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Student Debt Approaching $1.5 Trillion (1 Viewer)

Henry Ford

Henry Ford

Footballguy
https://blogs.wsj.com/dailyshot/2018/01/09/the-daily-shot-u-s-student-debt-outstanding-approaches-1-5-trillion/

This is a real problem.  I don't think anyone disagrees with the fact that to continue to lead and outpace the rest of the world economically, we need an educated populace - more educated than ever before.  Frankly, disagreeing with that would be disqualifying as far as being worthwhile to listen to on global economics.  Since 2008, student debt has gone from $600 Billion to $1.5 Trillion.  It's simply unsustainable, and continuing to rise.

Student loans now account for over 50% of the assets on the federal government's balance sheet.  It's nearly six times the amount of "tax receivables" counted as government assets.  I don't know what the solution is, here, but this has to be fixed.  "I owe my soul to the company store" is quaint compared to this.  It's a lifetime of servicing debt to the federal government in exchange for becoming the kind of worker this country needs in the current millennium.

 
It costs big $ to get a degree when you have to pay the football and basketball coach $5-10 million a year. Someone has to pay these guys along with all the other overpaid upper level employees of the universities. Of course the rank and file employees work for less than the average pay for their positions. They also must make a sacrifice.

 
lod001 said:
It costs big $ to get a degree when you have to pay the football and basketball coach $5-10 million a year. Someone has to pay these guys along with all the other overpaid upper level employees of the universities. Of course the rank and file employees work for less than the average pay for their positions. They also must make a sacrifice.
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I dont think any of the schools paying 5-10 mil for coaches are having any financial issues from doing so.

https://www.forbes.com/sites/aliciajessop/2013/08/31/the-economics-of-college-football-a-look-at-the-top-25-teams-revenues-and-expenses/#7c707a656476 

Stale data from 2013, but I highly doubt it has changed. 

 
I've already changed my mind some on college for my kids.  Before my thought was to have them go to a big, well-known state school if they get in from the get-go.  Now, I'm inclined to have them start out at the cheaper (and maybe easier) smaller state school to make sure they can hack it, that they like it and that they don't go 100k in debt if I can't help them.  I have one that wants to be a doctor so it's going to be tough unless she gets scholarships.  I would almost recommend to her that it's not worth it in the current climate if she has to pay in full.

 
its a reflection of millennials isn't it ?

charge up $200,000 in student debts to get a degree to make $45,000 a year

nobody is forcing these young people to make these decisions, they are in control of their lives by the way they choose to go through high school and prepare for when they get out

my daughter has a full ride scholarship - she earned it

my son isn't going to get one unless he crushes SAT and ACT scores because he's not worked hard enough to get the high grades and accolades 

 
I agree with Bernie Sanders on this issue: eliminate all existing student debt. Get rid of it. 

Much more than the dumb corporate tax cut, this would spur the economy and lead to tremendous growth. The housing industry alone would have a boom like nothing since the GI Bill. 

Eliminating student debt would, in fact, be the equivalent of a new GI bill: millions of young people suddenly able to afford homes. Combine this with major infrastructure spending and we could practically guarantee economic prosperity for the next few decades. 

 
timschochet said:
I agree with Bernie Sanders on this issue: eliminate all existing student debt. Get rid of it. 

Much more than the dumb corporate tax cut, this would spur the economy and lead to tremendous growth. The housing industry alone would have a boom like nothing since the GI Bill. 

Eliminating student debt would, in fact, be the equivalent of a new GI bill: millions of young people suddenly able to afford homes. Combine this with major infrastructure spending and we could practically guarantee economic prosperity for the next few decades. 
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Oh, cool.  It's only half the assets of the federal government.  I'm sure that'll be easy to do.

