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General Category => General Discussion => Topic started by: Parsad on August 13, 2019, 01:52:28 PM

Title: Student Loans Getting Close to Implosion!
Post by: Parsad on August 13, 2019, 01:52:28 PM
Millennials are struggling with their debt load...in particular student loans, auto loans and credit cards.  In fact, delinquencies on student loans are getting dire:

https://finance.yahoo.com/news/student-loans-debt-grow-193708816.html

I would expect a bailout of some sort in the next Presidential term.  Cheers!
Title: Re: Student Loans Getting Close to Implosion!
Post by: Gregmal on August 13, 2019, 02:03:51 PM
Hopefully not. They are already entitled enough as it is. Nothing will ever teach them responsibility. Working how/when you feel like it(only to complain about wages), daily trips to Starbucks, paying $9 for avocado toast... they're idiots.
Title: Re: Student Loans Getting Close to Implosion!
Post by: wabuffo on August 13, 2019, 03:05:55 PM
I would expect a bailout of some sort in the next Presidential term.  Cheers!

Did you know that $1T of these student loan balances are 100% owned by the US Federal Govt as assets.  There already was a bail-out.

Around 2010, the Obama administration pushed private student lenders completely out of the market and basically took over the issuance of new student loans.   The "business case" made by the Administration at the time was that the Federal govt could borrow at a lower interest rate than private lenders could.  Thus, the govt could, in turn, lower student loan interest rates and help students while still making a small spread.  The claim was that the US taxpayer was going to 'make money' on this deal.  (LOL!)

The Federal spending wasn't even counted in the official Federal Budget deficit statistics since the disbursements under the Federal Direct Student Loans Program and Temporary Student Loan Purchase Authority were considered the purchase of an "asset" and not an expenditure. So the over $1T disbursed for new loans and purchased loans was never counted in the deficit numbers from 2009 onwards.   Nevertheless - to the student loan recipients the cash deposited to their bank accounts was real enough!  You can see the numbers in Schedule E of the US Treasury's monthly budget reports.

wabuffo
Title: Re: Student Loans Getting Close to Implosion!
Post by: Spekulatius on August 13, 2019, 04:47:32 PM
Hopefully not. They are already entitled enough as it is. Nothing will ever teach them responsibility. Working how/when you feel like it(only to complain about wages), daily trips to Starbucks, paying $9 for avocado toast... they're idiots.

Using about every cliche about the Millennial generation there is. My sample size is small, but from the handful of millennials I als I know from work, no fits this description. As for the student loan bailout, itís inevitable, imo. Once the millennial generation puts their mark on the political landscape, itís only a matter of time.
Title: Re: Student Loans Getting Close to Implosion!
Post by: Parsad on August 13, 2019, 04:54:16 PM
Hopefully not. They are already entitled enough as it is. Nothing will ever teach them responsibility. Working how/when you feel like it(only to complain about wages), daily trips to Starbucks, paying $9 for avocado toast... they're idiots.

Using about every cliche about the Millennial generation there is. My sample size is small, but from the handful of millennials I als I know from work, no fits this description. As for the student loan bailout, itís inevitable, imo. Once the millennial generation puts their mark on the political landscape, itís only a matter of time.

Ah, Greg was a grumpy, 65-year old senior when he came out of his mother's womb, so I would take that all with a grain of salt...especially on the $9 avocado toast...it's more like $15 everywhere! 

That being said, the stats don't lie, and they do show that Millennials are struggling on a broad basis.  So maybe not your immediate peer group, but certainly the age category.  And truth is that is natural since they come out of school with debt, carry mortgage debt, credit card debt and auto loans as they build their young careers.  But the sheer weight is enormous for this age category compared to Boomers, Gen X & Y, etc at the same age.  Cheers!
Title: Re: Student Loans Getting Close to Implosion!
Post by: DooDiligence on August 13, 2019, 05:15:19 PM
I need to max out a student loan quick.
Title: Re: Student Loans Getting Close to Implosion!
Post by: longinvestor on August 13, 2019, 05:18:58 PM
At least one large part of the problem is the total waste of the money spent on these college degrees. I donít know the percentage but for a good number of college grads the net benefit is below zero. The irony is that the internet has disrupted most other facets of life but is slow to disrupt college education. I canít wait! Thereís a big difference between getting a degree and getting education. Personally speaking, my own net learning during college pales in comparison to the post-c learning.
Title: Re: Student Loans Getting Close to Implosion!
Post by: DTEJD1997 on August 13, 2019, 05:24:27 PM
Hey all:

I've been talking about this for years.

Sure, you've got entitled "goofs" who squandered their time & money, who got useless degrees in underwater basket weaving or grievance studies.

You've also got swarms of people who "did everything right" and they either can't find gainful employment in their field of study OR they find employment in their field at pay rates FAR below what the skool & USNWR represented it to be.

So what do you do?  You are trapped.  You've got $100K+ in debt.   How do you pay that off with a $35k to $45k salary?  Especially when you've got to pay for room & board & transportation & everything else?

Do you chuck all your education and start big rig truck driving to make decent money to pay off your loans?

I am going to suggest that almost everybody on this board is relatively successful and has not had to deal with dismal job prospects and huge student loans.  So it is easy to condemn the idiots for borrowing too much.  It is easy to believe that all "educators" do a good job & are underpaid.

