"End student loans, don't make them cheaper"

Page 2 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.

IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
126
Try the students who have to pay back large loans. Who is the winner? The university system that has students flush with federal money flooding their campus's every semester.

The bankers were just an extra layer of a larger welfare system to the universities.

That's right.

I have several ideas on potential solutions that have been covered in many threads like this, but I need to run to a meeting and rather than whine and throw partisan digs, I'd like to hear Jhhnn's ideas because he might be surprised at how a common ground can be reached.
 

IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
126
This.

Make sure your vote supports tax cuts for job creators. It's the only way things will improve.

Tax cuts should be directly tied to payroll and hiring IMO. Also, any tax breaks given to corporations should be contingent upon x number of hirings and if they don't live up to that commitment, they need to pay the full taxes back (retroactive from the agreement) and a penalty. But that's a different thread. :)
 

dank69

Lifer
Oct 6, 2009
35,206
28,225
136
And you understand them? Don't make us laugh. Seriously, all you do is spew your partisan rhetoric and don't offer any suggestions, unlike CPA, whose list was quite good.

Universities and loan officers are partially to blame, but it is REALLY hard to feel bad for someone who goes into six figure debt for an art history degree. Where are the parents in all of this? Why aren't the parents helping their kids avoid these pitfalls by explaining the consequences?. Why aren't the parents saying "Junior, you're going to have a REALLY hard time finding meaningful employment with your art history degree?"

At one time, I was perhaps the biggest defender of universities, degrees, etc, but no more. Universities pedal degrees they know are worthless and people who frankly don't have the skills to major in something worthwhile eat these up (I'm looking at you, degrees ending with the word "Studies"). People should be smarter than that and know those degrees aren't worth the paper they're written on. The blame goes both ways and the idiots who show up periodically on CNN whining about their $150K in student loans for their Women's Studies degree are just advertising their lack of critical thinking and analytical skills.
Lol how many teenagers do you know that do what their parents tell them ot take their parents advice?
 

Exterous

Super Moderator
Jun 20, 2006
20,348
3,426
126
I have a couple of issues with the article:

Annual student loans, Pell Grants, tax credits and other federal assistance totaled some $169 billion a year in 2010-11 - more than 1 percent of national output. These programs are based on two erroneous premises: that almost everyone needs higher education for vocational success, and that they reduce student costs.

It seems like the article is lumping Federal and Private together which I think is ill advised although it certainly does make the numbers sound impressive.

The Federal loan premise they are issued on is that everyone deserves the opportunity to achieve higher education. They also reduce a students costs but have never been to reduce student costs across the entire country. They are a means by which students from lower a lower SES can attain a college education. Federal student loans are harder to get and almost always have a significantly lower interest rate. There are also limits to what you can get through the government.

Now Private loans on the other hand typically have much higher interest rates and much much (much) more generous lending practices. And why shouldn't they? They have NO risk to the banks. They can't be discharged by bankruptcy and often must be co-signed. Maybe if a plane carrying the lendee and co-singer crashed they would be out of some money but thats about it

Generally I am not much for government intervention in business but since the government has decided that student loans are not dis chargeable in court it seems like we need new regulations about the lending of private loans

It should provide educational vouchers (similar to Pell Grants) directly to students (not schools), and make those vouchers progressive (very low-income students receive the most, fairly low-income students a little, and middle- and upper- income children nothing)

Yeah - fuck those middle income brackets. What have they ever done useful. The poor get to attend for free/close to free and the wealthy can afford it all out of pocket. The middle gets gangbanged as usual as they try to milk as much as possible out of us.

Remove the tuition tax credit that largely assists relatively affluent students and their families; perhaps use savings from all of the above to reduce the budget deficit.

Really? You mean the same one that starts fazing out after $65k or 130k (joint)? Yeah - as it applies to anyone who has a loan under the cap I fail to see how this largely only assists relatively affluent students and their families - unless the premise is that most people making below 65k are attending college without loans?
 
Last edited:
Nov 29, 2006
15,601
4,051
136
Colleges and universities do not usually train technical people in specific job related skills for every known server and database and application on the face of the earth. That is the Employer's job. There are no such people. From my experience you can train a monkey to write a program.

