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Comment by kin | Hacker News Reader

I'm not pro-student debt, but all of the stories in this article are super irresponsible to me. All of my friends and I graduated at the worst time possible, shortly after the 2008 crash. It was a terrible time to enter the job market (unless you were a developer, but still, salaries were low and I worked hard to earn what I do now which apparently is now just considered market-rate).

Anyway, all the english majors and political science majors etc struggled to find jobs, but they found shitty jobs nonetheless. They chipped away at their loans, changed it to lower payments, or just paid interest for a while. Where are they now 5 years later? Their loans are mostly paid off and they're in better jobs.

My point is, yes our education system is backwards, but millennials need to learn some form of hardship or hard work. The stories where their parents have to deal with phone calls are especially bad.

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> My point is, yes our education system is backwards, but millennials need to learn some form of hardship or hard work.

The ol' puritanical work ethic. No, you need to make the best business choice. If a corporation defaults, no one cares. But your degree is worthless or provides you no benefit? You never get away from it.

When you can walk away, walk away. Its okay for the Fed to QE till the cows come home to prop up asset bubbles, but not okay for the US DOE to forgive loans on educations that have little value? Please.

I guess it just comes down to the type of slavery you want for the next generation. At least you have the option of not buying a home or equities in inflated markets, but garnishing your wages or your tax returns forever? We should be shocked about those who don't emigrate to countries that treat them better. I'm very surprised first world countries with declining populations haven't made an active advertising/outreach effort to appeal to young US graduates with large amounts of debt.

Do you think it would be best to start denying loans for education for worthless degrees?

I think the government should fund education directly, with tuition being free to students.

Right now, we have this joke where schools can raise rates as much as they want, because you must have a degree to be competitive (inelastic demand). Combined with cheap, government-backed lending, its a disaster. Its a long-term payday loan, no more, no less.

At least when the money flowed without discretion for housing, you could walk away from your house.

How does switching from cheap loans to free tuition change anything? The costs will still be out of control.

With housing it is secured against the value of the house but with education there is nothing.

If you pay for it directly, you control the costs.

No different then single payer healthcare.

Also, credit card and personal loan debt is unsecured; we don't prohibit that from being discharged in bankruptcy. Student loan debt is the only debt that can't be discharged.

Then why don't student use a credit or personal loan to pay for their education?

Because they don't have enough credit history to do so. You can get a credit card for a few thousand dollars with no credit history. Not tens of thousands of dollars.

The problem isn't the debt type. The problem is the government needs to use its regulatory authority to enable cost controls on education.

And that is the difference between a credit card/personal loan and a education loan. The student doesn't have enough history. Nothing stops anyone from forming a business that gives students a loan with is dischargable in bankruptcy except that business may have a tough time staying solvent.

I can't reply to you post below but do agree that cost control is the key. But giving free tuition is not the answer to cost control. It needs to be something more.

> But giving free tuition is not the answer to cost control. It needs to be something more.

Why? Why would education be no different than any other sunk cost, like a military or transportation infrastructure?

In most other spending, the government tends to negotiate. There are requirements on the bidder and the bidder with the lowest bid wins. Example of cost control. What do propose as a similar mechanism in education?

Was your high school outrageously expensive???? I went to one of the best in my state, it was public and free (minus book rental fees).

Why do you think your high school education was free?

Taxes? Ya'know the same way we used to fund most of higher education. But we've cut a large portion of tax funding for higher ed in the last several decades. The job market requires more skills and education (apparently) and for whatever reason government officials have decided to make it more difficult for citizens to acquire those skills.

> The job market requires more skills and education (apparently) and for whatever reason government officials have decided to make it more difficult for citizens to acquire those skills.

"Bootstraps"

My public high school was extremely expensive. Public schools are paid for by property tax in the US and taxes in my home town were extremely high. Most of that went to fund the extremely competitive and highly ranked school system.

Yes!

What's a general education degree worth? I ask because a lot of state schools won't even put you into a degree program until your 2nd or 3rd year. We're asking teenagers to make lifelong commitments knowing they don't have enough knowledge or experience to do so.