What about the so called educators? They are laughing all the way to the bank!  They got their money.

Cancelling student loan debt or "free" education is not going to deal with the grifters in the education system.
Title: Re: Student Loans Getting Close to Implosion!
Post by: Parsad on August 13, 2019, 05:42:33 PM
Hey all:

I've been talking about this for years.

Sure, you've got entitled "goofs" who squandered their time & money, who got useless degrees in underwater basket weaving or grievance studies.

You've also got swarms of people who "did everything right" and they either can't find gainful employment in their field of study OR they find employment in their field at pay rates FAR below what the skool & USNWR represented it to be.

So what do you do?  You are trapped.  You've got $100K+ in debt.   How do you pay that off with a $35k to $45k salary?  Especially when you've got to pay for room & board & transportation & everything else?

Do you chuck all your education and start big rig truck driving to make decent money to pay off your loans?

I am going to suggest that almost everybody on this board is relatively successful and has not had to deal with dismal job prospects and huge student loans.  So it is easy to condemn the idiots for borrowing too much.  It is easy to believe that all "educators" do a good job & are underpaid.

What about the so called educators? They are laughing all the way to the bank!  They got their money.

Cancelling student loan debt or "free" education is not going to deal with the grifters in the education system.

The problem is that this all comes down to the whole notion that everyone deserves an education (meaning college/university), a home, a job, etc...entitlement! 

There used to be a time when people would save up for all of these things...or at least a significant portion of it.  Hardly anyone puts down 20% now on their first home, but they all believe they should own one.  So many students borrow for college...instead of working part/full-time and paying for it as they study.  I see parents buying their teenagers cars, putting away money for college, but they don't even plan and save for their own retirement.

If you want something, go work, save for it and then buy it or get it.  Don't borrow unless you have a growing asset behind it.  A communications degree isn't going to guarantee a growing job!  Alot of this is bloody common sense is it not?  Cheers!
Title: Re: Student Loans Getting Close to Implosion!
Post by: DTEJD1997 on August 13, 2019, 05:50:31 PM
Hey all:

Here is another factor to the student loan crisis.

A lot of borrowers are stopping payments on their loans. 

They are doing this as there is a lot of uncertainty of what is going on with student loans.  Why make payments if there is a possibility of them being discharged/significantly altered?

So get them deferred, or get on IBR.  Try to postpone making payments as long as possible.  If you have to make payments, make the smallest payment possible to see if the situation changes.

Kind of stupid on the part of government.
Title: Re: Student Loans Getting Close to Implosion!
Post by: JRM on August 13, 2019, 06:00:17 PM
I like the concept that the schools are means tested in order for students of a particular school to receive government backed student loans.  In other words, if more than a certain percentage of students graduate from a school with a particular degree and cannot pay back the loan, then the government will no longer provide financing for student loans for the program. Some programs will probably need to be subsidized (or tuition lowered) like teaching degrees.  Why should a teaching certificate cost the same as an engineering degree or pre-med?
Title: Re: Student Loans Getting Close to Implosion!
Post by: Gregmal on August 13, 2019, 06:12:41 PM
What I think is retarded, is that none of this is forced, and much of this is because of selfishness and motives not really centered around education. Community college is available to everyone, and costs very little. If your goal is an education, why not do that? Its inexcusable to excuse student loans for people who chose to go to $30K+ per year universities, took room and board, and lets face it, basically were there for the "experience" and social aspects...
Title: Re: Student Loans Getting Close to Implosion!
Post by: Spekulatius on August 13, 2019, 06:21:16 PM
Hopefully not. They are already entitled enough as it is. Nothing will ever teach them responsibility. Working how/when you feel like it(only to complain about wages), daily trips to Starbucks, paying $9 for avocado toast... they're idiots.

Using about every cliche about the Millennial generation there is. My sample size is small, but from the handful of millennials I als I know from work, no fits this description. As for the student loan bailout, itís inevitable, imo. Once the millennial generation puts their mark on the political landscape, itís only a matter of time.

Ah, Greg was a grumpy, 65-year old senior when he came out of his mother's womb, so I would take that all with a grain of salt...especially on the $9 avocado toast...it's more like $15 everywhere! 

That being said, the stats don't lie, and they do show that Millennials are struggling on a broad basis.  So maybe not your immediate peer group, but certainly the age category.  And truth is that is natural since they come out of school with debt, carry mortgage debt, credit card debt and auto loans as they build their young careers.  But the sheer weight is enormous for this age category compared to Boomers, Gen X & Y, etc at the same age.  Cheers!