There are two facts you need to know.
1. The federal government forced the takeover of student loans.
2. The federal government makes money from student loans.

So if the rates go up the governemnt just makes more money off of the suffering of people. This is the Tyrany of the progressives. They will not be happy till every worker is paid slave wages. This is the future you will get from O'Bammah. If you voted for O'Bammah you are the problem.

By issuing student loans the Federal Government is running its own Bank.

Yeah i keep forgetting everytime the GOP is in control that the tyranical student loans disappear. :rolleyes: Please...both parties contribute to this problem.
 

dank69

Lifer
Oct 6, 2009
35,206
28,225
136
...
Really? You mean the same one that starts fazing out after $65k or 130k (joint)? Yeah - as it applies to anyone who has a loan under the cap I fail to see how this largely only assists relatively affluent students and their families - unless the premise is that most people making below 65k are attending college without loans?
Sounds like another 'raise taxes on the middle class while telling them we are simplifying the tax code so we can reduce rates for everyone (resulting in same effective tax rate for middle class and lower effective rate for wealthy)' type deal.
 

rudder

Lifer
Nov 9, 2000
19,441
85
91
Don't you know? You have to go to college to be successful.

High schools have ditched vo-tech classes to concentrate on standardized tests. But I suppose you can't blame them. A high school grad with vocational training will enter a workforce dominated by illegal labor and will find it difficult to earn a decent living.
 

Exterous

Super Moderator
Jun 20, 2006
20,348
3,426
126
Want to pay cheaper college costs or not get hit with a huge loan payment after graduating. Here's some tips:

1) Go to an in-state college.
2) Get your first two years of courses (ie, the prerequisites) at a community college or junior college
3) Live off-campus either sharing an apartment or living with relatives
4) Take relevant courses to your degree. Don't take fluff that you don't need.
5) Rent books or buy used
6) Take online courses
7) Only borrow what you need for the classes. Don't take extra because it's like "free money"
8) Work while you study so you can pay for some of your costs with cash.

I'd like to know the percentage of students/graduates who are buried by student loans that did any of these. I'm guessing very little. There's a whole hell of a lot you can do for yourself instead of whining for more help from the government.

Some very good points, esp the in-state and attend two cheaper years. The downside to the community college is that you have to be really careful what you take and where you want to transfer to. Many colleges can be very picky about what they will transfer in which is all compounded because you don't necessarily know who will accept your application.

Also - long, anecdotal story short - not everyone can easily work while attending school. I did it and was only one of 3 in my graduating class that held a job throughout the course but my grades did suffer.

One thing that annoys me is that a lot of colleges require fluff classes so you can't necessarily get out of that. They build an image about what their student should be like and that often includes 'well-rounded' and that means a host of liberal arts, science, math etc that are not required for your degree. I could have finished in two years if all I needed were core classes. The fluff added those other two years (which I was able to mostly complete at a cheaper school)

Where are the parents in all of this? Why aren't the parents helping their kids avoid these pitfalls by explaining the consequences?. Why aren't the parents saying "Junior, you're going to have a REALLY hard time finding meaningful employment with your art history degree?"

At one time, I was perhaps the biggest defender of universities, degrees, etc, but no more. Universities pedal degrees they know are worthless and people who frankly don't have the skills to major in something worthwhile eat these up (I'm looking at you, degrees ending with the word "Studies"). People should be smarter than that and know those degrees aren't worth the paper they're written on. The blame goes both ways and the idiots who show up periodically on CNN whining about their $150K in student loans for their Women's Studies degree are just advertising their lack of critical thinking and analytical skills.

But them not being worth the paper they are written on is a relatively new phenomenon. The parents are slow on the response as it used to be you could get a very good job with a 'studies' degree. Granted it was basically because you had a degree but its really only been in the last 8 years or so that its all come crashing down. Thats not much time to reverse generations of the 'any college degree = better job/life' mantra

When you evaluate a degree program, you must look at it as an investment. NOTHING in life is guaranteed. NOTHING. BUT, you need to evaluate the job prospects in a field, average salaries, etc. before assuming debt.