I think the president has it almost right. Deny student loans to worthless colleges. The degree is a byproduct since it is the coursework that counts.

>Deny student loans to worthless colleges

Deny student loans to all for-profit colleges. They only exist to suck up GI bill money anyway.

Mandate a gap year between high school and college: minimum age for attendance ought to be 19, barring a few exceptions. Many of my friends have gone on to be perfectly successful, but only after deciding after the first year that college is not for them. Too late; they already had loans. Had we all taken a year to truly ruminate on what we want to do, we'd all ended up a lot better.

One private-sector approach would be to fund education with equity instead of debt. Lenders can agree to fund a student's tuition in exchange for X% of their income for some fixed number of years Y after graduation. The lenders can choose X% and Y, within reasonable limits. After that period expires, no matter how much has been paid, the student has no further obligations.

The average cost of a 4-year undergraduate degree in the United States, including room and board, is around $76k. A lender might agree to pay this in exchange for 20% of wages for 10 years after graduation. The median income for fully-employed people with undergraduate degrees in the United States is $56k per year, so assuming the student earns that the lender gets a total return of $112k, or 47% ROI, over ten years.

That's roughly the same as debt with an interest rate of 4.7% percent, which is similar to what lenders are charging these days. The difference is that this scheme shifts the risk to the lender, where it should be: banks are experts of credit risk assessment.

Since lenders only get paid when the student does, their interests are better aligned. If you graduate and end up making a very high salary, they get a lot of money (and so do you of course); if you can only get minimum wage jobs, the lender doesn't make a profit. So they actually has an incentive to ensure the students earn more money after graduation to maximize their own return. Lenders would probably start competing with each other on job placement programs and whatnot.

It also puts the burden of the cost of education on the lenders, not the students. Lenders here have more bargaining power with schools, so they'd be better able to apply downward pressure on tuition fees.

What control does the lender have except to deny the equity deal? In the end they will pick those students with higher rate of return.

Well, that was the whole point of the idea, wasn't it? Less loans for worse-paying fields would mean less people pursuing them, and this is where supply and demand curve kicks in, lowering prices of studying in these fields.

This would cause more borrowers to work illegally off the books for cash.

Getting more difficult to do everyday. Everything is electronic.

Student debt should be abolished, its a huge brake on the economy, only serving finance, which at this point in the debt supercycle is draining real productivity.

You have the option of not taking on student debt, too.

Just like you have the option of not taking on medical debt by getting out of the ambulance while you're having a heart attack?

No. You don't have the option to not take on student debt unless a) employers stop requiring it for an entry level job or b) the US government sees enough social progress to remove the need to take out loans for education.

Casting a college education as a matter of life and death is an excellent example of the kind of rhetoric which produces results like those under discussion.

http://www.bls.gov/emp/ep_chart_001.htm

http://www.bls.gov/opub/ted/2015/unemployment-rates-by-educa...

Employment situation directly leads to living situations. Unemployed? You're going to be in poverty or homeless.

Its hard enough to get a job today with a bachelors degree. Without one? Much harder, if at all.

Getting a degree is truly a life or death situation. With proper social safety nets, single payer healthcare, and so forth, it would not be. But the way things are today, it is.

Oh. Well, that explains why I've been dead these past fifteen years, instead of making a good living as a software developer with a high-school education.

But totally unrepresentative, the plural of anecdote, et cetera, of course. I must simply be one of the privileged 95%.

You are an excellent example of the echo chamber the tech sector exists in.

"I did it, so anyone else can"

Not at all, though I think many more can (and do) than are given credit for being able to. But I'm enough to disprove the overheated "get a college degree or you'll die!" stuff that's flying around right now.

Fair enough, I'm definitely with you on the point of people not giving themselves enough credit. Unfortunately society tends to beat independent thinking out of us, and where I grew up it was definitely hammered into your mind that you "need" to go to college. I once had a teacher though that took a good 15 minutes aside one day, to lecture us how while this mentality came from a good place, we should really assess our future for ourselves and consider things like trade schools + apprenticeships.

