2] No sane person at this point believes the FED's economic predictions.
To make the difference I would put forth this point: finding analyses that defend the point that the US government (and indeed almost all governments with pension obligations) would be bankrupt in 2 year with a 4% funds rate and 6% inflation is easy. In other words, the FEDs predictions, if implemented, would blow up governments, make them bankrupt. Not just the US government (in fact the US government can probably last longer than the EU or Eastern European governments). I agree with that assessment. Maybe they can make it 3-4 years, but certainly no more.
So in order to believe the FED's predictions and stated reasoning are honest (same with ECB) you have to believe that somehow it escaped the attention of these finance industry 4, 5 and 6 decade veterans that this would cause a financial disaster worldwide. I find it hard to believe that these people are this stupid. I also do not believe the FED would destroy the government it's part of.
So I present to you: they are lying. They are lying about their reasoning, they are lying about their models, they are lying about their predictions. I understand why they're lying, but they're still lying.
They are lying about the CPI too. European inflation measures are similar, as they directly influence pension increases, and "surprisingly" they're very low.
[1] https://www.reuters.com/article/us-usa-fed-yellen/feds-yelle...
[2] https://mises.org/sites/default/files/styles/full_width/publ...
http://www.investmentoffice.com/show_image.php?file_id=2151
http://ei.marketwatch.com//Multimedia/2016/09/28/Photos/NS/M...
Link #1: She talks back this assertion in the very next sentence! She says she is probably exaggerating, but she has good reason to think there won't be another major crash of that magnitude, provided there are [list of conditions]. Furthermore, she at no point takes credit for this achievement during the interview.
Link #2: Yellen gets asked why she doesn't raise rates all the time. Far from unwarranted certainty, she admits that she expected the economy to to better, doesn't know why it hasn't, and has therefore revised predictions of when the rates will be raised! Any consumer of financial news over the past 4 years should be familiar with this. The fact you omit this is highly disingenuous.
The very last link summarizes my position pretty well. The experts, who admit that things can be a "mystery," change their minds and models based off of reality. Is that not humble enough for you?
I am curious why you continue to vigorously assert a view that you have failed to demonstrate. What is your personal connection to this, and why do you pursue it?
I agree with you, to some extent. Yellen is actually one of the more humble central bankers. Not much competition there, of course. But I would still classify what she says, and doubly so what she does, as unwarranted certainty.
The net effect of what she does, incidentally, is an unprecedented redistribution of wealth in the US economy (and elsewhere) from the poor to the rich. The fact that she does this things like this while being unsure about the consequences ...
And of course, she is like all other central bankers. As you say, she doubts whether what she's doing is the right thing. So what does this person do when she doubts the effects of her unprecedented policies ? Why, more of them, of course. She errs on the side of making the rich richer yet again and sabotaging the poor even more ...
Let's just be glad this woman is not a pilot.
My personal connection to this is that, like all central bankers, Yellen is effectively spending (sorry "loaning") my own money back to me, enriching a lot of people in the process. Needless to say, I feel less than ecstatic. And please don't make the central banker's argument (that it's to "save me from an economic crisis that didn't happen", ie. a counterfactual argument. It's about as realistic and useful as the quintessential example of such an argument "why didn't they just kill Hitler/Stalin/...")
And, yes, I understand why she can't be really humble.
Some are no doubt lying, but never underestimate one's ability to delude themself.
We should be able to freely sharing digital media as virtual-goods are immediate to duplicate. Instead we've created artificial barriers (drm, paywalls, streaming services, etc).
The only reason these barriers are allowed, is a dying industry is trying to stay relevant. The economic impact of the media industry loss would be great, and the media industry does still have a place in our system, but they need to let go of distribution.
It no longer makes sense to have laws protecting the sharing of media, but we are propping up a false representation of our economic system by trying to do so.
It's not like most people are going to pay Disney ahead of time for the next Pirates of the Caribbean movie, even though a lot of people will (inexplicably) pay to see it in theaters.
People are still paying a lot of money right now to fund media even though they can get it for free. It's not that people won't or don't want to pay, it's that we're paying on the wrong side of an outdated economic model.
You are essentially arguing that we should let everyone steal since stealing is easy.
Shadowstats claims that real GDP growth has been negative for every year since 2000 with the exception of 2004. Nearly 2 decades of GDP contraction. Seriously?
