The Imminent Student-Loan Disaster | Hacker News Reader

The Imminent Student-Loan Disaster

jamesgmartin.center

33 pointsBostonian99 comments

I'm so frustrated at the morality around giving these kids unsustainable loans. The entire discourse is loan forgiveness, with zero effort into preventing this crisis continuing.

Yeah, I think loan forgiveness without doing anything to reduce tuition (and other attendance) costs or expand alternatives like trade schools is throwing fuel on the dumpster fire.

There’s a high likelihood the next president will change the system, one very drastically (if rumors are true).

Could you expand on this? As an outsider I’m unfamiliar with what might change and who might change it.

Harris will likely offer loan forgiveness. It’ll be generous.

Trump is unlikely to offer generous loan forgiveness. Has in passing mentioned plans to change the department of education (and the loan system), weakening colleges power and reducing the amount of money colleges receive from the government.

Neither candidate will mention this out loud, it’s not a news story either group wants.

How will she offer it? Much of what Biden attempted to do through executive action was struck down by the Supreme Court.

If Harris won’t even say it out loud, then it’s unlikely she’d be able to get it passed through Congress.

Seems like wishful thinking.

Executive action is the only semi-viable way, I think

Which Biden already did and was slapped down by the Supreme Court. And so he’s trying smaller ways (still via executive action) to get as much forgiven as possible.

So again, I ask you, how would Harris do more?

What is Betsy DeVoss legacy from the dept education?

More ‘school choice’ for K-12 students

Loan forgiveness only fixes one symptom of the cancer.

The only people I've heard of having absurd payments are on private loans and/or have graduate degrees, like a dentist with a payment that looks eye popping until you realize he makes 2 million. DoE student loans have very lenient repayment options, including an income-based option with payments as low as $0.

I'm in favor of making higher education free or subsidized just on principle, but I've yet to meet a person in real life actually struggling as a result of federal student loans. Their terms seem more than fair overall.

https://studentaid.gov/manage-loans/repayment/plans/income-d...

And I don't know if it's the norm, but I had to take a written test proving I knew exactly what I was getting into - how long would a typical loan take to repay, what are the terms, who backs the loan, the fact it is a loan I have to repay..

It is also a possibility that people impacted are not part of your social circle/class.

These huge loans for professional degrees are a problem as well, because they create the imperative for those careers to be super-high-earning.

They should be. I want people to be incentivized to become doctors and engineers and to pursue other difficult fields that are of immense value to society.

You really want doctors to be in it primarily for the money rather than for delivering effective care?

I want them to be competent. This means rigorous training and stringent examination. Competency means effectiveness and we need to incentivize our brightest to do this rather than write code for ads or trade equities and bonds, which require significantly less training effort.

The opportunity for it to be lucrative is different than the imperative. Huge debts preclude or at least disincentivize people whose motivations may be more altruistic from taking lower-paying, higher impact roles.

It’s not arbitrarily expensive though. Training doctors is expensive. Regardless I don't know how to square the idea that altruistic people won’t become doctors because of debt with the reality of humans responding to incentives and we want to incentivize the best to become doctors, etc.

I would think dentists earning 2 million a year are very rare.

A family member was suckered into big student loans for a PTA degree from a mid-tier collage masquerading as a university. The jobs she could get didn't pay enough to cover the loan.

Every degree program should come with a statement of how much one can earn on that degree and a loan repayment schedule. However, there needs to figure out to prevent school administrators from lying and distorting the process.

I've always wondered why we don't make student loans similar to other loans; IE, dischargeable in bankruptcy, and thus force lenders to evaluate credit risk when making them. That would mean less loans are issued and schools must cut costs and borrowers must pick more economically advantageous programs.

"We will pay for it, but it's a loan so not really" is a fallacy. If we decide that education is an all around good thing so we want to subsidize it, great, but let's just do that directly.

Then people would complain that disadvantaged students are being denied high education, because such students inevitably are going to have worse academic prospects than well off students, and therefore can't get student loans.

Simple: look at the degree and future earnings, not the student.

