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Student Loans In America: the Next Big Credit Bubble
PolygamousRanchKid writes "In late 1965, President Lyndon Johnson stood in the modest gymnasium of what had once been the tiny teaching college he attended and announced a program to promote education. Almost a half-century later these modest steps have metastasized into a huge, federally guaranteed student-loan industry. On October 25th the Obama administration added indebted students to the list of banks, car companies, homeowners, solar manufacturers and others that have benefited from a federal handout. In response to students burying their obligations in court during the 1970s, anti-default provisions were imposed to make it almost impossible to shed student loans in bankruptcy. There are increasingly loud calls for reform of the system, with demands that range from a full-fledged bail-out of borrowers to a phased curtailment of government lending. The changes announced this week are designed to ease the pressure on struggling graduates. Borrowers who qualify will get payment relief, not debt relief. The administration says these changes will have no cost to taxpayers."
If their debt is forgiven at 20 years instead of 25, who eats the loss?
Any student loans are put onto your tax return, the ATO (Our form of IRS) knows about it, and if you can't pay for it, it simply garnishes them from your tax return if you have overpayed or been able to claim tax benefits that aren't taken into account (which most of us are able to do) in your normal PAYG tax payment?
We don't have any problems with student loans going out of control here that I am aware of? Seems a really simple idea to follow...
Moved to http://soylentnews.org/. You are invited to join us too!
Just sell your house to pay off your student loan.
-- I ignore anonymous replies to my comments and postings.
Nothing new here!
There is a flipping element in Credit Bubbles. NASDAQ stocks were flipped in the 90s. Condos and houses were flipped in the 2000s. How does one flip an education? By getting a job where the hiring manager blindly extends offers to a person just because they have a piece of paper. The student buys into the piece of paper using government-supplied money and then the employer takes on the costs of paying it off without really getting their money's worth.
We're done!
Is to outlaw unjust discrimination on basis of education. In other words, a job offer can't have education requirements that can't be justified (asking for just "college education" without specifying a degree is right out) , any more than one can hire personnel on the basis of what car they drive. ,and as such cause the obscene prices asked by the universities to drop. Here in England for example we pay far, far less for education than in USA and I don't see it being of worse quality, quite the opposite.
You know there's something wrong with the job market when almost any job higher than McD worker, cashier, or floor washer requires a degree.
Such breaking of "degree inflation" would reduce the demand on degrees
Don't forget socialized medicine, Medicare on steriods
And gives the Democrats another "entitlement" on which to get elected. "The EVIL Republicans are trying to eat your baby and take away your student loans".
Predictable as anything. And people still fall for it.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Look at what has happened to tuition rates in the past decade. You have to be rich to get a degree or you have to start your career deeply in debt. In the age of technology, shouldn't we be providing education at less cost than ever before? I think it's time people took a look at what has happened to academia.
Right now students are charged exorbitant rates as for high-risk loans, accumulating interest during the deferred payment period, even for drama / theater / ancient Greek history degrees - while the banks making these loans know they are backstopped by the gov't so there is NO RISK to them. Is there any surprise that anything 18ish with a pulse gets a blank check? This is an incredibly asymmetric system, and it is extremely anti-student... Yet those being taken advantage of do not realize they are signing away their lives, becoming debt slaves, until after graduation.
Allow discharge in bankruptcy (which is Constitutional, by the way; the current state is not). Suddenly two things happen:
No more lifelong debt slaves in the guise of students.
College costs instantly become affordable, as the investment must justify the expense.
As a happy side effect, the banksters that lobbied for the current asymmetric system will be forced to eat the paper they should never have written in the first place. For those that will cry "why does anyone deserve a free education!" realize that both parties lose, as is just and right - the bank for lending when they should not have (write down the loss), and the student for accepting the loan (trashed credit rating for a few years).
This is infinitely better than the current government-sanctioned and backstopped, un-Constitutional system designed to make debt slaves of the general populace.
Just wait until everyone is deemed incompetent to vote until they attend College to get a degree in Sociology and US His-Story.
This entire fiasco is one of many, created by the same people that intentionally unstabilize the civic natures in society to exaggerate problems while destroying the economy.
First women are put on a pedestel, then destroyed. Then agriculture was put on a pedestel, and destroyed.
Thereafter utilities, car companies, medical industry -- you name it.
Government is suppoesd to be competency, not financing problems with money.
NO CHILD LEFT BEHIND: everyone is a 30 y/o child now.
FUNNY! (At least in the American mortgage context!)
Three Squirrels
Social Security and socialized medicine are entitlements, it's something that people ought to be entitled for just for being born American citizens. It's a right that people in other parts of the developed world take for granted.
The point isn't that the GOP is trying to take those things away, it's _why_ they're trying to take them away. They're trying to take them away so that they can give to the wealthy, and cut taxes for corporations who in some cases don't pay any federal taxes. But, most importantly it's because if the average worker didn't have to work for a large company to have health insurance they'd be significantly more likely to do crazy things like start a business or work at something that they enjoy.
How dare the Federal Government take over a Federal Loan Program and make minor modifications to existing loan forgiveness programs! Soshulizim!
The real problem is the "higher education" system, the outrageous fees (on top of your tax money for public schools), $300 textbooks required for many classes, the pathetically low education value of most the classes, plus entirely worthless classes (required generals), and the fact that businesses still believe that these moron sheepskins should be a requirement for all employment.
Of course, doctors and engineers, etc, should attend higher training, but even these programs could be seriously stripped of the worthless educational bloat that universities profit so hugely from.
About the only thing that the university system succeeds at is indoctrinating/programing young people in the political agenda of the fringe left.
You can have my SIG when you pry it from my cold, dead hands.
Maybe people will start picking up responsible majors to cover their schooling costs, but hey who knows. I mean how many MA's in womens studies along with various lgtb stuff? Dime a dozen.
Om, nomnomnom...
Colleges encourage students to take out massive loans, that are not discharged in bankruptcy, to pay for their education. As if by magic tuition increases rapidly.
While at the same time the NCAA won't allow college athletes to be paid any of the billions in revenue they create for their schools. The money would be bad for them.
Clearly colleges are fine with a student in debt, but not one getting paid. Sad.
Oh how I wish this had been an option. The day after graduation, I would have filed for bankruptcy. It would have saved me from having to work my butt off for years. I could have bought a nice BMW and saved for a house.
It's always seemed rather bizarre that you can be a deadbeat car dealer, subdivision developer, banker - hell just about any "profession" that you care to name --run up unsupportable debts, and then declare bankruptcy and have them disappear with no significant long term harm to you.
Student loans though - the one debt that actually might make you more likely to avoid repeating the boom/bust credit cycle - is somehow untouchable.
Three Squirrels
All those things are basic and can easily be provided for free by govt. The Fed creates $16 trillion to bail out financial institutions, they can pay off the national debt too. What matters is innovation, advancing knowledge; as long as we keep creating we can create as much money as we want and the value will stay strong, like Japan's 200% debt-to-gdp ratio, and they constantly want to lower their currency's value.
The problem here is that the costs continue to skyrocket. Any solution that doesn't address that is simply a band-aid.
Why do costs continue to skyrocket? Because the colleges know that effectively any student anywhere can get loans to pay for the cost of college. From the school's standpoint, they can just about charge whatever they want. There's no brake on the price increase.
This is of course compounded by cuts from government support to the colleges. But the bubble has been inflating since long before the current economic trouble. It is certainly making it worse right now, but it's not the root cause of the problem.
And you can definitely see where the money is spent on the campuses. I work with college researchers and had the opportunity to visit a couple of state schools recently. And compared to when I went to college just 15 years ago, these places are absolutely gorgeous. Until there is some means of implementing cost control at the schools - without affecting the ability of students to go to college - this won't change.
I for one wish the student loan system never existed. Had this been the case, I wouldn't have some $90,000 in student loans that I will never, ever, ever, ever pay off. Yes, it's my fault I was foolish enough to borrow money for school, it's absolutely true. However, had the program never existed, I could have been saved from myself, rather than enabled to go into a lifetime of debt that has left me at the mercy of employers and government.
And for the curious - no doctor or lawyer. Two undergrad degrees and a useless masters degree.
You agreed. You signed the papers. You gave them your word and honesty that you would do whatever it would take to pay them back. You took the money from hard working Americans' bank accounts for these financial institutions to invest you in the hopes for interest in return to fund their retirement.
Pay it.
Why should hard working successfull people who paid off their loans be punished by having to pay for your own foolishness? They were smart and worked harder and saved and now should have their reward.
One thing we found out is Americans HATE bailouts. They will not support it and will fight every stance to keep what htey earned. Yes costs are going up but you are an adult and need to take responsibility. I wish home owners couldn't default either to level the playing field. The problem is if you help students, help big banks, then everyone else will want a handout. Ultimately, the government goes broke and end up like Greece all poor and taxed to death with no end in sight. ... FYI this is coming from someone who owes $40,000 in student loans and is living with his parents to pay them off.
http://saveie6.com/
"Social Security and socialized medicine are entitlements, it's something that people ought to be entitled for just for being born American citizens."
Bullshit. Complete and utter bullshit. No human has any right to force (via government taxation) any other to support them (parent/child relationships excepted). You want to be taken care of? Look to family and private, voluntary charity. I am not your keeper, except to the extent I choose to be.
You're not "entitled" to anything, except the opportunity to subsist on your own.
"National Security is the chief cause of national insecurity." - Celine's First Law
Yes, it is a debt bubble.
This much has been clear for a long time now, we did ask a question on /. What is you college major worth? - well, it's not worth much.
Here is what I think about Minimum Wage and Inflation and Obama's plan to destroy the education further. They don't allow price competition with public universities, you know?
Anyway, this is a debt bubble, so are US bonds and any US denominated debt for that matter because the US dollar is a bubble.
You can't handle the truth.
This is another "accomplishment" in the style of most everything he's done for domestic policy: deliver some good speeches that change has happened, then order a fresh coat of paint applied to the status quo. A lot of big talk for a program with limited scope and impact...that was already passed into law, and is just being implemented earlier. It only applies to students who have not yet graduated, it only applies to Federally guaranteed loans (which, at most universities, do not cover the cost of attendance), and it offers a maximum of 5% of a payment reduction and a 0.3ish % interest rate reduction. And the unpaid balance of the loan expires five years earlier. In other words, this does nothing to help anyone who already has student loans, such as all of the people who graduated college into the depths of the recession or the non-recovery recovery, and are struggling to make payments or even find work.