I think its unrealistic to expect that students are able to accurately study and examine the work place they are going to enter when they graduate. An 18 year old has no experience in market trends or any type of market analytical base to go on and now they must track the 4 year trend of a job while they were in college? I am no expert but basing a major change off of a 2 year trend for a degree that has historically done very well seems a bit of a knee jerk reaction so you might wait longer. Oh you are three years in and the market for your job tanked? Now what? That happened to me.

I started college. Hey - Architects are doing great! Three years in that all changed and got even worse by the time I graduated. In the span of 4 years Architects had gone from an average rate of unemployment to something like 14% - higher than degrees in arts or humanties! Do we really expect that 18 year olds can spot trends that the rest of the world doesn't see?

There are now some obvious low hanging fruits like an art degrees where I think almost everyone can agree that its a bad decision but we have to realize not everyone who is in this boat made that decision. Sure the really dumb ones make the really big headlines with their 150k debt but many are struggling with 30-60k of debt. (Side note: I firmly believe this will profoundly impact retirement issues. If someone is paying off debt into their 40s how big do you think their retirement savings are? Recent graduates are missing out on the best time in their life to invest)

18 year olds are not taught how to critically analyze a job market or trends. They are not even taught financial planning in schools. How many 18 year olds really understand what they are taking on? My bet would be very few. I was incredibly lucky that my father spent time teaching me about finances but I am not so naive to assume that other children get the same education. All I need to do is look at the housing market/amount of debt americans carry to know that the vast majority of parents are not suitable finance teachers/role models.
 
Last edited:

MovingTarget

Diamond Member
Jun 22, 2003
8,999
109
106
Getting rid of student loans is a BAD idea as it would lead to an overall decline in economic mobility. However, our system of funding higher education needs to be reformed. The recent moves to cap the interest rates of federal student loans was a good move, but why stop there? We should add a stipulation to the federal loan program that only allows those loans to go to schools that do not increase tuition beyond the approximate rate of inflation. If schools want to gouge students, then they must do so without the help of federal guarantees.
 

Jaskalas

Lifer
Jun 23, 2004
33,382
7,446
136
Don't end student loans, end college.

Apprenticeships, aka on the job training, should be a baked into most companies.
 

IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
126
Some very good points, esp the in-state and attend two cheaper years. The downside to the community college is that you have to be really careful what you take and where you want to transfer to. Many colleges can be very picky about what they will transfer in which is all compounded because you don't necessarily know who will accept your application.

Also - long, anecdotal story short - not everyone can easily work while attending school. I did it and was only one of 3 in my graduating class that held a job throughout the course but my grades did suffer.

One thing that annoys me is that a lot of colleges require fluff classes so you can't necessarily get out of that. They build an image about what their student should be like and that often includes 'well-rounded' and that means a host of liberal arts, science, math etc that are not required for your degree. I could have finished in two years if all I needed were core classes. The fluff added those other two years (which I was able to mostly complete at a cheaper school)



But them not being worth the paper they are written on is a relatively new phenomenon. The parents are slow on the response as it used to be you could get a very good job with a 'studies' degree. Granted it was basically because you had a degree but its really only been in the last 8 years or so that its all come crashing down. Thats not much time to reverse generations of the 'any college degree = better job/life' mantra



I think its unrealistic to expect that students are able to accurately study and examine the work place they are going to enter when they graduate. An 18 year old has no experience in market trends or any type of market analytical base to go on and now they must track the 4 year trend of a job while they were in college? I am no expert but basing a major change off of a 2 year trend for a degree that has historically done very well seems a bit of a knee jerk reaction so you might wait longer. Oh you are three years in and the market for your job tanked? Now what? That happened to me.

I started college. Hey - Architects are doing great! Three years in that all changed and got even worse by the time I graduated. In the span of 4 years Architects had gone from an average rate of unemployment to something like 14% - higher than degrees in arts or humanties! Do we really expect that 18 year olds can spot trends that the rest of the world doesn't see?

