When lenders get more stringent about handing out hundreds of thousands of dollars to teenagers, colleges will automatically have to scale back fees in order to get people to apply. No more 5-star hotel rates for shoebox dorms and cafeteria food. No more multi-million dollar pay packages for administrators and sports coaches. No more textbooks which cost $300 per class and need to be "refreshed" every year to prevent reuse. Prioritize lending for degrees which have a higher earning potential and so a higher chance of paying back. Favor students with a better academic record. Enforce a minimum GPA in order to keep getting funded. Issuing loans is a business, so treat it like a business rather than a social service with privatized gains and public losses.
Conversely, the worst thing you can do for the problem is forgive existing loans. What do you then do when universities jack up tuition even more and students run up a tab of another trillion dollars over the next decade and refuse to pay, knowing that the government will bail them out anyways?
Unfortunately, higher education will be completely opposed to this plan, because they get paid upfront, take on zero risk, and can charge whatever they want. (Yet another example of moral hazard. When the loan cannot be repaid the taxpayers foot the bill. Remember, “gains are privatized and losses are nationalized.”) Also as incredibly flawed as the present system is, I wonder if it provides an avenue to higher education to students that would otherwise have no such path. I propose that the universities should be financially responsible (instead of the federal government) when the student cannot repay the loan. That would provide a strong incentive for universities to have A. the student graduate B. have a manageable amount of debt with respect to future income.
With all that said about how drastic it would be, I agree with GP that it is the only real solution, and everything else is either temporary or addresses a symptom instead of the cause.
I suspect there would be widespread opposition to this idea on the grounds that "education is about more than getting a job".
If universities were paid based on students' future earnings, would they still teach liberal arts?
Was that not the original purpose?
School are dropping standardize test in the name of fairness (of the skin color).
First, I completely get how some people feel this way. It's valid.
However, as someone who's almost paid off their own student loan, I would not feel punished by student loan forgiveness. I would be glad to see it. The money I have repaid is already gone; yes, if I could turn back time knowing it would be forgiven, I needn't have repaid it, but if I could turn back time there are lots of investments or choices I would do differently. Student loan forgiveness would take a huge existential burden off an entire generation. It would do so much for mental wellbeing of so many of my peers. I can't think of something I'd rather see. And the truth is, I've almost paid off my loans because I'm doing alright. I'll be fine.
Now, the fact it got this bad to start with...doing student loan forgiveness without also making serious reforms is just promising it will happen again. But that doesn't mean we shouldn't help people who are suffering today.
Forgiving debt isn't about you, it's about unburdening an entire generation of working people so they aren't forever under the thumb of financial institutions. Undoing federal guarantees is also about rightsizing academia, which has bloated itself on these ever growing loan numbers.
Anybody currently holding student debt is required to pay the US government an interest rate exceeding what the Fed gives banks. Student loan interest a tax on the poor levied by the US government. My wife and I have the same degree from NYU: her parents paid her tuition, I took out loans. Over time I pay more for the same degree because of interest.
Furthermore, we already do wealth redistribution via corporate welfare of all varieties. There's countless subsidy programs for all manner of environmental harmful activities that will pass huge financial burden to my kid. A small fix to loan interest isn't much to ask.
If student loans were made dischargeable in bankruptcy, I don't foresee many people with good jobs quitting those jobs just to declare bankruptcy. Furthermore, that feels like the kind of thing a bankruptcy judge would see right through. Rather, those borrowers will continue to service their debt as per their agreement.
It's the people who are unemployed or underemployed that would be in the position to declare bankruptcy, and them doing so will result in the true value of their loans being made apparent to the bondholders. And for the cases somewhere in the middle, it will help with more voluntary restructuring (due to a real BATNA) which won't involve the courts at all.
In the 80s interest rates on long term treasuries were around 10%, so I imagine student loans were much higher. Very expensive to finance high dollar amounts with those kind of rates. Most of the gains in housing have been due to rates trending lower for decades, for example.
But I'd advocate a more radical change towards shorter term vocational focused programs (e.g. coding bootcamps) to college.
Many benefits to that, but shorter also means easier to switch professions if you feel you've made a mistake. Due to duration and financial commitment, college is hard to swallow twice through.
Really just need somebody in a position of power to advocate for this kind of radical change in education, to shift public perception and culture.
It's only useful to talk about interest rates in the 80's in the context of fighting inflation. In other cases, it's a cherry-picked number.
1) We've dumbed down public education to the point that college has become a near necessity just to function in society - or certainly to get a job in a society with over the top education requirements.
2) We would need to provide a "third way" where those skill paths that don't really belong in universities can be met. We'd need to further fix decades of telling our kids that they have to go to university and instead convince them that they will do just as well being welders and plumbers.
3) We'd need to accept as a society that there are worthwhile skill areas that just aren't profitable to higher education. For example, I'd argue society benefits from anthropologists and classicists, but if I'm being realistic I acknowledge that widely and cheaply available student loans make departments like these possible. So it brings up some uncomfortable truths about the society we want to be if loans are only available to those departments and future professions most likely to yield a profit - for the uni or the individual.
but the third way already exists? ie. vocational schools, community colleges, and apprenticeships. it's just that they're not as prestigious as university, and people go with university because they want the best.
Is it bad that some people have high student loan balances? Yes. But is it so bad that it's a crisis? I don't see why.
These loans generally have generous repayment terms, including income-based repayment, forbearances, etc. And the average balance is about $36k, which happens to be less than the average price of a new car sold in the past few years. A college education for the price of a car -- it's not the end of the world. There will always be some people who borrow too much, but the only way to prevent that is to get rid of loans altogether -- getting rid of Federal loans will simply push students towards private loans which are much worse.
What part of this situation is going to cause an economic crisis?
The problem isn't that "some people have made bad choices" it's that we are lending money to people they will not be able to pay back. When people default on their loans what happens to the lenders who are ultimately fed backed banks?
