I thought this was an interesting introductory legal analysis. As someone who has practiced bankruptcy law, I am surprised that advocates are not trying to amend the bankruptcy code to change the...
I thought this was an interesting introductory legal analysis.
As someone who has practiced bankruptcy law, I am surprised that advocates are not trying to amend the bankruptcy code to change the fact that student loans are a unique exception to dischargeable debt. Even taxes are dischargeable. Bankruptcy judges and trustees are qualified, skilled and experienced granting relief to the needy while sniffing out and denying relief to fraudsters and con artists. It would be very easy to implement a five or ten year delay after a student's last class before they were eligible for bankruptcy to prevent gaming the system.
If that was too much for someone, congress could explicitly pass a law overturning the undue hardship standard for student loan discharge where the former student debtor is disabled. The test is the Brunner test and it is very difficult to meet, even assuming a disabled debtor can afford to litigate the question. https://www.abi.org/member-resources/blog/discharging-student-loan-debt-the-brunner-test
The bankruptcy issue is serious, but I think the real economic drag of student loan burdens is just that it slows down consumption, entrepreneurship, and life milestones across the board, even for...
The bankruptcy issue is serious, but I think the real economic drag of student loan burdens is just that it slows down consumption, entrepreneurship, and life milestones across the board, even for people who aren’t in bankruptcy level hardship.
People aren’t starting businesses because of debt burden, they’re deferring having children, they’re deferring homeownership and home construction. It’s just a massive drag on the vitality of the economy when all the most educated people are pressured into choosing lower risk financial positions with their careers instead of doing the sort of dynamic stuff that generates long term growth and creative destruction.
I actually don’t want a state of affairs where access to education is gated by ability to pay and especially not on anticipated earnings after graduation. I think these both would commit the fundamental error of overoptimizing around higher education as a career path instead of a structure to generate a literate and responsive civic body.
Something to consider is that students are already going to be delayed on those life goals regardless of debt. Some marry, fewer have kids, and even fewer buy homes during their college years. So...
Something to consider is that students are already going to be delayed on those life goals regardless of debt. Some marry, fewer have kids, and even fewer buy homes during their college years. So there's already a delay from those getting degrees, adding the immense debt only exacerbates that.
But how are you going to do that without getting a law through Congress? Unless democrats somehow manage to get 60 votes in the Senate, there's no way any law that helps student debt borrowers...
As someone who has practiced bankruptcy law, I am surprised that advocates are not trying to amend the bankruptcy code to change the fact that student loans are a unique exception to dischargeable debt.
But how are you going to do that without getting a law through Congress? Unless democrats somehow manage to get 60 votes in the Senate, there's no way any law that helps student debt borrowers will be passed. Pre-2008, it might have been possible to get such a needed law through. But today, Republicans don't really have any political goals beyond grievance and malice. As the Obama era showed, a Democratic administration can literally adopt a Republican policy entirely, propose it as their own, and Congressional Republicans will oppose it. They oppose policies not because of their content, but simply because they are proposed by a democrat.
Remember, this is a party that is largely done with meaningful policy discussions. They didn't even pass a platform in 2020. At this point, they have abandoned any real attempt at governing and are have gone all in on grievance politics. They're the social media addicts party. Their modern generation of leaders don't know how to do anything except create outrage bait for facebook and other social media.
Objectively, you are correct. Ideally there are many, many better ways we could reform the student loan and university funding systems in general. But until the day comes that a party actually interested in governing gets 60 votes in the Senate, this is just a pipe dream. (Another option is nuking the filibuster, but democrats aren't really known for playing hardball. They will wait for republicans to repeal the filibuster before using it themselves.)
While you do make a good point, in the current world, it's mostly just a nice hypothetical. The Democrats in Congress would love to pass an educational reform bill that does these things and more. But unfortunately, even if they think all of the provisions are a good idea, Congressional Republicans will oppose it simply because a Democrat is in the White House. They are the party of outrage and grievance; they're simply not interested in policy anymore, unless that policy can be used to attack a minority group they've decided is worthy of destruction.
As such, we're stuck with whatever administrative actions Biden's team can cobble together. Is it perfect? No, but until the social media outrage party is driven from power, you will not see any meaningful legislation to actually improve people's lives.
We already have a good reason to vote democratic party because of abortion rights. This is another one, alongside civil rights for women, gay/lesbian/bisexual/transgender people and racial and...
We already have a good reason to vote democratic party because of abortion rights. This is another one, alongside civil rights for women, gay/lesbian/bisexual/transgender people and racial and ethic minorities.
I think overall you wrote a good post - and emotionally I get why you included lines like this one - but I feel like overall, snippets like the ones I cited promote a lazier discourse. Included in...
But today, Republicans don't really have any political goals beyond grievance and malice.
I think overall you wrote a good post - and emotionally I get why you included lines like this one - but I feel like overall, snippets like the ones I cited promote a lazier discourse. Included in overall good posts like yours, I don't mind, but it encourages people to post comments that are nothing but those types of snippets.
Again - I thought your post was good. I've just noticed that the discussion has started to get a little closer to the reddit smackdown so I thought I'd throw it out there.
I’m sorry, but can you explain how republican’s political goals doesn’t align with what they described. I understand not wanting to fall into a particular narrative, but there’s frankly obvious...
I’m sorry, but can you explain how republican’s political goals doesn’t align with what they described. I understand not wanting to fall into a particular narrative, but there’s frankly obvious reasons why people describe the Republican Party in that way.
