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View Full Version : Economics The next bubble bursting: could be student loans.


Direckshun
06-11-2012, 06:39 PM
I think this piece will prove to be prescient.

http://www.washingtonpost.com/opinions/george-will-subprime-college-educations/2012/06/08/gJQA4fGiOV_story.html

Subprime college educations
By George F. Will
Published: June 8

Many parents and the children they send to college are paying rapidly rising prices for something of declining quality. This is because “quality” is not synonymous with “value.”

Glenn Harlan Reynolds, a University of Tennessee law professor, believes that college has become, for many, merely a “status marker,” signaling membership in the educated caste, and a place to meet spouses of similar status — “associative mating.” Since 1961, the time students spend reading, writing and otherwise studying has fallen from 24 hours a week to about 15 — enough for a degree often desired only as an expensive signifier of rudimentary qualities (e.g., the ability to follow instructions). Employers value this signifier as an alternative to aptitude tests when evaluating potential employees because such tests can provoke lawsuits by having a “disparate impact” on this or that racial or ethnic group.

In his “The Higher Education Bubble,” Reynolds writes that this bubble exists for the same reasons the housing bubble did. The government decided that too few people owned homes/went to college, so government money was poured into subsidized and sometimes subprime mortgages/student loans, with the predictable result that housing prices/college tuitions soared and many borrowers went bust. Tuitions and fees have risen more than 440 percent in 30 years as schools happily raised prices — and lowered standards — to siphon up federal money. A recent Wall Street Journal headline: “Student Debt Rises by 8% as College Tuitions Climb.”

Richard Vedder, an Ohio University economist, writes in the Chronicle of Higher Education that as many people — perhaps more — have student loan debts as have college degrees. Have you seen those T-shirts that proclaim “College: The Best Seven Years of My Life”? Twenty-nine percent of borrowers never graduate, and many who do graduate take decades to repay their loans.

In 2010, the New York Times reported on Cortney Munna, then 26, a New York University graduate with almost $100,000 in debt. If her repayments were not then being deferred because she was enrolled in night school, she would have been paying $700 monthly from her $2,300 monthly after-tax income as a photographer’s assistant. She says she is toiling “to pay for an education I got for four years and would happily give back.” Her degree is in religious and women’s studies.

The budgets of California’s universities are being cut, so recently Cal State Northridge students conducted an almost-hunger strike (sustained by a blend of kale, apple and celery juices) to protest, as usual, tuition increases and, unusually and properly, administrators’ salaries. For example, in 2009 the base salary of UC Berkeley’s vice chancellor for equity and inclusion was $194,000, almost four times that of starting assistant professors. And by 2006, academic administrators outnumbered faculty.

The Manhattan Institute’s Heather Mac Donald notes that sinecures in academia’s diversity industry are expanding as academic offerings contract. UC San Diego (UCSD), while eliminating master’s programs in electrical and computer engineering and comparative literature, and eliminating courses in French, German, Spanish and English literature, added a diversity requirement for graduation to cultivate “a student’s understanding of her or his identity.” So, rather than study computer science and Cervantes, students can study their identities — themselves. Says Mac Donald, “ ‘Diversity,’ it turns out, is simply a code word for narcissism.”

She reports that UCSD lost three cancer researchers to Rice University, which offered them 40 percent pay increases. But UCSD found money to create a vice chancellorship for equity, diversity and inclusion. UC Davis has a Diversity Trainers Institute under an administrator of diversity education, who presumably coordinates with the Cross-Cultural Center. It also has: a Lesbian, Gay, Bisexual, Transgender Resource Center; a Sexual Harassment Education Program; a diversity program coordinator; an early resolution discrimination coordinator; a Diversity Education Series that awards Understanding Diversity Certificates in “Unpacking Oppression”; and Cross-Cultural Competency Certificates in “Understanding Diversity and Social Justice.” California’s budget crisis has not prevented UC San Francisco from creating a new vice chancellor for diversity and outreach to supplement its Office of Affirmative Action, Equal Opportunity and Diversity, and the Diversity Learning Center (which teaches how to become “a Diversity Change Agent”), and the Center for LGBT Health and Equity, and the Office of Sexual Harassment Prevention & Resolution, and the Chancellor’s Advisory Committees on Diversity, and on Gay, Lesbian, Bisexual and Transgender Issues, and on the Status of Women.

So taxpayers should pay more and parents and students should borrow more to fund administrative sprawl in the service of stale political agendas? Perhaps they will, until “pop!” goes the bubble.

Direckshun
06-11-2012, 06:41 PM
July 1st, the student loan rate doubles. (http://www.chiefsplanet.com/BB/showthread.php?t=259333)

Might be worth re-reading your take in that thread.

HonestChieffan
06-11-2012, 06:50 PM
My heart bleeds for the children.

patteeu
06-11-2012, 08:13 PM
July 1st, the student loan rate doubles. (http://www.chiefsplanet.com/BB/showthread.php?t=259333)

Might be worth re-reading your take in that thread.

I think you'd better re-read yours. The problem described here is created by too much easy money flowing to education through excessive subsidization. The solution to this isn't greater subsidization.

Iz Zat Chew
06-11-2012, 09:51 PM
I went to college and paid as I went. A student loan was nothing that even entered into my mind. The time was different and I was interested in the education rather than living away from home and having the funds to live beyond my means. My parents weren't rich so it was all on me.

I would recommend to anyone going to college to do their first 2 years at a local community college and then do as much online stuff as possible. Spending as little time as you can living in a manner that starts you off owing more than you will most likely make in your first 5 years you have a job.

blaise
06-12-2012, 05:37 AM
I think you'd better re-read yours. The problem described here is created by too much easy money flowing to education through excessive subsidization. The solution to this isn't greater subsidization.

We need to make it easier to flood the market with college students getting worthless degrees.

Iz Zat Chew
06-12-2012, 05:48 AM
We need to make it easier to flood the market with college students getting worthless degrees.

I know what you mean, look at all of those sports graduates that have their degree in either basket weaving or thuggery.

Cave Johnson
06-12-2012, 09:20 AM
Anecdotes supporting my viewpoint!

-George Will

qabbaan
06-12-2012, 09:34 AM
The obvious solution is that lenders, including the DOE, need to examine the risk of the loan before offering it. By that I mean the major should be taken into account. Loaning someone $50,000 for a theater degree is not a responsible thing to do with taxpayer dollars.

In the private sector libs sometimes call this predatory lending, because the poor slob isn't expected to assess their ability to repay, only their ability to qualify, when they decide if taking out a loan is a good idea. Then the bank gets the blame when their eBay business doesn't pay the bills anymore.

So why is no one blaming the government for huge amounts of available credit for investment in poor career plans? Why are they subsidizing aka encouraging this?

qabbaan
06-12-2012, 09:35 AM
I think you'd better re-read yours. The problem described here is created by too much easy money flowing to education through excessive subsidization. The solution to this isn't greater subsidization.

But it is the solution to educators wanting artificially high salaries.

Never mind that the easy credit is why the cost of higher Ed continues to spiral

Garcia Bronco
06-12-2012, 09:44 AM
The obvious solution is that lenders, including the DOE, need to examine the risk of the loan before offering it. By that I mean the major should be taken into account. Loaning someone $50,000 for a theater degree is not a responsible thing to do with taxpayer dollars.

In the private sector libs sometimes call this predatory lending, because the poor slob isn't expected to assess their ability to repay, only their ability to qualify, when they decide if taking out a loan is a good idea. Then the bank gets the blame when their eBay business doesn't pay the bills anymore.

So why is no one blaming the government for huge amounts of available credit for investment in poor career plans? Why are they subsidizing aka encouraging this?

The DE (not the DOE...that's the department of energy) is the only lender anymore. And the reason is we cannot discriminate that way and nor should we.

Direckshun
09-20-2012, 06:30 PM
The drum starts to beat.

http://www.businessweek.com/articles/2012-09-06/student-loans-debt-for-life#p1

Student Loans: Debt for Life
By Peter Coy
September 18, 2012

This much we know: College pays. You can lose your house to foreclosure, but never your education. Four-year college graduates’ pay advantage over high school grads has doubled over the past 30 years. If money for tuition is tight, the advice goes, borrow what you need. Students have been listening. In 2010 student debt exceeded credit-card debt for the first time. In 2011 it surpassed auto loans. In March, the Consumer Financial Protection Bureau announced that student debt had passed $1 trillion. It grew by $300 billion from the third quarter of 2008 even as other forms of debt shrank by $1.6 trillion, according to a separate tabulation by the Federal Reserve Bank of New York. In a press briefing at the White House in April, Education Secretary Arne Duncan said, “Obviously if you have no debt that’s maybe the best situation, but this is not bad debt to have. In fact, it’s very good debt to have.”