It's better known as being completely unreliable. It's the post-truth version of econ stats. It builds its own reality, selectively choosing and omitting facts.
There are a lot of detailed and nuanced articles/posts on the Internet that debunk this site and point out serious flaws. I can't compete with the quality out there, but you must read more before feeling so confident in this site.
(Preemptive Edit: I know they have free college in some European countries, but maybe they have the same problem.)
After a while we said "no, everybody should go to high school and learn civics and math even though they aren't necessary for most specific jobs". Before that, we had the poor starting manual labor or apprenticeships at 12, never learning anything beyond their specific skill, while actually becoming educated and a citizen was reserved only for the rich. We decided to make our workforce and citizenry more thoughtful and educated and improved society as a whole significantly.
It's time to do it again. Our world is much more complicated now, human knowledge has expanded vastly. College education is now the baseline for 'educated person' and that's okay. It's great, even. Thanks to free high school the poor can study math and history. If there were free college, the poor could study economics and philosophy and computer science too.
How many talented people do we lose by shunting the poor (who are, in capitalism, always the vast majority of the population) into non-education job training when they are young because they can't afford to learn about the world?
While the lack of student debt from studying so much sounds all nice, the reality is you get a bunch of 26-28 year olds graduating with Master's degrees and ZERO working experience, bar some internships which may or may not be useful.
There are two sub-problems here: "Free" education (not actually free when you see how much taxes are) allows Europeans to take their sweet time in graduating, so it's common for people to be done with their Bachelor's at 24 or 25, while their American counterparts graduate at 22/23 because of the (financial) pressure to finish on time. A combination of high taxes, encouragement from peers/uni to "study abroad" instead of work and from companies to keep their student status to stay interns, means there's also not much motivation to transition to full-time work.
Make no mistake about education quality here, it's not better than America, in fact it might be worse. The population here complains a lot on their local education quality (though you'll rarely ever hear it on the Internet - see last paragraph on why). A lot of memorization from books for things you'll rarely, if ever, use after graduating, lots of partying and bumming around. "Study abroad semester" is nothing more than a proxy term for "4 month vacation for sex, drinking, parties and roadtrips while the taxpayer takes care of the host country's evil out-of-state tuition (usually US, Canada or Australia)" - see for yourself with those "Erasmus" (exchange) students from Europe doing their exchange program in America.
There's a misconception commonly spread in Germany that staying as a student to work means you pay less taxes - kinda true, but technically it's because you get paid so little, you stay in the non-taxable <9000 EUR/year bracket - so you have people postponing graduation or enrolling in a new university without taking any courses after graduating to keep their student status.
Student/internship wage exploitation is turning into an epidemic because of the large student population that remain students for such a long time paired with legal loopholes that allow many companies to get away with hiring a bunch of cheap students instead of one full-time employee.
I've been living in Europe for a few years and they are not immune to the problems that Americans complain about. They do a good job complaining about America on the Internet while downplaying their own problems and spreading positive vibes (cough propaganda cough) on how Europe is superior/more human/ethical than America though.
Human beings are not studying machines.
Fail a course, and the response is not "re-booting, preparing trial N+1", the response is usually discouragement.
With free courses, good material, always on, and self selected motivated students - MOOCs were supposed to change the way we studied.
They had % completion rates in the single digits.
---
In every education system, there will be an issue.
The american system did very well - as long as there were jobs for high school students.
The fact is that most people are not cut out for college.
AS your (or any) society, starts forcing more and more people into higher education, because it becomes an unoffical pre-req for employment, you end up with many third order problems.
Firstly - testing.
In a class of 5 students, a teacher can test a students knowledge with detail.
With a class of 50 students, a teacher who has to grade submissions cannot afford the time to grade all of them.
This results in a drive for uniformity of answers - the removal of subjective answers from students, in favor of multiple choice.
The other way to enforce uniformity is to have a set of acceptable answers, so any deviation from it can just be identified and removed.
Since more students are now entering higher ed because its a pre-req for a job, they don't care about the subject. They care about the cert.
That means they will cheat, or memmorize the answers, and get on their merry way. Not everyone understand the humor in chemicals, or math. Nor do they care.
This is a process - and once started it grates at the old education system, till all of its higher purpose is eroded, and it streamlines itself to become a certification system. Buy your degree, or memmorize your way to do it.