In full seriousness, is your argument legitimately that the republican party doesn't have a single political goal besides grievance and malice or are you just dunking? I guess what I'm asking is...
In full seriousness, is your argument legitimately that the republican party doesn't have a single political goal besides grievance and malice or are you just dunking?
I guess what I'm asking is that you asked me to explain. Is there any chance at all you would change your mind? If so, I'm happy to talk about it with you.
They did remove their stated platform so they could freely oppose anything brought forward by the opposition. Their goal may not be “grievance and malice” but it does appear to be “power and...
They did remove their stated platform so they could freely oppose anything brought forward by the opposition. Their goal may not be “grievance and malice” but it does appear to be “power and control” above all else and their tactic is often to demonize minority groups as public threats to expand power in the name of safety and protection
I would add that it's "power and control" in furtherance of their goal of implementing a fascist theocracy. This has been something that they've wanted since at least the 80's when Reagan began...
I would add that it's "power and control" in furtherance of their goal of implementing a fascist theocracy. This has been something that they've wanted since at least the 80's when Reagan began courting Christian fundamentalists.
From what I've read on this topic, that's how it started out when they first introduced legislation around treating student debt differently. And as time went on, bankruptcy has become more and...
It would be very easy to implement a five or ten year delay after a student's last class before they were eligible for bankruptcy to prevent gaming the system.
From what I've read on this topic, that's how it started out when they first introduced legislation around treating student debt differently. And as time went on, bankruptcy has become more and more difficult as an exit route for student loans.
The downside of allowing bankruptcy is that it would likely force lenders to more strongly evaluate whether or not they'll issue student loans based on the debtor's ability to repay them, just like any other kind of debt. It would be interesting to see what kind of criteria they could use to make this decision for someone with no credit history. Will they simply require a qualified co-signer? Could they make a decision based on the perceived market value of the student's selected major?
Hopefully it would at least force colleges to lower their ridiculous tuition fees if no one can afford it anymore due to not being able to take crippling loans.
The downside of allowing bankruptcy is that it would likely force lenders to more strongly evaluate whether or not they'll issue student loans based on the debtor's ability to repay them, just like any other kind of debt. It
Hopefully it would at least force colleges to lower their ridiculous tuition fees if no one can afford it anymore due to not being able to take crippling loans.
Yes, totally agree. The cost of college has gotten out of hand in part because people are lining up at college doors to pay six figures for a college education. There are even waitlists for...
Yes, totally agree. The cost of college has gotten out of hand in part because people are lining up at college doors to pay six figures for a college education. There are even waitlists for acceptance at most schools. The ease of obtaining giant student loans to pay these ridiculous prices only makes the prices go up. That is one of my arguments against mass loan forgiveness - it would essentially mean that the federal government and taxpayers would be writing blank checks to universities, because students wouldn't need to worry about how much debt they're taking out (because it would just be forgiven anyway).
Making debt more difficult to obtain would result in fewer people with the financial means to attend expensive colleges, which would force those colleges to lower their prices. There would still be options for students, such as community college and/or in-state tuition at state schools.
How so? Your acceptance into school (typically) doesn't have anything to do with your ability to pay. It's up to the student to figure that out. If they can't pay, they can't attend (even today)....
How so? Your acceptance into school (typically) doesn't have anything to do with your ability to pay. It's up to the student to figure that out. If they can't pay, they can't attend (even today). Making debt more difficult to obtain means that more people are simply priced out of the super-expensive schools. It has nothing to do with the school being selective.
I think you're both saying basically the same thing. I assume he means, your school has 1000 spots and 3000 people apply. Right now you take the 1000 best students. New laws are passed and student...
I think you're both saying basically the same thing.
I assume he means, your school has 1000 spots and 3000 people apply. Right now you take the 1000 best students.
New laws are passed and student loans are harder to get. The school now has 1000 spots and 1500 students that can apply/ pay tuition. They still take the best 1000 students. Sure the quality of student has probably gone down, but it's not really hurting the school. Especially not in the short term. It doesn't become an issue that will effect prices, until they start having empty spaces, and not enough rich students to fill them.
Oh, I think I see what you (and he) mean. That kind of selection would be bad for high-profile universities in the long-term, though. Do you think ivy leagues and other universities that care...
Oh, I think I see what you (and he) mean. That kind of selection would be bad for high-profile universities in the long-term, though. Do you think ivy leagues and other universities that care about their rankings (which is how they're able to command high prices in the first place) would lower their admission standards just to enroll sub-par students with money? I know there have been scandals about this situation, but it's not very widespread. The most expensive schools will always care about their standings.
Most Ivy League schools already have programs for low income students that show a high level of promise. They would probably keep doing that and maybe expand them a bit.
Most Ivy League schools already have programs for low income students that show a high level of promise. They would probably keep doing that and maybe expand them a bit.
Schools care about how many of the students they accept choose to attend because that’s a significant factor in their rankings. They won’t accept students they think are unlikely to come and they...
Schools care about how many of the students they accept choose to attend because that’s a significant factor in their rankings. They won’t accept students they think are unlikely to come and they won’t accept students they think will struggle to graduate for whatever reasons, including inability to pay a few years in or because they have to squeeze in a class schedule on top of a job.
Making debt more difficult means more people are rendered unable to pay. There just aren’t that many grants floating around. i really haven’t seen any empirical basis for thinking tuition rates are boosted by credit.