No question the issue with student loan debt is real. The peer group I am referring to are all engineers, so they have a decent paying job, which goes a long way towards solving the problem.
Title: Re: Student Loans Getting Close to Implosion!
Post by: cherzeca on August 13, 2019, 06:22:18 PM
20 years ago I did some volunteer work at a NYC charter school, inner city.  principal said that her goal was to send everyone to college because data said that best way to escape poverty was to get a college education.  90% of these kids were totally unprepared for college imo, and this was a high aspirational charter high school.  the thing about merit is that it ain't easy.  just because some charter school principal and some college admissions teams think it would be great for everyone to get a college education doesn't mean that everyone will succeed.

moral of story:  you cant force achievement as social policy or a social science experiment
Title: Re: Student Loans Getting Close to Implosion!
Post by: Gamecock-YT on August 13, 2019, 06:57:44 PM
Seems like we average one of these threads once a quarter, nothing changes. Everyone rehashes the same points. SD can make my argument much more eloquently than I:

This is the same argument that the drunk makes at the bar.
ďI was drinking [young and dumb], and you [society] knew I wasnít making rational decisions [not mature enough].
You should never have lent me the money to continue - this is all YOUR fault, not mine!!Ē 

Money was made available to finance an education, and yes it came with strings; thatís life. No different to the mortgage that millions of people pay every day. But we can foreclose on a house, whereas that stupid educational decision has to be worn. By both the drunk AND society.

If the drunk canít repay, society gives the drunk the ability to earn debt forgiveness. If the drunkís program does not qualify [art history], nothing prevents the drunk from returning to school, and doing something that DOES qualify. The drunk just doesnít want to.

The only issue here is whether the money should have been made available. Most would say yes, but not until the following morning when the drunk is sober [student is mature]. With greater responsibility on the part of the student, comes a reduction in the educational abuses.

But until then it just comes across as spoilt brats, refusing to grow up.

SD
Title: Re: Student Loans Getting Close to Implosion!
Post by: CorpRaider on August 14, 2019, 05:04:28 AM
The fact that the debt is not dischargeable is insane.  There needs to be a system with some accountability for the schools and the lenders.  Most of the schools are borderline committing fraud with the statistics they publish and upon which these children (or adults with massive information disadvantages) are making huge financial decisions (with the help of advisors compensated by the recipient of the loan proceeds).  Higher education needs to be totally disrupted. The financial incentives are totally perverse and so....a clusterfk is born.
Title: Re: Student Loans Getting Close to Implosion!
Post by: cubsfan on August 14, 2019, 05:40:10 AM
The fact that the debt is not dischargeable is insane.  There needs to be a system with some accountability for the schools and the lenders.  Most of the schools are borderline committing fraud with the statistics they publish and upon which these children (or adults with massive information disadvantages) are making huge financial decisions (with the help of advisors compensated by the recipient of the loan proceeds).  Higher education needs to be totally disrupted. The financial incentives are totally perverse and so....a clusterfk is born.

+1 - "a clusterfk is born" - the consummate description
Title: Re: Student Loans Getting Close to Implosion!
Post by: Castanza on August 14, 2019, 05:50:37 AM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).



Title: Re: Student Loans Getting Close to Implosion!
Post by: Gregmal on August 14, 2019, 06:07:42 AM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

The highlighted are just proof IMO how people are stupid. Maybe you saw it differently, or maybe you just decided to work(or not make excuses), but those lowly minimum wage jobs offer a lot more than just cash. They offer job experience and industry knowledge. The problem is that with poor people, most are not ambitious at all and just want to do the minimum. They begrudge getting up at 7:30 so they can be at work at 8, and sit there staring at their watches counting down the time until lunch break, and then 5 pm. They should be soaking up knowledge; its free tuition. Its really not hard, if you have half a brain, to work in an industry for a couple years and then figure out how to make money in that industry somewhere else in the ecosystem.
Title: Re: Student Loans Getting Close to Implosion!
Post by: cherzeca on August 14, 2019, 06:20:34 AM
@greg/cast

great points.  as I look back on my manual labor jobs during summers of high school and college, I gathered more important responsibility/socialization skills there than in school.  could cut classes, cant cut work. needed to make deposits into favor bank since I will see my co-worker tomorrow v. just find different buddies (though playing on a team reinforced what I learned at work).

few in higher education appreciate this
Title: Re: Student Loans Getting Close to Implosion!
Post by: Jurgis on August 14, 2019, 06:36:32 AM
https://www.marketwatch.com/story/why-financial-education-wont-solve-the-15-trillion-student-loan-crisis-2019-06-27?mod=mw_latestnews
Title: Re: Student Loans Getting Close to Implosion!
Post by: wondering on August 14, 2019, 07:41:04 AM
From another point of view, I seem to be remember that Russell Napier mentioning at one of the FFH pre-AGM dinners that the forgiveness of student debt would be very stimulative to the economy, i.e. by removing the debt burden to young people, they would resume spending again.
Title: Re: Student Loans Getting Close to Implosion!
Post by: cherzeca on August 14, 2019, 07:44:47 AM
From another point of view, I seem to be remember that Russell Napier mentioning at one of the FFH pre-AGM dinners that the forgiveness of student debt would be very stimulative to the economy, i.e. by removing the debt burden to young people, they would resume spending again.

maxing their credit cards and then looking for more relief
Title: Re: Student Loans Getting Close to Implosion!
Post by: SharperDingaan on August 14, 2019, 09:14:21 AM
Just back from vacation .....

Whatever we may think as to whether student debt should be forgiven or not, the major problem with it that it cannot be done without distorting inter-generational parity. The practical reality is that you cant give 'X' dollars to just one generation - and NOT DO THE SAME for every other living generation that has passed through the same institution. Shouldn't the current student in the institution not get the same benefit? Shouldn't the 'older than millenial' generations that graduated earlier - not get the same benefit? Families with kids typically share the family resources equally amongst their kids, they don't systematically just give one kid more at the expense of the others. But ... I'm a millenial, I'm the 'chosen one!'
Sorry, but we're just not that into you!

