US student loans grotesquely high

[lpetrich]

Dan Price on Twitter: "If you're young and someone says just pull up your bootstraps, start with this chart

Since 2003
Student loans: up 356%
Other types of debt: up 25%

Not pictured: home prices and health insurance premiums more than doubled in that span; pensions went away
(links)" / Twitter

From No Job, Loads of Debt: Covid Upends Middle-Class Family Finances - WSJ - "The pandemic is wreaking havoc in loan-laden white-collar workers’ households; ‘I will never claw my way out of this situation’"

 

[lpetrich]

Addressing the $1.5 Trillion in Federal Student Loan Debt - Center for American Progress

Policymakers increasingly recognize the importance of bold ideas to address college affordability. Those ideas include Beyond Tuition, a plan that moves toward debt-free higher education, rolled out by the Center for American Progress.1 Under the plan, families pay no more than what they can reasonably afford out of pocket, with additional expenses covered by a combination of federal, state, and institutional dollars. There are also strong proposals for debt-free college from Sen. Brian Schatz (D-HI) and for tuition-free college, including one from Sen. Bernie Sanders (I-VT), as well as calls for free community college championed by Sen. Tammy Baldwin (D-WI) and Rep. Bobby Scott (D-VA).2

As policymakers think about solving college affordability for future students, they must not forget about the tens of millions of borrowers already holding college debt. Fortunately, the policy community is starting to develop new ideas for current borrowers as well. For instance, multiple presidential campaigns have outlined policy proposals that forgive some student loans or make changes to repayment options.

 

[James Brown]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

 

[KeepTalking]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

His first paragraph talks about that:

Addressing the $1.5 Trillion in Federal Student Loan Debt - Center for American Progress

Policymakers increasingly recognize the importance of bold ideas to address college affordability. Those ideas include Beyond Tuition, a plan that moves toward debt-free higher education, rolled out by the Center for American Progress.1 Under the plan, families pay no more than what they can reasonably afford out of pocket, with additional expenses covered by a combination of federal, state, and institutional dollars. There are also strong proposals for debt-free college from Sen. Brian Schatz (D-HI) and for tuition-free college, including one from Sen. Bernie Sanders (I-VT), as well as calls for free community college championed by Sen. Tammy Baldwin (D-WI) and Rep. Bobby Scott (D-VA).2

As policymakers think about solving college affordability for future students, they must not forget about the tens of millions of borrowers already holding college debt. Fortunately, the policy community is starting to develop new ideas for current borrowers as well. For instance, multiple presidential campaigns have outlined policy proposals that forgive some student loans or make changes to repayment options.

 

[prideandfall]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

well that's a social and cultural problem, so it's extremely difficult to address legislatively.

college is expensive for the same reason diamonds are expensive: a bunch of rubes got tricked into thinking the product has universal value for everyone, artificially inflating what people think the product is worth so vastly far beyond any measurable actual metric that the price of the thing no longer has even the slightest connection to the logistics of the thing.

so take an abstract product with a price utterly uncoupled from reality, add capitalism, and you have ridiculously and hilariously overpriced products that only continue to exist because people are so fucking stupid they make it a social imperative to continue buying it even though it offers nothing.

 

[zorq]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

well that's a social and cultural problem, so it's extremely difficult to address legislatively.

college is expensive for the same reason diamonds are expensive: a bunch of rubes got tricked into thinking the product has universal value for everyone, artificially inflating what people think the product is worth so vastly far beyond any measurable actual metric that the price of the thing no longer has even the slightest connection to the logistics of the thing.

so take an abstract product with a price utterly uncoupled from reality, add capitalism, and you have ridiculously and hilariously overpriced products that only continue to exist because people are so fucking stupid they make it a social imperative to continue buying it even though it offers nothing.

It's not uncoupled from reality. ... Well, not entirely. A bachelors degree is the minimum required education level for many jobs in the market. People with only a HS diploma need not apply. This sort of minimum requirement has proliferated along with university enrollment.

Here's an anecdote: My uncle had been trained in the US Navy to program computers and had been employed for 25 years in a US communications company. He was still happy to work, but his employer asked him to retire. His employer told him that it was partially because he didn't have a university degree on his resume that he was asked to retire early. The minimum requirements for his replacement included a university degree.

Is it the supply of degrees inflating the demand, or is the increased demand from the jobs market driving supply? It isn't clear.

