Actually, according to the Wall Street Journal (http://online.wsj.com/article/SB1000087239639044424690457757...), the upper-middle class has seen the sharpest jump in student debt since 2007. Households with less income have an easier time finding student aid and those in the upper class can more readily afford the rising costs. This puts the upper-middle class in a kind of purgatory for financial aid.

I think it's worth pointing out that these businesses are aware that they may have a problem, and have stepped up their political giving massively to protect their interests. Mostly, to Republican candidates, and especially to Mitt Romney. [1]

[1] http://www.nytimes.com/2012/01/15/us/politics/mitt-romney-of...

This could be achieved by switching government subsidies from loan guarantees to payment-share plans by which the government pays a portion of each payment but ceases to do so in case of default. These loans should be absolvable in bankruptcy - an immature decision made in one's adolescence shouldn't be a lifelong burden. Thus, the credit risk is retained by the lender while financial impact lessened on the student.

Unpopular as measures radically increasing costs on liberal arts majors may be, the present situation is a clear example of artificially locked markets producing inefficient outcomes.

Isaac Asimov articulated this very well:

Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge'.

While I won't claim that every single administrative dollar has been well spent, between 1993 and 2007, this would cover things like on campus tech support and IT staff and equipment (email, online registration, transcripts, etc), more broadly available and diverse student support (counseling, LGBT support organizations, ombudsmen, etc), and presumably tutoring services that help the growing fraction of the population in college thrive, rather than simply prep-school graduates. Again, I'm not going to claim that 4x increase relative to enrollment is the right amount, but compared to universities 20 years ago, they are providing more services.

*Edit - Ok, the tuition when I first went to college was $20k a year. I had a $14k scholarship, so it was a manageable $6k a year. Now the tuition, 5 years later, is over $27k. That is a 35% increase at about 7% a year. Pretty ridiculous if you ask me, especially for a state school which should be affordable.

I know there is a place for private educational endeavors in our society. But if you really want to fix education for everyone, you've got to focus on public education. Yes, it's a big ugly political seemingly unchangeable mess. But it's the only system that reaches everyone.

Every generation has a revolution waiting to happen. Improving public education might be the next significant social revolution in the US, but it won't be led by for-profit education companies.

As far as I can tell, much of the (debt) problem is caused by bad decision making by clueless parents and teenagers who think they need to send their kid to an Ivy League or think that their child somehow needs to spend 40k a year to go to an in-state school.

Let's be honest. The cost of education is going up, yes. But getting into debt is also bad and a poor choice. Yet nobody is responsible enough to consider it when making college choices, just to whine about it after the fact.

Students do not need to own a television or get cable or even have a video game console. Students probably don't even need a car, definitely don't need smartphones, and at least where I went to school, could probably do just fine without owning a computer, too. Likewise, instead of getting into debt they could go to cheaper community colleges or a whole slew of things.

Instead many college students, regardless of economic background, seem to have smartphones, Macs, and 42" TVs.

When I see someone complaining about college debt, I see somebody who went to an overly expensive school, without a plan, and did whatever they felt like without ever stopping to consider first if they could make a living when they were done. I see a child.

As someone who looked at the big picture when making college decisions and now has no college debt two years out of school, I have no sympathy.

I turned down the University of Chicago (among others) so that I wouldn't be in debt and to hear all the whining about it from entitled feeling kids who didn't make smart decisions makes me angry.

Now I'll agree that you may need to take on some debt to complete college. But if you're taking on more than the cost of a new car, you're doing it wrong.

Don't get me wrong, either. I concur that colleges waste lots of money.

While I was there, only about 1 in 5 students actually had a full financial aid package. Most of them didn't fill out FAFSAs, or didn't even use subsidized stafford loans - they had direct bank loans from their parents for upwards of $60k a year.

In my opinion, the people of the 22ed century will look back and think we were hilariously dumb. We have instantanous communication of ideas and knowledge via the internet, and our internet speeds are only getting better. If you want to learn something, it is easier than ever to find a community of fellow learners for a subject, find tons of free learning materials on that subject, and buckle down without the financial obligations and classroom environment (which doesn't work for everyone, and you inherently have less engagement there because one teacher can not effectively engage with even just 10 people all the time).

Like the article said, the degree is the problem. But I don't think thats the real problem - moreso the problem than that is the inability for individuals to have ideas and persue them in business ventures, because upstart small business will demand much less degree knowledge from employees (even if they are very skilled) since they draw from a local pool.

You get the degree because you will be applying to massive companies with huge HR that don't want to try to interpret you as a person but want to get a quick diagnostic of if you are capable or not from a one word answer to a 3 word question: Got a degree? If hiring was more based on individual accomplishment and demonstratable knowledge rather than paper, we would all be better off for it by getting off the degree treadmill.