Millenials are those born between 1981-1991; at the end of 2019, those aged 28-38. They're young, middle-aged geezers today!
That 19 year going through University/College today has a very different attitude and is a lot more pragmatic; much as the children of those born in the depression years of the 1920s never forgot the lessons of the depression. And quite a few are now graduating debt free, and with 2 years+ of paid co-op experience (business, engineering, computer science, trades, etc.), through sheer hard work. Point is, moral hazard works; and its effect is very evident in the generation currently going through university/college. All desirable.

Student debt either gets paid off, or written off; but nothing prevents anyone from 'earning' a write-off for societal services performed; looking after aging grand parents, performing admin/legal work in hospices, foodbanks, etc. But at the end of the day, you 'wear' your mistakes, and moral hazard ALWAYS gets paid!

Sure it's not what people want to hear, but neither is getting old!
You want to change the world? CHANGE IT, don't whine :)

SD




Title: Re: Student Loans Getting Close to Implosion!
Post by: DTEJD1997 on August 14, 2019, 09:17:06 AM
Hey all:

Here is another thing to ponder.

If the education being peddled by "educators" is valuable & worthwhile (certainly some is), why are there so many people so far in debt?  Why is the amount owed easily $1.5T?

If graduates get good jobs, jobs that pay $$$$ commensurate with the time & money invested in them, then why so much debt? 

People with valuable educations would be making more $, and easily paying down/off their student loans.

The simple fact of the matter is that a shockingly high percentage of education is simply no where near as valuable as what it is made out to be.  Thus, you get the shocking amount of debt.

The way edukation is set up in America is now a wealth transfer from the tax payers to the edukators, with students/graduates trapped in the middle.

Meanwhile, the "educators" laugh all the way to the bank.
Title: Re: Student Loans Getting Close to Implosion!
Post by: stahleyp on August 14, 2019, 09:48:16 AM
I find it funny that that colleges, by and large, tend to be very liberal and about "social justice" but have no issue loading kids with tons of debt. I agree that something needs to be done about education but I don't like the idea of loan forgiveness/bailout. It doesn't fix the actual issue (schools overcharging for the services provided). And rewards those that have a degree and debt but doesn't reward those with a degree and no debt or those without a degree.

I'd much prefer something like a tax deduction on the full amount paid back per year and limiting schools to allow them to only increase total cost by the rate of inflation. Perhaps we could do something like if you pay your loans off within 10 years, you can deduct all of it and no interest. If you pay it after that you get a deduction but will owe interest.

Title: Re: Student Loans Getting Close to Implosion!
Post by: Castanza on August 14, 2019, 09:59:34 AM
Hey all:

Here is another thing to ponder.

If the education being peddled by "educators" is valuable & worthwhile (certainly some is), why are there so many people so far in debt?  Why is the amount owed easily $1.5T?

If graduates get good jobs, jobs that pay $$$$ commensurate with the time & money invested in them, then why so much debt? 

People with valuable educations would be making more $, and easily paying down/off their student loans.

The simple fact of the matter is that a shockingly high percentage of education is simply no where near as valuable as what it is made out to be.  Thus, you get the shocking amount of debt.

Meanwhile, the "educators" laugh all the way to the bank.

I distinctly remember sitting in my dorm room wondering why the hell I was paying 20k a year for power points. That's exactly what the majority of courses are. Yeah you get some valuable lab work and get to talk with the professors but the majority of "learning" is done on your own. Youtube can teach you Calc, Chem (minus the lab), Biology, Physics and everything else just as well. The only thing different is it's free and there is no accountability or way to prove you "learned" it. It's easy to see the value of education looking back in history. But looking forward not as much. Seems to be more about making connections and having a piece of paper to market yourself and check off a box.
Title: Re: Student Loans Getting Close to Implosion!
Post by: KJP on August 14, 2019, 10:12:30 AM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.
Title: Re: Student Loans Getting Close to Implosion!
Post by: SHDL on August 14, 2019, 10:14:26 AM
Iím personally a fan of the income sharing arrangements that some institutions are starting/testing.  IMO a young personís professional career is the type of thing that ought to be financed mostly by equity, not debt.  A lot of the horror stories I read are about households that are like startups that got themselves started with 7x EBITDA worth of debt and no equity.  That is financially reckless, even if the expected returns are good. 

That said, I do agree that higher ed is ripe for massive disruption.
Title: Re: Student Loans Getting Close to Implosion!
Post by: Castanza on August 14, 2019, 11:26:35 AM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

Wouldn't this create a massive discrepancy between private and public institutions? I mean public schools receive state legislator and federal funding. So having them guarantee the loans would still technically come back on tax payers right? I know the majority of their funding is probably derived from tuition but there is certainly a tax element. Whereas private universities receive no state/federal funding. Then you have the issue of capping tuition costs. How would you do this with the inevitable demand of either tuition increases to pay these guaranteed loans? Either that or they ask for more money from state and federal funding. I'm not saying your wrong but it seems like the money is coming from the same pool so to speak.

