Soaring Student Debt Prompts Calls for Relief | Hacker News Reader

Soaring Student Debt Prompts Calls for Relief

wsj.com

106 pointsjstreebin516 comments

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses.

Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free?

I think the government should get out of the student loan industry entirely: stop subsidizing them and making interest rates a political issue. Let the market signal which degrees are valuable and which aren't. But also make them dischargeable in bankruptcy. At least then there would be a consequence for people deciding to take out expensive loans for education.

> Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

Not just that: this is, ultimately, a giveaway to the academic classes, who have lucked into the business of selling things to unwise consumers spending someone else's money.

When these loans are forgiven (let's not fool ourselves: they will be), the federal government will have moved $1.3 trillion into the coffers of colleges, universities, professors, junior assistant vice-provosts of diversity affairs, athletic coaches and the whole panoply of 21st-century academia.

I don't see it. Academia already has this money. It was paid to them as tuition.

If loans are forgiven, the money will be "moved" (so to speak) to the bank accounts of the indebted, not academia.

In the case of state schools, student loans also benefitted the tax payers. Student loans means such schools can charge a higher tuition, which means they need fewer subsidies from the the state.

Being able to charge higher tuition due to government-subsidized loans IS a subsidy from the government, by definition. The government paying the resulting debt would be a further subsidy.

We (my wife and me) would be so happy if we can just pay the principal and not accumulate interest anymore. The latter amounts to a bill of $700 each month. Or if the interest rate would be capped at 5% or less.

Moreover, I wish it went to the professors etc. but with intermediaries like Great Lakes I also fear that even that is not the case.

This. This. THIS.

Federally-backed student loans, undischargeable and given to all and sundry, to be spent wherever on whatever, is a gigantic short in the moral-hazard circuit.

I would throw an actual party for any dictator in the US who would do to the colleges what Henry VIII did to the monasteries.

>Federally-backed student loans, undischargeable and given to all and sundry, to be spent wherever on whatever, is a gigantic short in the moral-hazard circuit.

I'm not sure you're using the term "moral hazard" correctly. If the loans were dischargeable that would be a moral hazard, because the smart thing to do would be to borrow up to your eyeballs and then declare bankruptcy ten years later on graduation day.

> When these loans are forgiven (let's not fool ourselves: they will be), the federal government will have moved $1.3 trillion into the coffers of colleges, universities, professors, junior assistant vice-provosts of diversity affairs, athletic coaches and the whole panoply of 21st-century academia.

The principal on those loans already went there, and forgiving the debt won't move any additional money there except insofar as people with unpaid student loan debt overlaps with people working in academia.

You know what is worse? This subsidy isn't going to your top-tier or even mid-tier CS/engineering prof. For those students, education totally pays off. The subsidy is really going to the lowest-tiers of the academic enterprise.

For better or worse, the giveaway has already happened. The colleges have already been paid and they now have massively over-staffed administrations housed in remarkably nice offices to show for it.

The point of a move this move is twofold. The first is to unburden people who were, in essence forced into massive debt at gunpoint as the result of fairly recent and arguably corrupt policy changes (note the lifetime health / income / well-being stats. for those without college degrees, and the role played by banking lobbies if you doubt any of this).

The second is to signal to the predatory class of administrators who have benefited the most that the party is over. It may be unfeasible to claw back what they got from massively inflating the cost of higher education, but it's more than feasible to cap the damages and force a reckoning that will almost certainly lead to vastly more efficient administrations and more economically healthy graduates.

> It may be unfeasible to claw back what they got from massively inflating the cost of higher education, but it's more than feasible to cap the damages and force a reckoning that will almost certainly lead to vastly more efficient administrations and more economically healthy graduates.

Sure, I could see being in favour of loan forgiveness if at the same time we completely eliminated federally-subsidised loans. But I don't see that happening: I see us forgiving outstanding loans, then granting even more loans, with absolutely no pressure for students to economise.

True fact: one doesn't need a single-occupancy bedroom or a multi-room suite in order to get a good education. One doesn't need a winning football team. One doesn't need a fancy cafe with subsidised prices; one doesn't need a climbing wall. All one needs for a good education is food, shelter and good professors.

But as long as someone else is (or appears to be) footing the bill, students will angle for the nicest possible way to spend their four, or six, or more, years.

> to the academic classes

The academic dream is that everyone deserves the same education. This is obviously not a reality, but you should at least acknowledge the middle ground is disliked by the "academic class" and the "non-academic class" alike: it's expensive as hell and we still have idiots running the world.

Sure, those few thousand Machiavellian geniuses who run everything are idiots. That is a very reasonable opinion.

"for other people's bad financial decisions"

Why is making loans to people that have, statistically, a very low chance of paying off somehow not also a "bad financial decision"? We pay for "bad financial decisions" regardless of who makes them - debt forgiveness for individuals or bank bailouts when they get in over their heads.

Banks only lend for education because it's not dischargeable - there's no penalty for the bank making a 'bad decision' because they'll get their money one way or another.

Yes, make all student debt able to be discharged in bankruptcy, and we'll see a different dynamic play out. However... there are more predatory lenders out there that specifically target the newly bankrupt so... it may not 'cure' all issues, just shift some of the burden around.

EDIT: had meant to add that we already pay for people's bad health decisions via insurance pools, and we already pay for people's bad life decisions via prisons.

> Why is making loans to people that have, statistically, a very low chance of paying off somehow not also a "bad financial decision"?

I agree that the government shouldn't be making bad loans to people who are unlikely to pay them back. In fact, that's exactly what I said in my comment: the government should get out of the loan business.

Unfortunately, loan forgiveness would mean me (a current taxpayer) having to pay for the past poor decisions of students.

> We pay for "bad financial decisions" regardless of who makes them - debt forgiveness for individuals or bank bailouts when they get in over their heads.

Banks pay significant penalties for bailouts, while people seem to want debt forgiveness with 0 repercussions. Not to mention this whole issue of banks is orthogonal because most loans are from the government.

If we let the bankruptcy system handle it, people could get out of their loans but there would still be consequences.

> Why is making loans to people that have, statistically, a very low chance of paying off somehow not also a "bad financial decision"?

It's important to recognize that you're talking about the federal government and not really banks. Whether it's a bad decision to issue student loans to people who are unlikely to pay them back is irrelevant to the parent question about fairness. The government doesn't have money of its own. It has your money, and my money.

There is no scenario in which the government gets penalized for poor lending practices. The citizens get penalized, and that's why people who were conservative with their educational loans and expenses tend to be less than impressed with the idea of writing of a trillion dollars in student loans. That trillion dollars is largely going to come from the pockets of people who aren't carrying student loans.

When I took out my student loans it absolutely was the banks. Federal takeover is only a recent thing.

> Banks only lend for education because it's not dischargeable - there's no penalty for the bank making a 'bad decision' because they'll get their money one way or another.

I was under the impression that only federal student loans were protected from bankruptcy. However, it looks like that changed in 2005 when Congress largely extended this protection to private student loans as well. I still don't quite fully agree with your statement since financial institutions often have a hard time collecting on debt regardless of their legal rights, but you are certainly correct that this encourages financial institutions to take on more risk. Private student loans are performing much better than federal student loans though (11%+ vs 4%+ delinquency rates) so the data implies that they are still practicing somewhat strong underwriting practices. Further, nearly 95% of all private student loans have a cosigner.

Regardless, the private student loan market is very small in comparison to the federally subsidized student loan market. I know it is easy to blame the 'banks,' but in reality this situation has developed largely from societal pressures (college=success), federal and state policies ('cheap' and 'accessible' loans), and unchecked spending at colleges.

Link of an interesting paper on the subject for those curious: http://law.emory.edu/ebdj/content/volume-32/issue-1/comments...

TL;DR The health of the economy is more important than your moral high ground.

Same reason we let people walk away from homes (or not walk away, simply not be able to afford them), but we'll still give them a mortgage 3 years after their foreclosure; the economy needs the monetary velocity to survive.

> Same reason we let people walk away from homes (or not walk away, simply not be able to afford them)

Like I said in my comment, I recognize that there needs to be some option for people who can't possibly repay their student loans. Defaulting on your mortgage is not consequence-free: you lose your home and hurt your credit. We don't let people just forgive their mortgages and keep their homes without hurting their credit, but that's what a lot of people are advocating for student loans.

We should treat student loan debt like any other debt.

> We should treat student loan debt like any other debt.

We should! There's no asset to secure the debt, so just mark the trade line as unpaid/collections and have it be a black mark for 7 years.

If Congress isn't going to fix this, Millenials can max out unsecured credit, pay off their student loans, and then go bankrupt on the unsecured debt; 7-10 years of bad credit is better than the federal government pursuing you for the rest of your life.*

* Not legal advice. Confirm with an attorney first if you attempt such a feat to ensure you stay within the law by doing so.

It is much easier to obtain unsecured credit without prior student loan debt.

7 years for a bad decision made when you were 18?

That seems incredibly harsh.

Then again, you Americans really don't believe in rehabilitation do you.

We should treat student loan debt like any other debt.

Until Bush changed the rules at the request of the financial industry, we did.

How would one repossess an education? Isn't that the reason student loans are not dischargeable?

Like toomuchtodo mentions, we could treat it like other unsecured debt (like credit card debt).

Just because it's unsecured doesn't mean we shouldn't be able to discharge it with bankruptcy.

Get the government out of the loan business and the market will correct itself. You won't be able to get a loan for a useless degree and if you end up being unable to pay off your loan you can go through normal bankruptcy proceedings and their consequences.

> How would one repossess an education?

You can't.

> Isn't that the reason student loans are not dischargeable?

No.

First, student loans are, in fact, dischargeable, though there is a higher bar to discharging them. So expalanations of why they are not dischargeable are unnecessary (and necessarily incorrect.)

But, more to the point, unsecured loans in general are dischargeable without the heightened requirements that apply to student loans; not having something to repossess isn't a difference between student loans and other unsecured loans, so cannot explain the difference in treatment.

What does this have to do with the velocity of money? If the students continue to pay off their debt then the money flows to their creditors, who will use put it to work in the economy. If the debt is forgiven then it won't go to their creditors and will instead go to those who had student loans who will similarly spend it.

Is there another reason that forgiving student loans improves the health of an economy?

The class that lends is also the class whose marginal increases in wealth do not produce goods demand or consumption, it just goes back into lending and / or investment / and or bonds.

The best way to grow an economy is to give a dollar to its poorest participant, not its richest, because the poor class will immediately spend it on goods, creating demand, where the richer you are the less of your income goes to consumables that drive production.

This is another variation on the "rich people hoard money" theory. The reality is that rich people's lending, investment, and bonds all spend that money, too. Nobody borrows money unless they plan to spend it (otherwise it would make no sense). Nobody hoards cash.

Sure. So if you're wealthy, you invest your money. Let's say that the money which you would have received from the student loans which aren't forgiven was earmarked to invest in a new AI startup (with neural nets!). Those funds would be transferred to the startup's bank account, and then used to pay the salaries of people who work at that startup (who theoretically have a high marginal propensity to consume their income than the person who invested money in their employer). These employees then go out and spend money on stuff like Soylent and iPhone 7's and a bunch of other stuff which would be as you describe it "goods demand or consumption".

Even if these wealth hoarding lending class members had just left their money in the bank, remember that these funds have a corresponding entry on the left side of the bank's balance sheet (not much cash/reserve balances in the banking system) and would also have to be loaned out to someone else in the economy by the bank.

So I still don't see how lending money leads to guaranteed lower amounts of consumption in the economy?

For a student, they can either spend money on educational debt service or they can buy other things. "Buy other things" presumably increases monetary velocity.

