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U.S. Students/Grads Carrying Over $1 Trillion In Debt
An anonymous reader writes "Time reports that American students and grads were carrying $1.08 trillion in student loan debt at the end of 2013. This compares to just $253 billion a decade earlier. Aggregate debt grew 10% in the past year alone. 'By comparison, overall debt grew just 43% in the last decade and 1.6% over the past year.' About 70% of students graduate with some amount of debt, and the average amount owed is $29,400. 'Delinquencies on student loans have risen dramatically over the past decade: 11.5 percent of graduates were at least 90 days late on paying back their loans at the end of 2013, compared with 6.2 percent delinquencies on student loans in 2003. Moreover, the Fed's figures on delinquencies hide more stark data: nearly half of all students with debt aren't currently in repayment thanks to deferments and forbearances and the fact that students are not expected to pay while they're in school.' An attached graph shows an alarming spike in delinquent loans that looks a bit like mortgage delinquencies did at the beginning of the sub-prime crisis."
Tell me again why college in the US costs sooooo much? It's not like you are getting a super special top notch education that is not comparable to top Canadian universities for example.
Tired of my customary (Score:1)
After Bush made it impossible to shed student loans through bankruptcy, tuition went up dramatically. Because it could.
So should I stop making payments, in anticipation of looking like I need a government bailout?
-Lodlaiden
You can thank places like University of Phenix and Devry for this.
The problem is that anyone can get a loan, even people who definitely have no prospect of paying it back. With guarenteed loan money, schools can charge whatever they want and you'll just have to take out a bigger loan. And of course 18 year olds fresh out of high school don't understand the power of compound interest, they just know that they "have" to go to college to get a good job and they'll get a better job if they go to a fancy private school.
While you can't get a bachelors from our local community college, it only costs $2,500 a year in tuition and you're getting credits that can transfer to any state school. Why can a community college offer actual college classes for that little, but a 4 year school can charge $10,000, $20,000 or more for largely the same education? Its just insane.
One piece of good news is that the total amount of mortgage debt is 13 trillion dollars, which is quite a lot larger than the amount of student debt. So when the inevitable student loan financial panic arrives, it will probably not be as big as the subprime mortgage crisis.
In Finland, the government-backed student loan is tied to the student benefit, which you in turn get only for the typical length of the studies for that degree, so in practice you can only draw about €10,000 at maximum for a single 4-year degree. If your studies take longer than that, you have to pony up the extra money by yourself.
You can thank places like University of Phoenix and Devry for this.
Just think of all the amazing college football stadiums that have been built with that trillion dollars. I think it is well worth it. College isn't about education anymore, but rather think of them as world class sports orginizations.
Student loans aren't dischargeable in bankruptcy, the only way out from under them is to die. So how would a crash work in this sector? Are these loans being collateralized? Is there going to be a 2008 moment? I doubt it. This will just be an ongoing drag on the economy.
I delt with the delinquencies department when I was stuck living in the middle of the countryside with my mother, a fake leg and depression and no self confidence. They threatened me at home until I moved into a gay friend (uncomfortable sometimes) in another city where I started work I couldn't physically in retail. When my fake leg broke, they more or less said it was my fault for taking the only work that was around and for being handicapped. I should have died from cancer when I was 12 at that rate. I was close to hanging myself in Seattle in front of a bunch of children to protect them from a similar fate because of them.
The department of education cares for no-one. They are only full of threats. The kind where if you tell a person in a wheelchair every day, they will eventually kill themselves.
I had to go through the Slashdot questionnaire to work out how to restore Slashdot classic. It was awful! Imagine having your normal web browser work like a mobile web browser. It was all of 5 words per screen! Traumatic.
My theory: This "student loan bubble" is actually the bubble that caused the mortgage bubble. For the past 30 years, college loan professionals have been convincing 18 year olds that 5-digit debt is ok. We were "broken" (as in horse context) by the time we borrowed for our first car, our eyes glazed when buying our first house. We were trained to be numb by rationalizations worthy of drug pushers. The first thing a young person does at 18 is sabotage any hope of compound interest savings accounts, as every penny that would have been put away is spent on compounding interest in the wrong direction.
Ok, my college experience turned out ok. But I circumvented work-study and doubled my working hours (food service). If you DO borrow to go to college, it may turn out ok, but be sure to work in a few economics and accounting classes.
Gently reply
It can't be discharged by any bankruptcy proceedings. You are hooked for life once you take a loan in this form. We abolished debtors prisons sometime around 1800s, then indentured labor then fought a civil war to end slavery. Then created a debt that can survive even bankruptcy chaining the earnings of someone for life!
