College grads taking low-wage jobs displace less educated

[fskimospy]

Because educating them in worthless fields is definitely going to help us in international competition...... derp....

Maybe you should have gone to school for debate. Then at least you'd understand the arguments need to support your conclusion.

Funny thing you mention that, I was on the debate team in high school, haha.

You should take your own advice, btw, as your conclusion is not supported by your arguments: your idea was to eliminate all student loans, not only those in 'worthless fields'. The elimination of student loans would decrease the supply of labor across all fields, not just those 'worthless' ones. As previously mentioned, banks do not give high value unsecured loans to 18 year olds very often, no matter what they might be going to school for.

 

[fskimospy]

How about this - government backed loans are offered only for fields where current needs lie. I know, I know, social engineering is an evil tool of the left.

Haha, look who noticed the flaw in their argument!

 

[Jhhnn]

Bullshit. We researched in 8th grade to figure out what fields would be looking up at the point we were graduating from high school. We had tech, medical, and other companies come in and tell us where the economy was going. The teachers worked through the jobs likely to be high supply, and then advised the parents and students to base their curriculum around the ones that looked like the most interesting to them.

Planning your future isn't luck.

Which doesn't explain the dearth of jobs in the slightest, does it?

Of course not. It just explains how to compete for the diminishing number of jobs available vs the number of people who need them.

As I offered, there are larger issues. It's not all about you.

Refusal to account for luck, fortune, joss or whatever you want to call it is beyond delusional, btw.

 

[OverVolt]

Mmm

 

[momeNt]

Funny thing you mention that, I was on the debate team in high school, haha.

You should take your own advice, btw, as your conclusion is not supported by your arguments: your idea was to eliminate all student loans, not only those in 'worthless fields'. The elimination of student loans would decrease the supply of labor across all fields, not just those 'worthless' ones. As previously mentioned, banks do not give high value unsecured loans to 18 year olds very often, no matter what they might be going to school for.

There are a ton of ways private banks could find ways to make money off student loans to make it a viable option if government did not crowd out the market. You know this, but for some reason are being disingenuous about it.

Also demand for education outpaces the amount of education available because of just how many people are going to college for less than worthwhile degrees, lowering the relative value of grant money and scholarship trusts because education has been bid up so high.

 

[fskimospy]

There are a ton of ways private banks could find ways to make money off student loans to make it a viable option if government did not crowd out the market. You know this, but for some reason are being disingenuous about it.

Also demand for education outpaces the amount of education available because of just how many people are going to college for less than worthwhile degrees, lowering the relative value of grant money and scholarship trusts because education has been bid up so high.

I'm all ears, please share these student loan options with me. This principle should presumably hold true for any high amount unsecured loan given to an 18 year old who likely lacks any income, not just student loans.

 

[momeNt]

I'm all ears, please share these student loan options with me. This principle should presumably hold true for any high amount unsecured loan given to an 18 year old who likely lacks any income, not just student loans.

It's simple. Take a certain volume of loans, a certain delinquency rate, adjust the APR to make the loan's NPV positive. Actuarial data can provide the necessary grains of salt to adjust APR more precisely, like high school grades, test scores, etc. Family members could also be allowed to co-sign.

Education is not a phenomena of taxation and taxpayer backstopped funding.

The market maybe would take it in a different direction, there might be more on the job training, apprenticeships, and things like that. The possibilities are endless!

 

[desy]

underemployment is the result of the American dream of everybody gets a white color job so they don't have to sweat and have their dream career and pursue educational goals to that end.
Reality is there are certain jobs available. I took a job in 92 and was told I was overqualified. I replied that may be, however, I need a job and am willing to do whatever is required as I NEED to get paid to live. I was 27 and was in no way going to my parents basement.
The economy was poor back then and I took me a couple years to get back on the career track but I was single no debt or family obligations so I could live on any wage I received just needed to adjust expectations

 

[Exterous]

How about this - government backed loans are offered only for fields where current needs lie. I know, I know, social engineering is an evil tool of the left.

I think you over estimate the government's ability to respond to the changing needs of the market and overlook the lead times involved. Let's take a look at the MBA market as its a convenient example:
From 2005 until 2008 98% of MBA grads got and accepted a job offer within 90 days of graduation. In 2009 that fell like a friggen rock to only 85%*. So in 2005 you chose a 4 degree that is crazy hot but the year you graduate it turns ice cold. A 2% unemployment rate signals a need. How can you not think that there aren't enough MBA grads with stats like that? So, if the government were able to respond quickly it would hand out loans as there is a demonstrable need even though the following year showed that is absolutely not the case. Now you'll have an influx of people with degrees that are no longer needed.