State universities at the very least should be tuition free so as to not completely fuck over students from dysfunctional families who won't help/families that can't afford it. Of course, it would also be wiser to raise entrance standards and somehow figure out how to stop the ridiculous GPA inflation that goes on in the liberal arts fields. STEM still pays relatively well, but that's because our standards haven't dropped; unfortunately, many requirements for maintaining a scholarship fail to take choice of major into account when setting a minimum GPA.

Anyone can get a liberal arts degree if they have enough (or can borrow enough) money, which is why it means shit nowadays as a measure of IQ.

EDIT: What I meant by certification was more abstract. On a resume, saying you completed tutelage with an individual or a group (and have achievements to go along with them) is pretty similar to completing certification that implies knowledge attained prior to completing the certification...the disfunctional nature of certifications, degrees, and mentor-based systems notwithstanding. People market themselves with this stuff, no matter what precisely it is, or where they got it from.

Maybe we need to start outsourcing our education to China and India. We can send our kids to India for their undergraduate degrees and then they can come back here to get their post-graduate degrees.

Move towards knowledge certification instead of a degree that states you completed your degree. Bar Exam, MCSE, Board Certifications, etc. If you have the drive and capacity to learn without attending college then you should be rewarded only having to take a certification exam.

Once enough schools go belly up people can just start listing those institutions on their resumes. Since the school is close there won't be an easy way to verify. (Just kidding of course)

I've always wondered two things about this.

1. How is that even legal? I thought the whole point of bankruptcy was to raise a big flag that says "I can no longer pay my debts", and they go away. Why is student loan debt different?

2. Why do American students tolerate it? Look what happened in Quebec when they tried to raise tuition even a little.

Schools are lousy and degrade basic skills, as well as degrading deep cultural literacy and history. Idiots are held as heros. College costs are skyrocketing and dysfunctional buildings are being built by the colleges. The list of problems could go on... reams of paper have been spent documenting them.

Yes, there's a problem. I argue the essence of the problem is the deification of money.

Thanks, Congress!

http://studentaid.ed.gov/repay-loans/forgiveness-cancellatio...

In a normal market, the customers have the power. In a market where the consumers don't really pay or think they don't, they have no leverage.

And students are just passing through, are quite busy, so they aren't exactly lobbying Congress. But rest assured everyone else involved is.

We have a global population steadily lurching toward 8 billion. And, the richest of us seem to need less and less. And, that's coupled with aggressively commoditized global services industry that is providing more and more value for less and less cost.

Seems like major equilibrium shift waiting to happen.

Edit: serious question.

http://www.opensecrets.org/industries/indus.php?ind=W04

Also, purely coincidentally, non-profits are exempt from the "gainful employment" rule and all the other new rules being levied against competitors to the non-profit education sector.

Weird. It's almost as if the politicians don't care much when their cronies rip students off, only when other guys do it.

It seems that most of my engineering friends have a very existentialist perspective on it: the person is entirely responsible for the actions they take. If they got themselves into debt, then they should figure out how to get themselves out of debt.

That's valid. The student wasn't forced to go study art history, but they were lied to by a lot of people, including their parents and society, which are two difficult groups to ignore. I think it's good that we're airing out some of college's dirty laundry--it needs to be known that if you go study art history, there may be a greater than 50% chance that you will be jobless or working as a waiter or waitress. I had this debate with someone last weekend where I made the same argument, and she got very defensive. It's hard to get specific and criticize certain degrees without being offensive to somebody because people feel they need to defend their choices. I later found out she studied art history, she was a waitress, and she had just quit her job. To her credit, she probably didn't realize her job options were grim when she chose to do that. If this issue is spoken about publicly, it should at the very least make the decision easier for people. Every graduating senior in high school should hear both sides of the story and fully understand they can't arbitrarily pick any degree and expect the same results.

I see that ending really badly. We have seen that schools have no price pressure, so the standard price for school will end up being "50% or more of your future earnings."

You must have price pressure on schools. Even more money at even more onerous terms to the students will just exacerbate the problem.

http://www.tgslc.org/pdf/tamu_default_study.pdf

I don't think modulating loan rates based on whether you're a Liberal Arts major will really solve the problem, and I also think it's also unfair.

* These numbers are percentages of students who entered repayment of their loans between 1997 and 1999 and defaulted by 2003.

The current bankruptcy rules wrt student loans came out of some experience with different rules. (For example, speciality MDs had some cute hacks to dump their undergrad loans, which were very old by the time they had money.)

How does your knowledge of those rules and that experience inform your proposed policy?

http://www.washingtonpost.com/blogs/ezra-klein/post/medicaid...

[University bloat report](http://goldwaterinstitute.org/sites/default/files/Administra...)

"Universities are notoriously bad for raising rates by thousands a year"

These statements conflict. Tuition increases should be taken into account when planning a college education. Some schools have a policy of constant tuition over four years. Students who aren't okay with tuition increases should choose those schools.

We've created a system in which the reward for being an excellent teacher is... what, exactly? More paperwork? More friction from the ever-larger administration for not doing the same as everybody else? More frustration with not being allowed to be the good teacher because they have to teach ever harder to the test?