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
The government has essentially taken over the academic loan business in order to make funds more readily available to a greater number of people seeking a college degree. The result of this easy money? Not only this debt crisis but also college tuition and fees inflated at four times the rate of cost-of-living inflation. Way to go government intervention!
the fact that students are not expected to pay while they're in school
Surely they can agree with the lender to at least reduce the interests, or even reduce the original loan, if they have the means? It shouldn't be a bank's best interest to push their clients into avoidable difficulties. People talk and long term clients switch banks.
About 10% of the debtors owe more than $40,000. There is no reason to take on that much debt unless you are going to medical school.
Need to drop the college for all idea and replace it with more trades / tech schools / apprenticeship and get rid of the 4+ year idea as well.
So, pay the student loan with a credit card, then declare bankruptsy... Who said credit cards are bad?
Excuse me, but please get off my Pennisetum Clandestinum, eh!
This is clear proof that the banking class is responding to the common man's insistence on opportunity by selling him a deficient education for a price bloated by manipulation. If you want a chance to move up, they'll give it to you, but you have to sell yourself to the banks first.
Time to declare open season on Wall St?
330k in loan debt right here. Busted my but to get out of college near debt free, then medical school costed near 250k before obscene amounts of interest. IBR and privates total 2200 a month.... That's a house.
This bubble can't pop, as there is no way to discharge the loans. I did something I think was fairly smart. Joined the military. 10 years and loans are gone. Then life starts over. Hoping we start a new war somewhere so I can deploy and get some tax free income to speed up the payback.
One thing I will continue to impress upon my son is how toxic debt and specifically student loans are. My friends and I used to joke about how much our brains were worth as we racked up 6 figures in debt. Then you realize it's all a crock when your in debt prison. Moral of the story, get in and done with your education as fast and cheap as possible.
As much as people try to explain it away all of the economic problems we are seeing in the news have the same root cause: Money is simply a stand-in representation for resources so it can be shared amongst the populace. If the amount of resources stays roughly the same (which it does) but the population grows exponentially then there is simply fewer resources to go around as time progresses.
Yes -- we may occasionally stumble on a more efficient use of resources but fundamentally the earth is a pretty closed system. While there is a small minority of people who go to school in the genuine quest for knowledge and understanding the vast majority are doing so for a realistic gain in the future: a better job. And why do people want a better job? More money. More resources. It boils down to our basic physical needs: to eat, to reproduce, etc. These needs drive people to consume resources and there are more people and the same amount of resources. Expect the future to look more and more dystopian unless some major changes happen.
People who focus on the current upswing of the stock market and certain limited segments of the economy are completely missing the point: The long term trend is progressing in a pretty clear direction. There is also some snowball effect. Most of the improvements of modern life were made in part because people were well educated and didn't have to worry every day about survival. That's how our civilization formed, after all: a food surplus drove civilization. Expect the intellectual output of the human race to suffer greatly when smart people are occupied with how they are going to eat today and not busy creating the future. If drastic action isn't taken (globally) our population climb is going to have a very, very predictable outcome and it will take a great deal of time for civilization to repair itself -- if it does.
Once the fluid pool of global investment money was throttled back from the slimy mortgage market, they were bound to look at student loans. Everyone can get them, they are not dischargable in bankruptcy, they are increasing every year, the interest rate is way higher than the mortgage rate. This will be the next source of a financial meltdown.
If Slashdot were chemistry it would look like this:Cadaverine
You've heard it before, but this is inevitably the next financial bubble. You take a kid with no earning potential, saddle him with a lifetime of debt so that he can GAIN some earning potential, then move the goalposts that his earning potential doesn't earn anything, but demand that debt be paid... something MUST give somewhere.
Alienating an entire generation of well-educated kids has not worked out well in the past.
I think most would agree that almost nobody ever approaches college in a way that justifies the costs. We know that their are plenty of statistics that can guide a student towards a end degree that is worth something. But their are other students who simply feel college is just another four years of education. They come out with no more focus on what to do with the rest of their lives. My Daughter is struggling with this now and has a year left in High School to try and pin down what her focus of education will be. I give her credit for knowing that not just attending college is enough these days. Basic business, or liberal arts don't cut it anymore. If that's all the further they can focus their career on, then maybe a four year college is not for them. Not saying just forget about further education. But you need to develop a set of productive steps that not only will be worth the investment. But also give you skills that can provide you with a job you will want to do, and pay you what you need to earn.
Profs make text books to suck more out of the kids. They charge 100-150/book for every kid that takes the course (not just the classes he teaches). He can rake in a pretty nice bonus each semester by slapping together his own textbook. Plus there is a chance that other schools will pick his book and it also guarantees (if he has the political power) that he will be bucking for the head of the department.
Colleges are able to charge more for perhaps two reasons. The first is that student loans are fairly easy to get. This makes it easier for colleges to bill students for around that amount, plus or minus whatever the parents and a temp job can dish out.If you look at prices before student loans, they are dramatically lower. A second factor is that colleges, and even some post-graduate training, have become mandatory to achieve a decent wage (where decent is somewhere between livable and capable of raising a family). This compels students to risk being crippled by debt in order to avoid being crippled by poverty sometime in the future. Some posters mention that "nobody forces you to take a loan", but economic and societal pressures make it pretty damn hard not to.
