Author Topic: Waiting for a savior. A student loan debt saga.  (Read 11117 times)

DadJokes

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Re: Waiting for a savior. A student loan debt saga.
« Reply #50 on: December 11, 2019, 03:45:07 PM »
Stories like that make me think that a system in which lenders were able to create a risk profile based on major choice would stop a lot of people from being able to take on massive amounts of student loans for degree fields that don't have great career prospects.

If I see that the percentage of English majors who are hired in their field is (hypothetically) 60%, and the average salary starting out is (hypothetically again) $30,000, then I'd be willing to offer a lot less in loans than I would to someone taking on a computer engineering degree.

That would also have to require making student loans bankrupt-able, and I don't know how it would work with people who change majors. Would they have to disclose that to the lender? How would it affect their prior loans?

stashja

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Re: Waiting for a savior. A student loan debt saga.
« Reply #51 on: December 11, 2019, 04:15:01 PM »
Taking home restaurant leftovers is smart, not shameful. What I don’t understand, as a fellow English Major, is what he thought he would do with an MA in English if he can’t think of ways to apply its transferable skills. If he can read “The Dream of the Rood” in Anglo-Saxon, he can learn to code (another strange new lexicon, actually several) and can maybe learn to teach ESL and go to Asia (or parts of NYC) and find full-time work. If he left NYC, his housing and COL would go way down. There is absolutely a national student debt emergency, but this guy has a poverty of creativity. He must think the world beyond the MTA is flyover country.
« Last Edit: December 11, 2019, 04:19:56 PM by stashja »

tyrannostache

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Re: Waiting for a savior. A student loan debt saga.
« Reply #52 on: December 11, 2019, 04:27:04 PM »
I hate to see English constantly trotted out as a major with no utility.

OF COURSE English majors aren't employed in "their field." Neither are majors in psychology, anthropology, philosophy or a host of other fields. A lot of contemporary college majors don't feed into a specific employment track, and I'm not sure they should. Ideally, these majors give students a background in certain kinds of learning and certain fields of study (scientific method, textual and/or cultural analysis, human behavior, etc). A good suite of English courses should help a student develop strong skills in writing, communication, textual analysis, and storytelling (this sounds frivolous, but it's incredibly useful). English majors are doing great in marketing, development, business... all kinds of fields.

But going back to the original article, I will say this: going deeper into debt for a MA in literature is just willful blindness.

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #53 on: December 11, 2019, 04:36:08 PM »
Stories like that make me think that a system in which lenders were able to create a risk profile based on major choice would stop a lot of people from being able to take on massive amounts of student loans for degree fields that don't have great career prospects.

If I see that the percentage of English majors who are hired in their field is (hypothetically) 60%, and the average salary starting out is (hypothetically again) $30,000, then I'd be willing to offer a lot less in loans than I would to someone taking on a computer engineering degree.

That would also have to require making student loans bankrupt-able, and I don't know how it would work with people who change majors. Would they have to disclose that to the lender? How would it affect their prior loans?

Literally any major could lead to law school, medical school, or dental school. Literally any major could also lead to a lucrative executive level career.

Majors don't lead to careers.

Having poor understanding of how careers work and what it takes to be successful, that leads to poor success.

Speaking as someone who graduated with a BA in humanities who had excellent career options lined up by graduation, and got into multiple professional programs.

DadJokes

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Re: Waiting for a savior. A student loan debt saga.
« Reply #54 on: December 11, 2019, 06:16:19 PM »
We can talk about exceptions all day long, but that still doesn't change the fact that some majors are statistically more likely to generate greater income than others.

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #55 on: December 11, 2019, 06:34:48 PM »
We can talk about exceptions all day long, but that still doesn't change the fact that some majors are statistically more likely to generate greater income than others.

In the broadest strokes, yes, but considering A LOT more people don't do those degrees...are we really proposing that banks only fund certain degrees based on a correlation?

Isn't it at all possible that people with certain aptitudes and skills are attracted to particular degrees that also happen to correlate with more career success?