Oh, I agree. People should understand their place in life and not be encouraged to strive.

Absolutely, a lot of people in tech haven't got the faintest clue about the world outside their bubble.

Agreed. How else to explain people who seem actually to believe there are no jobs anywhere that don't require a degree?

There are plenty of people who have jobs that don't have Bachelors Degrees. You don't need a degree to work retail, to work in a supermarket, to be a barista, to work in sales, to drive an Uber. A degree is not a requirement to live, and to claim otherwise is offensive to those people who work damn hard.

I have a Bachelors Degree. Didn't ace it, but did pretty well. But it's been completely useless for my work & employers didn't care about it - they're more interested in what you can do than in the random letter soup after your name. I've seen 4-year graduates who literally didn't know what an array was.

(The one place where I have found a degree to be useful is in moving overseas, where visa programs prioritize someone with a Bachelors Degree.)

> "Their loans are mostly paid off"

I'm not sure what bubble you're living in, but some of my tech colleagues (making six figures) have enough student debt that they'll be paying it back for the rest of their working lives.

For less well-off people, a single misstep (or illness) can throw them into insolvency. This is an insane price for individuals to shoulder just to get on a level playing field (aka getting an education).

I don't know how it's possible for someone making six figures to have so much student debt they'll spend the rest of their career paying it off.

Say you take home 6K/mo after taxes and 401K contributions. This is reasonable for a dev making 100-150K. 2K to rent. 1K to bills, groceries. 1K to entertainment. You can now contribute 2K/mo to your loans. Even with a massive loan of 200K you could pay it off in 10 years.

10% interest that doesn't go away. At 10% interest it would take 18 years to repay a 200k loan at $2,000/month if you never missed a payment or had any penalties.

200k loan? What in the everloving f...

If you were to move to my country, Uruguay, and pay for rent, normal expenses and private education for 7 years (Comp. Sci. being 4-5yrs) you still would barely be above half that amount of money.

Why do you guys pay that much for a degree? Just haven't considered moving (and I don't mean here, I'm pretty sure there are many other countries in a similar or better situation) or is it something else?

Most public universities will be 20K on the low end and 60K on the high end for a degree.

It's when you get to private universities that you see 200K+ degrees.

20k on the low end? Where is charging $5k/year only? Berkeley is $14k, ucsd is $13.5k, UW Madison is $9k, georgia tech is $10k, ohio is $10k, minnesota is $10k (all costs in-state.)

I think a more reasonable budget is $25k/year on the low end: tuition, books (often $500-$1k/semester in engineering or similar programs), food, rent, etc. In CA if you live close to a community college, you can do the first two years for much less money and live at home, but we have perpetual budget crises so you will probably have to waste an extra year because you'll have a hard time getting into classes.

I was only describing tuition, not cost of living. And took into account taking advantage of community college for all the prerequisites you can.

That said, my undergrad in Arkansas was probably only 15K/year with cost of living included. I had friends who paid < $200/mo for rent. Location, location, location.

The numbers I posted are tuition only.

Even U Arkansas tuition/fees are $8.5k/year.

Two more thoughts:

1 - whether you have access to inexpensive public education also wildly varies depending on where your parents live;

2 - Universities w/ better rep makes it far easier to get those first 1-2 jobs. After that it matters much less, but a great univ will open doors for the rest of your career.

> minnesota is $10k

Do you have a source for this? Considering I've been looking at in-state MN costs for a couple years now, that's absurdly low.

Current costs for in-state attendance including everything reasonable you would expect (aka fees) is more along the lines of $25k/yr then of course add in your daily living expenses on top of it.

This of course assumes you will be living on-campus. Even if you assume free rent and free food, you are talking $15k/yr for tuition and books alone.

sorry, was discussing tuition only. source: table on top of this query

https://www.google.com/search?q=minnesota+tuition&oq=minneso...

also, I read the 3rd row instead of the second; 3rd (room and board) says $10k, 2nd row says $14k in-state tuition. Sorry to get your hopes up =P

I fell out of my chair when I heard what US students pay. It's pure predatory ponzi finance really.