 
Stealthycat said:
its a reflection of millennials isn't it ?

charge up $200,000 in student debts to get a degree to make $45,000 a year

nobody is forcing these young people to make these decisions, they are in control of their lives by the way they choose to go through high school and prepare for when they get out

my daughter has a full ride scholarship - she earned it

my son isn't going to get one unless he crushes SAT and ACT scores because he's not worked hard enough to get the high grades and accolades 
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I don't understand your point here. You think everyone can earn a full ride scholarship if they just work harder?

 
Stealthycat said:
its a reflection of millennials isn't it ?

charge up $200,000 in student debts to get a degree to make $45,000 a year

nobody is forcing these young people to make these decisions, they are in control of their lives by the way they choose to go through high school and prepare for when they get out

my daughter has a full ride scholarship - she earned it

my son isn't going to get one unless he crushes SAT and ACT scores because he's not worked hard enough to get the high grades and accolades 
Click to expand...
You understand that if everyone works as hard as your daughter, there will still be only a limited number of scholarships, right?

 
IvanKaramazov said:
Don't worry.  Once he starts explaining to folks who scrimped and saved to pay for college why they should hand a freshly-minted MD a six-figure windfall, the momentum will be enough to overcome all obstacles.
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Even better will be the folks who have paid back 100K+, just to see folks in default get a free meal.

 
Stealthycat said:
its a reflection of millennials isn't it ?

charge up $200,000 in student debts to get a degree to make $45,000 a year

nobody is forcing these young people to make these decisions, they are in control of their lives by the way they choose to go through high school and prepare for when they get out

my daughter has a full ride scholarship - she earned it

my son isn't going to get one unless he crushes SAT and ACT scores because he's not worked hard enough to get the high grades and accolades 
Click to expand...
Did you ever think that your son just might not be quite as smart as your daughter?  Do you think that if everyone in the country makes the right choices in high school and works hard, they will all get full scholarships?  That sounds an awful lot like the people who think that company CEO's and presidents worked harder than everyone else in the company and that's why they deserve more money. 

 
AAABatteries said:
Yeah - I didn’t do 100k but I did 50k - would kind of be a kick to the hacky sack if everyone else gets to write it off.
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Yeah, that's vacations my wife and I didn't go on, meals we ate at home, a car we didn't buy and kids we delayed having.
To erase student loan debt would be one of the very few causes that would get me gathering brick bats.
This also doesn't address the 102 billion dollars of private student loans outstanding. That's a year of federal funding of the ACA. I'm sure the banks will happily write-off these balances.

There's already 287 billion in federal aid that's on an income-based payment schedule. Many people are getting by without paying anything on their loans and staying in good standing. Many others are paying less than their interest. Isn't that enough.

The biggest issue is that the feds have made so much money available, prices inherently have to rise. Tighten financial aid and try to correct tuition inflation.

 
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Henry Ford said:
https://blogs.wsj.com/dailyshot/2018/01/09/the-daily-shot-u-s-student-debt-outstanding-approaches-1-5-trillion/

This is a real problem.  I don't think anyone disagrees with the fact that to continue to lead and outpace the rest of the world economically, we need an educated populace - more educated than ever before.  Frankly, disagreeing with that would be disqualifying as far as being worthwhile to listen to on global economics.  Since 2008, student debt has gone from $600 Billion to $1.5 Trillion.  It's simply unsustainable, and continuing to rise.

Student loans now account for over 50% of the assets on the federal government's balance sheet.  It's nearly six times the amount of "tax receivables" counted as government assets.  I don't know what the solution is, here, but this has to be fixed.  "I owe my soul to the company store" is quaint compared to this.  It's a lifetime of servicing debt to the federal government in exchange for becoming the kind of worker this country needs in the current millennium.
Click to expand...
I'll step up to the plate here. I have a friend with 2 Ivy League degrees, and figured out afterwards he wasn't cut out to be a lawyer. After something like $250k-$300k in debt. Right now he's prep'ing and trying to get into a programming boot camp which lasts something like 2 or 3 months, costs $15,000, and is very likely to get someone a job with only that bit of education. Say $70k-ish to start with upside potential and a growing field. And there's kids 19 years old enrolling.