I don't think blanket forgiveness is a good approach partly because of unfairness to those without loan balances and partly because it would drive up the cost of education, but I would like to see some programs to reduce the burden of education expenses that both those who owe money for loans and those who don't would be eligible for.
there are maximums on the total that can be lent under federally organized and subsidized student loan programs. last i checked that was around $60k for an undergraduate degree. they are not the cause of outsized student debt.
> and make the loans dischargeable in bankruptcy
non-dischargability of private student loans (i think was a rider on a budget bill under bush ii) opened the borrowed money spigot which then allowed cost of attendance to accelerate into high six digits territory unchecked.
professional schools like law, medicine and business have typically been powered by these sorts of loans. whether or not fully grown adults should be allowed to make big bets on themselves like that is debatable. (i'd argue that there's something of an information asymmetry. people looking to enter new fields don't know how they work and higher education brands are often seen as highly trustworthy institutions where acceptance is the main hurdle and financing would be fair and reasonable given the acceptance bar has been cleared.)
it is pretty clear, however, that encouraging it in high school seniors for undergraduate degrees is ethically problematic.
But students choose NYU over those schools…
Liberal arts education in universities is a disaster. 10% of the students are actually passionate about it, take it seriously and go on to contribute to the society. Rest of them are rich kids who are out there to party.
We need to push students to think about their career choices before picking them.
A more focused system could be much more economical and societally beneficial.
You can always elect to "broaden" your education on the side, but should not be the baseline path. Most would not be willing to pay for the extracurriculars, if you gave them the choice.
I am sorry people, what the fuck is going on over there, slavery-lite? The bank's job is to access risk, if I want to get a loan that will knee-cap me for the rest of my life I might as well go to the Mob.
Real solutions would be cost control or changing our economy so that useless degrees are no longer a requirement/advantage
I like history, however I also have to eat so I majored in CS and am content with reading books about history. If some rich kid wants to get phd in Classical Greek History or English Civil War era history and not be able to use that degree to get a job, let him. It is no difference than if someone wanted to buy a lambo. The rich people can buy it if they want to show off, but the government shouldn't subsidize poor people to get lambos. Some degrees are luxury goods.
I can probably get the same knowledge as any of those "luxury" degrees by my self via free books or videos online. Them going thru the motions to get the degree, which there are few jobs for, is therefore a luxury and should not be subsidized.
A GPA varies by school, private, public, etc.
kids in disadvantaged situations often have less support & less extra curricular opportunities. Also less opportunity for AP/IB which i think some colleges use as a GPA 'bump'
I did find research that shows the correlation to college GPA and high school GPA is way more than ACT. research says ACT doesn't predict success (defined as college GPA).
But that's part of my point in that GPA in college doesn't mean a ton from my perspective and doesn't factor in a bunch of way more important things like social, leadership, and the connections you can make by being born into it or ideally new opportunities from college that you couldn't get growing up.
in terms of strict future earning there is also research to back this up. The 2nd link says even IQ was only 1-2% bump in $.
I would guess that colleges and banks that use that type of strict minimum standard score would tend to discriminate against bright kids in difficult circumstances. Similar to not lending in D zip codes, which tended to be black (funny how that grade aligns).
https://www.k12dive.com/news/high-school-gpa-5-times-more-li... https://www.forbes.com/sites/theyec/2020/10/19/do-college-gr...
Pricing the risk of an 18 year old trying to get through school is a crap shoot, so banks just won't do it. That effectively shuts out kids from poor backgrounds. I know I wouldn't have been able to go to school without loans, and saving money for a few years wouldn't have been an option because of my area/family.
Current laws were made to solve a problem. Now we know that they create a new problem. Let's try something new rather than reverting back to the old problems.
You could divide it up into 4 equal parts for all I care: if someone has paid back at least 25% of their loan, and get want to declare bankruptcy, they should be allowed to do so, but the taxpayers shouldn't pick up the whole check. The bank should definitely eat some of it, and the university should take a financial hit as well.
I agree, the government should have no place in this whatsoever.
> and make the loans dischargeable in bankruptcy
Toss personal responsibility out the window? No, sorry, someone who wasn't financially prudent and _chose_ to attend a college that was obscenely expensive should be putting in 15 hour days until their loans are paid back in full. Why should society or the banks bear any responsibility here?
So restructuring of the loan program has to be in conjunction with other education and access reforms
I’m a big fan of the proposal that people should be able to pay down student loans pretax just as easily as investing in a 401k.
IMO, structure the payment as a mandatory 5% of your paycheck until it’s paid off.
> In total, then, only 25 of the approximately 1,100 schools across 102 conferences in the NCAA made money on college sports last year
1. Forgive all loans, or 2. Never receive any federal funding ever again
"Arbitrary and Capricious means doing something according to one’s will or caprice and therefore conveying a notion of a tendency to abuse the possession of power. In U.S this is one of the basic standards for review of appeals."
However, the US is approaching a situation where the student loan problem will be an "everyone" problem, not just a borrower - I believe a ~$1.6 Trillion debt burden is a significant enough drag on the economy to be felt by everyone, and will be more painful not only for borrowers who can not pay but also non-borrowers who are indirectly affected.
The money that could have been used to pay for housing, services, etc, will instead go to student loans. If I was a local business owner, I would think about that. If you are homeowner, imagine what the price of you home could be if buyers did not have student loans.
I hope people realize this soon.
I don't personally have a lot of sympathy for people who do a liberal arts degree at NYU though. At least I knew I'd be able to pay this all back with some high degree of certainty.
Visual and Performing Arts 17%
Social Sciences 14%
No surprise then.
But alas, when you come from a normal family, it's hard to justify $50k-$80k/yr tuition - especially if you're not connected, or have backup plans.
Pay cash for school, live modestly - no bailout.
Get a loan for school, use cash for immodest lifestyle - free money!
If college loans are a problem, then the cost of college is the real problem. Let's not use government to selectively reward individuals based on how they paid rather than the price they paid.
