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Comment by ashtonkem | Hacker News Reader

Part of the issue is that there is no mechanism to discourage universities from doing this. With the state underwriting student debt without limit, and universities effectively gatekeeping the path towards middle class employment, there is effectively no social or financial mechanism to push back on them.

Heck, there is a huge amount of social pressure pushing 18 year old kids to do this. They can’t possibly know better, but the adults encouraging such reckless behavior really should not be doing this.

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Right this is why I like the idea (that will never happen) of having schools being on the hook to backstop some % of federal loans on their degrees. May quickly change how many kids they allow to get $300K in debt for useless degrees.

How many kids are currently induced into that situation per year?

Many.

I can think of a dozen people who got schnookered into 3+2 business/mba programs. They graduated with $150k in the hole (this was in 2000) and ended up in retail banking or working for the government in some civil service job that required 15 accounting credits.

The classic example of this phenomenon is art majors, who are basically unemployable in a “job” outside of teaching, and those job openings are usually cyclical.

Many means many things. It could be a few hundred annually and someone might still call that "many."

I'm dubious that many art majors wind up $300k in debt. Undergrad doesn't cost that much.

If your parents are wealthy enough to not qualify for need based aid, but not enough to be rich, your $50k tuition + $30k NYC living situation adds up quick.

Ok, so we've got $320k debt for NYU grads. They're at around 6.5k students graduating each year. I don't know what portion have "useless" majors paid entirely by debt. Let's say half. That's probably one of the worst offenders, but let's imagine there are around 10 more schools in a similar situation. Ok, 30k students out of around 4 million students graduating college each year in the US ... that's a tad less than 1%.

More than I thought, and enough to call "many", but perhaps still an acceptable level.

There's programming bootcamps that basically take a fraction of the graduate's income for a few years instead of charging tuition. But since they optimize for quick employability, and not necessarily a more depth/breadth oriented curriculum as is common in traditional higher education, they have relatively superficial curriculums and thus they don't have the greatest of reputations among companies looking for brainpower rather than fad cookie cutters. Incentives are hard.

I worked for a company that hired a few from these. We weren't expecting them to know everything, but to have the drive, determination and perhaps a bit of natural skill in understanding programming.

They were easily the best junior developers we had hired, and all have done quite well in their careers.

Perhaps we just got lucky?

I've worked with one, hired right before I joined, I became lead 6 months later. He would ask for help and then when I gave him things to do or lookup he would just fail, and would subtly try and get others to do it for him. Total mooch. Multiple meetings and attempts about it. Couldn't fire him. Had him on a plan immediately after being lead. It was so bad at one point I had his desk moved to be next to mine and I had to tell him he can talk to me but stop interrupting other seniors. Eventually that became work in whatever you want so long as you don't need anyone. He sat there for 3 months and did nothing before he was finally payed off. Parent company transfered him to his own department essentially and then "restructured" it.

He had a mech engineer background, two years out of engineering school went to code camp.

Ceo was an idiot and payed him 90k starting which was a lot more than one of the other seniors who was an self taught English grad. He worked his ass of an was performing as a senior. Ceo stiffed him on the raise, he didn't know any better until he found out code campers salary and was gone in two weeks.

My director left shortly after and so did I. They haven't kept a lead for more than 6 months since, that was 3 years ago... Sorry I digress.

We’ve had some outstanding juniors hired from bootcamps, self motivation is powerful.

There's something to be said for the drive of someone who has had to strive to get where they are versus those who take it for granted.

Bear Stearns had a hiring mantra of not liking MBAs and instead hiring PSDs: "Poor, smart and had a deep desire to be rich" :-)

How did that work out for them?

What about loan companies, who definitely issued the loans, being on the hook? It's a lot simpler and it follows the chain of moral responsibility.

Note: All it takes is changing the law back to the way it was before - debts forgiven in an ordinary bankruptcy.

Student loans would evaporate. Full time students have no income or collateral, since the degree and knowledge and skills cant be taken away and sold to recover losses.

All this would do is ensure that higher education is utterly inaccessible for anyone not rich enough to pay cash.

Student loans would evaporate.

Good!

Let education be paid for by grants and the student own income, most grants. Plus force the universities to make their tuition cost effective.

Edit: However many years ago, public universities charged a fairly nominal tuition and survived for many doing that (financed by their respective US states). These public universities today have massively expanded their costs, primarily based on capital spending and follow the model of private universities.

Every student would with good cause declare bankruptcy immediately upon graduation, because they have debt and no assets and no job. I get where you're coming from, but this is not a workable solution.

It didn’t happen that way until many, many years after student loans started to be a thing.