So you expect private lenders to be on the hook for delinquencies and put them in charge of assessing credit risk, but then at the same time kneecap them by not allowing them to see any information about the lenders aside from what degree they're studying? Seems like a shitty regime where the smart middle class students (not rich students, because they don't need student loans) bears the burden of subsidizing all the bad students.

it would simply result in no one lending

> thus force lenders to evaluate credit risk when making them

The lender is the federal government for almost all student loans now.

Which might seem like a bad thing but remember why we got into this mess - private loans are often predatory! Private lenders understand the nature of young adults and absolutely used that to their advantage.

I think that, to most 18 year olds, the concept of tens of thousands of dollars of debt is basically too abstract to reason about clearly. I agree that the fact kids can take on this amount of debt at that age–which cannot be discharged in bankruptcy, but is also guaranteed by the government such that the universities take zero risk in the transaction–is basically unconscionable.

The logical thing to do here would be as you correctly point out, have universities and private banks bear more of the risk vs the government.

Of course, the moment that happens, enrollment would crater and the whole student loan program would be revealed as a subsidy that benefits university administrators, provosts and deans to promote 21st century grand tours, for the middle class.

The reckoning is coming. The question is who pays. Kids arent paying anymore. Will it be Banks, university administrators, or low income americans? Will it be the low incoime class who finances the debt largesse of the middle class, via monetized debt and inflation?

I don't see a scenario where the people who benefit most from the corrupt system (schools) bear the cost.

Very likely the cost will go right to the taxpayers.

Seems to be a pretty condescending view of an 18 year old.

Don’t worry we made sure they couldn’t be discharged through bankruptcy. So, we don’t have to worry about whether or not the system is sustainable. Free money for everybody, yay!

Free money for the school endowments**

The major part of the reason for that is the requirement for actually preventing it: Congress needs to act. Congress is divided[0], and only one party is likely to favor reducing the number of unsustainable student loans given out. (Or, to the extent that the other party might favor measures that would have that result, it would be secondary to other goals that would be antithetical to their opponents'—so either way, nothing is going to get passed.)

Fundamentally, there are really only two ways forward that reduce the number and magnitude of student loans: Either make higher education[1] dramatically more affordable, by restoring a lot of the federal support from it that's been removed over the past several decades, or make it dramatically less accessible, by various kinds of measures that either outright restrict who can go to college, or condition federal funds on other less-straightforward limitations.

Unfortunately, in addition to reducing the overall education level of our populace, the latter category would do little to reduce the burden on those who still want to go to college—indeed, there's reason to think it might make things worse, as the same facilities get fewer students and thus less tuition.

[0] Noting that I am phrasing this extremely obliquely to try to define the problem as clearly as I can without running afoul of site guidelines on political partisanship.

[1] This would, IMO, include most kinds of trade schools; I do think that providing incentives for many people to go into trades rather than colleges and universities is a sort of middle ground here, but it's far from a solution to the identified problem.

The problem with student loans is that people need them in the first place. In a world pervaded by technology, one can no more live without education than without water; and the first twelve years having been reduced to day care, "higher" education is the only education there is.

Wrong way around. Student loans provide a state-subsidized, leveraged instrument to buy a commodity. It should surprise absolutely no one that this increases prices in accordance with the applied leverage.

You are mixing up two different meanings of education.

The kind of 'education' you need for technology, ie education in the sense of knowledge, is almost free or can (largely!) be had for very cheap. Look at libraries, Wikipedia, online courses, or even just ask the professor if you can sit in on lectures.

The kind of 'education' that is so expensive you need a loan is education in the sense of getting a piece of paper at the end. That's credentialism.

(Just to be clear: not all education in the knowledge sense is cheap. But most things most universities teach falls in this category.)

While the loan-fueled runaway cost of traditional university diplomas in America has created a big mess that seems to serve everyone except high level administrators poorly, I don't really see the solution at a societal level being self-teaching.

I say this as a 100% self taught programmer who started learning (unprompted) from a book as a 10 year old in 1998. I slowly built a base of marketable skills and CS fundamentals over time, and have done well for myself, but I don't really see this as a viable alternative to formal education programs at scale.