There are now some obvious low hanging fruits like an art degrees where I think almost everyone can agree that its a bad decision but we have to realize not everyone who is in this boat made that decision. Sure the really dumb ones make the really big headlines with their 150k debt but many are struggling with 30-60k of debt. (Side note: I firmly believe this will profoundly impact retirement issues. If someone is paying off debt into their 40s how big do you think their retirement savings are? Recent graduates are missing out on the best time in their life to invest)

18 year olds are not taught how to critically analyze a job market or trends. They are not even taught financial planning in schools. How many 18 year olds really understand what they are taking on? My bet would be very few. I was incredibly lucky that my father spent time teaching me about finances but I am not so naive to assume that other children get the same education. All I need to do is look at the housing market/amount of debt americans carry to know that the vast majority of parents are not suitable finance teachers/role models.

Perhaps, but when I graduated high school in 1989, I had a pretty good idea about what degrees had the highest chances of getting good jobs after graduating from high school. Maybe most kids aren't that forward thinking, but that goes back to financial education and I think it should be a requirement in high school. Maybe if these kids understood what they were getting into, they'd be more careful.
 

IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
126
Lol how many teenagers do you know that do what their parents tell them ot take their parents advice?

If my parents said "This degree will cost you $120K in loans and will take you a couple of decades or more to pay off if you get a <insert generic liberal arts degree here>," you damn well better believe I'd listen. But as I mentioned in another post, I think basic financial education needs to be addressed and it should be a requirement in high school. I have no doubt that most of these people didn't understand what they were getting into, but that doesn't excuse their behavior especially when many kept going back to the trough for more money.
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
76
Student loans should be un-socialized. There must not be a "too big to fail" mentality to them, that is what causes bubbles and crashes just like "affordable housing". Student loans should be given by private banks seeking a profit. Therefore in order to get a loan, you should have to submit a business plan to show what degree you will work on, how long it will take, what kind of job you will get when you graduate, how much you will make, and how long it will take to pay back the loan. Banks wouldn't give $100k loans to morons who want to get a masters in women's studies at a private school, and neither should the US taxpayers.
 

jstern01

Senior member
Mar 25, 2010
532
0
71
Student loans should be un-socialized. There must not be a "too big to fail" mentality to them, that is what causes bubbles and crashes just like "affordable housing". Student loans should be given by private banks seeking a profit. Therefore in order to get a loan, you should have to submit a business plan to show what degree you will work on, how long it will take, what kind of job you will get when you graduate, how much you will make, and how long it will take to pay back the loan. Banks wouldn't give $100k loans to morons who want to get a masters in women's studies at a private school, and neither should the US taxpayers.

I would go along with that, but with one caveat, they should be treated like any other loan, dischargeable through bankruptcy. If we are going to treat the loan like a business loan, with the associated process, then its all or nothing on how we handle them.

One last point on the entire issue about jobs, college and the hireability of college grads. Back in the day, when a student graduated, the expectation of that student was a basic understand of the field in which he specialized. Companies would take that raw talent and thru (for lack of a better term) reshape them into a productive employee. Large companies like IBM, Westinghouse, etc. would have programs that trained these graduates to become useful. The process sometimes took as little as 6 months, sometimes for more technical areas a couple of years.

What has changed is that in our globalized world, these companies no longer choose to invest this effort, if they can hire a foreign worker (H-1B and L1 visas) that will work for less, and if they do not have the skills are let go without issue. So companies are in a perpetual cycle of hiring, checking and firing if the employee can not do the work.
 

Capt Caveman

Lifer
Jan 30, 2005
34,547
651
126
Student loans should be un-socialized. There must not be a "too big to fail" mentality to them, that is what causes bubbles and crashes just like "affordable housing". Student loans should be given by private banks seeking a profit. Therefore in order to get a loan, you should have to submit a business plan to show what degree you will work on, how long it will take, what kind of job you will get when you graduate, how much you will make, and how long it will take to pay back the loan. Banks wouldn't give $100k loans to morons who want to get a masters in women's studies at a private school, and neither should the US taxpayers.

LOL.
 