America needs a trained workforce. It does not need a workforce with only 4-year college degrees and degrees subsequent. See also 2-year technical or health care related schools.

 
That said, it's been clear student debt has been the bubble waiting to pop for the last decade. I have other friends, also with fancy degrees, and solid jobs, who figure or at least half-joke, that they're just going to die with their debt. And they're much better positioned than the kids finishing college right now with $80k in debt and are looking at employment of $25k being a barista or whatever.

 
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Henry Ford said:
https://blogs.wsj.com/dailyshot/2018/01/09/the-daily-shot-u-s-student-debt-outstanding-approaches-1-5-trillion/

This is a real problem.  I don't think anyone disagrees with the fact that to continue to lead and outpace the rest of the world economically, we need an educated populace - more educated than ever before.  Frankly, disagreeing with that would be disqualifying as far as being worthwhile to listen to on global economics.  Since 2008, student debt has gone from $600 Billion to $1.5 Trillion.  It's simply unsustainable, and continuing to rise.

Student loans now account for over 50% of the assets on the federal government's balance sheet.  It's nearly six times the amount of "tax receivables" counted as government assets.  I don't know what the solution is, here, but this has to be fixed.  "I owe my soul to the company store" is quaint compared to this.  It's a lifetime of servicing debt to the federal government in exchange for becoming the kind of worker this country needs in the current millennium.
Click to expand...
FWIW I was a Research Assistant back in college to a labor economist who was musing on the appropriateness and desirability for more of the German votech model to education. He did go on to win a Nobel Prize. May be qualified to listen to. Haven't followed at all since to know where he currently stands.

 
Hilts said:
Related: When Unpaid Student Loan Bills Mean You Can No Longer Work

I think this is a sort of modern day debtor's prison. 
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With PAYE, REPAYE and IBR, there is 0 reason for anyone to default on a federal student loan.
I have very little sympathy for someone who is spending money on non-essentials and then cries inability to pay anything on their student loans.

“I really do want to pay the loans back,” she said. “How do you think I’m going to be able to pay it back if I don’t have a job?”
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She says after she worked for two years without trying to pay anything back. If she makes 50K a year, with a family size of 6, her IBR payment is seven bucks a month.
No sympathy given.

 
AAABatteries said:
I've already changed my mind some on college for my kids.  Before my thought was to have them go to a big, well-known state school if they get in from the get-go.  Now, I'm inclined to have them start out at the cheaper (and maybe easier) smaller state school to make sure they can hack it, that they like it and that they don't go 100k in debt if I can't help them.  I have one that wants to be a doctor so it's going to be tough unless she gets scholarships.  I would almost recommend to her that it's not worth it in the current climate if she has to pay in full.
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Financial aid at schools is based primarily on need. Of course, getting into a school with a big endowment guarantees more need-based aid. And getting into Harvard, Princeton,  Yale or Stanford ain't easy.

Moving to a state with affordable public schools (e.g., Florida) is an option.

 
Matthias said:
I'll step up to the plate here. I have a friend with 2 Ivy League degrees, and figured out afterwards he wasn't cut out to be a lawyer. After something like $250k-$300k in debt. Right now he's prep'ing and trying to get into a programming boot camp which lasts something like 2 or 3 months, costs $15,000, and is very likely to get someone a job with only that bit of education. Say $70k-ish to start with upside potential and a growing field. And there's kids 19 years old enrolling.

America needs a trained workforce. It does not need a workforce with only 4-year college degrees and degrees subsequent. See also 2-year technical or health care related schools.
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Of course not.  Those "boot camps" are a great solution to the problem I'm talking about.  And similar ones for other careers would be great.

 
My disdain only goes towards chiselers not paying non-profit schools and federal loans.

Private loans and for-profit schooling? #### those guys.