Worst, people spin morality plays out of it, without ever doing the math or looking at systemic flows and going... 'hmmm maybe all this talk about personal responsibility and fortitude is completely irrelevant in the face of systemic unsustainability'

They are "making six figures", yet "they'll be paying it back for the rest of their working lives"? How did they end up with over $2 million for debt? (half of $100,000 times 40 years is $2 million)

Suppose they took about 7 years to get both BS and MS degrees. (the PhD is normally "free") This would amount to about $300,000 per year. That is overpaying for school by a factor of 6 to 100, depending on the school.

You know, if you make $100k, you don't actually get $100k. In the US, you'd be happy to get low 60s. And if you live in an area like sf, you may reasonably spend $2k/mo after tax to share an apartment.

$100k - taxes = ~$65k.

Now subtract rent, which in most tech hubs is at least $1500 / month. Now you're left with ~$47k. After the cost of food, transport, and a little travel let's say you still have ~$35k. So each year of working pays for one semester of NYU. Not "the rest of their working lives" but even a generous salary takes a while to chip away at the loans students are currently taking out.

Living within your means could involve Texas.

No, I don't mean Austin. I mean real Texas. Actually, it seems the better deal is Florida. (for example, Palm Bay is an easy commute to companies like Harris) You can eat non-organic food, including beans and rice. Do not travel. Carpool with your spouse. Do not buy furniture.

Consider the tax advantage of buying a home and having kids. Your taxes plunge. You can end up paying nothing, even with a 6-figure salary. Kids and houses are way more affordable than you might think.

Sure, you can live in rural tx, but good luck getting a job that pays $100k there. Remote employees can do it, but you're almost certainly not going to get that straight out of university. And this is the first time I've seen someone claim kids net save money =P . That would be, ah, different from the experiences of everyone I know.

Also, your calculations ignored interest. Even 5-8% interest on private student loans adds up in a hurry.

So we should tell our kids to work hard and good a good degree so they can get a good job so they can sit in an empty apartment eating organic rice and beans?

The typical state school runs $10k/yr (for just tuition); $40,000 of student loan debt should be no problem for a person making $100k/yr to pay down in five years. My partner managed to do that on less than 50k/yr ($800/mo over five years, about 1/4-1/3 of take-home pay at that salary).

So, a person making $100k/yr that can't manage to pay for their college education either spends too far too much of their income, or horribly overpaid for school.

Hard work is part of it, but it is really about responsibility. I know when I was an 18 year old I was not the most responsible person, but my parents had taught me enough about money matters to not doing anything too stupid.

Since I mostly f'd off in HS, I had few scholarship options (and the state lottery had not come into effect yet), so I went to a decent nearby college and lived at home while working 20ish hours/week. Even then, some of my peers who went away to big schools with big price tags were saying I was missing the 'real' college experience because I had a job and lived at home. To me the real experience was not worth that kind of money.

Also, having his parents co-sign and then bolt is just a selfish jerk thing to do. My parents had to cosign for the initial loan I received, but from there on I either paid or took loans out on my own. Given how little money my parents already had, seeing them willing and excited to co-sign made me sad. My parents only had 3 years of college between them, but they taught me a lot of life lessons that formal education seems to miss.

I think this quote from the first segment sums it up

"I think at this point I owe about $40,000. I really, truly, honestly don't want to pay it back. Sure, I realize the responsibility I took on when I signed the papers and agreed to take out the loans, but I should have never had to do it in the first place. I feel some sort of civic duty not to pay them back, as if my small protest will make any kind of difference."

Emphasis added.

I am sympathetic however - people under 35 were sold a bill of goods - we were told "go to college, get a degree, and they will be a good job waiting for you" which turned out to be a load of malarkey - the problem isn't that you need to take loans out, its that student loans are not dischargeable - if normal lending standard applied, you'd see a whole lot less student debt, and the cost of education would likely drop precipitously.