I oppose any student loan reform or student loan bailouts for this reason. Do not believe the magician's misdirection, focus on the real issue.
I'm getting real tired of hearing these sob stories about not being able to pay for rent and food and being saddled with a lifetime of debt because you make very poor decisions
I'm sorry these students chose a different path, but there's no way the rest of us should take care of their terrible decisions. If you want to mandate some super low interest rate, then I'm fine with that, but just having the government pay off their loans is extremely offensive.
If these people got into NYU in the first place then they're almost certainly from more well off families. They don't need the help.
Teaching a kid how to be wise with their money is unbelievably valuable. Just teaching kids how to spend and save their money can point them in the right direction when making a huge financial decision for college.
I had the experience of managing, saving, and earning my own money as a kid, and when the time came to go to college, I had the choice between a more expensive school and my local state school. I chose my local state school, got basically the same education, and was able to pay off my debt in a year after graduating. I'm at a good spot professionally so it didn't end up mattering if I went to the more expensive school.
For so many reasons, we cannot do loan forgiveness. This is not a one-time problem with a one-time solution. It would present a huge moral hazard to do it once with a naive expectation it wouldn't need to be done again in a few years. Plus, it amounts to a giveaway to people who are by definition elite, which is political suicide. I get that the people paying student loans feel like it is a crushing debt they can never seem to escape, but college graduates earn significantly more, on average, so they are the least deserving of a handout.
But if we use our educations, we know that popular trends are an exceedingly poor means of understanding the world - it's hard to think of more dangerous, less reliable signals. Popular trends are astrology, witchcraft, conspiracy theories, lynchings, etc.
Thinking about it just a little, probably anyone serious would much rather learn personally from the world's leading experts in the field, with every resource (labs, research libraries, etc.), and among brilliant, hardworking, serious classmates. Or would you be happy learning from just any person, with uneven resources and among people of questionable talent and motivation? In our industry, you want to learn software development from Google Fellows or the local front end shop? If the latter seems sufficient, or if you just want to hang out and take some classes like high school, I agree: Don't waste money on a top school (unless you do it cynically, just for the status and connections). If you're serious, I don't see how there is any question.
I do agree that there's a bit of a mismatch - many people see college as High School Part II, just with harder classes and more personal independence - and colleges seem to cater to that. Not enough students conceive of what college really is, which is understandable given their high school backgrounds and lack of experience in the world: K-12 is all they know and they are experts in it with deeply engrained perspectives and habits after 13 years. The colleges need to help them see that it's a different world, and far wider and greater possibilties. Optimally, IMHO, college should wait for about 5-10 years of real world experience; how can you study the world without ever having experienced it? But as with anything, we have to work with imperfect institutions, systems, and people.
[0] And that fits the general trend of degrading anything that stands in the way of elite power.
In other words, stop going to NYU. It's a bad investment of time or money.
https://www.wsj.com/articles/nyu-college-graduate-parent-stu...
If you're implying that this debt should be cancelled, note that it doesn't go away if the President decides to cancel it. It just gets passed on to the broader tax base in the form of more national debt.
The reason student loans are a problem for the US is that the government keeps on pumping money into higher education but has no incentives for them to control costs. Universities have fairly inelastic supply, so they can swallow up most the money the government pumps in. Cancelling student loans would just exacerbate this.
A country that can afford trillions in tax cuts for the very rich, financial stimulus, and defence spending can easily afford a one-off loan jubilee.
The real reasons this won't happen are political. Loans are a slaver's whip, and financial freedom is a horror that can't be tolerated for those who live below decks and need to be available to work on demand.
Student loans end up in the same place whether they are cancelled or the borrower can't pay back - unpaid and eventually written off.
IIRC the fed puts it at more like 30%. But your point stands.
I like your rhetoric of the liberal POV as actually conservative - "trickle down". But it's not working.
Then expensive programs that don’t have a career path to support them will have trouble getting students needing financial aid.
Are you saying student loan reduces house price? Sound like a win.
I'm a self-taught developer who's thought about maybe attending a school part-time, and they have an awesome makerspace here, so I figured why not try one of their non-matriculated programs?
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Even as a senior developer making a higher end salary for New York City, I found it unaffordable.
It absolutely blew my mind because new grads wouldn't make this kind of money for years out of school.
If someone nearing the later parts of the degree's "ideal career" can't afford it, how is someone supposed to afford it with interest?!
Liberal arts teaches people to deal with the problems that cannot be solved with algorithms or engineering, nor yield to the precise objective methods of science - which is the vast majority of them in the world, including the most critical ones, and even in IT. In fact, algorithms, engineering, and science are all ultimately subordinate to the other issues - ultimately, they are products of human nature. Those are some of the same issues about which many tech leaders like to advertize brazen ignorance, never a sign of good judgment!
And not coincidentally, looking around our society, those are our biggest problems by far - we aren't suffering from a lack of algorithms (and other tech), we have far more than ever. Perhaps if more people at Facebook studied the humanities, they wouldn't make such obvious errors with their truly brilliant technologies - errors bizarrely elementary to people who understand these things. Technology is power, and power is orthogonal to good decisions and good outcomes. I suspect that the fact that the knowledge in humanities and social sciences conflicts with power - again, a bizarrely elementary situation - is why so many powerful people try to ridicule and destroy the reputation of liberal arts. I'm afraid that in IT they have too willing an audience - a population widely ignorant of and often uncomfortable with non-technical issues - and that we and the public have disarmed ourselves of all our protection againt the corruption of power and tyranny (many even celebrate corrupt personal power) - dropping our far superior weapons simply because the powerful pointed them and laughed.
I watched William Shakespeare's play Julius Caesar the other day. The issues of today were addressed brilliantly, and on a level no data could describe or express - one function of art going back to ancient Greece and probably through human history, to hold up a mirror. If more SV engineers would watch it and learn from that and the rest of the humanities, the world would be in much better hands. Heck, just studying Shakespeare would be a start.