Some enterprising law students figuring out they could get a loan to learn how to get out of the loan - and end up with a very valuable degree out of it that could not be repossessed - and by the time they needed good credit, it would be off their records.

It took awhile for word to get out, and then they banned getting out of student loans.

So blame the lawyer (students) I guess?

As someone with a relative currently going through bankruptcy, I can assure you that every student would not go through this process. It is incredibly difficult, intensive, and horrible process that takes years. It is not pleasant and I think that the idea that it would be utilized in this way by students is totally coming from a place of ignorance of what modern bankruptcy actually entails.

I totally understand that this is an unpleasant and long process, but I think you in turn come from a place of ignorance about what it means to live the best years of your life under hundreds of thousands of dollars of student debt. It eats at you, every time you spend money, for decades. It's soul-crushing.

I know people who would GLADLY throw away two years of their life in bankruptcy proceedings if it means they could be free of their crushing student debt.

The issue is that then you gatekeep higher education to the wealthy. What's more likely? Harvard reducing tuition because underprivileged kids aren't able to attend and can't get loans. Or Harvard keeping the same tuition and only admitting the wealthy people that are able to pay it (of which there are plenty).

Harvard reducing tuition because underprivileged kids aren't able to attend and can't get loans.

Harvard in particular is so wealthy it always charges tuition based on ability to pay. The poor who go to Harvard pay nothing. But, of course, the poor seldom go to Harvard because they aren't admitted.

Just saying. There are mid-range school where, all else being equal, your scenario might be true. But those school depend on those same lower income students and, well, I'd be in favor of them buckling and charging less.

Good thing there is a whole market of ranging degrees of education quality and price distributed a cross the US...

Also there are lots and lots of programs state and private to fund low income higher Ed. It is not a dichotomy.

Driving education policy based off anything Harvard is doing is a mistake. Pay attention to state schools only, that’s what policy should be tailored for.

Ivys are basically majority privileged kids already anyway. There was a stat that 1% of Americans go to Private High School but 40% of Ivy admittance is from Private High Schools. Add to that: the % who go to elite selective public HS in systems like NY, the large number of full-freight paying foreign students who represent their local elite and legacy admissions..

If underprivileged kids represent anything above about 5% at Ivy's I would be shocked. One stat from Boston Globe was that only 3% of Harvard comes from the US bottom 20% economically.

The Ivys do more to perpetuate the existing power dynamic than they do to raise anyone up. They are far too small and far too nepotistic to do otherwise.

If you want to raise the middle/bottom up, you need to look at the large state university systems which are orders of magnitude larger.

Here's an article in Fortune from 1957 arguing college is too cheap. Seems like it was really taken to heart: https://fortune.com/2013/05/05/colleges-are-too-cheap-fortun...

> massively expanded their costs

While I attended college, tuition costs almost doubled, but since haven't increased much per year. It wasn't massive increased spending, it was the state cutting off basically all finding. There's certainly fat to be cut, but the admin costs are mostly imposed on high.

What if we put a time limit on it? Say that student loans can be discharged in bankruptcy only 10 years after graduation?

Then few students would want to stay poor for ten years just to get rid of loans. But lenders would also have incentive to not back very poor career paths.

Then private loan terms would change to a max of 10 years, thereby increasing the monthly costs due to accelerated payback.

>> Student loans would evaporate.

Good. When I got my degree, almost nobody had student loans. The kids from lower middle income and below tried for scholarships, Pell grants, and even had jobs that slowed them down due to fewer hours available for school. Tuition was a tiny fraction of what it is today. Oh, and a couple years taking transferable courses at community college was a thing too.

If you want to help the poor, then do that but dont corrupt the system the way it has been the last 25 years. Now everyone is screwed.

Not sure I understand this sentiment.

I went to a good university, majored in history, took out 100k in debt totally for said degree, and have been working as a programmer ever since.

Why does my outcome feel so rare? I think 100k was a fair enough price. (25k per year including food and a room).

Because inflation adjusted it used to be a few grand a year. It’s not like college is 10x better than it was in the 1960s or 1970s.

If you got the same degree for 10k (what it used to cost inflation adjusted), why would that not be better for everyone?

Every professor or co-professor I know gets paid peanuts, gets poor support, and gets waaaay too many students. These folks are at Yale, Princeton, etc. It’s a scam and the money disappears into the machine with little accountability and a ton of hand waving.

How would it be possible for 4 years of education to cost just $10,000? The cost of my food for 4 years is higher than that alone.