I give you a +1 for such an inane post, it's Beavis and Butthead funny.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
So the government gives loans to the poor, to go to a school that it is statistically unlikely that they will graduate from, learn anything from, or even gain any positive benefit from. Then the government demands return payment under penalty of law of this money, which has in every way you look at it, passed directly from the government to schools and teachers that have through tenure been guaranteed high paying, high benefit jobs for the rest of their natural lives. These schools have failure rates that are staggering when reviewed by any measure you can think of, and if forced to rely just on the money that came in from graduating students would be forced to either take drastic pay cuts or shutter their doors. The poor are then forced to spend a large portion of the beginning of their careers paying back loans, that payed for their boss to graduate. It's an inefficient, un-subtle and demeaning tax on the poor to pay for the wealthys education and keep tenured professors in plush offices teaching one or two classes a week. It's typical of a well meaning government program that's been corrupted by rich people that want a free ride, and lazy intellectuals that want to get paid exorbitant amounts of money for contributing to the humanities. As usually, the government should just stay the hell out of it and we'd all be better off.
For-profit schools. Shut them down. Period.
The average annual tuition for for-profit schools this year is about $14,000. Public four-year colleges charge, on average, $7,605 per year in tuition and fees for in-state students. What's worse is this: The default rate on student loans from for-profit institutions is 15%, while the default rate at public universities is only 7.2 percent (same source).
For-profit schools are milking the American taxpayer for money. Just walk into any one of these schools, tell them you want to be a nurse / chef / accountant / whatever, and they'll lay down a student loan form for you to sign before you could even say "Herbie Hancock." Because, at least with the present law, once a for-profit school gets their money from Uncle Sam, it's theirs, no strings attached. I'd almost call it fraud, except those students who enroll in a for-profit school actually do get something in return, even if it is a sorry-excuse of a half-ass education. (PBS did an excellent documentary a year back on for-profit schools, particularly exposing the "value" of a diploma one gets from these crooks. You can watch it here.)
What's sad is that there's a really simple solution to all this: require a for-profit school to assume some of the risk. If we required a for-profit school to pay back even just 50% of the loan that was defaulted on, you'd see the default rate decrease overnight.
If their debt is forgiven at 20 years instead of 25, who eats the loss?
The same people *always* eat the loss, the taxpayers and/or consumers. Banks and corporations do *not* eat the loss, it either becomes a fully deductible expense for tax purposes or it is passed along to consumers who are paying for other products or services. Regarding the later, note that when the Dodd-Frank bill limited credit card processing fees the response of the banks was to raise fees elsewhere.
There is possibly another type of person who will "lose". Banks may decline applicants in majors that are not correlated with a higher earning potential.
The problem is pegging the right price to the cost of college.
I say, trace the lifetime incomes of everyone who graduated from college XYZ. Peg the cost of 4 years of that college, to 4% of the average lifetime income of previous graduates. THAT is how much that college deserves to charge.
Then, paying back your college loan is easy: a 4% surcharge is added onto your taxes, your entire working life.
So if the average graduate of college XYZ makes $80,000/ year, on average, for 30 years of employment, on average, then that college deserves to charge only
80K * 40 years * 4% / 4 years of college = $32,000 a year
That is paid back via a 4% tax surcharge over the working lifetime of the grad. Of course there are complications (grad school, only doing 3 yrs of college, etc.), but this is just an rough idea, it can be refined
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
First of all the myth needs to be busted that somehow a continued education is magically going to equal success. Nothing could be further from the truth, it can help in certain situations but as all things in life there is no guarantee.
We all are born with certain talents, it is those that can find and monetarily exploit those talents that find success. Unfortunately we where not all born as equals, some will easily find success while others may struggle their entire lives.
Got Code?
Yes, let's look at Japan. As you say they get along fine with a 200% of GDP national debt.
Except the Japanese worker has a 15% savings rate that he cheerfully buys 0% interest government bonds with. So the debt is owned by the Japanese people who get paid nothing to carry it. It is exactly the same as if the US were to add an additional 15% income tax for which they would issue you a certificate for every year. This certificate would bear no interest and would be redeemable never.
I am sure you would like that system.
Republicans have their own entitlements like military spending, oil industry subsidies, multiple forms of corn subsidies, dairy subsidies, a war on drugs, TSA, etc.
It isn't that either side thinks entitlements are bad. They merely disagree on what the entitlements should be.
As a human it is in my best interest to choose entitlements which benefit me as someone whose only healthcare options are medicaid and moving to another country. My Hemophilia is mild but if I get seriously injured, the medication to keep me alive costs $300,000 for the six week recovery. I also have Osteochondroma (bone spikes near joints) that can break off and cause said serious injuries. If I get injured, any company that hires me will see their healthcare plan rates raised up to the point where they either need to let me go or screw over everyone at said company. This does wonders for my employment opportunities in a time when finding jobs are hard.
I choose renewable energy subsidies because I don't want my country to be in perpetual war with any country that refuses to sell us cheap oil for the benefit of US corporate interests. A half a billion loan being defaulted on is peanuts compared to our daily military budget. So we tacked half a day of foreign wars to our budget with that blunder. We're making a big deal out of a tiny leak in a household pipe while the watermain is gushing water down the street.
I dislike the war on drugs because every legal medication that I can take with my Hemophilia either doesn't work or will kill me. Having bone spikes poking my flesh isn't pleasant. I could instead put some Cannabis Indica in a vaporizer and generally feel better, but I'd rather not have paramilitary goons raid my house and then later die from injuries sustained.
I dislike food subsidies as they are because they remove choice. I can't partake of milk products. Why not move the subsidy to the grocery so people can buy subsidized food of their own choice? That way my pseudomilks will be cheaper.
Please tell me how Republican entitlements benefit you. At least make sure you are getting something out of it while they screw me over; other than the joy of knowing they screwed people like me over.
As for Obama, he is the most epic closet republican ever. I wish he'd switch parties so the Democrats can field a real democrat for the position.
We needed a balance for the "Evil Libruls are trying to destroy our Army, prisons and secret intelligence agencies!" side.
It's a right that people in other parts of the developed world take for granted.
I advise to not attempt this argument. The that's-how-Europe-does-it-and-they-are-economically-healthy argument just doesn't work the way it used to.
I don't think college grads are entirely without blame. I graduated less than years ago with a Bachelors degree and a relatively modest $22,000 in student loans. In under 18 months, I've managed to pay off $10,000 while making $30,000/yr (that's 45% of the principal in 15% of the 10 year loan period). How do I do it? For one thing, I don't have cable TV, a smartphone and my car has very little beyond the basic options. Not paying for cable TV and a smartphone with data plan every month is another $80 I can contribute to the student loan (that's nearly an extra $1000/yr off the principal and a savings of more than $3000 in interest over the course of the loan). Throw in the fact that I rarely eat out, buy foods in bulk ($100 chest freezer is a great investment when buying beef by the cow) have all used furniture, work extra odd jobs whenever possible and avoid shopping trips that zig zag around town to save gas and it adds up quickly. I'm finding many of my peers that complain about loans do none of those things... they want everything and they want it now. I realize this isn't an option for everybody... but students also shouldn't be off the hook if they get a crap degree in English or Underwater Basketweaving because it's easy and they have a passing interest in it.
You and your attitude is the reason the rest of the world has been able to watch the rise and fall of the USA over the last 40 years.
When you realise the wealth of a nation is in how it cares for the worst off there may be some hope for the USA.
But if you remain narrow-minded uncharitable xenophobes you will reap what you have sown.
Wow. The *government* cannot provide anything for free. Anything that comes "from the government" comes from taxpayers, with a tremendous overhead (they call it the "skim" in Vegas) as it goes from my paycheck to the deadbeats. Anything else you may have heard is utter and complete nonsense.
Brett
Somehow, I suspect that you believe the answer to the student loan problem is more tax cuts for the "job creators".
Why don't we pay for higher education the way successful countries like Germany do it? Oh, that's right, it would be another government program.
And Social Security didn't "start small". Neither did Medicare. In the first case, Social Security can pay for itself without adding to the federal deficit. In the second case, Medicare became a problem for the same reasons student loans became a problem: because prices have grown out of proportion to any other area of the consumer economy, often several hundred times the consumer-price index.
You are welcome on my lawn.
This may be due to ignorance, but where exactly is the bail out part? It seems to be simply good business sense if the government is acting like a bank: if the loan can't be paid, reduce the rates so you at least get something.
Every other industrialized nation on this planet has some form of socialized medicine. They also pay far less than we do for health care. 1/2 or less.
To give a perspective on the situation, consider Canada. The US government pays the same per capita over its entire population for the health care it funds - Medicare Medicaid etc as the Canadian government. What is the difference? The Canadian payment covers it's ENTIRE population, the US payment a much smaller fraction.
It is absolutely ridiculous that we are paying via our taxes per capita the same as nations that receive universal care and the majority of us get bupkiss for it because of the runaway costs of our private system.
After interest, I owe $12K from a 1990 guaranteed student loan that was issued by a bank, then picked by the government when I graduated. I've had my tax refunds applied for the last seven years. I could pay off $4K right now in one shot, but that is it.
The truth is that it is still possible to work 25-30 hour per week and pay for a state university. $14K or so per year for tuition, room and board came up in a related post weeks ago. Yes, you will have give up going to many, but not all, of the parties. Yes, we have gotten to the point where it seems just barely possible to put yourself through school and graduate debt free.
Then again, there is a middle ground. Work part time to greatly minimize what you need to borrow. You don't necessarily have to graduate debt free, maybe graduate with $30K of debt rather than $60K.
You keep telling yourself that while being raped blind every day by corporations. How does your world view explain the military, for example? Or municipal running tap water?
talking about the student loan bubble without talking about the securitization chain is like talking about the housing bubble without talking about the securitization chain
student loans are sliced and diced and sold on to third parties who sell them on to other parties.
banks dont care. the colleges dont care. the only people who care are the investors who buy this debt... but it could be in a mystery-meat structured product that they dont even understand. it is also probably highly rated by the ratings agencies, who get payed by the banks to rate this trash highly. just like the housing market.
goldman sachs, jp morgan, etc, are very happy about the student loan bubble, it gives them more suckers to scam and another bubble to short. and if you are screaming about 'lib arts majors' and 'useless bureaucracy' at schools, you are missing the point. its like yelling at the migrant farm worker who was loaned 200 grand to buy a house.... a sharp looking guy in a nice suit from a big bank told him it was a good idea, because he can re-sell it for 250 grand in two years. why shouldnt he listen? he probably didnt even graduate from high school.