This naturally brings us to a bunch of controversial solutions: apprenticeships, subsidized colleges, increased minimum wage, loan forgiveness programs, etc. I'm personally in favor of any option that enables citizens to get better paying jobs regardless of whether if debt is payed back or not. Most of the time, the government will easily make back its money through increased taxes on higher paying jobs and society benefits from having more people available to take on the advanced jobs.
if you understand it or not. You still don't have a choice. Right now major employers won't even look at your resume unless you've got a 4 year degree. The HR filters just toss you right out.
Requiring degrees has lots of benefits for employers. You get a more desperate employee (they've got a tonne of debt after all). Odds are you don't have to spend a dime training an employee. If you don't get enough employees you can run to Congress and ask for more work Visas.
The real problem here is that the 1%ers that have most of the wealth are happy to sit on their cash until a better deal comes around. So we're the people that hold the purse strings have no incentive to push education. We used to use a 90% tax bracket to force them to "use it or lose it" and then the gov't poured that money into education. It's all about idle capacity in the economy.
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Very.
I have worked with CS degre'ed people and industrially educated people in I.T.
I have been trying to understand whyt here is such a huge difference between CS Degree;ed people, with BS/MS degrees and Industrially educated people.
I have come to the conclusion that:
1) Industry educated people love their work far more than CS degree'ed people. Daddy didn't pat for their education, they come to work everyday because they want to, not because they have loans to pay off.
2) Industry educated people are far more motivated than CS Degree'ed people. The reason why this fits my observations is the typical CS degree'ed person wants someone to teach them, which is why they went to school anyway. Industrially educated people see education more as their responsibility.
Carefully looking at resume's, I found industrially educated people who do nat have CS degree'es statistically have more independant/free lance work on their resumes. (i.e. They know how the technology works to the extent that, they do not need someone to hand them a check every 2 weeks. They really can develop solutions themselves and sell them.)
But, that may be due to the fact that some jobs require CS degrees and industrial educated people find that if they want to eat, they have to do it all themselves.
So they are much more resourceful and typically better business people.
3) Personally, looking at the education of a typical CS graduate, I am not convinced a university degree in the age of the internet is worth $120K.
My house for example, is worth $150k. I don't have a degree, but I own a house. I think it was a much better investment.
I still am employed in the I.T. world though, so in my opinion if you are doing hardware or software in the engineering department, or selling solutions, you can do a University program for 4 years, but you are at an EXTREME disadvantage compared to a person like me, that leverages a internet connection, does a few free lance jobs to get your career going.
Plus you typically get to stay at home rent free while you figure this stuff out.
By the time compare a 4 year tour through a university, you will most likely already have references, no debt and may even be employed.
However, Universities do have their place in education, but not at the $120K level for years anymore.
I could go back to school and would, but I would probably pay about $15K for a university degree for 4 years.
I don't think it is worth more than that, in my opinion as both a 25 year veteran working in the computer industry, and hiring and firing many of you out there with CS degrees.
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
If not for loans only rich people would get quality education... but then again is it worth all that money.
...because they already have money, if we don't enslave each generation with debt?
They aren't children. They're slaves to the investor class, and it's reach the point where the next generations will never become members of the investor class.
1) Go to college because your parents tell you its the only way to succeed.
2) Bust your tail and do well in college.
3) Be unable to find any job coming out of college.
4) Be unable to work a minimum wage job because it won't even pay off interest on your loans.
5) Now what?
God spoke to me
buy a new car as soon as they get that first job. A mid-level car costs about $23K (Toyota Camry starts at $22,495) but they won't bat an eye about the car payment while they moan about the student loan.
Go to a state school, live on campus, buy used textbooks, apply for any financial aid available beyond student loans. It is possible to graduate without massive debt. Oh, and get a degree in something more useful than Social Work or Ethnic Studies. There's just not that many jobs for French Literature grads or Art History majors.
Thanks government for making student loans "affordable". All the easy money in student loans did was drive the prices higher; we had inflation in college costs because of an oversupply of easy money.
The education you get at Harvard or Yale isn't first on the list of reasons why people want to go to those schools (or maybe even second or third).
The big reasons are the cachet of a diploma from those schools opens doors at grad schools and employers, and maybe even more importantly it's the people you go to school with are the economic elite. You get to rub shoulders with the rich and make contacts with them.
Other schools may offer equal or even better educations, but they don't offer access to those people.
Companies don't train anymore. They won't even look at you if you're not carrying a 4 year degree. Why should they? Congress will give them all the Work Visas they want.