If some aimless highschool.student has little drive and little conviction regarding studies, they aren't likely to choose math or engineering. So is it not possible that it's not the education that's the problem, but some confounding factor that makes people who are less likely to pursue lucrative careers to seek out liberal arts degrees?

What might make more predictive sense is for students to have to fill out some kind of "business plan" in order to qualify for funding. Demonstrate that they have some concept of what it will take to pay back a loan, the same way that anyone applying for a business loan has to.

FINate

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Re: Waiting for a savior. A student loan debt saga.
« Reply #56 on: December 11, 2019, 07:51:04 PM »
We can talk about exceptions all day long, but that still doesn't change the fact that some majors are statistically more likely to generate greater income than others.

In the broadest strokes, yes, but considering A LOT more people don't do those degrees...are we really proposing that banks only fund certain degrees based on a correlation?

Isn't it at all possible that people with certain aptitudes and skills are attracted to particular degrees that also happen to correlate with more career success?

If some aimless highschool.student has little drive and little conviction regarding studies, they aren't likely to choose math or engineering. So is it not possible that it's not the education that's the problem, but some confounding factor that makes people who are less likely to pursue lucrative careers to seek out liberal arts degrees?

What might make more predictive sense is for students to have to fill out some kind of "business plan" in order to qualify for funding. Demonstrate that they have some concept of what it will take to pay back a loan, the same way that anyone applying for a business loan has to.

I think the idea is to lend based on projected income. This wouldn't mean English Majors couldn't get loans, but rather they would be limited to a lower amount whereas a STEM major may be eligible for more. One way this could work would be to limit borrowing at some multiple of median first year income for each degree.

If students navigate to certain degrees because they are less rigorous, instead of actual desire or interest in the field, then is a Very Bad Thing as it dilutes the job candidate pool with folks who aren't ambitious or motivated. Lending based on projected income would encourage programs to maintain a high bar for entering and completion of the program, as this would lift the median income for these degree types.

FrankExchangeOfViews

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Re: Waiting for a savior. A student loan debt saga.
« Reply #57 on: December 11, 2019, 08:08:12 PM »
...are we really proposing that banks only fund certain degrees based on a correlation?

Isn't it at all possible that people with certain aptitudes and skills are attracted to particular degrees that also happen to correlate with more career success?
It's more that the market a) bear the cost of defaults and b) be free to price debts correctly based on whatever information (minus protected classes i.e. race, sex, etc) they want.

If one lender decides to factor in major, SAT/ACT, high school grades; then maybe they'll make some money maybe they won't, but students can shop with another lender. If every lender does, then those factors are necessary for pricing the debt correctly.

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #58 on: December 11, 2019, 08:27:41 PM »
We can talk about exceptions all day long, but that still doesn't change the fact that some majors are statistically more likely to generate greater income than others.

In the broadest strokes, yes, but considering A LOT more people don't do those degrees...are we really proposing that banks only fund certain degrees based on a correlation?

Isn't it at all possible that people with certain aptitudes and skills are attracted to particular degrees that also happen to correlate with more career success?

If some aimless highschool.student has little drive and little conviction regarding studies, they aren't likely to choose math or engineering. So is it not possible that it's not the education that's the problem, but some confounding factor that makes people who are less likely to pursue lucrative careers to seek out liberal arts degrees?

What might make more predictive sense is for students to have to fill out some kind of "business plan" in order to qualify for funding. Demonstrate that they have some concept of what it will take to pay back a loan, the same way that anyone applying for a business loan has to.

I think the idea is to lend based on projected income. This wouldn't mean English Majors couldn't get loans, but rather they would be limited to a lower amount whereas a STEM major may be eligible for more. One way this could work would be to limit borrowing at some multiple of median first year income for each degree.

If students navigate to certain degrees because they are less rigorous, instead of actual desire or interest in the field, then is a Very Bad Thing as it dilutes the job candidate pool with folks who aren't ambitious or motivated. Lending based on projected income would encourage programs to maintain a high bar for entering and completion of the program, as this would lift the median income for these degree types.

I didn't say those programs were less rigorous, but the giant world of humanities is a huge place to get lost in compared to the rigid structure of STEM degrees, so I can see the less career focused being more attracted to the humanities where there's a lot more flexibility.