But if the investor receives the cash from the student as payment of their loan, they have to do something with that cash too (buy dinner at Per Se, grab a new Vertu phone, lend the money to a startup so that the startup can spend the money on consuming goods and services, etc)

The spending isn't necessarily the same. Here's a hypothesis: people who aren't well off will buy stuff they need and therefore spend money more readily than banks that will only spend on fairly safe, profitable investments. There are lots of investors looking for safe investments and this seems more supply-limited than demand-limited (yields are low due to competition).

Of course you'd need a real economist to do a study to find out if that's actually true.

>TL;DR The health of the economy is more important than your moral high ground.

Will the economy be more healthy? I see little evidence for the assertion. It's possible the damage done by all that debt cancellation will be greater than any benefit.

Student loan debt that can't be discharged drags down discretionary spending, spending which drives the economy.

Cancelling the debt might cause a negligible amount of inflation.

http://www.businessinsider.com/3-charts-explain-the-effect-o...

http://time.com/10577/student-loans-are-ruining-your-life-no...

The projected amount of inflation probably still won't push growth into the Fed's target.

>>When the Fed could just poof more money into existence?

I hope you realize it doesn't quite work like that.

I removed that part because it wasn't relevant, but it does work exactly that way. The Federal Reserve simply credits the bank's reserve account from thin air.

Fiat currency is a shared delusion of value with invisible hands exerting forces to enforce certain behaviors (the Federal Reserve attempts to stoke inflation in order for the economy to reach full employment, arguably unsuccessfully, while technology and cheap Chinese labor is having enormous deflationary effects, with the result being real estate and equities turning yet again into asset bubbles); never be fooled that we're somehow "losing" value by forgiving debts at the national government level.

> Federal Reserve attempts to stoke inflation in order for the economy to reach full employment

No, the Federal Reserve attempts to provide easy money to spur employment, balancing that goal against the competing goal of controlling inflation. The Fed does not try to stoke inflation to drive employment (especially since inflation doesn't drive employment, though employment can help drive inflation.)

Google "William F. Hummel money" and read the whole thing.

Technically, money is created when a bank writes a loan, but the Fed does meta-meta(-meta?) money creation on a global scale.

Right. "Buying 0 interest treasuries" is what the Bank of Japan calls it.

Interesting tidbit: We're way passed that with the BoJ. They're the majority shareholder of 55 companies on the Nikkei.

http://www.bloomberg.com/news/articles/2016-08-14/the-tokyo-...

That's right. The Bank Of Japan is printing money to prop of the value of top companies trading on Japan's exchange. Think about the macroeconomic causes and consequences of that.

I agree with the conclusion, but:

> other people's bad financial decisions?

This is different than someone taking a bad loan on their own. This is the case of your parents and grandparents, your government, the schools, the newspapers, etc. all effectively telling you that it's a good idea to invest in education. So good that in a country that loves its liberties and independence so much people will fight against public health care, the government will do the work to guarantee that you can get your education loan.

Surely they can't be all wrong... I cannot honestly blame people for believing the lie in this case.

> Surely they can't be all wrong... I cannot honestly blame people for believing the lie in this case.

I absolutely can. I grew up listening to all those same messages and hearing all the same things.

I also realized that it might be a good idea to do some college research and to apply for various scholarships.

High school seniors aren't babies. If they're good enough to get into a college, they should be smart enough to do the minimal research which it takes to find out which degrees are valuable and which aren't. There are tons of resources online to learn about this stuff.

Bla bla I'm a more rugged individual than others... Screw everybody else!

> This is the case of your parents and grandparents, your government, the schools, the newspapers, etc. all effectively telling you that it's a good idea to invest in education.

I'm pretty sure that absolutely no one anywhere tells their kid, go to Columbia University, live full time in Manhattan, take an extra three years to finish your bachelors, study pottery making, live entirely off of student loans. Aim for at least $400,000 in debt when you finish.

No one ever says that. Ever.

(As a random data point, the average student debt in 2015 was $35,000. That doesn't seem like an insurmountable bill.)

Doesn't seem like it but when you're paying rent, electric, gas, loans, phone, food, and transportation it adds up pretty quickly especially when you're working below median wages for families/single persons in America, or worse, unemployed.

There's a reason more people are living at home, struggling with their debts, and the middle class is declining and it's not because their bills are so easily surmounted.

Not in this words. It's closer to: aim higher, follow your dreams, figure out what you want to do in life, good education now will give you good salary in the future. In practice they easily translate in some mind to the statements you mentioned.

Also 35k is still a huge amount that will follow you for decades for some people.

You may be right that it's a poor financial decision, but I still hope to one day live in a country where people can pursue education in any subject matter (not just STEM/other money makers) for the pure purpose of educational fulfillment. That can only be done with a system that helps pay for education instead of letting the market decide which degrees are most valuable in terms of pure capitalistic measures

Well, and really I think it depends on the person rather than the degree. One of my friends majored in theater, which I'm sure many people see as a useless degree. She paid off her loans and bought a house within 3 years of graduating and owns a successful business teaching voice lessons over skype. On other other hand, I know someone who has a PhD in biochemistry who struggled to find a job for years. It's not fair to say "this degree is bad and this one is good." There are so many other factors.

Not exactly. If a person knows where they truly stand its easy to make life choices from there on.

Many people I know who did engineering with me in India were stuck waiting for a 'dream job' and have gone no where with their lives. People like us knew we had no special skills in engineering to wait for a magical moment of a 'dream job' to arrive and took whatever came our way. Incrementally we worked towards improving ourselves and now have near dream jobs.

The more special you think you are, lesser the options you will have. Because you would got used to thinking of many jobs as work beneath you.

Let me know when you find the hole in the ground that is shooting money up into the air that enables us to have luxuries like this.

Frankly, we have thousands of other problems, highlighted by basic health care, that we should probably prioritize first.

Note that this is literal in some cases. Norway, being one of the major neo-socialist successes, is also a major oil exporter in the region. They have holes in the ground shooting money up that help enable social programs.

Fascist countries don't need people with critical thinking skills, STEM I'd the only thing that matters.

What if I want to pursue an education in driving luxury cars and sailing yachts? Is that a valid subject matter? And if not, what makes it a less valid subject matter than any other degree that costs money but does not have a clear path to recouping the investment? Who decides?

I'd like to sign up for "Driving Luxury Cars and Sailing Yachts 101" please. These are vital life skills I require.

If you're not going to take the discussion seriously, then don't bother to comment at all.

One of my favorite quotes from the movie Good Will Hunting:

"See, the sad thing about a guy like you is, in 50 years you're gonna start doin' some thinkin' on your own and you're going to come up with the fact that ... you dropped 150 grand on a fuckin' education you could have got for a dollar fifty in late charges at the public library!"

It's not the actual learning itself that's expensive; it's the credentials.

One day I hope to live in a world where every single person in the world can live in Malibu year round...

Unfortunately, the world isn't making new land. It's a reality of life that we live in a world of scarcity.

You can do this right now. There are various social media groups, even local ones, about specific subjects and areas of study. You can get all the same textbooks any given college professor writes in the syllabus, you can watch recorded lectures on every chapter, and you can discuss the material with like minded knowledge seekers.

The Internet era effectively invalidates structured schooling education for the vast majority of people who do not require the rigored environment such institutions impart. For most people, reading books, watching lectures, and discussing with fellow students of the discipline (or even experts) in social media is more than sufficient to acquire a knowledge of desirable fields of study.

The only difference is, you don't get a piece of paper after doing it for four years many industries mandate you have to try to use that knowledge professionally. But if you are only in it for fulfillment, you can get that right now, without any state institution subsidizing your living and accommodations to acquire it.

Having encountered some of these people in my life, their education is often incomplete, and more dangerously, they're often unaware it's incomplete.

> but I still hope to one day live in a country where people can pursue education in any subject matter (not just STEM/other money makers) for the pure purpose of educational fulfillment

Is there a country in the world where this isn't possible now?

They can; pick up a book.

I know several people who have degrees that have no relation to their current "day job".

Maybe it's just having the sheepskin that matters most.

Library card.

Schools can charge a lot because other people pay a lot. As individual you cannot single-handedly decide to pay less.

Compared to Europe the education system in the US looks like a system that is trying to get as much money out of young adults as possible rather than getting as many people as possible an affordable education.

There are vast differences in the cost and benefits of different degrees. Nobody forces you to go to an expensive, low-benefit university.

In fact, there are lots of free calculators which will show you the expected earnings and cost of different degrees.

You can single-handedly decide to go to a cheap community college for the first 2 years.

But why even care about cost at all if college will be free anyway (loan forgiveness)?

My wife went to Ohio State, and although its tuition is "only" 10k a year, compare that with 1k overseas. If we will have kids the question where they get their education is a nobrainer.

Apart from that she also went to Columbia University. Totally overpriced in my opinion, but it made her really happy. Because of her decision back then, now, as a couple we have a "second mortgage". Not all financial decisions in your life are under your own control.

> Compared to Europe the education system in the US looks like a system that is trying to get as much money out of young adults as possible rather than getting as many people as possible an affordable education.

the private college system is what you are describing.

the community college and public university system does exactly that, but nobody talks about it, because it's un-glamorous and un-dramatic.

Let's not pretend public universities are low-cost options now. Their cost has ballooned along with private universities.

The problem is the credit. The state underwrites all loans so more people go to uni. It reaches a critical mass where all employees start demanding a degree before you can even speak to them. At this point would-be-graduates know degrees are often not worth it but they become a toll tax. You have to pay for the degree or you can't play.

Really I don't blame young people for this. There are too many degrees and too much money is being created to pay for them. The state loves this, it creates lots of money and it ties people into debt which seems to be the entire aim of western states now as they want to work people hard all the time. If you attain financial independence through non-debt you might decide not to work 40 hours a week. Then the establishment can't cream off your labour, and they hate that.

>Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

Not at all! These people are called "conservatives".

Goldman Sachs made some pretty bad financial decisions as well. So you're OK with paying for their mistakes?

I don't know what Goldman Sachs did and I don't know who should pay for it. I'm not very informed about economics.

Why did you word your question so rudely as an assumption? Bank bailouts were largely a political class decision. Rare was it that conservative citizens voiced favor for bailouts.

Bad financial decisions are nothing new. People are constantly getting loans for things they can't afford like homes, cars, credit card debt and so on.

I used to feel the same way as you. But we need to stop loading young adults with debt that can never be dismissed. Young adults are easy prey. Student's are for the most part clueless on what it means to be in debt without being able to pay for it. Mostly student's are desperate to afford their dream school or study for the one profession that will increase their pay check and are willing to sign a simple contract to get it.

Luckily some of us know early on that we must get trained in a marketable skill to pay back the loan. Greek studies or French literature will not cut it these days. Not all of us are that lucky to know it.

We need to look at the lenders and schools too. They don't care who they lend to because they have a guaranteed repayment. This leads to predatory lending for lenders.

Schools don't care what they teach. This leads to nice to know classes. They will always find student dreamers that will major in (name you silly major here.)

The supply and demand curve has gotten out of wack. Maybe only certain majors and schools can be eligible for loans as a start.

Also, how is it that a student can go to school from K-12 and not have a skill. High schools need to be responsible too. I took a year of Calculus in high school. It's nice to know it yet it has not lead to a pay check. I'm sure there are other more productive ways to spend a year of school.

Indebted students are a symptom of the bigger problem on how to train society's future workers. It's time to do something about it. Debt forgiveness and a reform to the educational system is a great place to start. BTW, free higher education is not the answer. Look at what happens to the K-12 graduates. Free higher education will only extend that system without much results.

Yes, student's are stupid and it sucks that some will get a free ride but they are only a part of a bigger problem. We need to look at the problem more broadly.

> Student's are for the most part clueless on what it means to be in debt without being able to pay for it.

I give students more credit than you do. If you're capable of going to college, you should be capable of understanding compound interest.

> The supply and demand curve has gotten out of wack.