Until you fix the incentive system you're not going to get better teaching, and yeah, that's probably going to involve someone making some money, because it's beyond me how to fix the incentive system in the presence of an open-ended promise to keep the money hose opened and pointed at them no matter how much they fail. I suppose we could always try giving the same people even more money if they just promise to try really, really hard to do something else a couple of times until they give up.

And I am also pretty sure that true 21st century education isn't going to just a tweaked 20th century education. It's going to be something totally different, and the non-profit system simply won't get us there. Why would they? They don't get defunded for using decades-old totally outdated education systems. (In contrast to the decades-old non-outdated parts, which do exist, but are not 100% of the curriculum by any means.) We know that, because that's already the current situation. They've got no reason to move.

Note that non-profit private institutions are not public schools and are highly effective research institutions.

When things aren't working it's a good idea to rethink the base assumptions we are making on faith alone.

When Obama stands in front of a bankrupt auto factory in Detroit and says, "We'll retool these factories and retrain these workers to produce wind turbines, solar panels, and electric cars!", how do we do it?

People are desperate to answer that question and services like bloc.io, Udacity, Coursera, Khan Academy, University Now, etc. are just our best first answers.

Education is more than a big problem: it's the root problem.

Caveat lector: I help run http://devbootcamp.com and the bloc.io guys work out of our offices 2-3 days per week.

source: http://www.npr.org/blogs/money/2012/01/10/144978487/the-tues...

Furthermore, while its easy to criticize the students themselves - obviously many of them are not paragons of responsible spending, but it also kind of misses the point. For one thing it's easy to wave away and say 'many' students have shit they 'don't need', but how many really do? And how much is that really contributing. Without data, its just a gut feeling. Maybe it's true, maybe it's not. Because I can tell you that where I live, very few students have 42" TVs. Yes, we have smartphone and Macs, and some of us have video game consoles, but how much does this really add to our debt load? Certainly not trivial, but when you consider the average student debt is like 25k, you certainly can't say that the extra 4-6k on random gadgets is what is driving the problem. After all, if you can pay a 20k loan and avoid defaulting, you probably can also pay for a 25k load and avoid defaulting.

And finally, how does one even approach solving a systemic problem (it obviously is systemic) like this if all you do is place the blame on the actors. Clearly the problem is large enough for blame to be ladled on everyone.

(edit: "Nerds are Unpopular" => "Why Nerds are Unpopular")

I'm still paying it off, but it was worth it! My life is without question 100x better for it.

Your point is fair, though: with few exceptions student's expectations of how transformative their college education to be absolutely eclipses the reality.

Mostly, I see student debt as a glaring indicator that the system as a whole has some serious problems. I don't like to place blame on who is responsible.

But, it can't be denied that student and family responsibility is a factor in the massive student debt problem.

But keep in mind there are external pressures on families and students as well. Schools will sell students very hard. Peers. Our entire culture. When your president gets on air and says "We are dedicated to sending every kid to college", that's a very strong cultural message.

I commend you for making wise decisions when you went to school, though.

University funding comes from three sources: tuition, state funds and research grants (federal or industrial). The last two have been steadily declining, so that leaves tuition as an ever more important source of funds. The university is building new dormitories to get new paying bodies. It doesn't matter just how damn incapable the students are, what counts is that they pay. You can't encourage anyone to drop their chosen degree, if you do you might have to apologize to the chair and the parents.

Again, funds are scarce, and the administration tries to hive off teaching of introductory courses to adjuncts. It takes anyone a year or two to learn the ropes, then people leave because working conditions here are poor, the classes are too large and the workload too heavy. No one is concerned about the revolving door for introductory courses. Besides, you have to have an excellent command of the subject matter to be able to teach a beginners' class, you just cannot put a bottom-of-the-barrel type in front of an introductory course and expect the students to do well.

Again, it's the undergraduates that pay, and they money goes primarily into teaching facilities. Meanwhile the research space is neglected. There is no money to replace the fifty year old rotting tiles in my office, everything goes to provide a nice environment to the dear undergrad kids.

Someone might notice that mathematics and computing are peculiar in that there is not much capital equipment or education needed to be productive. One can be a decent programmer with a bachelor's degree and grow into software engineering. But consider the physical sciences, biology, chemistry physics. To produce any results one needs capital equipment and a PhD. No one goes anywhere far in biology even with a Masters.

Startup mania. I'd love to join a startup in my field. Try that with a sick wife. Can't afford it.

I know, this all sounds airy-fairy pie-in-the-sky, but it's largely true. Many employers are still going to be impressed more with hustle than with degrees on paper. The ones that aren't - perhaps you don't want to work there anyway.

The world is very much who-you-know vs what-you-know, and getting out there networking with people is going to get you a better chance of work than fighting with 9 other degree-holding applicants filling out forms on monster.com.