I'm not saying that I'm somehow super special, but I do think that I approach learning things differently than the great majority of other people I know. I also very much appreciated my traditional liberal arts education (I studied Political Science thinking I wanted to go to law school), and feel that our society would benefit from tech workers having a broader background in history, humanities, religion, and social sciences overall.

> [...] I don't really see the solution at a societal level being self-teaching.

Sorry, if I wasn't clear: self-teaching can be part of a solution, but it's not required. (See eg what I said about sitting in on lectures or doing online courses etc.)

There's also relatively cheap universities you can attend.

> I also very much appreciated my traditional liberal arts education (I studied Political Science thinking I wanted to go to law school), and feel that our society would benefit from tech workers having a broader background in history, humanities, religion, and social sciences overall.

There's nothing wrong with people choosing to learn about these things, yes.

Though I don't think making these topics mandatory would do much (or does much). Just have a look at all the mandatory crap in school, and what people actually remember. Eg they have years and years of math (or history etc) and barely anything sticks.

Solve the problem of the "first twelve years having been reduced to day care" instead of spending more money to subsidize college. College graduates do earn more than non-grads on average, but there are many non-grads who earn more than grads, so it's not true that everyone must be encouraged to attend college.

I’d challenge that assumption. If you look outside of the US context, Germany invested heavily in trade schools, which by no means are considered “higher education”. Seems to be working pretty well for them.

Unless you want an actual education. This works, of course, by kicking near everyone out of general education. This has lead to the value of general education (which everyone wants for their children) to go up by A LOT, and that means the pressure on teachers to cheat is absurd (making sure the right children end up in university).

The government KEPT saving money on the number of children in general education, and kept increasing control over school, which has lead to in most places ONLY children who get let through achieve a general education (ie. the number of free places is so low, only the children let through get a place. Effort, actually being good at it, doesn't get you a place anymore. It only gets jealous people to intensely sabotage you)

The government saving money on this has ALSO of course reduced the quality of teachers. Everywhere, but also in general education, so one can ask "even if you do get a place ... what's the use of that? Teachers won't help you beyond what's required of them and won't teach you all the material". In most places you cannot get a general education from your teachers EVEN if you have a place in general education. Leading to ridiculous drop-out rates: starters in 1st year gymi / people who succeed in "abitur" (ie. final exam 6th year) is 10-30%. Somewhere between 2/3 and 90% of kids drop out, or otherwise fail to pass the final exam.

Oh and to make matters worse yet again: the government has ALSO saved money on libraries. Which means that not having access to the material goes quite far. In anything but the largest cities you CANNOT get free access to anything but the most basic math or scientific materials.

I guess one tiny bit of good news is that it's cheaper than ever on amazon and available illegally, but unless you know what material is good and how to download illegally ... good luck.

Even private schools have become cheaper than ever, but "cheaper than ever before" should not be confused with "affordable". We're still talking 30% of yearly pre-tax wage per child (and, I just checked, 80% of pre-tax AVERAGE German wage per child). Most people, even with really good jobs, cannot afford them and so almost no kids have access to people who actually know science. This has lead to the resumption of the situation my grandfather complained about: in "a good family" ONE kid gets educated. Obviously, usually the oldest. The rest ... tough.

So now you have the worst of all possible outcomes:

1) WAY too few children have a general education

2) the ones that do pass a general education, do not know the material

3) this is still getting worse every year

Yes, there's exceptions. People who achieve a general education almost exclusively under their own power. However, as you can imagine, this is a small minority.

It is already at the point that Germany is completely dependent on immigration of highly educated people. "highly educated" does not mean university degree, it means "passed high school education". You know, people actually capable of doing general minimally scientific work (think accounting, lab work, nursing (where it's nursing including administering medicine or managing a diagnostic machine, not just changing beds), "production work", anything dealing with computers, ...)

Oh and absolutely NOBODY is happy with this situation. Not parents. Not children. Not employers. Not the government. Not universities. Not trade schools. Most people are very angry how they were treated, personally, and they do understand that this will cause more and more problems as time goes on. But you're not allowed to suggest improving this situation, you see that would be VERY unfair to the people who already got fucked by the system, ie. to them. I kind of agree that it would be unfair to them, but of course it means nothing will ever get better.

