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Student Loan Debt Has Nearly Tripled (npr.org)
An anonymous reader shares a report: Recent college graduates who borrow are leaving school with an average of $34,000 in student loans. That's up from $20,000 just 10 years ago, according to a new analysis from the Federal Reserve Bank of New York. In that report, out this week, the New York Fed took a careful look at the relationship between debt and homeownership. For people aged 30 to 36, the analysis shows having any student debt significantly hurts your chances of buying a home, compared to college graduates with no debt. The cliche of "good debt" notwithstanding, the consequences of borrowing are real, and they are lasting. The report paints a mixed picture of how student borrowing has evolved over the last decade, since the financial crisis. There are some bright spots: For example, student loan defaults peaked five years ago and have declined ever since. And repayment seems to have slowed down among high-balance borrowers -- those who owe $75,000 or more. Meaning, after 10 years, they have paid down only one-quarter to one-third of what they owe.
the New York Fed took a careful look at the relationship between debt and homeownership. For people aged 30 to 36, the analysis shows having any student debt significantly hurts your chances of buying a home, compared to college graduates with no debt.
I'm glad public salaries were paid to come up with that study.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
When I went to community college in the early 1990's, I collected bottle and cans on campus to pay for next semester's classes and books because my parents (sixth-grade and high-school graduates) didn't believe in higher education. After doing that for a year, and avoiding a 98-year-old with a pointy stick who also collected recyclables, I got a job at the bookstore warehouse and worked 30 hours per week while taking 12 units.
My second tour through college after the dot com bust was paid for with a $3,000 tax credit that George W. signed into law after 9/11. I was working 60+ hours per week as a video game tester, teaching Sunday school and taking two classes per semester for five years. Made the president's list for maintaining a 4.0 GPA in my major.
The most successful college students I know have worked their way through college without racking student loans.
The problem is special case cared out for student loans - in US you can't discard them in bankruptcy. This should be ruled unconstitutional. If you could discard them in bankruptcy, lenders will be forced to re-introduce risk analysis back into the system. Some loans will be declared too risky based on costs and job prospects for graduates from specific program at a specific institution. This will put pressure on universities to keep costs in check as it will be again possible to price out 'consumers' out of the system.
Mark Cuban noted that colleges increase tuition to the amount that students can borrow, and suggested if they capped the amount of loans, the universities would be forced to lower tuition or lose students.
It's an interesting idea, but in the end I'd guess the lower income families would get hurt.
"Who are you?" "No one of consequence." "I must know." "Get used to disappointment."
Yea, those people that vote the way I don't like should totally not be able to vote because I don't like their decision! Everyone should think like me because I am morally superior. I am fucking better than you.
Very accepting of your fellow man, aren't you?
I don't think the quality of education has deteriorated at all, rather many students are choosing to get totally worthless degrees because they feel entitled to pursue their passion.
That said, I'm sure that schools are pumping out better and better art historians, music therapists, and western philosophy majors than ever, but that doesn't necessarily mean that these majors have any actual economic demand.
I mean think about it: Last time you were pondering your own existence, when did you consider hiring a philosopher to help?
And the reason tuition rates are going up is because of the increase in the money supply in the higher education system, which itself is entirely caused by the increased availability and ease of acquiring of student loans. And, I know an easy fix: Make it possible to go bankrupt on these loans just like any other unsecured loan. If you do that, watch how basically overnight, lenders will start scrutinizing borrowers more, and borrowers will be thinking harder about borrowing to begin with in light of higher interest and/or collateral.
chapter 11 and 7 for student loans whould fix it. The banks and schools have no skin in the game.
Let's tell everyone they need college in order to be successful, but let's not be specific about what kind of college will get you success; after all a basket weaving degree is just as valuable as an engineering degree.
Let's tell them that college is so important that we'll make government-guaranteed loans available to be sure they can afford that critical degree.
We'll add to the mix the natural market reaction of increasing prices as more money is made available to pay for the product.
Then we can all act surprised as loan loads increase, the feel good degrees don't allow one to make payments causing the ability to pay those loans to decrease resulting in a requisite government-bailout for everyone who got a student loan to pay for a degree that has no value.
If you think a degree is going to have a positive economic value for you then you make the investment to get the degree. If that means working two jobs and taking 6 years to get a degree then so be it, you can make the economic decision to do that. If the economic numbers don't make sense for you then don't go to college to get a degree.
The whole story line about college being better for you economically is based on a mis-understood or mis-applied correlation: people who went to college earned more than people who didn't. That headline is based on the overall group. A more interesting question would be what is the net cost of college by degree-type. A student who spends $50,000 for a worthless degree will be overshadowed by someone who spends $50,000 for a degree ultimately worth millions. The average of the degrees is higher than those who have no college but the value is still close to zero for the person with the worthless degree and $50,000 in student loans.
That $50,000 degree worth millions isn't because of the degree. It's because of the application of the knowledge attained with the degree by a person driven enough to use that knowledge in a way that creates market value.
And yet the argument we hear as automation is set to take over even more jobs is that people need to seek better educations. So which is it? Should people just avoid advanced education and hope the robots don't take over their low-skilled job next, or should they seek advanced education so they can maintain full employment even when the robots come?
It strikes me that a lot of people, like you, just sort of automatically regurgitate certain popular talking points, talking points that very likely have absolutely no relationship with reality. I call it "talkradioitis", this notion that some windbag on the AM dial or on Fox or CNN actually has, or even actually cares, whether the memes they're trying to get out there represent any kind of objective reality.