I agree with the regulators part. I wasn't thinking of having them determine what degrees are worthless. More along the lines of recognizing supply and demand in the general workforce.
Title: Re: Student Loans Getting Close to Implosion!
Post by: KJP on August 14, 2019, 12:29:30 PM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

Wouldn't this create a massive discrepancy between private and public institutions? I mean public schools receive state legislator and federal funding. So having them guarantee the loans would still technically come back on tax payers right? I know the majority of their funding is probably derived from tuition but there is certainly a tax element. Whereas private universities receive no state/federal funding. Then you have the issue of capping tuition costs. How would you do this with the inevitable demand of either tuition increases to pay these guaranteed loans? Either that or they ask for more money from state and federal funding. I'm not saying your wrong but it seems like the money is coming from the same pool so to speak.

I agree with the regulators part. I wasn't thinking of having them determine what degrees are worthless. More along the lines of recognizing supply and demand in the general workforce.

I suspect tuition would go down, not up.  Universities currently have incentives to continually raise tuition to fund internal salaries, various projects, etc. -- the typical bureaucratic incentives.  They have been able to raise headline tuition more than inflation because of subsidies arising from federally issued or guaranteed loans.  If that subsidy were taken away and the risk of loss were placed on universities, I believe they would find ways to cut tuition costs (and the attendant risk of loss on their guarantees) significantly.

The public/private distinction is an issue, and public schools might continue to enjoy a taxpayer subsidy to some extent.  But they are also the universities with the lower tuition costs to begin with, and legislators could make any university debt non-recourse to the state, preventing any taxpayer subsidy.  I believe this is already the case for most public university systems in the U.S. -- although they are considered arms of the state for many purposes, their debt is not backed by the full faith and credit of the state that sponsors them.
Title: Re: Student Loans Getting Close to Implosion!
Post by: Castanza on August 14, 2019, 12:58:54 PM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

Wouldn't this create a massive discrepancy between private and public institutions? I mean public schools receive state legislator and federal funding. So having them guarantee the loans would still technically come back on tax payers right? I know the majority of their funding is probably derived from tuition but there is certainly a tax element. Whereas private universities receive no state/federal funding. Then you have the issue of capping tuition costs. How would you do this with the inevitable demand of either tuition increases to pay these guaranteed loans? Either that or they ask for more money from state and federal funding. I'm not saying your wrong but it seems like the money is coming from the same pool so to speak.

I agree with the regulators part. I wasn't thinking of having them determine what degrees are worthless. More along the lines of recognizing supply and demand in the general workforce.

I suspect tuition would go down, not up.  Universities currently have incentives to continually raise tuition to fund internal salaries, various projects, etc. -- the typical bureaucratic incentives.  They have been able to raise headline tuition more than inflation because of subsidies arising from federally issued or guaranteed loans.  If that subsidy were taken away and the risk of loss were placed on universities, I believe they would find ways to cut tuition costs (and the attendant risk of loss on their guarantees) significantly.

The public/private distinction is an issue, and public schools might continue to enjoy a taxpayer subsidy to some extent.  But they are also the universities with the lower tuition costs to begin with, and legislators could make any university debt non-recourse to the state, preventing any taxpayer subsidy.  I believe this is already the case for most public university systems in the U.S. -- although they are considered arms of the state for many purposes, their debt is not backed by the full faith and credit of the state that sponsors them.

https://www.cnbc.com/2018/06/25/why-your-first-job-out-of-college-really-really-matters.html

My concern would be that incentive's colleges to get jobs for graduates would create a more pay to play employment model. As the article above says 40% of college grads take jobs that don't require a degree. How would universities handle the inevitable lawsuits? Or is that not what you are saying in terms of accountability?

Title: Re: Student Loans Getting Close to Implosion!
Post by: SharperDingaan on August 14, 2019, 01:24:25 PM
ALL degrees have 'value'; it's just not always a commercial value.
Few would argue that attending the Julliard School is of little value if you want a career in the performing arts. But while we may think that attendance is not worth the cost (NPV < zero), a successful graduation from Julliard WILL very likely improve your odds of success.
https://www.juilliard.edu/admissions

It is well known that if something is 'free', we attach little value to it. Even if we need it to live (ie: clean air and water).
Hence the reality is that a 'sheepskin' needs to cost you something to obtain. But If you dont have the confidence to invest some of your own dollars in your own future - why should anyone invest dollars in you? (making financing available). There needs to be debt upon graduation, and it needs to be large enough to spur positive behaviour. ie. Work like a dog, to pay it off as soon as possible (and get your career off the ground at the same time).

How much is too much, is different for everyone. But there will always be losses to predation - its part of life.
However, the bigger &/or more mature/smarter the prey, the harder it is to predate.

Cut the apron strings, pop the bubble-wrap, & let the kids swim.

SD

Title: Re: Student Loans Getting Close to Implosion!
Post by: KJP on August 14, 2019, 03:25:03 PM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

Wouldn't this create a massive discrepancy between private and public institutions? I mean public schools receive state legislator and federal funding. So having them guarantee the loans would still technically come back on tax payers right? I know the majority of their funding is probably derived from tuition but there is certainly a tax element. Whereas private universities receive no state/federal funding. Then you have the issue of capping tuition costs. How would you do this with the inevitable demand of either tuition increases to pay these guaranteed loans? Either that or they ask for more money from state and federal funding. I'm not saying your wrong but it seems like the money is coming from the same pool so to speak.