My tuition was around $15,000 per year. You are more than welcome to investigate where that disappears to (presumably not all to staff salary), but requiring me to pay $100,000 upfront would have killed my career before it ever started-- unless of course you convince employers that a degree isn't needed.

It used to be possible (albeit required significant work, but it was not 20 hrs a day of work + school - more like 6-8) to literally work your way through a 4 year degree while working a minimum wage job - including using that job to rent a room or an apartment somewhere, or live in a dorm.

$15k for tuition alone (not counting books/materials/food, room and board) obviously makes that impossible.

It isn’t going into teaching staff. It goes into administrators salaries, bloated programs/overhead in sports, recruiting program costs, fees for housing, fees for food, and ever larger endowments that somehow never trickle down - among other things.

For what is being taught 99% of the time, the economies of scale make $2500/yr for tuition perfectly doable in a typical undergrad environment - if anyone wanted to. And it is done all the time in Europe, for instance.

If you’re taking out a loan to cover all your living costs + tuition than obviously that is going to be more expensive than tuition alone. In Europe where school tuition is covered, there are also separate programs to cover student living costs - which are also not super high generally. My ex-gf got her physics degree from a well known university in Spain, and they paid her $500 per month or week (forget) to cover living costs at the time I believe which was more than enough.

She wasn’t eating imported caviar, but students in general have always been able to get by (and have fun/a social life) without big expenses.

Which would put obscene pressure on the legislatures to re-fund the education systems they’ve been purposefully defunding for a while. Arguably this is good.

I wouldn't want my alma mater funded entirely by the state. They went on a real estate and related spending binge while I was in school. Some of my friends worked at the alumnus center, spending all their hours calling up alumni begging for donations.

Meanwhile, really useful classes that students wanted and professors wanted to teach didn't exist, because the school wouldn't fund the extra class time.

In short, out of all the school's top priorities, the students were nowhere to be found. Change that, and maybe I'll change my mind too.

I doubt the state would fund the university without oversight and forcing them to show 'value for money'.

> All this would do is ensure that higher education is utterly inaccessible for anyone not rich enough to pay cash.

Which would cause significant negative price pressure on that education.

It might even make it affordable (cash wise) for many people like it used to be. Wouldn’t that be scary?

> What about loan companies, who definitely issued the loans, being on the hook?

These days almost all student loans (90+% of the dollar amount) are being issued by the feds.

I'd be skeptical of that stat, almost all of my loans 10 years ago were private ( although I'm sure there is a federal backstop )

This change occurred in 2010:

> Prior to 2010, Federal loans included 1) direct loans originated and funded directly by the United States Department of Education and 2) loans originated and funded by private investors and guaranteed by the federal government. Guaranteed loans were eliminated in 2010 through the Student Aid and Fiscal Responsibility Act and replaced with direct loans because of a belief that guaranteed loans benefited private student loan companies at taxpayers expense, but did not reduce costs for students.

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

> Most student loans — about 92%, according to a June 2020 report by MeasureOne, an academic data firm — are owned by the U.S. Department of Education.

https://www.nerdwallet.com/article/loans/student-loans/stude...

The MeasureOne link: https://www.measureone.com/resources

>> What about loan companies, who definitely issued the loans, being on the hook?

> These days almost all student loans (90+% of the dollar amount) are being issued by the feds.

Well that makes it easy. Forgive those loans and then stop issuing them. Force the universities to come up with reasonable programs with reasonable tuition. Universities have gone from institutions of learning to scams exploiting students and low-paid lecturers alike.

Assuming the political impetus is there to stop issuing them. I'm sure there's the will to forgive those loans, though, which will probably just end up being a blank check from the feds to universities.

> I'm sure there's the will to forgive those loans, though

There's pretty clearly not, not even in the dominant wing of the Democratic Party, despite people—mostly in the progressive wing of the Democratic Party—expending a lot of effort to try to build it. It's possible there might be in the future, even perhaps the near future, though having a plan to prevent the problem from recurring and tying it in with the forgiveness makes that a lot more likely.

Student loan forgiveness is a mainstream topic. Biden is supporting cancelling $10,000 of federal student loan debt per person. On the other hand eliminating student loans, or even a segment of student loans (as GGP suggested) is not something you will see proposed outside of Reason Magazine or a Ron Paul newsletter. Any possible reform you could make will inevitably reduce the amount of income taken in by academia, a notoriously politically active bunch. So I foresee only indefinite band-aid solutions going forward.

> Forgive those loans and then stop issuing them

Yes! I would not want to see these loans forgiven if they didn't also stop them at the same time.

> forgive those loans

And what about the people who have already paid off their federally backed loans via their own hard work? They seem to get the short end of the stick in this case.