I'd be curious to hear from college admissions staff if a student's financial position is factored into their acceptance to a school. I've never heard of this being the case, but I also don't work...
they won’t accept students they think will struggle to graduate for whatever reasons, including inability to pay a few years in or because they have to squeeze in a class schedule on top of a job
I'd be curious to hear from college admissions staff if a student's financial position is factored into their acceptance to a school. I've never heard of this being the case, but I also don't work in college admissions.
i really haven’t seen any empirical basis for thinking tuition rates are boosted by credit
You really don't think that the price of tuition has gone up at least in part due to the widespread availability of easy-to-obtain debt, which is willfully accepted by teenagers who don't understand the consequences of taking out that debt? This is a simple economics concept. Prices are driven by supply and demand. Taking supply out of this equation (I'm assuming it's either been steady, or has increased over time), demand is kept afloat due to the "ease" in which a student can obtain the funding (via debt) to pay the high prices of college tuition. Colleges literally have more people willing to pay six figures for a 4-year degree than they have admission slots available. Since demand exceeds supply, the price continues to increase. Less debt availability would mean fewer applicants/acceptances, which translates to less demand.
They don't ask ahead of time, but they can make pretty reliable inferences based on your school and what you list as extracurriculars. "Simple economics concepts" are rarely actually that simple...
I'd be curious to hear from college admissions staff if a student's financial position is factored into their acceptance to a school. I've never heard of this being the case, but I also don't work in college admissions.
They don't ask ahead of time, but they can make pretty reliable inferences based on your school and what you list as extracurriculars.
You really don't think that the price of tuition has gone up at least in part due to the widespread availability of easy-to-obtain debt, which is willfully accepted by teenagers who don't understand the consequences of taking out that debt? This is a simple economics concept.
"Simple economics concepts" are rarely actually that simple once you get past the 101 systems and start having to look into specifics of how each field uniquely works instead of sticking with the broad, general models.
Demand is not kept afloat due to the ease of credit. Demand is functionally unlimited because the diploma is a gate to so many different opportunities. The expenses would be astronomical regardless of the availability of credit because professionals will structure their entire lives and personal financial decisions around making sure their kids have access to it. For money to be an object prices would need to get so high that college becomes functionally out of reach for anyone but multi-millionaires. Demand inelasticity is very low.
The spending mostly comes in from building more and more amenities to attract high dollar spenders (who are mostly extremely privileged scions of rich people). They aim to attract these students because they're much more likely to become alumni donors in the future and be in positions to run grant-making foundations. They're all whale hunting and there are enough whales out there to saturate the market because we're not really building more storied higher-education institutions. In a way, we can't largely because the history and pedigree is part of what people value.
For Harvard, granted, but for central American state community college? And either way, that's sort of beside the point because higher education is less a good than it is a market. I consider this...
For Harvard, granted, but for central American state community college? And either way, that's sort of beside the point because higher education is less a good than it is a market.
I consider this an Occam's razor problem. It's very near an economic truism that cheap credit drives demand, which results in price increases. Why wouldn't that be the case for higher education?
I saw your other post arguing that demand is essentially unlimited. I think that's partially true (or true enough for our purposes, anyway,) but that doesn't mean that cheap credit doesn't affect prices. The demand for food is also relatively inelastic, but people elect to buy more or less expensive goods.
Similarly, I recognize that economic principles are very rarely principal, but this one is broad enough that it doesn't fall apart.
I mean you basically already said it’s not a good but a market, so the logic of treating it strictly as a good or service doesn’t quite apply. It’s like treating OB/GYN services as a service....
I saw your other post arguing that demand is essentially unlimited. I think that's partially true (or true enough for our purposes, anyway,) but that doesn't mean that cheap credit doesn't affect prices. The demand for food is also relatively inelastic, but people elect to buy more or less expensive goods.
I mean you basically already said it’s not a good but a market, so the logic of treating it strictly as a good or service doesn’t quite apply. It’s like treating OB/GYN services as a service. Technically it is, but what are people gonna do? Give birth with the wise old lady down the street as midwife in a ditch like it’s the Middle Ages?
It’s further complicated by the supply side being screwy too. Education isn’t a normal good. The best, most selective colleges are the most financially accessible (and their student pool is the most able to secure scholarships as well). Take the case of GW University, which rocketed up the rankings and got way more applicants when they dramatically raised their tuition rates.
And education has even more complicating factors. People get scholarships, independent of financial aid. Colleges compete for highly valued students for prestige, it’s not like Planet Fitness and Gold’s Gym are in stiff competition to attract the fittest, buffest people around but colleges do the equivalent so there’s a lot more two-way negotiation between the school and student. They care more about attracting the superstar future titans of industry than they do about pulling in as many people as possible. They make their money off minting rich alumni who donate to the endowment, not tuition fees. The tuition just covers administrative expenses that progressively bloat to attract those superstars.
central American state community college
By and large community colleges aren’t the ones causing the debt burdens. They tend to be heavily publicly supported. The bad cases happen with for profit schools and in situations, like elite law schools, where they just minted too many graduates right as the demand for entry level associates disappeared due to automation and market consolidation, so they had completely saturated the market and the grads who expected multi-six figure salaries instead got nothing and had to make hard pivots.
It’s also a misuse of Occam’s razor to use it as a justification for just running with unexamined assumptions about how stuff works instead of evaluating the specifics of a situation. Razors are just decision making tools for when conditions aren’t conclusively known but a decision has to be made, not determinants of what’s true or not.