If student loans are good debt, how do you account for the reaction of Christina Mills, 30, of Minneapolis, when she found out her payment on college and law school loans would be $1,400 a month? “I just went into the car and started sobbing,” says Mills, who works for a nonprofit. “It was more than my paycheck at the time.” Medical student Thomas Smith, 25, of Hamilton, N.J., is $310,000 in debt and is struggling to make ends meet even before beginning to repay his loans. “I don’t even know what I eat,” he says. “I just go to the supermarket and buy the cheapest thing I can and buy as much of it as I can.” Then there’s Michael DiPietro, 25, of Brooklyn, who accumulated about $100,000 in debt while getting a bachelor’s degree in fashion, sculpture, and performance, and spent the next two years waiting tables. He has since landed a fundraising job in the arts but still has no idea how he will pay back all that money. “I’ve come to the conclusion that it’s an obsolete idea that a college education is like your golden ticket,” DiPietro says. “It’s an idea that an older generation holds on to.”

Even if you buy into the notion that education debt is good debt, at what point does it become too much of a good thing? Mark Kantrowitz, publisher of FinAid.org, which researches financial aid, estimates that student debt, compounded by rising enrollments, is growing by nearly $3,000 a second.

“The question isn’t the debt per se. It’s what the students are getting in return,” says Richard Arum, a New York University sociologist who specializes in education. Many students are incurring heavy debts for an education (ethnomusicology, theater arts) that just isn’t worth it from a strictly financial viewpoint. (Money isn’t everything, but try telling that to the collection agency.) Education benefits society by creating a workforce that creates wealth, pays taxes, and stays off welfare. But state governments—whose schools educate 7 in 10 students—have raised tuition abruptly because of their own financial problems. So far the federal government has offset the state cutbacks by boosting financial aid, but Education Under Secretary Martha Kanter testified to Congress earlier this year that “this path is not fiscally sustainable.”

There’s a lot of speculation that college debt is the next bubble after housing, the latest sector in which prices leap above real value. American colleges may not be turning out the kind of graduates that employers want. In Academically Adrift: Limited Learning on College Campuses, NYU’s Arum and sociologist Josipa Roksa of the University of Virginia write that employers are being forced to turn to foreigners or graduate and professional schools to fill jobs that they once filled with homegrown college graduates.

That’s the value side. The cost side is ugly, too. The economic slump that began in 2007 has forced people to pay more for college even as it has driven more of them into it as a refuge from an unfriendly job market. The National Center for Education Statistics projects that college attendance this fall will be up 19 percent from the fall of 2007. Meanwhile, state and local support for higher education last year was the lowest in 25 years of measurement, in inflation-adjusted dollars per student, according to the State Higher Education Executive Officers Association. Two-thirds of college seniors graduated with loans in 2010, and those who did had an average of about $25,000, according to the Institute for College Access & Success.

The poor, who need the boost that a college education can provide, are suffering the most. Strapped colleges know that they can bring in more revenue from one student paying close to the full load than from a dozen low-income students. So some are bribing rich kids to attend with $10,000 a year they don’t need—grant money that otherwise might have gone to the truly needy. That’s just one of the reasons the lowest-income students are more than three times as likely as the highest-income students to be studying for a certificate or an associate’s degree rather than a four-year degree, according to an analysis of data compiled by FinAid’s Kantrowitz. That leads to lower-paying jobs. Equal opportunity in higher education remains more an ideal than a reality.

Ten years is considered a reasonable period to repay one’s student loans, but many students take 20 or 25 years under extended repayment plans. The New York Fed found that in the first quarter of 2012, people 60 and older were responsible for $43 billion in student loans. It’s not clear how much is from their own studies and how much because they co-signed on their children’s loans, but whatever the case it’s no way to head into retirement.

There are solutions, but each is bound to be resisted by at least some powerful constituency—students, professors, administrators, lenders, or governments.

One huge step would be to allow bankruptcy judges to wipe out education debt, as they could until Congress began to tighten restrictions in 1976. Under today’s punitive statute, judges can discharge student loans only in cases of undue hardship, which in many jurisdictions requires proof of “certainty of hopelessness.” (Congratulations, pal, you’re hopeless!) “The law is much too harsh,” says U.S. Bankruptcy Judge A. Jay Cristol in Miami.

Current law gives lenders no incentive to come to terms with overindebted borrowers. The National Consumer Law Center, in a July report, said “pursuing the most vulnerable borrowers until they die” is inefficient and imposes “significant costs to taxpayers.” To help debtors avoid defaulting in the first place, the center advocates placing them automatically in repayment plans that make the payment a percentage of the borrower’s income rather than a certain dollar amount. Under this “income-based repayment,” which the Obama administration has pushed, any outstanding debt is forgiven after 20 or 25 years.

Colleges should suffer more pain when federal loans go bad, argues Alex Pollock, a resident fellow at the American Enterprise Institute. That would make them more careful about raising prices and encouraging students to take out government loans.

Better disclosure would help, too. Some financial aid offer letters don’t even clearly identify loan components of aid packages as debt. Others abbreviate “loan” as L or LN. “Sometimes they have the excuse that they’re limited in the number of characters,” Kantrowitz says, “but they created the form.” The Education Department is developing a form that colleges can use to give prospective students standardized information about how much they will owe upon graduation, what the school’s loan-default and graduation rates are, and so on. In May, Senator Al Franken (D-Minn.) introduced a bill to make a standard form mandatory. The National Association of Student Financial Aid Administrators opposes portions of the bill.

School-provided financial aid, far from being charity, is a tool for legal price discrimination—i.e., charging different customers different amounts right up to the limit of their willingness or ability to pay. Most schools dole out grants based on how much they need to discount the sticker price to lure a given student to attend. Financial aid allows them to collect more revenue than if they had to charge every student the same amount. If oranges were sold the same way, a bag of them might cost one family $40 and another $5.

(cont...)

Direckshun
09-20-2012, 06:31 PM
(...inued)

Some of the nation’s wealthiest universities—and some smaller schools such as North Carolina’s Davidson College—have eased the burden on students by replacing all loans with grants in financial-aid packages. That’s noble, but not a realistic solution for all of higher education. “Most colleges are not awash in money. It would be very difficult to dial back the competitive game” of doling out aid to maximize revenue, says Douglas White, a business consultant and higher-education expert in Richmond, Va.

Republican presidential nominee Mitt Romney says President Barack Obama encourages students to take on more debt, “sending them the bill tomorrow.” But Romney is still living down advice he gave to college students in April, telling them to “borrow from your parents” if they need money for school or to start a business. (Parents’ contributions are already figured into financial-aid packages.) Romney also favors reversing a 2010 decision under which the Education Department has tried to save $60 billion over 10 years by making all new federal loans directly, eliminating middlemen.

The most straightforward way to deal with the student debt problem is to bring down the unreasonably high cost of higher education, which forces students to go into debt in the first place. “We can’t just keep shoveling money into a system that consumes resources at an ever-faster clip,” Kevin Carey, then policy director of a nonprofit called Education Sector, told the Senate Committee on Health, Education, Labor and Pensions last winter. Carey, who now directs education policy at the New America Foundation, told the senators about cost-saving initiatives such as those at Virginia Tech, where students learn intro math courses in computer labs rather than watching professors at chalkboards, and the University of Minnesota’s new Rochester campus, whose classrooms and labs are in the former food court and movie theater of a mall. The Minnesota school collaborates with IBM (IBM) and the Mayo Clinic for advanced courses such as computational biology.

Removing the campus altogether is even cheaper. Online operations such as EdX, Coursera, Khan Academy, and Udacity, among others, offer high-quality instruction at no cost to the student—but don’t yet award degrees. Accrediting agencies, dominated by incumbent schools, are skeptical. A survey published in June by Babson Survey Research Group and Inside Higher Ed found that 58 percent of professors surveyed have “more fear than excitement” about online learning.

Some day, low-cost online education that requires zero student borrowing may displace a big chunk of today’s entrenched establishment. The fact that it hasn’t yet says a lot about the durability of colleges and universities, several of which predate the country’s founding. Rather than places of learning, colleges have become expensive screening mechanisms. It’s not what you learn in four years at Harvard University that impresses potential employers; it’s the fact that you got into Harvard in the first place.

So maybe the real problem is that credentialism has trumped learning. That drives people to get degrees simply to displace others who don’t have degrees, says Richard Vedder, who directs the Center for College Affordability and Productivity. He notes that the U.S. has more than 100,000 janitors with college degrees and 16,000 degree-holding parking lot attendants.