I agree with the regulators part. I wasn't thinking of having them determine what degrees are worthless. More along the lines of recognizing supply and demand in the general workforce.

I suspect tuition would go down, not up.  Universities currently have incentives to continually raise tuition to fund internal salaries, various projects, etc. -- the typical bureaucratic incentives.  They have been able to raise headline tuition more than inflation because of subsidies arising from federally issued or guaranteed loans.  If that subsidy were taken away and the risk of loss were placed on universities, I believe they would find ways to cut tuition costs (and the attendant risk of loss on their guarantees) significantly.

The public/private distinction is an issue, and public schools might continue to enjoy a taxpayer subsidy to some extent.  But they are also the universities with the lower tuition costs to begin with, and legislators could make any university debt non-recourse to the state, preventing any taxpayer subsidy.  I believe this is already the case for most public university systems in the U.S. -- although they are considered arms of the state for many purposes, their debt is not backed by the full faith and credit of the state that sponsors them.

https://www.cnbc.com/2018/06/25/why-your-first-job-out-of-college-really-really-matters.html

My concern would be that incentive's colleges to get jobs for graduates would create a more pay to play employment model. As the article above says 40% of college grads take jobs that don't require a degree. How would universities handle the inevitable lawsuits? Or is that not what you are saying in terms of accountability?

I'm not sure what lawsuits you're referring to.  Lawsuits on the guarantees?
Title: Re: Student Loans Getting Close to Implosion!
Post by: TwoCitiesCapital on August 15, 2019, 09:57:53 AM
The fact that the debt is not dischargeable is insane.  There needs to be a system with some accountability for the schools and the lenders.  Most of the schools are borderline committing fraud with the statistics they publish and upon which these children (or adults with massive information disadvantages) are making huge financial decisions (with the help of advisors compensated by the recipient of the loan proceeds).  Higher education needs to be totally disrupted. The financial incentives are totally perverse and so....a clusterfk is born.

+1

No bailout is necessary. Just the ability to discharge the loans in bankruptcy. This will force reasonable lending standards on the industry instead of making loans that can never be paid back.

I don't want a bailout to borrowers because it was a choice, but less of a choice when considering all of the social pressures. We were all told to go to college to get a good job. No other alternative was offered. Now, you may fault kids for not doing the cost-benefit analysis, but ultimately this is what they were told to do by older people with more experience - and those same people are the ones who disparaged the lazy millennials who DIDN'T want to go to college.

The borrowers need to accept responsibility for their decisions. Bankruptcy doesn't come easy, but would "let them off the hook" and it would also punish the lenders who made unreasonable loans.

The real travesty here is that the govt took it over by arguing private lenders were being predatory and make unsustainable loans....and then continued the practice at a much larger scale!
Title: Re: Student Loans Getting Close to Implosion!
Post by: Castanza on August 15, 2019, 10:08:51 AM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

Wouldn't this create a massive discrepancy between private and public institutions? I mean public schools receive state legislator and federal funding. So having them guarantee the loans would still technically come back on tax payers right? I know the majority of their funding is probably derived from tuition but there is certainly a tax element. Whereas private universities receive no state/federal funding. Then you have the issue of capping tuition costs. How would you do this with the inevitable demand of either tuition increases to pay these guaranteed loans? Either that or they ask for more money from state and federal funding. I'm not saying your wrong but it seems like the money is coming from the same pool so to speak.

I agree with the regulators part. I wasn't thinking of having them determine what degrees are worthless. More along the lines of recognizing supply and demand in the general workforce.

I suspect tuition would go down, not up.  Universities currently have incentives to continually raise tuition to fund internal salaries, various projects, etc. -- the typical bureaucratic incentives.  They have been able to raise headline tuition more than inflation because of subsidies arising from federally issued or guaranteed loans.  If that subsidy were taken away and the risk of loss were placed on universities, I believe they would find ways to cut tuition costs (and the attendant risk of loss on their guarantees) significantly.

The public/private distinction is an issue, and public schools might continue to enjoy a taxpayer subsidy to some extent.  But they are also the universities with the lower tuition costs to begin with, and legislators could make any university debt non-recourse to the state, preventing any taxpayer subsidy.  I believe this is already the case for most public university systems in the U.S. -- although they are considered arms of the state for many purposes, their debt is not backed by the full faith and credit of the state that sponsors them.

https://www.cnbc.com/2018/06/25/why-your-first-job-out-of-college-really-really-matters.html

My concern would be that incentive's colleges to get jobs for graduates would create a more pay to play employment model. As the article above says 40% of college grads take jobs that don't require a degree. How would universities handle the inevitable lawsuits? Or is that not what you are saying in terms of accountability?

I'm not sure what lawsuits you're referring to.  Lawsuits on the guarantees?