 
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My idea (others' idea too? I don't know) to fix the problem is to have the benefiting educational institution be partially liable for defaulted loans.  This would make institutions have more "skin in the game" in providing a good investment for the student.

 
I think that research and education need to be split. I don't really know the stats so I could be totally off base, but it certainly seems like research costs are a huge part of many schools' budgets. And that many of those "professors" rarely step foot in their undergrad classes. It's not that uncommon for a large portion of undergrad classes to be almost entirely taught by TAs. That's just absurd to me. Students pay tens of thousands of dollars a year to be taught by somebody just a few years older than them with just slightly more education in order to fund the absent professor's research is what it essentially boils down to.

 
Juxtatarot said:
My idea (others' idea too? I don't know) to fix the problem is to have the benefiting educational institution be partially liable for defaulted loans.  This would make institutions have more "skin in the game" in providing a good investment for the student.
Click to expand...
This isn't the best source, but one of the major issues with default isn't graduates, it is dropouts:
https://www.zerohedge.com/news/2017-11-06/about-33-students-drop-out-college-heres-how-many-go-default-their-student-debt

LendEDU polled 1,000 respondents that had dropped-out of a four-year higher education institution and also held some amount of student loan debt...nearly 50% of respondents saying they're currently in default on their student loans.
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The financial outlook for a 4-year dropout isn't much better than for one who never tried, but the dropout has the debt around their neck.
Do you hold an institution liable for the default rate of their dropouts?

 
There should be more of a push for students to attend a community college for two years while working part-time.  Get the electives out of the way before attending a university and saving tens of thousands of dollars and minimizing their future debt.

 
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Henry Ford said:
Of course not.  Those "boot camps" are a great solution to the problem I'm talking about.  And similar ones for other careers would be great.
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Sure. It's just not more education than ever before, which was your post I was responding to. It's less education but more focused.

 
Matthias said:
Sure. It's just not more education than ever before, which was your post I was responding to. It's less education but more focused.
Click to expand...
My apologies for being unclear.  We need a more educated workforce than ever before.  That doesn't mean each individual person will have more time invested in education than anyone ever before.  It means the workforce tilts toward needing education in order to do relevant jobs more than ever before. 

 
Henry Ford said:
Oh, cool.  It's only half the assets of the federal government.  I'm sure that'll be easy to do.
Click to expand...
It will cost us a trillion and a half to relieve this debt. The tax cut just passed is going to cost that. What the hell just add it to the debt. Unlike the stupid tax bill, we’ll get it all back. 

 
timschochet said:
It will cost us a trillion and a half to relieve this debt. The tax cut just passed is going to cost that. What the hell just add it to the debt. Unlike the stupid tax bill, we’ll get it all back. 
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Yes, by all means convince the Republican held House, Senate, and Presidency to forgive $1.5 trillion in student loan debt.  It should be a simple phone call or two.

 
Henry Ford said:
Yes, by all means convince the Republican held House, Senate, and Presidency to forgive $1.5 trillion in student loan debt.  It should be a simple phone call or two.
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Would probably help it along if you explain that it's the big liberal colleges that have the highest tuition.

 
timschochet said:
It will cost us a trillion and a half to relieve this debt. The tax cut just passed is going to cost that. What the hell just add it to the debt. Unlike the stupid tax bill, we’ll get it all back. 
Click to expand...
Are you also proposing that tuition will be free in the future?  Does it matter if the debt was for tuition or living expenses?  How do you justify the fairness to people who paid for their education instead of borrowing it?

 
Juxtatarot said:
How do you justify the fairness to people who paid for their education instead of borrowing it?
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I don't think this argument really holds any water. Life isn't fair. Some people live in their economic prime through a lower tax rate. Does this mean it should never be raised? Are we never allowed to change anything because someone who came before didn't have the exact same path? 