I agree completely. Get the government out of this business and we'd see realistic supply and demand.

It'd be much easier to get a loan for a CS degree and a degree in CS would cost a lot more than one in English literature. Instead, we have the ridiculous status quo where the latter costs almost exactly the same as the former despite vast differences in value.

Thinking the government shouldn't be involved as a matter of principle is fine, but in terms of policy recommendations, you have to balance that against the evident dislike of the current situation by substantial parts of the voting public.

If you set up the situation so that students can get themselves into crippling debt due to the market, you should realistically recognize that this might result in people with different underlying assumptions deciding that those students/former-students should get bailed out. So maybe it's better to just figure out ways to preempt the problem, which leaving it to the market (often a fairly abusive place for the less-informed or less-wealthy) doesn't really do.

Making them dischargable in bankruptcy would be a very useful change here, but where I disagree is that the market would be good at usefully signalling "this is a valuable degree" or "this isn't a valuable degree."

I kind of empathize with you since I did the same...but just because I feel angry, does that dictate what's moral overall? Here's an interesting question. Does someone who served in the military, peace corps, Americacorps or whatever have a higher, "moral high ground," for having served the country, for a super-reduced wage, over one who has not? Using your same logic, we should have anyone who did not do that pay a, "non-participation fee." We really just all live in a society with lots of winners and losers, different personalities, people who were unlucky because they got cancer, others who are descendants of the Rockerfellers, etc. Individual moral decisions, good or bad, don't automatically take precedence over moral decisions about the aggregate.

> Using your same logic, we should have anyone who did not do that pay a, "non-participation fee."

Err, we do. It's called taxes, which fund the military.

More importantly, joining the peace corps is a choice. Nobody compels you to do it. Taxes are not: if student loans are forgiven, I'm being forced to pay for other people's financial decisions. I find that much more objectionable than my voluntary charitable contributions.

People in the military pay taxes as well. My argument still stands according to your logic - those who did not participate in the military should pay higher taxes.

You may not like being forced into something, I may not like being forced into something, a criminal may not like being put in jail - but there are certain rules on the aggregate which are set up not for the individual, but to benefit society as a whole. There are situations in which the ethics of upholding a society overtake those of an individual (e.g. the prevention of returning to a, "state of nature," argument.)

Beyond that, in our situation, there are multiple extenuating circumstances of for-profit universities who had lobbied the Federal Government to gain special treatment which would grant them the capability to be funded via student loans. Those Universities then went on to employ extremely unethical practices, preying on those who did not have the proper background or capacity to choose. Mind you, this was all done with Federal money, sanctioned by your and my tax dollars, which we have no choice in paying, as you stated. What we do have a choice in, is saying that a certain percentage of student loans should be forgiven due to extenuating circumstances such as unethical for-profit educational institutions, educational institutions such as ITTTI which went out of business, etc. I think the underlying assumption that people are making here on this discussion is falling prey to the, "slippery slope," fallacy in that ALL student debt should be forgiven, when in reality perhaps only a certain percentage should be, due to the high incidence of unethical educational institution degree-awarding growth which occurred subsequent to the 2008 economic collapse.

What you will see on here is a lot of people making appeals to the economic benefits of making a decision which benefits a larger aggregate of the population. If you can't stomach that, then you should at least watch the latest Frontline Documentary on For-Profit Schools, and read the Wikipedia Articles on various for-profit schools which have recently gone out of business, like ITTTI.

To be fair, you are being forced to pay for your poor investment decisions as a taxpayer. That is, you as the taxpayer are the person who wrote all the terrible loans, wildly inflated tuition, and destroyed the spending capacity of an entire generation of young people. Kids arent making poor financial decisions, theyre just doing what society demands of them to get jobs. It is your financing that makes the system the clusterfuck it is. So yeah, the American taxpayer should be the one to eat it.

I think the government should get out of the student loan industry entirely: stop subsidizing them and making interest rates a political issue. Let the market signal which degrees are valuable and which aren't. But also make them dischargeable in bankruptcy. At least then there would be a consequence for people deciding to take out expensive loans for education.

In economic models, one of the biggest reasons for soaring tuition is increased ability to pay. So every move to increase how easy it is to take out student loans causes tuition to go up which causes pressure to make it easier to take out student loans.

Therefore the expected result of your policy is outrage, short term dislocation, and then greatly reduced tuition. Which will move money from academic administration to the rest of the economy.

There have also been massive cuts in state aid. Frankly, having the federal government instead of state governments pay for college seems better -- the fed always captures benefits (increased tax money) while if you leave the state you grew up in, the state takes a bath on you.

I disbelieve.

The cuts in state aid were mostly due to the 2008 financial crisis. However over decades, tuition has been rising significantly faster than inflation, while state aid has mostly kept up with inflation.

Furthermore rising tuition is not just a phenomena of state schools. Private universities have seen tuition skyrocket over the decades by similar percentages as public schools, and they never received state aid.

Exactly. It would in the end be better for everyone except for overpaid administrators.

While there are certainly people that go into extreme amounts of student loan debt due to picking prestigious colleges, I don't think that is the real crisis here. Isn't debt also increasing for the vast majority of college students who are in whatever the middle-quintile of average students are?

I think a student from a middle class family (meaning loans and not grants) should be able to attend four years of an in-state college, get a full education, perhaps work a part-time job but also have time for the kind of valuable extracurricular activities that are a part of the college experience, and graduate, without going into an unreasonable amount of debt. But it sounds like the reality is that that amount of debt, for that scenario, has climbed quite a bit.

You must have gone to college before 1990.

The price of tuition practically /skyrocketed/ after it become impossible to discharge student loan debts.

Worse we've had two recent 'recession' periods and had insufficient recovery since then. It is extremely difficult for those entering the workforce to find entry-level jobs, and the competition for those seeking part time jobs means anyone going to college is automatically 'overqualified' (source, my own personal experience; over a decade ago, and I DOUBT it's gotten any better since!)

This chart shows part of the story:

https://en.wikipedia.org/wiki/College_tuition_in_the_United_...

https://en.wikipedia.org/wiki/File:InflationTuitionMedicalGe...

"... All rates are computed relative to 1978. [51]

Cost of living increased roughly 3.25-fold during this time; medical costs inflated roughly 6-fold; but college tuition and fees inflation approached 10-fold. Another way to say this is that whereas medical costs inflated at twice the rate of cost-of-living, college tuition and fees inflated at four times the rate of cost-of-living inflation. Thus, even after controlling for the effects of general inflation, 2008 college tuition and fees posed three times the burden as in 1978."

>Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

You are undoubtedly not the only one who feels this way. It's very natural.

However, in the west sometimes I think we forget how lucky we are, and that the rest of the world often pays for our bad decisions and with much more than money.

I would rather pay their student loans and be grateful for what I have as a white western person, which puts me on a privilege level well above a large proportion of humanity.[1]

I am _not_ trying to preach, just giving you some food for thought.

[1] And this is why here in Canada, I am pleased to pay for other people's healthcare too.

> I would rather pay their student loans and be grateful for what I have as a white western person, which puts me on a privilege level well above a large proportion of humanity.

I am very aware of my privilege. In fact, that's why I donate at least 10% of my income to charities operating in the developing world.

That's actually part of why loan forgiveness galls me so much. It's offering a subsidy to people who are actually some of the most privileged people in the world. College-educated Americans are hardly an underprivileged group.

There's also a choice aspect of this. Going into huge debt for college is a decision, as opposed to being born into an underdeveloped nation or falling victim to illness. [0]

> There's also a choice aspect of this.

Points taken above.

I'll just point out that the focus on fairness is a strong human trait, and IMHO it is a trait that we over-express. Often our notion of fairness is very biased as well.

We are most likely to recognize situations that are unfair against us, but easily gloss over all the unfair advantages we may have.

An anecdote: One time I was complaining to my grandmother that something wasn't fair, what did I do to deserve this... etc.[1]

And she said: "Don't say that. If we got just a fraction of what we had coming to us for our sins, we'd be in big trouble!"

If we insist that things should be fair, let's be very careful about what we wish for.

[1] She was the most upstanding, hardworking honest person I have ever met, and a whole community agrees with me. And even though her point was made from within a religious framework, I think it is very applicable. She died almost 20 years ago, and she would have been 100 years old today. She is greatly missed. I also realize it's a bit of an imposition to mention this in your thread. I just wanted to insert a reference to a remarkable individual on this anniversary. Her name is Thérèse Pilon.

And this is why here in Canada, I am pleased to pay for other people's healthcare too.

You don't think all Americans pay for everyone's healthcare?

I don't think a lot of Americans realize this considering how frequently you see "why should I pay for someone else's healthcare?" trotted out.

I think you misunderstand the magnitude of the problem. Put it another way: will you carry the burden of chronic credit bubbles through decades of reduced economic activity? Everyone, including good financial actors, will share in collateral damage. The resulting unemployment will make existing debt harder to pay off, and there's A LOT of it!

http://i.imgur.com/yU9b1Ta.png

These things really, really shouldn't happen in the first place, but when they do, the systemic effects should be prioritized over individual gains.

I have student debt that I irresponsibly took out (I am thankfully able to manage it with diligence and patience), and I am with you on the moral hazard. I'm also 100% with you getting the government out of the loan industry, particularly if they continue to insist on not using any kind of ROI estimate for actual dispersal of the loans. That said, you're just sticking your head in the sand if you can't see the structural risks associated with the sheet volume of student debt out there that simply cannot be walked away from.

How would you exactly be paying for other people's decision? If you think your tax money is spent to fund the federal government, then you will be surprised to find out that the federal government doesn't use tax money for paying for anything.

Only downside would be more economic activity because well educated people can spend more of their money on things....oh wait, that isn't a downside.

I can't think of a scenario for resolving the problem of college funding, that won't seem unfair to somebody. There will be winners and losers, guaranteed. And as others have pointed out, a continued demand recession punishes all of us.

Should each of us support the status quo, because we don't to give up our little piece? Are we in a Nash equilibrium?

You might be the one who made a bad financial decision. A loan might have made you richer in the long run. ;-)

I took out loans for college. After a few years out working, I've just about paid them off. 4 months to go and I'm finished.

Even though I worked hard to pay back everything with interest, I still wouldn't wish the experience on anybody. I don't understand how funding other people's education is somehow a "punishment" to me.

I agree. I'll just say though, that when jobs are very scarce, people are broke, and everyone and their brother keeps saying "get an education to improve your job prospects", then what do you expect the swarms of unemployed young people to do?

We should absolutely stop subsidizing this craziness though.

> I'll just say though, that when jobs are very scarce, people are broke, and everyone and their brother keeps saying "get an education to improve your job prospects", then what do you expect the swarms of unemployed young people to do?

Get a degree in something useful (ex. CS) instead of political science or musical theater.

So I don't weigh 600 pounds and smoke. But I have to pay higher health insurance premiums than I rightfully should. Why don't they get consequences?

It's a tricky problem. To both provide consequences and support the weak amoung us.

> So I don't weigh 600 pounds and smoke. But I have to pay higher health insurance premiums than I rightfully should. Why don't they get consequences?

Moral hazard and consequences are exactly why smoking is one of the few things which are allowed to affect premiums under ACA.

But overweight is not.

"Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?"

Bad financial decisions that they made at age 18 with heavy pressure from everyone around them?

I got bigger fish to fry.

> Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

you've got a serious lack of perspective if that's what you think this is

Could I ask for a little clarification about your critique? I understand what his perspective is: socializing the cost is a moral hazard (people will make different decisions if they don't have to pay the cost of them). That's the perspective I assume GP has, as I feel similarly.

If what you are implying is that the eventual result of non-forgiveness is access to education only for the wealthy, I would disagree - there are other options, none of which are perfect that I'm aware. That said, I'm trying to figure out what reasoned argument you might be making with this statement which might be an exercise in futility.

