Student loan forgiveness and free college are bad ideas.

[Meadmaker]

Something else to throw into this debate. In Australia at least, science graduates have had a very high employment rate. Just not in science. The skills they developed were in high value in many non-science and technology industries. Were their degrees a waste of money?

Possibly. Did they develop those useful skills in the course of pursuing a degree, or did they just use those skills in the course of pursuing a degree. Could they have developed those skills without spending four years working in their academic specialization?

If there was another way to develop those skills, or if, in reality, they are not so much skills as inherent abilities, then yes, there degrees were a waste of money. I don't know the answer to that.

But it sidesteps the question. In the USA, there are plenty of people who spent four years developing some sort of skills while they studied in college, and didn't end up with a high employment rate. Well, at least they have their knowledge. No one can take that from them.

 

[Giordano]

As a backdrop to this and to some of your recent answers, I just have to reiterate something.

What do you suppose the problem is? Because Bernie thinks there's a problem. And Elizabeth Warren thinks there's a problem. And in 2016, Hilary Clinton thought there was a problem. For that matter, Betsy DeVoss thinks there's a problem. Why do these people think there's a problem?

What I see, though, is that Bernie's solution to the problem is to not solve the problem, but instead shift the cost of the problem to someone else. I don't see anything in his plan about easing regulatory burdens. I don't see anything in his plan about addressing the factors that lead to high costs. I don't see anything in his plan about changing the way people are prepared for life in the workforce that will offset the economic cost of four years with no pay while receiving high services. In fact, I see in his plan, very specifically, that people should be able to do all the things they do now, and more, but not be burdened by the cost of things so that they can become environmentalists, teachers, social workers, and artists instead of having to take a job that would allow them to pay off their loans. (That's directly from the plan, if you can call that set of platitudes a plan.)


So, maybe my analysis of the root of the problem is all wet, but somehow, an awful lot of people seem to be burdened by student loans, or possibly unable to pay them at all. There are enough of those people that politicians are saying, "Vote for me and I'll make someone else pay off your debt!" (They usually phrase it differently.)

What went wrong that made this situation come about?

To my way of thinking, the people in that situation must have made some bad decisions, and there are a lot of those people, which points to some sort of systemic problem. What is it?

Well, I've offered some possible explanations for that problem, and people seem to think my explanations are wrong, but one thing I'm certain of is that those bad decisions were made by people when they were 18 years old. I think somehow, somewhere, that is actually part of the problem.

Short answer: the cost of education is much higher, even at state universities/colleges that used to be where less wealthy people could afford an education. In many places the states have pulled back from finding these colleges resulting in much higher tuition costs. So one problem I see is less “free” higher education subsidized by the government. People who aren’t wealthy need to take out loans and the loans are bigger.

I also think that the loan terms are much nastier now. Higher interest rates and payment due sooner. But I need to confirm that.

Just looked it up and it looks like I was wrong about nastier interest rates; they haven’t consistently gone up. So mainly increased costs of tuition?

 

[Silly Green Monkey]

Bad decisions made by 18 year olds, sure. Why were they bad? Were they bad because the 18 year olds are only newly able to sign contracts, probably have never signed one before in their life, don't know anything about it, are straight up being lied to by the ones getting them to sign those contracts, and don't know that it's a trap they have no hope of escaping? There are people who've been paying for decades and owe MORE than the amount they borrowed now!

It sure feels like a crisis to me, I have 40k in debt, graduated with a bachelor's degree in cellular and molecular biology, and work part-time in a call center. Income-based repayment has me repaying nothing per month, so interest is going to skyrocket my balance. And there's nothing I can do about it.

 

[Meadmaker]

Bad decisions made by 18 year olds, sure. Why were they bad? Were they bad because the 18 year olds are only newly able to sign contracts, probably have never signed one before in their life, don't know anything about it, are straight up being lied to by the ones getting them to sign those contracts, and don't know that it's a trap they have no hope of escaping?

I think that sums it up quite nicely.

 

[Roboramma]

Short answer: the cost of education is much higher, even at state universities/colleges that used to be where less wealthy people could afford an education. In many places the states have pulled back from finding these colleges resulting in much higher tuition costs. So one problem I see is less “free” higher education subsidized by the government. People who aren’t wealthy need to take out loans and the loans are bigger.

I also think that the loan terms are much nastier now. Higher interest rates and payment due sooner. But I need to confirm that.

Just looked it up and it looks like I was wrong about nastier interest rates; they haven’t consistently gone up. So mainly increased costs of tuition?