Very interesting. Can you back up any of these big statements with data?

Maybe there’s some sensible common ground between Germany and the US system where everyone is required to get a general education even though a lot of people have no interest in it which also causes a lot of problems and makes it worse for everyone.

Anecdotal of course but from my own experience and from the few teachers I know now, there are so many issues with students assaulting teachers, assaulting each other, kids who can barely read, write or do math, etc.

I strongly preferred my liberal arts classes at my university but most people in them were just checking the box because they viewed the expensive ($20k+/yr in state) school as a job training program even though it isn’t that.

In a world pervaded by technology, where you are competing for labor positions with countless other capable humans who can get access to the information/vocational training required to successfully do the position, you cannot live without the $200k credential required to get your foot in the door to the interview room.

McDonald's is hiring though

There is likely something be said about marketing yourself in a unique way when competition is fierce, which a degree might have served at one point in history when virtually nobody had them, but everyone and their bother has a degree these days. That's not interesting. That doesn’t make you stand out. If you are going to spend $200,000, a billboard is likely to yield better job prospects.

The amount of work available - number of labour positions - is also in proportion to how many people there are. More people means more jobs, as well as more people looking for work.

Broadly speaking, if you say double population of country, you double size of economy. Everyone is generally better off, because there are efficiency gains, but amount of work per person is we can say remains in some sense of proportion.

With all due respect, no one needed these loans. The belief that you HAVE to go to college led us into this mess and now we have highly paid tradesmen making more while we have coders sitting idle.

It's time to eliminate student loans entirely, hard cap student visas, tax college endowments, and remove higher education non profit status and let the higher education industrial complex collapse in on itself.

It's become a leviathan of highly paid over credentialed demigods with dubious benefit.

>hard cap student visas

???

Don't international students subsidize domestic students because they pay much higher tuition? I'm not sure how reducing their numbers would be a good thing, at least for domestic students.

>tax college endowments

Endowments come from donations, not tuition, and if anything they subsidize the tuition. At best taxing them would be breaking the piggy bank for a one time cash infusion.

>remove higher education non profit status

Eliminating non-profit status won't matter when the institutions are blowing all that revenue on bloated staff.

>and let the higher education industrial complex collapse in on itself.

Based on this and your other suggestions, it seems like you're more interested in smashing the "higher education industrial complex" rather than fixing it.

Colleges prefer international students because they pay full tuition without any aid whatsoever. Eliminating student loans would then encourage colleges to seek students abroad and lobby for their entry into the country. See Canada.

Endowments are almost entirely used for dubious things like sports and football programs which have a nebulous educational value at best and a negative impact at worst. If you were aware of the industry (which you're not down d00ter) you'd know that there are efforts by the government to already start taxing sports and football programs in particular because of how much money these programs bring in.

Eliminating the non profit status allows business taxes to be collected from bloated college programs, sports, and more.

The goal is to return higher education to its pre 1960s status of being affordable from basic income and not a 4 year long resort with learning sprinkled on top.

>Colleges prefer international students because they pay full tuition without any aid whatsoever. Eliminating student loans would then encourage colleges to seek students abroad and lobby for their entry into the country. See Canada.

How is that bad? Should we ban work visas as well because they encourage companies to lobby for workers to immigrate to the US? Maybe we should ban state sponsorship for education as well, because that would encourage students and parents to lobby for tuition subsidies.

>Endowments are almost entirely used for dubious things like sports and football programs which have a nebulous educational value at best and a negative impact at worst. If you were aware of the industry (which you're not down d00ter) you'd know that there are efforts by the government to already start taxing sports and football programs in particular because of how much money these programs bring in.

The logical conclusion for that would be "ban/tax sports programs", not "tax endowments".

>Eliminating the non profit status allows business taxes to be collected from bloated college programs, sports, and more.

This doesn't address my previous comment. Taxes are collected on profit. If they're indeed "bloated", then there wouldn't be much profit to collect from in the first place, because all the money is being spent on bloat.

> How is that bad?

It's "bad" because the venn diagram of the people who scoff at higher education AND think immigration into our country is a fundamentally bad thing is almost a perfect circle.