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Higher education gives a chance to the small guy to attain a comfortable life and to move up in society. The elite don't want this, and in places like the US, they will manipulate the government to have policies where education is exorbitantly expensive, and puts the ones who take loans (and therefore, a risk), into a nearly impossible situation.
where after a mortgage default the bank gets the house, AND you still owe the bank the loan!
They start programming children to go into the system beginning in kindergarten. It is a self-reinforcing system.
Help stamp out iliturcy.
I paid about $25K for a top-10 BS/MSEE degree at a State school. I dug up scholarships, part time work, and other sources of funds and ended up being able to graduate without any debt.
That same state school runs less than $50K for the same degree today (it has been a while). Still ranked in the top 10. Still a fantastic value for the money. Still feasible to pay for it through working, scholarships, and aid sources.
How students about picking majors which will actually land you decent job at the end and only take on debt load is reasonable compared to expected career salary. If you can't plan that out, then consider another field and stop getting the rest of the world to pay for your playtime.
For the last few years the run away costs of a college education have caused some to state that borrowing and spending all this money for higher education is actually a bubble. Several of the earlier comments about the huge administrations in schools now and the relentless hiring of administrators while other staff is reduced is also a symptom of this.
My kids graduated from college in 2013, and I had them do community college first, and not take on any debt. Especially for my daughter, the English major who has visions of grad school and more in her future.
For more information and it is a fast read that covers the topic nicely:
http://www.amazon.com/Higher-Education-Bubble-Encounter-Broadsides-ebook/dp/B0088Q9TAU
No one wants to hear it, but when it requires a college degree to flip burgers, you have a problem. When people have a bachelors degree to become "Java programmers" you have a problem.
Stupid people doing stupid jobs don't need a college degree.
HR departments and hiring managers need to learn this.
There is a lot of little things, not just one big answer. But it comes down to supply and demand all along the chain.
Apparently you stopped your studies at interest rates.
Loans allow leverage. By taking a loan, you can get a far nicer house now than if you waited to gather all the cash up front. There is a time-value to having the nice house now. That nice house usually appreciates at rates well above the rate of inflation, and over the long term, well above the interest rates on Mortgages. YOU get to keep the gains on the 'levered asset'.
So you can own a house for $1, but I was able to get a house worth $10, and when they appreciated, your house was worth $1.50, mine worth $15, and I was able to re-invest the liquid asset into a second house, now also worth $15. Along the way, I might have paid $5 in interest, but that means I have $25 and you have $1.50. (Yes, I have loans for $20, but that means I'm ahead by $5 compared to your gain of $0.5.)
But if you can't tell a winning investment from a losing one, probably better for you to have $1.50. Congratulations.
A simple-minded objection to interest rates makes you a rube, not Insightful. The Mods should reconsider.
Well, that 20,000 square foot gym and aquatic center with 2 Olympic sized lap and diving pools wasn't built for free you know, and all of those brand new buildings, designed by world class architects no less, also cost money to build. Then you have the brad new student center with the gourmet food court, luxury spa and other resort type amenities. All of this designed to appeal to the spoiled and narcissistic undergraduates who attend these 4 year vacation destinations, financed by taxpayer backed loans, and whine when they have to work hard and pay them back after they leave school, with or without a degree. A big part of why college cost less for our parents' generation was less government financing, with the exception of the GI Bill which was limited to veterans, and more spartan facilities designed to be minimalist and functional, not luxurious and indulgent.
Damn, I thought my $20,000+ debt to the Department of Education was unbearable, but to have a $1 trillion debt is something completely out of hand.
Kinda makes my debt tiny in comparison. Dammit, I'm going to pay that back now that it seems like such a small and manageable size.
The only question I have is "how do I profit from the knowledge that there is another loan bubble?"
It seems you could short equities in for-profit colleges, but they don't represent the bulk of the debt (at least I don't think so.) As far as student loans themselves are concerned, aren't most of them backed directly by the gov't? In other words there's no Fannie/Freddie that I could short sell.
I'm sure some savvy investors have also thought of this - does anyone have any sage insight for me?
And yet, costs have not re-normalized to meet that new reality.
I don't think you understand. There's nothing to make prices "normalize" because anyone who wants a cheap student loan can get one. It's a pipeline from the government, to universities through any number of students - indeed the more students there are the better the money "bandwidth" to the schools.
The schools don't care because they get the money. It's the taxpayers who have to tax in on the chin WHEN there are massive defaults because not many people can really make back $300k on a basket-weaving major (without even the underwater specialization these days because who can be arsed?)
"There is more worth loving than we have strength to love." - Brian Jay Stanley
"nobody forces you to take student loan" is a common false choice
1) Going to college at all is a choice, and lots of people could go without.
2) I did go to college - but I worked all through college EXACTLY so that I could keep student loans small. I left with just 11k of debt.
3) Pick your college with a consideration of costs in mind as well as what you want to study. When choosing a school I found that made a pretty large difference.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
This, exactly.