That would suggest that while the tuitions paid by students are higher, the total cost (government funding + tuition paid by students) hasn't really changed. In that case the lack of government funding would be the problem.

But that's not the case is it? The total cost of education has been increasing, outpacing inflation, for decades. I think that's the major issue.

That high cost is why people are struggling to pay off student loans: when the cost was X, and you could expect an increased income by factor Y, such that the interest on X was less than Y, the whole thing made good sense. But if Y is greater than the interest on X (which is why people are struggling to pay off student loans) then you've got a problem.

Meadmaker has been focusing more on Y, suggesting that on average the increase in income isn't so high since people are choosing less productive degrees. You have made what seems to be a good case that that's not the issue. But the problem of the cost of the education increasing without the value of that education (measured in terms of future earnings) increasing seems pretty real.

You seem to argue above that the reason that cost has increased isn't that it's absolute cost has increased, but rather that the cost to students has increased because the fraction of the cost taken on by government has decreased. That may be a factor, but I don't think it's the major factor. We'd have to look at the total cost (government funding + tuition) over time, and everything I've read about the issue is that this has increased a great deal.

 

[Ziggurat]

So you don't care whether your doctor will treat your particular ailment or treat you as a money tree.

OK, then.

That wasn’t what you said. I’m happy to have a doctor who will treat my particular ailment because he will get money for it. Why wouldn’t I be? Why would you assume doctors motivated by money wouldn’t do a good job? That doesn’t actually make sense. If you do a bad job, at ANY job, it’s harder to make money.

 

[Roboramma]

The people who graduated with their bachelor's degree aren't the crisis. So why spend precious resources on them?

First, thanks for that data, I think it informs the issue.

One problem I see with your suggesting that we differentiate between people who graduate and people who don't, is that we don't actually know ahead of time which is which. What sort of solution could differentiate between them? Perhaps making colleges more selective?

 

[Ziggurat]

Already posted just upthread: more selective based on percent of applicants accepted.

Why can it work in Germany for example but not in USA?

If fewer people apply, then your acceptance rates go up. That doesn’t mean you are being less selective if the pool itself has narrowed.

Germany puts people on career paths well before college, so that many people simply never apply. Doing that here would involve a radical overhaul of more than college. Could we do it? Maybe. But it isn’t a simple change, and it isn’t just paying for people’s college either.

 

[Roboramma]

Here's a naive solution: a cap on the number of administrators at a school as a fraction of the total number of employees.

A possibly more reasonable solution: someone suggested that the rise in administrative burden is related to a more restrictive regulatory environment. So some sort of regulatory reform to ease that burden might help lower the cost of college.

I'm sure other people could think of better solutions. But it seems to me that the high costs are the major issue. I'm actually a big fan of free college. But I also think some of the issues that Meadmaker raises are issues, and just making college free doesn't solve the problems by itself.

 

[lionking]

Possibly. Did they develop those useful skills in the course of pursuing a degree, or did they just use those skills in the course of pursuing a degree. Could they have developed those skills without spending four years working in their academic specialization?

If there was another way to develop those skills, or if, in reality, they are not so much skills as inherent abilities, then yes, there degrees were a waste of money. I don't know the answer to that.

But it sidesteps the question. In the USA, there are plenty of people who spent four years developing some sort of skills while they studied in college, and didn't end up with a high employment rate. Well, at least they have their knowledge. No one can take that from them.

Wow. Your position seems to be that college/university does little or nothing to develop skills and that “inherent abilities” whatever that means, is all that’s necessary.

Why don’t you go all in and demand schools close down? Surely school students have “inherent skills” which will get them through life?

I’ve seen no evidence in this thread that you know anything about education.

 

[Meadmaker]

Meadmaker has been focusing more on Y, suggesting that on average the increase in income isn't so high since people are choosing less productive degrees.

Not exactly.

Forum discussions sometimes focus on aspects of arguments that aren't really central. People pick up and respond to things, and the context gets kind of lost.

A better statement, in terms of your X and Y, which I think is a very good way to do it, is that X has been increasing. Meanwhile, Y has always been a distribution. Some people, schools, and majors have one value of Y, whereas others have a smaller Y, let's call the lucrative wage majors Y, and the not so lucrative wages y. As X has increased, X has become greater than y, even though it is still less than Y.
As a result, people with degrees that increase their wages by y can no longer pay off their loans, because X has become so much larger.

