Student loans, debt and the creation of neoliberal citizens

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Helsing: Aug 23, 2003; MY FAVORITE GAME OF ALL TIME IS SUPERMAN 64

The following two pieces take a relatively fresh and unusual look at student debt and its role in the capitalist system. Its very common to see student debt described as representing a sort of neofeudal arrangement, but as the first article argues this argument really fails to account for the role that these loans play in determining the kind of career paths we take. Far from (merely) being a symptom of financial rent seeking, student loans are a way of moulding and shaping behaviour.

You often see this described as a fundamentally selfish issue when its raised by college students. But the implications of how our society compels people to finance their educations goes far beyond the selfish concerns of the individual. The rise of students loans is having a clear impact on the overall trajectory of people's careers.

Chris Maisano, "The SOul of Student Debt", Jacobin, Issue 9 posted:

The Soul of Student Debt

Strike Debt
by Chris Maisano

Not quite feudalism, student debt is a peculiarly capitalist form of social control.

Janet Lynn Parker is a middle-aged elementary school art teacher from Arkansas. She graduated in 1991 from Arkansas State University with a degree in art education and $25,000 in student loan debt. Unable to find a job in her field of study, she bounced around from job to job until 1999, when she finally found employment at a public school at an annual salary barely over $20,000. Over that time, her financial mounting difficulties forced her to ask for multiple forbearances and deferments on her student loan, pushing the balance of her educational debt up to about $70,000.

To add injury to insult, Parker broke her back in a boating accident in 2000. It left her in a back brace for months after the incident, and reliant on pain medication to get her through the day. In spite of it all, she continued to teach and to care for her young granddaughters during the summer months, when school was out of session. Still, the strains took a toll on her family and her marriage. Parker and her husband separated in 2003 and divorced in 2004. With her student loan, credit card, retail, and medical debts running far beyond her ability to pay them, she finally filed for bankruptcy in 2004. Because of the peculiarities of U.S. bankruptcy law, she had to file a separate petition to seek a discharge of her student loan debt. Despite the long odds ranged against her, she actually won: the bankruptcy judge in her case agreed with her claim that her student loan debt constituted an “undue hardship” and should therefore be wiped out.

But the story didn’t end there. Parker’s creditor, the Student Loan Guarantee Foundation of Arkansas, appealed the bankruptcy court’s decision, bringing the case before a federal bankruptcy appellate panel. Despite the ample evidence that Parker’s educational debt was ruining her life, the panel decided to reverse the lower court’s ruling and compel her to continue making payments on her loans.

The reasoning behind the panel’s decision is revealing, and perfectly consistent with the merciless logic of capitalist rationality. According to the judges’ decision Parker failed to demonstrate undue hardship because—in their view—she failed to adequately maximize her income and minimize her expenses, a requirement of the test adopted in case. As the panel argued, “the Debtor has a duty to maximize her income…Although she is working as a full-time teacher, the Debtor admitted that ‘it would be possible’ for her to get a paying summer job. The bankruptcy court found that the Debtor was capable of summer employment and attributed to her additional net income of $100 per month.” No matter that the unpaid care work she performed over the summer months was a crucial source of support for her daughter, a single mother. For these Gradgrinds, the bonds of family and the imperatives of caretaking are, as Marx so vividly put it, to be drowned in the icy waters of egotistical calculation.

In the end, the bankruptcy panel directed Parker to consolidate her student loans under the William D. Ford Consolidation Program, which would reduce her monthly payments but leave her with only $15 after expenses at the end of each month. It would also her require her to make those payments for an additional 25 years—at which point she would be 76 years old.

The issue of debt generally and student loan debt in particular quickly emerged as a major concern of the U.S. Occupy movement. In June 2010, total outstanding student loan debt became larger than total outstanding credit card debt for the first time in the country’s history, and in the spring of 2012 this figure surpassed the astonishing figure of $1 trillion. This explosion in student loan indebtedness has been the logical result of the dramatic inflation in the cost of higher education (particularly public higher education) in recent decades. Economists estimate that the cost of tuition and fees has more than doubled since 2000, easily surpassing the rate of inflation in energy, housing, and even health care costs.

The driving force behind this explosion in higher education costs is the long-term disinvestment in public colleges and universities at the state level. While public higher education institutions have absorbed the majority of new undergraduate enrollments since 1990, the proportion of state spending on higher education has dramatically declined. According to a recent study by Demos, between 1990 and 2010, real funding per public full-time enrolled student declined by over 26%. This shortfall has not been filled by other sources of public funding, but rather by a marked increase of students’ out-of-pocket costs. Over the same period, tuition and fees at four-year public colleges and universities rose by 112.5% while the price of public two-year colleges increased by 71%. Because household incomes have stagnated over the previous two decades, students and their families have been compelled to turn to student loans to cover these costs. According to the Department of Education, 45% of 1992-1993 graduates borrowed money from federal or private sources; today, at least two-thirds of graduates enter the workforce with educational debt.

Even though college-educated workers tend, on average, to earn higher incomes than their less-educated counterparts, young college-educated workers have not escaped the pressures of wage stagnation. In the last decade, the average annual earnings of workers ages 25 to 34 with Bachelors degrees fell by 15%. New graduates, meanwhile, saw their as the average debt load increase by 24%. What makes this dramatic expansion of student loan indebtedness particularly troubling is the fact that unlike most other forms of personal debt, student loans cannot be discharged through the standard bankruptcy process. In the event of default on a private or federal student loan, borrowers face a range of invasive measures: wage garnishment, the interception of tax refunds or lottery winnings, and the withholding of future Social Security payments.

The leading intellectual lights of the Occupy movement have seized on the issue of debt as their leitmotif, organizing their analysis of the economy around what they’ve taken to calling the “debt system.” For them, the explosion in personal and public indebtedness that has occurred over the last three decades represents a break in the logic of capitalism and marks the revival of older forms of exploitation associated with feudalism. At an Occupy conference held shortly after the clearing of Zuccotti Park, David Graeber made the case succinctly:

quote:
I think there’s a fundamental shift in the nature of capitalism, where some people are still using a very old-fashioned moral logic, but more and more people are recognizing what’s really going on. They just don’t know the extent of it. It’s not even clear that this is capitalism anymore. Back when I went to college, they taught me that the difference between capitalism and feudalism. In feudalism they take the money directly, through legal means, and they just shake you down, pull it out of your income, and in capitalism they take it through the wage, in these subtle ways. It seems like it’s shifting more toward the former thing. The government is letting these guys bribe the government to make laws where they can pick your pocket, and that’s pretty much it.

Graeber is certainly correct to point out the ways in which debt and finance can be nakedly exploitative. Marxists have traditionally characterized capitalist exploitation as an abstract social process that takes place behind the backs of those it exploits. But there’s nothing indirect about a credit card or student loan bill. All of those seemingly extraneous charges and fees are right in front of you on your bill, chipping away at your income and your standard of living month after month for years on end.