Do not help and add up costs.
Why should you be forced to buy high cost meal plans that for at some places sub par food and meal times that do not work with all class times and have head of people buying $100-$200 in candy just to use up a meal cash card before it times out and the cast is just gone.
Also why forced dorms living where you can pay for a dorm with a room mate + 10 people shared bathroom when you for the same price or less you can rent a apartment or save even more with a room mate and get a bathroom that just you and the room mate use alone.
shrug shrug! !
No human has any right to force (via government taxation) any other to support them (parent/child relationships excepted). You want to be taken care of? Look to family and private, voluntary charity. I am not your keeper, except to the extent I choose to be.
You don't make the rules, actually: our society as a whole does. You don't have the right to personally dictate the terms under which you'll participate in a particular society.
Our society has decided that taxation is an appropriate means of providing a reasonable safety net for its citizens (among other things), and if "msauve" doesn't think so, guess what? Tough shit. We haven't decided, actually, that we particularly give a flying fuck what "msauve" thinks of any of this.
If you don't like it, go find somewhere else to live out your Little House on the Prairie fantasy of perfect autonomy. This isn't 1870, and in a huge and deeply interconnected world where we're all practically shitting in each other's water supply, your Oedipal rage (interesting how so many libertarian, I-can-do-it-all-myself types seem to have abusive or absent fathers!) does not a fiscal policy make.
required credits are pushing 4 year plans out to 5 years.
Due to the way classes at some colleges fail in and they fill up to fast.
I do love how Libertarians just sort of invoke these things out of thin air. They really do believe in some sort of natural law of sociopathy.
People have paid taxes since the beginning of civilization. Get over you selfish leacher.
The world's burning. Moped Jesus spotted on I50. Details at 11.
the government back stops large investment banks to securitize a shitty loan, pay ratings agencies to over-rate the quality of the loan, and then resell the loan to investors.
the feeder system, i.e. the subprime colleges (ITT tech, Univ of Phoenix, etc) are completely unregulated, and basically control their own accreditation system. this is thanks to extensive lobbying, and brainwashing of "no regulation" twats who think the government is the root of all evil.
congrats, no regulation directly enables scam artists to fuck the government of its necessary functions. there is no decent, modern country on the planet (or in the history of the planet) that does not have government funded education.
Stop taking my goddamn tax money to bail out people who took on debt they couldn't afford. Bad enough I had to bailout dumbass homebuyers and a bunch of corporations. Now I have to bail out students too? I should've sucked up all this debt when I had the chance. If only I had know there was a get-out-of-debt-free card coming for the irresponsible :P
Education is a public good. The government should pay for it through taxes. My neighbor could be the guy who cures cancer, lowers food prices, or educates others!
The government should pay for everyone's education as long as they want to go provided they are getting grades which show they are indeed learning.
Also, who's looking forward to the education revolution on the horizon: Digitization of books. K-12 books can cost 100$ for a computer instead of $10,000 for books. You can then export it to 3rd world countries. Expand it to collegiate level education and you'll have kids who have nothing better to do than learn becoming doctors, scientists, and teachers in places they can barely afford food.
God spoke to me
and even give more to them so they can post profits, and give back NOTHING in return, but, make it impossible for citizens to do the same.
Ron Paul talks about lots of things. There are few things he talks about for which he makes much sense, or shows any capacity to understand the issues. In fact, I'd say the only thing that is a bigger waste of time than listening to Ron Paul prattle on about and invoke his sociopathic ideology is his mentally deficient supporters who actually seem to believe this guy has a fucking clue about fucking anything.
The world's burning. Moped Jesus spotted on I50. Details at 11.
it is really hilarious to watch people bitching about everything from dorms that are too nice to too many mac's in the computer labs, but nobody wants to follow the money.
student loan debt is securitized and resold to various investors, just like housing debt was in the housing bubble. its the securitization chain, and the big banks are behind it, along with the corrupt government agencies that look the other way instead of doing their job (preventing fraud, preventing false advertising, preventing misdeeds by the credit ratings agencies, etc)
it is like this never ending pattern when people talk about financial matters. everyone goes off their own personal experience instead of approaching it like a hacker: : : how does the system work? what are it's major pieces? how do they fit together? what is the flow in between those pieces? if people would just ask those basic fucking questions we wouldnt be in this fucking recession.
instead its 'oh no, i graduated and i payed my debt off, these freeloaders / communists / blah blah blah' .. complete and utter red herring bullshit that is in no way helpful to solving the problems of the planet.
There are public libraries, and you'ld have a better atmosphere if everyone memorizes a book to tutor eachother the merits of that knowledge, and you'ld have a student-run learning environment.
Now, you have students going to college to learn how to be teachers that teach only what they're allowed: inexperienced teachers teaching things they've never done before.
If and when the US economy loses it's Federal Reserve Note monetary system, then the wealthy are in worse shape than the people who have debt because debtors can print their own money with their own self-endorsed product while the so-called money-rich "wealthy" have strung theirselves out so much that they will be known to the world as the people who none will work for and have no skills because their ussury is what handicapped theirselves into such failing order of society.
I don't work for money, but mutual satisfaction.
oh yeah, socialized europe is doing so well right now..
pension funds, city governments, people running 401 k plans, etc etc etc.
all you have to do is read some SEC reports really close to find out who has invested in student loan debt. its the same morons who invested in subprime mortgage debt. they are the people who run the pension systems, the 401k funds, the union funds, the funds of funds, etc etc etc. there are also a lot of stupid individual investors, corporate investors, and government investors, people who dont want to do due diligence and prefer to rely on the ratings agencies, even after the greatest financial crash in the history of the planet was directly caused by the ratings agencies (which, for some reason, have escaped any and all punishment, whatsoever, let alone meaningful scrutiny by the government).
and the same people are shorting it (Steve Eisman, of Michael Lewis' Big Short, is now shorting 'subprime education', he made millions shorting the housing bubble at Morgan Stanley).
If the monthly payments on your 20 year consolidated student loans are more than your expected monthly payments of a IBR plan you might as well just go with the IBR plan. Not only that, but when you reach the point where the IBR plan becomes more cost effective you might as well just take out as many loans as possible. The payment will just be the same anyway.
Also to take into account is how much of your income is not included. First they allow 150% of the poverty level($16335) taken off your AGI for the purposes of determining your payments. Then there are also retirement account ways to hide money too. $5000 can be put away into an IRA, and $8250 for a 401K (Assuming an employer match of 100%).
All in all that means someone might only pay 10% of their income past $29585
"Over the years, we had the option of making large capital expenditures in the textile operation that would have allowed us to somewhat reduce variable costs. Each proposal to do so looked like an immediate winner. Measured by standard return-on investment tests, in fact, these proposals usually promised greater economic benefits than would have resulted from comparable expenditures in our highly-profitable candy and newspaper businesses.
But the promised benefits from these textile investments were illusory. Many of our competitors, both domestic and foreign, were stepping up to the same kind of expenditures and, once enough companies did so, their reduced costs became the baseline for reduced prices industrywide. Viewed individually, each companyâ(TM)s capital investment decision appeared cost-effective and rational; viewed collectively, the decisions neutralized each other and were irrational (just as happens when each person watching a parade decides he can see a little better if he stands on tiptoes). After each round of investment, all the players had more money in the game and returns remained anemic."
A similar dynamic applies to education too. College has historically been the gatekeeper to a better life. You want to be set, you've got to graduate. More and more though, that economic profit is being captured by schools and not the student, in the form of higher tuition. But since HR departments aren't likely to get a clue and stop using "bachelor's degree" as a filter, students *have* to go to school. Which means they're trapped. This will continue until either our country gets a clue, or until schools have captured all the economic rent.
We tried giving everyone a cheap home - that backfired and we're left with more homeless and struggling.
Plenty of other nations provide "free" or heavily subsidised tertiary education. Why does the US have to re-invent the wheel to solve a problem that was solved elsewhere decades ago? If a country such as Australia with a piddling 20M population can give it's students a subsidised degree with less that $10K of the cost coming directly from the student then why can't the almighty US get it's shit together and do something similar?
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
How are the military and police funded in your world ?
Back in the late '70s and into the early '80s, the prime rate was in the teens and the student loans were 4 to 6%. The banks did everything in the book to default people. Reagan changed the rules so that if you were a single day late with a payment, you were defaulted and the loan went back to the government (or the bank lost government insurance), the bank got payed and had money to lend out at over 10+% in place of your 6% student loan. The defaults went through the roof and they amended the bankruptcy law to prevent discharge in bankruptcy. I had a student loan go back to the government--they printed the monthly statements over two weeks before they were supposed to go out, held them until the usual date, mailed them from some post office in an out of the way place, and when I got it it was already 24 days from the date on the statement which was the "due date", so I had 6 days to get them a payment. Child of innocence I was at the time, I waited my usual two weeks to pay it (after a payday), and was in default and went through collection.
Banks have always been scum, and the government has always been in cahoots with them.
Forgive the student loans. Really. The banksters got truckfuls of tax money in exchange for ruining the economy. There's no reason why we can't forgive the loans for the people who will never be able to pay back the loans.
It is possible to writeoff a debt and still have made a profit. Remember that interest and repayments have already been paid on the loan for 20 years. The final total repayment for a loan is always higher than the loaned amount, so the lender breaks even a lot earlier than the point at which the loan is fully paid off. After that it's all profit.
Example:
(Disclaimer: These figures are for a standard commercial loan. I have no idea whether repayments differ substantially for Stafford/Perkins/PLUS/whatever.)
We are pushing to many people into college and parts of the old model defined in European universities during the Middle Ages that part of are based on just don't fit to day.
Reform the PhD system or close it down
http://www.nature.com/news/2011/110420/full/472261a.html
Now the older college system can be cut down to 2-3 years
community college do the basics and some tech / apprenticeships type stuff. So we can use that as a starting point.