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
But them not being worth the paper they are written on is a relatively new phenomenon. The parents are slow on the response as it used to be you could get a very good job with a 'studies' degree. Granted it was basically because you had a degree but its really only been in the last 8 years or so that its all come crashing down. Thats not much time to reverse generations of the 'any college degree = better job/life' mantra

I'd beg to differ. I graduated 20 years ago with a BA in sociology from a very well-respected liberal arts college, and even back then, it quickly became apparent employers had no interest in liberal arts degrees. The vast majority of employers who recruited at our school limited potential applicants to those with specific degrees. This trend is definitely NOT new.
 

Exterous

Super Moderator
Jun 20, 2006
20,348
3,426
126
Perhaps, but when I graduated high school in 1989, I had a pretty good idea about what degrees had the highest chances of getting good jobs after graduating from high school. Maybe most kids aren't that forward thinking, but that goes back to financial education and I think it should be a requirement in high school. Maybe if these kids understood what they were getting into, they'd be more careful.

It was a tad easier in 1989. Unemployment rates for college graduates were 5% which has been about average over the last couple of decades. In 2010-part of 2011 it was ~11% and this spike happened in a 2 year period. Thousands of college students entered college when rates were at about 6% and exited when it was 11%. A bit hard for people to plan when unemployment doubles from historical norms in less time than it takes for them to get their degree

I have no doubt that most of these people didn't understand what they were getting into, but that doesn't excuse their behavior especially when many kept going back to the trough for more money.

But there is nothing to balance predatory lending practices. The banks assume 0 risk so the spigot remains on. We've seen what happens when those balances fail (housing lending). Too few people said 'No, thats enough' on both sides of that little bubble. Do we really want to see what happens when neither side says no?
 

Exterous

Super Moderator
Jun 20, 2006
20,348
3,426
126
I'd beg to differ. I graduated 20 years ago with a BA in sociology from a very well-respected liberal arts college, and even back then, it quickly became apparent employers had no interest in liberal arts degrees. The vast majority of employers who recruited at our school limited potential applicants to those with specific degrees. This trend is definitely NOT new.

Compared to other degrees - most likely. But that is not at all what I was talking about
Unemployment rate recent grad Arts: 12%
Unemployment rate recent grad Drama: 8%
Unemployment rate recent grad Music: 9%
Unemployment rate recent grad Photography : 13%
Unemployment of young high school graduates (no college): 31%

You are more likely as a young adult to find a job with a degree than without.
It is only recently that getting that degree is going to cost you outrageous sums of money which makes it much more difficult to figure out if the lower unemployment rate is worth the cost.

http://www.epi.org/publication/bp340-labor-market-young-graduates/
http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/Unemployment.Final.pdf
 
Last edited:

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
76
I would go along with that, but with one caveat, they should be treated like any other loan, dischargeable through bankruptcy. If we are going to treat the loan like a business loan, with the associated process, then its all or nothing on how we handle them.

One last point on the entire issue about jobs, college and the hireability of college grads. Back in the day, when a student graduated, the expectation of that student was a basic understand of the field in which he specialized. Companies would take that raw talent and thru (for lack of a better term) reshape them into a productive employee. Large companies like IBM, Westinghouse, etc. would have programs that trained these graduates to become useful. The process sometimes took as little as 6 months, sometimes for more technical areas a couple of years.

What has changed is that in our globalized world, these companies no longer choose to invest this effort, if they can hire a foreign worker (H-1B and L1 visas) that will work for less, and if they do not have the skills are let go without issue. So companies are in a perpetual cycle of hiring, checking and firing if the employee can not do the work.

I don't think student loans should be dischargeable. That leads to moral hazards of racking up huge loans, declaring bankruptcy, and then moving on with the rest of your life. Especially for expensive degrees with high potential incomes such as lawyers and doctors. You can still declare bankruptcy to negotiate the terms of the loan with the bank (i.e. longer term, lower interest, limited deferral period, etc).
 