Political scientist Charles Murray would get rid of the bachelor’s degree altogether. In an Intelligence Squared U.S. debate last October in Chicago, he said education is or at least ought to be a lifelong process for everyone, diploma holders or not. “We are all engaged in the same process,” Murray argued. “We are not divided into professionals and service workers or blue-collar workers. We all start out as apprentices. We become journeymen, and we all strive to become master craftsmen.”

To tell the truth, though, many students are not exactly striving, if Arum and Roksa’s Academically Adrift is correct. Five-year colleges would be a better label for schools, since that’s the average amount of time it’s taking students to get through them. Financial aid is part of the problem: Students equipped with big loan packages can play schools against one another—and what students seem to want is good grades for light work, according to Arum’s research. To combat grade inflation, which has made college transcripts virtually useless to potential employers, Arum recommends that transcripts include the average grade given in a class next to the student’s letter grade. That would be like grading on a curve without having to grade on a curve. Students will presumably study harder, he says, if they know that their grades contain real information for employers and grad schools.

As for paying it all back, it would be going too far to direct students away from, say, ethnomusicology just because it’s less lucrative than nursing or petroleum engineering. Princeton University economist Cecilia Rouse points out that the liberal arts provide benefits to society beyond those that loan officers pay attention to. It’s hard, though, to argue against a standard disclosure form that would tell students about the debt load, unemployment rate, and average first-year income for graduates of the school and the major they’re thinking of committing their lives to.

It may be a while before it’s all solved. In 1939, the New Yorker published a short story called “Ah, the University!” about a well-to-do man who orders his only son to become a professional poker player because he doesn’t want to pay for him to go to college. “Certainly nothing in the world is more delightful than being at the university,” the father says. “The springtime of life! Pleasure after pleasure! … However, I’m not going to send you there.” Perhaps the gentleman was just ahead of his time.

Chocolate Hog
09-20-2012, 06:33 PM
KEEP THE INTEREST RATES LOW!

BucEyedPea
09-20-2012, 06:37 PM
I went to college and paid as I went. A student loan was nothing that even entered into my mind. The time was different and I was interested in the education rather than living away from home and having the funds to live beyond my means. My parents weren't rich so it was all on me.

I would recommend to anyone going to college to do their first 2 years at a local community college and then do as much online stuff as possible. Spending as little time as you can living in a manner that starts you off owing more than you will most likely make in your first 5 years you have a job.

A lot more people are. However few work their way through anymore. I think the loans set up that incentive.

blaise
09-20-2012, 09:23 PM
"Oh no! I voluntarily entered into a contract where I knew exactly how much I borrowed! It's not fair!"

La literatura
09-20-2012, 10:39 PM
"Oh no! I voluntarily entered into a contract where I knew exactly how much I borrowed! It's not fair!"

It's really hard to have sympathy. Not sure if that's the issue here, though.

BWillie
09-21-2012, 04:10 AM
I don't even care,I have like $2900 left at 3% interest.

Direckshun
02-01-2013, 10:38 AM
http://www.zerohedge.com/news/2013-01-29/student-loan-update-situation-simply-unsustainable

Student Loan Bubble Update: "This Situation Is Simply Unsustainable"
Submitted by Tyler Durden
on 01/29/2013 13:49

The last time we looked at the most underreported debt crisis sweeping the land, which is nothing short of the second coming of subprime, namely the student loan bubble, we posted "the scariest chart of the quarter (http://www.zerohedge.com/news/2012-11-27/scariest-chart-quarter-student-debt-bubble-officially-pops-90-day-delinquency-rate-g)" in which the Fed had finally caught up with our prior data showing that student loan delinquency had soared to some 11% from the 9% reported in the previous quarter, even as the Fed disclosed it had issued some $42 billion in Federal student loans in the same quarter, and a cumulative $956 billion, a number which as of December 31 is certainly over $1 trillion. This number was lower than the one we had shown previously, or a default rate of some 13.4% (http://www.zerohedge.com/news/2012-09-28/next-subprime-crisis-here-over-120-billion-federal-student-loans-default), sourced by the DOE. As it turns out both we and the Fed were optimistic.

Research by FICO Labs into the growing student lending crisis in the U.S. has found that, as a group, individuals taking out student loans today pose a significantly greater risk of default than those who took out student loans just a few years ago. The situation is compounded by significant growth in the amount of debt that new graduates are carrying.

The delinquency rate today on student loans that were originated from 2005-2007 is 12.4 percent. The comparable figure for student loans that were originated from 2010-2012 is 15.1 percent, representing an increase in the delinquency rate by nearly 22 percent.

And since there is always a lag between getting the full cohort remittance and delinquency data, the real bad loan percentage is likely in the 20%+ category. So $1 trillion in federal student debt now, 20% delinquency, means $200 billion in loan defaults with zero collateral. And rising fast.

This is on par with the amount of subprime loans that was expected to end in foreclosure (http://www.responsiblelending.org/mortgage-lending/tools-resources/snapshot-of-the-subprime-market.pdf), yet another number that was vastly optimistic and would have been far worse had the Fed not stepped in to bailout the entire financial system.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/01/Subprime_0.jpg

And it gets worse. According to FICO:

While the delinquency rate is climbing, the average amount of student loan debt is increasing even faster. In 2005, the average U.S. student loan debt was $17,233. By 2012, it had ballooned to more than $27,253 – an increase of 58 percent in seven years. By contrast, the average credit card balance and the average balance on car loans owed by U.S. consumers actually decreased during the same period.

In a related finding, FICO’s quarterly survey of bank risk managers conducted in December 2012 found that nearly 60 percent of respondents expected delinquencies on student loans to increase over the next six months. The same respondents expected delinquencies on all other types of consumer loans to decrease, putting the pessimism around student loans in sharp relief.

So not only are loans accelerating, but the actual amount of any given loan is rising exponentially.

Some of FICO's scary charts which nobody will pay attention to until it is far too late.

The total percentage of US population with 1 or more student loans has increased from 12.1% in 2005 to 19% in 2012.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/01/FICO%201.jpg

The consumer may be deleveraging... in everything but student loans that is: a 58% increase in the average student loan notional in seven years.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/01/FICO%202_0.jpg

And nearly 1% of the population has over $100,000 in student loans!

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/01/FICO%203_0.jpg

* * *

FICO's assessment is round in line with outs. "This situation is simply unsustainable and we’re already suffering the consequences,” said Dr. Andrew Jennings, FICO’s chief analytics officer and head of FICO Labs. “When wage growth is slow and jobs are not as plentiful as they once were, it is impossible for individuals to continue taking out ever-larger student loans without greatly increasing the risk of default. There is no way around that harsh reality.”

blaise
02-01-2013, 10:58 AM
So, stop taking out student loans you can't pay back.

Dayze
02-01-2013, 11:11 AM
I'm so glad I didn't go. Well, that and because I'm not the college type and would've busted out/quit.

but the costs for those that do go are ridiculous.

If I were to ever go back, or if I chose to back then, I would've gone the trade school route.

Pitt Gorilla
02-01-2013, 11:18 AM
A lot more people are. However few work their way through anymore. I think the loans set up that incentive.where are you getting that few students work their way through college?

KC native
02-01-2013, 11:45 AM
That was quite the fear mongering piece by Zero Hedge.

The bubble won't burst on student loans. They aren't dischargeable in bankruptcy except for extenuating circumstances. Is it sustainable? No. Will it lead to a financial contagion? No

patteeu
02-01-2013, 11:52 AM
where are you getting that few students work their way through college?

Real life.

patteeu
02-01-2013, 11:53 AM
That was quite the fear mongering piece by Zero Hedge.

The bubble won't burst on student loans. They aren't dischargeable in bankruptcy except for extenuating circumstances. Is it sustainable? No. Will it lead to a financial contagion? No

I agree with this. It also won't lead to falling home prices for people with otherwise good loans.

Garcia Bronco
02-01-2013, 11:54 AM
I went to college in the mid 90s. Had student loans and worked two jobs and parental help. I now work for one of the Tivas (student loan servicer) and let me tell you that we are the best right now at getting people to pay.

Amnorix
02-01-2013, 11:57 AM
This isn't about a bubble bursting, this is about an economic model (colleges) that isn't sustainable in the long run. There is a highly dysfunctional system involving kids with too much debt, the federal government taking on too much risk, and colleges that think that 8% increases in tuition fees EVERY YEAR is perfectly reasonable regardless of what the economy is doing.

Combine that with EVERY middle and upper income family thinking that a college degree is ABSOLUTELY required, and you have a recipe for disaster, probably at taxpayer's expense ultimately.