Still, that’s not “pretty much it.” The critique of debt as neo-feudalism advanced by Graeber, the organizers of the Strike Debt campaign, and others fails to capture how debt and finance works under contemporary capitalism. It also echoes the misguided populist discourse that casts the financial sector as a parasitical growth on the productive, “real” economy. In the case of student debt, the neo-feudal argument also prevents us from properly understanding one of the main functions of debt and finance within neoliberal capitalism: the shaping of our economic souls. The social function of student debt is not to make us into serfs or indentured servants. It’s to teach us how to be investors and risk-takers, entrepreneurs who have taken on debt to finance our climb up the ladder of bourgeois success. The soul of student debt is not feudal, but capitalist through and through.

Any discussion of higher education and student debt needs to be situated within a larger understanding of the turn toward neoliberalism and financialization that began in the 1970s. As the postwar settlement between labor and capital collapsed under the weight of its own contradictions, capitalists and policy makers in governments throughout the advanced capitalist countries pursued what is now a familiar strategy. They set out to smash the power of organized labor, unleash the financial sector, and integrate ever-wider layers of the population into the circuits of finance through the expansion of access to credit. This last point was a particularly crucial aspect of the neoliberal project. As Leo Panitch, Sam Gindin, and Greg Albo argue in their book In and Out of Crisis, the expansion of access to credit— and hence debt—“was as or more important to the dynamism and longevity of the finance-led neoliberal era” than any of the other aspects of the turn to neoliberalism. In particular, it allowed the working class to maintain its living standards in the face of stagnating wages, allowing the system to preserve its legitimacy and stability.

The consequences of this shift have been profound, dramatically altering the social textures of everyday life. They have upended relationships between workers and employers, citizens and the state. They have shifted the place of the individual in society and encouraged the formation of new forms of consciousness and being in the world. As Gerald Davis has argued in his book Managed by the Markets: How Finance Re-Shaped America, we now live in a “portfolio society” whose animating spirit is the logic of finance. Education, among other things, is conceived as a form of “human capital” rather than a social good, an investment security for one’s personal economic portfolio rather than the foundation of democratic citizenship. Student debt— the price one must pay in order to gain access to the possibility of upward mobility— is now one of the most risky investments in that portfolio.

Modern student lending practices date from the 1950s, when Cold War competition with the Soviet Union spurred Congress to establish the Perkins Loan Program in 1958. Perkins expanded student loan lending through need-based loans at low interest rates. But this program was relatively modest. Federal student loan lending expanded further during the Johnson administration with the passage of the Higher Education Act of 1965 and the establishment of the Guaranteed Student Loan program (known today as the Stafford Loan Program). With the onset of the fiscal crisis of the 1970s, states began their long-term disinvestment from public higher education, driving up the cost of tuition and necessitating the expansion of federal student loan lending. In 1978, federal spending on student lending was $500 million. In fiscal year 2012, the federal government lent $115.6 billion in new student loans. Today, the average student graduates college or university with over $25,000 in educational loan debt.

For Americans in dire financial straits, bankruptcy offers perhaps the only realistic avenue for relief. As Elizabeth Warren observed in Law and Class in America, the bankruptcy courts are a strategic vantage point from which to survey the social wreckage of contemporary capitalism:

Eventually virtually every social and economic problem in the United States threads its way through the bankruptcy courts. For families, bankruptcy is the place to deal with lost jobs, erratic incomes, inadequate health insurance, no disability insurance, and the financial impact of divorce. The bankruptcy courts deal indirectly from the fallout from stagnant wages and a part-time or “consulting” workforce, with the high cost of housing and daycare that chews through a parent’s take-home pay.

Article I, Section 8 of the Constitution authorized Congress to enact uniform bankruptcy laws under federal jurisdiction to offer a “fresh start” to those who simply could not keep up with their debts. In 1970, Congress appointed a Bankruptcy Act Commission to assess the effectiveness of the nation’s bankruptcy laws, which hadn’t been significantly altered in almost a century. The Commission released its recommendations in 1973, and they generally accorded with the relatively pro-debtor bias of the fresh start principle. Crucially, however, the Commission decided to make an exemption in regard to educational debt. Until 1976, all student loans were eligible for discharge, just like most other forms of consumer debt. But the Commission argued that this provision was necessary to prevent unscrupulous borrowers from financing their education through easily-accessible federal loans and then declaring bankruptcy after graduation.

Even though there was little evidence to suggest that students were running up huge debts simply to dump them back on the taxpayers, Congress included the exemption of student debts from discharge in the Bankruptcy Reform Act of 1978. The Act, however, contained one crucial caveat: such debts could be discharged through separate proceedings if borrowers could demonstrate conclusively that repayment of the debt would bring “undue hardship” on themselves.

But Congress neither defined exactly what constitutes “undue hardship” nor did it recommend a uniform standard for determining how and when a debtor’s personal financial situation meets that threshold. Bankruptcy courts have employed a number of tests for determining whether plaintiffs have adequately demonstrated undue hardship, but the most commonly used is the “Brunner test,” established by the Second Circuit bankruptcy court in 1985’s In re Brunner. The court’s decision in this case employed a three-pronged test to find whether debtors have shown sufficient evidence to support their claim of undue hardship. First, debtors must show that they cannot maintain a “minimal” standard of living if forced to repay the loans. Second, the available evidence must show that this sorry state of affairs will likely persist over the course of the repayment period. Third, debtors have to show that they have made a good faith effort to repay the loan.

By abdicating any responsibility for determining just what constitutes undue hardship, Congress gave bankruptcy judges an enormous amount of leeway to interpret and adjudicate claims arising from the growing pile of student loan debt. As representatives of the judicial branch of a capitalist state, it should come as little surprise that these judges have, more often than not, privileged the claims of the creditor over those of the debtor in their rulings. In doing so, they have reinforced the normative and disciplinary assumptions of what Michel Foucault called neoliberal governmentality.

Neoliberal governmentality seeks to subject our social life to the logic of what Foucault called the “enterprise society.” In The Birth of Biopolitics, he argued that it encourages the formation of subjects whose moral character and economic activity resembles that of the risk-taking entrepreneur. This should not, however, be construed as a simple top-down process of domination. The genius of this form of social control is that it elicits the active participation of the population in the construction of its own discipline. By bringing ever-widening circles of the population into the orbit of finance capital, it imbues the process of financialization with a spirit that accords with democratic norms of mass participation and equal opportunity. After all, what could be more American than the proposition that everyone have access to a college education and, presumably, a chance to go as far as your talents can take you?

As states disinvest from public higher education and compel students to take on ever-increasing debt loads to fund their studies, the experience and purpose of higher education is transformed. The pursuit of a college diploma becomes an entrepreneurial activity, a species of personal investment and risk-taking that places the attainment of future returns above all other concerns. By integrating higher education into the circuits of financial capitalism, the state encourages debtors to look to the market for self-improvement and personal security. Like the subprime mortgage borrower or the worker with a 401(k) plan, the indebted student is taught to view access to credit and the financial markets as the golden ticket to prosperity and security.

Student debt subjects the borrower to a distinctly capitalist pedagogy, transforming higher education into an increasingly expensive commodity that is bought and sold on the market. But as the legions of student loan debtors can attest, investment in a college education is no longer a guarantee of remunerative employment or personal financial security. It is an increasingly risky investment that can bring the student debtor into severe financial distress, and in the worst cases, to the door of the bankruptcy court to seek relief.