You could argue that people are paying for an education that doesn't buy them a job. No matter how you turn the ownership on the student, the university has a responsibility not to sell crap, too... or pass fewer students or both.
It's in the bible, people!
I don't necessarily disagree, but I believe in Show, not Tell, so care to explain why?
Like Cars? Like Doctors? Like the Internet? Power Grid?
You benefit TREMENDOUSLY from their education. You're just conveniently ignoring that fact because it happens to suit you right no.
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What alternatives does a young person have to getting a 4 year degree? If you happen to land a _really_ sweet job or you happen to be someone that can get by on 4 hours sleep a night you can slowly work you're work your way though school. Otherwise every time and all your time goes into survival.
No one forced you? You really have no idea what life was like in America until about 1950 and what it is like in most of the rest of the world. Just google "Company Store" and "16 tons" and call it a day. Or read "A people's history of the United States". Also this. A few very lucky people have options. The rich and powerful are working to remove those options.
So I guess I'll qualify my statement: What are the alternatives for those of use that aren't very lucky.
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So why don't more high schools start teaching courses designed to make their graduates into halfway competent business owners? When I was in high school, they heavily pushed college prep. Has this changed?
Absolutely true, but blaming the courts for tightening bankruptcy laws probably amounts to addressing the wrong end of the issue.
When you first incur a debt, you're essentially making a commitment to pay the debt back under specific, written terms. If the terms have become so unreasonable that a good percentage of those accepting them wind up wanting to sit in a Federal courtroom, to get a judge to let them out of it? Then maybe more people should start questioning the terms before signing on the line.
In the case of a primary residence, if you get far enough behind so you're at risk of losing it, I'm not so sure a loan modification ordered by a judge in bankruptcy court would be a huge benefit. You could likely sell the house in a "short sale", avoiding the negative mark on your credit for putting it in a bankruptcy default, and just start renting a place that was more affordable. Even in a worst case scenario where you lose the house to bankruptcy, same thing applies. Nobody likes losing their primary residence, but renting is the next option. It's not like you're really *entitled* to remain a homeowner, even though you can no longer afford it. (You have to consider that even if your loan was modified to make payments smaller, that still won't help you with paying for repairs and maintenance costs of owning a home. A bankruptcy doesn't do a thing to increase your income. It only releases you of selected debts you already ran up -- and ensures you won't get to borrow any more at a half-way reasonable interest rate for years to come.)
The education loans are a problem because there's nothing tangible there. It's not like they can repossess everything you learned in school. If government was smart, it would start severely limiting how much students can borrow for a college education. Make it easy and painless to take out a student loan for college -- but cap it at something reasonable. When the colleges realize people just can't come up with more than that amount of money for an education, mark my words -- they'll start finding ways to offer one cheaper.
When the labor market is an employer's market, the only thing I can think of that keeps anyone from becoming a business owner is if suppliers refuse to deal with inexperienced business owners.
Who says many college graduates buy new cars upon graduation? Most of them don't have the income and credit scores for it.
Democracy Now! - your daily, uncensored, corporate-free
1. For profit universities and tutors had a record breaking year of revenue.
2. Ivy League schools have their football AND basketball teams rank in the top 3 of their division. A record year.
3. R&D at universities has nearly doubled in funding. (Cause all that money doesn't go back to the students, but their tenured professors that have more importatn things to do)
4. Non-profit US state schools rank dead last in student performance compared to schools outside of the US.
Ok, we know the next bubble is student loans. Now the interesting question is: is there a way to profit from it? What kind of financial product could win from the bubble burst? Is it possible to buy a CDS on student loans?
The basic laws of economics, like the basic laws of physics, cannot be violated - no matter how much Hope and Change the dumbest portions of the population try to deploy.
When government took over the student loan business (under the pretense that evil bankers were an unnecessary and discriminatory middle man) it opened the money spigot. In telling young people they could get huge piles of cash to go to the schools of their choice, while their lunatic liberal school counselors (who, being liberal, do not understand basic economic laws) told them not to consider the prices when selecting colleges, the federal government sent the signal to colleges and universities across the land that they could boost ALL prices (not just tuition fees) without suffering any loss of applicants. If you tell ANY business it can boost its prices without losing any customers, it will boost prices. This is REALLY BASIC stuff... AND you young people who took out those loans and overpaid for your college degrees WERE WARNED. This stuff was discussed in the 2008 presidential campaign (including the FACT that this would be worse for people than the previous federal government takeover of most home loans (via Freddie Mac and Fannie Mae, which lead to the 2008 mortgage meltdown) because student loans cannot be escaped by bankruptcy), and nothing here is unexpected or unpredicted. I'm not sympathetic because, as with Obama Care, the generation of fools who voted for this administration were explicitly warned but THEY chose this and THEY are the ones who are going to suffer the most. My heart breaks for the Americans who will be born 20 years or more from now and the wreckage they will inherit, but I have not a single tear for the people who chose this fate; like all leftists (like those who supported the rise of the Union of Soviet Socialist Republics, those who supported the rise of the National Socialist Deutche (German) Arbeit (Workers) Party, etc) they expected to get stuff for "free" and expected "somebody else" (usually their political enemies) would pay the costs.