Dec 30, 2004
12,554
2
76
Employers want people who know the job without training, and believe youth are lazy and entitled. That last part is certainly partly true, but too generalized. I don't think university should be free. If it's free, it becomes meaningless and you do become entitled like those kids in Quebec. However, indebting our students so much is hurting society. Loans should be harder to get, and more restricted on what they can be spent on. I knew kids who spent their loans on everything but school.

the loans are paid directly to the schools.
You're only allowed to take out up to the maximum of the cost of tuition.
 
Dec 30, 2004
12,554
2
76
Want to pay cheaper college costs or not get hit with a huge loan payment after graduating. Here's some tips:

1) Go to an in-state college.
2) Get your first two years of courses (ie, the prerequisites) at a community college or junior college
3) Live off-campus either sharing an apartment or living with relatives
4) Take relevant courses to your degree. Don't take fluff that you don't need.
5) Rent books or buy used
6) Take online courses
7) Only borrow what you need for the classes. Don't take extra because it's like "free money"
8) Work while you study so you can pay for some of your costs with cash.

I'd like to know the percentage of students/graduates who are buried by student loans that did any of these. I'm guessing very little. There's a whole hell of a lot you can do for yourself instead of whining for more help from the government.

this is great advice, except for online courses (have heard too many horror stories), and possibly the working while studying since that can be really tough.
Schools won't tell you about the community college thing, or limit the number or types of classes you can transfer. For some schools this is important for things like Math and programming because you can't control the quality of the courses and you get kids that suck. However, you could just fail them out and let the results speak for themselves...
 

WHAMPOM

Diamond Member
Feb 28, 2006
7,628
183
106
http://www.startribune.com/opinion/commentaries/159449755.html?page=all&prepage=1



This is a case where I'd like some middle-ground. I don't think we should go back to the days when only wealthy people could afford to send their kids to college and perpetuate undeserved class distinctions. On the other hand we can't just fund any tuition increase. A lot of this money should go towards shoring up affordable public colleges and universities.

'cause employers are advertising for people with ten years experience in three different fields at entry level wages.
 

Exterous

Super Moderator
Jun 20, 2006
20,348
3,426
126
I don't think student loans should be dischargeable. That leads to moral hazards of racking up huge loans, declaring bankruptcy, and then moving on with the rest of your life. Especially for expensive degrees with high potential incomes such as lawyers and doctors. You can still declare bankruptcy to negotiate the terms of the loan with the bank (i.e. longer term, lower interest, limited deferral period, etc).

Do you really think we are just stuck with only two options - either always discharge-able or never discharge-able? What about an option where they could be discharged after X number of years? You could even make X based on some income/employment scale
 

IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
126
I'd beg to differ. I graduated 20 years ago with a BA in sociology from a very well-respected liberal arts college, and even back then, it quickly became apparent employers had no interest in liberal arts degrees. The vast majority of employers who recruited at our school limited potential applicants to those with specific degrees. This trend is definitely NOT new.

Thanks, that was my point. When I was in high school in the late 80s, it was already very apparent that employers had no interest in liberal arts degrees and that the best course of action would be:

1. Major in engineering, science, or accounting finance.
2. If you were 100% sure you'd go to grad school, do liberal arts and then do law or something of that nature.

The fact that it might have been easier to get a job when graduating from college 20 years ago isn't relevant; the fact is that 20 years ago, you were still going to have a much harder time finding gainful employment with only a liberal arts degree as opposed to an engineering or another of the aforementioned degrees. That's my point and people in this thread keep losing sight of this fact. The problem may be worse now because of the economy, but this is not a new development and will always be true.
 

IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
126
But there is nothing to balance predatory lending practices. The banks assume 0 risk so the spigot remains on. We've seen what happens when those balances fail (housing lending). Too few people said 'No, thats enough' on both sides of that little bubble. Do we really want to see what happens when neither side says no?

There is blame on both sides -- while the banks had little to lose and kept the money flowing, the fact of that matter is that people need to exercise some freaking common sense when it comes to loans and do research -- whether the loan is for education, cars, houses, etc. This "boo hoo, poor me, the bank got me!" excuse people are using is ridiculous. I've never had these issues -- why do you suppose that is?