Federal case law offers an important glimpse into the ways in which student debt works to impose a particularly capitalist form of discipline on borrowers. The judges on these cases often seem as if they were social workers trained by the University of Chicago economics department. In cases where debtors have their claims rejected, a common theme quickly emerges. In denying plaintiffs relief from their debts, judges and appellate panels often seek to encourage economic behavior more akin to that of a competitive firm than a healthy human being.

Janet Lynn Parker’s story is, admittedly, something of an extreme case. But her treatment by the bankruptcy courts is not entirely out of the ordinary for the small segment of student debtors who actually attempt to have their debts discharged. The case law is replete with examples of judges resorting to a particularly merciless form of reasoning to deny plaintiffs relief.

Consider the case of Steven and Teresa Hornsby, a Tennessee couple who came to bankruptcy court with approximately $30,000 in student loan debt. Like Janet Lynn Parker, the Hornsbys received a discharge from a lower court only to have the decision reversed on appeal. The appellate judge agreed with the Tennessee Student Assistance Corporation’s argument that the couple did not adequately “tighten their belts” in order to make student loan payments. In moving from Tennessee to Texas (a state with higher monthly rental expenses), taking on debt to purchase a newer used car, and running up “relatively high bills for telephone use, electricity, meals eaten out, and cigarettes,” the Hornsbys failed to meet the highly restrictive standards of judgment adopted by the court. The appellate judge seemed particularly concerned with the couple’s ostensibly “exorbitant” telephone usage as well as the $100 they dared to spend on cigarettes each month.

In other cases where they have denied discharge, judges have directed dance teachers to seek better-paying work in other, often unrelated fields; reproached workers for leaving higher-paying jobs for lower-paying ones, whatever the reason; and, in one case, advised the pastor of a small, financially insecure church to close it and do something more profitable with his time. Unsurprisingly, many student loan debtors desperate enough to seek relief through the courts work in public sector professions. In an extensive 2005 empirical study of undue hardship cases, Emory University law professor Rafael Pardo and Tulane University mathematician Michelle Lacey found that a disproportionate number of plaintiffs worked in education, training, and library occupations. In today’s enterprise society, becoming a teacher or a librarian just isn’t a wise investment.

As Doug Henwood pointed out in his critique of Strike Debt’s Rolling Jubilee initiative, debt is not a system. It’s a symptom of the restructuring of the U.S. state and its priorities away from social provision toward capital accumulation, both at a national and a global scale. If the scourge of student debt is to be confronted in any kind of meaningful way, Occupy and its offshoots will need to struggle on a terrain that they have assiduously avoided – that of politics, public policy, and the state.

In addition to the Rolling Jubilee, student debtors and their allies should begin building toward a concerted attack on the country’s bankruptcy laws, particularly the egregious Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). This 2005 “reform” law, passed at the behest of the creditor lobby to tighten the screws on debtors, made it harder than ever for student borrowers to win relief. For the first time, the law excluded loans from non-governmental lenders from discharge through the normal bankruptcy proceedings. Because of the time and effort required to file a totally separate claim for undue hardship, many borrowers in extreme financial distress don’t even bother to do so. It’s estimated that less than 1,000 student debtors make an undue hardship claim in the U.S. each year. And when they do, it can take years for their cases to be resolved in the courts.

While there are many obstacles standing in the way of relief, there is some evidence that more student debtors should consider filing undue hardship claims. As reported in a New York Times series on student debt, a recent study of such proceedings from around the country found that 39% of claimants eventually received full or partial discharges. While it’s not an adequate solution to the problem, we need to make it easier for student debtors to file for bankruptcy and to win at least a partial discharge of their debt. Repealing BAPCPA and overhauling the bankruptcy process for student debt should be just as high a priority for Occupy as the Rolling Jubilee.

Ultimately, however, the problem of student debt cannot be resolved without winning free public higher education for all. The Quebec student movement provides an instructive example in this regard. In its victorious battle to stop of the provincial government’s tuition hike earlier this year, the movement made a brilliant strategic decision. It made demands that not only spoke to the immediate needs of the people, but pointed toward a broader transformation of their society – and of the state as well. Perry Anderson once remarked that class struggles cannot be resolved anywhere besides the realm of politics and the state. That’s where the struggle over student debt and public education must ultimately be fought, and won.

The second piece is a short blog post from Rortybomb that takes a more quantitative approach, quoting from a paper that tried to measure the actual impact of student loans on career path.

Mike Konczal, "Student Loans, Indenture and Constraints, Rortybomb.wordpress.com 2011/09/23 posted:

Student Loans, Indenture and Constraints

Posted on September 23, 2011 by Mike

Sarah Jaffe has a story over at Alternet, Is the Near-Trillion-Dollar Student Loan Bubble About to Pop?, that starts with stories about people buried under student debt, unable to make their payments in this terrible economy. Jaffe opens with stories of people for whom the tradeoff – great education and full opportunities combined with massive debts – didn’t work out. People, for instance, who had to drop out of college and thus ended up with a debt load and without the necessary credentials to get ahead in the economy.

Jaffe goes on to look at the large amount of student debt out there and what can be done about it. I want to add three additional ways of looking at this problem.

Firstly, notice how the debt works here. For those that can successfully graduate from college and transition into higher paying work – often people with the most resources behind them – the debt is less of a burden, but for those who don’t finish college – those who often have fewer resources – the debt is a gigantic burden. It’s like rolling dice, with the consequences being how much the debt impacts your life.

A nice comparison is to late 19th century Western and Great Plains farmers with mortgage debt along with sharecropping in the South. Success of their enterprises were a dice roll, but either way the debt had to get paid. As J.D. Fields, a leader in the Texas Alliance (which would later evolve into the People’s, or Populist, Party), put it, farmers’ two alternatives were “success and freedom, or failure and servitude.” How well does that describe out educational debt system now?

A second point is that the analogy should be extended to the notion of indenture more broadly. For all the talk about freedom, the majority of whites who came to the British colonies arrived under indenture. Indenture was extensive and prevalent, secured not by property but by people and an extensive legal code that limited recourse if things went bad. Indenture was the means of social mobility, something that could transfer people across space – class and distance – and into a better life with more opportunities. It was used more by the young and those with less resources, of course. And it generated a major financialized secondary market to go along with it.

How well does colonial indenture match up with student loans? Pretty well I’d argue. That’s the provocative thesis of this great Jeffrey Williams piece in Dissent, Student Debt and the Spirit of Indenture. I brought this thesis up to a conservatively-minded economic historian I know and he delighted in it – as he pointed out, in colonial times people died so quickly and they could disappear easily. As such indenture needed to function in a “total institution”-like space with coercive punishment very present to get maximum returns to creditors. With today’s longevity, as well as our surveillance and monitoring technologies, indenture can function in the background as a cut deducted from your checking account every month for a few decades.

But Jaffe’s piece focuses more on those for whom this arrangement doesn’t work out. What about those for whom it does work out? What about those who go to a great, highly-selective school and place into the job market? How does student debt impact them?