*If you think 85% is still high for reference the unemployment rates for recent MBA grads in 2009 and 2010 was on par with History, Drama and Arts degrees.

This is not an isolated incident either. Architecture suffered the same, it appears Law school is suffering the same, IT only escaped due to the plethora of options and it wouldn't surprise me if we saw this happen to nursing in the future.

http://www.stanforddaily.com/2010/01/14/mba-grads-facing-low-employment-rate/

An interesting dynamic. But, from my perspective, not one that is going to end well.

Uno

I agree and the ripples are already starting to be seen. Since the debt cannot be discharged this is going to delay the age at which college students buy cars, houses or save for retirement which sets the stage for this to remain an issue for decades to come.

http://libertystreeteconomics.newyorkfed.org/2013/04/young-student-loan-borrowers-retreat-from-housing-and-auto-markets.html

About the only positive side effect that I can see if there are some early signs that the following generation is being better prepared in terms of financial education having watched and been instructed by those who are currently dealing with the student loan issue

 

[fskimospy]

It's simple. Take a certain volume of loans, a certain delinquency rate, adjust the APR to make the loan's NPV positive. Actuarial data can provide the necessary grains of salt to adjust APR more precisely, like high school grades, test scores, etc. Family members could also be allowed to co-sign.

Education is not a phenomena of taxation and taxpayer backstopped funding.

The market maybe would take it in a different direction, there might be more on the job training, apprenticeships, and things like that. The possibilities are endless!

Do you have any idea what the APR would be on a pool of unsecured loans to candidates with no credit history, no assets, and no income?

This is what I mean about student loans not existing. You would have to be insane to take them.

 

[fskimospy]

The market maybe would take it in a different direction, there might be more on the job training, apprenticeships, and things like that. The possibilities are endless!

Yeah, either that or higher education would go back to being what it was before: only for the rich.

 

[Jhhnn]

I do luv how the usual suspects lean on the false "useless degree" paradigm. It's a nifty bit of self-aggrandizement, if nothing else.

If more people got what they consider to be "useful" degrees, then it just means that more people with those degrees would be working outside their chosen fields for less than their potential in their field, while less capable people would be pushed even lower.

Righties seem to think that there are more jobs than workers, when that's not true except in very, very specialized & rare endeavors. They also seem to think that the constant (often involuntary) churn in employment has little effect when that's not true, either. Or that the reason your company went bust is because the workers weren't good enough, or something.

Successful young families depend on steady employment in no small way, because they live on the monthly payment plan, having low assets & high overhead. The number of times they'll suffer setbacks from being downsized, rightsized, laid off, relocated and offshored is no small matter, particularly when forced into occupations below their academic achievement.

 

[momeNt]

Yeah, either that or higher education would go back to being what it was before: only for the rich.

Jobs might not also demand college education. Who knows maybe a single semester bookkeeping course might allow you to be the wealthiest American who ever lived again?

 

[momeNt]

Do you have any idea what the APR would be on a pool of unsecured loans to candidates with no credit history, no assets, and no income?

This is what I mean about student loans not existing. You would have to be insane to take them.

You might be right. In the end there is always the option of going back to being an agrarian society and living simply. As opposed to be an incredibly advanced society unable to help so many people simply live.

How is that for poetry?

 

[Hacp]

Do you have any idea what the APR would be on a pool of unsecured loans to candidates with no credit history, no assets, and no income?

This is what I mean about student loans not existing. You would have to be insane to take them.

Cheap loans are the reason for high college prices. Colleges keep raising tuition because the demand for college is SO high, due to cheap loans. Get rid of the cheap credit and colleges will be forced to reduce tuition. Thus, even with APR, students will be paying less total for college.

 

[fskimospy]

Cheap loans are the reason for high college prices. Colleges keep raising tuition because the demand for college is SO high, due to cheap loans. Get rid of the cheap credit and colleges will be forced to reduce tuition. Thus, even with APR, students will be paying less total for college.

Cheap loans are one of many reasons for high college prices. There is simply no way college prices are going to go down anywhere close to the amount they would have to in order to make college cost less overall. We are probably talking APRs north of 20%, maybe north of 30%. Even at 20% that would mean that with interest you would already owe double what you paid in the first year by graduation day.

If you want to talk alternative ways of financing higher education I'm down, but the idea that the unsecured loan industry is going to lead the way for that is patently absurd.

 

[momeNt]

What is the delinquency rate? It's not that hard to set up an excel sheet to return a positive NPV with the few inputs of delinquency, payback period, tuition costs, loan company overhead and collection costs.