It’s also a misuse of Occam’s razor to use it as a justification for just running with unexamined assumptions about how stuff works instead of evaluating the specifics of a situation.
We need to do several things to handle college costs- Stop gating well paying jobs that don't require college behind 4-6 year degrees. The average entry level accountant i've worked with uses 90%...
We need to do several things to handle college costs-
Stop gating well paying jobs that don't require college behind 4-6 year degrees. The average entry level accountant i've worked with uses 90% on the job skills and MAYBE 1-2 years worth of classes. I suspect almost none of it couldn't be on the job taught to a half decent entry level employee. It's absolutely absurd that credits mean nothing for a job, only the degree. It's even more absurd when you consider how many people are hired into technical positions with degrees in totally different fields (philosophy/psychology/political science and arguably business all being popular "gen ed" majors). There are jobs that should require higher education (STEM mostly), but we have a lazy HR system that just uses degrees as a filter.
Work on the public education system. Many other countries have a public education system that can create educated workers, and yet in the US it's seen as "not enough" if you graduated high school because you probably didn't learn anything (something not really true either). Still the public system in the US is a disgrace of political corruption and misaligned incentives. It's a huge project to clean it up and maybe not even possible with all the yelling everyone wants to do, but there's so much that can be done there.
Stop making student loans impossible to default on (ironically something Biden helped create). It's just insane that they can do this. It also leads to odd incentives. It will hurt some nebulous fields like philosophy, as they're no longer going to give out 5-6 figure loans for a philosophy major who might not land a job that can pay it back, but the incentive this has created is nuts.
Find a way to make the insanity with college textbooks go the fuck away. Not a single one of those books is worth more than $100, let alone the $500+ you can sometimes see, and then it just so happens to be edited to screw the students more. This is just rent seeking at its worst.
Regarding textbooks: there is not one university in this country which does not already have the infrastructure to simply lend students the books they need. Libraries can handle it. It would also...
Regarding textbooks: there is not one university in this country which does not already have the infrastructure to simply lend students the books they need. Libraries can handle it. It would also cost less money over all, compared to requiring each student to buy their books, since the books can be used for multiple semesters. It would also be cheaper than renting over all, since the book rental company would not take a cut. I see no reason why the university should not simply buy enough books to lend to all the students who want to borrow. The university is uniquely positioned to be able to predict the demand, so this would also reduce the start-of-semester chaos where students don't have their books yet, or have the wrong editions. Since the university would be buying in bulk, they could negotiate much better pricing.
Do you have any idea how expensive education is? Especially bleeding-edge education which is intended to catapult society forward? Sure, you can get a BS at a small community college for about...
Do you have any idea how expensive education is? Especially bleeding-edge education which is intended to catapult society forward?
Sure, you can get a BS at a small community college for about $40,000. But that's about as barebones as you can get. You'll get plenty of business majors. You're not gonna get many nuclear engineers or doctors if that's the only way forward though.
Building and maintaining small research nuclear reactors is not cheap.
To mirror your phrasing: Do you have any idea how much money is allocated to administrative bloat and overhead, athletics departments, and other non-academic/research related uses at many US...
To mirror your phrasing: Do you have any idea how much money is allocated to administrative bloat and overhead, athletics departments, and other non-academic/research related uses at many US universities?
I personally watched hundreds of millions dumped into unnecessary premature athletic department expansion, for example, while sitting in an engineering department that could unquestionably use better maintenance, let alone more upgrades or more “cutting edge” equipment.
Yes, I'm a millennial who put myself through college (and graduated with loans which I worked my ass off to pay off) and also have a niece and nephew in college right now. Both of them chose to go...
Do you have any idea how expensive education is?
Yes, I'm a millennial who put myself through college (and graduated with loans which I worked my ass off to pay off) and also have a niece and nephew in college right now. Both of them chose to go to in-state schools, despite one of them originally wanting to go to Virginia Tech (which would've cost him more than 4x his current school).
For most degrees, your first 2 years are gen eds, which can be done at a community college and then transferred to a 4-year university. Many universities actually have standing partnerships with local community colleges to make this path clear. For some degrees, getting a BS would be fine. But for specialized degrees like nuclear engineers or doctors, their potential income is high enough so that lenders would be more willing to loan them the funds to obtain the degree.
Student loans are only as ubiquitous as they are today because they are not dischargeable. They're federally backed, and the government has made it so that you pretty much have no choice but to pay those loans back. If you treat student loans as being dischargeable like other types of loans, then you have to start treating the application process more like other loans as well.
You can't really compare it to a car or house, because there's nothing in a college degree that you can repossess if you default on your loan. So the next closest example is probably a business loan. When you apply for a business loan, you actually have to present a business plan to the bank. They will evaluate your plan to determine risk, and issue (or deny) your loan accordingly. If you applied this to a college degree, given the lack of credit history, an assessment of the ability to pay back a loan is largely going to be based on the earning potential of your investment - in this case, average salary of graduates with that particular major.
So nuclear scientists and doctors would have an easier time getting funding to go to a special school compared to your run of the mill business degree, or some kind of liberal arts degree.
If reincarnation was proven to exist, it would take banks and other lenders no time to determine who you were in a past life. "Thought you were going to get out of that loan repayment that easily,...
If reincarnation was proven to exist, it would take banks and other lenders no time to determine who you were in a past life. "Thought you were going to get out of that loan repayment that easily, eh Mr. Lama?"