American healthcare was FAR more affordable before the government intervened (pre-ACA government intervention was a primary reason it was so expensive before Obama was elected) just as energy was far cheaper before the federal government intervened, and college was far cheaper before the federal government intervened (there's a common thread there for those who care to notice). The Democrats get a lot of support from the academics who live their lives in the artificial world of the ivory towers of academia... and by taking over the college loan business, Obama has effectively funneled BILLIONS of dollars into their coffers (at the expense of American kids). Unfortunately for many of the new graduates with new degrees and huge piles of (artificially-inflated by Obama) debt, their degrees will not help them to earn the extra money required to repay the debts they incurred and still have more income than they would have had if they'd just gone to a trade school and taken a "blue collar" job. (I say this NOT as a blue collar guy but as an engineer with a degree, but from an earlier era)
It turns out that it really DOES matter what politicians believe, and it really DOES impact you directly when you vote for politicians who offer the same bankrupt ideas (which cannot work because they violate basic economic laws) from the original Marxist playbook instead of the ideas of the nation's founders (McCain is a jerk, was not a good choice, and was not very close to the founders on economic principles, but on this matter alone his election would have spared an entire generation of Americans from a lifetime of financial problems)
If not, then you should should certainly get in on his other scam of pretending to have a Nobel Prize in economics (no such prize exists)
Seriously, dude, the economy is not, and never has been, about a fixed-size pie that must be divided and re-distributed amongst a growing population... that's the provably false assumption at the base of all left-wing economics (which leads left-wingers to all sorts of schemes for government intrusion into economics that ALWAYS lead to trouble).
HINT: The economy of today is NOT the same size it was in ancient Mesopotamia, nor the same size it was in Ancient Rome, nor in medieval Europe, nor Colonial America. Economies grow with human productivity and human populations. A unit of money does NOT represent a fraction of the value of some fixed set of resources. A unit of money is representative of some abstract, generally market-set unit of VALUE. That value MIGHT be a portion of some resource that has value... or it MIGHT be the value a worker adds to something by performing a unit of work on it, or it MIGHT be the abstract value I place on having comebody perform a service for me. The total of all the "value" that a total collection of "money" must represent is something only a market, and not some smart individual, can determine because it not only inlcudes the value of physical stuff but also the value of the available labor pool, modified by some abstract things like the values people assign to work they pay others to do that has no effect of physical assets. The one constant theme here is that the total value pool that can be represented by money is a pool that grows with the human population and with human productivity
Try putting down your copy of Das Kapital, and try reading a book by Adam Smith, Freidrich Hayak, Milton Friedman, or some other sane person
$41,000
Alright we'll give you a loan of $720,000 that you'll never be able pay off.
Then we'll give you two options
1. Pay up.
or
2. Give us your firstborn.
Did you ever notice how many of the nation's most-successful and richest people DROPPED OUT of places like Harvard??? Try Googling.
The self-appointed "elites" in ANY society (rich or poor, left or right, 1st world or 3rd world) will ALWAYS seek to setup and/or use systems to keep power to themselves, pass it to their heirs, and deprive people who are not like them (not in their tribe, their club, etc) of access to that power. Ever heard of the "caste system" in places like India, "party membership" in places like the Soviet Union, or the "royal families" in many places in history? Same basic idea. The so-called elites tell everyone that belonging to something, or having been taught somewhere, is what makes you "elite" and then they seek to control who can "get in" or who can attain some "higher level" within the entity.
The fallacy that you have fallen for is that you think the elites are actually in control (rather than that they are simply asserting that they are in control) AND that the path to success in life is only the path that they say it is (it is demonstrably NOT). Some political agitators find it useful to embrace this fallacy in order to have an enemy they can claim has "rigged the system" and to therefore justify a revolution (which is usually designed to bring to power a system with a WORSE case of this very human disease).
Want a society free of all this? Go SMALL. Small government that is barely involved in the economy and cannot insist on degrees from certain places. Small colleges and universites, none of which can get too big and therefore become this institution whose degree somebody MUST have. There USED to be MANY small very affordable colleges in communities across the nation; American doctors and engineers got their degree without becoming buried in debt. SOME still exist and a few of those are still very affordable precisely because they stay away from government "aid" programs.
Come on all you young and stupid people out there!!!
Stop taking it up the ass with that big government dick!!!
Force the government to pass legislation to make government school loans
dissolvable under bankruptcy law!!!
and if you want jobs stop voting for communists and socialists - namely, bush and obama clones!!!