But most of these examples in this piece have small amount of debt, something along the size of a car loan, with generous and long repayment terms - its much harder for me to accept someone crying hardship when they owe less than 40k. Even if the amounts were larger, once you take on the debt, it's yours, you own it, no matter if you want to pay it back or not.

I posted this up elsewhere, but $40k can be paid off in five years if you toss $800/mo at it. That's hardly an insurmountable debt burden. Sure, it sucks, but it's gone before well before most people would turn 30.

But yes, bankruptcy should absolutely apply to student loan debt if the individual can't pay.

I think the reason bankruptcy doesn't apply is so that lenders are more willing to give out student loans (which is good, more educated society, more opportunities) and also so they lend them out at a lower rate.

Without this, banks might require very good credit to give out loans (hard for young students to acquire).

Actually, the government guarantees the loans on behalf of the student. So if the student fails to pay, then the government will foot the bill.

The reason bankruptcy doesn't apply to student loans anymore is because a bunch of a-holes in the 70s started getting massive loans for their graduate degrees and immediately declaring bankruptcy after graduation (but before getting a job).

> Actually, the government guarantees the loans on behalf of the student. So if the student fails to pay, then the government will foot the bill. The reason bankruptcy doesn't apply...

So what are the conditions in which the guarantor will be required to take ownership of the loan? Death? Anything else?

If any of these examples had anywhere near $800/mo of disposable income I would be shocked. I'd guess less than 10% of student loan holders could afford to pay $800/mo on their loans.

Man, I don't want to pay back my car loan either but those are the rules for getting a loan. They're taking a super irresponsible approach to the problem IMO.

The bank can repossess your car but they can't get back what you learned in college and re-sell it.

These people have no sense of responsibility or owning up to their decisions.

I had exactly the same reaction: higher education is overpriced and has perverse incentives, but these individuals hardly seem like the most deserving of compassion for their circumstances.

> I think at this point I owe about $40,000. I really, truly, honestly don't want to pay it back.

No shit

> Sure, I realize the responsibility I took on when I signed the papers and agreed to take out the loans, but I should have never had to do it in the first place. I feel some sort of civic duty not to pay them back, as if my small protest will make any kind of difference.

He didn't have to; it was a choice.

Let's change the system of higher education, but lets also get some better standard-bearers.

I love your assessment. These are the type of people that are hard to side with even when you fully agree with some of their ideas.

I find myself seriously wondering whether the Vice author intended readers to sympathize with his subjects, or despise them.

Partly I think this might be just my bias, inasmuch as I opted against taking on a six-figure debt load as my first adult act, and have discovered that not going to college is hardly the kiss of career death it's made out to be.

But I really don't think you have to be me to find someone who got his parents to co-sign that six-figure debt load, then skipped the country and left them holding the bag, almost beneath contempt.

No. If we continue to make educational debt non-dischargeable through bankruptcy, then millennials should be doing more to avoid paying back their loans (in an attempt to break the system) if they cannot secure a good job.

Baby boomers get to lose hundreds of thousands of dollars on their homes and walk away scott-free, but heaven forbid we forgive 40K in student debt for someone making 13$/hour.

We love to express the sentiment that business owners do not owe the working class anything. And that's true. But somehow we gloss over the fact that the working class does not owe their masters anything either. Owners are not entitled to cheap wages. We're all in this together...and if not, then many people say 'fuck it I'm doing what's best for me!'

Expecting people to act in the best interests of society is a wholly stupid notion. If you want people to do what's best for their neighbors, then you must make it semi-convenient to do so.

> My point is, yes our education system is backwards, but millennials need to learn some form of hardship or hard work.

There is no reason to praise hardship. Saying that they shouldn't inflict extra hardship on others (their parents) is fine, but the ridiculousness of the situation is not something we should pride ourselves on getting through.

No one's parents worked hard so their kids would have as hard of a life. It's so they have an easier one, and that's something we should aspire to.

Based on the articles it does not seem that most of the kids in the article really thought through what it means to take out large amounts of debt. (Including roping in parents as co-signers.)