The "moral hazard" argument holds very little water with me in this era. We've bailed out big banks despite the moral hazard, because it was necessary or else the consequences would have been ever worse. I think a similar argument is applicable to student loan debt, except that student debtors are a much more sympathetic and deserving beneficiary than big banks ever were.

The simple truth is that the world isn't a fair place and doing the right thing is not the same thing as doing the fair thing. Fair is "everybody gets treated equally". That just isn't how things work in the real world. Right is "to the best of our ability, we try to help people get what they need." That's something we can really aspire to. Doing the right thing.

That exactly what this is. Person A goes to school, takes out loans, diligently pays them back. Person B does the exact same thing, but gets his/her loans forgiven.

How is that fair?

It isn't. Fair would be allowing them to discharge their loans via bankruptcy and forcing the institutions that took the loans to eat most of that.

the world isn't fair and what's fair and what's right are rarely the same thing.

> Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

Yes, this is called living in a society.

Society can only work when there is trust and self reliance. Usurping from those who are responsible with their money rips this fabric. If you assume we all should be ok with this because 'society' then why not make it a voluntary bailout and see how far it goes. This would be a bailout at gunpoint because that's how laws and taxes boil down.

Would you say society is not working now then? There's plenty of mistrust and people who are not self-reliant. By your definition we don't currently have and have never in human history had, a working society.

I think it's fine to subsidize education through government programs.

Instead, remove the standard of requiring certain levels of education. Perhaps require industry-specific credentials that can be earned through exam or internship for most jobs. College should be about personal exploration over career preparation—at least in the bachelors level.

Students can complete credentials as part of their final semester Senior curriculum or on their own time.

Apprenticeships.

Not as common in a white collar setting (in the US at least).

The issue is that unlike every other form of debt, student loans are bankruptcy proof.

"Should I now be punished for that decision?"

You're not being punished, in any sense of the word.

Of course I am. I had to pay an initial cost (avoiding loans) and then am further being forced to pay for other people's decisions through taxes.

Punishment is a consequence for your actions.

You would be paying regardless of your own decisions. You are not being punished, you are being forced to contribute. If that's the way your fellow citizens vote, that is how it will be (though I doubt it will happen soon).

Come on, that's so disingenuous. "Punishment," as the word is most commonly used (and defined), implies a harm is being inflicted due to some fault or bad act by the punished.

You can say it's "unfair," or "undeserved," or like you say below, that it "discourages people from making a financially prudent decision". But no one wants to "punish" you -- that would be absurd.

No, you are not. Not in any sense of the word.

You're not alone. I graduated college a few years ago. My parents made too much to qualify for need-based aid, but too little to be able to actually afford it (living in the NYC sphere, you can earn decent money and still struggle). I too picked a lesser-tier school because it was more affordable. My parents paid for my food, and the occasional rent payment, but the rest was on me. So, I took out loans.

I started college in 2006, and graduated in 2012. Why did it take me so long? Partially because I switched majors to one that would yield a stronger career (read: tech), and partially because I worked my backside off for years, including a full year away on an engineering internship. I worked 20+ hours each week during school doing remote engineering so I could graduate without debt. I regret working so much. Some of my grades suffered because I was oversubscribed, and the work time meant I didn't have much of a social life. I applied for every merit scholarship for which I was eligible, and 33% of my college expense ended up being paid for by one I was fortunate to be granted. The paid-for months were the best.

So I agree with the question: Why should other kids have it easy when I busted my ass? My answer is nuanced. Kids who coasted through school on piles of debt while enjoying the ample time it afforded should not get away scot-free. Nevertheless, it is in society's best interest to help them out. Like it or not, we live in a capitalist and consumer-driven society. Debt is holding people back, as the WSJ article described. We all benefit when people can get out from under their debt and contribute, and we also all benefit when everyone is educated (even if it costs each of us something).

Society has a right to expect something in return, however. My college scholarship was from the federal government, and it came with a service requirement. It was a fair deal. They paid part of my way, and I owed them part of my time. I worked in a job I picked that was relevant to their interests, and contributed to their cause, while starting my career. Both sides won.

My ideal solution would allow citizens to dispel student loans through public service. Unlike making student debt eligible for bankruptcy, public service wouldn't be punitive. The deal would be that you have give back to society if you want society to have your back. We should bring back the Civilian Conservation Corps, and the Works Projects Administration. We have crumbling infrastructure? No problem: put graduates to work fixing it. They can earn minimal wages while getting student loans reduced for each month worked. They'll dispel their loans, have a job (an issue for many), learn practical life skills, and we'll all benefit from public works that make the country stronger. We can have shining bridges, beautiful parks, and an educated citizenry with the agency to move forward and pursue their higher ambitions. Some countries have mandatory military service. Is asking for a few years of service so much for those who want to dispel their loans?

> My ideal solution would allow citizens to dispel student loans through public service.

We actually already have public service loan forgiveness programs. I think they're great and would support expanding them to additional fields.

Maybe you should have to do that in order to clear the loans, but if you do I think it should still bite the institutions that overcharged the student just like actual bankruptcy should.

There needs to be negative pressure applied to the price of education.

Part of the problem is that the last few generations have been told the same thing: blue collar jobs aren't "good" jobs. You need to go to college so you can get a "good" job sitting at a desk because those other jobs are below you. If you take one of those blue collar jobs then you've failed and aren't "achieving your potential".

The grand irony in all of this is that the people who did go on to become plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the ones that are currently in huge demand. And over the next 20 - 30 years they're the ones that aren't going to be automated (well ... mechanics may become less relevant with electric cars rising in popularity). As much as I'd love to automate remodeling my kitchen I'm not holding my breath on seeing it happen any time soon.

>> Part of the problem is that the last few generations have been told the same thing: blue collar jobs aren't "good" jobs. You need to go to college so you can get a "good" job sitting at a desk because those other jobs are below you. If you take one of those blue collar jobs then you've failed and aren't "achieving your potential".

I think another part of it is that even low level office jobs now require some sort of degree simply because everybody has one. It's no longer something unique to have on your CV hence why so many people seem to be going for Masters degrees too. I know so many people only getting out of education in their late 20's and many of them got a degree, struggled to find a job, so went back for the Masters to give them ad edge.

Another problem all this education causes is lack of experience. If you decide at 16 or 17 that you're going into a trade you can get an apprenticeship and build up experience. If you go to college 'because that's what people do' and struggle to find a job based on your degree when you come out it's hard to even get a job in retail or sales because you're 23 with no experience.

One solution might be to only offer loans for degrees that lead to a job (doctor, lawyer, architect etc.) and consider things like History or Music a luxury.

I think the idea of offering loans only for 'vocational' degrees is extremely damaging. It leads to people taking 'Software Engineering' degrees rather than computer science or maths or physics when really these less directed degrees generally allow people to explore what they are really most passionate about.

The idea of a university is not a place where one goes to get a piece of paper that certifies one as competent to perform a job - that should merely be a side effect - university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual. I acknowledge this is a rather idealistic view of our higher education institutes but I think it's one we should strive to make a reality.

- university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual.

Sounds like a fun luxury good. Why should we subsidize such a luxury good and encourage 25-50% of the population to consume it?

Should we also subsidize luxury goods enjoyed by other subcultures, e.g. video games, muscle cars or strip clubs? If not, why not?

It leads to people taking 'Software Engineering' degrees rather than computer science or maths or physics when really these less directed degrees generally allow people to explore what they are really most passionate about.

I share your concerns; on the other hand, is signing up for a 3-to-5 year course really the best way to help people discover their passion? As an exploratory path, it sound expensive both in resources and in time wasted for the student.

Around here, we have something called "summer university" wherein high-school students can spend a week or two getting an high level overview of the college course. It's extra-curricular, so few attend, but seems like a similar approach introduced into the regular HS calendar (say, the last two months), getting everyone to try a few courses of their choice, could provide even more exploration for much lower costs.

I can see how you thought I was advocating loans for only vocational degrees. Something like Computer Science I think would be fine as a job path is very clear and well paid. I can't speak for Maths of Physics because I don't know much about jobs paths from those. I was more talking about degrees that have no clear job path and which could don't need to be studied at an institution where you are largely paying for the name. If someone wants a loan to study history - fine, give them enough to study in-state or at a community college.

>> university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual

This is the problem. That all sounds great but it is not worth $100k and there are many other ways to have that experience that do not cost that much.

> university is a place where people should go to learn about things that interest them and inspire them in the company of other like-minded people whilst simultaneously growing as an individual

As long as we continue to believe this, nothing will change.

Universities indoctrinate, lets not be naive. Most schools have little interest in widening the perspectives of students. They are on a mission to unify perspectives. Indeed I would say that universities are more responsible for our Idiocracy than television - graduates really believe they have become enlightened when in fact they have been programmed.

I'm skeptical of not allowing loans for degrees that don't lead to jobs. The fact that a statistical argument can be made, like "Only 30% of music majors have jobs out of school" totally obscures the fact that there are causal factors that determine career success out of school. I don't think the issue is degrees that don't lead to jobs. I think much of the issue is people beginning degrees that they have no business beginning. I suppose this is probably related to to many people going to college in the first place?

I majored in music. It's pretty easy to tell who will have a reasonable career after college. The people who are well prepared succeed. The people who aren't usually flounder and subsequently go on to flounder after school.

Should we be telling people who are likely to succeed in their field that they can't get loans to study something they will probably do well at because of all the asshats that apply to these programs with little preparation?

I can see your point. Let's take music for example seeing as you majored in it and I am also quite invested in it. I can't think of too many music jobs that require a degree. It tends to be an industry where you work hard, from the bottom and learn as you go or you teach yourself. There are legitimate reasons to study it as a degree but are you really getting $60-100k of value from it? Some people might but even a lot of the people prepared to succeed are not going to get that amount of value out of it and likely could have got the information they need for their future through an online course, on the job training, or a community college course.

My main point is that a lot of people are doing degrees when they can get the information they need elsewhere, much cheaper, and they are not getting value for money. Unless we can convince people college isn't something they have to do being more specific about which degree paths get loans is the only way I can see to prevent those people taking out loans they will never be able to pay back.

>I think another part of it is that even low level office jobs now require some sort of degree simply because everybody has one.

This is the key problem - education is often positional good, since not every job seeker can be better educated than the others.

>One solution might be to only offer loans for degrees that lead to a job (doctor, lawyer, architect etc.) and consider things like History or Music a luxury.

Better is to make asking about and providing your college background illegal, with some exceptions for doctors/lawyers/engineers/etc.

Education is not job training. And a good education should prepare you to switch careers.

Comparing higher education to job training is especially damaging in a fast paced economy with new fields and jobs popping up all the time.

>plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the ones that are currently in huge demand.

...You might get a different picture of things if you hang out in some of the skill trades reddits:

https://www.reddit.com/r/SkilledTradesNetwork/wiki/community...

...fer instance: "Here's what 10$ an hour looks like! Had to put in my 2 weeks."

https://www.reddit.com/r/Welding/comments/52byky/heres_what_...

>>...fer instance: "Here's what 10$ an hour looks like! Had to put in my 2 weeks."

And pretty much every reply is "I make way more than that, what are you thinking??"

I'd imagine the guy either doesn't know how to show up consistently and on-time, or has such a severe lack of social skills that he can't properly interview for a job. If you can weld like that and can't find a job making more than $10/hr you are doing something SERIOUSLY wrong.

> "I make way more than that, what are you thinking??"

Way more than that being $30/hour = $60K per year.

I don't even think it goes that far. A lot of young kids go to school because they can. It's autopilot, basically no different than going middle school -> high school. Find a school that'll accept you, pick a major when they tell you to, and don't worry about the loans until after you've graduated.