 

[prideandfall]

It's not uncoupled from reality. ... Well, not entirely. A bachelors degree is the minimum required education level for many jobs in the market. People with only a HS diploma need not apply. This sort of minimum requirement has proliferated along with university enrollment.

but it IS uncoupled from reality... that's the part where it's a social and cultural problem.

a bachelor's degree (which, btw, is about as useful and as relevant as a liberal arts degree) does not confer any knowledge required to do any of those jobs, it's just an arbitrary goal post that society has decided to put in front of certain jobs because it seems fancy to do so... it's delusion on top of delusion.
this again comes back to the diamond analogy: diamonds are plentiful, and mostly useless. so the people with the diamonds used marketing to convince everyone that diamonds are rare and highly valuable, and everyone just accepted this.

Here's an anecdote: My uncle had been trained in the US Navy to program computers and had been employed for 25 years in a US communications company. He was still happy to work, but his employer asked him to retire. His employer told him that it was partially because he didn't have a university degree on his resume that he was asked to retire early. The minimum requirements for his replacement included a university degree.

here's another anecdote: i dropped out of high school after 2 years, have never had any secondary education, and pull a 6 figure salary doing IT work.
i'm not special, the system is just stupid.

Is it the supply of degrees inflating the demand, or is the increased demand from the jobs market driving supply? It isn't clear.

college, in terms of the social zeitgeist and the cultural and economic pressure to have a degree in something, isn't about learning anymore (if it ever was) - it's just job training that you have to pay a shitload for.
if you have a career path in mind and it's a field that you have a reasonable expectation will require a degree to even enter, then yes it makes sense to do college.
but quite honestly, that seems to be at best maybe 30-40% of the people who go to college... those with a plan who are executing it and then actually follow through with it.

i know it's purely anecdotal but i feel like i've seen plenty of studies that back this up - many, if not most, people who go to college and get a degree end up not actually using it in any meaningful way, or in any way relevant to their long term career.

 

[rousseau]

Seems like it's primarily a demographic problem to me. We're still living under the assumption of the old industrial model where you're going to reach your twenties and be paid 35 dollars/hour as long as you can prove that you're somewhat intelligent.

But during the baby boom people were few, and jobs were plenty, which drove up wages and demand for workers. Now we have the opposite situation - a glut of people competing for fewer jobs - so naturally the cost of education goes up, and wages go down. I think you can make a kind of naturalistic argument here that economics aren't static across generations, nor should they be. Communities change, realities change, and we can't guarantee that things will be easy for everyone, all the time.

But there still seems to be something unwieldy about tuition costs in the U.S.. I can't pretend to know everything behind them, but the debt burden that students are facing does seem unreasonable.

 

[KeepTalking]

but it IS uncoupled from reality... that's the part where it's a social and cultural problem.

a bachelor's degree (which, btw, is about as useful and as relevant as a liberal arts degree) does not confer any knowledge required to do any of those jobs, it's just an arbitrary goal post that society has decided to put in front of certain jobs because it seems fancy to do so... it's delusion on top of delusion.
this again comes back to the diamond analogy: diamonds are plentiful, and mostly useless. so the people with the diamonds used marketing to convince everyone that diamonds are rare and highly valuable, and everyone just accepted this.


here's another anecdote: i dropped out of high school after 2 years, have never had any secondary education, and pull a 6 figure salary doing IT work.
i'm not special, the system is just stupid.

I can provide an anecdote right in the middle, as I also make a 6 figure salary in IT. I have an AS in Programming & Analysis, obtained at a community college in the '90s, so it wasn't very expensive. About a third, maybe up to half, of the courses I took were relevant to my field, some were useful to me later, others not so much. Something else that was key for me, however, was that I worked in the computer lab part time, so gained some valuable experience there. I too make a 6 figure salary, and with my first couple of entry level IT jobs after graduating, having that AS certainly helped. These days, it is the wealth of experience in the field that make me valuable to a company, most job reqs in the industry require either a Bachelors degree, or 5 years experience. The trend for hiring software developer these days is to have the applicant do a coding challenge or two, and how well you demonstrate the ability to tackle the challenge in a logical manner is one of the primary metrics used for hiring. I work with people currently who have no education beyond high school, and taught themselves how to code, demonstrating their ability was key to getting hired. So, a Bachelors degree can help you get a foot in the door at the entry level, at least in Software Development, but if you can show relevant experience, and especially an ability to code, you have a good chance of landing a good job.

 

[Loren Pechtel]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

The politicians.

The budgets of colleges haven't gone up unreasonably. The cost to the students has shot up because the government contribution has gone way down.