The fact you think both is a net positive is part and parcel why we have the mess of a country we have today. Enjoy being led by people who hate you.

We should not hard cap student visas. Getting all the smartest people from around the world to come join America should be our goal (I mean, every country should compete for the most talented people, and we shouldn’t unilaterally give up on that).

Expose universities to other market forces? Sure.

And they are even dumbing down college now so anyone can get a degree. When are the idiots who run our government going to figure out that a credential only as value because someone else can't get it?

FWIW, people from non-US countries looking at this situation are not thinking the problem is that policies are “too nice” to students.

Other countries are thinking that the cost of post-secondary education in the US is insane.

And then you tell them about the number of administrators and the salaries of faculty and staff and it blows their mind even more.

It isn’t a matter of the level of niceness really, in the sense that it was a bad decision (not funding public education) compounded by a half-assed compromise (a special type of unique load which can’t be discharged through bankruptcy, our normal system to incentivize prudent loan issuing).

We often throw people to the wolves in the US, which is a whole thing, but we don’t usually give the wolves immunity to fighting back like this.

We can talk about the incentive structures of loans all day, but what I’m saying is that if you take a step back, that problem is dwarfed by the broader incentive structure of a system where education costs 30-100k per year.

I suspect the prices are a symptom of the underlying loan problem. Young adults would not be able to secure 100k/semester loans in a rational market that has to account for the fact that they might not be able to pay them back.

We should also subsidize education, definitely. But I first step should be to not intentionally mess things up.

For anyone stuck in this pit I recommend PSLF. Due to my public service as a scientist, all my student loans were forgiven after ten years and 120 payments were made. Public service may not pay great but it does have this perk, in addition to helping humanity.

https://studentaid.gov/manage-loans/forgiveness-cancellation...

PSLF = Giving away 10 years of your prime at cut-rate

I believe in public service, but PSLF is just another way student loans distort the labor market & stifle competition and innovation.

The author is correct that the universities should have to co-sign for the loans. Having skin in the game would transform our university system overnight for the better. I’m sort of surprised there hasn’t been a class action lawsuit yet claiming that universities deceived students by suggesting unlikely outcomes and that the universities are liable for the financial devastation they caused. University endowments are great targets for this.

It kind of sounds like another hack on top of the current solution to me. Does the problem not stem from the fact that the government backs a lot of these loans and forbids to discharge them during bankruptcy?

Why cant we rollback the government backing and the anti-bankruptcy protections at the same time?

If less people secure these loans, the universities will have no longer find enough people to pay those insane tuition fees. That will force them to cut back on needless expenses.

The problem is a person is loaned money without collateral. If not gov backed then there won’t be any loans. The idea was to make college something attainable. But it has become the monstrosity it is today.

In lieu of collateral make the universities co-sign and put them on the hook.

> The problem is a person is loaned money without collateral. If not gov backed then there won’t be any loans.

None sounds a bit hyperbolic but we would have a lot less of these loans though I agree.

> The idea was to make college something attainable. But it has become the monstrosity it is today. In lieu of collateral make the universities co-sign and put them on the hook.

I agree that universities currently have no incentive to lower their tuition. I just do not see why we need to create this new unique construct instead of rolling back what did not work.

As far as I know, we would create a special loan where the entity receiving the money becomes responsible for it. We do not do this for any other product. If somebody goes into debt to buy a TV from walmart, walmart does not co-sign the loan. What makes education so special that we need to carve out such an exception?

And let us assume this solution does not work, do we continue hotfixing it? What kind of results would it take for people to accept that this approach does not work?

If you solution works great. But at this point I fear that even when it does not we always start from the premise that we cannot undo what came before. We can only add more stuff never remove anything.

I’m sympathetic to the instinct that created the student loan system: it is nice to try and give people a chance, but fully funded public colleges were apparently a non-starter, so a compromise was struck.

But, it turns out giving late-teenagers and young adults loans that can’t be discharged through the normal bankruptcy procedure, and then having every adult in their life tell them that they need to go to college to have the middle-class lifestyle their parents enjoyed, creates wildly a poisonous incentive structure.