I am curious where you are getting your information about college enrollments. Over the last decade enrollment in both 4-year and 2-year programs in the US has been on a steady decline,...
I am curious where you are getting your information about college enrollments. Over the last decade enrollment in both 4-year and 2-year programs in the US has been on a steady decline, accelerating somewhat during COVID. The vast, vast majority of college students in the US attend public colleges, not for-profit colleges. Here is a source with a variety of enrollment breakdowns over the past decade: https://nces.ed.gov/programs/coe/indicator/cha
Yes, and now we're starting to see tuition rates lowering compared to inflation. I don't know all of the factors that lead to that, but softer demand for a product or service in a market with...
Yes, and now we're starting to see tuition rates lowering compared to inflation. I don't know all of the factors that lead to that, but softer demand for a product or service in a market with competition and profit margins will naturally lead to price reductions.
I am not a banker or a lender. But credit card lenders for example price in their risk in spite of bankrupty and make money. Also congress might want to subsidize student debt in some way. Or...
I am not a banker or a lender. But credit card lenders for example price in their risk in spite of bankrupty and make money. Also congress might want to subsidize student debt in some way. Or there might be other solutions.
Yes, and they are able to do this by charging interest rates typically around 25%. They also make money off of merchant fees on every transaction that you make. Congress already subsidizes...
But credit card lenders for example price in their risk in spite of bankrupty and make money.
Yes, and they are able to do this by charging interest rates typically around 25%. They also make money off of merchant fees on every transaction that you make.
Congress already subsidizes education via financial aid (such as the Pell Grant and other scholarships), as well as direct subsidizes to universities.
Pell grants are miniscule compared to the cost of univerisity education today. They were a substantial contribution when I went to college in the 80s. It's a complex problem that needs a solution....
Pell grants are miniscule compared to the cost of univerisity education today. They were a substantial contribution when I went to college in the 80s.
It's a complex problem that needs a solution. What we have is oppressive and harmful for a variety of reasons.
I agree with everything you're saying here. The problem is indeed complex, but the root cause of this issue is the actual charged price of education. Insane student loans or the fact that $25B in...
I agree with everything you're saying here. The problem is indeed complex, but the root cause of this issue is the actual charged price of education. Insane student loans or the fact that $25B in pell grant funding doesn't put a dent in the cost of education are merely symptoms of the problem.
I'd hope the lenders gatekeep the unqualified students. I knew far too many classmates who ended up with debt but no degree because their 3.5 high school GPA meant nothing when it came to...
I'd hope the lenders gatekeep the unqualified students. I knew far too many classmates who ended up with debt but no degree because their 3.5 high school GPA meant nothing when it came to preparedness for collegiate-level work.
I like that idea in theory, but practically gatekeeping of that sort often succumbs to some degree of class or race-based discrimination. Helping people find their path in life is important, but...
I like that idea in theory, but practically gatekeeping of that sort often succumbs to some degree of class or race-based discrimination. Helping people find their path in life is important, but how do we do that in a way that doesn't push people into roles that fit the stereotypes other people think they fit into?
I thought this was an interesting introductory legal analysis.
As someone who has practiced bankruptcy law, I am surprised that advocates are not trying to amend the bankruptcy code to change the fact that student loans are a unique exception to dischargeable debt. Even taxes are dischargeable. Bankruptcy judges and trustees are qualified, skilled and experienced granting relief to the needy while sniffing out and denying relief to fraudsters and con artists. It would be very easy to implement a five or ten year delay after a student's last class before they were eligible for bankruptcy to prevent gaming the system.
If that was too much for someone, congress could explicitly pass a law overturning the undue hardship standard for student loan discharge where the former student debtor is disabled. The test is the Brunner test and it is very difficult to meet, even assuming a disabled debtor can afford to litigate the question.
https://www.abi.org/member-resources/blog/discharging-student-loan-debt-the-brunner-test
The bankruptcy issue is serious, but I think the real economic drag of student loan burdens is just that it slows down consumption, entrepreneurship, and life milestones across the board, even for people who aren’t in bankruptcy level hardship.
People aren’t starting businesses because of debt burden, they’re deferring having children, they’re deferring homeownership and home construction. It’s just a massive drag on the vitality of the economy when all the most educated people are pressured into choosing lower risk financial positions with their careers instead of doing the sort of dynamic stuff that generates long term growth and creative destruction.
I actually don’t want a state of affairs where access to education is gated by ability to pay and especially not on anticipated earnings after graduation. I think these both would commit the fundamental error of overoptimizing around higher education as a career path instead of a structure to generate a literate and responsive civic body.
Something to consider is that students are already going to be delayed on those life goals regardless of debt. Some marry, fewer have kids, and even fewer buy homes during their college years. So there's already a delay from those getting degrees, adding the immense debt only exacerbates that.
But how are you going to do that without getting a law through Congress? Unless democrats somehow manage to get 60 votes in the Senate, there's no way any law that helps student debt borrowers will be passed. Pre-2008, it might have been possible to get such a needed law through. But today, Republicans don't really have any political goals beyond grievance and malice. As the Obama era showed, a Democratic administration can literally adopt a Republican policy entirely, propose it as their own, and Congressional Republicans will oppose it. They oppose policies not because of their content, but simply because they are proposed by a democrat.