We need to wean our society off the notion that EVERYONE should get a college degree, and EVERYONE should own a house, and the taxpayer should underwrite all of it. All we do is screw up the economics around those sectors and then have the inevitable breakdown down the road.

mlyonsd
02-01-2013, 12:28 PM
It will suck if Obama lets this happen.

blaise
02-01-2013, 12:35 PM
Wasn't he occupy crowd claiming college should be paid for by taxpayers?

Pitt Gorilla
02-01-2013, 12:38 PM
Real life.I don't think anecdotal evidence even supports such a claim.

Direckshun
02-01-2013, 12:53 PM
This isn't about a bubble bursting, this is about an economic model (colleges) that isn't sustainable in the long run. There is a highly dysfunctional system involving kids with too much debt, the federal government taking on too much risk, and colleges that think that 8% increases in tuition fees EVERY YEAR is perfectly reasonable regardless of what the economy is doing.

Combine that with EVERY middle and upper income family thinking that a college degree is ABSOLUTELY required, and you have a recipe for disaster, probably at taxpayer's expense ultimately.

We need to wean our society off the notion that EVERYONE should get a college degree, and EVERYONE should own a house, and the taxpayer should underwrite all of it. All we do is screw up the economics around those sectors and then have the inevitable breakdown down the road.

Hm.

Are you arguing that there is such a thing as educating your population too much?

Comrade Crapski
02-01-2013, 12:57 PM
Hm.

Are you arguing that there is such a thing as educating your population too much?

Don't confuse going to college with getting educated.

I think most people go in dumb, and come out dumber.

blaise
02-01-2013, 01:27 PM
Hm.

Are you arguing that there is such a thing as educating your population too much?

Nope, every person should take out enough student loans to got to college until they're 65.

blaise
02-01-2013, 01:29 PM
The overwhelming majority of people I knew in college weren't working their way through college. They maybe had a summer job to pay for books and some beer and that was about it.

loochy
02-01-2013, 01:32 PM
So, stop taking out student loans you can't pay back.

NO DAMMIT.

It's my God given right to go to college for a worthless degree that has no earning potential!

It's just like my God given right to drive an Escalade with big wheels and own a house that eats up half my income after putting 1% down with a variable rate loan.

/today's fiscally irresponsible dumbasses

Amnorix
02-01-2013, 01:49 PM
Hm.

Are you arguing that there is such a thing as educating your population too much?


No, I'm arguing that there is a growing disparity in the COST of a college education versus the VALUE of a college education. That disparity is being driven by a number of factors, but primarily:

1. constantly dramatically escalating tuition costs due to inflated demand and no-risk students because most tuition payments are essentially guaranteed by the federal government.

2. flat or nearly flat value of college education, particularly to those who graduate with soft (i.e. worthless) majors such as poli sci, history, English and other majors where unemployment is high, and salaries are low.

Amnorix
02-01-2013, 01:53 PM
Don't confuse going to college with getting educated.

I think most people go in dumb, and come out dumber.


That's mostly because you're a knuckle-dragging mouth breathing dumb fucking neanderthal.

patteeu
02-01-2013, 01:59 PM
I don't think anecdotal evidence even supports such a claim.

I don't think you know what you're talking about. Somewhere between 60 and 70% of students at 4 year schools take loans. Add in the number of non-loan students who get help from family and those who get through with substantial scholarships and/or grants and all you have left are a few who work their way through. Having a job during the semester to pad your spending money account or to make up the shortfall between aid and school-related costs isn't the same thing as working your way through. It's hard to believe that these real world truths have escaped your notice given your experience with higher education.

La literatura
02-01-2013, 02:05 PM
No, I'm arguing that there is a growing disparity in the COST of a college education versus the VALUE of a college education. That disparity is being driven by a number of factors, but primarily:

1. constantly dramatically escalating tuition costs due to inflated demand and no-risk students because most tuition payments are essentially guaranteed by the federal government.

2. flat or nearly flat value of college education, particularly to those who graduate with soft (i.e. worthless) majors such as poli sci, history, English and other majors where unemployment is high, and salaries are low.

It would be nice to see some analysis of income based repayment plans on a large scale. I know that IBR is one of the main things that keep law school an economically rational decision for 80% of law students.

It's essentially a back-end subsidy as opposed to front-end.

Amnorix
02-01-2013, 02:08 PM
I don't think anecdotal evidence even supports such a claim.


Wait, are you saying "most kids work their way through college, thereby paying for a significant portion of their tuition and room and board"?

Because I'm not sure that's really the case. I think the vast, vast majority of student costs are either funded by mom and dad or by loans, with only a relatively modest percentage of the total typically funded by the student.

Note that this isn't necessarily unreasonable. When college tuition, room and board is in excess of $40,000 per year, it's tough to make much of a dent working part time and summers when you have very limited knowledge/experience to offer employers.

morphius
02-01-2013, 02:10 PM
I went to college and paid as I went. A student loan was nothing that even entered into my mind. The time was different and I was interested in the education rather than living away from home and having the funds to live beyond my means. My parents weren't rich so it was all on me.

I would recommend to anyone going to college to do their first 2 years at a local community college and then do as much online stuff as possible. Spending as little time as you can living in a manner that starts you off owing more than you will most likely make in your first 5 years you have a job.
Have you gone back and looked what that university that you paid as you go is charging now compared to what you paid? I did the same as you, and it cost me just over $1000 a semester, but now the cost at the same school is $2500 for just 12 hours, and that is without all the new fees they have added.

Amnorix
02-01-2013, 02:11 PM
It would be nice to see some analysis of income based repayment plans on a large scale. I know that IBR is one of the main things that keep law school an economically rational decision for 80% of law students.

It's essentially a back-end subsidy as opposed to front-end.


Don't know what IBR is, but law school is very unlikely to be an economically rational decision for 80% of law students when only 50% of law school graduates are getting jobs. Indeed, I just saw today an article in the ABA Journal referring to "massive" law school layoffs, likely lowering of admission standards and other effects from a dramatically reduction pool of law school applicants as a result of the increasing recognition that law school is a very poor choice for a very large number of attendees/graduates.

https://twitter.com/ABAJournal/statuses/297094419260248064

Amnorix
02-01-2013, 02:13 PM
Note, also, that Forbes wrote an article about what a bad idea going to law school is for so many people. I have personally counseled young college graduates to consider the decision very carefully.

http://www.forbes.com/sites/jmaureenhenderson/2012/06/26/why-attending-law-school-is-the-worst-career-decision-youll-ever-make/

La literatura
02-01-2013, 02:16 PM
Don't know what IBR is, but law school is very unlikely to be an economically rational decision for 80% of law students when only 50% of law school graduates are getting jobs. Indeed, I just saw today an article in the ABA Journal referring to "massive" law school layoffs, likely lowering of admission standards and other effects from a dramatically reduction pool of law school applicants as a result of the increasing recognition that law school is a very poor choice for a very large number of attendees/graduates.

https://twitter.com/ABAJournal/statuses/297094419260248064

Income Based Repayment. With this program, a prosecutor who makes $45K out of law school can based his repayment on his salary. To say this helps is quite an understatement when he might have $120K in loans. Instead of a $1200/mo payment, he has a $500 (and even less if he's married and/or has kids). At the end of 25 years, he's paid roughly 100K into the system, and gets a discharge of $80K that the public basically paid.

Yes, there are a lot of schools who can't get graduates jobs, but a top 100 law school will still work out for a student.

But, I fully support reduction in law schools and grads.

La literatura
02-01-2013, 02:18 PM
I've read all the criticism, and a lot of it is valid, but a good deal of it is also fueled by contrarians and people who expected way too much out of law school. They expected, basically, high school with more sex and a lavish suit job afterward.

Dayze
02-01-2013, 02:21 PM
This isn't about a bubble bursting, this is about an economic model (colleges) that isn't sustainable in the long run. There is a highly dysfunctional system involving kids with too much debt, the federal government taking on too much risk, and colleges that think that 8% increases in tuition fees EVERY YEAR is perfectly reasonable regardless of what the economy is doing.

Combine that with EVERY middle and upper income family thinking that a college degree is ABSOLUTELY required, and you have a recipe for disaster, probably at taxpayer's expense ultimately.

We need to wean our society off the notion that EVERYONE should get a college degree, and EVERYONE should own a house, and the taxpayer should underwrite all of it. All we do is screw up the economics around those sectors and then have the inevitable breakdown down the road.

100% agree. It's almost like there is a machine that pushes for everyone to get into debt up to their assess to they HAVE to work; and have to be forced to take low paying jobs because the companies hold all the cards based on unemployment rate.