I saw this first-hand -- I want to a very good school that wasn't _quite_ top-tier. My classes were full of kids who were only there because their parents had decided they should go to college, and then the parents fell in love with the school.

The trades are difficult to completely automate but there are similar impacts from deskilling and moving work into factories.

When I say deskilling, I'm talking about creating products that reduce the amount of skill required to do a task. This increases the pool of labor competing for the job. It also often increases how much a single person can get done in a given amount of time.

Compare PEX and copper pipe fitting.

Yep, the laser cutter I operate can do in a day what it was taking 4 apprentices to do in a week. And it can do things no human could possibly do with hand tools.

The next thing we'd like to get us something like the Voortman V808[1], that thing should cut or labour input requirements by 50% or more.

1. https://youtu.be/Tk1un34l81E

That's the interesting thing. It's the opposite of deskilling that the parent was talking about.

Instead of removing skilled jobs and increasing a job pool of less skilled ones, tech can increase efficiency of master craftsman to the point where there is no need for the less skilled/experienced apprentices, thereby compressing the job pool instead of expanding it.

Non-salaried jobs are not stable, it's not about "good"ness. If you want to provide, find a salaried job. If you want to weather recessions, find a salaried job. If you want to have a career as opposed to a job, start with a salaried position and work your way up.

At least this is how I was raised. I don't think I have an opinion myself aside from enjoying the idea that I'll likely have the same job in a year I do now.

Blue collar employment has been falling in this country, replaced by either knowledge work -- which usually requires further education -- or service industry jobs. If there were truly huge demand for many of these professions, pay would be skyrocketing, encouraging more and more people to go into these professions.

I agree that there are and will continue to be good skilled trade jobs and many people would be better served by pursuing these options, but there is tremendous value for the average American in a college degree. The problem is that a lot of Americans are unable to graduate college, and waste their time and money pursuing a degree instead of doing something more inline with their talents or their drive.

As it stands, automation will most likely continue to primarily affect blue collar workers before it hits knowledge workers. Long-haul truck driving will probably fall relatively soon and factories will continue to have more and more automation.

I've seen welders making $160k/year in Texas (oil), BUT the caveat is that its 1 welder whereas 20 years ago that 1 guy had 3 coworkers.

Plus that is likely a shitload of hours per week. Definitely not sustainable long term.

How do the health risks compare to sitting at a desk all day?

OTOH, I've been trying to get a bathroom remodel done for about 18 months at this point. (Hopefully about to start.) It's 1.) Not cheap and 2.) Isn't about to be done by a robot.

Not for everyone obviously and it's not big pay but I know what I pay contractors and it's nowhere near minimum wage.

But you could have gotten it done much faster by paying more...

They aren't good jobs. The average salary for plumbers is around $50-55k or so, right around the median for the US. Ok, but certainly not good. For roofers and mechanics, you're significantly below the median around $35k, basically in poverty especially if you have a family. I don't think encouraging people away from education is the problem when salaries are this low (poverty levels).

Here is the thing: A lot of jobs after college are bad jobs if you go by income only. The average teacher's salary is around 40-45k, beginners make much less. Preschool teacher with degree? Barely over minimum wage if you are lucky. Sure, you get summers off, but you also don't have a paycheck during that time.

Business degree? You might be a retail store manager because that is what you found that you actually have experience in... because you worked retail through school.

It is bad all around.

The median you quoted is for a household (usually more than one person). 55k is well above the median individual income.

not to split hairs, but that's median household income... usually made of 2 incomes these days.

plumbers, electricians, and plenty of other blue collar vocations do pretty well imo.

Hah, i bet its way higher. Anyone that owns their own business like that is probably fudging their income numbers and writing off as much as they can. I wouldn't be surprised if the income was 2-20x higher for established self employed people.

The owners are a minor percentage of the workers in these fields and therefore what they make is irrelevant.

35K is def not poverty. I managed to get by in Manhattan on less...

pray tell how you managed to do that

Most of these jobs are not salaried and can have significant opportunity for overtime at time and a half or more.

> And over the next 20 - 30 years they're the ones that aren't going to be automated

Not true. Look at any construction site and labor-saving innovations abound. Plumbing comes in new materials like PEX, which takes less labor to install. Large parts of houses are fabricated off-site and shipped in on trucks. No job is immune from automation and increased efficiency.

The problem with the jobs you're listing is that they are tied to the individual's physical health and capability. A 50 year old guy can sit at a desk and work, but many 50 year olds don't want to go fixing roofs. Sure they can run a business and hire other plumbers/roofers, but then they are doing desk job again.

Your anecdotes are interesting but the data shows that the college wage premium is as high as it has ever been.

Or how about software engineer?

You can absolutely get a job as a web developer without a degree. I know many who have done so.

To me, the issue started when college became about securing a career over expanding / exploring intellectual horizons.

The result of this transition incentivizes the wrong output: instead of kids coming out of college able to freely think for themselves, now they come out begging for direction.

> The grand irony in all of this is that the people who did go on to become plumbers, electricians, mechanics, roofers, HVAC specialists, etc, are all the ones that are currently in huge demand.

Huge demand? Not in the US. Trades salary growth has been flat.

The demand for many of those trades largely follows the rises and falls of the housing market. I grew up with family in that industry and have seen both extremes of it. Right now, in this area, there is more demand than labor. Several years ago the opposite was true.

The other irony is that when college is paid for by taxes of the entire society, both those who went to college and those who didn't, the ones who didn't go to college end up paying for those who did. Net, it's literally a transfer from the non-college educated people to the college-educated people. Absolutely insane.

Even if they were not able to get a college education, their kids might. Also people who benefit the most for college will pay more. The productivity that society gains as a whole will offset the costs.

Not only that, but "tradespeople" start earning right after high school. That four-five year head start is more meaningful than people realize. You could be making a down payment on owning your residence while your friends are still undergrads. Nothing wins in investing like being early.

That depends on whether or not your trade requires some sort of qualifacation or not and whether your high school or surrounding area offers free courses in it. (Occasionally folks will pay to train you, if you meet minimum qualifacations, but you also must work for them for some years).

Otherwise, you wind up going to school a couple more years. You are still likely going to start work 2-3 years sooner than someone going for a 4 year degree.

Technically, some really need to go through an apprenticeship. Plumbers take a while. Most also need to go to a trade school. Your point about a head start stands though. Plus its very hard to ship those jobs overseas.

Conversely, leverage allows you to make more money, and if you can use education as leverage to put you into a six-figure-a-year career trajectory, that's going to pay off.

IMO, a large chunk of this would be resolved if federal loans where limited based on tuition not just need. If a school charges more than ~20k/year then students can't apply for federal loans and private loans become dischargeable.

Note: Some schools still charage less than 10k/year. http://www.usnews.com/education/best-colleges/the-short-list...

Instead, schools have a huge incentive to raise tuition endlessly and family's are stuck playing a zero sum reputation game.

This. You're also just looking at private schools there; whereas students could attend public universities in their state and realize benefits that their (or their parents) tax dollars have defrayed the cost of tuition. The amount of money that amounts to poor spending on "needing" to live on campus, "needing to go to your top pick school", etc. is a little astounding. Also astounding is the ability to finance things like living expenses / room & board, which are often a huge component of total cost

I like this idea. FDIC-style "look, we'll protect a reasonable amount" approach.

Every state school in NJ is pushing close to 20k a year now with fees. Let alone room and board and you're getting close to 30k.

Who sets those limits and how are they enforced over time? What if colleges find other ways to charge you money (accomodation, usage fees for equipment etc).

It'll be a never-ending cat and mouse game deciding those limits. I'd say artificially skewing the market is unsustainable and shouldn't be done.

If this happens, do I get benefits on the debt I've already paid off? I would be pretty pissed if I didn't. I worked my ass off to pay my loans.

> If this happens, do I get benefits on the debt I've already paid off? I would be pretty pissed if I didn't. I worked my ass off to pay my loans.

That's not going to happen because it's politically easier to continue to subsidize failure than to draw the line on this bullshit and reward sensible hard working people like you.

I always loved this quote,

“The only time you look in your neighbor's bowl is to make sure that they have enough. You don't look in your neighbor's bowl to see if you have as much as them.”

I'm almost done paying off my student loans, and because of that, I don't want anyone else to have to endure paying for student loans, even if I myself don't get the benefit.

No one's stopping you from cutting them a check. Ideally you would not hold a gun to my head and demand I do the same.

You completely missed the point. Further, this "holding a gun to your head" thing is completely asinine.

I understand that feeling... I'm nearing the end of my loans and dropped $3k on one of them yesterday. I would have rather had a vacation if it's just going to vanish!

...but don't get salty because the debt won't vanish. I have no doubt that if an education loan is forgiven, it WILL affect that persons credit rating. Much like when a debt is forgiven/charged-off. Also, charge-offs are typically treated as a form of taxable income... so these people will pay one way or the other, and likely take a long-time credit rating hit.

A vacation, or buying a house, or just about any other use of the money would also benefit the economy more than paying it back into loan accounts at some bank or gov't ledger.

> Also, charge-offs are typically treated as a form of taxable income

That's not much consolation. I wouldn't be happy if the government decided to simply pay people for making poor financial decisions, even if we recovered x% of those payments through taxes.

I'd still be paying for it with my massively higher taxes.

Just get the government out of the student loan industry. Let the market signal which degrees are valuable and allow students to discharge through bankruptcy (but ruin their credit).

>"I wouldn't be happy if the government decided to simply pay people for making poor financial decisions"

Government already does that in a myriad of ways, some more morally accepted than others. It's almost part of the base definition of what we expect the government to do, if you really think about it. Paying for the poor that made bad life decisions and lost their job, the sick that didn't save for medical expenditure, the parent that had one-too-many kids and can't pay for their food/schooling, etc.

I would argue they are all very similar, buffering and protecting those that are incapable of providing for themselves, either by inability or conscious inaction/abuse. It's just that some people think this should be done by private efforts, instead of by government which uses it's power to force people to obey and pay.

And will the forgiveness be tax free or will the IRS come after students for income taxes?

I assume if forgiveness ever occurred, it would need to be respected as income for the debtor(so then IRS gets involved) simply to prevent fraud. Much in the same way that charge-offs are currently taxable income(1099-C).

There's simply no way that you will want to forgive the student debt... so pay them off if you can! The punishments of 'forgiveness' simply have to outweigh the benefits or the system will be gamed until broken.

I refuse to not be salty if somebody else has something I don't have.

Just finished paying my student loans this month. 8 years at $500/month. Yeah, I overpaid to get rid of them faster, but if I could have gotten a reduction in year 2016+X I would have paid the minimum.

I understand the sentiment, but "I had to do <thing that sucks>, therefore everybody has to do <thing that sucks>" isn't a great argument either, especially when it leads to a stagnant economy due to nearly an entire generation with no funds to spend. I'm not advocating for any particular solution, but don't react so quickly that you cut off your nose to spite your face.

I'm confused. We will transfer wealth from people without degrees to (typically much wealthier) people with degrees. How does this prevent economic stagnation? Could you explain the mechanics in detail?

The problem is that the rest of us have to pay for this forgiveness.

"I had to do <thing that sucks>, therefore everybody has to do <thing that sucks>" isn't a great argument, but "you had to do <think that sucks>, but I don't want to so I'm going to make you do <other thing that sucks> so I don't have to" is even worse. It's like forcing someone who just finally managed to rebuild their house after it burned down to share their house with another fire victim for free.

I came here to say something similar. Yes, you can be angry, but sometimes it's better (as an economy and as a country) to just let it go.

The selfish thinking that people shouldn't get anything for "free" (ie, shifting education burden from taxes to the student) and everyone should be accountable for every dollar is how we got here.

If I just finished paying off my student loans, and debt forgiveness happened, I would be annoyed and a bit jealous. But also happy that those who had their debt forgiven now have more money to do stuff and contribute to the economy. I would truly be happy for them. Why wouldn't I?