 

[Loren Pechtel]

Dan Price on Twitter: "If you're young and someone says just pull up your bootstraps, start with this chart

Since 2003
Student loans: up 356%
Other types of debt: up 25%

Not pictured: home prices and health insurance premiums more than doubled in that span; pensions went away
(links)" / Twitter

From No Job, Loads of Debt: Covid Upends Middle-Class Family Finances - WSJ - "The pandemic is wreaking havoc in loan-laden white-collar workers’ households; ‘I will never claw my way out of this situation’"

What we need is data that breaks this out between traditional schools and for-profit "schools" that provide little in the way of education.

 

[Trausti]

If the universities fired the diversocrats and used the money to lower tuition, that'd be a benefit to all. And if we encouraged more young people to attend vocational schools rather than be submerged under mountains of debt taking grievance studies at Pretentious University, the societal benefit would be exponential.

 

[Derec]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

I think much of the ridiculously high student loan balances are either from doing professional school like med school, and then the income should be enough to easily handle them.
Or it's people who go to private colleges, esp. if they also . Which can be a good career move or it could be something silly like going to a small private lib arts college for BS and PhD in Medieval French Poetry or something.

Public universities are much cheaper, and if you have financial need, there are also federal Pell Grants and many states have programs too. Georgia has the lottery-funded HOPE scholarship that mays most of in-state public university tuition if you maintain a 3.0 GPA or higher.

But you are right that even public school tuitions have increased much faster than inflation. There are many reasons for that, not the least the diversocrats and other administration parasites Trausti mentioned. But also, facilities have become a lot nicer - dorms, libraries, student center, rec center all look nice in order to compete with other colleges. And that costs millions. In Germany, for example, tuition is free, but facilities are much older and drabber looking as a rule.

 

[Metaphor]

Part of the reason that American tertiary education has skyrocketed to obscene levels is the rise and rise in non-teaching administrators, such as six-figure salaries for diversity, equity and inclusion officers and every conceivable specialty-interest 'support' groups on campus.

I used to think most people should go to university except those obviously unsuited. But for many years I've thought increasing tertiary education comes at a greater and greater cost to ever-diminishing, and possibly negative, returns. When I was doing my masters degree, a fellow student said simply 'why should everyone go to university?' And I couldn't answer her properly, and my snobbish attitude faded.

In fact, I wish I had never gotten my masters degree and instead had gone straight into the full time workforce. I never used my specialty degree and I'd have reached the level I am currently at at my workplace years sooner.

And in the past, the main route to many careers was not university at all. Law, now a degree that takes years and years to earn, was once an on-the-job training route. Nurses, too. Skilled trades, in Australia at any rate, are in demand, and tradesmen routinely turn away work because they're so busy.

 

[Swammerdami]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

The politicians.

The budgets of colleges haven't gone up unreasonably. The cost to the students has shot up because the government contribution has gone way down.

I think this is correct. Other factors which make college cost appear to go up are:
(1) The ever-increasing gap between skilled and unskilled labor costs. College jobs are generally highly skilled.
(2) The losses to students for whom college was not a realistic plan, who should have chosen a vocational school.
(3) Scam colleges, like Trump University. But I assume this is a tiny portion; no?

I am all in favor of an education in arts or humanities, if that's what the kid wants and he/she can afford it. But the idea that mediocre students uninterested in college should attend anyway is liberal fantasy.

A general forgiveness of student loans is unfair, IMO. What about two students in identical circumstances except that one paid his student debt, while the other defaulted and used the money to buy a sportscar. General forgiveness teaches a wrong lesson: Cheat and win a sports-car! Wouldn't it be fairer to refund a share of all tuitions during a period, even if they've been paid off?

There is no good, fair system for reimbursing student debt. I'd prefer to do nothing, except as part of a more general rich-to-poor transfer.

 

[lpetrich]

What Joe Biden Has Said about Canceling Student Loan Debt

While Biden has not committed to canceling all student debt, his administration will be able to introduce changes that could affect millions of borrowers—although this will also likely depend on who controls the Senate.

In March, Democratic senators Elizabeth Warren and Chuck Schumer called for $10,000 relief for all student borrowers in light of the financial chaos sparked by the coronavirus pandemic—a proposal that Biden later endorsed in a tweet.

By September, they later called for the next president to cancel up to $50,000 in debt and while Biden has not officially committed to this, he has instead proposed a program that offers public service workers $10,000 a year in student loan relief.

He also pledged to make public colleges tuition-free for all families with incomes below $125,000.