Now as for tech school they do some stuff right (teachers in the industry) (more hands on) (more up to date topics) but other parts not that well.
apprenticeships need to be added to Tech jobs / tech schools / college.
Now a college based CS may be good for high level stuff but for a lot of other IT not so much that lot of people with 4 year CS who are very clueless with IT work.
Now in a tech school you can learn alot about IT work but there should be a apprenticeships system added to it.
Also IT sever, desktop, help desk IT workers should not be forced to have CS level programming. Some stuff like VB is ok and what the tech schools due but in a CS your are taking high level programming and even then that at some colleges lacks more of the programming language part Now at time for people doing sever, desktop, help desk type work is better off doing an apprenticeship.
Does non coding IT work really need Calculus?
Also can get rid being forced to pick major?
see how I'm saying apprenticeship not internships they need to be more trades like with at least mini wage and real work (no you are just a copy or coffee boy).
Also there should be trades like continuing education that is not just Masters or PHD CS. No continuing education on new OS's, systems, and so on.
Unlike the Compassion Nazi's of the left, who decide who is worthy. Poor Students.
I went to college, worked 35 hours a week to do it took six years to graduate so that I could without any debt. Nothing worthwhile is easy. They choose the easy way, and now ... they have to pay interest on their party years. Call the Wambulance.
Why is it that I, having paid my own way, not got into debt that I cannot pay, didn't buy a house I couldn't afford, don't have credit card debt upto my eyeballs have to pay for everyone else who did?
When a LIBERAL can answer that question, then we can have a dialog. Until then bite me. I'm pissed at all the lazy ass fools who think they deserve college because they are 'merican", that it is some inalienable right of all. You're the reason why Americans have no jobs, we've exported them all to pay for college, and now you're wondering how to pay off those loans
And I'm the 45% the "99%" doesn't want to admit exists.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Most of us understand why the government can't just print more money. The price of everything would just go up. College tuition is exactly the same scenario. The only difference is that in this case, the government is printing a special kind of money -- money that can only be used for one thing. It is no surprise when then price of that thing just goes up accordingly. Subsidies (i.e., cheap loans) increase demand. Increased demand causes the price to rise. Consider: * The US massively subsidizes education. The price of education rises far beyond the rate of inflation. * The US massively subsidizes housing. The price of housing rises far beyond the rate of inflation. * The US massively subsidizes health care. The price of health care rises far beyond the rate of inflation. (Except, of course, the kinds of health care -- like cosmetic surgery or lasik surgery -- that do not typically get subsidized. Costs in these areas have plummeted.) Pointing this out inevitably draws attacks, like by acknowledging this, you are part of a conspiracy to deny education to poor people. And I don't pretend to have an answer to this dilemma. The only really clear thing is that the laws of supply and demand aren't *statutory* laws, that can just be altered with a pen and a lot of hand-waving. They are fundamental natural laws, and well-intentioned attempts to manipulate markets (from student loans to price-control regimes) almost always trigger equal and opposite consequences. The real shame is that important issues like these are so easily demagogued. Even though the system is clearly broken, no politician in his right mind would ever propose changing it. "Look!" people would scream. "He hates poor people!" - AJ
1. Create web site for fictitious for-profit college
2. Print up your "degree"
3. PROFIT!
And before everyone goes "you can be fired for lying" ... in most places, you can be fired for any reason, or no reason at all, so what's the big diff? Places are now asking for a degree for washing dishes. Why? Because they can.
After a few years practical experience, your experience counts for more than a piece of paper anyway.
Supply of college degrees has been artificially increased in a sort of self-replicating process. The government triggered it by deciding that all people need to have access to college if they choose, and they instituted a combination of policies (Pell grant, subsidized loans, etc.) to make this happen. Well a lot of extra people did indeed go get that degree to get higher wages, and employers found that they could more easily demand a college degree from applicants. And also this degree would not entail paying them as much as it used to, because the degree is not as rare as it used to be. As more employers demanded degrees, more people had to go to school to get a degree. Here is where the key thing happens. These people have been ABLE to get the degree because they have a guaranteed student loan from the government, and so even more college degrees flood the market and the cycle repeats.
If it had been a private student loan system, and that private system was working responsibly, then they would have drastically slowed down providing student loans a long time ago, and the college degree numbers would have corrected. If a private loan system was not working responsibly then you get basically the same effect as the housing bubble.
I've had to pay off every loan I've taken out in my life (age middle 50's now). Get off your lazy butts and pay off your debts! Oh, you took out a 50-100K loan to attend college, now your underwater basketweaving degree can't get you a job? Well, the world needs ditch diggers too!
Federal Student Loans remove the negotiating relationship between the person paying for the education and give it to someone (the government) who doesnt care about costs. Costs of college rise and we complain why and proceed to bitch and whine about it....... Without realizing it the problem is the Federal Student Loan Program. The potential for increased default is a symptom of the problem.
If America scraps most of its military nuclear capabilities, including its submarines and ICBMs -- relics of the cold war -- then I suspect the government would have enough money to make good education completely affordable for all students nationwide, as well as pay off much of the debt owed by those who already have an education.
Let's face it: America's once mighty economy is in serious decline, mostly because all of those manufacturing jobs have now moved overseas. Ironically, America's powerful corporations, which continue to receive so much government support (through tax breaks and laws passed in their favor), only helped to exacerbate this job exodus.
The real problem is that, for many decades now, the most expensive country in the world to get a good education has been the United States. As long as America was a booming industrial economy, that was never a problem -- especially not after WWII, when all the other economies lay in ruins -- but as soon as Asia's sleeping giant woke up, it became an albatross around Uncle Sam's neck.
For America, now is the time for serious investment in education. America is still a rich country, but just spends too much of its money in the wrong places. Shifting tax dollars from the military to education seems about right, because without being able to receive income tax from educated citizens with good jobs, pretty soon the country will no longer be able to afford all that expensive military hardware anyway.
Welfare is welfare. I'm against welfare, all of it. And it wasn't the GOP that gave 1/2 billion to Solyndra, so don't act like the Democrats are any better, they aren't. Let me know when GE pays taxes okay? Let me know when the Democrats stop spending money like a drunken Republican.
FYI, I'm a Libertarian. Without Liberty, we are slaves. Our taxes have made us all indentured servants and Serfs to the government. We don't work for ourselves, we work to pay taxes. We're the frogs in the frying pan not noticing it is getting too warm until it is too late. And it is getting too late.
But hey, if you want more entitlements and more income redistribution, keep voting for your slave masters in the Democratic Party. I'm sure they appreciate selling you out for a vote.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Military (common defense) is one of the functions of the government, unlike "entitlements" you speak of . Granted we're in more wars and more countries than we ought to be, and that doesn't seem to bother the left right now as much as it did four years ago. Obama is about to start another few military actions, having just finished off Qadaffi with a bullet. He is actually worse than GWB who at least got congress to vote for it.
And when you can't tell the difference between a (R) and a (D) you know things are bad (they are). There is no difference, and that is why I'm a Libertarian.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Why, because Greece is so corrupt that half of their businesses don't pay taxes (gee, where have I heard that before), or Spain has something like a 50+% high school dropout rate? European countries have a lot of problems, but their commitment to a healthy populace is absolutely not one of them. France and Germany are economic powerhouses, and both of them have universal health care. For them it's a competitive advantage, just like American bankruptcy laws: people were encouraged to take risks, like starting a business or changing careers, with the knowledge that their families' health is still protected, regardless of the outcome.
If you think such a law will improve the economy, then you have absolutely no grasp of the most basic principles of human behavior.
Universities do not charge high prices because employers want graduates, universities charge high prices because student loans guarantee that the buyers will be there. The education market is heavily tampered-with, hence far from free, and hence the price has little to do with demand.
Stop giving loans to everyone who wants a degree, and the only people applying will be people who are actually willing to work hard (at a paying job) in order to afford an education. Such people will, of course, be significantly fewer in number, and will be picky (when its your own hard-earned money you are spending, you get that way). Such a drop in buyers will force universities to compete both in terms of the quality of their offerings and also their pricing.
THAT will improve education. It will also reduce the huge flood of educated workers in the job market, which will in turn force employers who don't need educated labor to accept non-educated candidates.
Both the labor and education markets are seriously damaged due to well-meant government regulation. Further tampering (as you suggest) will only make matters even worse. Americans should have known better, and it is about time this lesson got re-learned!
GE paid taxes last year, and the year before, and the year before. And will again this year and next year.
You and your attitude is the reason the rest of the world has been able to watch the rise and fall of the USA over the last 40 years.
His attitude is what made America great. The increasing entitlements are what have been draining the American work ethic.
When you realise the wealth of a nation is in how it cares for the worst off there may be some hope for the USA.
America takes care of its worst off very well, thank you very much. Then it takes care of its "not quite as worse off". Then it takes care of its "not bad off at all, but only have one flat screen TV and two game consoles, how am I supposed to eat?". In the latest RedBox article, there was this tidbit:
"Douchebags in the suburbs who can afford the 4 DVD plan from Netflix wouldn't know any redboxers but low income areas are all over these things. Reserving Blu rays from an iPhone app at one of the many kiosks means you don't even have to chance it anymore and waste time in these lines. A twenty cent increase != a twenty dollar increase."
Notice that? Low income, but using iPhone apps to rent movies.
But if you remain narrow-minded uncharitable xenophobes you will reap what you have sown.
Just because one gets taxed out the wazoo and that money is then given to someone else doesn't make one charitable. What makes one charitable is having the individual choice to give to someone else. I would advise you not to pay attention to sites like this which list charitable countries by how much their governments contribute, and instead check sites like http://www.guardian.co.uk/news/datablog/2010/sep/08/charitable-giving-country or http://abcnews.go.com/2020/story?id=2682100&page=1 which discuss individual charity. Americans might be slightly xenophobic (although not really; we're the f-ing melting pot!), but we are charitable.
Don't forget national defense. Medicare on socialized medicine on student loans on Viagra on steroids.
I am not a crackpot.
Interest does not accrue as long as you are enrolled full time in school. So after you graduate, have enough money to cover tuition at the lowest cost community college for the minimum amount of hours. Use early enrollment, and send in your receipt IMMEDIATELY to stop the interest. Then withdraw before the semester starts, and get all your money back. Rinse and repeat forever.