Too lazy to look for delinquency rates by degree. Can't take an overall average of it because banks would loan with greater caution than how it is done now.

 

[momeNt]

Cheap loans are one of many reasons for high college prices. There is simply no way college prices are going to go down anywhere close to the amount they would have to in order to make college cost less overall. We are probably talking APRs north of 20%, maybe north of 30%. Even at 20% that would mean that with interest you would already owe double what you paid in the first year by graduation day.

If you want to talk alternative ways of financing higher education I'm down, but the idea that the unsecured loan industry is going to lead the way for that is patently absurd.

You're talking about this as if the banks would have zero ability to vet the student before giving the loan. This wouldn't be like an apply online and get credit decision in 30 seconds type of loan.

 

[fskimospy]

You're talking about this as if the banks would have zero ability to vet the student before giving the loan. This wouldn't be like an apply online and get credit decision in 30 seconds type of loan.

No I'm not. I'm saying if you don't think that APRs will be very, very high you're dreaming. Additionally, since the loans will be unsecured and people at that time in their life often have no assets, there would be a powerful motivation to simply declare bankruptcy after finishing college. People will notice this and this will drive APRs up even further.

This is why banks don't give out large unsecured loans, btw.

 

[momeNt]

Maybe employers would pay for college. Kind of like a MLB farm system.

See. This is how the free market works, we pitch ideas, they get critiqued, and we evolve.

NFL and NBA doesn't use farm system (like how current employers work) because the NCAA is well established in those areas (equivalent of college and federal backstopping). MLB is forced to establish a farm system because the NCAA baseball system isn't structured properly to develop American talent, much less foreign talent.

Maybe jerb creators can really fix education after all huh? After all they have been getting a free pass this entire time to education.

 

[Hacp]

No I'm not. I'm saying if you don't think that APRs will be very, very high you're dreaming. Additionally, since the loans will be unsecured and people at that time in their life often have no assets, there would be a powerful motivation to simply declare bankruptcy after finishing college. People will notice this and this will drive APRs up even further.

This is why banks don't give out large unsecured loans, btw.

That's great. As I mentioned, cheap money is why colleges are unaffordable today. The first step is to reduce the number of people who can afford to go to college. Colleges will then react by finding ways to cut costs (like not building that shiny new theater or sporting facility).

 

[fskimospy]

Maybe employers would pay for college. Kind of like a MLB farm system.

See. This is how the free market works, we pitch ideas, they get critiqued, and we evolve.

NFL and NBA doesn't use farm system (like how current employers work) because the NCAA is well established in those areas (equivalent of college and federal backstopping). MLB is forced to establish a farm system because the NCAA baseball system isn't structured properly to develop American talent, much less foreign talent.

Maybe jerb creators can really fix education after all huh? After all they have been getting a free pass this entire time to education.

So your argument is 'I don't know, but I'm sure someone will figure it out'.

I'm sorry, but the idea that you thought some better loan underwriting would solve the problem of unsecured student debt does not make me confident in your solutions.

 

[fskimospy]

That's great. As I mentioned, cheap money is why colleges are unaffordable today. The first step is to reduce the number of people who can afford to go to college. Colleges will then react by finding ways to cut costs (like not building that shiny new theater or sporting facility).

You should look up the relationship between student loan availability and tuition increases. You realize a lot of empirical research has been done on it and they find no statistically significant relationship, right?

I tend to think that there is still one in there somewhere, but it is clearly not the dominant trendsetter.

 

[Jhhnn]

That's great. As I mentioned, cheap money is why colleges are unaffordable today. The first step is to reduce the number of people who can afford to go to college. Colleges will then react by finding ways to cut costs (like not building that shiny new theater or sporting facility).

Heh. That's a helluva way to increase already diminished social mobility, huh?

Maybe we should just go back to the 1820 model, where only the wealthy went to college? That way, their kids won't have to compete with upstart commoners, ya know?

 

[chucky2]

That's great. As I mentioned, cheap money is why colleges are unaffordable today. The first step is to reduce the number of people who can afford to go to college. Colleges will then react by finding ways to cut costs (like not building that shiny new theater or sporting facility).

Dude are you crazy? Can you imagine if staff actually were paid what they were worth instead of inflated salaries? If people had to use the same bldg that has nothing wrong with it rather than construct the new $100M bldg? If the chancellor couldn't make $400k a year? My god man, think of academia! What are they going to do if the kids with no clue who are there to party, get drunk, have sex, do some schoolwork (maybe), and graduate with a piece of paper that guarantees they can do nothing more than spend lots of money aren't able to do that?