What Biden's student loan forgiveness plan means for borrowers

Progressives ramp up pressure on President-elect Joe Biden to forgive student loan debt | Fox Business - "According to the Federal Reserve, there are about 45 million student loan borrowers who owe a collective of roughly $1.6 trillion in federal and private student loan debt as of June 2020"

"That’s generally hundreds of dollars each month that borrowers spend paying down loans in addition to rent or mortgage payments and other costs of living," the Senators wrote in the joint statement. "With over 9 million borrowers in default, student loans have much higher rates of delinquency than any other type of household debt. This massive student debt burden is preventing people from being able to start a small business or buy a home, and forcing students to drop out of school before completing their degree.”

Senators EW and CS.

 

[lpetrich]

I like this.
Alexandria Ocasio-Cortez on Twitter: "Student loan forgiveness is good, actually" / Twitter
then
Alexandria Ocasio-Cortez on Twitter: "We should also push for tuition-free public colleges to avoid this huge debt bubble from financially decimating ppl every generation. It’s one of the easiest progressive policies to “pay for,” w/ multiple avenues from a Wall St transaction tax to an ultra-wealth tax to cover it." / Twitter

I especially like this.
Alexandria Ocasio-Cortez on Twitter: "“Things were bad for me, so they should stay bad for everyone else” is not a good argument against debt cancellation - student, medical, or otherwise. #CancelStudentDebt" / Twitter

 

[Playball40]

If the universities fired the diversocrats and used the money to lower tuition, that'd be a benefit to all. And if we encouraged more young people to attend vocational schools rather than be submerged under mountains of debt taking grievance studies at Pretentious University, the societal benefit would be exponential.

They aren't all that cheap either unfortunately.

 

[Playball40]

Why have colleges become so expensive? Shouldn't that issue be addressed first?

I think much of the ridiculously high student loan balances are either from doing professional school like med school, and then the income should be enough to easily handle them.
Or it's people who go to private colleges, esp. if they also . Which can be a good career move or it could be something silly like going to a small private lib arts college for BS and PhD in Medieval French Poetry or something.

Public universities are much cheaper, and if you have financial need, there are also federal Pell Grants and many states have programs too. Georgia has the lottery-funded HOPE scholarship that mays most of in-state public university tuition if you maintain a 3.0 GPA or higher.

But you are right that even public school tuitions have increased much faster than inflation. There are many reasons for that, not the least the diversocrats and other administration parasites Trausti mentioned. But also, facilities have become a lot nicer - dorms, libraries, student center, rec center all look nice in order to compete with other colleges. And that costs millions. In Germany, for example, tuition is free, but facilities are much older and drabber looking as a rule.

Don't forget easy credit forces up costs. That's called a bubble and is what happened with the RE Market. Tuition rises as credit to go eases. Thanks in part to the lobby of the for profit schools that started this trend.

 

[Playball40]

What Joe Biden Has Said about Canceling Student Loan Debt

While Biden has not committed to canceling all student debt, his administration will be able to introduce changes that could affect millions of borrowers—although this will also likely depend on who controls the Senate.

In March, Democratic senators Elizabeth Warren and Chuck Schumer called for $10,000 relief for all student borrowers in light of the financial chaos sparked by the coronavirus pandemic—a proposal that Biden later endorsed in a tweet.

By September, they later called for the next president to cancel up to $50,000 in debt and while Biden has not officially committed to this, he has instead proposed a program that offers public service workers $10,000 a year in student loan relief.

He also pledged to make public colleges tuition-free for all families with incomes below $125,000.

What Biden's student loan forgiveness plan means for borrowers

Progressives ramp up pressure on President-elect Joe Biden to forgive student loan debt | Fox Business - "According to the Federal Reserve, there are about 45 million student loan borrowers who owe a collective of roughly $1.6 trillion in federal and private student loan debt as of June 2020"

"That’s generally hundreds of dollars each month that borrowers spend paying down loans in addition to rent or mortgage payments and other costs of living," the Senators wrote in the joint statement. "With over 9 million borrowers in default, student loans have much higher rates of delinquency than any other type of household debt. This massive student debt burden is preventing people from being able to start a small business or buy a home, and forcing students to drop out of school before completing their degree.”

Senators EW and CS.

WTH is with the arbitrary $125K as the cut off for free tuition? We already have programs (MANY) for people that come from families with no money. We NEED relief for the MIDDLE CLASS families. My husband and I make above that $125K threshold but there is NO WAY we can afford university for all three of our younger kids. They don't tier crap. Rich families can afford college - poor families get grants, but the middle class kids don't get shit!