And gives the Democrats another "entitlement" on which to get elected.
Cough. I think you mean "abortion". And I think you mean it gives Republicans another "enemy" to fight against on which to get elected. An enemy that will of course never be defeated, thanks to those mean Demmycrats!!!! Ooooh. But just vote for 'em again, cause this time, we mean it for real. And you wanted some capital gains tax cuts with that abortion ban, right? Maybe some school vouchers? Don't worry, we'll get down to business real soon now.
Why is it that I, having paid my own way, not got into debt that I cannot pay, didn't buy a house I couldn't afford, don't have credit card debt upto my eyeballs have to pay for everyone else who did? When a LIBERAL can answer that question, then we can have a dialog.
Watch out. A they might answer truthfully: "Because we think we're better than you." They like to rule, not govern.
Why is it a problem that someone receive an upper-middle class salary for a job that typically requires a PhD, gold-plated references, and often post-doctoral and/or teaching fellowships? We're talking about a job that only certified geniuses are likely to get before the age of 30, which often doesn't pay as well as using those credentials outside of academia, and you think it shouldn't pay well? Even at Harvard assistant professors start at just barely six-figures, and they have the highest compensation in the top 50 schools. It takes 4-8 years to make it past assistant professor, and many people are simply fired at that point because they didn't make tenure. I know people who got ulcers trying to get their tenure, and when they didn't make it they were 40 years old and unable to use their 15+ years of higher education and experience for anything but term-by-term lecturing work.
Trust me, most academics who take it easy in their 'plush office' did decades of very hard work to get there, and truthfully almost anyone who makes it that far has a personality type that won't let them stop working hard.
And as for your obvious hatred of the arts and humanities, some of us understand that there's more to life than science and consumerism.
Lot's of theory is just part of it all the filler classes do not help as well.
I wonder how much the gov't subsidizes students on average per year at public schools. Could the difference between what in-state tuition is and for-profit tuition is be because we the taxpayer are picking up half the tab of in-state school students?
Personally I'd like to see student loans restricted to degrees that have some value. Want to study dead languages? Fine, do it on your own dime.
Military (common defense) is one of the functions of the government, unlike "entitlements" you speak of .
Have you read the US Constitution? Even just the Preamble? Even just watched Schoolhouse Rock? Oh, nevermind, you already said you were a Libertarian.
The only losers are the company's stockholders.
I apologize for the tangent but it might be useful to consider that stockholders are often regular people who have a pension, 401K or IRA.
Being an Aussie, I was happy to see the recent story on Qantas. But the forums posts were full of Yanks screaming 'OFF TOPIC!' because it wasn't a tech story. Well this isn't a tech story either. But the loud-mouthed Yanks have disappeared. Obnoxious one, where art thou?
Read some Locke/Hobbes/anything.
"National Security is the chief cause of national insecurity." - Celine's First Law
Did you really pay your own way? What I mean by that is that if you had, say, been born in Somalia, would you have been able to accomplish the same?
Despite what you may think, a helluva lot of other people contributed to where you got. You actually didn't do it on your own at all.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Banks no longer make govt backed student loans.
http://www.nytimes.com/2010/03/26/us/politics/26loans.html
Unless we are talking about a bubble from current outstanding loans and the securitization of them, the bubble is coming straight from the Federal Govt. That is also assuming that almost all loans are the govt rubber-stamp type, not real show me your credit rating bank types.
What's drained the work ethic in the US is the lack of reward for labor. Most labor is done for the benefit of the rich investor class whereas the people actually doing the work get screwed. No pension plans, no loyalty from the company and no guarantee that they'll be able to pay for the necessities of life without those social programs from the government.
If you want to blame anybody, blame the corporations that offshore work when the workers can't afford to make the concessions the company has demanded.
As far America taking care of the worst off, I challenge you to come to a large city and ask the homeless people you meet if they're being well taken care of.
As a side effect of that, it might be easier to get into a vocational school to learn how to be a plumber or a car mechanic than, say, an art program. Maybe you're not following your dream, but in the real world you don't always get to. In fact, you almost never get to. And chasing that dream usually doesn't look as good at 40, when your art degree has landed you a choice position behind a counter selling stuff to people for 25% more than minimum wage. At that point you might find yourself wishing someone had told you to go into vocational school when you were 18.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
A half a billion is like nothing compared with the benefits that we're going to get from the other companies that are being invested in. 0.5 billion is a bit more than a dollar a person for every man woman and child in the US, it's not a huge amount of money compared with other expenditures. Sure it was an unfortunate happening, but it's hardly as bad as the rather egregious losses under GOP stewardship.
As for welfare, you like every other libertard out there is opposed to them now, but how many of you folks are opposed to them when they're eligible? I don't often hear about people turning down medicare or portions of the Social Security dollars when they get it.
When it comes to income redistribution, the GOP has done more of that in the last decade than any and all parties combined up until that point. It's astonishing to me that people can still suggest with a straight face that Democrats redistribute wealth, implying that the GOP doesn't. At least the Democrats comprehend where wealth comes from in the first place.
Hobbes was writing over three centuries before the invention of chemical weapons or the atomic bomb. Suggesting that folks now could go back to things in that way is naive to say the least.
I'm a fan of Hobbes writings, but trying to apply it in that way to the modern world requires a certain dedication to ignorance.
Also there should be trades like continuing education that is not just Masters or PHD CS. No continuing education on new OS's, systems, and so on.
In addition to the usual systems and theory courses, most schools have "hot topic" classes that cover the latest stuff like cloud computing, robotics, mobile application development, etc. Many employers just don't want to fork over the time or money to keep their employees up to speed. I was fortunate enough to work for a company that did pay for continuing education, but cases like that seem to be the exception, not the rule.
I left college with $5000 in student loans (2006). I also worked full-time every summer as well as all of my junior and senior year (part, to 3/4 time freshman and sophomore year). My social life consisted of dorm-LAN parties, on-campus complimentary student body activities, and splurging once in a while to go to the dollar theater to see campy movies or movies that were already out on DVD.
What surprised me when I went in to get a loan for my last two quarters is that I could borrow as much as I wanted (way more than anyone would need just for school) and the restrictions and accountability about how the money was spent seemed way too lax. I'd be curious to see studies about how much students spent in total on school vs. how large their loans are.
Not saying the way I did it was best, but I wouldn't trade the work ethic and freedom I've got from how I did it.
Faith is a willingness to accept something w/o complete proof and to act on it. Reason allows you to correct that faith.
So you can have "hot topic" classes with out the load and time of all the theory classes that's what's tech schools should offer.
Also college needs to have more drop in stuff with out all the filler and other classes like what Steve Jobs did.
"Social security ... is an entitlement".
Really?
So, what about all that money I've paid into it for the past 40 years? Doesn't count, huh?
Jackass.
Debt is not the problem - debt is a symptom of the problem. The real problem is young people are being hit by a one-two double whammy:
1) If they don't get a college degree they'll be mostly relegated to retail and manual labor, meaning they'll be stuck at somewhere around ten or twelve bucks an hour. Far, far too many employers require a college degree for jobs that could be done by high school graduates. There are a few reasons for this, and we could deal with the causes, but we won't because too many people are benefitting. As a recent high school graduate you basically have three choices: go to college, go into the military, or spend your career making lattes. Recently I'm hearing the problem is getting worse - in an effort to stand out graduates have been going back for advanced degrees, which just means employers can demand graduate degrees for jobs that used to require only a bachelor's degree.
2) College is a rip off. An absolute, bend me over forget the Vaseline reaming. Colleges in the US have some advantages no other industry has. For one thing they have perfect pricing. Can you imagine going to the local car dealer and hearing "Well, this baby will set you back $150k, but hardly anyone pays that. Just give us your family's financial records and we'll figure out how much you can borrow." That would be against the law, but that's exactly what happens when you get accepted to a four year college in the US.
The other big advantage they have is the student loan program is pumping essentially unlimited amounts of money into the sector. You don't want to pay that much? No problem. Any kid can pay pretty much any tuition as long as he's willing to sign away his future income. You have no market power under those circumstances. Millions of people are signing up for mountains of debt because that's what everyone else is doing.
And there's no way colleges can justify tuition based on their own costs. Adjusted for inflation college is more than twice as expensive as it was when I went in the '80s, and if anything the students are getting less than I did for their money.
People see education as a guarantee. That is why you can't get rid of them through bankruptcy. A college education is NOT a guarantee for a job. It is NOT a guarantee to success.
It isn't just about 'the major.' Yes, some majors are more profitable than others. But, that does not mean someone won't get a disability, the certificate/major simple not be applicable anymore, location, family emergencies, economic crises...yada yada.
Truth is, education is like any other investment. Students take a risk of spending four-six years of their lives toiling at mostly pointless crap, to get a piece of paper that might be or might not be a return on investment. Many times people find jobs completely unrelated to the field they are employed in. A person who can market themselves may do really well with a Philosophy major, and then become successful. A person who is extremely disorganized may have a degree in engineering but never land a job. There is risk with every major.
People accept that businessmen invest and it has risk. When a businessman declares bankruptcy, people don't go around blaming their decisions, marketing a product that is doomed to fail, or working in a niche market.
People argue that the degree is a lifetime thing, and say that "you get that piece of paper and they can't take it away." While a businessman can liquidate, but they still have *experience.* They still can put specific skill sets on their resume. What if they managed 1,000 people before they went under? Banks have never been able to take experience away. A degree is no different.
On a side note...I personally work in Social Work. Which requires lots of qualifications (License, Master's Degree, Insurance, some require car) but pay is low (I was offered as low as 32,000 in an expensive metropolitan area, that required use of my own car. They required me to pay the costs of business car insurance, gas out of pocket, and other general expenses. Health insurance wasn't great, and the job probably took closer to 60 hours a week...no overtime. This is not to far outside the norm). An MSW is a 60 credit hour program with the going rate at 600-800 an HOUR. Looking at 36,000 - 48,000 give or take. Add in an undergraduate degree...and the loans really hurt. (Yes, I am under the new IBC rules).