Beyond a major drag on their income at a crucial point in their lives, there’s another interesting factor. As the third item, we luckily have this fantastic Jesse Rothstein paper to examine, Constrained After College: Student Loans and Early Career Occupational Choices. From the paper (my bold):

quote:
In the early 2000s, a highly selective university introduced a “no-loans” policy under which the loan component of financial aid awards was replaced with grants. We use this natural experiment to identify the causal effect of student debt on employment outcomes…We find that debt causes graduates to choose substantially higher-salary jobs and reduces the probability that students choose low-paid “public interest” jobs…Specifically, in our preferred specifications in columns 6 and 7, we estimate that an extra $10,000 in student debt reduces the likelihood that an individual will take a job in nonprofits, government, or education by about 5 to 6 percentage points. This is a large effect…students with more debt are less likely to accept jobs in low-paying industries and accept higher paying jobs more generally.

There’s a lot of great stuff in the paper about life-cycles of economic agents for those who would find that interesting. For our purposes, even those for whom this arrangement works find themselves pushed out of government, education or non-profit work by their debt loads. Debt puts contraints on what people are capable of doing, and one way out of that constraint is to work in the fields that pay the most. For those who want to see our best working in schools, government, nonprofits, taking chances starting entrepreneurial work or simply not working to replicate already existing power structures, this is a terrible arrangement.

And as a reminder, moving from subsidizing loans and grants, capital that can be easily captured by incumbent institutions, to providing a cheap public option, is one way to use the market to combat this runaway educational price inflation.

The paper Konczal is refering to can be accessed in pdf form here.

Obviously student loans are the begining of a conversation, not the end of them. These are one particularly prominent (for this audience) example of a broader shift in the economy toward a financialized economy.

# ? Dec 30, 2012 09:33

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# ? May 22, 2013 05:07

corpulent clown: May 9, 2005

Paper posted:

Neoliberal governmentality seeks to subject our social life to the logic of what Foucault called the “enterprise society.” In The Birth of Biopolitics, he argued that it encourages the formation of subjects whose moral character and economic activity resembles that of the risk-taking entrepreneur. This should not, however, be construed as a simple top-down process of domination. The genius of this form of social control is that it elicits the active participation of the population in the construction of its own discipline. By bringing ever-widening circles of the population into the orbit of finance capital, it imbues the process of financialization with a spirit that accords with democratic norms of mass participation and equal opportunity. After all, what could be more American than the proposition that everyone have access to a college education and, presumably, a chance to go as far as your talents can take you?

Sorry for being a fool; the finer points are things I've tried much to familiarize myself with months ago, but are mostly foggy, or out of forefront of my mind. I've avoided much of it, and topical events --as best as possible-- for my mental health, but am still very mucked up in liquidating my meager assets; if not giving them to people I think would benefit from them. Regardless, this most resonated with me. I hope not to derail by going on and on in a tangent about my own troubles, as it would only lead to the inevitable derail of fishing expeditions with the classic "what have you done to better your situation?"

Coward, idiot, fool, escapist, destructive moron; whatever I am regarded as by those who would wish to have their fishing expedition, is fine by me; so long as there isn't a needless derail. Moreover, so long as people better suited to the conversation are the ones talking. Anyways, thanks for posting those pieces, it was a nice read.
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Edit:
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Also, as I think it relates to the pieces in the OP. Has anyone done any significant research work on the "commodification of people"? Not as it relates to slavery --as the first few google results indicated-- but to those in debt; and in particular, student loans? Taking it out of the context of slavery leaves applications --again, assuming there isn't already an ample body of work available-- that are many. For instance, the way --and excuse the example if it sounds silly-- it is done on dating websites; from moral codes and theology, to ones educational background, career, present earnings, and earning potential. The mentioning of people being like portfolios in the OP comes to mind.

Edit: A letter n wasn't the right size.

corpulent clown fucked around with this message at Dec 30, 2012 around 11:22

# ? Dec 30, 2012 10:24

shrike82: Jun 11, 2005; I HAVE NEVER CONTRIBUTED ANYTHING WORTHWHILE TO ANY DISCUSSION EVER. IF YOU ARE REPLYING TO ME YOU ARE WASTING EVEN AS PALTRY A RESOURCE AS INTERNET FORUM SPACE. PLEASE STOP ENGAGING ME FOR THE LOVE OF GOD, I'VE BEEN DOING THIS GIMMICK FOR YEARS.

I probably spent 200K on my BS + MS and am setting aside another 200K for my MBA. I'm fortunate enough not to be in debt but it's crazy to think the amount I've spent on my education in the States would pay for a house.

I wonder what the tipping point for the student loan bubble will be. It's difficult to compare it directly with other traditional bubbles because of the social importance placed on college education, supported by inter-generational wealth transfers.

# ? Dec 30, 2012 10:52

nunchi: Apr 18, 2004

I'm really starting to wonder what the endgame is going to look like. I have a terrible feeling that nothing is going to change and by the time it does it's going to be too late for it to matter for me in any meaningful way.

# ? Dec 30, 2012 11:07

TheEldar: Oct 24, 2010

So student loans in the USA are treated the same as a standard bank loan?

Here in the UK, it is taken automatically as a tax from monthly income if the person earns over a certain threshold (15k per year at the moment). If earning under that amount, not a penny is asked for back. It does accrue interest, but only in line with the rate of inflation, plus any outstanding debt is written off after 25 years.

In the current recession a lot of people I know with good degrees can't find a job whatsoever, let alone a decent paying one in their respective field. Can't imagine what it would be like having a huge debt hanging over one's head too. Its a good balance I think, while the cost of education is technically born by the 'consumer', the government effectively subsidizes a large portion of it by offering very favourable loan terms.

Therefore higher level education is not so much of a massive risk to take on, although it is a large initial outlay if things do go bad later in life it is not going to cause financial problems. Therefore far more people can take this risk due there being a safety net of sorts. And if they do make it into a decent career they will be paying the loan back in full.

To me this whole area can be likened to welfare benefits. When there is a strong social security net to full back on (not to mention fully nationalized healthcare), people in general can take more risks because their basic livelihood is not at threat were they to fail. Me, being a young single man, could quit my job tomorrow and plow all my savings into a business venture. Were it to fail and I was left penniless I would not have to worry about basic needs like healthcare and food, even a place to live to some degree. In the capitalist utopia of the USA, I'd worry about losing health insurance from my job, of having less generous jobless benefits were things to go wrong, etc.

Now, the neoliberals of the world would argue the opposite, that people take less risks because of cushy unemployment benefits. That the poor need the threat of near starvation to be motivated enough to better themselves. Which they love of course, since all success is down to the individual and there are no outside factors beyond one's control at all in life. All poor people deserve to be that way, etc. makes no sense whatsoever, but then its not supposed to is it?

# ? Dec 30, 2012 14:38

signalnoise: Mar 7, 2008; i'm your lady machine
cybernetic supreme
sweet as peaches and cream
i'm your lady machine

TheEldar posted:

So student loans in the USA are treated the same as a standard bank loan?