As someone who changed their degree mutliple times in and out of STEM and has taken everything from Biochem to Art as Visual Communication, Physics to Symbols of Islam, I can absolutely assure you that my most demanding courses weren't science courses.

What I have seen and do see in my years of mentoring university students, is that those with less vision and direction for their future are less likely to pursue very limiting degrees like STEM degrees.

STEM degrees may make some students more immediately employable (highly debatable*), but they open fairly particular doors. So it stands to reason that people who choose STEM degrees, or other likewise career directing degrees, also happen to be people who have a fair degree of certainty about what kind of career they want to pursue.

Likewise, someone who chooses a degree in animation or graphic design is also pretty likely to have a solid concept of what career they want to pursue.

Someone who goes to university because they feel they have to, but has no fucking clue what they want to do with their life is probably going to end up floating around the humanities.

Just because humanities tends to catch the aimless doesn't mean that humanities degrees aren't of career value.

*I used to teach in a university in a science department (as an arts major, fancy that), and I saw countless young people graduating with bio, chem, neuroscience, and physics degrees who were virtually unemployable, had no skills of any real value, and who steadily realized with horror that the only use their degree served them was to get into a master's program.

So if we're really going to look at immediate employability of undergraduate degrees, we're going to have to rule out most of them. 

So... professional degrees get funded, and that's about it?
How the hell are the graduate level professional degrees going to get students???
« Last Edit: December 12, 2019, 06:21:57 AM by Malkynn »

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #59 on: December 11, 2019, 08:29:14 PM »
...are we really proposing that banks only fund certain degrees based on a correlation?

Isn't it at all possible that people with certain aptitudes and skills are attracted to particular degrees that also happen to correlate with more career success?
It's more that the market a) bear the cost of defaults and b) be free to price debts correctly based on whatever information (minus protected classes i.e. race, sex, etc) they want.

If one lender decides to factor in major, SAT/ACT, high school grades; then maybe they'll make some money maybe they won't, but students can shop with another lender. If every lender does, then those factors are necessary for pricing the debt correctly.

I'm not saying they should keep lending, I'm arguing that this notion of "employable majors" in university, which is often talked about here, is deeply flawed and wholely impracticle.

DadJokes

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Re: Waiting for a savior. A student loan debt saga.
« Reply #60 on: December 12, 2019, 06:09:13 AM »
...are we really proposing that banks only fund certain degrees based on a correlation?

Isn't it at all possible that people with certain aptitudes and skills are attracted to particular degrees that also happen to correlate with more career success?
It's more that the market a) bear the cost of defaults and b) be free to price debts correctly based on whatever information (minus protected classes i.e. race, sex, etc) they want.

If one lender decides to factor in major, SAT/ACT, high school grades; then maybe they'll make some money maybe they won't, but students can shop with another lender. If every lender does, then those factors are necessary for pricing the debt correctly.

I'm not saying they should keep lending, I'm arguing that this notion of "employable majors" in university, which is often talked about here, is deeply flawed and wholely impracticle.

It's not a simple fix because it's not a simple problem. I liked your suggestion of a business plan as well. I just really don't like the system of guaranteed loans that we have right now. I think if the government stops guaranteeing loans, and we make loans bankrupt-able like any other debt, then we will force banks to be more particular about who they give loans to. They'll have to follow similar policies that they use for other kinds of loans, and I'm simply guessing (as someone who is not a lender) that they would want to include many factors in the approval process, which includes major.

I certainly don't think the government should legislate how much students should be able to take out in loans based on major, though maybe they should put a hard limit based on the degree level. For example, maybe the hard limit to borrow for a bachelor's program is $50k (or some value that is more appropriate). That would take out those who go overboard on the far edge of the bell curve.

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #61 on: December 12, 2019, 08:02:52 AM »
...are we really proposing that banks only fund certain degrees based on a correlation?

Isn't it at all possible that people with certain aptitudes and skills are attracted to particular degrees that also happen to correlate with more career success?
It's more that the market a) bear the cost of defaults and b) be free to price debts correctly based on whatever information (minus protected classes i.e. race, sex, etc) they want.