(Note: I don't believe debt forgiveness will ever happen)

It's a great argument, just not phrased correctly. It's more like "I had to work hard and make difficult decisions to succeed which included choosing a field that is guaranteed to pay and being obligated to pay back the money I borrowed. Therefore, everybody should have to do the same. If not, then I at least want to be treated fairly."

> Therefore, everybody should have to do the same.

Why, though? Depending on how the idea of debt relief shakes out, this might be one of those "sometimes life is unfair" moments that you just have to accept and move on as part of living in a society. The alternative is a massive contraction in buying power, which could certainly directly impact your livelihood. Is the spite worth that?

My wife and I worked and sacrificed to pay our student loans off. Struggle builds character, appreciation, and gratitude.

> Struggle builds character, appreciation, and gratitude.

https://en.wikipedia.org/wiki/Survivorship_bias

Struggle can also cause bankruptcy, violence, and misery.

Same here! However, there is a line to draw on how much debt to put on someone. I know people who have tuition payments cutting into their living wages, affecting their ability to have even the basic necessities. There is nothing good about this unnecessary suffering, having to worry if you will still be able to afford a meal or a roof over your head.

Paying off your debt early also builds really good financial habits which will help in the future. You learn to live below your means, make a budget, etc

It is possible to build character without having it forced upon you.

Its nice that you earned your black-belt in self-discipline, but it doesn't benefit society much for you to become a miser to pay for a piece of paper. We are in a consumption economy...we need you spending money on things that create jobs for others, like homes and cars.

I used to feel the same way, but just because our generation got fucked, there's no reason to take it out on the next one.

Are you familiar with the phrase "from each according to his ability"?

If it is a means-tested program, say a more expansive version of IBR where you have to pay an income-adjusted amount for a certain number of years to have the loan forgiven, I would be okay with that. If it were a straight up give away to everyone with loans regardless of whether they could afford to pay for it, I would be angry.

I absolutely understand the sentiment, but if there is legislation to forgive student loans it will not have actually hurt you. In other words, such anger at the forgiveness of student loans really just comes down to envy - namely that other people received a benefit you didn't.

> that other people received a benefit you didn't

Actually, probably not. That's part of it, but if student loan debts are forgiven, the banks aren't going to eat all of that cost - the government is going to step in and help recoup some of that cost. So not only did I have to pay for my own college education, I'll be taxed to help pay for thousands of others, as well.

> forgive student loans it will not have actually hurt you

Of course it will. That's money which the government loses.

I pay tens of thousands in taxes every year.

You'd get indirect benefits from the debt unloading. Things like economic stimulus from increased spending power, likely increased home values by bringing more buyers (but this is good debt! /s). That last point is probably controversial depending on if you own or rent, it would be a real killer if that student debt unloading was just converted into a different kind of debt that hit a diff. proportion of the population.

Many generations before now either had access to very low or free tuitions from public universities, or fairly low tuitions (relative to future earnings) for private schools. Society subsidized those costs because it was an excellent investment on future economic growth.

Somehow we got twisted into this track of thought that everything must be individually accounted, and student became individually loaded with the debt of their education. And because students as a group are in a poor bargaining position for tuitions - the inflation of education costs skyrocketed. I think they are the only life cost that gives healthcare a run for it's money in it's ability to exceed (by multiples) both the growth in the economy, let alone the growth in personal incomes. This cannot continue.

Plans to give student aid to income below a certain threshold will only serve to further cause tuition inflation. It is a case where individual allocation of cost/debts is much less efficient and harmful to our economy than social allocation of the cost. I think we need to go back to funding public universities out of direct state and federal budgets so that public institutions can offer low or no tuitions. This way, gov't organizations with the budget leverage, with much better visibility and oversight can keep costs down at public universities. Low public university costs will also help cap the excesses of private tuitions via market competition.

Unwinding the current mess of student debt is also a huge issue, but should be undertaken too (but I'll leave that to some other time...)

It really requires a rethinking of the need for college, how college should work, and how it should be paid for.

Most undergraduates have no real need to obtain a gold-plated degree. Undergraduate education in nearly all fields is well-understood and can be delivered adequately at low cost. This is why foreign countries that aren't wealthy still produce excellent undergrads. Only in the US do we believe you really can't get educated unless you went to an expensive and/or elite school.

Am I the only one that thinks this is actually fairly simple? Change the rules to allow the loans to be discharged by standard bankruptcy and limit the percentage of federal backing.

All of the sudden the banks will actually care about doing due diligence and the likelihood of being paid back, instead of throwing money at everyone knowing they have a federal taxpayer backstop.

You want a loan for $60k to major in electrical engineering at NC State? Approved. You want us to loan you $225k to major in Sociology at Sarah Lawrence University? Denied.

-- note - not to disparage anyone who went to Sarah Lawrence University. Chosen purely because it was listed as the most expensive private school

Yup and another benefit is it will not set as many of our youth into debt just when they are enjoying freedom for the first time in their life.

It's such a weight off of the shoulders to have paid my wife and my student loans off a few months ago. Instead of the 20 or 30yr plan we put every extra dollar towards it and paid it off in 3.5 years. It feels fantastic! It's bizarre that student debt has become the norm and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major.

> It's bizarre that student debt has become the norm and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major.

Not so bizarre when you consider that student loans are very difficult to get discharged via bankruptcy. The loan issuers don't need to worry so much about whether you'll be able to pay it back or not, because it's more a question of "when" than "if".

That's the problem. You add bankruptcy back in and the student loan problem will disappear. Banks will start assessing each person's ability to pay back loans before giving them a lifetime burden of debt.

Fix bankruptcy laws, fix the student loan problem.

> The loan issuers don't need to worry so much about whether you'll be able to pay it back or not, because it's more a question of "when" than "if".

That wouldn't be true even with the limitations on discharge in bankruptcy, except that servicers have been actively steering people with trouble paying into deferments rather than the various income-based-and-discharged-in-N-years plans (where N is generally 20 or 25.)

Yeah that's a very good point. Interesting how they aren't easily discharged via bankruptcy. I may have to do some research on how exactly that got put in place and who was behind it...

I thought I could pay mine off in 2 or 3 years of graduating, but ended up taking about 5. I paid my car off about a month ago, so I have zero loans!

I've been entertaining the idea of buying a house in my neighborhood. This town never had real estate inflation and bubble, because of rust belt economics. $150,000 should buy a nice place.

>It's bizarre that student debt has become the norm

Our generation has no solidarity. We should just strike or protest and demand lower tuition. Or just not pay back the loans en-masse.

How come with the internet and twitter etc, we can't organize whereas in the 60s and 70s they could get their act together?

>and students who have potentially low-earning majors such as History are still given similar amounts of money from banks as a CS major

The corporations would love to turn universities into training grounds for the skills they need. Yet another example of them pushing an externality back onto the rest of us again.

Education is not the same as training. Education is more than training and expands your mind.

Training just teaches you a set of job skills.

> potentially low-earning majors such as History

FYI, Lloyd Blankfein was a History major, amongst other Billionaires: https://en.wikipedia.org/wiki/Lloyd_Blankfein

It's what you do with the degree.

Comparatively, teaching is a low-earning major on average, as are many that wind up in a government or public service job. Teaching, btw, is one of the options with a history degree. We need public defenders (and the funds to properly pay them), but that isn't generally a get-rich job either. Especially in a small county or cheap area. And we need these sorts of jobs.

It seems mighty unfair to limit the money simply because a degree doesn't earn so much. I think such a system would lead to sub-par schools for the 'lesser' degrees and better ones for those with better earning potential.

Having deliberately attended the University of Minnesota - Twin Cities rather than an expensive private college, and having paid for it with a combination of savings, work, and some loans which I paid off immediately after graduating, I find the idea of loan relief morally reprehensible.

Some ideas to improve the "situation on the ground":

- reduce the demand for college education

- reduce the cost of attending college by providing better material support for students in the form of affordable room and board.

- reduce the cost of attending college by providing better public funding (by an order of magnitude) for public universities, state schools, and community colleges for students of proven ability (3rd/4th year students).

- fail students who are wasting their money more quickly and aggressively.

- make it easier to attend college part-time while working or while raising kids (the idea of intensive four-year study with "Summer Breaks" is absurd in the modern non-agrarian economy)

- publish clear metrics on loan-repayment/income prospects after achieving a 4-year degree of <type> from <institution> with <gpa/perf metrics/etc> and use these to gate loans (it is probably rational to take out loans to get a philosophy degree from Harvard, it is probably not rational to take out loans to get a philosophy degree from a random state school in Minnesota.

- regulate predatory loan-lending even more aggressively.

- offer insurance as part of loans to allow students to hedge against catastrophic life/economic problems.

If you are a dead average intellect with dead average work-ethic and ambitions, I see absolutely no reason to support your post-secondary education beyond a year or so. That's throwing damp logs on a dead fire.

If you're a dead average intellect with dead average work-ethic and ambitions and you take out tens of thousands of dollars in loans gambling on a future that doesn't exist, I see no reason to treat you any differently than someone who gambles and loses in the market.

I also went to the University of Minnesota...same story. That being said - do you remember those ads on daytime TV for ITT Technical Institute? Well it turns out that they shut that school down last month, for basically being a fraud school. The people who went to that school still owe federal debt. So, it's more complicated than that. Also, by saying, "dead average intellect and dead average work ethic," I think you're building a construct, which doesn't really exist. There are all sorts of reasons why people may have chosen a place like ITTTI - desperation, a family to support, lack of a proper background information on what education can do, lack of information, etc. You and I are lucky. Also, if you were presumably white, let's keep in mind that there is a massive educational gap in the Twin Cities...the largest in the nation. So we can get on our moral John Lockeian high horse about how responsible we are, talk about property rights, etc, but there have been many injustices perpetrated in all sorts of directions in the past, and we have a duty as members of society to improve that society, by whatever means make the most sense.

Source: https://en.wikipedia.org/wiki/ITT_Technical_Institute

I think you're absolutely right. I was trying to craft my suggestions in such a way that we discourage fraudulent lending and provide (publicly, not privately) insurance against not being able to pay future education debts because of circumstances outside our control.

I want to increase the odds that someone who is willing and able can work their way to where they want to be, and decrease the odds that fortune dictates who wins and who loses.

(I vehemently support leveling the funding playing field for primary and secondary public schools in Minnesota and dramatically increasing funding for schools in poorer neighborhoods; also providing credits for child care, preschool, public transportation, and safer streets. What I object to is the idea that someone should go to Macalester College, get a degree in Psychology with a C+ average, then complain because they aren't handed a job with a wage high enough to cover $100k in student loans).

The only recent grads (within 5 years) with student debt in my circles who could afford and have bought a house recently are:

1. Doctor & Finance couple with combined income $400,000+/year 2. Pharmacist & Finance couple with combined income $200,000+/year 3. Science Research & Quant(finance) couple with combined income $300,000+/year

Interestingly - all have finance or medical field/science exposure..

The rest are renting forever paying of debt with no plans to buy soon (we are in hot real estate area).

I dont see who will support real estate prices going forward.

While I agree with your sentiment in general, do you really think it's normal to be in a house 5 years after graduating? That's still "first steps of my career" phase. Completely unheard of even when I was growing up where I'm from - you would have been seen as doing very well to own a home in your mid/late-20's.

Location, Location, Location:

$124/mo, 840 sq. ft: http://www.zillow.com/homedetails/1204-Via-Seville-Cathedral...

$93/mo, 1190 sq. ft: http://www.zillow.com/homedetails/617-NW-8th-Ave-UNIT-11-Mil...

$70/mo, 832 sq. ft: http://www.zillow.com/homedetails/1745-35th-St-NW-Winter-Hav...

$72/mo: http://www.zillow.com/homedetails/8528-Highland-Ave-Kansas-C...