In the USA, student loans are pursued like criminal debt. If you default, you can be penalized with an increase on your principal. Your wages can be garnished and you cannot discharge it without special circumstances, like dying or becoming permanently disabled.

# ? Dec 30, 2012 15:19

shots shots shots: Sep 6, 2011; Basically A Stupid Idiot

TheEldar posted:

So student loans in the USA are treated the same as a standard bank loan?

Here in the UK, it is taken automatically as a tax from monthly income if the person earns over a certain threshold (15k per year at the moment). If earning under that amount, not a penny is asked for back. It does accrue interest, but only in line with the rate of inflation, plus any outstanding debt is written off after 25 years.

As mentioned above, it's not like that. But also, a critical difference is that people with 200k in debt almost certainly racked up that debt by thumbing their nose at the inexpensive state education offered in favor of a private school, or going to a school in a state they don't pay taxes in.

While student debt is bad, the government shouldn't be picking up the tab for what is essentially a consumption choice. In addition to that, states should try to reign in capital spending and administrator pay to contain costs in their universities. Obviously states should keep tuition low through funding, but they can't do it if every faculty member has a senior level manager.

# ? Dec 30, 2012 15:31

d3c0y2: Sep 29, 2009

shots shots shots posted:

As mentioned above, it's not like that. But also, a critical difference is that people with 200k in debt almost certainly racked up that debt by thumbing their nose at the inexpensive state education offered in favor of a private school, or going to a school in a state they don't pay taxes in.

While student debt is bad, the government shouldn't be picking up the tab for what is essentially a consumption choice. In addition to that, states should try to reign in capital spending and administrator pay to contain costs in their universities. Obviously states should keep tuition low through funding, but they can't do it if every faculty member has a senior level manager.

The idea that education should ever be viewed as a consumption choice is terrifying.

# ? Dec 30, 2012 15:36

shots shots shots: Sep 6, 2011; Basically A Stupid Idiot

d3c0y2 posted:

The idea that education should ever be viewed as a consumption choice is terrifying.

Choosing an private university over public is absolutely a consumption choice. You lose the right to complain about government subsidizing your education when you go out of your way to choose education that isn't subsidized by your taxes.

# ? Dec 30, 2012 15:39

CommieGIR: Aug 22, 2006; The Screw Whisperer (TM)

shots shots shots posted:

Choosing an private university over public is absolutely a consumption choice. You lose the right to complain about government subsidizing your education when you go out of your way to choose education that isn't subsidized by your taxes.

How does that make a difference? I understand your point, but you are no better off with the public university than you were with the private beyond maybe a degree that would be worth more?

Both are going to cost you, neither are free, and both are going to probably put you into some massive debt.

# ? Dec 30, 2012 15:43

froglet: Nov 12, 2009

TheEldar posted:

So student loans in the USA are treated the same as a standard bank loan?

The exception being that it cannot be discharged by regular bankruptcy proceedings. Even if you can convince a judge it causes undue hardship, higher courts can overturn that decision by deciding your lifestyle was 'too luxurious' for somebody in debt.

In the great depression 2 thread a few weeks ago somebody posted a video from an Australian economist who pointed out Congress the economy's greatest weakness wasn't the public debt, but private debt. His theoretical solution to the issue of private debt (which includes student loans) was to give everyone a large sum of money (his figure was $100,000) and force every recipient to pay off their debts (if they have any), but they could keep the rest or all of it if they had small or no debts.

Obviously it would never happen in real life irrespective of the benefits because of the 'gently caress you got mine' mindset that seems to have permeated politics, but it was a nice idea.

Fake edit: I believe it was this video or a talk made by the same guy:
http://www.youtube.com/watch?v=GLnhjfH3wbg
The bit about how to fix the situation is towards the end, at about 37 minutes in.

# ? Dec 30, 2012 15:44

TheEldar: Oct 24, 2010

shots shots shots posted:

While student debt is bad, the government shouldn't be picking up the tab for what is essentially a consumption choice. In addition to that, states should try to reign in capital spending and administrator pay to contain costs in their universities. Obviously states should keep tuition low through funding, but they can't do it if every faculty member has a senior level manager.

I would argue that a government subsidizing the cost of higher education for its citizens is something that benefits society as a whole since more people have the chance to study to a higher level, meaning the population is better educated overall. This leads to a less unequal society since the path to higher level careers is not so dictated by whether one can afford it. Many developed nations have entirely state-funded universities and appear to have a very strong overall standard of living.

The key factor however is my use of the word 'overall'. It is whether one looks at society as being purely individualistic or something that should look out for the collective good. But there is plenty of evidence that things done for the benefit of all that reduce inequality actually work out more favourably for each individual too.

I think its awful that anyone would look at higher education and label it purely as a 'consumption choice'. It is part of what the articles above allude to, how everything we do is viewed in terms of monetary worth and how it advances us as an individual. Life should be about more than that.

# ? Dec 30, 2012 15:52

Tuckleberry: Aug 30, 2009

shots shots shots posted:

Choosing an private university over public is absolutely a consumption choice. You lose the right to complain about government subsidizing your education when you go out of your way to choose education that isn't subsidized by your taxes.

It isn't really that simple. When did you go to high school? All throughout high school public colleges are seen as fall-back options, last resorts for the failures who couldn't get into a university. There's little to no information available regarding cost efficiency to the students.

If there was a huge push to set forth a program that demonstrated the benefits of enlisting in public colleges for the more common courses and then transferring to a university for the more specifics, it would go a long way to helping with student debt.

I'm willing to bet a lot of the debt is akin to the mortgage crisis - people that were duped into signing on to things they thought they could achieve, or afford, when in actuality it was just more loan sharking.

# ? Dec 30, 2012 15:58

shots shots shots: Sep 6, 2011; Basically A Stupid Idiot

TheEldar posted:

I would argue that a government subsidizing the cost of higher education for its citizens is something that benefits society as a whole since more people have the chance to study to a higher level, meaning the population is better educated overall. This leads to a less unequal society since the path to higher level careers is not so dictated by whether one can afford it. Many developed nations have entirely state-funded universities and appear to have a very strong overall standard of living.

Yes, they have state funded universities. They don't endlessly subsidize private universities.

The way to make college affordable is to have state-funded universities, not to shovel money into the bottomless maw of private colleges/universities.

Tuckleberry posted:

It isn't really that simple. When did you go to high school? All throughout high school public colleges are seen as fall-back options, last resorts for the failures who couldn't get into a university. There's little to no information available regarding cost efficiency to the students.

I went to school in a state with excellent public universities, but a lot of my classmates actually left the state to go to public universities in other states rather than public universities. Outside of the tip-top of universities, public is almost always better.

Tuckleberry posted:

I'm willing to bet a lot of the debt is akin to the mortgage crisis - people that were duped into signing on to things they thought they could achieve, or afford, when in actuality it was just more loan sharking.

I'm sympathetic to people who have already made poor choices (we should help them out somehow), but part of fixing the system is cutting off loan money to other people who want to go down that same road.