Capitalism works pretty good, but it is reliant on people on both sides of the deal making rational decisions. There’s nobody doing due diligence on the loan issuer side. Why should they? They are offering these unique risk-free loans.

Most people don’t want to go through bankruptcy. It just exists as a looming specter to disincentivize bad investments. Let people discharge their loans through bankruptcy, and we’ll see the market work. College prices will go down when students can’t get ill-considered loans. I can’t promise this is the full fix but we should at least give the free market a try.

Another way of looking at it is: universities should be priced such that middle class parents can pay for their kids to go. People who can’t afford to go should not be the default case. They should be the exception, handled through exceptional means like a combination of need and talent based scholarships.

We’ve created a problem where all of the control flow is via exceptions. We want our administrative systems to be lean and efficient, C not Python.

> But, it turns out giving late-teenagers and young adults loans that can’t be discharged through the normal bankruptcy procedure, and then having every adult in their life tell them that they need to go to college to have the middle-class lifestyle their parents enjoyed, creates wildly a poisonous incentive structure.

The real problem is college degrees that cant pay for themselves.

Why do we (the US) insist on doing everything our own way? And usually worse. The sentiment behind loan forgiveness is great but it doesn’t address any of the core problems. This will only happen again.

Many other first world countries have publicly subsided and affordable higher education. There seem to be plenty of good models to choose from.

If we don’t want to fund higher education then the government needs to step out entirely. As much as I think that’s the wrong way to go. This half-in half-out game that we play in so many areas seems to lead to failure so often. See the disaster that is Amtrak.

Compromise is important but it’s also important to realize when it won’t get you over the finish line. Similar wisdom to building a high-end desktop and not skimping on the PSU.

Anyone worth their education would not be paying down their 0% student loan right now. The article didn’t take into account of the high interest rates everywhere else. The money could be better used to pay down other debts or be put in treasury bills.

I'll say it again and keep saying it: the solution to all the problems with higher education, all of them, is to allow student debt to be discharged through bankruptcy.

Very rarely dies one problem systemically rot out entire institutions, and so very rarely do you find such a huge mess can be cleaned up with a simple solution. But in this case it happens to be true. Student loans should not be special compared to other debt. The fact that they are has destroyed the value proposition of higher education and simultaneously made it unbelievably expensive. They teach garbage and gouge kids who have no understanding of the debt load they're taking on. Indentured servitude for nothing of value on return. If it could be discharged through bankruptcy, a university would have to offer it's students their dollar's worth or risk not getting paid, and they'd have to price an education at what it's worth.

Occupy has become too big to fail. But this market will correct, it has no choice, and when it does the result will be catastrophic. Or, we could fix it. Treat student loan debt like any other debt and allow it to be discharged through bankruptcy.

It’s the debt repayments that are unsustainable or is it the rising cost of education ?

I think both can be true , and also both intrinsically connected as you correctly point out

Aren’t they the same thing ?

Dup: https://news.ycombinator.com/item?id=41206723

The comments in this thread are so hyperbolic as to lead me to believe there's no value in reading them except for entertainment value:

> Student loans are an aspect of generational warfare

> one can no more live without education than without water

> Student loans should be illegal

Will there be 50B+ in student loan delinquencies in US?

https://news.ycombinator.com/item?id=41206723

author is talking about the upcoming cliff in the wrong way....

ITS NOT MORE NON PAYING ED LOAN BORROWERS....

Yes, the trend is there but its the wrong conclusion...

If you look at States spending per college student...you find a trend of less money spent per student as adjusted for inflation from before the programs were accessible 1960s to today 2024.

In Federalist systems...what often happens is when a Fed program starts up it acts to DEFUND the state efforts in the same need area...

Instead what should happen is what we do for first and secondary schools in that the Fed offers states thousands of dollars per student for school attendance.

An example:

Say 4 year costs $40,000 per student...

Fed pays $20,000 not through loans but same way we do for secondary...state school turns in attendance and student numbers and gets the money.

Or via loan which means that the loan costs acts to take out of the economy.... -loan costs of $80,000 direct to student..... $1million earning- $80,000 = no longer making house payment and purchase -ripple effect as 40% less housing purchases means house building labor has to go down by 40%

In short words, making state colleges somewhat more free acts as an economy GDP multiplier both in student income, gov taxes, and consumer buying...

