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Comment by c0balt | Hacker News Reader

> “The original purpose of tuition discounting was to make higher education affordable to low-income students,” Bridgewater president David W. Bushman said in a press release explaining the dramatic shift. “But over time, the practice has resulted in higher and higher tuition sticker prices that bear little resemblance to the actual cost of education.

This somehow seems inevitable in hindsight. It is quite bizarre, as a German student in university, how the education sector in the U.S. is working acceptable-ish[^1] and yet everytime I read something about it is seems to in some stage of self-imploding for colleges/ universities.

It would be interesting to see how this societal issue can be addressed in the longer term. Imoe neither technology alone nor any simple approach will work but it definitely is a great challenge for the future/ present.

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The college system in the US works well. The vast majority of students go to community colleges or public schools and end up with very little debt (if any).

The nightmare stories you hear are about the small, vocal minority that go to expensive private schools and/or major in something that doesn't pay well (like theatre) and/or get Masters degrees that put them in debt.

> The college system in the US works well.

From an educational standpoint, this is arguable, as most students are forced to take classes unrelated to their area of study simply to fill out a the credit requirements. But overall our schools are world class. It's the money side that's a wreck.

> The vast majority of students go to community colleges or public schools and end up with very little debt (if any). The nightmare stories you hear are about the small, vocal minority that go to expensive private schools and/or major in something that doesn't pay well (like theatre) and/or get Masters degrees that put them in debt.

This is just the exact opposite of the truth, with literally no room for interpretation. The vast majority of students graduate with debt, the number is about 64%. Average debt from non-profit schools is about $35k of debt, and about $60k of debt from for-profit colleges. This is two thirds of students, and the amount rivals car loans, which are NOT insignificant.

> The college system in the US works well.

> > From an educational standpoint, this is arguable, as most students are forced to take classes unrelated to their area of study simply to fill out a the credit requirements.

The point of this is to help round out an education. I started and finished my college career as a science student, but in the middle I switched to humanities. I witnessed an extraordinary difference in the ability to clearly articulate ideas between those areas which really highlighted for me the value in requiring a curriculum beyond just a student’s chosen major.

That's one argument, another is they're filler to make people think paying huge sums is reasonable for what they get. If these classes were teste for and only given to those who need it, I could believe it was for student enrichment. This is rarely the real case, and many administrators will admit it.

I don’t think so.

> As of 2023, approximately 44 million Americans carry student loan debt, with the total student loan debt in the United States reaching $1.76 trillion according to the Federal Reserve. This figure includes both federal and private student loans. It's notable that the number of people with federal student loans is around 43.4 million, and there are about 3.5 million private student loan borrowers, leading to a total of around 46.9 million American adults with a student loan. The average student loan debt in the United States as of 2023 is approximately $37,645 per borrower. This figure represents the average amount owed by those carrying federal student loan debt

https://www.studentloanplanner.com/student-loan-debt-statist...

https://www.finder.com/student-loan-debt-statistics

I held a similar level of student loan debt, and it was worth it. My earnings are much larger thanks to the degree it enabled me to pursue, and I was able to pay it off early. While I don't think the system is ideal, just the existence of student debt isn't indicative of an issue, we'd need to look at statistics around what proportion of borrowers have undue hardship as a result.

Personally I don’t think it’s ideal that people who are going into less lucrative but still incredibly important societal roles should have to give up the ability to have basic needs like stable housing met because the cost of getting into those roles preclude the ability to meet basic needs.

I am not sure if you're in agreement or not, but yes, loans help access things that cost money (like basic needs) in the case that earnings are deferred due to education. Student loans generally require no payments until 6 months after education ends.

Right but it’s also debt that doesn’t need to be incurred, which puts people way behind the starting line, especially when the student loans come due and people can’t afford to pay for a house

Doing things like making it so student debt isn’t dischargeable in bankruptcy effectively creates a market for more credit than would exist otherwise. Student debt should at least be held to the same standards as regular debt.

I think those figures support the GP's "small, vocal minority" argument. Assuming students carry their debt for 45 years (across their earning lifetime -- my gf and her ex both carry student debt in their 50s) that's only 1 MM students per annum, which is 5-6% of the number of students any given year. And most of them aren't complaining.