$92/mo, 2302 sq. ft.:http://www.zillow.com/homedetails/122-Cheyenne-Rd-Shohola-PA...

> I dont see who will support real estate prices going forward.

China.

You walked uphill through snow to get to your current position, with grit and determination and those freeloaders, who majored in THEATER or LITERATURE, spending their college days socializing while you studied for difficult engineering exams shouldn't be allowed to escape without paying for their crime of living in a country with a broken higher education system.

Eerily similar narrative to any other welfare debate in the US.

How about colleges and universities stop price gauging the population? Or, eliminate student loans, so the population will not be able to afford their ridiculous rates and force the cost down.

>eliminate student loans

This will do nothing more than favor the rich and further suppress the poor.

I'd like to see something similar to the risk retention rule that was supposed to be put in place for mortgages by Dodd-Frank.* Colleges should only get 80 or 90 cents on the dollar from student loans and have to wait for the rest until the loans are repaid (if at all). Perhaps a sliding scale could be used depending on the amount borrowed, with more expensive schools bearing more of the risk.

* I say supposed to be because the rule was swallowed by an exception during the regulatory process and now only plays a minor role.

The typical new graduate owes less than $40,000.

The great majority of student debt holders owe less than $30,000.

I'd like to see more direct funding for schools and a shift of federal support to competitive grants, but those aren't huge numbers when you look at a degree bringing in hundreds of thousands of extra dollars over a career.

Grants aren't as egalitarian as giving anyone who wants it a loan, but they can be expected to distort the market less (because schools have to compete for people who don't get them).

They may not seem that large, but I suspect that compounding interest effects and the fact that the debt is there very early in peoples lifetimes make them very heavily weighted in terms of the effects on lives and economies.

If there is going to be any "debt relief", it should be accomplished by taxing the schools & administrations that have immensely benefitted over the past 60 years from the massive subsidies granted to higher ed.

This just shows how incredibly stupid the right wing is in the US. They could be using this as a cudgel to punish their intellectual opponents in the universities (entirely justified, since their claims to be increasing the human capital of their students in an economically productive way were evidently false), and simultaneously break down a barrier used to exclude a large number of their constituents (non-college-educated whites) from white collar employment.

Instead it looks like they might be setting up to cut another check and further solidify the role of colleges as ideologically hostile gatekeepers to decent employment.

I'm not sure why it has to be forgiveness. They should be be able to file for bankruptcy just the same as if it was some other bad investment. All investments should come with risks and rewards and be "priced" appropriately.

This will have a drastic affect on the interest rate of student loans, but perhaps a turn towards normal will be good for us. As of right now the government gaurantees it 100% -- which is to say YOU guarantee it!

Why is shelling out six figures to go to college even a thing? Any of the knowledge obtainable through a college course is available free on the internet. Is it having the accountability of grades and adult supervision? 60k/yr/student seems like a lot of mark up for repackaging knowledge which is free in a format consumable by the average high school grad. This this is a market waiting to get disrupted.

Leaving aside whether degrees add value or not, the perception is that they do and it absolves hiring managers some responsibility.

If you work for a big company and you have an ivy league grad and a guy from a conference you met who seems promising do you:

a) hire the ivy guy and if he is crap mumble about youth today b) hire the random guy who screws up and everyone blames you ?

Both get hired at low wages as starters, you might save a bit on the random person but not that much. Plus if he is good he'll want a rise.

Large corporations are about sitting nice and still and not messing up.

I'm not sure it's the market, it's the consumers of the product in our world where managing perception in large companies which often have monopolies is more important that cranking stuff out. Not always, but often.

I wish we could switch to a system like Australia. Graduates take on no debt but have to pay a few extra percentage points of taxes after.

I'm reminded of the U of C's Aims of Education Address when this discussion comes up.

EG: https://aims.uchicago.edu/node/83

I tend to think that many things that are now in college degree programs are actually things that should be in trade programs - we've turned everything into a degree, and in the process, stopped realizing what the value of a degree is and/or what the purpose of a theory driven/liberal arts education is.

(TL:DR if you don't end up reading the link - to think, to create the ability to teach yourself, to encounter new ideas and figure out which ones are hot air and which ones are not. To learn how to create good new ideas for yourself! To become a better human being and citizen in order to better participate in this world)

If we separated out the trade school aspect, well, it becomes very hard to value an education in the traditional degree/liberal arts sense - and it becomes easier to tell what's the value of that immediate trade school diploma by market forces. In that, then the government could apply a limit on loans to what is very knowable (market forces) and apply some other metric because of the public good gained by aiming towards education in general

Was there in person for that address (was that 10 years ago...). In my view if you go to college today and don't get a real liberal education (distribution requirements!) then you have waisted your time and probably your money.

With a year left on my massive loan, I can not wait. I can't imagine students these days coming out, and not having the luxury of being picked up right out of school to a well paying job. And god forbid they chose a less "desirable" concentration.

Thanks to the new health care laws, states must (or will be) spending more money on Medicaid which takes money away from public higher education. As it is, the boomer generation is funding a far lower proportion of the state public universities than their parents' generation did for them, which is really unfair.

It is because of increased Medicaid costs and also because boomers aren't financing the proportion of state higher education that their parents did that many of today's young have higher student debt than it the past.

Doctors don't haven't to incur debt in medical school if they spend four years in the military as doctors.

That first point i'm not sure if it is true or not: My understanding was that the federal government was going to pay most of the money. Besides, if we as voters thought a little more and demanded better funding for schools - and say, cutting money spent on unwanted or unneeded military equipment - we could get it.

Your option for doctors to not incur medical debt is very hopeful. First, I doubt the military has enough positions for all the doctors to fill, and I doubt all doctors would be fit enough to qualify for military service. On top of that, that is 4-6 years longer before they can actually practice.

There should be a way that is much better than sending potential doctors and surgeons off to war. For instance, forgive loans to folks that work in general family practice for 7 or 8 years, less if they move and practice in an area that is in a high demand (poverty stricken area) - with the disclaimer that they must take all forms of government backed insurance.

Since when did HN turn into an objectivist hellhole? It's like Ayn Rand herself is trying to convince me to harm others for my own benefit.

Ah yes, the old "let's attempt to solve a problem by introducing more of what caused the problem in the first place" solution.

Armchair marxist opinion: forgive the students debt, make the administrators pay more taxes.

In all seriousness, though, there is a real sense in which students who go to college are being scammed, in this sense I pity them. Their money isn't going to better professors, who are still paid a pittance for a lifetime of devotion to their field, even in the sciences. It's going to the administrators, whose motives are not actually education, but gaming the already broken system of academia.

In my eyes, this makes the case for socialized higher-ed even stronger. A system which incurs financial ills so great is , by definition, a market failure, one so vast that it begs the question why it is a market in the first place. It'd be much more prudent to pay for students educations if they show potential for success in the first place, rather than financing many of my college peers who now work in coffee shops as compensation for their $200k Anthropology degree. No system built on craftily selling economically useless degrees as an "investment in one's future" will actually provide any benefit to society.

So what's to be done? First, Provide students with scholarships, or the like, to schools which limit administrative expenditures or those whose administrative expenses pale in comparison to the money they spend on qualified professors. Second, disqualify schools which do not produce a threshold percentage of net-gain employees - if a school has a track record of pumping out angsty coffee shop Lit majors, it has no business in taking taxpayer dollars. Last, provide outlets for students who aren't destined for a career in the sciences. Maybe trade schools that offer classes in academics alongside chances to become electricians or plumbers, both careers face workforce due to people's obsession with reading hundred-year-old books instead of doing something meaningful with their time.

Rant complete

Who should pay for college?

Should it be the individual receiving the education (either at present, or in the future in the form of loans), or other people? Should people who don't go to college be forced to pay for education of those who do?

Should we further tell students not to care what price colleges charge them? If we forgive debt, we're telling students to go to a school regardless of the costs, and telling schools to charge whatever they want.

We're then forcing non-college-educated plumbers to pay (through the tax system) for the engineers college education.

This seems like a terrible idea.

I also see a huge problem with lumping all education together. There are some colleges, degrees and people where college can be considered a wise investment. That is, the expected value of the degree is more than the cost. There are other times when it appears college is a consumption expense, like just buying a four year vacation or a luxury car.

When someone graduates college with the same productive capacity they had before college, but now with debt, that's sad to me. Working at $10 an hour in a coffee shop isn't that bad. Working at $10 an hour with $50k in debt is very bad. Many times people were just 18 year olds who were handed a blank check (loan) for college, and didn't know better. But there was no checks or balances on this ignorant 18 year old, as the lenders dont care that the student was not increasing their productive capacity.

What we need is a system with no lender guarantees, with potential for percent of income repayment (earning equity), and have it be unsecured like other forms of debt. This will make lenders function properly, and only give loans to those who it believes are improving their human potential at college- and for whom college isn't the equivalent as buying a $100k luxury car.

There are a few things that the government could do to help, without blanket loan forgiveness:

1. Allow people to pay off their loans with pre-tax dollars, just like 401k investments.

2. Cap interest rates. The high rates are a big problem for people with large balances. The interest rates are a little lower now than the used to be -- 6.8% was standard for Federal loans for many years, and private loans are even higher.

3. Limit the amount that can be borrowed in the first place. Colleges have been raising tuition because they know students will be able to get the money. Apparently there are already limits, but I know people with over $100k in debt for a bachelor's degree, so clearly the limits aren't low enough. Limit what students will borrow, and you limit what they can pay -- tuition increases will become a lot harder to justify.

4. Make it easier to discharge loans in bankruptcy. This will also reduce lending, which is actually a good thing.

America's student loan policy for the last 20 years: Reward bad decisions, punish hard work and responsibility.

America's general policy for the last 80 years on any particular issue you can name.

Society has an over emphasis on going to college. So much education is available for free in the Internet age.

s/college/youtube/g

Also, bring back the apprenticeships. Why not let someone learn for free or even get paid a small amount? It's so much better than them going into debt.

College is such a racket.

My call is that we will have a student debt relief fund when enough government folks get scared (within 5 years my guess). So basically the printing press will turn on and we will bail out students. Watch out for all the controversy that's going to come with this bail out.

The two proposals they explicitly call out, allowing employers to subsidize the debt, and allowing farmers to write off their debts, are the exact kind of special carve-outs that caused the damn problem in the first place (the genesis being the non-dischargability & government guarantee of education debts, which was an enormous give-away to the higher ed sector).

This is eerily reminiscent of the pre-revolution French or late Soviet Union trying to keep their spinning plates of state obligations, onerous taxes, and corrupt subsidies aloft.

I'm going to be so pissed off if a whole generation of students gets their students loans forgiven two decades after I paid mine off.

If it makes you feel any better, they will be the generation that will get to pick up the tab for climate change caused by yours (And the one before it.)

Not to mention that college was a lot more affordable two decades ago...

So, let's see, if you were a black person in 1863 who'd been enslaved but bought your freedom prior to the Emacipation Proclamation, you'd resent the Emancipation Proclamation since from then on other wouldn't have to buy their freedom?

Then instead of feeling bad that others got a benefit you didn't, perhaps be happy your college education was much, much less expensive than those that came after you.

I got a 2-year degree from a community college and then went to a cheaper university for CS. I would recommend it, especially if your grades are not the best or you don't have a ton of money.

My wife, on the other hand, is in another boat. She is studying vet med and has a pile of debt, and will likely be paying off her loans for most of her career.

This should be framed as call to increase tax on everyone for student debt relief. I wonder if people will be happy then.

They should probably make general core classes free, but make students pay for anything specialized and solely related to their major. This would strike a balance between having an educated population, and having education focus on subjects that are in-demand and beneficial to society.

The solution seems simple: a few years of public service (infrastructure repair, maintaining parks, teaching in inner-city schools, military, etc.) in exchange for loan forgiveness.