In very attention grabbing words....making state colleges somewhat free with fed help increases GDP by 3 to 5 percent....which is why economists are somewhat screaming for it to be done.

Student loans should be illegal, and state schools should be heavily subsidized for low income residents.

Don’t practically all university users have very low incomes?

Yes, but I'm talking about the way university financial aid works. It is based on the household income of the parents, given the expectation that parents will contribute significantly to the costs.

"Low income residents" in this context almost certainly means "low income families" or more succinctly, parents.

I don't know I would go as far as illegal but they should be discouraged at least.

The loans really create a perverse system of runaway prices.

The government should get out of the student loan business. If a private company wants to make a loan, and take the risk of default or bankruptcy, fine.

OK I admit "illegal" is too hot headed.

> state schools should be heavily subsidized for low income residents.

I mean they mostly are - I'm annoyingly in the middle on this in that I see a lot students borrowing to go to schools they shouldn't when there are cheaper options available like state and community colleges. I don't feel a lot of sympathy for loan forgiveness when there are alternatives.

However, schools that accept loan money should underwrite the loans if it's such a sure thing, and they should be dismissable via bankruptcy.

Sadly, I don't think we can get good numbers on the number of people who take higher education seriously.

I managed an R1 universities LMS for several years, and I taught at community college, as well as going through my own 8 year Associates to Bachelor adventure (without government assistance).

It sickened me, paying my way, and then later in my career, how many people I saw cheating and putting in minimal effort...but the expectation is to generally accept both of these and award the same degree. Cheating had to be extensive, or for profit, for it to result in anything that would prevent a degree from being possible.

The end result seems to be "why bother" if it's all the same, and probably less than half the students in a classroom actually want the education.

However, schools have to invest in more dorms, parking, teachers, etc. which all makes the costs higher... And businesses like Microsoft and GitLab want licenses based on total employees + students.. which is ignoring the actual usage/needs of different classes of employees and schools of students. GitLab wanted $250/user/year (effectively), which was almost twice our existing technology fee.

We like to blame universities for all the raised costs, and they are to blame for a lot of it.. but many operate close to non-profit, and their rates are set by what businesses demand for what they need to operate.

I've watched plenty of the folks who I knew to be "cheaters" in my local state university not only end up at the FAANG, but end up being promoted relatively quickly.

Plenty of folks witness and seethe the same way on places like blind where the leetcode interview cheaters who make it into the FAANG also get promoted.

I think cheating in school is basically logical, as I think school performance is only lightly predictive and companies either fire incompetents quickly or are themselves incompetent and deserve their fate. Why should we be upset at someone programming a periodic table into their calculator for a physics class where that would be "cheating" when the tip-top of our educational elite cheat at the highest levels of their craft?[1] [2]

Most professors/teachers are deeply authoritarian to the core, as their role in society is to act as the filter, who decides that "some in this room should have good earning potential and eat lobster thermidor" and others should "go back to the fields". I do not believe that most teachers or professors have earned or deserve their role as "arbiters of future earning potential", and I view subverting their intentions as needed - including their intentions to root out cheating - to be extremely important in the maintenance of a free society, as the alternative begins with ideas like "teachers can confiscate cellphones for the whole year and not give them back" and "This one notorious shitty professor acts as the arbiter in the whole department for who writes the code at the FAANG and who serves them sushi at their cafeteria"

[1] - https://stanforddaily.com/2023/07/19/stanford-president-resi...

[2] - https://www.thecrimson.com/article/2024/1/3/plagiarism-alleg...

They operate close to non-profit only because they pay an army of useless bureaucrats. They are essentially cities within a city, having their own housing, food service, gyms, swimming pools, etc. They need to go back to just being schools.

We have a similar impending, though more distant, student-loan disaster in the UK, although the details are very different (generally to the benefit of the loanholders, thankfully).