So, where once that sociology degree may have made sense, or at least done no harm, it is now a source of economic hardship. It's not that more people are studying certain majors than once did, it's that those majors can no longer offset the cost of obtaining them.


In fact, some other factors have caused y to actually decrease relative to inflation, so those degrees have both higher costs and lower rewards, which means even greater numbers of people in financial trouble burdened by loans, but that's for later.

 

[Meadmaker]

Wow. Your position seems to be that college/university does little or nothing to develop skills and that “inherent abilities” whatever that means, is all that’s necessary.

Why don’t you go all in and demand schools close down? Surely school students have “inherent skills” which will get them through life?

I’ve seen no evidence in this thread that you know anything about education.

Let me do some hiliting for you.

Possibly. Did they develop those useful skills in the course of pursuing a degree, or did they just use those skills in the course of pursuing a degree. Could they have developed those skills without spending four years working in their academic specialization?

If there was another way to develop those skills, or if, in reality, they are not so much skills as inherent abilities, then yes, there degrees were a waste of money. I don't know the answer to that.

So, you talked about "my position", when I said, right in the post, that I have no position on that. However, I can tell you, that an awful lot of other people have asked the same question.


To what extent does a college education develop skills, or simply document abilities? I'm not the first person to ask that question.


In other words, people with engineering degrees often get high paying jobs. However, we hardly ever use the material we studied in our classes. It's true. Is our education actually valuable, or is it simply a lengthy IQ test, with a certificate at the end that documents to a potential employer that this person has some combination of intelligence and work ethic that allowed him to solve the problem of how to get good grades in an engineering curriculum, so he can probably solve whatever problems your business is needing to solve as well.


A lot of people ask that question. You can google it, if you can come up with the right search terms.

 

[The Great Zaganza]

I'm all for Knowledge for Knowledge sake - our survival isn't threatened by a lack of mini-maxing our knowledge/work ratio.

The more everyone knows about anything, the better the chances for unconventional solutions.

 

[Roboramma]

I'm all for Knowledge for Knowledge sake - our survival isn't threatened by a lack of mini-maxing our knowledge/work ratio.

The more everyone knows about anything, the better the chances for unconventional solutions.

I'm all for it too, in theory. But in practice there are a lot of people saddled with huge student loan debts and that's a problem.

This thread seems to be an attempt at discussion solutions to that problem. One is to get government to foot the bill, but given the scale of the problem we should be careful about addressing its underlying causes.

 

[The Great Zaganza]

Again, I believe that the legal protection of student debts are the key problem: it makes education into a money-making machine ... which it is not supposed to.
Education should be something you put money in and get educated people out, not put uneducated people in an get money out, with a bit of knowledge on the side.

The benefit to the Economy of education shouldn't come from Education providers making money.

 

[cullennz]

How it works here now is the loans are interest free if you are living in NZ and the current govt made the first years study free. Which is incredibly dim as they did it universally, so rich kids get it and it should be the last year given student drop outs.

The odd thing about ours is if you cark it the debt is written off and not passed on to you partner (or whoever is you inheritor), so we are starting to see people just keeping the debt till they hit by the old death train.

 

[Giordano]

If fewer people apply, then your acceptance rates go up. That doesn’t mean you are being less selective if the pool itself has narrowed.

Germany puts people on career paths well before college, so that many people simply never apply. Doing that here would involve a radical overhaul of more than college. Could we do it? Maybe. But it isn’t a simple change, and it isn’t just paying for people’s college either.

If fewer people apply with the same breadth of quality as before and yet you still take the same number as before you are being less selective. If more people apply and you admit fewer, which is the case, you are definitely being more selective. This doesn’t address the nature of the selection criteria.

 

[cullennz]

Was reading today that our unis are trying to get the govt to give them an exemption over that novel Coronavirus.

No one who isn't a resident is allowed to come from mainland China and all their Chinese foreign students are supposed to be here in about a week.

They pay a shed load more fees as most kiwis students are about 80% subsidised by the govt, so the unis a panicking.

Hopefully the govt will say no. But given the current govt are nutters who knows.

 

[Checkmite]

Anyone who has lived a few decades has encountered doctors that never should have been doctors in the first place. They merely had rich parents.

Is that really a good selection process for doctors?

Rich parents who likely forced them to become doctors, no less.

 

[Ziggurat]

If fewer people apply with the same breadth of quality as before and yet you still take the same number as before you are being less selective.

But that isn’t what happened. The distribution of applicants today is not the same as the distribution 60 years ago.