Our taxes are the dues we pay to live in a civil society, but civic responsibility doesn't end there.

College is just all sorts of disgusting in the US right now. I support relief, but I'm sure that we're going to have to see a massive crash in the system before anything happens.

I managed to go to a small public university after the tuition hike but before the Great Fees Gouging. I'd probably have escaped with $5,000 less in debt if I had started with my state's (Georgia's Hope) merit based scholarship instead of having to build up 10 semester hours totally on Federal UnSubsidized Loans the first year.

At that point, used Ebay books could run you well past $1,000 a semester. Hope only gave you a $150 for books. Hope also did not cover fees. Those started at about $800 every semester when I enrolled. My 4th year, they had hit well past $2,500 per semester. Included in that was $150 to build a new student recreation center that I would never use since it wasn't even being built yet.

The amount of hustle I had to do just to escape that school with minimal debt was insane. My overloaded schedule (because semester hours past 12 didn't increase your tuition or fees) meant I needed a job that let me do study or homework while working. So typical service jobs off-campus were out of the question. My year basically was applying for summer retail jobs, lying my face off during the interview that I was going to stay on past the summer, and then of course quitting. I'm basically black-listed from several retailers for quitting for this reason. Christmas was always easier because those jobs are naturally seasonal.

During school, I'd tutor various core classes under the table. At my university, this was considered quasi-against-the-rules. Tutors were supposed to go through the Student Support Center. They'd pay you hourly minimum wage and set you up with other students for free. Tutors who were students caught not going this route were usually sanctioned by the university and threatened with all sorts of administrative punishments.

Naturally, this was unacceptable to tutors, so we all snuck around advertising by word of mouth and meeting off campus. I mean, when I can easily pull $100 a session as the only person willing to try to cram Plato into your brain, why would I go through the SSC? Calculus was a bit harder because there was more competition, so that usually ran about $60 to start. Once I had kids getting their B's and telling their friends, I was able to pull $100. I ran a group rate for a Fraternity that was a flat $350 a month.

I lived off campus, because rent on a 3 bedroom, 2 bath was $950/month plus utilities. Speaking of hustle, keeping those bedrooms stocked with roommates was it's own drama. Kicking roommates who fell behind was even worse. The lease was in my name, because most places I went to rent a room were on 6 month leases and headed home every summer. I wanted something more permanent since I was staying in town year round.

All said, I managed to escape with just over $30,000 in debt. That's tuition, fees, and about $10,000 a year to supplement all my other income. I hit a job immediately and started burning it down as fast as possible. I landed a better job with nice, $10,000 yearly bonuses and finished murdering it.

This was right as the next big wave of inflation hit higher education. Now? I went back and poked some of my social circle in that town. Getting out without $60,000 in debt is basically impossible. If you live outside of a 10 mile radius of the campus, you are required to live in the dorms your Freshman year. Literally every course uses some sort of book with an online component. To access that component, you have to buy the book new to get a code. The university regularly charges current students fees to raise money for buildings that won't be built for 5 years. They recently charged a parking fee, and then made all lots on campus hourly paid parking. The lot that parking fee is for? It's about a 4 minute walk off campus. Good luck if your class is on the other side of the campus.

Part time students are actually charged the exact same fees, but are not allowed access to several benefits of of the campus. This is disguised as "discounts" for full time students at on campus food vendors, a higher co-pay for health services (physical and mental), and being barred from the free tutors (that no one can use because we won't work for them) Student Resource Center.

The problem isn't just the loans, it's a deep cultural problem in the administration of these universities. University presidents down to the department chairs are held to metrics that lead to perverse incentives. They must milk students of every dollar possible so they feed the enrollment machine. This leads to admitting students that probably shouldn't be admitted. This leads them to dumb down courses to graduate students who have no business having a degree to feed the graduation rate.

TL;DR: The US higher education system is abusive and terrible. Avoid at all costs.

A good read, and I agree on your points. Like you, I worked my way through undergrad (including a period in the national guard and active army), and escaped with only a few thousand in debt thanks to that. Masters and PhD were free, but that's not too unusual in my area (applied math).

I'm teaching one class as a part-time instructor now back at my old university (basically for beer money on top of the day job), and it's blowing my mind how much more flashy the campus is. And naturally, how ridiculously expensive it is after only 10 years. The focus on "student life" facilities strikes me as an odd set of priorities considering how long hiring and pay raise freezes for faculty seem to last.

The mandatory online book thing is pretty insidious. We're required to use it by the department, and I can see how there is a kernel of a good idea there. It basically helps you run gigantic course sections while grading all homework for you, but while simultaneously killing the secondary textbook market (which is pretty evil). Worse, they are clearly implemented by the lowest bidder and break every web standard you could imagine.

Basically, with increased class sizes and mandatory online content, every core course is slowly turning into a weird online hybrid class. I think this is decreasing the difference between a traditional education and a MOOC bit by bit, which is eventually going to give a lot of universities a bit of an identity and marketing crisis.

Pearson, Wiley, Mcgraw-Hill et. al. are the entities that I would most like to see disappear when the college bubble pops. Free open-source community maintained textbooks seem like the obvious way forward to my software developer brain.

On the bright side, I do enjoy actual lecturing. It's a lot more fun when you can do it with few or no stakes, since I don't have to rely on it for a living. I'm literally on the exact opposite of the spectrum from a tenured professor, but I weirdly feel like I have to same level of freedom.

I would prefer an approach(I am a US citizen) in which if we are going to call college loans financial aid than every student should upon graduation get a 10% more money but in small business grant form so that they can form a small business.

So did all this free-flowing money actually result in more college grads, or did it just allow the colleges to jack up their prices due to supply/demand? How supply constrained is the market?

I'm really torn on this for the same reason I'm torn on what to do with the people in jail for marijuana offenses:

On the one hand, yes what's happening is wrong. On the other hand, you CHOSE to go into debt knowing that you would have to repay it after you graduated. Just like people who CHOSE to deal marijuana KNEW it is illegal.

Disagreeing with the law doesn't entitle you to break it. Similarly, disagreeing with your loan terms doesn't entitle you to not pay them.

I CHOSE to go to a cheap state school to avoid this fiasco. Now others who didn't choose prudently get "relief"?

At one point do we just say, hey, you made shitty choices, sorry. Where is that line? I'm not saying we shouldn't do something, just offering up a different point of view.

You are correct. Disagreeing with the law obligates you to break it. Or at least it does according to Thoreau, Jefferson, Gandhi, ML King Jr, et al.

But the difference between a law and a promissory note is that the legislature didn't get your explicit approval before passing the law. The promissory note has your signature on it, under a promise that you made to pay a certain amount at a certain time in exchange for valuable consideration.

The note is a contract, and you can make any contract you like. But we do have rules for the types of contracts that the state will help to enforce. The parties to the contract have to be competent, and the contract can't force anyone to do anything illegal, and everybody has to understand what they are agreeing to. If it was, indeed, a "shitty choice" to take a loan that you couldn't reasonably pay back, there may be an argument there that the contract was lopsided and unconscionable from the start, and being forced to repay it on the original terms would be rewarding bad behavior on the part of the lender.

Defaulting on a loan because you now disagree with the terms is less ethical than dealing weed because you disagree with cannabis prohibition. You should really support clemency for nonviolent drug offenses before considering forgiveness of student loan debts. One is a matter of being forced to live under the (somewhat arbitrary and capricious) edicts of the powerful, and the other is about breaking promises after already realizing the benefits from making them.

You would seriously keep people in jail for marijuana charges after marijuana was legalized?

If a mistake is made, remedy the mistake. The government made a mistake in providing a glut of cheap money and prohibiting the borrowers from discharging the debt in bankruptcy. They need to fix their mistake by undoing that.

What you're proposing is like abolishing slavery, except for everyone who is currently a slave. "Sorry guys, there will be no NEW slaves, but you were slaves when it was legal, so, tough"

Allow student loans to be dischargeable in bankruptcy (don't forgive them all) and for all future public college & university students, let them go tuition-free...

How do all the foreign nationals afford it? In engineering, the majority are Asian paying full tuition.

Why doesn't competition bring down the prices of university degrees?

Can they compete with prestige?

This will impact every other aspect of our consumption economy...home sales and even car sales will be impacted as working adults have to dedicate more and more earning potential to paying off student loans...far in excess of any real economic value these degrees have provided.

I hate to get all "Zero Hedge", but this really does stink of some conspiracy to turn the middle class into lifelong renters instead of owners. The independence the middle class once had by achieving a debt-free existence and owning their own residence is being wiped out, and as a result, the middle class itself will effectively be destroyed.

It doesn't need a conspiracy - macroeconomic forces and demographics are more than enough. On a societal and generational scale, it's basically impossible to make things now and have them be valuable in the future. Roads crumble, machines break down, inventions become obsolete, and in general what you did thirty years ago is of no particular value today. The one small exception to this is deciding to pump oil out of the ground later instead of today.

So if saving real goods and services doesn't work, what does? You can make things now, and sell them to people for dollars or some equivalent promise of future goods and services. Then you can later redeem these for the stuff you need later.

Oh, and did I mention the generational stuff? Small family sizes and aging Baby Boomers means that there's huge pressure to turn today's resources into promises to give people stuff later. Hence, debt.

I'd actually prefer if a conspiracy was responsible for this. Economic forces make a lot more people work a lot harder to push back against changes. Price controls are a great case in point for this.

Home ownership is a bubble created first by VA and then FHA subsidized financing.

Mortgages were sort of unusual - housing was simpler then and people just paid cash. Sears sold home kits - of 12,000 pieces they said could be finished in 90 days by the owner - and while they offered financing, they topped out @ 60K in 2016 dollars. I don't think the financing was a "mortgage" per say, closer to consumer credit. People pay $60k for cars on four and five year notes.

Can't read the article without signing in or subscribing.

You can Google the headline of any WSJ article, click the result, and it'll let you through.

Next addition to HN: automatically inserting comments complaining about the paywall and then explaining how the "web" and google search tricks work when Wall Street Journal links are posted.

As you are paying off your loans remember the high price of your education helped pay for not just a fancy diploma but also:

Shiny new buildings, Hotel-like dorms, Professors making 400k, Administrators making 700k, a moped for every football player ...

Lol in which world do professors get paid 400k? Even at Berkeley CS mis career pay is roughly 150k. Administrators have ballooned.

Also our dorms are pretty shit.

Not to mention the adjuncts making $900 a month to do the actual teaching.

Not sure I can imagine a football player on a moped, though.

Situation: Government guarantees student loans and forbids issuing of loans based on likelihood they'll be bad back.

Problem: Schools charge max loan value. Students can't pay them back.

Solution: Give away free money.

All the government has to do is nothing. Just stop doing things. Stop being involved. The problem will fix itself overnight if they did literally nothing.

Le sigh.

The education market won't fix itself because students are not in a sufficiently secure bargaining position where they (collectively) can make an informed decision that corrects the market.

The comments,,, so,,, ignorant. As if, all in one place, all the reasons I needed to stop reading social commentary in HN comments. The ignorance, the abundance of it, the diversity of it, Trump would be unable to stop himself from jizzing over the cornucopia of bigotry. Trump bigotry jizz, everywhere.

As a college graduate, I'd be ok with student loan relief as long as it's funded by a tax on college graduates (and it has to be preceded by something preventing this occurring in the future, like making student loan debt dischargeable under certain circumstances)

Seems twisted to tax the rest of the country who decided not to or weren't able to participate in college in the first place

As someone who has never spent a dime on student loans, I would be happy to help bail out graduates with my tax dollars. What do I care? I've been paying for the trillions dollar war for 15 years now, so paying for something this would be a breath of fresh air.

You folks are getting screwed.

How about a tax on college endowments instead?

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