...
P.S. In employment, most well-paying jobs are outside IT and completely non-technical (if you can't think of any, you are a bit lost in the IT bubble). And more importantly, life is not all about work; there are more important things - wars aren't fought over job skills. Families aren't workplaces. Freedom in Hong Kong and peace in Ukraine aren't dependant on algorithms. Wages and markets, even, are dependant on politics.
No offense but you're arguing against some thought you have of me in your head not any of my actual stances on liberal arts. My only point is that if you're going to go to an expensive college then the trade off better be worth it otherwise there are far cheaper alternatives (reading is free mostly!) to get that value.
Do you have recommendations for self-study to gain a broader appreciation for the types of problems they can solve and the approaches taken to solve them?
> most well-paying jobs are outside IT and completely non-technical (if you can't think of any, you are a bit lost in the IT bubble)
The ones I can think of typically require graduate / professional degrees or some sort of on the job training program. I don’t know what the employment prospects are for fresh liberal arts grads. I’ve seen some survey data that puts liberal arts grads at below the university average. There are problems with the survey data, but it’s the only information I’ve seen for early career salaries.
The other set of data I’ve seen says mid-career liberal arts graduates out earn everyone else. The issue I take with that data is the liberal arts grads in that data set are more educated in that they go on to earn JD, MBA, MPP, and other professional degrees. The second issue I have with it is the people are older and from a time when undergrad business degrees weren’t common. I have seen some arguments made that business degrees took up a lot of liberal arts students when they became more common at the undergrad level.
In the interest of gaining a more comprehensive understanding, it would be great to know what jobs I’m blind to.
Thanks!
Relief for NYU students though seems pretty far-fetched.
> a solid, practical job.
ffs
Edit to be a bit less flippant: As a holder of a “solid, practical job” for over a decade I definitely feel there should be more to life and don’t fault those who aspired for more than just practicality at the age of 17/18.
Definitely a worthwhile policy to pursue.
The NYU Tisch School of the Arts is widely considered one of the best film schools in the world. I'm sure it graduates plenty of starving artists, but certainly also a disproportionate number go on to be incredibly successful compared to the same degree from your standard community college. It should still be less expensive.
Take a look at some of the alumni: https://en.wikipedia.org/wiki/List_of_NYU_Tisch_School_of_th...
For several years the press has reported "government bailout for student loans is coming" and you add to this historically low interest rates. And then we are surprised when people take out lots of student loans and defer repaying them as long as possible. And now the press uses that as evidence of why we need a bailout.
Do you have evidence of this? Most students I know who have borrowed are struggling. Many can't afford books, housing, food. People are living on ramen.
> free money
Loans aren't free money. Do we say the same about loans to wealthy people and corporations?
I think there is often (I don't know about you) a bias against students or the poor as inherently untrustworthy or just unworthy, and therefore credit to them will just be used for bad things. That is, the issue is the preconceived notions, not the economics or policy.
> If college loans are a problem, then the cost of college is the real problem. Let's not use government to selectively reward individuals based on how they paid rather than the price they paid.
Education is essential to the general welfare. We can't wait for the perfect system and lose another generation of talent to waste (not developing) or bankruptcy; we need to address that is happening now.
Many people that didn't borrow money are also struggling. No reason to make the existence of a loan a pre-requisite to receive a bailout. Why isn't the fact that you paid for college sufficient? Why is the conversation only about debt?
> Loans aren't free money
Yes, bailing out student loans is free money. That is the conversation we are having.
And considering only bailing out student loans without a provision for reimbursing students with similar backgrounds that didnt finance college or did but paid off loans early is incredulous. There is no reason the solution to the price of college is to selectively bail out people that choose not to repay their student loans and ignore everyone else.
Bailouts just look like rewarding poor decisions...
We need to stop literally underwriting (as taxpayers) bad decisions. And private banks that do underwrite such decisions need to face the possibility of bankruptcy in some form (maybe not quick and easy bankruptcy after 2 years, but something).
Who is responsible for drinking the poison?
I agree that we don't prepare high school kids for real life. We're too busy focusing on their feelings and building a generation of weak minded fools that will never be fully functional adults.
I also agree that we need government out of the edu loan business. It is a poison pill and just enriches the self-serving class that operates these schools.
The greatest mistake was allowing them to lobby and sell the American people the BS that a college degree is required to live a good life. There are endless examples of that not being the case.
People are more thirsty than ever for college.
This is one of the things I got most wrong about the Pandemic (the other being they wouldn't dare attempt a third lockdown).
[edit] I guess also the explosion of the chinese upper middle class should also be a big factor.
While I agree, there is a clear benefit to the student, and to society (through the student's productivity), in learning from the best teachers with better resources, and in a community of the most brilliant people (which tend to become very expensive). I want public health professionals that come up with brilliant solutions to our problems. Anyone in any profession I think would choose that avenue of skill acquisition over the discount option. People in finance go to NY, people in IT go to SV, etc., for good reasons.
That said, it is a matter of degree. NYU seems to be near one pole of extra cost. If you are in California, for example, there are at least two public universities that are considered better than NYU.
That advice doesn’t seem to have percolated through to the hoi polloi yet though.
(And the bigger questionn: people who aren't on HN are hoi polloi? Wow. What does that make us? And it's so easy to get an HN account ...)
Sounds like a very low ROI degree.
If you're interested in getting an advanced education in the healthcare field, you might as well either get an MD (to make the advanced degree worth it) or go to a less expensive city and become a PA, DPT, or OT at a public university.
Out of all of the options in healthcare, MPH at NYU seems like the most excessive waste of money.
Many graduates from the top MPH programs go onto leadership and management positions - for these programs, my experience is that there is a significant focus on the leadership aspect layered with specialist knowledge in policy, epidemiology, biostatistics, health care administration, etc. Many MPH programs will offer subspecialties like that - so you get, for example, an MPH in biostatistics or epi rather than a generic MPH without a focus.