It's not government interference in the "supply" of student loans. If that were the case, more and more schools would have opened to compete for those dollars, driving prices back down.
No, it's the lack of government involvement in the form of the 30+ year conservative war on the public financing of education.
It's the American way of debt, get them into debt with student loans, then with housing loans and finally at end-of-live with health insurance.
1. Profit ...
2. Profit
3. Profit!
Was it around that time of spiking that Obama said he would forgive collage debt if it wasn't paid? Not sure if that ever happened but I could see where some students would not pay just to have it forgiven. I think part of the problem is kids going to the :"best" collages despite knowing it will be hard to pay off in Obama's jobless country. Another part would be spending problems a majority of people have, people don't want to give up anything, even while in debt.
Go ahead and blame Government, or banks, or the collage themselves. But I will say the same thing as I do about wage. If people keep going, or working for low wage, a collage or business will keep charging or paying the same. Other then a degree like a doctor where knowledge is a must, go for a cheaper degree and get a great paying job threw actual experience.
Democrats run education, so you can't expect much from kids graduating from high schools. If a kid graduates, and still think Democrats are smart... they were not educated very well, a good education will show how wrong Democrats are.
But the cause isn't the schools, it's the free money
Asolutely the exact problem with the (so called) higher education, ALSO the same problem with HEALTH CARE!
The big-government entitlement handout asshats (Democrats and RINOS) pour money into the system and then wonder why the costs skyrocket! Simple economics - no wonder Congress (and leftists) can't figure it out.
But it's the libtards and leftists who profit from the education cost debacle, where do you think that $1T went? Into the pockets of the leftist scum that runs the college system (read: leftist programming camps) who, after filling the minds of the young with socialist lies, fund the campaigns of scum like Obama.
It's all there in the light of day to be seen, yet cue the libtards to start squealing "you can's say that!" in three, two, one...
You can have my SIG when you pry it from my cold, dead hands.
This is precisely the issue! Universities are no different than any other market; it's ruled by supply and demand. When the government provides an nearly endless supply of money, is there any surprise that rates hikes will follow? They charge more and more because they can.
I bet that less than 1% of college grads even understood what you mean by the "Tulip Bulbs". Great education they have.
College isn't for everyone. Too many kids with freshly minted degrees competing for jobs that don't exist. And not just college degrees, but worthless ones where they majored in stupid shit like history or philosophy. Good luck getting a job with that. Or social workers who make $30k a year and still have to get a masters degree to make $40k a year... and be paying that shit off for the rest of their lives.
When I was an IT manager - I'd get a ton of resumes from recent grads with not a single day of real-world experience outside of the college intern/co-op bubble - many expecting $65,000+ salaries for a Network Admin job requiring 5+ years of experience in Windows this, Linux that, etc... with a starting salary of $40,000 that I have 400 laid off IT guys standing in line for. Some of these kids I'd have to pull aside and tell them look - you have no experience. I need verifiable references from people in my professional peer group (not the part-time adjunct instructor who taught you the basics of Cisco Routing for a semester) who'll stick their neck out for you. Go work for Company X who is a large helpdesk outsourcing company and man the phones all day long walking 62 year old people through the basics of Quicken, make a good impression, if you're lucky you'll move up the ladder there, otherwise come see me in a year or two with a few good references from that shitty job and I'll see what I can do for you. If not a job with me - a job with someone who I know is looking for a few good people.
Truth is - I don't care what your degree says. It's a piece of fucking paper you probably paid too much for in the first place. Most jobs out there you can train a monkey to do - and Microsoft networking in the classroom, Contoso, Ltd., or Fabrikam, Inc. is nothing like Microsoft networking in my enterprise. Come to me with the basics and some verifiable experience and I'll teach you the rest. What I really want is someone with a good work ethic who'll show up on time, put in an 8 hour day, check the attitude at the door and become a productive member of my team. Not some kid with an entitlement mentality. Otherwise, everything your high school guidance counselor (sitting in an office full of chotchkies and 40 lbs overweight from free lunches with admissions folks from 50 different colleges year after year) sold you on is bullshit.
That said - there are plenty of blue collar types who never set foot on a college campus pulling down some serious coin. My brother nearly dropped out of HS, did 2 years in the Army, and is making more $$ than my 4-year degree ass. That along with a number of union trades guys, cops, etc... all making some good money without a day of college. Skilled tradesmen are in huge demand these days - many good paying openings go unfilled because spoiled kids these days are afraid to get a little bit of dirt under their fingernails.
These days it's the guy with the shitty blue collar job with no student loans succeeding and not the college grad.