This brings us to the next problem - not enough work even for degree holders.
The creation of more degree holders doesn't resolve the inherent jobs problem.
It just creates more supply, which drives certificate inflation, and wage stagnation.
Higher degrees are meant to indicate a level of mastery and capability on a topic. After a few cycles of degradataion, it just means that the end product is someone with the capability of passing an exam. Not necessarily that they can create new and novel works in their field.
And all the while, life goes on. These students are usually young human beings, who have varying levels of motivation, maturity and experience - they will go on holidays, take breaks, fail, succeed gloriously, do stupid things and so on.
TLDR: What you have described are epi-phenomena. The issue is jobs. The input cost of production from blue collar labor has been going down over years.
Unless there is meaningful work, for people who were never meant to be ... data scientists, or comp sci engineers - you will always have a problem.
The fix for this can be realized with a tax that funds education; if you need someone with a bachelors, you pay X as a tax. If you need someone with a masters, you pay 2X. A PhD? 4X. If the position doesn't require a degree and you train them, you pay no tax (ie journeyman or apprenticeship).
The problem is the proliferation of degrees, and thinking that hasn't caught up with the new reality (e.g. "getting a degree is good" -> "getting the RIGHT degree is good").
Not sure it gets better in a global world, where the vast majority of high IQ people live outside the west, and intelligent jobs not based on local legislation (like lawyers) can move easily internationally.
But it's hard to see and justify the same need for typical white collar jobs where college is mostly a repetition of high school and employers train you/indoctrinate you with their koolaid anyway once you're done showing them you have a Bachelor's/Master's.
The same applies for comp sci/developers where a lot of the talented ones tend to enjoy writing code or playing around with tools like web APIs or their Android SDK way before they went to college anyway. It seems a lot of people who weren't passionate in the tech field before, but majored in the T part of STEM in college basically forced themselves into it for the money. They end up graduating with the same certificates anyway, but the forced-non-passionate ones use the cert only for getting their foot in the door while still lacking critical thinking and have little interest in improving/enhancing their skill set (See: majority of developers from India).
And don't even get me started on lower-tier majors like communications, history/librarian, arts, basic design, etc where little more than basic hands-on training would be adequate to get people on their feet to do their jobs, versus spending a ton of time and money on 4 to 8 years of 'higher education'
Actually I don't know. If it is then that's certainly a good use of it and I agree that college is not an intrinsic good but ending poverty is. I suppose it's really a two-pronged problem. (1) We want to raise everybody up out of poverty. (2) We want people to be economically mobile, aka even in the case of UBI no-one wants to be a serf on the CEO's plot.
Some view better education as a potential solution because poverty is often directly correlated with the level of education.
"Now the problem poor people have is obvious: they don't have enough money. They can't afford food, housing, or medical care. The simple, obvious, efficient way for the government to help them is to give them money so they can buy these things. So that is not how the government does it."
This is basically the libertarian argument for a basic income: if we're going to have an expensive welfare state, it should be efficient and it should actually accomplish its stated goals.
poverty is often directly correlated with the level of education.
It's even more directly correlated with the level of money.
Self-directed learning is great, but if you've ever been a teacher or a student in a genuinely difficult subject you know autodidactism is VERY limited and works for a tiny few on a tiny number of subjects. Autodidacts generally have an oversimplified understanding of a subject they think they know because they lack the social engagement in the topic and deep understanding that comes from engaging with true expertise. They think they know far more than they do, nearly every single time in my experience interacting with them. Which is not bad, as a teacher this is an excellent place to have your students start because you can quickly disabuse them of this notion and they become eager to learn more.
Even if one didn't require that many employers require exactly that from you in the form of a diploma or some other authority vouching for your claimed expertise and skills.
Corporate taxes basically don't exist in the US. Taxes on the wealthy barely exist compared to the most productive period in US history, when they were 94%. Your question reveals more about its asker than the subject. The whole point of having a country is so that the resources we generate together can be used to help the country, not so that a tiny wealthy oligarchy can siphon off all our resources and leave us to die, then when we ask to live, say "how will you pay for it?" [because I, after stealing your money, obviously won't give any of it back to you]
Nobody is going to say "sure the deficit is increasing even more, but at least the spending is consistently wasteful instead of only wasteful towards rich people".