Pay can vary greatly. Some MPH graduates will work in non-profits and others will wind-up running clinical trials at big pharma. You can imagine the kind of salary range those very different job types cover.
I would be extremely cautious about making a ROI judgement of the MPH. I know MPH grads who have worked as direct advisors to US senators, MPH grads who write biostats software, and MPH grads who help run rape crisis centers in underserved communities. There are also combined programs for MD/MPH linking up a school of medicine at a university with its MPH program. Those grads are often looking to lead research efforts or county-level health departments.
More generally speaking, I think you aren't wrong about NYU being an "excessive waste of money" but I don't think that has much to do with the degree in question. I have met too many successful people with "low ROI" degrees just in the software industry to feel confident about judging these programs in general. Which, of course, is very different than saying it is a good idea to rack up $157,000 in debt (like the student FTA) for any program from any school.
Prospective students, their families, and the schools all responded rationally and predictably. Funding either needs to remain consistent with inflation or slowly phased out.
Good schools do worry about repayment of applicants, but not all schools are good or in a financial position to worry about that.
What most schools are trying to do right now is rapidly expand their endowments with the hope to be able to consistently and sustainably offer tuition discounts and aid to students. The schools with the largest endowments are already essentially free if your family makes below a certain threshold, however this is only a handful of elite schools. For most schools they have what is called a “discount rate.” That is, the rate of students that receive a discount on the sticker price of tuition. These days most families receive a discount to most schools, which is a pretty dramatic from even 10 years ago when most students paid the full tuition price.
Agreed.
Many working class 18 year olds will be punished for making what they thought was a pragmatic choice.
You might be fine right now, but what about all the people who scrimped and saved for years to pay off their student loans. Are their efforts for nothing?
So would having you pay my mortgage.
But I don't see this being a big part of current public discussion on education. So I doubt the idea would really get any traction without e.g. a candidate in a presidential election pushing for it.
Similar to Yang and Basic Income. Even though that idea is more far fetched/challenging to implement, he was able to give it a lot of public mindshare. I believe if somebody did the same for streamlining college education to make it more economical to students it would be a broadly popular position. That lights the match for the grassroots movement to kick off and grow.
So when people talk about how easy it was for the last generation to buy a house or pay for college, part of that was due to higher rates suppressing prices.
The lower rates go, the higher prices go, and the ability to live a debt free life becomes diminished. Some say it's ok because the lower rates offset the increase in price.
It is a bit unfair to go to a teenager, set them up with debts in exchange for something that doesn't measurably impact their earnings and turn them loose. The reason they are even in education is because their brain isn't fully formed yet and they have no practical experience. Relying on their judgement of what is a good long-term idea is a bad move.
Absolutely, but that's not what was proposed above. This quote suggests the usual model in which the government pays for education (which I support, most nations use, and even the US uses for K-12), not the income dependent repayment model proposed by julienchastang.
* All your friends are leaving to amazing places. If you don't go you'll be left behind.
* Going to college is a high class move. Even if you're poor, people will still probably think you are high class if you sign up.
* Everyone says you make more money.
* People won't hire you unless you have a degree.
* If you sign here, you get awesome friends, the best dating opportunities possible on Earth, and we'll show you your true path in life.
* Nobody will ever criticize this decision even if it's foolish. No matter how foolish, the worst case scenario still shields you from any consequences for five years.
* Five years is a long time. Maybe you'll marry someone with money that you meet here. And politicians keep talking about free college, so maybe you won't have to pay it back.
An 18 year old would have to be really mature and self-confident not to sign up. Maybe a wise 18 year old would choose a cheap college and a good major, but very few will resist it entirely.
Is this actually true? ie. are they seriously looking for welders that know how to weld and have a college degree? I doubt that's the case. My impression is that all of the "you need a college degree even though it's not really needed" kind of jobs are entry level service jobs, or jobs that otherwise have a flood of applicants. College degree is used as a filter in those situations just to whittle down the huge applicant pool, not because the applicants "simply aren't getting enough educational foundation in high school anymore".
https://www.nerdwallet.com/article/loans/student-loans/how-m...
I think you are thinking about the percent of Americans with a bachelor's degree (32.1%).
[0] https://www.investopedia.com/student-loan-debt-2019-statisti...
The joke here is believing that college graduates are the slaves. What about the 2/3 of the population who have no degree and will earn significantly less through their life, who struggle from paycheck to paycheck and can't even look forward to eventually paying off a student loan?
Comparing degree-holders who willingly took on loans to slaves, and with such wildly inflammatory rhetoric, is absurdly (and typically) out of touch.
Degree holders are the managerial class. It is essentially a prerequisite to be part of the elite class. Those below the decks in our society are those who never had a chance at higher education. The exact same people who would be paying more taxes to pay for a hand out to the professional class if loans were forgiven.
I wonder who is out of touch.
"besides being able to borrow on personal security, an individual might sell himself or a family member into slavery...Slavery was the standard penalty for failure to pay off a debt"
It's not like it's physically impossible to provide education at $10k/year. I live in Europe, I went to a normal university, and I think the "market rate" for non-EU students was something like that.
If you capped it to $10k/year, are you saying there simply wouldn't be anyone around to give you an education at that price in the whole country?
For example, this is the tuition and expenses for CSU East Bay, one of the less expensive public universities in California: https://www.csueastbay.edu/financialaid/prospective-students...
A tuition of about $7k balloons to over $20k when the cost of books, housing, etc. are added.
I remember talking to some exchange students from Greece. There, college is 100% free (no debt). This is guaranteed by their constitution, and the system simply has to adapt. For example, nearly everyone lives with their parents, books are free because they have to be, etc.
More broadly, all of these costs seem like they could be reduced, if you had the proper incentives.