I may have completely misunderstood what you were saying. What I thought you were saying was that if students upon graduation could not find a job would be able to sue the college and put the loan back on them to be paid. What did you mean by accountability/guarantee?
Title: Re: Student Loans Getting Close to Implosion!
Post by: BG2008 on August 15, 2019, 12:04:14 PM
I volunteered as an alumni for my college fraternity.  The school quoted us $400k to redo our bathroom.  Granted, it is designed to have 6-8 showers and multiple stalls etc.  But $400k for a communal bathroom in upstate New York.  The amount of administrative burden on such a task is ridiculous.  But all jobs must be approved by the school. 
Title: Re: Student Loans Getting Close to Implosion!
Post by: SharperDingaan on August 15, 2019, 12:58:39 PM
The fact that the debt is not dischargeable is insane.  There needs to be a system with some accountability for the schools and the lenders.  Most of the schools are borderline committing fraud with the statistics they publish and upon which these children (or adults with massive information disadvantages) are making huge financial decisions (with the help of advisors compensated by the recipient of the loan proceeds).  Higher education needs to be totally disrupted. The financial incentives are totally perverse and so....a clusterfk is born.

+1

No bailout is necessary. Just the ability to discharge the loans in bankruptcy. This will force reasonable lending standards on the industry instead of making loans that can never be paid back.

I don't want a bailout to borrowers because it was a choice, but less of a choice when considering all of the social pressures. We were all told to go to college to get a good job. No other alternative was offered. Now, you may fault kids for not doing the cost-benefit analysis, but ultimately this is what they were told to do by older people with more experience - and those same people are the ones who disparaged the lazy millennials who DIDN'T want to go to college.

The borrowers need to accept responsibility for their decisions. Bankruptcy doesn't come easy, but would "let them off the hook" and it would also punish the lenders who made unreasonable loans.

The real travesty here is that the govt took it over by arguing private lenders were being predatory and make unsustainable loans....and then continued the practice at a much larger scale!

Sorry, but we don't get to 'game the system'.
No going to Harvard to get your masters, racking up 200K to pay for it; walking away from the debt (via bankruptcy) ... while still keeping the earning power of that Harvard degree! The loans are secured against (the future taxes on) lifetime earnings, and lifetime means exactly that - lifetime.

As already pointed out; all a student need do every month is just pay interest only.
Never pay the loan back, and just bank the principal that you would have paid in either a mortgage principal repayment, or T-Bills. No defaults, no pressure to act, and every month you're a little further ahead. Student wins, government loses, and eventually you will probably get a community related write-off.

All we need do is just not give the loan until the student evidences sufficient 'maturity'.
Pick a set of relevant criteria, that the student either has or does not.

SD

Title: Re: Student Loans Getting Close to Implosion!
Post by: TwoCitiesCapital on August 15, 2019, 01:03:15 PM
The fact that the debt is not dischargeable is insane.  There needs to be a system with some accountability for the schools and the lenders.  Most of the schools are borderline committing fraud with the statistics they publish and upon which these children (or adults with massive information disadvantages) are making huge financial decisions (with the help of advisors compensated by the recipient of the loan proceeds).  Higher education needs to be totally disrupted. The financial incentives are totally perverse and so....a clusterfk is born.

+1

No bailout is necessary. Just the ability to discharge the loans in bankruptcy. This will force reasonable lending standards on the industry instead of making loans that can never be paid back.

I don't want a bailout to borrowers because it was a choice, but less of a choice when considering all of the social pressures. We were all told to go to college to get a good job. No other alternative was offered. Now, you may fault kids for not doing the cost-benefit analysis, but ultimately this is what they were told to do by older people with more experience - and those same people are the ones who disparaged the lazy millennials who DIDN'T want to go to college.

The borrowers need to accept responsibility for their decisions. Bankruptcy doesn't come easy, but would "let them off the hook" and it would also punish the lenders who made unreasonable loans.

The real travesty here is that the govt took it over by arguing private lenders were being predatory and make unsustainable loans....and then continued the practice at a much larger scale!

Sorry, but we don't get to 'game the system'.
No going to Harvard to get your masters, racking up 200K to pay for it; walking away from the debt (via bankruptcy) ... while still keeping the earning power of that Harvard degree! The loans are secured against (the future taxes on) lifetime earnings, and lifetime means exactly that - lifetime.

As already pointed out; all a student need do every month is just pay interest only.
Never pay the loan back, and just bank the principal that you would have paid in either a mortgage principal repayment, or T-Bills. No defaults, no pressure to act, and every month you're a little further ahead. Student wins, government loses, and eventually you will probably get a community related write-off.

All we need do is just not give the loan until the student evidences sufficient 'maturity'.
Pick a set of relevant criteria, that the student either has or does not.

SD

While I understand your point, it's not students who went to Harvard to get their MBAs that are the cause of the student debt explosion or the inability to pay. If govt isn't comfortable subsidizing that risk, it could go back to the private market which is going to look for co-signers and/or collateral which isn't an unreasonable request.

The problem is primarily middle-america students who racked up 70k in loans to end up with a 35k-50k/year job OR those who couldn't get a job in 2008-2010 who then went back to grad school and racked up additional loans to make themselves more competitive even as wage growth continued to stagnate.