The fact is that the number of high-paid low skilled jobs have been shrinking for a few decades now, and they're not coming back, so if you think you're going to enter or remain in the middle class without some sort of higher education, then you are very a much fucking idiot, and if you're telling your kids or anyone else that they can just coast along and the likes of Donald Trump will take care of them, then you're something far worse than a fucking idiot.
The world's burning. Moped Jesus spotted on I50. Details at 11.
and how many of them served in Vietnam and paid with the GI Bill? How about ROTC? Boomers i've met who went to college also worked and lived in rat infested apartments, worked full time and ate scraps and didn't get to party like kids today
If you are independently wealthy and looking for self-actualization, then following your passion is a perfect use for college. Go crazy with your philosophy degree!
If you are looking for a job, then a vocational school makes a lot more financial sense, these days.
Colleges, of course, want money, so they push the "follow your passion for a happy life" agenda on hordes of students who don't have any money and will need to work for a living after graduating. Example: there are more journalist majors graduating each year than there are jobs for journalists in the entire world!
I was talking about this on a bus not long ago, and one of the college kids decided to step in and correct me, explaining how following your passion is totally justified because if you are truly passionate about it, you will find a job doing it. This person was passionate about theater, not statistics.
Every objective measure is markedly better.
Wages, job availability for that matter, property prices, the same goddamn college debt this thread is about that you casually hand-wave away?
Clearly you're either far too wealthy to understand what most Gen. Y'ers are going through, or you're simply a baby boomer in disguise.
"When information is power, privacy is freedom" - Jah-Wren Ryel
And the reason tuition rates are going up is because of the increase in the money supply in the higher education system, which itself is entirely caused by the increased availability and ease of acquiring of student loans.
That's a big factor. But you're also overlooking that in the last ~25 years, most states have slashed state funding to state universities.
So all these students in the "second tier" of the system are getting a double whammy. These kids would mostly be from what used to be the middle class as opposed to most of those going to an ivy league school.
This myth won't die, will it? The funding for state schools has nothing to do with it.
https://www.insidehighered.com...
What I've found in the past when looking at long-term trends is that when state funding of universities doesn't rise, they raise tuition to "make up for it". But when the state funding goes up in the next year or whatever, the tuition never goes back down. So we have a ratchet effect.
State schools are well funded. Like most universities, they're also dramatically overstaffed, with a bunch of burdensome administrative staff members and no more faculty than before. That needs to change.
My only day job was working at Indiana University. One year they went nuts because there was a big cut in state funding. In reality, the state wasn't raising funding at the same level as the year before. We were still getting more money than last year, just not as much more as they wanted.
So we were told no pay raises, can't afford them. The morning that I was to talk to my manager about the pay raise I was walking in when I noticed the workers out front pulling up the flowers in front of our building to plant new ones. So when my manager tried to bullshit me about the "funding cuts" I shushed her and said "You know, it's funny, I *hear* about this lack of money, yet on my way in to work this morning I saw that the university is paying some guys to pull up perfectly beautiful flowers and plant new ones. See, if there really was some sort of budget crisis they wouldn't be pulling up flowers out front, because that doesn't help the university. I, on the other hand, do. So, since we're not acting like there's a budget crisis I'll assume it's made up bullshit and I'll be getting a raise this year." Yes, I was a dick. That was my largest single year raise during my four year tenure there.
I know a thing or two about this subject.
Do you have ESP?
I keep hearing this but does anybody actually have data to back it up?
The report you cite is focused on graduate degrees and debt, but let's also look at actual enrollment in humanities programs. For example, see this study. A few relevant facts mentioned there:
-- The number of bachelor's degrees in "core" humanities disciplines was at the lowest level in 2014 since 2003, constituting only 6.1% of degrees awarded.
-- The core humanities had their highpoint in 1967, constituting 17.2% of all bachelor's degrees awarded. That's back when most people got degrees in actual fields of study, rather than generic "business majors." (The shift from humanities to "business" degrees largely occurred in the 1970s and 1980s.)
-- ALL humanities degrees in 2014 were less than 10% of all bachelor's degrees, compared to 34.6% for all sciences, and 18.5% for business/management degrees.
So, the percentage of humanities degrees has basically been in decline for the past 50 years (though there was a slight rise in the early 2000s, followed by a more recent decline again). Humanities majors (particularly for bachelor's degrees) don't seem to carry that much more debt than for other fields, so I'm not sure what evidence there is to support GP's assertion that "totally worthless degrees" (which seem to be humanities for GP) are a significant contributor current problems.
Oh, and then we have the question of whether these actually ARE "totally worthless degrees." Once again, let's look at data from actual studies:
-- In 2013, the unemployment rate for Americans with a bachelor's degree in the humanities was 5.4%.
-- Across bachelor's in all disciplines, unemployment was 4.6%.
-- Unemployment for those with only a high school diploma, meanwhile, was 9%.
Oh, the next question will be -- "But surely they don't earn anything to pay off their debt!?" Once again...
-- Median salary for bachelor's degrees in humanities in 2013 was $50,000
-- Median salary was $57,000 for all bachelor's degree holders
-- High school diploma holders, median salary of $35,000
Bottom line -- humanities degree graduates may have a slightly harder time finding a job than your average bachelor's degree holder, and they may earn a bit less, but calling such degrees "totally worthless" is simply not supported by the evidence. They certainly are significantly better than having no degree at all in most cases.