"Food and housing" comes to $900/month, living with parents. Are they suggesting students are eating $900 worth of food ($30/day!), or does this include some type of rent paid to their parents as well? I spend about $300/month on food, and I'm not even that stingy. Where does the extra $600 go?
The average high school in my country spends $4/student/day on providing school lunches. This includes labour costs - we're talking basically catering. Naively extrapolating this, we get $12/day ($360/month) for three proper meals a day.
For that matter, why are the dorms so expensive? Isn't it their land? Why don't they just lower the rents? $1200 food+rent implies $900 rent, which is obviously way more than you need to maintain a dorm room.
If they're living on campus, why do they need to spend $135/month on transportation anyway? Isn't the entire point that the place they need to be is right there? A bicycle works out to $50 one-time cost, plus let's say $10/year in repairs.
What's the $1000/year on books get them? Why can't the university simply use cheaper books? Wikipedia tells us: "East Bay has a student body of almost 15,000". That's $15 million per year. For that much money, couldn't you just buy up the rights for all the books you needed and put them into the public domain?
I just don't understand why you couldn't simply make the schools more effective.
If very few have a degree, companies will adjust and people will end up in similar careers without the massive time/money investment of college.
I'm saying that it is a smart move (if you are serious about learning). It benefits the students and society on an essential level.
> there are far cheaper alternatives (reading is free mostly!) to get that value.
It's not the same value: Learning from the world's leading experts, with all the resources you need (reading, just one tool, is certainly not free - try downloading some papers or buying a library of scholarly books), among smart, motivated, hard-working people, is invaluable. Do you want to learn software development from Google Fellows at Google, or from the local front end shop dev? What you get at top universities are Google Fellows in their fields. Do you want to study painting with world-class painters or the person at the mall? Someone I know is in undergrad at one of the top 10 schools in the world, and in every class my friend studies with someone who literally wrote the book in their field, whom personally guides their learning, lectures on it, and whom my friend personally and regularly meets with as a matter of course. My friend is serious about learning these things - can you imagine something more valuable?
You should check with your friend how much debt they're in. I'd imagine it's 0 and if that's the case they made a good call.
You'll benefit no one with your education while scraping by under the thumb of a corp because you can't afford to stop working as a debt slave. That's the reality most people face which is something you seem to ignore.
1. Leaders (executives and management) at top companies almost always come from these top universities you rave about, and many with degrees in Liberal Arts. Yet they still always put profit > the ideals you just spent three paragraphs praising.
2. ALL students in the US receive a Liberal Arts education via general education requirements. On the contrary, only a select few take anything over remedial math/science.
This also puts “leading experts” on a far higher pedestal than deserved. Take Robert Reich, a famous History professor at Berkeley. Despite raving about affordable housing and equality in courses, on Twitter, etc., he actively votes against such legislation [0]. Did his liberal arts education at Dartmouth, Oxford, and Yale fail him?
0: https://www.econjobrumors.com/topic/robert-reich-tries-to-st...
I don't think I mentioned any ideals. Also, your disagreement with their decisions doesn't make them wrong or, more to the point, unaided by their educations.
> Take Robert Reich, a famous History professor ...
You personally disagree with someone who is a leader in liberal arts (and on the level of one among thousands), therefore all liberal arts education for everyone is invalidated? Your support is an (anonymous?) post in a forum on Economics Job Market Rumors? If you are accurate, one leader (of thousands) in liberal arts is flawed, so their entire education is a waste and all of liberal arts is without value? (What about you and me - are we flawed? Is everything we've learned therefore a waste? What about every other commenter and OP author on HN?)
Disagreement is part of liberal arts - it's essential, defining, for liberal arts to contain multiple contrary opinions simultaneously. Human flaws are part of liberal arts - it's impossible for it to work otherwise, as with any human endeavor. But claims without factual and rational basis are excluded. Also, Reich is an economist and professor of public policy.
Which is why I think forgiveness should be an option ~7 years after leaving school. You still have to convince a bankruptcy judge that you can’t pay but wrecking your finances at 30+ would discourage most from going down that path.
It costs money to forgive loans, which either could have been spent elsewhere or must be raised in new taxes.
The analogy is if you build a house with plumbing, and your neighbor builds without, then the city uses tax money from you to pay for their upgrade.
Those with just Bachelors degrees still make almost twice as much as those without (average 38k vs 64k). And their median net worth is more than 2x those with just HS diplomas (74k vs 198k). Arguing that the poor should help bail out those more wealthy than them is extremely regressive any way you slice it.
EDIT: To those saying 'why not just tax the rich more': That comes at the cost of (again) more equal and broad uses for that money - that doesn't make a regressive policy less regressive it just pushes the can down the road. We're talking about a 1.7T bailout for just 12% of Americans with far higher than average earning potential.
Well, yeah, liberal and progressive positions are generally opposed.
FWIW I actually think you make a good point, but it's ignoring the fact that the ultra-rich are grossly (I'd argue an order of magnitude) undertaxed right now.
Couldn't agree more on that point. I don't however think earmarking 1.7T for a very select 12% of Americans that have a far higher than average earning potential fixes the problem with the policy though. That 1.7T could be used in far broader more equal ways.
You can have the rich pay for undergraduate degrees instead of the poor - as you have conveniently assumed. A rather hilarious assumption given that tax slabs for the poor are the lowest.
Pitting one class of poor/middle class against the other is a fairly well known conservative tactic. Intraclass "warfare" is what conservatives want to focus on, instead of the big elephant- interclass "warfare".
If you are going to focus on other people getting windfall they don't deserve, there are much better places to focus your energies - I am sure anyone here has a few candidates, but in UK we had government award multimillion dollar contracts for COVID supplies to companies started a month ago, who copied their terms and conditions from a pizza delivery company.
And consider this other view: It's not a perfect analogy but imagine that the federal government decides to give $10k to every white man. Of course everyone would scream that was racist and sexist. But nobody is being punished by giving a reward to one race and gender and not the others. There are obviously issues with the analogy, but it might at least show another angle of why some people don't want others to get loan forgiveness when they get nothing.