Prior to WWII, college was a (relatively speaking) expensive proposition, only undertaken by those at the top-most rungs of the socio-economic ladder. Non-professional jobs did not call for a baccalaureate degree because there simply weren't nearly enough people with bachelor's degrees in the workforce to make such a requirement at all tenable. That all changed with WWII, and FDR's original GI Bill, which guaranteed a full ride at any accredited four year college. 16 million WWII vets qualified for GI Bill benefits. College enrolment exploded, both at existing colleges, and at the many new colleges that opened in the post-war years to service the explosive demand driven by the GI Bill. As the Greatest Generation completed their studies, there was suddenly a glut of college educated workers in the job market. Sallie Mae and the rest of the student loan/financial aid apparatus were erected to sustain enrolment and continue to make college affordable (at the point of service).
The last couple of generations (The Greatest Generation, Baby Boomers) benefited greatly, in terms of upward mobility, relative to their parents, thanks to their greatly expanded access to post-secondary education. Bachelor's degrees are now so easy to get that all the upper-level professional jobs are saturated with degreed workers, and employers, acting in their own self-interest, are requiring them of applicants for even mundane, low level positions. The Millenials are the first generation whose parents were themselves college educated. Thanks to the greatly increased income their parents have enjoyed, Millenials very often find themselves overqualified for the same financial aid benefits their parents enjoyed. Given the evolution of the job market, the student loan treadmill is Millenials' last option to get a degree, and enjoy even a small fraction of the upward mobility their parents took for granted. A bursting of this trillion dollar bubble is the surest way to break this cycle. Already, the system has evolved to the point that a large plurality of colleges and majors no longer pay for themselves in terms of lifetime earning-power increase. As a late Gen X father of three post-Millenial boys, I say "Bring it on! Burst the bubble!"
Only well connected individuals get Free passes....rest have to support the burdon of few. Mainly whites get it free and rest of the minorites have to carry their weight. I should know I have worked with my White guys who are managers (no college) and co-workers, who ARE great at market, nothing @ hands on jobs.
Only well connected individuals get Free passes....rest have to support the burden of few. Mainly whites get it free and rest of the minorities have to carry their weight. I should know I have worked with many a White guys who are managers (not college graduates) and co-workers. Very good at marketing and sales.
Not a single one of them could do what I can do, but guess what, I have 200K loans. Problem only arises when name isn't Ken, Matt or Cindy. Tide will turn.
student loan reform was part of the health care bill but the savings went to offset the predicted costs of the health care law instead of helping students.
education costs have gone up steadily with the availability of money to pay for it but this gets tricky because student aid has also gone up to help offset some costs.
I'm making 24 an hour without a degree right now :)
People without a degree have the highest rates of unemployment, make significantly lower over their lives, and are the first ones to get cut in down times. Statistics say you're wrong.
https://en.m.wikipedia.org/wik...
Casteism
Any organization which saddles our children with unbearable burdens is a menace to our society, and should be shut down. shut them all down. seriously, this is unreal, and pure evil. if they cant find a way to run universities without stealing our future, they are a cancer on society. I dont want them any more. Im tired of this.
To go to a college or university that costs $20,000 per semester or to get a degree in Medieval-Era Pacific Island Anthropology (or other equally useless degree).
No one wants to be reminded that all of that debt and extra "education" may not have been required.
It is less disturbing for many to claim they made the best choice where there was no good one.
Grammer Nazis - I mod you "troll" unless you actually add something on-topic. Yes, I know I have mispellings in my sig.
If this "crashes" I wonder what will happen.
Suddenly, the government simply can't afford to give out more student loans?
Education Programs get massively cut for at least a year, leaving millions of students at home instead of in schools. The kids with rich parents are fine. Everyone and their grandmother (literally) sells assets to cover their kids' education. This pulls the publicly-trading securities market lower (especially muni bonds... that's an accident waiting to happen)
I'm just trying to ponder the fallout of this... this will keep getting bigger til it collapses, or until something happens to slow it down.
Would colleges simply close, forcing good professors to local colleges, leaving administration/middle management adrift (thank god)?
-
I recently graduated with a masters and many years after college, so I was not as naive as I was. The administrators are worthless and each of them earning a great salary for doing almost zero work. Once a year they review the applications and figure out who gets in and whatnot. Then they don't really do anything for the rest of the year. And you think your professor are altruistic and doing because he cares about the youth? No, the professor is top dog at the university. The smaller salary compared to their private sector counter-parts is easily offset by the power and influence they wield. And I would think that they probably make more than a private sector person, after factoring the reports they are commissioned to write. Each and every one of the engineer professor at this top-8 engineering school had a SBIR shop on the side where they are on the board. The company's business model is to bid on DoD Small Business Innovation Grants. I worked at one that has been in existence for 10+ years, never ever trying to use that grant to develop any commercial solutions (because that takes work and is risky!), but rather collecting the various 6 digital loans they get, pay their freshly graduated Ph.D. student (H1-Bs) a measly salary and pocket most of the grant money.
On top of that you are paying for these professors to be condescending towards you, for the administrators to not give a shit about you. Why? If you pay for a product or a service, shouldn't you demand a certain level of service? Not with Universities!