# ? Dec 30, 2012 16:11

A Winner is Jew: Feb 14, 2008; Shabbat shalom motherfucker!

Since my wife is actually going back to school for her MBA next year (as in her applications are just waiting on her GMAT score to come back) here is what she is facing cost wise from the local private university vs. the two local public ones, and all three of the schools she is applying to are credited 4 year schools and not university of phoenix or anything like that just to give some points of reference for the discussion.

First off, the private university is actually easier to get into by needing a 500 GMAT score but all told will cost $70,000 for her MBA program. Spread out over 4 years since she will be working full time in order to get the $5400 per year her employer gives her for going to grad school it works out to $12,100 per year out of pocket for us. Now combined our income is 6 figures, but we also live in OC CA so our cost of living is retardedly high and she is still paying off her first round of student loans which thankfully are only $200 a month since she was good enough for a 1/2 scholarship originally. Even still that leaves us with having to take out a student loan if she doesn't get any kind of returning student scholarship from that private university and at 29 & 31 respectively that's not really something we want to take on. Oh, she needs at least a 600 GMAT score for a scholarship there.

Now for public schools the GMAT required is 570 to get in since they are so impacted right now, but the cost is still $40,000. With her work reimbursement that's just $4,600 out of pocket a year... something we can actually budget for by not paying off the cars, credit cards, and school loans as quickly as we have been and thank god we don't have any kids and aren't planning on it in the next few years. The problem of course is that one of them would require her to go an additional year due to prerequisites so that's actually $50,000 total, while the other school is 20 miles away in OC/LA traffic so it's an hour commute easily.

Then there is me. No 4 year degree but I'm making more than my wife by a good margin since I just happened to start my career when I was 17 by shear dumb luck, won the genetics lottery (white, male, born into an upper middle class family in the perfect area of the country for my profession while having nearly perfect brain chemistry and access to the right toys from an early age to start from for what I do) and I only have to worry about it taking 3 years again to get back to making what I should be if I get laid off again while I work essentially poo poo pay / work jobs in my industry.

So I really do think that while college is a great thing to go to and should my wife an I ever decide to have a kid that's the first choice we would give it, it's not really necessary and other things should be pushed along side college such as trade schools and paid internships, the last one being how I really came out on top (along with the whole genetics lottery thing).

# ? Dec 30, 2012 16:35

shrike82: Jun 11, 2005; I HAVE NEVER CONTRIBUTED ANYTHING WORTHWHILE TO ANY DISCUSSION EVER. IF YOU ARE REPLYING TO ME YOU ARE WASTING EVEN AS PALTRY A RESOURCE AS INTERNET FORUM SPACE. PLEASE STOP ENGAGING ME FOR THE LOVE OF GOD, I'VE BEEN DOING THIS GIMMICK FOR YEARS.

A Winner is Jew posted:

Then there is me. No 4 year degree but I'm making more than my wife by a good margin since I just happened to start my career when I was 17 by shear dumb luck, won the genetics lottery (white, male, born into an upper middle class family in the perfect area of the country for my profession while having nearly perfect brain chemistry and access to the right toys from an early age to start from for what I do) and I only have to worry about it taking 3 years again to get back to making what I should be if I get laid off again while I work essentially poo poo pay / work jobs in my industry.

I see this argument a lot but what happens when you're 40 and lose your job for any reason. The lack of a degree is going to be an issue especially when you're competing with college graduates even for positions that don't need a degree.

# ? Dec 30, 2012 16:40

Anukis: Jan 23, 2006; I know it
I think I know it
from a hymn

A Winner is Jew posted:

So I really do think that while college is a great thing to go to and should my wife an I ever decide to have a kid that's the first choice we would give it, it's not really necessary and other things should be pushed along side college such as trade schools and paid internships, the last one being how I really came out on top (along with the whole genetics lottery thing).

Paid... internships? You Marxist.

Also, as far as I'm aware (though I have zero first-hand experience outside of my dad being a contractor, so this could have changed lately), trade jobs are still ridiculously backed up and it's hard for newcomers to get hired on as apprentices at this point. Basically, everything is broken and there are no safety valves. Whee!

# ? Dec 30, 2012 16:45

Ghost of Reagan Past: Oct 7, 2003; Advice from above

Tuckleberry posted:

It isn't really that simple. When did you go to high school? All throughout high school public colleges are seen as fall-back options, last resorts for the failures who couldn't get into a university. There's little to no information available regarding cost efficiency to the students.

If there was a huge push to set forth a program that demonstrated the benefits of enlisting in public colleges for the more common courses and then transferring to a university for the more specifics, it would go a long way to helping with student debt.

I'm willing to bet a lot of the debt is akin to the mortgage crisis - people that were duped into signing on to things they thought they could achieve, or afford, when in actuality it was just more loan sharking.

It's absolutely like the mortgage crisis in that respect. Kids are sold on the idea that college will pay for itself, and expecting a 17 year old to understand the risks involved is ludicrous. The article is spot on in how people view it as an investment, but it's sold as a risk-free investment. And it's not just loan companies, but schools (high schools and colleges) selling them.

The fact that education is a risk, and not just a risk, but one which you can't recover from, is horrifying.

# ? Dec 30, 2012 16:56

SpaceDrake: Dec 22, 2006; "... Vanessa? Let's keep this between us."
"My lips are sealed, milady."

"L'Arachide flies agaaaiiiin!"

TheEldar posted:

So student loans in the USA are treated the same as a standard bank loan?

In no small number of cases, they can come from private banks once you hit the federal limit. Unless things have radically changed since I got out of college in the mid-noughts.

Student loan debt in this country is remarkably hosed, to a degree that I suspect most people outside the US will find baffling.

I also feel guilty whenever I see these threads because I actually lucked out and got into a state college that remained funded while I was there so the tuition wasn't awful, thus keeping my college debt manageable even after I hurfed around for a few years with forebearances and whatnot. I can't even loving imagine what going to college today must be like, or how in the name of hell these people are supposed to pay any of that back.

# ? Dec 30, 2012 17:04

Peven Stan: Feb 1, 2006

The gigantic financial burden that's been shifted from the state to the individual is putting a damper on economic recovery. For example, some people I know in the sociology department had six figures in loans when they graduated, basically the equivalent of a mortgage in a college town. While those might be outliers, the average debt load of 27,000 is like having a car payment on your back before you actually are able to buy a car. So even with a good job, people already have large debts to pay off before they can consume and buy durables like a house and a car. Another example of how unfettered, neoliberal "capitalism" is chasing its own tail again.

# ? Dec 30, 2012 17:09

A Winner is Jew: Feb 14, 2008; Shabbat shalom motherfucker!

shrike82 posted:

I see this argument a lot but what happens when you're 40 and lose your job for any reason. The lack of a degree is going to be an issue especially when you're competing with college graduates even for positions that don't need a degree.