This is such an incredibly lazy answer. Why reply if you're not going to even attempt to interact with the points put forward?
The owners of corporations already pay more taxes than most of the so-called "working class." In fact, if you earned over $118,000 in a year, you pay 70% of the tax burden in a country where better than half of the adult residents pay no income tax at all.
Owners of any corporations pay a variety of taxes, some paid regardless if you turned a profit, such as property tax and employment tax. They also pay state/fed income tax on profits, regulatory fees, and a host of other liabilities that get paid to the state.
To wax on "corporate welfare" is to say you really don't know how it all works.
Need to think through the exact mechanism, but at least public schools should operate this way. Once college has skin in the game, education would change so fast for the better your head would spin
Not sure that is the problem of universities though. Look at computer science, I wish I would be able to apply my bsc/msc education in my job but that simply is not the case.
Sure, university taught me how to think in a different way but the actual course work is not so helpful. I would not fault the university for this.
It sounds like what you want is an apprenticeship-system and not a university.
The answer to that question should motivate the shape of the education system. The answer is implied, of course, but pretty obvious people go into debt for hopes of better employment opportunities.
Another reason that loan forgiveness would be unfair. And what about people who learned a trade instead of paying for an overpriced college? Or poor people who didn't go to college because their underfunded neighborhood high school didn't prepare them for college?
America has already had too many bailouts to save the privileged from the consequences of their own decisions.
You're helping to make GP's point. You are saying that those who owe money are more important to this conversation without knowing anything else about them.
People with massive, life-ruining debt are more important for us to help than people who graduated debt-free or who got jobs/careers that let them pay off their debt.
If you can divorce yourself from a kindergarten-esque "fairness" complaint, it's pretty obvious that yeah, we should (unfairly!) help people who are being destroyed by debt.
This is a very crabs in a bucket mentality. From the perspective of a society we should ask: what is the effect of removing this debt burden? Many people are repaying loans at a very high monthly amount. My loans are currently >400/month. If that debt "poofed" I'd be spending that in my local economy (instead of going to a bank to then issue another student loan for). Much better for the economy.
The plans are to forgive 10K of debt per person. There is a crazy suggestion of forgiving 50K of debt per person but let's just ignore that (it costs more than a trillion).
People who owe 100K are still fucked. They did go to better schools, though, so they have better jobs. Many also have good connections, because they have an easier time networking with their connections.
Wanna know who is more fucked?
Many people who didn't take loans and went to no-name schools and are working low paying jobs and have few social connections.
If we give money to either group it's a handout. For these politicians to pretend it's not a handout because it's forgiving a loan is disingenuous.
Elon Musk isn't wrong to poke fun at Elizabeth Warren. Let's just hope it doesn't result in another Trumpist president.
If they went to school, got a degree, and a job, then they got what was promised and need to pay their commitments.
Society is set up in such a way that people are trained to:
1. Respect authority figures
2. Follow what your parents tell you to do
3. Your education is the most important thing in your life (between 10 and 30 yo)
All of these things lead to situations where people are more than willing to take out massive loans because everyone in their life tells them "it will be ok!" and "don't think about the money right now, it's about the experience" which is one of the most disgusting ideas that I think is perpetuated. Basically when your parents, your teachers, your politicians, your peers, etc are doing something it's hard to think "that's a bad idea".
Graduating high school, it's incredibly clear that studying finance or engineering will give you a higher income than studying most liberal arts majors. That's so universally known in our culture — and I say this as someone from a terrible neighborhood where nobody went to college — that it's almost absurd.
Nobody signs up for a liberal arts major, stays through it throughout college (even seeing their low to zero internship pay compared to high pay for other majors their peers are in), and then when they get out, says "wow, I'm shocked!".
Why not? We expect homeopathic medications to include "Not an FDA approved treatment for X" on the label.
Why should the government give you money to pay off your debt when for less administrative burden they could drop money out of a plane instead? Both would help the economy the same, so you haven't made it clear why people with student loans helping the economy and no one else is the antidote we've been missing.
Well, for one, I don't think the recovery rate of money thrown out of a plane will be too high.
> Both would help the economy the same, so you haven't made it clear why people with student loans helping the economy and no one else is the antidote we've been missing.
I'm not against distribution of money to make sure everyone has the means to live a survivable lifestyle.
We've actually been giving 'free money' to rich people for 20 years by this point, it's called quantitative easing, it gave us rising house prices and securities, and 97% of that money never made it into the real economy. So we can conclusively say that does not improve the economy.
Stands to reason the free money experiment should be tried on the opposite end of the scale.
I haven't read any studies done on the effect that this could have but if it was: 1) researched and 2) financially doable (results in net gain) then yes I would. If as a society we can find that doing X will improve the quality of life for all Americans for very little financial cost to us and only a long term positive impact, I don't see why anyone would say no to that?
> Many of the arguments you gave would also apply to credit cards, if not more (eg. 20+% APR compared to 7% for PLUS loans).
Just to note I have ~20k of loans @ 12.625% APR. 7% is what government backed loans are like. Not at all what a majority of private loans are like. Comparing credit card companies to private student loans is more fair.
I’m talking about liberal and progressive as modern American political factions (which in major partisan terms, though the factions aren't tightly bound to a major party, map roughly to the right and left wings of the Democratic Party.)
I don't think this 'zero sum' view is helpful, but what I have a real problem with is when people only apply their 'beliefs' selectively - you have to logically consistent.
If this is your view, surely you should be More offended about extremely rich people paying zero tax, getting government bailouts when they mess up, than you should be concerned about poor people being slightly less poor? Is this actually a view you believe in, or is it just an excuse to keep poor people down?
This is like 'pro life' people not supporting healthcare, or 'freedom' libertarians supporting civil forfeiture and surveillance or 'personal responsibility' people making up excuses for why executives shouldn't be charged after they make a decision that kills several hundred people.