Amnorix
02-01-2013, 02:23 PM
Income Based Repayment. With this program, a prosecutor who makes $45K out of law school can based his repayment on his salary. To say this helps is quite an understatement when he might have $120K in loans. Instead of a $1200/mo payment, he has a $500 (and even less if he's married and/or has kids). At the end of 25 years, he's paid roughly 100K into the system, and gets a discharge of $80K that the public basically paid.

I can't tell you how fucking excited I am that $80K taxpayer dollars went to a law school that really, REALLY needed that money to increase its endowment and continue to rip off students by offering a program that has an impractical method for training another zillion lawyers that we don't freaking need.

We are over-lawyered. Not slightly, but MASSIVELY.

We could seriously just eliminate half the law schools in the country (or halve the student body) and it would be the BEST thing we could do. Instead, the economics of law schools (they are MASSIVELY profitable to their institutions) demands that they churn out more and more young people with mountains of debt, most of whom are poorly trained to actually BE lawyers, and only half of whom (at best) are NEEDED to be lawyers.

And the public is funding this.

Joy. Oh joy.

Yes, there are a lot of schools who can't get graduates jobs, but a top 100 law school will still work out for a student.

But, I fully support reduction in law schools and grads.

Top 100 sounds fine. Unfortunately there are 200 or so. So yeah, cut the number in half and we'd be good.

What really needs to happen is a recognition by people going to college that (1) soft majors are likely worthless, and (2) law school is no longer a good option for what to do after you graduate college with your worthless soft major.

Once those two things are firmly embedded in the minds of potential college students and their parents, they can start making far more rational decisions about these things.

Until then, they will continue to be burdened by debt, and Joe Taxpayer will continue to underwrite useless degrees for people who are contributing little/nothing to American enterprise and the country's GDP.

La literatura
02-01-2013, 02:26 PM
I agree with you for the most part. And so do many undergrads who decide not to go to school. At my law school, we saw a drop from 200 entering students in 2010, to 180 in 2011, to about 160 in 2012.

The ABA needs to shut off the accreditation to a lot of these loser schools (not in the top 100) that do send kids into spiraling debt with no hope of gainful employment.

Still, the IBR plan is a good policy because although we may have a lot of litigators or 26 year olds who dig through boxes of papers, there are a lot of segments of society that do need lawyers. Like small communities with old men running a county firm.

mlyonsd
02-01-2013, 02:31 PM
This is like watching Denny Crane and Alan Shore sitting in overstuffed chairs on a balcony smoking cigars.

Amnorix
02-01-2013, 02:35 PM
Still, the IBR plan is a good policy because although we may have a lot of litigators or 26 year olds who dig through boxes of papers, there are a lot of segments of society that do need lawyers. Like small communities with old men running a county firm.


I'm not saying zero government support for college and other higher education tuition, but the massive support, when it's basically the colleges deciding who will get the support, with the feds writing a blank check, is creating massive economic distortions, including burdening the same students they're trying to help with more and more debt.

Why do you think tuition goes up 8% every year like clockwork? Easy, it's because society has a screwed up understanding of the value of a college degree, and the colleges have NO RISK that their students won't pay the tuition. The repayment risk is entirely on the students and the federal government, so why not fleece them for every dime?

Amnorix
02-01-2013, 02:36 PM
This is like watching Denny Crane and Alan Shore sitting in overstuffed chairs on a balcony smoking cigars.


Can I have some scotch too? Macallan 12 please... Thx.







:D

La literatura
02-01-2013, 02:41 PM
I'm not saying zero government support for college and other higher education tuition, but the massive support, when it's basically the colleges deciding who will get the support, with the feds writing a blank check, is creating massive economic distortions, including burdening the same students they're trying to help with more and more debt.

Why do you think tuition goes up 8% every year like clockwork? Easy, it's because society has a screwed up understanding of the value of a college degree, and the colleges have NO RISK that their students won't pay the tuition. The repayment risk is entirely on the students and the federal government, so why not fleece them for every dime?

So . . . do we allow student loans to be dischargeable in bankruptcy in an attempt to get schools to lower spending, or hold off public funding to the school (which will just have the schools raise student fees). Or dry up the loan process, which will cause the public to complain about lack of education opportunity.

Cave Johnson
02-01-2013, 02:47 PM
So . . . do we allow student loans to be dischargeable in bankruptcy in an attempt to get schools to lower spending, or hold off public funding to the school (which will just have the schools raise student fees). Or dry up the loan process, which will cause the public to complain about lack of education opportunity.

B. Tie future student loan approval to default rates for grads of underperforming schools.

Cave Johnson
02-01-2013, 02:51 PM
100% agree. It's almost like there is a machine that pushes for everyone to get into debt up to their assess to they HAVE to work; and have to be forced to take low paying jobs because the companies hold all the cards based on unemployment rate.

Fun fact: almost 1/2 of college grads are in positions that don't require a degree.

About 48 percent of employed U.S. college graduates are in jobs that the Bureau of Labor Statistics (BLS) suggests requires less than a four-year college education. Eleven percent of employed college graduates are in occupations requiring more than a high-school diploma but less than a bachelor's, and 37 percent are in occupations requiring no more than a high-school diploma.

http://gawker.com/5979579/we-need-fewer-college-graduates

Amnorix
02-01-2013, 03:19 PM
So . . . do we allow student loans to be dischargeable in bankruptcy in an attempt to get schools to lower spending, or hold off public funding to the school (which will just have the schools raise student fees). Or dry up the loan process, which will cause the public to complain about lack of education opportunity.

The student loans are owed to the government, not the schools, right? Or are guaranteed by the government anyway, right? So discharging it in bankruptcy doesn't change the economics from the school's point of view.

Federal guarantees of all student loans should discontinue. It's really that simple, unfortunately. It's having a massive distorting effect, and driving up the cost of college education for everyone, largely negating the benefit it was supposed to confer. Loans may be cheaper, but because it's driving up demand exponentially, and eliminating payment risk, colleges are just jamming it to students in the form of massive tuition increases.

Some scholarship / grant programs can certainly remain to help those who are incapable of funding from paying, but otherwise, eliminate it.

Of course, this will hit the middle class the most. Those who are wealthy pay their way, and those who are poor get need-based grants. But that's not really different than what goes on now.

Without the feds standing behind everything, EVERYONE needs to analyze what a college degree is "worth". Banks or colleges who give loans, and students who take them out. The pool of college applicants will (and should) shrink, especially as to less worthy degrees.

Frankly, there is no reason that a history student should have the same tuition cost as an engineering student, nor that a history teach gets paid the same as an engineering teacher. The market DEMANDS that they not be treated equally, because they just ARE NOT worth the same. Yet the professors get paid the same, and the students pay the same, when they are demonstrably, measurably, PROVABLY not equally valuable.

Whole system is fucked up.

Whatever, this is all pie-in-the-sky. None of this will happen. Eventually, maybe, when a college tuition and loan takes an average of 40 years to repay, people will wise up. Until then, forget it.

J Diddy
02-01-2013, 03:28 PM
The student loans are owed to the government, not the schools, right? Or are guaranteed by the government anyway, right? So discharging it in bankruptcy doesn't change the economics from the school's point of view.

Federal guarantees of all student loans should discontinue. It's really that simple, unfortunately. It's having a massive distorting effect, and driving up the cost of college education for everyone, largely negating the benefit it was supposed to confer. Loans may be cheaper, but because it's driving up demand exponentially, and eliminating payment risk, colleges are just jamming it to students in the form of massive tuition increases.

Some scholarship / grant programs can certainly remain to help those who are incapable of funding from paying, but otherwise, eliminate it.

Of course, this will hit the middle class the most. Those who are wealthy pay their way, and those who are poor get need-based grants. But that's not really different than what goes on now.

Without the feds standing behind everything, EVERYONE needs to analyze what a college degree is "worth". Banks or colleges who give loans, and students who take them out. The pool of college applicants will (and should) shrink, especially as to less worthy degrees.

Frankly, there is no reason that a history student should have the same tuition cost as an engineering student, nor that a history teach gets paid the same as an engineering teacher. The market DEMANDS that they not be treated equally, because they just ARE NOT worth the same. Yet the professors get paid the same, and the students pay the same, when they are demonstrably, measurably, PROVABLY not equally valuable.

Whole system is ****ed up.

Whatever, this is all pie-in-the-sky. None of this will happen. Eventually, maybe, when a college tuition and loan takes an average of 40 years to repay, people will wise up. Until then, forget it.


A student is required to take classes, at least at my school, regarding the employment prospects, the hiring trends and the cost of loans and their impact. They are well educated on the likelihood of what's coming and chose to live for the now.