If one lender decides to factor in major, SAT/ACT, high school grades; then maybe they'll make some money maybe they won't, but students can shop with another lender. If every lender does, then those factors are necessary for pricing the debt correctly.

I'm not saying they should keep lending, I'm arguing that this notion of "employable majors" in university, which is often talked about here, is deeply flawed and wholely impracticle.

It's not a simple fix because it's not a simple problem. I liked your suggestion of a business plan as well. I just really don't like the system of guaranteed loans that we have right now. I think if the government stops guaranteeing loans, and we make loans bankrupt-able like any other debt, then we will force banks to be more particular about who they give loans to. They'll have to follow similar policies that they use for other kinds of loans, and I'm simply guessing (as someone who is not a lender) that they would want to include many factors in the approval process, which includes major.

I certainly don't think the government should legislate how much students should be able to take out in loans based on major, though maybe they should put a hard limit based on the degree level. For example, maybe the hard limit to borrow for a bachelor's program is $50k (or some value that is more appropriate). That would take out those who go overboard on the far edge of the bell curve.

You're kind of stuck between a rock and a hard place.

On one hand, the current system of allowing teenagers to take on enormous debt that can't be discharged in bankruptcy for degrees ostensibly for career choices that most don't even remotely understand, is OBVIOUSLY a total disaster.

However, limiting funding puts you right back into a position where only the very wealthy can afford to attend the best schools, which structurally segregates the population, reinforces a class system, and promotes wealth inequality.
Also suboptimal.

There are cases where brilliant-but-broke kid A takes out 6 figure loans to go to an elite Ivy League school, hustles their ass off, networks like crazy, and uses that education as a launching pad to truly great things.

The challenge is that at 17, people aren't fully formed, and often it's the university experience itself that's so shaping of who they will become professionally.

To me, it's not so much about identifying in advance who will be successful or what degrees will lead to success, because we really can't predict such things in a population of teenagers.

The options range from making education more affordable, like other countries do, OR to systematically change the way education is understood.

If we stopped telling kids to get degrees so that they can get good jobs, which is nonsense anyway, if we started teaching them the realities of what degrees can and cannot do for them, and that building a career is a whole other process, then just maybe, they would be better equipped to actually utilize their educational experience better.

The "I have no idea what I want to do, and I'm not super motivated to hustle" students might choose cheaper schools or trade school, or no school.

The "I want to study obscure literature because it's what I truly love, but dammit, I'm going to hustle every second and network my brains out to find a way to turn that into a solid career" students might still go into massive debt, but they might understand that it's going to take a lot more than studying to make that investment pay off.

Kids aren't stupid, they just don't know what they don't know, and it really wouldn't take a lot to illuminate them as to what a degree can and cannot do for them professionally, which could really help them and their families make more appropriate decisions. More importantly, it could open their eyes to seeing that studying is only part of the work of getting the most out of 4 years in school.

I was lucky, I had family in staffing telling me about all of the grads (even STEM grads) begging them for min wage retail jobs because they had absolutely no work experience and were under the misapprehension that a degree alone would make them highly employable.

SwordGuy

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Re: Waiting for a savior. A student loan debt saga.
« Reply #62 on: December 12, 2019, 08:05:15 AM »
Maybe some of you aren't old enough to remember this, but student loans USED TO BE bankruptable.   Yep, they were.

The problem was that back in the 1970s too many unethical students graduated and immediately declared bankruptcy, leaving the taxpayers in the lurch for the student loans.   So we as a society said, F that!, and make the loans non-bankruptable.

Daisyedwards800

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Re: Waiting for a savior. A student loan debt saga.
« Reply #63 on: December 12, 2019, 08:08:46 AM »
It should be obvious that after graduating from college, no one is really qualified yet to do anything until they are trained on the job for that particular job.  That means their paychecks will be small until that happens.  But loans assume you will be at top pay right away!

DadJokes

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Re: Waiting for a savior. A student loan debt saga.
« Reply #64 on: December 12, 2019, 08:24:51 AM »
You're kind of stuck between a rock and a hard place.

