Comment by toomuchtodo | Hacker News Reader

Comment by toomuchtodo | Hacker News Reader

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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.)

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