Secondly, not sure where you think interest rates are on most of these loans, but paying interest only and investing the principal at 2% is still a mutli-decade strategy that will suck up a large portion of disposable income and only provide a modicum of relief a decade down the road.. .
Title: Re: Student Loans Getting Close to Implosion!
Post by: cubsfan on August 15, 2019, 01:43:24 PM
Nice article on the tradeoffs on the public picking up the tab for higher education in developed countries:

https://www.nationalreview.com/2019/08/what-european-countries-sacrifice-for-free-college/

Title: Re: Student Loans Getting Close to Implosion!
Post by: SharperDingaan on August 15, 2019, 03:00:44 PM
Public/private is really just swings & roundabouts.
For some states/nations there may well be a clear direction, whereas for others it may well be essentially a wash.
There's lots of abuse in both approaches

The principal thing is aimed at house buyers.
If I only have 2K month for debt service, and student loans take up 500 (350 P, 150 I) of it, the remaining 1500 is not going to cover a mortgage; I need partners/renters to split the mortgage with. If I can pay interest only on that student loan, the remaining 350 can go to mortgage (bigger house &/or fewer partners/renters). Ultimately I can live rent-free (managing my 'slum'), sell out for a higher price; but this time buy something similar with more equity, and no renters. Still have a partner though ... just this time re-named 'significant other'  ;D

Our new graduate can just be an 'intelligent idiot', or he/she can actually do something useful.
No help required !

SD


Title: Re: Student Loans Getting Close to Implosion!
Post by: LC on August 15, 2019, 03:44:56 PM
SD, the simple solution is to wait say 8 years out-of-school before being allowed to include student loan debt in bankruptcy.

You have either built some life for yourself which you will be hesitant to lose in bankruptcy, or you have so few assets that this would be a ďlegitimateĒ case. Of course people can try to game this as well by spending 8 years stuffing all these assets in blind trusts or whatnot, but people play that same game with all types of other assets as well.
Title: Re: Student Loans Getting Close to Implosion!
Post by: BG2008 on August 15, 2019, 04:31:38 PM
https://www.bloomberg.com/news/features/2019-08-13/if-the-tuition-doesn-t-get-you-the-cost-of-student-housing-will

College kids don't need luxury apartments
Title: Re: Student Loans Getting Close to Implosion!
Post by: Gregmal on August 15, 2019, 04:44:25 PM
It's odd, but I've seen some of the opposite. My brother attended Stony Brook. The kids on campus live in utter shit boxes. Room and board is like $15,000 a year.  Yes, the equivalent of $1250 per month rent. While it kind of comes with a meal plan, that too is a crock. The main cafeterias charge per item, and Starbucks is still airport level price wise, burgers and sandwich pricing resembles Yankee Stadium, and once you run through your "allotment" that is included with room and board, your get billed. Easily tacking on another $3000 per semester. And oh yea, you don't even have housing during winter and summer breaks. So your adjusted rent is actually about $1700-$1800 per month. Move off campus? And you can find entire houses for $1500-$2000 per month and 1/2 bedroom places for $1000 per month. I saw the same thing when I attended school in Florida what seemed like ages ago. Schools are legit scams that prey on people who trust them.
Title: Re: Student Loans Getting Close to Implosion!
Post by: KJP on August 15, 2019, 04:51:38 PM
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

Wouldn't this create a massive discrepancy between private and public institutions? I mean public schools receive state legislator and federal funding. So having them guarantee the loans would still technically come back on tax payers right? I know the majority of their funding is probably derived from tuition but there is certainly a tax element. Whereas private universities receive no state/federal funding. Then you have the issue of capping tuition costs. How would you do this with the inevitable demand of either tuition increases to pay these guaranteed loans? Either that or they ask for more money from state and federal funding. I'm not saying your wrong but it seems like the money is coming from the same pool so to speak.

I agree with the regulators part. I wasn't thinking of having them determine what degrees are worthless. More along the lines of recognizing supply and demand in the general workforce.

I suspect tuition would go down, not up.  Universities currently have incentives to continually raise tuition to fund internal salaries, various projects, etc. -- the typical bureaucratic incentives.  They have been able to raise headline tuition more than inflation because of subsidies arising from federally issued or guaranteed loans.  If that subsidy were taken away and the risk of loss were placed on universities, I believe they would find ways to cut tuition costs (and the attendant risk of loss on their guarantees) significantly.

The public/private distinction is an issue, and public schools might continue to enjoy a taxpayer subsidy to some extent.  But they are also the universities with the lower tuition costs to begin with, and legislators could make any university debt non-recourse to the state, preventing any taxpayer subsidy.  I believe this is already the case for most public university systems in the U.S. -- although they are considered arms of the state for many purposes, their debt is not backed by the full faith and credit of the state that sponsors them.

https://www.cnbc.com/2018/06/25/why-your-first-job-out-of-college-really-really-matters.html

My concern would be that incentive's colleges to get jobs for graduates would create a more pay to play employment model. As the article above says 40% of college grads take jobs that don't require a degree. How would universities handle the inevitable lawsuits? Or is that not what you are saying in terms of accountability?

I'm not sure what lawsuits you're referring to.  Lawsuits on the guarantees?

I may have completely misunderstood what you were saying. What I thought you were saying was that if students upon graduation could not find a job would be able to sue the college and put the loan back on them to be paid. What did you mean by accountability/guarantee?

No.  I'm suggesting that universities be required to guarantee federally issued school debt.  If the student defaults, the government can sue the university on the guarantee, and the university would retain the right to seek indemnity from the defaulting student, as on a typical debt guarantee.