Remember, this is a party that is largely done with meaningful policy discussions. They didn't even pass a platform in 2020. At this point, they have abandoned any real attempt at governing and are have gone all in on grievance politics. They're the social media addicts party. Their modern generation of leaders don't know how to do anything except create outrage bait for facebook and other social media.
Objectively, you are correct. Ideally there are many, many better ways we could reform the student loan and university funding systems in general. But until the day comes that a party actually interested in governing gets 60 votes in the Senate, this is just a pipe dream. (Another option is nuking the filibuster, but democrats aren't really known for playing hardball. They will wait for republicans to repeal the filibuster before using it themselves.)
While you do make a good point, in the current world, it's mostly just a nice hypothetical. The Democrats in Congress would love to pass an educational reform bill that does these things and more. But unfortunately, even if they think all of the provisions are a good idea, Congressional Republicans will oppose it simply because a Democrat is in the White House. They are the party of outrage and grievance; they're simply not interested in policy anymore, unless that policy can be used to attack a minority group they've decided is worthy of destruction.
As such, we're stuck with whatever administrative actions Biden's team can cobble together. Is it perfect? No, but until the social media outrage party is driven from power, you will not see any meaningful legislation to actually improve people's lives.
We already have a good reason to vote democratic party because of abortion rights. This is another one, alongside civil rights for women, gay/lesbian/bisexual/transgender people and racial and ethic minorities.
I think overall you wrote a good post - and emotionally I get why you included lines like this one - but I feel like overall, snippets like the ones I cited promote a lazier discourse. Included in overall good posts like yours, I don't mind, but it encourages people to post comments that are nothing but those types of snippets.
Again - I thought your post was good. I've just noticed that the discussion has started to get a little closer to the reddit smackdown so I thought I'd throw it out there.
I’m sorry, but can you explain how republican’s political goals doesn’t align with what they described. I understand not wanting to fall into a particular narrative, but there’s frankly obvious reasons why people describe the Republican Party in that way.
In full seriousness, is your argument legitimately that the republican party doesn't have a single political goal besides grievance and malice or are you just dunking?
I guess what I'm asking is that you asked me to explain. Is there any chance at all you would change your mind? If so, I'm happy to talk about it with you.
They did remove their stated platform so they could freely oppose anything brought forward by the opposition. Their goal may not be “grievance and malice” but it does appear to be “power and control” above all else and their tactic is often to demonize minority groups as public threats to expand power in the name of safety and protection
I would add that it's "power and control" in furtherance of their goal of implementing a fascist theocracy. This has been something that they've wanted since at least the 80's when Reagan began courting Christian fundamentalists.
From what I've read on this topic, that's how it started out when they first introduced legislation around treating student debt differently. And as time went on, bankruptcy has become more and more difficult as an exit route for student loans.
The downside of allowing bankruptcy is that it would likely force lenders to more strongly evaluate whether or not they'll issue student loans based on the debtor's ability to repay them, just like any other kind of debt. It would be interesting to see what kind of criteria they could use to make this decision for someone with no credit history. Will they simply require a qualified co-signer? Could they make a decision based on the perceived market value of the student's selected major?
Hopefully it would at least force colleges to lower their ridiculous tuition fees if no one can afford it anymore due to not being able to take crippling loans.
Yes, totally agree. The cost of college has gotten out of hand in part because people are lining up at college doors to pay six figures for a college education. There are even waitlists for acceptance at most schools. The ease of obtaining giant student loans to pay these ridiculous prices only makes the prices go up. That is one of my arguments against mass loan forgiveness - it would essentially mean that the federal government and taxpayers would be writing blank checks to universities, because students wouldn't need to worry about how much debt they're taking out (because it would just be forgiven anyway).
Making debt more difficult to obtain would result in fewer people with the financial means to attend expensive colleges, which would force those colleges to lower their prices. There would still be options for students, such as community college and/or in-state tuition at state schools.
It would not make them lower their prices. It would make them become more selective based on ability to pay.
How so? Your acceptance into school (typically) doesn't have anything to do with your ability to pay. It's up to the student to figure that out. If they can't pay, they can't attend (even today). Making debt more difficult to obtain means that more people are simply priced out of the super-expensive schools. It has nothing to do with the school being selective.
I think you're both saying basically the same thing.
I assume he means, your school has 1000 spots and 3000 people apply. Right now you take the 1000 best students.
New laws are passed and student loans are harder to get. The school now has 1000 spots and 1500 students that can apply/ pay tuition. They still take the best 1000 students. Sure the quality of student has probably gone down, but it's not really hurting the school. Especially not in the short term. It doesn't become an issue that will effect prices, until they start having empty spaces, and not enough rich students to fill them.
Oh, I think I see what you (and he) mean. That kind of selection would be bad for high-profile universities in the long-term, though. Do you think ivy leagues and other universities that care about their rankings (which is how they're able to command high prices in the first place) would lower their admission standards just to enroll sub-par students with money? I know there have been scandals about this situation, but it's not very widespread. The most expensive schools will always care about their standings.
Most Ivy League schools already have programs for low income students that show a high level of promise. They would probably keep doing that and maybe expand them a bit.
For the ivies, it's irrelevant. They can pick and choose and they all have massive endowments anyway. This pinch is more about the good state schools.
Schools care about how many of the students they accept choose to attend because that’s a significant factor in their rankings. They won’t accept students they think are unlikely to come and they won’t accept students they think will struggle to graduate for whatever reasons, including inability to pay a few years in or because they have to squeeze in a class schedule on top of a job.