To be fair the US Congress didn't think this through either since most programs to improve access appear to be loan-based.

I couldn't totally agree more. Private school at $30,000 / year, private university at $53,000 - who does that? When my sister and I went to college, we had no delusions that we were going to go to in-state public universities where we qualified for in-state rates. Some of our friends even went to community colleges the first few years, then transferred to save even more money. Many of us had part time jobs and/or internships the whole time.

Also at the time, we knew we were going to need to be sponsored by companies if we wanted to stay in the US so we both chose practical degrees which would most likely lead to sponsorships for our H1B visas (ie engineering degrees).

I don't understand these people who willingly choose to go to EXPENSIVE private schools they COULD NOT afford, take HUGE loans they COULD NOT HOPE to repay on degrees that will barely pay for those loans. Then they have the audacity to feel entitled NOT to pay back those loans.

"the name Sallie Mae sounds so friendly; she's just your cute aunt making soup" - seriously?

You get what out of your university what you put into it. If you attend your top state school, go into an employable field, and put in a lot of effort you won't need to emigrate.

Did I miss out on some fabulous career path because I chose my state school over Drexel, Urbana, etc.? That's not entirely fair comparison for every student because Virginia Tech is a phenomenal engineering school. The point still stands though, are there any states in the USA that don't have a high quality state school?

Not to mention the rule changes Obama put in: income based repayment and loan forgiveness after 20 years.

I can't think of any other loan that is this generous with its terms.

> yes our education system is backwards, but millennials need to learn some form of hardship or hard work.

Hmm, I wonder if we can come up with similarly nasty and unhelpful instructions for other generations, based on stereotypes and anecdotes.

E.g.: baby boomers with failing health should just accept that they're going to die, and stop overburdening Medicare with expensive treatments that only give a few more years of life.

Well I'm actually a millennial and your example was far more dark than mine. I got lucky in that I'm a developer, so finding a job wasn't so bad. But people who graduate college with a "useless" degree aren't so useless. Everyone has to start from somewhere and I think people lack the humility and confidence to deal with tough situations like a shitty commute, shitty pay, or having to live at home for a while. Honestly, none of these solutions are as bad as running away from it and leaving your parents to deal with your problems.

The student loan industry is rapacious and unethical. Would you feel comfortable selling someone an English or Communications degree for a $200K which will accrue compounding interest?

Institutions that feel comfortable doing this are profiting from factories of debt-peonage. This includes both for-profit and non-profit institutions. They must be stopped.

Educational institutions are ostensibly founded on the magnanimous goal of educating people. If they must lend to be sustainable they should do so without charging interest.

And student loans should be disclosable in bankruptcy. If you're bankrupt, you're bankrupt!

>Where are they now 5 years later? Their loans are mostly paid off and they're in better jobs.

This is missing the magical step 2 just before "Profit!". How did your "English major" friends manage to pay off their their student loans from shitty jobs in 5 years? Even state school tuitions are now starting to reach several tens of thousands of dollars per year. For private universities, the annual tuition is often significantly higher than the median annual salary of their graduates.

Mostly paid off != paid off. After a few years you get raises, you get better jobs, you save money by living at home. Etc. My story may be anecdotal but my point still stands. People in the article are irresponsible.

Anecdote, but I graduated in 2011 and almost none of my friends have their student loans paid off.

Probably because they all stuck to the default 10-year payment plan.

Exactly. Besides, mostly paid off != paid off. I went to a UC so by the time you graduated loans were about $20k-$50k depending on how much you take out. Live at home, work hard, chip away at your loans, they'll be mostly gone after 5 years.

> Where are they now 5 years later? Their loans are mostly paid off and they're in better jobs.

not so sure about all of that

This seems implausible. The standard loan repayment term is 10 years.

My story is anecdotal but it's true. Who says you have to repay a loan on the standard terms? I also said mostly gone. If standard is 10 years than after 5 years half is gone. Pair that w/ an accelerated payoff and you're looking at loans that are "mostly" paid off. IMO a lot more responsible than the stories in the article.

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