The most intelligent solution is for the schools to assign a risk rating on degrees and adjust loan payouts accordingly.

Furthermore, history is valuable as well as some other programs and to keep them costs the same, so I can see the reason for tuition being equal. However, the big problem is trying to attract students to the campus to compete with other campuses in the "student mill." I have been here for a year and their have been 5 proposed rate increases. Each one was campus improvements in such areas as expanding the student center, building a new performing arts center, new practice gym, and other cosmetic changes. Keep in mind that the biggest pain in the ass at my school is the ungodly parking situation. There has been no proposed remedy for that.

cosmo20002
02-01-2013, 03:46 PM
Don't confuse going to college with getting educated.

I think most people go in dumb, and come out dumber.

You must have multiple degrees then.

notorious
02-01-2013, 06:05 PM
No sympathy here.

patteeu
02-01-2013, 07:55 PM
The student loans are owed to the government, not the schools, right? Or are guaranteed by the government anyway, right? So discharging it in bankruptcy doesn't change the economics from the school's point of view.

Federal guarantees of all student loans should discontinue. It's really that simple, unfortunately. It's having a massive distorting effect, and driving up the cost of college education for everyone, largely negating the benefit it was supposed to confer. Loans may be cheaper, but because it's driving up demand exponentially, and eliminating payment risk, colleges are just jamming it to students in the form of massive tuition increases.

Amnorix is trying on a sensible libertarian streak. Bravo.

Some scholarship / grant programs can certainly remain to help those who are incapable of funding from paying, but otherwise, eliminate it.

Of course, this will hit the middle class the most. Those who are wealthy pay their way, and those who are poor get need-based grants. But that's not really different than what goes on now.

Without the feds standing behind everything, EVERYONE needs to analyze what a college degree is "worth". Banks or colleges who give loans, and students who take them out. The pool of college applicants will (and should) shrink, especially as to less worthy degrees.

Frankly, there is no reason that a history student should have the same tuition cost as an engineering student, nor that a history teach gets paid the same as an engineering teacher. The market DEMANDS that they not be treated equally, because they just ARE NOT worth the same. Yet the professors get paid the same, and the students pay the same, when they are demonstrably, measurably, PROVABLY not equally valuable.

Whole system is ****ed up.

Whatever, this is all pie-in-the-sky. None of this will happen. Eventually, maybe, when a college tuition and loan takes an average of 40 years to repay, people will wise up. Until then, forget it.

Unfortunately, this is probably right too.

J Diddy
02-01-2013, 08:14 PM
Amnorix is trying on a sensible libertarian streak. Bravo.



Unfortunately, this is probably right too.

College can be done cheaply if that is the goal.

mlyonsd
02-01-2013, 08:31 PM
USD (South Dakota) recently added a new degree for 'General Studies' so their newly Division 1 athletes will have something to keep them in school.

Yeah, as an employer that's the kind of awesome knowledge I'll be looking for.

patteeu
02-01-2013, 09:16 PM
College can be done cheaply if that is the goal.

I don't understand what point you're making here.

patteeu
02-01-2013, 09:17 PM
USD (South Dakota) recently added a new degree for 'General Studies' so their newly Division 1 athletes will have something to keep them in school.

Yeah, as an employer that's the kind of awesome knowledge I'll be looking for.

My resume only has one thing in the Education section: ChiefsPlanet (Sept 2002-Present)

mlyonsd
02-01-2013, 09:20 PM
My resume only has one thing in the Education section: ChiefsPlanet (Sept 2002-Present)
n00b.

J Diddy
02-01-2013, 09:53 PM
I don't understand what point you're making here.

He said it's driving up the cost of a college education, which you applauded, and too which I replied that it can be done cheaply if that is the goal.

What's not to understand?

J Diddy
02-01-2013, 10:05 PM
My resume only has one thing in the Education section: ChiefsPlanet (Sept 2002-Present)

Really? You couldn't tell.

King_Chief_Fan
02-02-2013, 07:05 AM
I think this piece will prove to be prescient.

http://www.washingtonpost.com/opinions/george-will-subprime-college-educations/2012/06/08/gJQA4fGiOV_story.html

Subprime college educations
By George F. Will
Published: June 8

Many parents and the children they send to college are paying rapidly rising prices for something of declining quality. This is because “quality” is not synonymous with “value.”

Glenn Harlan Reynolds, a University of Tennessee law professor, believes that college has become, for many, merely a “status marker,” signaling membership in the educated caste, and a place to meet spouses of similar status — “associative mating.” Since 1961, the time students spend reading, writing and otherwise studying has fallen from 24 hours a week to about 15 — enough for a degree often desired only as an expensive signifier of rudimentary qualities (e.g., the ability to follow instructions). Employers value this signifier as an alternative to aptitude tests when evaluating potential employees because such tests can provoke lawsuits by having a “disparate impact” on this or that racial or ethnic group.

In his “The Higher Education Bubble,” Reynolds writes that this bubble exists for the same reasons the housing bubble did. The government decided that too few people owned homes/went to college, so government money was poured into subsidized and sometimes subprime mortgages/student loans, with the predictable result that housing prices/college tuitions soared and many borrowers went bust. Tuitions and fees have risen more than 440 percent in 30 years as schools happily raised prices — and lowered standards — to siphon up federal money. A recent Wall Street Journal headline: “Student Debt Rises by 8% as College Tuitions Climb.”

Richard Vedder, an Ohio University economist, writes in the Chronicle of Higher Education that as many people — perhaps more — have student loan debts as have college degrees. Have you seen those T-shirts that proclaim “College: The Best Seven Years of My Life”? Twenty-nine percent of borrowers never graduate, and many who do graduate take decades to repay their loans.

In 2010, the New York Times reported on Cortney Munna, then 26, a New York University graduate with almost $100,000 in debt. If her repayments were not then being deferred because she was enrolled in night school, she would have been paying $700 monthly from her $2,300 monthly after-tax income as a photographer’s assistant. She says she is toiling “to pay for an education I got for four years and would happily give back.” Her degree is in religious and women’s studies.

The budgets of California’s universities are being cut, so recently Cal State Northridge students conducted an almost-hunger strike (sustained by a blend of kale, apple and celery juices) to protest, as usual, tuition increases and, unusually and properly, administrators’ salaries. For example, in 2009 the base salary of UC Berkeley’s vice chancellor for equity and inclusion was $194,000, almost four times that of starting assistant professors. And by 2006, academic administrators outnumbered faculty.

The Manhattan Institute’s Heather Mac Donald notes that sinecures in academia’s diversity industry are expanding as academic offerings contract. UC San Diego (UCSD), while eliminating master’s programs in electrical and computer engineering and comparative literature, and eliminating courses in French, German, Spanish and English literature, added a diversity requirement for graduation to cultivate “a student’s understanding of her or his identity.” So, rather than study computer science and Cervantes, students can study their identities — themselves. Says Mac Donald, “ ‘Diversity,’ it turns out, is simply a code word for narcissism.”

She reports that UCSD lost three cancer researchers to Rice University, which offered them 40 percent pay increases. But UCSD found money to create a vice chancellorship for equity, diversity and inclusion. UC Davis has a Diversity Trainers Institute under an administrator of diversity education, who presumably coordinates with the Cross-Cultural Center. It also has: a Lesbian, Gay, Bisexual, Transgender Resource Center; a Sexual Harassment Education Program; a diversity program coordinator; an early resolution discrimination coordinator; a Diversity Education Series that awards Understanding Diversity Certificates in “Unpacking Oppression”; and Cross-Cultural Competency Certificates in “Understanding Diversity and Social Justice.” California’s budget crisis has not prevented UC San Francisco from creating a new vice chancellor for diversity and outreach to supplement its Office of Affirmative Action, Equal Opportunity and Diversity, and the Diversity Learning Center (which teaches how to become “a Diversity Change Agent”), and the Center for LGBT Health and Equity, and the Office of Sexual Harassment Prevention & Resolution, and the Chancellor’s Advisory Committees on Diversity, and on Gay, Lesbian, Bisexual and Transgender Issues, and on the Status of Women.

So taxpayers should pay more and parents and students should borrow more to fund administrative sprawl in the service of stale political agendas? Perhaps they will, until “pop!” goes the bubble.
Eliminate student loans from the gov
I worked my way through and others can do the same

patteeu
02-02-2013, 07:36 AM
He said it's driving up the cost of a college education, which you applauded, and too which I replied that it can be done cheaply if that is the goal.

What's not to understand?