A large part of the problem is that course of study and total cost of a degree are not considered in the loan underwriting process. For every other form of debt, the borrower's capability to pay back the loan is considered in determining eligibility, size of the loan, and interest rate. It doesn't take an actuary to realize the debt incurred by a communications major paying a total of 100k for their education may be of lower quality than that of the engineering major paying half the amount. Interest rates and credit availability need to reflect that difference, for the student and the taxpayer's sake.
It's not a credit bubble; debtors defaulting on their debt will not cause a collapse like the mortgage market. The difference here is that the government secures these loans: if a student defaults on their debt, the government will pick up the tab and the creditor will be paid. The student will still be on the hook for the money, of course, but United States government is obligated make payments on the loan in the meantime. That's why student loans are so attractive to the financial industry despite appearing to be "high risk".
Our taxes have made us all indentured servants and Serfs to the government. We don't work for ourselves, we work to pay taxes.
While I roll my eyes at the amazing numbers that our (Australian) government pulls out when it starts quoting how much money is needed to fix this or that, and at the same time wonder how much it could REALLY be done for, I actually like paying taxes. I don't consider paying taxes as making me an indentured serf to the government. I consider it a small price to pay to have roads built, an army there to protect my country, help in case of a medical emergency (I also have private health insurance for those extra big emergencies if needed) and all those other wonderful things that make up life in a civilised world. I don't want to have to even worry about all those insignificant things that town councils look at, city mayors and their offices, state governments or the federal lot. My taxes are a get out of jail free card to not have to do all of that. That buys me the time and liberty to do what I want to do.
Moved to http://soylentnews.org/. You are invited to join us too!
Yes, nevermind that changes in bankruptcy laws have made it much harder to discharge debt. First with student loans, then with credit card debt.
Gee, you think that lenders might abuse those laws to offer loans to people they know can't afford them if people can't discharge their debts?
Wrong. They hate bailouts of criminal bankers that sank the worldwide economy only to have their asses (and bonuses) saved by the Fed, while the rest of us have to take our austerity for the team to pay for it.
Don't forget the 220 million the FED gave to 2 wives of morgan stanley bankers, who had no business experience, to purchase student loans. The agreement also covered them for any losses, while they kept the profit. Sweet! Where can I get a deal like that, free money and no chance of loss.
What if people don't start paying substantial amounts of that $687/month of yours for the first 5 years after they finish college? It's not unheard of that people that are fresh out of college don't make the same as people that have 5 or more years of working experience. Not only that, but they'll have a lot of tax deductibles once they start having kids, so in reality, the chances you'll be getting a solid $687 a month for the entire period are rather low
Maybe most of the people will be able to pay off the loans, but the people that won't be, may just make the profitability of the whole scheme go out of the window. If, compared to other investments, if there's not enough money to be made, you'll have a hard time finding investors that will want to sink their money in this sort of thing. Those institutions won't be looking at individuals not paying off their loan, but at the total return on their investment.
You can't really foreclose on a college education, so what are you going to do when the industry your education is about is in shambles? What if you get health problems, or marry someone that also has a student loan? Will one of you be able to (temporarily) stop working to take care of the kids?
I was promised a flying car. Where is my flying car?
My Burger-Flipping PhD at Harvard only cost me $500000, but luckily, I'm living on a minimum wage now so I don't need to pay anything back. I'm grateful to the government for providing me with a guaranteed student loan, because without it, surely I wouldn't have been able to land this job. Employers all require PhD's now, ever since 99% of the population started to have them.
France and Germany are economic powerhouses, and both of them have universal health care.
You really are living in the past.
..." ..."
"... France has lived beyond its means, for nakedly political reasons, for longer than most people alive can remember
"... This would be bad enough if the French enjoyed German-style economic health: but they do not
http://www.dailymail.co.uk/debate/article-2037509/French-banking-crisis-Frances-hour-reckoning.html
Note: That report was from 2002, and things have gotten much worse since then. Here's a more current story from the last week: http://www.sacbee.com/2011/10/26/4008283/college-prices-up-again-as-states.html
Another major factor is that -- even though faculty and facilities costs have not appreciably gone up -- the number and cost of non-teaching administrators have dramatically bloated (as part of the corporate-management takeover of universities in the last few decades). Today there are more administrators than teachers in colleges, which was not the case in the past. Article on that in the last month: http://www.washingtonmonthly.com/magazine/septemberoctober_2011/features/administrators_ate_my_tuition031641.php
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
The tax system is borked, as 16th amendment allows taxing income without apportionment to the States, the real problem is that some (half) people don't pay income taxes and so this fact can be used to raise taxes on those who pay them anyway, and the system is unfair in that the more one makes, the higher the rate of taxation is. As if it's not enough that making more automatically means one pays more taxes in dollar amounts, no, he has to be paying more percentage wise. Obviously you can't even imagine the resentment that this generates and fuck the economy if that's how it works. Just put it on a tab and fuck everybody who lives now and supports this system and fuck everybody who'll be inheriting this mess, after all, those who live now also inherited a mess from the past with all the SS and Medicare and War transfer payments.
You don't see a problem?
You can't handle the truth.
As in, they pay back up to half the loan if the student defaults. If the student cannot make the minimum payment the school makes up the difference. Then they might actually start rejecting people who obviously have no chance in their dream field instead of selecting students based on who can get a loan.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
While I agree a degree in computer sciences may not be required for rebuilding a Windows server, please DON'T think that if you begin to deal with legacy VAX, UNIX and then legacy database/licence/application servers require a high level of intellect, probably someone capable of passing a degree.
"Stuff like VB" - find (an engineer) who can write ADA.
Does non coding IT work really need Calculus?
NONE of IT requires calculus - including coding. In all my years of programming in the software industry and business, I have never used calculus - ever.
Now someone will say, "Yeah but in the CAD/CAM software industry you will NEED calculus and advanced math!"
No. We had Math grad students come in and handle the algorithms. CS people don't have enough of a math background for intense math algorithms.
Education is a right all of you wish to say. If you can't realistically study due to financial reasons I wouldn't call it a right but more of a privilege. In the end the issue is the amount of useless degrees awarded. You'll never have too much technical and scientific skilled people. You can always find a spot for an engineer, programmer, administrator, lab worker, etc. In fact, over here most of those already have a job with a signed contract by the time they leave college/university.
On the other hand the same doesn't count for all these political "science" majors, historians, and other such frivolous degrees. If you have 500 people applying for a single job you can't expect them all to get it. In fact it's these people that end up working at bus driver, cashier at McDonalds or other such jobs. So what you should really be asking is if these degrees should be able to get student loans. The answer is clearly no. And now that does seem unfair, but lets be realistic. If you already have a privilege system that depends on people having money or being able to pay back a loan then it's not that far of a step.
On the other hand, one must argue that if education is really a right one should be able to study without tuition fees. In other words, the colleges/universities should be non-profit organisations funded with tax payer money. No scholarships either for athletes so they can win pointless competitions between colleges/universities. Education should be about education, not money or political ideology.
This is a useless measure.
Anyone who could pay back their loans in 20 years could have paid them back in 25 and the other way around.
France and other countries have competitive exams for students leaving high school. Most university is free and the better you do in your competitive exams the more likely you are to get into the school and program that you're after.
It's a strong system leading to a strong country now and in the future.
Too bad that Americans (and I am one) tend to value money over the strength of our future.
blindly antisocialist = antisocial
Look, first of all, nobody is forcing anybody to take out Student Loans.
That said, learning to do even a basic risk analysis is part of growing up to become an adult (something that even today's 25-30 year-olds have chosen not to do). The basic risk analysis is this:
"I am going to be responsible for paying $X to get an education that will, in the end, result in Y probability of being gainfully employed for $Z per year in expected annual income."
If $X is large, and Y and $Z are small, then the risk is great and the likelihood of being able to pay back $X is small.
If $X is large, Y is close to 1, and $Z is large, then obviously the risk is warranted.
It's really not that difficult to see that spending $50K/year to get a Ph.D. in Underwater Basketweaving at Middlebury College is not a good risk, and that spending $8K/year on in-state tuition at a school like Georgia Tech to get a degree in pretty much any Engineering discipline is a good risk to take.
What we have in OWS is a crowd of 20-30 year old children who have not yet grown up and taken responsibility for themselves, and want someone else to pay for their mistakes. Get real.
that the same macroparasites that brought you the mortgage investments debacle internationally identified the college degree as another asset of the actual wealth creating class that it could exploit. A college degree used to be an asset that an individual bought and paid for and which brought value to an individual's effort over a lifetime. In short, it brought you more money lifelong. The macroparasites came to understand this and decided to tap the lifelong value of the college degree. Not content just to be paid for the college degree, they now demand a cut of the take lifelong. This is also what business CEO macroparasites are doing in corporations: they are demanding, and getting, not pay, but a cut of the take. Like tapeworms, they suck a growing proportion of the passing nutrients from the corporations that they have infected. We have a deadly financial macroparasitic infection worldwide at all levels going on right now. This is why pay and benefits are going down. They are not evaporating; they are just being transferred more efficiently to the one percent class of financial macroparasites. This is proven by the increasing distance between the graph lines (gap) of the assets of the wealthy and the workers who actually create that wealth. Until we are able to see this as an actual infection of the system by a macroparasitic class, we are not going to be able to deal with it. In the end, an unchecked macroparasite kills its host.
E Proelio Veritas.
I think the fundamental issue here is that these debtors were reckless enough to finance lifestyle, tuition, and course of study combinations that were fundamentally imbalanced. This is a classic personal responsibility problem, apathetic, self-entitled people making decisions in their youth and not wanting responsibility for them later. Why did they use student loans to go to expensive schools and study courses they should have known up front are unlikely to land them the type of salary that can pay back those student loans? I studied philosophy for two years as I worked though my non-technical requirements. I enjoyed that time and loved studying the subject but I knew it wouldn't pay the bills. Two years in I changed my course to computer science. It took me 5.5 years to graduate debt-free. And I didn't benefit from my state's lottery-funded scholarship program. I've watched as my peers that received that benefit pissed it away. And now they're whining about their debt load working for a third or less of what I make and requesting "relief". As far as I'm concerned, they should be forced to pay it back no matter how long it takes.
I'm not entirely sure it is too expensive. If that were the case then why are more and more people going? People are seeing a benefit to it.
Too many people are getting degrees that shouldn't do it. To be honest I don't really have sympathy for them. People should stand up to companies demanding unnecessary degrees but they don't. It's just easier to get the degree and hopefully gain an advantage over someone.
