Imagine taking out 200k in loans for an uncertain future income.
Imagine that previous generations paid less for the same hiring opportunities.
Imagine that previous generations paid less for the same hiring opportunities.
Here's some stats: https://www.pewresearch.org/fact-tank/2019/08/13/facts-about...
Median bachelors degree debt: $25,000
Most of these people with huge debts are getting graduate degrees and they significantly skew the results when looking at the average, the median is far more insightful.
Would it be better if students didn't owe money after college? Yes. Is the student loan debt equivalent of a new midrange Toyota Camry a life-crushing burden? No, not really.
It might or might not be a life-crushing burden for individuals. But it's still an incredibly risky burden for a fragile economy.
And personally I don't find "And don't even think about a graduate degree unless you want to end up with >$40k" all that reassuring for those with postgrad talent and ambitions.
Professional schools (law, medicine, MBA, etc.) are different, but they also cost way more than $40k.
We're telling every kid in high school not born into means that they'll be destitute if they don't go to college.
The two are not comparable.
Spend some time near a military base. Brand new Mustangs galore. And when you ask the kids who bought them for some details you find out these Lance Corporals are paying like 19% interest. -_- A side-effect of schools not having classes like Home Economics anymore.
If that $25k is public loans, which it should be since that's well under the limit, the uncertainty should be mitigated by income based repayment plans. You'll never have to pay more than 10% of your disposable income (income over 1.5x the federal poverty level).
If anything I think the feeling of doom is caused by people constantly telling kids how bad student debt is without realizing that $25k in public loans and $200k in private loans are vastly different situations. Most younger people I know feel guilty about taking out $25k in loans to make hundreds of thousands more over their life time.
1. Future reward should be discounted, usually by a fairly large constant, because of interest and risk. Also, in many fields, most of those extra hundreds will come toward the end of a career. So, highly discounted.
2. I wonder if it's really a good idea to set up a society where banks that provide educational loans are able to capture huge percentages of future productivity. Seems like this would have all sorts of really negative outcomes. Some of those negative outcomes are already happening -- e.g., we effectively import 90+% of our scientific human capital because US students aren't willing to do phds.
We realize that allowing financiers to capture a big chunk of the rewards for K-12 ed is a bad idea. Why don't we realize that the same is true for college?
2. Public loans are over 90% of disbursements, and if you're only borrowing $25k you're definitely getting public loans. Public loans are made directly from the treasury. No banks involved.
Also most stem phds work as researchers and teachers--they generally aren't paying tuition.
Whether it's banks or other taxpayers or recipients of other entitlement programs is, I guess, a bit of a red herring wrt the point I was trying to make.
The question is about the knock-on effects of squeezing an entire generation for some chunk of what they're worth before they even enter the job market.
Again, I think the K-12 analogy is the best way of communicating the point I'm trying to make. Why don't we also charge high school students $10K @ 4% instead of paying for high school through taxes? Well, because that would be a huge net negative for society.
> Also most stem phds work as researchers and teachers--they generally aren't paying tuition.
I have a stem phd :). I was referring to the huge opportunity cost re: delayed earnings. US students opting out of phds because they have huge student debt to service is a real thing. This is true even when the phd would undoubtedly increase lifetime earnings (e.g., students from no-name schools turning down CMU/MIT/Berkeley/Standford phd acceptance letters for mid five figure salaries).
If it would undoubtedly increase life time earnings it's a stupid decision to turn it down because of undergrad student loans. That makes absolutely no sense.
>red herring
I was taking your post at face value. It lamented allowing financiers to capture value.
I'm also not against tax payer funded college. But the loan system we have in the US combined with income based repayment is not as bad as people think it is. Mostly people just don't understand income based repayment and public vs. private loans.
Also the cost of living around good schools is mostly increasing, at least if they are in an urban environment.
Or, they can live at home and go to a local community college for the first two years to take the general reqs, and finish up at that expensive 4 year school. A few of my friends did that and saved quite a lot.
Where does this come from? The major one had was game design, another was for IT.
I'm not implying anything. I know people from states who don't have great schools (or programs) available to them and choose to go out of state.
The whole instate/out of state system needs an overhaul as well. Some students want to resettle out of their state and intend to stay after getting their education. That's a net plus for the state, why make it so difficult for them to get an education here if they are academically qualified?
Yep, the public university program could definitely use work, no argument there. But I’m under the impression that most states have at least one serviceable university.
Reminder to periodically get away from technology and into nature. Take up a hobby like fishing, kayaking or whatever floats your boat. Too much outrage in the world today.
Man, I wish plumbing was automated. It's not going to happen any time soon though and plumbers will quote exorbitant prices for their work for quite some time.
If you look at plumbing businesses they tend to be getting bigger with lots of entry guys doing monkey work and not so many journeymen.
For more complex work, you get quoted wacky prices because there are few high skill plumbers, and the pain of dealing with homeowner issues is only worth it at a high margin.
My town though thinks only a person who has completed a three years apprenticeship is allowed to install a new electric outlet.
That's what I ended up doing after having a few unfortunate interactions with local handymen of various specializations. After going through the motions I understood how badly I was ripped off previously
Tradesman != Day laborers or low skill factory work.
Not trying to be rude but lets hold ourself to better evidence standard on HN.
All that said I 100% that we are dropping standards on physical activity and food quality.
People incur debts in all sorts of ways for school besides a formal student loan as well. Private loans are expensive and often avoided. Home equity loans are common, as are credit cards for both students and parents.
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Not even less in terms of money. Not even less money adjusted for inflation. Less in terms of time.
This website[0] lets you look at how much time of minimum wage work it would have taken to pay for a college degree in 1987 vs now, Because of vastly inflating tuition prices and relatively stagnant minimum wage, there's a very significant difference.
For the college that I went to, working part time at a minimum wage job not only would have paid for the entirety of tuition, it would have paid 156% of tuition. What I would have had left over would have been more than what my parents paid for the down payment of the house my family of 5 grew up in.
(warning: projection time)
Now I could barely pay half on a part time job, so I either start my adult life with absolutely crushing debt, hope that my parents set aside what would have been way more that the original tuition to cover what would have been left, kill myself trying to work full time and be a student full time, or stunt my career by a few years doing school part time and coming into the workforce years behind in a fairly ageist sector.
And all this for a piece of paper that was pounded into our head that we needed in order to have any kind of hope of getting into even a reasonably basic field.
If you can't tell, I can empathize with why college might give someone depression and anxiety. That's not to mention the general artificial competitiveness of getting into a "good" school, internships, and everything else to make sure that your resume is good enough to even find a job after college, lest you spend a year or two floating and having to explain an every growing gap in your resume. There was also the special bureaucratic that I ended up falling into (though those were just unfortunate circumstances).
I ended up getting the amazing job I have right now by almost pure luck. I know a lot of my classmates that aren't so lucky and have simply very little extra value (other than the worthy pursuit of knowledge and life experience) for the incredibly expensive piece of paper gathering dust in their closet.
[0]: https://www.marketwatch.com/graphics/college-debt-now-and-th...
Given all the generous payment, deferral, and forbearance plans, student loan debt is a better deal than other types of debt, and unlike consumer debt ,a college degree gains value in term of higher inflation adjusted wages.
Economists almost always hand-wave away the financial (let alone human) cost of forcing people can switch jobs or careers, then complain people are "irrational actors." I assume they do this because economists are actually bad at economics and so should find jobs more suited to their aptitudes.
Remember that previous examples of people rioting over poverty has included literally beheading the rich, en-masse, in a fundamental change of the nature of national governance.
Imagine that previous generations paid less for the same hiring opportunities.