This. Its their job to calculate risk, and bet on it. Let them and let em set the interest rate accordingly. This would also solve the ever inflating tuition costs and cause schools to be competitive. In general it would curb academic tomfoolery.

Weird what happens when the government assumes liability. Everyone wants to blame the banks for '08, and they have some fault but it was all enabled by federal encouragement and liability. At least in the private sector the companies live and die by their decisions and the banks were held accountable /s.

BestBuy isn't on the hook if I buy $20k of stuff on my credit card and can't pay it back. The bank that gave me the card is on the hook.

We don't blame BestBuy for having prices that are too high, or not educating shoppers that their quantum dot TV's will be obsolete and valueless in a few years.

The main problem is that not only is the government subsidizing the loan, but they're never dischargeable in bankruptcy.

The banks are the ones that truly have no skin in the game. Universities at least need to be able to point to graduation rates and successful graduates of their programs, the quality of their internship opportunities and career services department. Not that they're worth $250k/student, but the universities at least have some vague reputational stake in this that will impact their ability to recruit more students. For a little while when someone google's the quality of Columbia's program they may see these posts. The more these issues come out, the bigger the impact on schools.

Banks on the other hand? They won't lose money, business, reputation, prospective employees... Nothing.

How about students pay for college with a state-brokered income share agreement? As in, for every year of university, a student pledges to pay that university .25% of their annual income, for life. The government could easily facilitate this via the income tax process. This would eliminate the issue of student loan debt, and finally put the incentives of our universities in line with the students they're supposed to serve. I imagine we'd see a lot fewer frivolous degrees once it was in the universities interest to actually equip their students for financial success. The way things are, I doubt these institutions care. They get paid either way!

Tie the ability for a student to take out a loan to go to a particular school to the ability for its graduated students to pay back said loans. Put simply, incoming Colombia film students can only borrow money Colombia film graduates have paid back.

Schools that have always graduated successful people with valuable degrees will prosper, and schools which prey upon idealistic young people will quickly find themselves only able to entertain rich dumb kids.

It's an indirect solution which will fix future and past wrongs, without giving any University the right to sue. It doesn't impose any unreasonable burden on institutions, other than the most reasonable one, that they're giving young people educations that actually have value.

One key thing to recognize is that terminal masters programs like this are different from the bachelor's degrees and the PhD programs. They are generally smaller, and are very much run as cash cows for the departments.

Moreover, they will accept almost anyone regardless of how well they are prepared. It's not often a faculty decision, as it would be for a PhD.

> They can’t possibly know better.

This seems to be kicking the can down the road a little. College applicants and students absolutely should bear some responsibility in making sure that their programs, degrees, and desired careers are actually feasible and practical in the long-term. Where you're spot-on, though, is that they don't bear all the responsibility.

The big problem, it seems, is that there's no safety-valve for those students who didn't (whether through their own fault or not) get the memo about programs being worthless. In those cases, making other stakeholders (schools, the state) have some skin in the game seems like it'd make the problem solve itself.

Like you said, if the students are the only ones incentivized to have universities give a good education, we're going to have a bad time.

> They can’t possibly know better

C'mon. Google "starting salaries for [my major]"

Right, if STEM kids could figure this out in the late 90s on dial-up and pay by the minute internet, then 2020s kids with iPhones in their pocket can check this in seconds in between classes and TikToks.

You're discounting the impact of aggressive marketing for these programs in the 2020s vs. virtually zero back in the 1990s.

As well as there being less non degree career options that pay decently, causing many young folks to feel "a degree" is only option.

Let's look at the top result for google for "film and media studies major salary".

- Job Growth (8% writers & authors, 12% producers and directors, 5% advertising and promotions managers)

- Average Salary ($73k writers and authors, 89k producers, 133k advertising and promotion managers)

Sounds pretty good right? the part that's missing is that the placement rate of "Film and Media majors" into these fields.

Right, the more important stat is if/what the school publishes for - % employed at graduation and average salary. My school had this online in the 90s, though I suspect many hide this now.

That doesn't sound like starting salaries. Who starts as an advertising and promotion manager?

The average starting salary for a film and media studies is $22,656 per year. https://news.ycombinator.com/item?id=27828557

Now, given 2087 working hours in a year, and $15/hr, that yields an annual pay of $31,305. 50% MORE than a FAM studies college graduate.

All with a few seconds of effort, with a device in everyone's pocket.

Part of the issue is that there is no mechanism to discourage universities from doing this.

It's very specifically the loan companies that do this and the universities just sell their stuff. But stopping would be good, yes.