I think the growing importance of a degree is ruining high school (parents go bat shit if their kids would fail) so kids are less prepared leaving high school. Then the ones going to university just because they have to probably aren't gaining anything out of it except a shitty attitude of "I have all this debt so I damn well better be rich" and then they hit reality.
It would not surprise me if the push for degrees is to try and ensure you employees that are up to their neck in debt and scared about keeping their job let alone considering moving out of a bad job when they want. But whatever the reason behind it more people are going. There must still be a benefit there so suck it up and make the most of it.
Clearly, the rich got to where they are because they are very good at accumulating capital and investing capital (to create more capital, ad infinitum), better than everyone else
As such, all those CEOs and rich people are the most suitable to hold on to the wealth, and make the decisions on how to use that wealth.
Come on, you gotta have faith and believe man! When in doubt, just recite the prayer!
Our CEOs
Who art in thine offices
Profits be thy name
Thine money empire come
Thy will be done
On earth as it is in factories in China
Give us this day our daily unbeatable low prices
And forgive us of our copyright infringements
As we forgive those who put DRM against us
And let us not fall into temptation to walk out on our student loans
And deliver us from communism
For thine is the management
The lawyer power
And the glory of money
for ever and ever and every quarter
Amen
If kids wouldn't agree to take out huge loans, much less when they are going into an area that has very few related jobs, well, they are on their own.
They agreed to take out $160k in loans (or more) knowing the chance of pay on the other side wasn't there. That's their own damn fault.
Others you see just don't want to pay them back. I'm sorry, but you agreed to the terms of the loan willingly. No one forced you into it. You chose to take on the debt. Now pay it off like you expect people with bad home loans to pay them off.
Works the same way.
I assume your parents were rich enough to pay for you to go through further education debt-free, or you had another income source that ensured you would not need to take on debt? Interested to hear your story and your solution.
I can't speak for the USA, but here in the UK, it's likely that students will have to pay 9000GBP a year for course fees, plus accomodation, food, transport, other costs. Some may have access to 10K GBP a year at aged 18 but many won't. So many academically capable 18 year olds need to take on 30K+ debt, gambling that this is an acceptable risk and can be paid off later by the expectation of a higher paid job gained by a university qualification.
People are asking many questions about taking on this debt, some are demonstrating, some are writing to their political representatives, some are deciding not to continue into higher education. I doubt many of them have found ways of creating 30K overnight i nthe middle of a global recession, particularl those who are less well off financially.
My impression is that you were either blessed with rich enough parents that you didn't have to worry about debt, found an alternative income stream (I believe in the US the military pays for some education?), or didn't go on to higher (university degree) education?
I am interested to hear your solutions for those who don't have access to 30K or more....
testing, please disregard.
Thank you for posting this comment. It is so clear and succinct, and most of all reasonable.
Does non coding IT work really need Calculus?
Calculus is about problem solving and logical thinking. At least that's they way we taught it when I was a graduate TA. I would still recommend it to most people in IT, if they are going to be in a position where they will need to troubleshoot and resolve problems, even if it doesn't involve coding.
The underlying problem is that there are too many people going to college.
College education has become an industry. Because everyone wants to go, and the government guarantees a certain amount of loans, the colleges have upped their prices to match.
The huge numbers of people they're turning out have in turn reduced the value of a college degree.
The underlying solution is that we need to fix high schools so that a high school diploma signifies ability again. High school graduates of the future should have the abilities that our community college and state college graduates currently have.
For most people, "career" is going to mean working in an office. We don't need college careers for that.
In my case, I think college was fun but a hindrance. If you want to be a developer, you will have learned the skills you need by pushing yourself to explore the machine and read the books. Skipping college just gives you another four years of income and a chance to get ahead of everyone else.
I'm not sure I understand why this is so complicated?
When you borrow money, isn't it logical to understand that you have to pay it back?
If there is interest (as there usually is) you have to pay that back as well. Money isn't free.
When I bought my first (only) house, it seemed like we had to sign at least a couple of times confirming that we understood that in exchange for borrowing something around $100,000 we would have to pay around $300,000. (These were back in the days when a 7% interest rate was good.) It was the only point during the process when I actually physically hesitated, when I realized as a 25-year-old that I was committing to owe that staggering of an amount.
I signed my name to that, that I promised to pay it. Period.
Now, I see a lot of posts about 'predatory' lending. Simply, that's bullshit.
Of COURSE your lender tries to get you to borrow more, they aren't a bloody charity. They're trying to make money.
Our loan officer was an idiot, she could barely work her calculator. So we double-checked every calculation, as well as confirming all the verbal statements were reflected in the documents. They kept telling us "you can afford more house" but we recognized that this was a serious matter and (here's the important bit) only an idiot would pay as much as they could afford leaving nothing in reserve.
Some here have posted that changes to the bankruptcy laws have made it difficult/impossible to discharge that debt. That indeed is probably the pernicious influence of debt-company lobbyists, and their government friends protecting them. Bankruptcy seems like it should remain an option, a 'reset' button for ones' financial existence...that just makes economic sense to allow someone to reset and hopefully become productive instead of desperate and hopeless. But the consequences of this reset need to be appropriately draconian, depending on the size of the default - the idea of multiple bankruptcies over a lifetime is absurd.
If people want to be exonerated from their loans, I'm fine with that. But what needs to happen is such exoneration needs to be accompanied by a personal admission of fault* and a prohibition on that person borrowing large sums for at least a decade. Yes this is draconian: If they were too stupid to understand the consequence of their commitments, that's fine, everyone makes mistakes. But the system equally needs to insulate these people from making the same mistake in the future.
*this would probably be the reason this idea would never fly; it seems passe that people be held personally accountable for their choices.
-Styopa
The text of this article is more or less verbatim from this week's copy of The Economist's article "Nope, just debt." Some citation for credit would probably be appropriate.
What a lot of folks here aren't taking into account is the fact that the whole collegiate education system will be turned entirely on its ear in the next few decades. In fact, we are seeing the nascent stages of this already happening with the wider dissemination of knowledge via the internet. For instance, if I want to learn how to start programming, I can pool enough information from a variety of Google searches to cover about 3 semesters worth of programming courses. For a nominal fee (nowhere near what I would pay for a single course over a semester, let alone for a single lecture) I can take that acquired knowledge and turn it into a certification that translates into a real wage increase, or at least a chance at opening a door.
To be honest, I have picked up more knowledge since leaving college than I acquired in college. Did college give me a framework to learn this new knowledge? Not really. For instance, I spent the majority of my college career planning to be a graphic artist, but using techniques before the advent of computers. I used computers all through college, but they were for writing term papers or to look up course materials and email, and, of course, a few games from time to time, but never really for graphic design.
But my entire industry was turned on its ear by the advent of computers, so much so that by the time I graduated, I had discovered that no one out there was hiring folks with traditional training, but they were paying top dollar for experienced artists who could work in Photoshop and Illustrator. So, over the course of two weeks, I went through a crash course to learn both programs, and landed my first job out of college working for an advertising agency. I kept that job for about 2 months until my paycheck bounced (a reality-check for me, since nowhere in my college career did they cover this part of the work) and then I moved on to bigger and better pastures.
Ever since then, there has been that temptation to go back to school. But each time, when I have been faced with new crossroads in my career, instead of going back to school, I have instead knuckled down, picked up the right material to learn and then picked up the certification as a matter of due course. I taught myself through most of my programming and development experience this way, picking up C++, HTML, Perl, Java, SQL and several other languages. I even went so far as to tie in my graphic design background and now spend a large amount of my time doing UI design.
To be honest, the last time I spent time in a classroom was over 20 years ago, and the last student loan I paid off was about 15 years ago. But I feel that I am constantly learning and refining the knowledge I already possess. I guess this is the true definition of "professional." My next "re-invention" will be to move into game programming and design. I fully expect that I will do well considering my design experience, programming experience, as well as my background in UI design. Is this going to be a paying gig? Probably not, since I make more than enough money at my day job. Is it going to be fun? You bet it is!
Non-academic administration, especially senior administration, has been expanding much faster than faculty.
Over half of University of California salaries go to administrators, whose salaries have increased over the years while faculty salaries have flatlined relative to inflation.
UC Davis now has more administrators than professors.
UNC Wilmington is further combining already combined science departments to save $80,000 while expanding its "diversity" portfolio's five separate departments plus a six-figure salary head over it all.
This also shows why education is becoming less valuable. They'll actually cut hard education funding to expand politically favorable administration programs and give jobs to their friends.
The lesson of freedom needs to be addressed here because the interference of the government is exactly why there is a 99%. It is also the reason why middle class is shrinking and people are burdened with debt both individually and collectively as a nation. I would state that in light of all these facts, those government officials who (with even the best intentions) artificially prop up one group of people over another damage the poor. Even when their intentions are to help the poor. This is the case with the housing bubble and it is the case with the student loan bubble. Sadly you CANNOT just spend your way out of these. You cannot 'bail out' the situation without creating yet another bubble. The market has to be allowed to pop. The real dis-service comes from say-anything-to-get-elected, politicians not having the courage to change this. We vote for the kids who says "he can't promise soda in the drinking fountains" instead of the true leaders. There is one politician out there who is willing to take a stand. He's the only one brave enough to take a stand and yes, people will say that 'He hates poor people'. But it is his respect for each and every person that will vindicate that. It is his knowledge that our system as constructed robs the poor of their ability to raise themselves. Ron Paul.
"Consider: * The US massively subsidizes education. The price of education rises far beyond the rate of inflation. * The US massively subsidizes housing. The price of housing rises far beyond the rate of inflation. * The US massively subsidizes health care. The price of health care rises far beyond the rate of inflation."
It's a very odd kind of subsidy if it causes people for whom the subsidy is intended to end up with enormous debt that's roughly equal to the amount of subsidy. Maybe that's why it's called a loan instead of a subsidy. In other words: it's not a subsidy.
Interestingly, in times and places where education was/is (really) subsidised, students do not end up with enormous debt. Same with healthcare.
"And I don't pretend to have an answer to this dilemma."
It's similar to the toxic mortgage loans: loans are worth money so they traded in the financial markets. Some insiders know those are bad loans (much more risky than they are made out to be) and bet on those loans defaulting. Result: many traders/investors lose money while a few insiders (ie the directors of Goldman Sachs and Citigroup) make a killing.