Making debt more difficult means more people are rendered unable to pay. There just aren’t that many grants floating around. i really haven’t seen any empirical basis for thinking tuition rates are boosted by credit.
I'd be curious to hear from college admissions staff if a student's financial position is factored into their acceptance to a school. I've never heard of this being the case, but I also don't work in college admissions.
You really don't think that the price of tuition has gone up at least in part due to the widespread availability of easy-to-obtain debt, which is willfully accepted by teenagers who don't understand the consequences of taking out that debt? This is a simple economics concept. Prices are driven by supply and demand. Taking supply out of this equation (I'm assuming it's either been steady, or has increased over time), demand is kept afloat due to the "ease" in which a student can obtain the funding (via debt) to pay the high prices of college tuition. Colleges literally have more people willing to pay six figures for a 4-year degree than they have admission slots available. Since demand exceeds supply, the price continues to increase. Less debt availability would mean fewer applicants/acceptances, which translates to less demand.
They don't ask ahead of time, but they can make pretty reliable inferences based on your school and what you list as extracurriculars.
"Simple economics concepts" are rarely actually that simple once you get past the 101 systems and start having to look into specifics of how each field uniquely works instead of sticking with the broad, general models.
Demand is not kept afloat due to the ease of credit. Demand is functionally unlimited because the diploma is a gate to so many different opportunities. The expenses would be astronomical regardless of the availability of credit because professionals will structure their entire lives and personal financial decisions around making sure their kids have access to it. For money to be an object prices would need to get so high that college becomes functionally out of reach for anyone but multi-millionaires. Demand inelasticity is very low.
The spending mostly comes in from building more and more amenities to attract high dollar spenders (who are mostly extremely privileged scions of rich people). They aim to attract these students because they're much more likely to become alumni donors in the future and be in positions to run grant-making foundations. They're all whale hunting and there are enough whales out there to saturate the market because we're not really building more storied higher-education institutions. In a way, we can't largely because the history and pedigree is part of what people value.
Fair, though in basically every other scenario economic activity is boosted by cheap credit, so I think it's a reasonable assumption.
Higher education doesn't really work like a normal competitive market. There's a lot of reason to assume it's a Veblen good.
For Harvard, granted, but for central American state community college? And either way, that's sort of beside the point because higher education is less a good than it is a market.
I consider this an Occam's razor problem. It's very near an economic truism that cheap credit drives demand, which results in price increases. Why wouldn't that be the case for higher education?
I saw your other post arguing that demand is essentially unlimited. I think that's partially true (or true enough for our purposes, anyway,) but that doesn't mean that cheap credit doesn't affect prices. The demand for food is also relatively inelastic, but people elect to buy more or less expensive goods.
Similarly, I recognize that economic principles are very rarely principal, but this one is broad enough that it doesn't fall apart.
I mean you basically already said it’s not a good but a market, so the logic of treating it strictly as a good or service doesn’t quite apply. It’s like treating OB/GYN services as a service. Technically it is, but what are people gonna do? Give birth with the wise old lady down the street as midwife in a ditch like it’s the Middle Ages?
It’s further complicated by the supply side being screwy too. Education isn’t a normal good. The best, most selective colleges are the most financially accessible (and their student pool is the most able to secure scholarships as well). Take the case of GW University, which rocketed up the rankings and got way more applicants when they dramatically raised their tuition rates.
And education has even more complicating factors. People get scholarships, independent of financial aid. Colleges compete for highly valued students for prestige, it’s not like Planet Fitness and Gold’s Gym are in stiff competition to attract the fittest, buffest people around but colleges do the equivalent so there’s a lot more two-way negotiation between the school and student. They care more about attracting the superstar future titans of industry than they do about pulling in as many people as possible. They make their money off minting rich alumni who donate to the endowment, not tuition fees. The tuition just covers administrative expenses that progressively bloat to attract those superstars.
By and large community colleges aren’t the ones causing the debt burdens. They tend to be heavily publicly supported. The bad cases happen with for profit schools and in situations, like elite law schools, where they just minted too many graduates right as the demand for entry level associates disappeared due to automation and market consolidation, so they had completely saturated the market and the grads who expected multi-six figure salaries instead got nothing and had to make hard pivots.
It’s also a misuse of Occam’s razor to use it as a justification for just running with unexamined assumptions about how stuff works instead of evaluating the specifics of a situation. Razors are just decision making tools for when conditions aren’t conclusively known but a decision has to be made, not determinants of what’s true or not.
C'mon man. Now you're just being a dick.
We need to do several things to handle college costs-
Stop gating well paying jobs that don't require college behind 4-6 year degrees. The average entry level accountant i've worked with uses 90% on the job skills and MAYBE 1-2 years worth of classes. I suspect almost none of it couldn't be on the job taught to a half decent entry level employee. It's absolutely absurd that credits mean nothing for a job, only the degree. It's even more absurd when you consider how many people are hired into technical positions with degrees in totally different fields (philosophy/psychology/political science and arguably business all being popular "gen ed" majors). There are jobs that should require higher education (STEM mostly), but we have a lazy HR system that just uses degrees as a filter.
Work on the public education system. Many other countries have a public education system that can create educated workers, and yet in the US it's seen as "not enough" if you graduated high school because you probably didn't learn anything (something not really true either). Still the public system in the US is a disgrace of political corruption and misaligned incentives. It's a huge project to clean it up and maybe not even possible with all the yelling everyone wants to do, but there's so much that can be done there.