I applauded because it *is* driving up the cost of college education. Just because you can get a degree from a combination of community college and directional state for the same amount of money that an ivy league degree used to cost doesn't mean costs aren't going up rapidly.

So I guess I don't understand the relevance of your statement. The goal, btw, is to get the same (or better) quality degree (from the same school with the same amount of teacher/student interaction) you could have gotten 30 years ago for about the same amount of money plus a reasonable level of inflation. It can't be done.

Loneiguana
02-02-2013, 08:04 AM
You can no longer work through college. It cannot be done.

I am a twenty-eight year old, non traditional undergrad. at the cheap state school in Springfield, MO.(I am paying for early mistakes). I work two jobs. One is at a restaurant for the money, the other is working as an English Tutor on campus so I have something on my resume. I work 30 hours a week, Tutor 7 and have 15 hours of class.

My total bill last year for the spring and fall semesters was over 7,000 dollars. I only made, at the restaurant, 16,000 and some. (Tutoring pays minimum wage). That is almost half of my yearly salary. Could you put half of your yearly salary towards tuition? And this is a cheap state school.

I only receive one federally grant from the government for 1300 dollars, divided out over two semesters. The State says I earn too much for a state grant.

I also did a few years at the cheap cheap Tech. School down here. (the math and speech classes among others.)

My wife graduated over a year ago and now works for the state in Child Social Services (Springfield is the number one city for child abuse and neglect in MO.) Her position requires a Degree, but hardly pays enough to meet the student loan repayment - (she has some out of state loans) - near 300 a month.

And to all you saying stop taking loans you don't need, you are aware that the majority of people taking out these loans are just at 18. Would a bank give a house loan to an 18 year old that doesn't have a job? No, they wouldn't. Can a 18 year old get a car loan without a job? No. But we happily give them tens of thousands of dollars for a promise they might get a well paying (HA) job one day.

I don't know what the answer is. I love Community colleges and tell everyone to go to a community college first. But the cost of Tuition is insane and goes up every year and it is bankrupting my generation. My wife and I could have bought a new car by now without the mountain of student loans.

J Diddy
02-02-2013, 11:05 PM
I applauded because it *is* driving up the cost of college education. Just because you can get a degree from a combination of community college and directional state for the same amount of money that an ivy league degree used to cost doesn't mean costs aren't going up rapidly.

So I guess I don't understand the relevance of your statement. The goal, btw, is to get the same (or better) quality degree (from the same school with the same amount of teacher/student interaction) you could have gotten 30 years ago for about the same amount of money plus a reasonable level of inflation. It can't be done.

I can get a degree from KU now for $8790/year. In contrast at harvard in 1983 tuition was $8200 a year. http://vpf-web.harvard.edu/budget/factbook/00-01/page23.html

Furthermore, you start to see the jump in tuition coming (at least in the case of harvard) well before us being in the student loan business.

J Diddy
02-02-2013, 11:09 PM
You can no longer work through college. It cannot be done.

I am a twenty-eight year old, non traditional undergrad. at the cheap state school in Springfield, MO.(I am paying for early mistakes). I work two jobs. One is at a restaurant for the money, the other is working as an English Tutor on campus so I have something on my resume. I work 30 hours a week, Tutor 7 and have 15 hours of class.

My total bill last year for the spring and fall semesters was over 7,000 dollars. I only made, at the restaurant, 16,000 and some. (Tutoring pays minimum wage). That is almost half of my yearly salary. Could you put half of your yearly salary towards tuition? And this is a cheap state school.

I only receive one federally grant from the government for 1300 dollars, divided out over two semesters. The State says I earn too much for a state grant.

I also did a few years at the cheap cheap Tech. School down here. (the math and speech classes among others.)

My wife graduated over a year ago and now works for the state in Child Social Services (Springfield is the number one city for child abuse and neglect in MO.) Her position requires a Degree, but hardly pays enough to meet the student loan repayment - (she has some out of state loans) - near 300 a month.

And to all you saying stop taking loans you don't need, you are aware that the majority of people taking out these loans are just at 18. Would a bank give a house loan to an 18 year old that doesn't have a job? No, they wouldn't. Can a 18 year old get a car loan without a job? No. But we happily give them tens of thousands of dollars for a promise they might get a well paying (HA) job one day.

I don't know what the answer is. I love Community colleges and tell everyone to go to a community college first. But the cost of Tuition is insane and goes up every year and it is bankrupting my generation. My wife and I could have bought a new car by now without the mountain of student loans.

That's horseshit. I am a single father, at 38, who works 7 days a week. Two in my field and the other 5 for extra bucks to make ends meet. I bust my ass in school at 18 credit hours so I get scholarships, I bust my ass at work so I get raises, and I bust my ass at home to be a good dad.

**Edit**I jumped the gun and read what you said as you can't work through school. After actually reading what you wrote I see you meant to pay for school as well. My apologies.

patteeu
02-03-2013, 06:58 AM
I can get a degree from KU now for $8790/year. In contrast at harvard in 1983 tuition was $8200 a year. http://vpf-web.harvard.edu/budget/factbook/00-01/page23.html

Furthermore, you start to see the jump in tuition coming (at least in the case of harvard) well before us being in the student loan business.

I hate to break it to you, but a degree from KU isn't going to be anywhere near as valuable as a Harvard degree. It's a black mark for your institution that one of their students is even making this comparison. I don't know why you think it matters that you can now get a Corolla for what a Rolls Royce used to cost.

When do you think the federal government got into the student loan business?

alanm
02-03-2013, 08:12 AM
USD (South Dakota) recently added a new degree for 'General Studies' so their newly Division 1 athletes will have something to keep them in school.

Yeah, as an employer that's the kind of awesome knowledge I'll be looking for.The kids I'd be looking for would be smart enough to go into the military for a few yrs, come out, and go to school on their GI Bill getting a degree with no debt.

Just from a discipline standpoint alone I'd take this kid.

mlyonsd
02-03-2013, 08:33 AM
The kids I'd be looking for would be smart enough to go into the military for a few yrs, come out, and go to school on their GI Bill getting a degree with no debt.

Just from a discipline standpoint alone I'd take this kid.Absolutely.

Bwana
02-03-2013, 08:36 AM
Choose wisely, or you could be pushing a broom or collecting food stamps.

http://www.onlinecolleges.net/2013/01/08/americas-phds-on-food-stamps/

https://s3.amazonaws.com/infographics/Americas-PhDs-Food-Stamps-800.jpg (https://s3.amazonaws.com/infographics/Americas-PhDs-Food-Stamps-800.jpg)

chiefzilla1501
02-03-2013, 08:47 AM
I hate to break it to you, but a degree from KU isn't going to be anywhere near as valuable as a Harvard degree. It's a black mark for your institution that one of their students is even making this comparison. I don't know why you think it matters that you can now get a Corolla for what a Rolls Royce used to cost.

When do you think the federal government got into the student loan business?

The comparison is interesting and valid if you use two different schools in the comparison. Funny... a buddy of mine and I were talking about cars. Yeah, huge difference between a Corolla and a Rolls Royce. But man, a Ford is really starting to catch up to an Acura.

Harvard and KU aren't good examples. But Michigan or UNC vs. Cornell or Dartmouth? Absolutely.

patteeu
02-03-2013, 08:58 AM
The comparison is interesting and valid if you use two different schools in the comparison. Funny... a buddy of mine and I were talking about cars. Yeah, huge difference between a Corolla and a Rolls Royce. But man, a Ford is really starting to catch up to an Acura.

Harvard and KU aren't good examples. But Michigan or UNC vs. Cornell or Dartmouth? Absolutely.

There's no comparison you can make to refute the fact that college tuition inflation exceeds general inflation by a huge amount.

ThatRaceCardGuy
02-03-2013, 09:12 AM
A lot more people are. However few work their way through anymore. I think the loans set up that incentive.

You're missing the point. FEW PEOPLE CAN AFFORD TO WORK THEIR WAY THROUGH COLLEGE. My wife graduated from KU owing 5k in 2003. She applied for any and every scholarship available to her and received almost every single one. There was a time when working your way through school was a viable option, but today that is not the case. Unless you luck out and receive a full ride scholarship, student loans are pretty much your only option. My brother graduates this year and will owe 62k in student loans, and thats while working his way through school paying as he went. The days of getting a good education at a affordable price are are long gone.

patteeu
02-03-2013, 10:46 AM
You're missing the point. FEW PEOPLE CAN AFFORD TO WORK THEIR WAY THROUGH COLLEGE. My wife graduated from KU owing 5k in 2003. She applied for any and every scholarship available to her and received almost every single one. There was a time when working your way through school was a viable option, but today that is not the case. Unless you luck out and receive a full ride scholarship, student loans are pretty much your only option. My brother graduates this year and will owe 62k in student loans, and thats while working his way through school paying as he went. The days of getting a good education at a affordable price are are long gone.