Best disincentive: Debt forgiveness. Forgive those "unforgivable" and people will think twice about ever doing this again.

The vast majority of student loans are originated and backed by the federal government, for most cases there is no "loan company". It's the federal government that these students owe the money to.

Not at these ultra expensive universities. Federal loans cap at high but vaguely reasonable annual limits, to get 200+k of debt from a 4 year degree takes massive loans from private companies. https://lendedu.com/blog/federal-student-loan-limits/

However, the federal limit is still sky high $31,000 for dependent undergraduate students. A loan cap of say 20k/year would dramatically change what goes on at these private collages.

Grad PLUS loans can be as much as tuition.

> The loan limits for Grad PLUS and Parent PLUS Loans also differ from Stafford Loans. There is no annual limit as a set dollar amount, but students or parents may not borrow more than the total cost of attendance, less any other financial aid received.

These aren’t available to undergraduates. Such programs can really screw people over financially, but more often it’s a question of lost earnings and interest on initial loans rather than graduate tuition on it’s own.

Most of these horror stories you hear about students being hundreds of thousands of dollars in debt come from people who have graduate degrees in, for example, film from Columbia University.

Yes, but compound interest from deferred payments make undergrad prices more important than a 2 years masters alone.

Let’s assume 40k / year at say 5% interest compounded annually. That’s ~82k for a 2 years masters which is serious money. But tack on a 4 year undergrad at 40k/year with that same 5% interest and your up to ~272k all said which means that 4 year undergrad cost ~190k. Add a gap year and things look even worse.

Not that 40k and 5% are norms, but it shows how costly deferring payments is independent of graduate tuition rates.

Well, that's why these ultra-expensive universities have very generous financial aid packages for their undergraduate programmes (although presumably a large chunk of this aid also comes from the feds). For example, let's look at Columbia's tuition by family income:

$0-30k pays on average $10,245

$30k-48k, $3,409

$48k-75k, $6,864

$75k-110k, $14,421

$110k+, $41,002

https://www.usnews.com/best-colleges/columbia-university-270...

This falls comfortably below a cap of $31k, or even $20k for students with family income below $110k. But these financial aid packages are for their undergraduates; clearly they are not so generous with their graduate students, presumably because there's no cap to how much those students can borrow. Other Ivy League universities are very similar in this respect.

It seems clear from the WSJ these massive debts are just the balance that comes from graduate degrees:

> Undergraduate students for years have faced ballooning loan balances. But now it is graduate students who are accruing the most onerous debt loads. Unlike undergraduate loans, the federal Grad Plus loan program has no fixed limit on how much grad students can borrow—money that can be used for tuition, fees and living expenses.

> It has become the fastest-growing federal student loan program and charged interest rates as high as 7.9% in recent years.

> The no-limit loans make master’s degrees a gold mine for universities, which have expanded graduate-school offerings since Congress created Grad Plus in 2005. Graduate students are for the first time on track to have borrowed as much as undergraduates in the 2020-21 academic year, federal loan data show.

> “There’s always those 2 a.m. panic attacks where you’re thinking, ‘How the hell am I ever going to pay this off?’ ” said 29-year-old Zack Morrison, of New Jersey, who earned a Master of Fine Arts in film from Columbia in 2018 and praised the quality of the program. His graduate school loan balance now stands at nearly $300,000, including accrued interest. He has been earning between $30,000 and $50,000 a year from work as a Hollywood assistant and such side gigs as commercial video production and photography.

> ...

> “As a poor kid and a high-school dropout, there was an attraction to getting an Ivy League master’s degree,” said Mr. Clement, 41. He graduated in 2020 from Columbia, borrowing more than $360,000 in federal loans for the degree. He is casting for an independent film, he said. To pay the bills, he teaches film at a community college and runs an antique shop.

The infographic here is making it clear that the debt for Patrick Clement is just from Columbia; from his website, it appears he went to the University of Kansas for his Bachelors.

https://www.wsj.com/articles/financially-hobbled-for-life-th...

>"to get 200+k of debt from a 4 year degree takes massive loans from private companies"

So we are enabling private investment to profit from bad loans again? Have we learned nothing in 2008?

> Part of the issue is that there is no mechanism to discourage universities from doing this

certainly not a root cause, but am enabling cause is whem student debt changed to not be dischargeable in bankruptcy. there is literally no longer a way to get rid of it.

seems like an obvious false dichotomy. perhaps we look at how much tuition "should" cost (god knows what that means) and make some percentage dischargeable. ~50%?

... and make the issuing university be on the hook for the other 50% that defaults

Allowing easy bankruptcy would clean it up very fast. That’s how it was prior to 2005.

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