"elevating the people that have behaved less responsibly"
We don't actually know that, maybe person A was on track to pay off his student debt, and then someone in his family had cancer or got hit by a bus. Person A might actually be more responsible, being able to solely focus on your career is a privilege that some of us don't get
Are there studies showing that student loan forgiveness would result it better "a long term positive impact" compared to the alternatives? eg. giving everyone a stimulus check, regardless of whether they have student loans or not, or giving everyone earning under $x a stimulus check?
Though we technically expect securities to include "Not guaranteed to make you rich," it's in small text nobody ever reads. I doubt a high school student would be reading it and rethinking their major...
If you're American, you already know that liberal arts majors don't go to college thinking "people are going to pay me so much money for this degree in gender studies."
Let's be aware of our bias toward our own knowledge and work.
Knowledge of humanities and social sciences is not a luxury; it addresses almost all the critical issues in society - freedom, peace, war, prosperity, politics, economics, human nature through which it all happens, communication, conflict, power, democracy, capitalism, communism, etc. etc. All things more important than whatever most of us do.
I reject the argument that taking 4 years of courses on "communication, conflict, power, democracy, capitalism, communism, etc" is "more important" than "whatever most of us do", and I reject it for a bunch of reasons, not just the obvious one that taking a class on power is not the same thing is engaging with power.
Are their decisions good ones? No, not really. But at 18 I can’t really fault someone for not understanding the decades long implications of interest payments and job market dynamics.
Funny thing I’ve noticed. 18 year olds are either fully developed adults with full complete knowledge of their choices and the nuances around them, or complete idiots who wouldn’t be trusted to to make big decisions depending on what issues you’re discussing.
Yalies know this is just something upper class people say but don’t mean. Half the kids in this audience are now in banking, tech, or management consulting. Because of course they are—doing that was in their 10 year plan that they sketched out at 15. It’s the proles that are duped by the message and get themselves into trouble.
I agree, I just have no interest in subsidizing it.
But there are always second order effects and perverse incentives to any system. I agree if it were enacted as I stated that outcome could be something along lines of what you're suggesting.
Of course, we already have that now with the university of Phoenix type of schools.
I meant moreso aligning incentive of school and student. But exact mechanism of implementation would need to be refined to avoid any obvious perverse incentives
But it sounds like you want universities to change
It shouldn't be possible to take out so much debt on such bad terms that you fuck up your life. Bankruptcy should be available for these cases, and lenders should be responsible for checking that an applicant is capable of paying back a loan.
And you're being persuaded by them. Successfully. While still being convinced that the status quo isn't just the best of all possible worlds, everything you believe about it is your own idea.
Addressing some details, in case the paragraph above misunderstands you, thought I think these are a bit too much in the weeds:
> A post-secondary 4-year education in the humanities is a luxury almost by definition, since it is not available to a substantial portion of the population (including many who attend 4-year college!)
Availability doesn't define luxury. When food is unavailable to most of the population, it still isn't a luxury. But we're not here to define words; I think the core issue is that, IMHO, such issues in the liberal arts are critical to the individuals and to our society.
> 4 years of courses on "communication, conflict, power, democracy, capitalism, communism, etc"
Reducing essential knowledge on these issues to just "courses" is like reducing knowledge about food supply to 'courses'. It's not 'courses', obviously, any more than nuclear weapons nonproliferation agreements are 'paper'. The idea that you know without studying is hard to fathom (beyond the popular trend) - how does the knowledge get into your head? Should we all rediscover through personal experience the most brilliant in human history have discoverd over billions of lifetimes? It seems a bit unlikley and inefficient.
I don't think you mean to belittle the skilled trades (which, ultimately, the industry most of us work in is destined to join) the way you're doing here. But it might be worth reflecting on how what you're saying might be coming across.
I'm in the same trade, if that helps. What I do isn't the most important thing in the world. It's fine. I do my best, which is what I can do; that is my standard and it makes me very satisfied and gives me joy.
(I once read someone call that point of view the core of the Enlightenment, the discovery by Copernicus that we are not the center of the universe, implying that 'I' am not the center either.)
> The premise of your response is that these challenges we face in our culture and politics are best addressed by a 4-year liberal arts education.
> it implies that only a subset of people who hold degrees are qualified to engage with society.
It can be matters of degree, not extreme claims. Liberal arts can be significant help for some things in life without being required. Analogously, certain IT education can be significant help, but not required. (Corporate HR being the exception, absurd enough to require them!) And yes, there are people who are judgmental and 'require' them to pass muster in their eyes; I completely reject their point of view; that's not what I'm advocating.
Maybe this is closer to your concern: Does it suck to be at a 'disadvantage' to someone who has studied those things for four years in college? I guess it could be seen that way, but it's not an insult (and it doesn't define an outcome, just an input - people learn the same things without the advantage of liberal arts educations, they are just at a disadvantage in time and resources). We all have advantages and disadvantages; we can't know even a fraction of everything; we all make choices and take forks in life. Some learn computer science, some history; if they are both serious and work at it for four years, they will of course each know much more about their chosen field of study than the other person does. How could they not? The same goes for going to college and doing something else; each has a unique set of advantages and disadvantages, better for some things (for that unique person in that unique situation), and yes, worse for others.
Let's not kid ourselves that people don't miss something by not studying liberal arts; let's not respond with sour grapes - it cuts us off from the everything outside our experience. It's life, we each do something else than X for almost all X, and we are each on different paths - must yours/mine be the best, most important X for the entire universe of life? For one thing, we can still learn and there are incredible things to learn. One upside to 'we can't know even a fraction of everything' - and forgoing sour grapes - is that we'll never run out of new, incredible learning when we want it. With online learning (thank you IT people), we could take a liberal arts class now.
At any rate: attendance at a 4-year university immediately after high school to pursue a liberal arts degree? A luxury, plain and simple.