I was 28 when I lost my high paying job actually, and by that time I had already married my wife. What happened was that I did have to go up against all those other applicants with a degree and there were quite a few jobs that I know I lost out on because of that. Now like I said, I won the genetic lottery with my skill set since I am the fastest person I've ever seen in CAD along with only knowing maybe a dozen people that are even close to my knowledge base for CAD so if I at least got an interview I knew I had a very good chance at any of those jobs, but part of the problem was just getting to that part. All told I had 5 jobs in the span of 3 years before I landed where I am now one since my main focus during that time was to always keep moving up no matter what. I also taught myself Revit since the industry was moving in that direction which even though Intel didn't switch to that for the Fab 42 project that I'm working on now, other projects my firm is contracted for requires it.

Anukis posted:

Paid... internships? You Marxist.

Also, as far as I'm aware (though I have zero first-hand experience outside of my dad being a contractor, so this could have changed lately), trade jobs are still ridiculously backed up and it's hard for newcomers to get hired on as apprentices at this point. Basically, everything is broken and there are no safety valves. Whee!

My younger brother just graduated with his AS this spring in welding and seems to be finding his way pretty well. Also, the company I work for gets contracted all the time to train firms that are full of people that had finished CAD / Drafting programs from ITT / University of Phoenix in how to actually do their job and the one I just finished a month long training session with is hiring on at least 10-15 new modelers... which means I'm back out there in probably 2 weeks since they are really, really loving bad at it. Hell my job is to either teach those classes locally, go to other firms for at minimum a month (of which I get a sizable travel allowance so it's really nice) to write programming and streamline their production work flows via on site training and drawing management protocol improvements, or flat out run their BIM/Modeling department if they don't have the talent to do it themselves (again, sweet, sweet travel allowance).

Getting back to those for profit universities though is that the little known fact is that what costs you $30-40k at those schools you can get for like $5,000 at a community college... which is what my younger brother just did. Now that is something that needs to be taught to high school kids as an alternative to a 4 year school since before that degree my younger brother couldn't find any paid internships, now with it people are falling all over themselves to offer them to him since he's not starting from scratch and will be a breeze to train since he is meeting them at basically the half way point.

A Winner is Jew fucked around with this message at Dec 30, 2012 around 17:48

# ? Dec 30, 2012 17:22

935: Jul 28, 2006; abcdefghijk
ELLAMENNO-P

So when the bubble bursts, what happens to alumni with outstanding loans, what happens to current students in school and what does it mean for prospective students who are looking to apply for loans?

When the housing bubble burst, people who had crazy expensive mortgages still owed that mortgage even though their house was worth half that overnight, but it was great for people looking to buy houses because the costs came down overnight. But we're not talking about houses and I can't make an analogy.

935 fucked around with this message at Dec 30, 2012 around 17:37

# ? Dec 30, 2012 17:34

A Winner is Jew: Feb 14, 2008; Shabbat shalom motherfucker!

935 posted:

So when the bubble bursts, what happens to alumni with outstanding loans, what happens to current students in school and what does it mean for prospective students who are looking to apply for loans?

If the housing bubble is anything to go by the loan institutions will be given hundreds of billions to trillions of dollars to keep giving out bad student loans while everyone with a student loan will still be on the hook for 90-95% of their loan amount.

# ? Dec 30, 2012 17:37

Timelord: Jan 17, 2008; I wish I were dead

What exactly happens if you refuse to pay the loans until you are 75 and just drop out of normal society? Do they pursue your family for the debt while they declare you a criminal and try to find you, or is it one or the other?
What I mean by drop out is to live someplace like slab city (http://www.businessinsider.com/slab...ert-2012-5?op=1) or even more remote living.

Even though I chose the most likely sub-discipline and research interest to make money in my field, I am under no pretense that everything could fail. Its become a joke between the other grad students and I to laugh about paying the loans, and even more so considering the subdiscipline we are in is so very tied to business (Industrial/Organizational Psychology).

I really do think that, from other articles I've read in addition to the OP's articles, the entire loan based system is against the principles of an established society. I would like to pay the loans back if I get a "Stable Job", but I haven't really heard about or don't know what happens when you decline to pay (overtly or not).

Timelord fucked around with this message at Dec 31, 2012 around 05:53

# ? Dec 30, 2012 17:38

Adar: Jul 27, 2001; William "J." Fillmaff in training

Timelord posted:

What exactly happens if you refuse to pay the loans until you are 75 and just drop out of normal society? Do they pursue your family for the debt while they declare you a criminal and try to find you, or is it one or the other?

If your family co-signed for the loans, yes, they're liable for them. If not, you'll just have whatever wages, tax returns and so forth you have above the poverty line garnished into eternity while the interest builds up. If you're okay with living off the grid when you're 70 and have no desire to ever get a significant other, this isn't a problem at all. Most people aren't.

More realistically, if you hit the 'okay, this is never getting paid in my lifetime' mark, leaving the country also works.

# ? Dec 30, 2012 17:43

NovemberMike: Dec 28, 2008

TheEldar posted:

I would argue that a government subsidizing the cost of higher education for its citizens is something that benefits society as a whole since more people have the chance to study to a higher level, meaning the population is better educated overall.

He's right though, the way that higher education in the US works is consumption based. You can generally get an education that's just as good at a local public school or at a two year college and spend a lot less to do it. Schools are trying to push how much they can charge by adding in perks like better gyms and cafeterias and dorm rooms or expensive buildings, not by providing a better education.

# ? Dec 30, 2012 17:46

redmercer: Sep 15, 2011; Can't post for 8 days!

Adar posted:

More realistically, if you hit the 'okay, this is never getting paid in my lifetime' mark, leaving the country also works.

Except that you're about as undesirable as they come, at that point; so have fun being an illegal immigrant!

# ? Dec 30, 2012 17:46

Ghost of Reagan Past: Oct 7, 2003; Advice from above

A Winner is Jew posted:

If the housing bubble is anything to go by the loan institutions will be given hundreds of billions to trillions of dollars to keep giving out bad student loans while everyone with a student loan will still be on the hook for 90-95% of their loan amount.

Eh, I think it'll be a bit different when it blows up. It'll be worse than the mortgage crisis, and there will be something done. It won't really fix anything, but it should keep graduates with student loan debt above water, at least a bit.

Frankly, a big forgiveness above a certain amount would probably fix most of the problems, but that won't happen. So we'll see some milquetoast measure that just barely works.

# ? Dec 30, 2012 17:49

Adar: Jul 27, 2001; William "J." Fillmaff in training

redmercer posted:

Except that you're about as undesirable as they come, at that point; so have fun being an illegal immigrant!

You're very wrong. Your credit rating doesn't follow you across borders and immigration agencies don't ask. As long as you have a degree (meaning you're employable/can get a work permit) and don't plan on coming back permanently, you're fine and it's a legitimate exit option.

Now, if you dropped out, you're probably screwed.

# ? Dec 30, 2012 17:50

IAMKOREA: Apr 21, 2007; Yes, I AM the retarded one

NovemberMike posted:

He's right though, the way that higher education in the US works is consumption based. You can generally get an education that's just as good at a local public school or at a two year college and spend a lot less to do it. Schools are trying to push how much they can charge by adding in perks like better gyms and cafeterias and dorm rooms or expensive buildings, not by providing a better education.