Stop making student loans impossible to default on (ironically something Biden helped create). It's just insane that they can do this. It also leads to odd incentives. It will hurt some nebulous fields like philosophy, as they're no longer going to give out 5-6 figure loans for a philosophy major who might not land a job that can pay it back, but the incentive this has created is nuts.
Find a way to make the insanity with college textbooks go the fuck away. Not a single one of those books is worth more than $100, let alone the $500+ you can sometimes see, and then it just so happens to be edited to screw the students more. This is just rent seeking at its worst.
Regarding textbooks: there is not one university in this country which does not already have the infrastructure to simply lend students the books they need. Libraries can handle it. It would also cost less money over all, compared to requiring each student to buy their books, since the books can be used for multiple semesters. It would also be cheaper than renting over all, since the book rental company would not take a cut. I see no reason why the university should not simply buy enough books to lend to all the students who want to borrow. The university is uniquely positioned to be able to predict the demand, so this would also reduce the start-of-semester chaos where students don't have their books yet, or have the wrong editions. Since the university would be buying in bulk, they could negotiate much better pricing.
Do you have any idea how expensive education is? Especially bleeding-edge education which is intended to catapult society forward?
Sure, you can get a BS at a small community college for about $40,000. But that's about as barebones as you can get. You'll get plenty of business majors. You're not gonna get many nuclear engineers or doctors if that's the only way forward though.
Building and maintaining small research nuclear reactors is not cheap.
To mirror your phrasing: Do you have any idea how much money is allocated to administrative bloat and overhead, athletics departments, and other non-academic/research related uses at many US universities?
I personally watched hundreds of millions dumped into unnecessary premature athletic department expansion, for example, while sitting in an engineering department that could unquestionably use better maintenance, let alone more upgrades or more “cutting edge” equipment.
Yes, I'm a millennial who put myself through college (and graduated with loans which I worked my ass off to pay off) and also have a niece and nephew in college right now. Both of them chose to go to in-state schools, despite one of them originally wanting to go to Virginia Tech (which would've cost him more than 4x his current school).
For most degrees, your first 2 years are gen eds, which can be done at a community college and then transferred to a 4-year university. Many universities actually have standing partnerships with local community colleges to make this path clear. For some degrees, getting a BS would be fine. But for specialized degrees like nuclear engineers or doctors, their potential income is high enough so that lenders would be more willing to loan them the funds to obtain the degree.
Student loans are only as ubiquitous as they are today because they are not dischargeable. They're federally backed, and the government has made it so that you pretty much have no choice but to pay those loans back. If you treat student loans as being dischargeable like other types of loans, then you have to start treating the application process more like other loans as well.
You can't really compare it to a car or house, because there's nothing in a college degree that you can repossess if you default on your loan. So the next closest example is probably a business loan. When you apply for a business loan, you actually have to present a business plan to the bank. They will evaluate your plan to determine risk, and issue (or deny) your loan accordingly. If you applied this to a college degree, given the lack of credit history, an assessment of the ability to pay back a loan is largely going to be based on the earning potential of your investment - in this case, average salary of graduates with that particular major.
So nuclear scientists and doctors would have an easier time getting funding to go to a special school compared to your run of the mill business degree, or some kind of liberal arts degree.
This is all leading to a dystopian future where banks use mind wiping tech to erase your education when you fall behind on your loans.
Don't give them any ideas. I'm sure there are people who would love to abuse that kind of tech.
If reincarnation was proven to exist, it would take banks and other lenders no time to determine who you were in a past life. "Thought you were going to get out of that loan repayment that easily, eh Mr. Lama?"
I am curious where you are getting your information about college enrollments. Over the last decade enrollment in both 4-year and 2-year programs in the US has been on a steady decline, accelerating somewhat during COVID. The vast, vast majority of college students in the US attend public colleges, not for-profit colleges. Here is a source with a variety of enrollment breakdowns over the past decade: https://nces.ed.gov/programs/coe/indicator/cha
Yes, and now we're starting to see tuition rates lowering compared to inflation. I don't know all of the factors that lead to that, but softer demand for a product or service in a market with competition and profit margins will naturally lead to price reductions.
I am not a banker or a lender. But credit card lenders for example price in their risk in spite of bankrupty and make money. Also congress might want to subsidize student debt in some way. Or there might be other solutions.
Yes, and they are able to do this by charging interest rates typically around 25%. They also make money off of merchant fees on every transaction that you make.
Congress already subsidizes education via financial aid (such as the Pell Grant and other scholarships), as well as direct subsidizes to universities.
Pell grants are miniscule compared to the cost of univerisity education today. They were a substantial contribution when I went to college in the 80s.
It's a complex problem that needs a solution. What we have is oppressive and harmful for a variety of reasons.
I agree with everything you're saying here. The problem is indeed complex, but the root cause of this issue is the actual charged price of education. Insane student loans or the fact that $25B in pell grant funding doesn't put a dent in the cost of education are merely symptoms of the problem.
I'd hope the lenders gatekeep the unqualified students. I knew far too many classmates who ended up with debt but no degree because their 3.5 high school GPA meant nothing when it came to preparedness for collegiate-level work.
I like that idea in theory, but practically gatekeeping of that sort often succumbs to some degree of class or race-based discrimination. Helping people find their path in life is important, but how do we do that in a way that doesn't push people into roles that fit the stereotypes other people think they fit into?