 
Juxtatarot said:
Are you also proposing that tuition will be free in the future?  Does it matter if the debt was for tuition or living expenses?  How do you justify the fairness to people who paid for their education instead of borrowing it?
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My wife and I met at the University of Michigan..both of us worked 20-30 hours a week the whole time we were  there.  We had no choice as my dad was deceased and my mother could not afford to give me spending money.  Just became a routine.  I worked at a nightclub on Friday-Sat night so that helped me get my party out of the way. Delivered or made pizzas 2 nights a week as well.  My wife was a server at the Gandy Dancer restaurant in Ann Arbor for 4 years. So she knew all the bartenders.

The good thing about having these jobs is that we drank for free at the nightclubs I worked at, we got free pizza whenever we wanted, and we got huge discounts/free at the Gandy Dancer a place we could not afford to walk in the front door at the time.  We used to belly up to the bar there at 21 years of age and be sitting with all the Country Clubbers ordering up big..knowing our bill would be 20 or less.

 
Hilts said:
I don't think this argument really holds any water. Life isn't fair. Some people live in their economic prime through a lower tax rate. Does this mean it should never be raised? Are we never allowed to change anything because someone who came before didn't have the exact same path? 
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Because other things aren't fair shouldn't justify additional unfairness.  Fairness should always be a consideration.  Sometimes the benefits of implementing a policy outweighs its unfairness.  I personally don't think it does for Tim's proposal, however.

 
Juxtatarot said:
Because other things aren't fair shouldn't justify additional unfairness.  Fairness should always be a consideration.  Sometimes the benefits of implementing a policy outweighs its unfairness.  I personally don't think it does for Tim's proposal, however.
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That's fair. I agree I'm not on board with tims debt plan but I really dislike the mentality of some things never being able to change because they haven't been that way before. 

 
Henry Ford said:
Because it's necessary.  Because the American spirit and heritage is based in a desire to be more.  Because that's integral to who we are as a nation.  And because if people don't, we're going to be living in the dark ages.
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what is the total of American's debt in owning homes? cars? boats? vacation properties? 

advanced education is very important, its worth the cost .............. its not free, its an investment in your future, in your career, in your life

 
Juxtatarot said:
My idea (others' idea too? I don't know) to fix the problem is to have the benefiting educational institution be partially liable for defaulted loans.  This would make institutions have more "skin in the game" in providing a good investment for the student.
Click to expand...
Allowing social work/psychology majors to rack up 150k in loans is absurd.  There has to be some limit based on expected salary that is set - these monies are handed out like candy and (IMO) can be in the predatory range.  A student should be able to rack up maybe 1.5x their expected starting salary, that's it.  After that the math simply never allows them to catch up on payments, even with steady employment.

 
whoknew said:
I don't understand your point here. You think everyone can earn a full ride scholarship if they just work harder?
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if you cannot pay for something, and you dive deeply in debt for it ........... who's to blame for that ?  yourself and poor planning maybe ?

if you don't have the grades and scores and cannot get them, maybe higher education isn't for you, maybe other means of hard work will get you where you want to go ?

 
Henry Ford said:
You understand that if everyone works as hard as your daughter, there will still be only a limited number of scholarships, right?
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put it to the test - see how colleges react

although honestly, colleges give 1 years discounted educations knowing most will not retain their scholarships but will take loans and return - that's the money maker isn't it ?

 
JuniorNB said:
Did you ever think that your son just might not be quite as smart as your daughter?  Do you think that if everyone in the country makes the right choices in high school and works hard, they will all get full scholarships?  That sounds an awful lot like the people who think that company CEO's and presidents worked harder than everyone else in the company and that's why they deserve more money. 
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He's not quite as book smart, he doesn't quite apply himself the same. 

His choices to get where he is. Now, if he doesn't attain scholarships, what will be his goals? Trade school? Military? $150,000 in debt ?

He's got some choices to make in the next 2 1/2 years.

BTW those CEO's and Presidents? They DID work harder and smarter to get where they are. If you don't think they did, sounds a lot like people who are jealous and tear down others to make themselves feel better about their own life choices

 
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