Huh, I never considered hedge fund managers or high frequency traders to be providing value via "creativity" and "inventiveness", but I'm sure happy to let them argue that before being hung in a public square.
Hedge fund managers make investments on behalf of their clients. Here the idea is specialization. Instead of you having to research a bunch of investment vehicles for your small pile of cash, you along with hundreds of other people hire a hedge fund manager to do that for you. This means only a few people have to do that research that before specialization hundreds had to do. As long as there are enough fund managers to avoid group-think society benefits by having fewer work hours spent on finance overall.
High frequency traders have driven down the insane profits that used to be made by human traders on the trading floors. This has succeeded to the point where many of my neighbors in NYC who used to be traders have now switched to the other side of the house and have become fund managers and investment advisors. This is often misunderstood because trading itself is a zero-sum game so there is no benefit to society in the profits that are made, but the HF traders have driven down the overall profits which is a net benefit to society.
None of this means I will defend the privatization of profits and the socialization of losses. But I don't think that is a problem with the financial industry per-say. Other industries have been equally successful at fleecing society, Hollywood with the copyright laws, large 'real' property owners with the zoning laws, the drug industry with our patent laws, and industrial farmers with our food labeling and inspection laws. The problem is not with our financial industry, it is with us and our inattentiveness to managing our own government.
I was just talking to a college prof. He told me admins at his school are arguing that higher tuition with big discounts attracts students. i.e. Given the choice of attending a $30,000/yr school with $5000 scholarship v.s. $40,000/yr school with $10,000 scholarship, the students will choose the larger scholarship.
Didn't make sense to him or me, but apparently does to marketing types.
I have noticed more schools using this Harbor Freight approach - impressive discounts means more sales.
More than what industry pays for equivalent experience. There is also a premium for living in the expensive Bay area.
And I've heard as little as half that. You have to teach a dozen courses over three semesters to make ends meet. And this pay doesnt include making up for lack of benefits and [ tax deductable ] expenses.
Your business would be ruined if you declare bankruptcy
Google emerges from chapter 11 disagrees with you
I would somewhat object to the "health care" part, but that depends on how it's done. In Canada, health-care is subsidized, but AFAIK there are limits to how much can be charged.
In absence of a could be determined by the line between volume-based or price-based profit.
For example, in BC there is a province-based vehicle insurance carrier. Everyone in the province must get their (base) vehicle insurance through this carrier. Ignoring the various other issues with this, shops that want the business of said carrier can only charge up to certain amounts. Obviously they get higher volumes that they would from non-carrier or out-of-province claims, but they don't get to charge as much.
I don't have cable TV
Then I guess you had to the money to move away from a town where the local cable company in effect won't sell you Internet without TV.
This whole discussion seems off to me. We have compulsory education through 12th grade, and we pay for this entirely through taxes. We don't charge minors for their education, though of course there are private schools which are optional. Regardless, the minor does not end up in debt, and is not required through force of law to be gratefully repaying society for suffering their existence and education.
Then suddenly, the high school grads are adults, and the costs of further education is ultimately their problem, because we say so. The only realistic source of money for this very expensive education are one's parents. The pay from most jobs a college student can get is a joke. We've been seeing that going the loan route breaks down when graduates are unable to get jobs. The military way is very costly. Grants and scholarships have so many requirements that they are sometimes in the embarrassing position of not having awarded any money because no one qualified, or they have to bend the rules. I've also seen the kind of scholarship that is merely bait to get a student to attend. Once students have invested a year or 2 towards a degree, they discover that the requirements are too much and they are unable to keep the scholarship, and once lost, it cannot be regained. A requirement that one must maintain a 3.5 GPA doesn't seem unreasonable, until one is victimized by a few bad professors who relish handing out F's to people they just plain don't like regardless of or perhaps even because of merit, or weed-out classes where the game is to be tough on everyone to get rid of the weak students and never mind whether they're being fair with the tough love, or a department that is so afraid of grade inflation that almost no one receives an A even when they have earned it.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
No. We had Math grad students come in and handle the algorithms. CS people don't have enough of a math background for intense math algorithms.
Your CS school fucked up. You do realize computer science is a branch of mathematics, right?
We keep hearing about these mega sized student loans for people going to a 4 year university. Why not cut those loans nearly in half by spending the first two years at a junior/community college? In all my time in the local CC, all I ultimately had to pay for was books and parking. Come tax time, there were various programs that took care of my tuition costs completely. Even if I had to shell out for class fees too, the whole deal would have cost less than a single semester at some high end university.
Sure, local colleges may not offer the same level of education as a university (which is debatable), what percentage of students actually bust ass and excel during these first two years of freedom from high school and home? How many of these people with giant student loans and a degree actually got any more out of it than if they had spent the first two years in a coma? Perhaps the student debt problem would be so large if the money had been spent in a more realistic manner, instead of squandered on America's false expectations of "best and most expensive" as always being the wisest return on investment.
"The only difference is that in this case, the government is printing a special kind of money -- money that can only be used for one thing."
If you borrow in excess in tuition, which they usually allow you to do so because of "living expenses", then you can use the money to pay for whatever you want, be it car stereo or your next spring break.
For me I use the excess to fund my health savings account and IRA account, getting a huge tax deduction in the process.
New Economic Perspectives
The more the government provides loans for tuition, the higher the universities will charge, which ends up with zero benefit for the students as a whole. And what are the students asking for to fix the problem? More loans!
"Most of us understand why the government can't just print more money. "
Indeed they must first talk it over and agree to print even MORE money than was originally needed to suit their own personal re-election agendas. Seriously, it wasn't THAT long ago the bailout happened...
Oh, you mean we understand why it SHOULDN'T just print more money, not that it can't or won't. Gotcha.
The problem today is that students are led to believe they must have a college education in order to get a "real" job. Hiring managers are led to believe this as well, so we have college-educated people doing laborer's jobs. The truth of the matter is that it makes the hiring manager's job easier to filter resumes for only college graduates even when hiring a truck driver.
The reality part of this is that there is a fairly simple division that can be made in the general cateogory of employment in the world today. There are jobs that require the abstract manipulation of symbols and there are jobs that do not. Being a cashier at McDonald's does not require this ability whereas punching numbers into a CNC machine in order to make a complex part does - at least to understand what you are doing. This isn't something simple like the ability to do long division or read German labels on a machine. This is fundamental to the way society works today and it is something that has been proven that it can't be trained into a person. Either you have the ability or you do not. If you do not have it, you are not going to be able to be a computer programmer. You can also write off other careers like writing music that would not seem at first glance to be related.
One of the great retraining fallacies is that you can take a laid-off truck driver and teach them to be a computer programmer. If the subject has the capacity for abstract symbol manipulation they will easily grasp the concept of programming and be able to succeed at it. However, if the subject does not have this mental ability they are simply going to be frustrated to no end and never see the point. It has nothing to do with intelligence, although there is some argument that intelligence is related to this ability. But I do not want to equate the lack of this ability with someone being "stupid" or "smart" - it literally has nothing to do with it.
What we are doing today is setting up people going into college for a huge failure. If we indeed push everyone towards college regardless of their abilities they will not succeed and, more importantly, their failure will become our failure as a society. There is certainly the scenario of the potentially productive laborer or tradesman being put into a position where they cannot succeed and considering themselves to be a failure for life. This doesn't do anyone any good, not the person themselves, not the education system and not anywhere where they might work.
Read about this some more, find out more and stop pushing people into college when they don't need it, want it or even should have it.
Until we come to grips with this and stop trying to fit everyone into the same "knowledge worker" cubbyhole there are going to be severe problems. We will have college graduates which are incapable of finding a job they can actually do. We will have companies hiring people on the basis of a degree and pushing them along a track that they are not only not suited for but incapable of succeeding at. I would suspect a significant number of suicides can be traced to this sort of situation because given what people are taught today, there is no way out for someone caught up in this.
The most important change that could be made it to allow existing loans to be refinanced more than once, just like a home loan. It is painful to watch loan rates continue to drop, knowing that mine are locked in above 6%. Having the ability to refinance sounds like a simple change, but no one is talking about it.
The US total debt is around 50 trillion
US M2 money supply around 9.5 trillion.
The 9.5 clearly cannot pay the 50. You may be able to pay the interest, and the principal of the 50 in 100 years if new larger debts are created, kicking the can down the road which means there's more credit around to pay the old debts (this is what they call growth) but current debts are not payable from the current money supply.
The US monetary system is a grow or die one. You either inflate or you collapse. Right now. No growth. Which means lots of people and businesses are going to collapse.
Ooops there goes a bank. A big one. One of the Fed primary dealers too.
http://www.zerohedge.com/news/mf-global-finance-files-bankruptcy
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At some point someone thought getting an educated population was worth the risk/cost ....
I agree with that idea, although I may disagree with some current implementation details. I am only arguing against a different idea, the idea that defaulting on bank loans somehow effects (to use today's popular euphemism) the 1%'er (bank execs, etc). In truth it is the 99% (taxpayers, students, share holders, etc) that will pay.
I have found that being a scientist is a fantastic way to learn how to think like a scientist.
"The changes announced this week are designed to ease the pressure on struggling graduates."
Guess I screwed-up. Instead of choosing a major with a good chance of generating fiscal success and paying as I went, I should have gone for some glitzy, relatively-useless piece of parchment and run up the bar tab while I was at it.
That way, it would me who was being bribed by a two-faced politician using my own money.
Regards;
Exactly. cript2000's question should really be:
"If their debt is forgiven at 20 years instead of 25, who eats the extra loss?". The answer is, "It doesn't really matter, because there isn't any."
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Isn't it?
The Daily Mail as a source? Really?
I know the whole "let's Google until I find something that says what I want" thing is fun. But citing an editorial in the Daily Mail as if it somehow proves your point is just retarded. It's a tabloid, it has a well-known (and heavy-handed) conservative bias, and the piece you cited is a fucking editorial.
I don't care what your political point of view is, but if you don't know how to think critically, and evaluate your sources before trumpeting their claims, you really have no business opening your mouth.
You don't see a problem?
Yeah, I see a problem. The problem is you are an idiot with no idea what the fuck you're talking about. The harder question is what is the solution?
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