I'm from the capital of one of the most Republican states and every public school graduate here can go to the city community college two years for free. There's no sort of minimum GPA and I don't think you even need an ACT or SAT score to enroll. Is this not common elsewhere?

# ? Dec 30, 2012 17:51

Amarkov: Jun 21, 2010

NovemberMike posted:

He's right though, the way that higher education in the US works is consumption based. You can generally get an education that's just as good at a local public school or at a two year college and spend a lot less to do it. Schools are trying to push how much they can charge by adding in perks like better gyms and cafeterias and dorm rooms or expensive buildings, not by providing a better education.

The problem is that nobody considers this important. A degree is valuable in large part because of its signalling. My local public school might teach me just as well, but a degree from there doesn't mean very much, so I'm still not going to get hired.

And by the way, local public schools aren't the cheapest thing in the world either. I'd be surprised if you can find any four-year university that charges you less than $10k a year; unless you have some merit scholarships or mom and dad are paying your living expenses, you're still going to need loans.

# ? Dec 30, 2012 17:55

Torka: Jan 5, 2008

The whole concept of encouraging clueless kids who haven't left home yet, most likely haven't received any schooling at all about managing personal finances and don't really know anything about anything to borrow huge sums of money just blows my mind. It almost seems actively malicious in its craziness, like a nasty practical joke played by a society that despises its own children.

# ? Dec 30, 2012 17:58

A Winner is Jew: Feb 14, 2008; Shabbat shalom motherfucker!

IAMKOREA posted:

I'm from the capital of one of the most Republican states and every public school graduate here can go to the city community college two years for free. There's no sort of minimum GPA and I don't think you even need an ACT or SAT score to enroll. Is this not common elsewhere?

This is my local community college cost calculator.

Lowest I got was $6,317 per year for a CA resident student without needing housing.

Highest was $21,569 per year as a non-resident student that required housing.

Non US students are also charged additional fees per credit taken but that option isn't available in the calculator.

So yeah, the state with the largest economy in the nation charges between $6k and $21k to attend a Community College for 1 year. Thanks prop 13

# ? Dec 30, 2012 18:06

The Agent: Mar 10, 2008; The face of three franchises

This may be extremely simplistic, but what would happen if the federal government "bailed out" all student loan debt as it did with investment banks in 2008-2009? To me the economic benefit of relieving millions of U.S. citizens of their huge student loan obligations would be much greater than what was achieve when we did the same for large companies at a similar price tag.

It would help our consumer-driven economy if people could actually, you know, afford to consume.

# ? Dec 30, 2012 18:13

Muck and Mire: Dec 9, 2011

Torka posted:

The whole concept of encouraging clueless kids who haven't left home yet, most likely haven't received any schooling at all about managing personal finances and don't really know anything about anything to borrow huge sums of money just blows my mind. It almost seems actively malicious in its craziness, like a nasty practical joke played by a society that despises its own children.

Yeah you're 17 when you make these decisions which is funny because at 17 you'd be hard pressed to get a loan to buy a used car. Laughin' at the idea that it's a consumption choice like picking the most optimal brand based on all available data, it's a racket predicated on manipulating children into non-dischargeable loans with a ton of misinformation. If you read D&D you know the numbers about college debt and unemployment but if you're 16 or 17 and in high school you're probably not going to see that data.

# ? Dec 30, 2012 18:15

Amarkov: Jun 21, 2010

The Agent posted:

This may be extremely simplistic, but what would happen if the federal government "bailed out" all student loan debt as it did with investment banks in 2008-2009? To me the economic benefit of relieving millions of U.S. citizens of their huge student loan obligations would be much greater than what was achieve when we did the same for large companies at a similar price tag.

It would help our consumer-driven economy if people could actually, you know, afford to consume.

Well, that would cause a horrible ~*~*~MORAL HAZARD~*~*~. If we bailed out student loan debt, people might start thinking that the government would always bail out student loan debt. Then everyone who could possibly make it work would go to college.

So you know, it would be basically the same as today, except because of MORAL HAZARD instead of massive systemic flaws.

# ? Dec 30, 2012 18:17

computer parts: Nov 18, 2010; Pam you better not be making pornos!

The Agent posted:

This may be extremely simplistic, but what would happen if the federal government "bailed out" all student loan debt as it did with investment banks in 2008-2009? To me the economic benefit of relieving millions of U.S. citizens of their huge student loan obligations would be much greater than what was achieve when we did the same for large companies at a similar price tag.

It would help our consumer-driven economy if people could actually, you know, afford to consume.

For federal loans, it would basically be the same thing as debt forgiveness afaik since they got rid of the bank skimming part, so basically the debt would go up a bit faster but probably not much else.

Private loans, I don't know if they could or would do something like that, but those are more rare I believe.

# ? Dec 30, 2012 18:18

MeramJert: Jul 2, 2005; I'M TOO GOOD TO EAT HUMAN HAIR

I went to the cheapest, public university I could and still graduated with over $30k in debt due to hard caps on scholarships. I got several local scholarships worth a few thousand dollars a year each and in response to that, my state university decreased the grant portion of my financial aid by the exact amount. I graduated in 4 years, and my annual cost of attendance had gone up 20% from my first to my last years during which the university decided that our required-for-graduation internships would not count if the company we interned for paid us (and instead instituted a $3,000 registration fee for the "internship class"). Meanwhile several of my friends went to fancy private universities and got enough financial aid to graduate with under $10k of debt because there weren't all these restrictions. It's not always a clear cut financial decision.

# ? Dec 30, 2012 18:18

Paul MaudDib: May 2, 2006

MeramJert posted:

I got several local scholarships worth a few thousand dollars a year each and in response to that, my state university decreased the grant portion of my financial aid by the exact amount.

This is really, really common. A local university did this when my sister got a scholarship through Rainbow Connection and only grudgingly relented when my dad threatened to write the paper and tell the local news station and anyone else who would listen that they were stealing money from a cancer kid.

# ? Dec 30, 2012 18:23

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# ? May 22, 2013 05:07

A Winner is Jew: Feb 14, 2008; Shabbat shalom motherfucker!

MeramJert posted:

I went to the cheapest, public university I could and still graduated with over $30k in debt due to hard caps on scholarships. I got several local scholarships worth a few thousand dollars a year each and in response to that, my state university decreased the grant portion of my financial aid by the exact amount. I graduated in 4 years, and my annual cost of attendance had gone up 20% from my first to my last years during which the university decided that our required-for-graduation internships would not count if the company we interned for paid us (and instead instituted a $3,000 registration fee for the "internship class"). Meanwhile several of my friends went to fancy private universities and got enough financial aid to graduate with under $10k of debt because there weren't all these restrictions. It's not always a clear cut financial decision.

This is the same decision my wife an I are facing with her grad program. There are zero scholarship's and near zero grant money she can get for going to either of the less expensive public universities, but if she nails her GMAT (600-650) she can get a 1/2 scholarship to the private collage and it then works out to being just a little bit cheaper for us overall. The only other upside for that private university is that it's one of the top 10 schools for Marketing degrees in the nation so the number of connections she can get by attending that school for future job prospects are nothing to be ignored.

# ? Dec 30, 2012 18:26

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