Working for an international company has really opened my eyes. It's actually fucking insane that someone could be paying off school in their 50s. The cast majority of European schools are in the single digit thousands per semester. The US needs to immediately allow tuition to be discharged in bankruptcy which would at least fix some of the copious problems with our higher education system.

I don't see how ~50% of college graduates currently being in debt for their education is a small minority.

I don't know how you got your number but your math seems deeply flawed...

>Assuming students carry their debt for 45 years

I don't think that's common. I especially don't think it was common ~45 years ago.

It's a totally bonkers assumption. If it was true, it seems to support a slightly different version of the same point. A 45 year loan on education doesn't seem like the result of a successful system.

Well my n is small. Tenured faculty at Stanford, still paying after 30 y and unlikely to pay off in next decade (note: not in CS, Economics, or business which pay the big bucks). Have heard other faculty discuss this at dinner parties too.

I graduated 35 years ago and back then was able to pay my MIT tuition by consulting over the summer + January. CS of course during the AI boom. Doubt that’s possible today.

I think the financing of education in the US is absurd and broken, but there is some logic to spreading the financing of an asset over the lifetime of the asset.

I'd estimate that the lifetime of a house is generally longer than the "useful lifetime" of an education. House financing, as far as I've seen, rarely exceeds 30 years. There are probably outliers, just like in education financing.

I wonder if the 5-6% is an accurate estimate.

Some back-of-the-envelope math:

- K-12 enrollment in 2021 was 49.4MM [1]

- Assuming even distribution across 13 grades, that's 3.8MM / academic year.

- 1MM ~= 25%, though if one factors in that drop-outs increase as years advance, this is conservative.

[1] https://nces.ed.gov/fastfacts/display.asp?id=372#PK12-enroll...

[edit] formatting

Student loan debt lasts longer than mortgages?

That average is the mean (we can tell because it roughly equals $1.76 trillion divided by 46.9 million borrowers).

The mean is notorious for being affected by outliers, that is, the few borrowers like doctors who owe tremendous sums. (As GP says, "the nightmare stories you hear are about the small, vocal minority")

If 90% of borrowers only owed $10k each, and the other 10% owed 210k each, the average would be $30k per borrower.

In fact, if 90% of borrowers only owed 1k each, and 10% owed 300k each, the average would still be over $30k.

Edit: According to the census, the median student loan debt is slightly under $20k, which certainly seems like an amount that people can pay off.

https://www.census.gov/library/stories/2021/08/student-debt-...

The median amount of education debt in 2021 among those with any outstanding debt for their own education was between $20,000 and $24,999. This reflects the central tendency of student loan debts, providing a perspective less influenced by extreme high or low values compared to the average debt amount.

https://www.federalreserve.gov/publications/2022-economic-we...

Yeah, I just added a similar figure to my post.

To me, that seems consistent with "very little debt" as discussed above. It's less than the cost of an economy car, for an education that increases average lifetime earnings by over a million dollars.

That's the current debt load, not the debt load graduated with nor the amount that will end up paid over the lifetime of the debt.

Even so, calling a 5 figure debt load "very little" is flat out ridiculous.

$25,000 is basically nothing compared to the extra earning potential of the degree. It's less than a lot of cars. A good saver could pay it off in under 5 years without noticing a decrease in lifestyle.

Oh good. Glad you make enough money to view 25k as such a measley sum. Most people don't and this median debt load already mostly excludes people like you who payed off thir debt in 5 years.

It so funny that you guys are so quick to point out the difference between media and mean when it serves your world view but completely ignore all the other statistical factors. Like comparing q lifetime average earnings of all college graduates aganist the median debt load of those who still have debt. Rich people don't leave college with as much debt and don't hold it as long. Not all degrees pay equally so people with lower paying degrees will be disproportionately represented in that data set.

I know many college graduates for whom even making minimum payments on a 25k debt would significantly impact their quality of life.

You don't have to feel guilty for your privilege, but don't let it blind you to reality.

> Not all degrees pay equally so people with lower paying degrees will be disproportionately represented in that data set.