It looks like you're the one missing the point. One of the main reasons it's too expensive to work your way though college now is that we've had so much easy money pumped into the college system through student loan programs over the past few decades.

ThatRaceCardGuy
02-03-2013, 10:52 AM
It looks like you're the one missing the point. One of the main reasons it's too expensive to work your way though college now is that we've had so much easy money pumped into the college system through student loan programs over the past few decades.

It was easier to get money for school years ago than it is today. Before they never pulled your credit , now they do a complete credit check, so I'm not sure where the "easy money" is coming from. The reason why you could work through school is because it was affordable to do so-loans where not always the first option. Now , they are your only option if your parents aren't loaded, or if you don't earn a scholarship.

patteeu
02-03-2013, 11:15 AM
It was easier to get money for school years ago than it is today. Before they never pulled your credit , now they do a complete credit check, so I'm not sure where the "easy money" is coming from. The reason why you could work through school is because it was affordable to do so-loans where not always the first option. Now , they are your only option if your parents aren't loaded, or if you don't earn a scholarship.

You're still not getting it.

The people for whom the money is easy are the colleges. I don't know anyone who has ever been denied the ability to borrow money for college. Maybe it happens in a small number of cases, but it can't be very common.

But even if loans are harder to get today than they were a few years ago, or if the loans have worse terms today than they did then, the tuition problem of today comes from the loans of the past few decades, not the loans being made today. The loans of today (and they're still easy to get regardless of what you believe) are simply driving up costs for tomorrow's students.

ThatRaceCardGuy
02-03-2013, 11:34 AM
You're still not getting it.

The people for whom the money is easy are the colleges. I don't know anyone who has ever been denied the ability to borrow money for college. Maybe it happens in a small number of cases, but it can't be very common.

But even if loans are harder to get today than they were a few years ago, or if the loans have worse terms today than they did then, the tuition problem of today comes from the loans of the past few decades, not the loans being made today. The loans of today (and they're still easy to get regardless of what you believe) are simply driving up costs for tomorrow's students.

When was the last time you applied for a student loan ?

blaise
02-03-2013, 11:53 AM
If you don't want to pay the cost of going to college don't go to college. The whole, "I ended up owing too much!" is like saying, "I bought a car and now I owe $30,000!" And?

Loneiguana
02-03-2013, 12:13 PM
You're still not getting it.

The people for whom the money is easy are the colleges. I don't know anyone who has ever been denied the ability to borrow money for college. Maybe it happens in a small number of cases, but it can't be very common.

But even if loans are harder to get today than they were a few years ago, or if the loans have worse terms today than they did then, the tuition problem of today comes from the loans of the past few decades, not the loans being made today. The loans of today (and they're still easy to get regardless of what you believe) are simply driving up costs for tomorrow's students.


It is not access to loans that is driving up the cost of College. It is simple market forces, supple and demand, that are driving up the cost.

The college degree is about as useful as a high school degree forty or even thirty years ago. You are almost required to have a college degree for the most basic of jobs.

Colleges and universities know this, they sell it. Were you told about Community colleges in High School? We tell every single high school graduate to go to college. Because everyone and their parents think you need a degree to do anything (which to an extent you do). Colleges can continue to charge whatever the want. The people will pay it. The Loans you talk about, those are just a means to meet the payment.

You can compare it to a monopoly in a way. College will can charge whatever price they want because there is no check on demand.

I know you want to blame the government for everything, but even without government loans the cost would still be skyrocketing. Colleges have the market cornered, if you want the high paying jobs, you have to get a degree, so you will pay their costs.

Loneiguana
02-03-2013, 12:20 PM
If you don't want to pay the cost of going to college don't go to college. The whole, "I ended up owing too much!" is like saying, "I bought a car and now I owe $30,000!" And?

Cool concept. Good thing 18 year olds are known for making great choices in life. Especially ones that impact them for thirty years. I know every 18 year old has taken finance class in high school and understand compound interest and grasp how long it really takes to pay off a loan. That is why we give so many 18 years house loan and car loans.

blaise
02-03-2013, 12:29 PM
Cool concept. Good thing 18 year olds are known for making great choices in life. Especially ones that impact them for thirty years. I know every 18 year old has taken finance class in high school and understand compound interest and grasp how long it really takes to pay off a loan. That is why we give so many 18 years house loan and car loans.

It's not really rocket science.

patteeu
02-03-2013, 02:20 PM
When was the last time you applied for a student loan ?

Last fall. What difference does that make?

patteeu
02-03-2013, 02:25 PM
It is not access to loans that is driving up the cost of College. It is simple market forces, supple and demand, that are driving up the cost.

The college degree is about as useful as a high school degree forty or even thirty years ago. You are almost required to have a college degree for the most basic of jobs.

Colleges and universities know this, they sell it. Were you told about Community colleges in High School? We tell every single high school graduate to go to college. Because everyone and their parents think you need a degree to do anything (which to an extent you do). Colleges can continue to charge whatever the want. The people will pay it. The Loans you talk about, those are just a means to meet the payment.

You can compare it to a monopoly in a way. College will can charge whatever price they want because there is no check on demand.

I know you want to blame the government for everything, but even without government loans the cost would still be skyrocketing. Colleges have the market cornered, if you want the high paying jobs, you have to get a degree, so you will pay their costs.

Nope, you're wrong about this. You're focusing on symptoms instead of the underlying problem. All the issues you focus on grew out of the fact that the government flooded the market with easy money. Demand was increased because it was easier to pay for college. People started to think you needed a degree because everyone was getting one since it was easier to pay for it.

Colleges are simply soaking up all that money that's been injected into the system.

Loneiguana
02-03-2013, 03:59 PM
Nope, you're wrong about this. You're focusing on symptoms instead of the underlying problem. All the issues you focus on grew out of the fact that the government flooded the market with easy money. Demand was increased because it was easier to pay for college. People started to think you needed a degree because everyone was getting one since it was easier to pay for it.

Colleges are simply soaking up all that money that's been injected into the system.

Demand has increased despite an crazy increase in cost. At what cost do you think demand will decrease? Or do you believe that government money will only always increase demand no matter the cost? Its not like it is free money, people are still going into debt.

/honest questions.

patteeu
02-03-2013, 04:19 PM
Demand has increased despite an crazy increase in cost. At what cost do you think demand will decrease? Or do you believe that government money will only always increase demand no matter the cost? Its not like it is free money, people are still going into debt.

/honest questions.

I don't know when it will decrease, but as long as we keep finding ways to "make college affordable for all" by pumping taxpayer dollars into the system, demand will remain artificially high just like it is now.

Loneiguana
02-04-2013, 06:26 AM
I don't know when it will decrease, but as long as we keep finding ways to "make college affordable for all" by pumping taxpayer dollars into the system, demand will remain artificially high just like it is now.

I just have to disagree with you on this. I don't think the Government is making college affordable for all because people still have to pay the loans back. The debt college students are incurring is very real and debt has a way to curve demand. I don't believe it has because, so far, the majority of people are in college because they think it will improve their life and get them a better job. I do not believe people are going to college because the government is backing their loans.

patteeu
02-04-2013, 06:55 AM
I just have to disagree with you on this. I don't think the Government is making college affordable for all because people still have to pay the loans back. The debt college students are incurring is very real and debt has a way to curve demand. I don't believe it has because, so far, the majority of people are in college because they think it will improve their life and get them a better job. I do not believe people are going to college because the government is backing their loans.

Government guarantees and subsidies for these loans distorts the supply vs. demand curve even if it's not as great a distortion as pure free money would be. How could it not?

Dayze
02-04-2013, 07:30 AM
I realize there are probably people that have more debt than a friend of mine; and I might not have a ton of perspective as to the costs etc. But, in a 2 year tech school he ended up with a loan of $55k.

I thought to myself that was insane. Again, no idea if that’s a good deal or what. But, I couldn’t believe it.

blaise
02-04-2013, 07:32 AM
Makes it seem like the athletes that get full rides aren't being exploited as much as people claim they are.

phisherman
02-04-2013, 07:46 AM
I realize there are probably people that have more debt than a friend of mine; and I might not have a ton of perspective as to the costs etc. But, in a 2 year tech school he ended up with a loan of $55k.

I thought to myself that was insane. Again, no idea if that’s a good deal or what. But, I couldn’t believe it.

That IS insane. My 4 (closer to 5) year degree at a state university set me back around 25k.

My Masters that I'm working on currently will only cost me around 11k in the long run.