Between 2012–22, university tuition more than tripled and student loans were offered with the following terms: no debt collection or defaulting; no impact on credit rating; only repay 9% when you earn over £27,000/yr (average UK graduate salary is £38,500, ranging between £16,000 and £90,000[1]); debt wiped after 30 years.[0]

The idea was that having more graduates was a good thing, but this was in the midst of the post-2008 austerity hysteria so the government couldn't be seen to just be paying to subsidise higher ed. So the dumbest possible solution was devised, such that all the money given out as 'student loans' could be recorded on the balance sheets as loans that would one day be repaid (i.e., not an expense but an asset).

One can voluntarily make additional repayments, but there is no benefit to doing so because there is no downside to having the debt.[2] The interest gained (which is comparatively high) results in the balance usually increasing faster than most people are paying it off. The government has in the past backed off on highly controversial plans for retroactive changes to the repayment thresholds,[3] although in 2022 they did freeze the thresholds for three years (which had until then been rising with inflation).[4]

As a result, in 2042 a good amount of the first tranche of these loans will default, leaving a big hole in the budget. By that point, the total value of student loan debt is forecast to be £500bn.[5] It's estimated that over 80% of loans will never be fully repaid.[6] For comparison, UK annual spending on defence is ~£55bn and healthcare is ~£180bn.

[0]: https://www.moneysavingexpert.com/students/student-loans-tui... — I think post-2022 loans are similar, but I'm less familiar with them

[1]: https://www.savethestudent.org/student-jobs/whats-the-expect...

[2]: https://www.moneysavingexpert.com/students/repay-post-2012-s...

[3]: https://www.moneysavingexpert.com/news/2015/11/autumn-statem...

[4]: https://www.moneysavingexpert.com/news/2022/02/plan-2-studen...

[5]: https://commonslibrary.parliament.uk/research-briefings/sn01...

[6]: https://fullfact.org/education/about-17-students-are-forecas...

They should be discharged in bankruptcy like other loans.

Students not paying these loans only hurts the students and it's partly a debt slavery mechanism that the government will use to deny social security and maybe Medicare later on.

https://larson.house.gov/media-center/in-the-news/inside-fig....

It's coming and the government knows what it did.

Student loans are an aspect of generational warfare. Generational warfare that has been waged quite poignantly against the current younger generations.

Student debt being categorized is a separate uncancelable debt in bankruptcy is a curious aspect of this. Much like the mortgage crisis, student debt was not a problem as long as the value of a college education and the job market justified it as a good investment.

The fact that student loans have punitive lock-in for a class of consumer coming straight out of high school with almost no real world experience and arguably lacking biological cognitive aspects to appreciate long-term implications of the loan contract, that seems like collective exploitation.

In a sense, the generation did the proper thing. It was a quiet rebellion. They simply stop trying and paying. Regardless of the legal requirements of forced repayment, The government is now forced to deal with its malfeasance in policy.

I didn't like the tone of the article. It places all the blame on the lack of payment by loan holders, while absolving all responsibility for providing good loans by the loan givers. Situations very similar to the housing crisis of the aughts.

We've all seen what happens with bad debt on this website. It goes for pennies on the dollar or less.

And if the alleged scope of the problem is only 475 billion, as ridiculous as that sounds, this is not some nuclear bomb for the economy as a whole.

I would say just take it out of a couple years of social security payouts and Medicare. Obviously politically untenable.

EFF off James G Martin.

I am a 50 year old for reference.

The article also asked to have colleges co-sign student loans. That would be the end of that program.

It shows what kind of economic system we have that the parasitic idle class has imposed upon the class which works, when the one kind of loan you can't shake is one you sign up for before you're allowed to drink alcohol, under high pressure from society at large if you ever want a job. Whereas corporations go bankrupt discharging debts, get PPP Covid government handouts, bailouts etc.

In Europe students get free college. Up until 1981 there was free public college in parts of the US, but that kind of New Deal / Great Society thing has ended.

Its not generational warfare its warfare of the useless managerial / bureaucratic class against the productive class. Why do we have student loans, health insurance, or any other number of systems that are net drains on everything? Because the hundreds of thousands that benefit from the system via useless jobs will be fired if we get rid of these systems.

The people that benefit from student loans are not old people or students. Its the useless administrators hired by these schools

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