This is true. A degree that doesn't increase earnings by at least $1/hour (enough to cover the payments on a $25k student loan), is a financial mistake.

If someone spends four years doing what they love and not working, without a care for what will happen afterwards, they should expect it to significantly impact their quality of life afterwards. Being able to do that at all is quite a privilege.

I come from a working class family in which most people didn't go to college, so I don't forget what a privilege it was to be able to go to college nor how valuable a well chosen education is.

> This is true. A degree that doesn't increase earnings by at least $1/hour (enough to cover the payments on a $25k student loan), is a financial mistake.

1$ per hour seems on the far low end to cover that much debt. Also, the 25k number isn't the amount that was owed at graduation, but rather still owed some number of years into the repayment term so the actuall monthly payment is likely even higher.

Additionally, many of the lower paying jobs are still ones that we need as a society. While everyone picking lucrative degrees is good for them, it would be bad for us as a society.

Even so, I'm not disputing that the vast majority do pay for themselves in time. I'm saying that financial burdens imposed by student loan are significant. I would also posit that this repayment can hamper the ability for people to make other investments that improve their productivity and long term earning potential. Instead of the financial safety net enjoyed by the more well off, it does the opposite and increases risks.

It's a few percent of the million dollars or more that a good education is worth.

Very little indeed.

It's very little. You can easily pay that off in a few years.

Average? Mean? Median?

Average, eg mean.

> The vast majority of students go to community colleges or public schools and end up with very little debt (if any).

I wonder if that's really true for state schools anymore.

The two state universities in Kansas (LCOL state) quote ~10-12K annually for in-state tuition alone (KSU: https://www.k-state.edu/sfa/cost/manhattan-campus-costs/unde..., KU: https://admissions.ku.edu/costs). I can't imagine many (if any) states charging significantly less than that.

When you add room and board, food, books, and all the extra hidden fees tacked onto tuition, you're closing in on ~20-25k.

Students aren't getting out of that without debt unless they have a sizable nest egg saved up beforehand and/or work a decent number of hours throughout their school life.

And, while it's certainly doable for an individual to make it through school without debt, there aren't enough decently-paid seasonal jobs around said schools for even a majority of students to follow suit.

It used to be significantly cheaper when I got my BS ~20 years ago, but a push by Republicans to make student loans non-dischargeable in 2005 (see https://www.congress.gov/bill/109th-congress/senate-bill/256) along with significant cuts to Kansas spending on education tripled tuition shortly after I graduated.

All true, however the amount of student loan debt (in total) is still a staggering amount.

And while state colleges have sticker prices well below those of privates, the pricey private schools are more likely to discount tuition. So students have to guess at where they’ll get the most aid/discount (most schools do a decent job getting these figures to prospects, but you have to apply to get them).

IMO, “shopping” for college shouldn’t be anything like buying a used car. The prices should be affordable and publicly shared.

> IMO, “shopping” for college shouldn’t be anything like buying a used car. The prices should be affordable and publicly shared.

The price of a used car is more transparent than US universities. I think the main comparison for the cost of going to college is more similar to the cost of going to the emergency room. You get individual bills coming in from every doctor and nurse that gave a sideways glance at your X-Ray. Likewise with a university they talk about the price of tuition, and oh wait you're too far from home and need a place to stay? And you're under 26 years old? Going to need to spend another $10k per semester for staying in a dorm. You'll need food passes and parking passes. You'll need books and everything.

Food and accomodation shouldn’t be a surprise cost, as it wouldn’t be if you buy plane tickets to Thailand. Is there any real gotcha costs that you only find out later?

Food is not really a surprise cost. Accommodation is surprising with how much it costs considering you're basically staying in an tenement home with people stacked on top of each other.

Book cost is highly variable. And not remotely affordable.

Source?

The pricing makes a lot of sense when you consider there’s one price for domestic students and one price for international ones.

You don't have to go that far. The education sector in the Netherlands is quite similar, perhaps 5 years or so behind the US.

I often wonder why we don't provide free university education in the US.

It would benefit society and employers as a whole.

Some states effectively do. Georgia and Florida will pay full tuition for In-State students with high enough GPAs. Students still have to pay some fees, so it isn’t perfect, but it provides incredible value.

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