On one hand, the current system of allowing teenagers to take on enormous debt that can't be discharged in bankruptcy for degrees ostensibly for career choices that most don't even remotely understand, is OBVIOUSLY a total disaster.

However, limiting funding puts you right back into a position where only the very wealthy can afford to attend the best schools, which structurally segregates the population, reinforces a class system, and promotes wealth inequality.
Also suboptimal.

There are cases where brilliant-but-broke kid A takes out 6 figure loans to go to an elite Ivy League school, hustles their ass off, networks like crazy, and uses that education as a launching pad to truly great things.

The challenge is that at 17, people aren't fully formed, and often it's the university experience itself that's so shaping of who they will become professionally.

To me, it's not so much about identifying in advance who will be successful or what degrees will lead to success, because we really can't predict such things in a population of teenagers.

The options range from making education more affordable, like other countries do, OR to systematically change the way education is understood.

If we stopped telling kids to get degrees so that they can get good jobs, which is nonsense anyway, if we started teaching them the realities of what degrees can and cannot do for them, and that building a career is a whole other process, then just maybe, they would be better equipped to actually utilize their educational experience better.

The "I have no idea what I want to do, and I'm not super motivated to hustle" students might choose cheaper schools or trade school, or no school.

The "I want to study obscure literature because it's what I truly love, but dammit, I'm going to hustle every second and network my brains out to find a way to turn that into a solid career" students might still go into massive debt, but they might understand that it's going to take a lot more than studying to make that investment pay off.

Kids aren't stupid, they just don't know what they don't know, and it really wouldn't take a lot to illuminate them as to what a degree can and cannot do for them professionally, which could really help them and their families make more appropriate decisions. More importantly, it could open their eyes to seeing that studying is only part of the work of getting the most out of 4 years in school.

I was lucky, I had family in staffing telling me about all of the grads (even STEM grads) begging them for min wage retail jobs because they had absolutely no work experience and were under the misapprehension that a degree alone would make them highly employable.

You're operating from the assumption that some schools are so much better than others that they are worth paying 2x, 3x, or even more to attend. They aren't, but that's something that 18 year-olds believe. I believed it when I was 18 and skipped community college and went across the state to go to school. Thankfully, it only took me two years to realize that student loan debt was a bad idea.

If lenders stop writing blank checks, people might be forced to go to community college and state schools instead of private schools. The whole article this thread is based on is by someone who decided to not only get bachelor's and master's degrees in English, but to get them from NYU. He/she could have gotten the same (low potential) degree at a state school and taken on a lot less debt, and a lender who knows that the loans are bankrupt-able isn't going to let someone get into six figures of debt for a (nearly) useless degree in English.

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #65 on: December 12, 2019, 08:31:22 AM »
You're operating from the assumption that some schools are so much better than others that they are worth paying 2x, 3x, or even more to attend. They aren't, but that's something that 18 year-olds believe. I believed it when I was 18 and skipped community college and went across the state to go to school. Thankfully, it only took me two years to realize that student loan debt was a bad idea.

If lenders stop writing blank checks, people might be forced to go to community college and state schools instead of private schools. The whole article this thread is based on is by someone who decided to not only get bachelor's and master's degrees in English, but to get them from NYU. He/she could have gotten the same (low potential) degree at a state school and taken on a lot less debt, and a lender who knows that the loans are bankrupt-able isn't going to let someone get into six figures of debt for a (nearly) useless degree in English.

Nooooot quite.

I'm operating under the very reasonable assumption that elite schools offer superior networking opportunities.

Whether students actually capitalize upon those opportunities is a whole other matter.

TheGrimSqueaker

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Re: Waiting for a savior. A student loan debt saga.
« Reply #66 on: December 12, 2019, 09:33:33 AM »
You're operating from the assumption that some schools are so much better than others that they are worth paying 2x, 3x, or even more to attend. They aren't, but that's something that 18 year-olds believe. I believed it when I was 18 and skipped community college and went across the state to go to school. Thankfully, it only took me two years to realize that student loan debt was a bad idea.

If lenders stop writing blank checks, people might be forced to go to community college and state schools instead of private schools. The whole article this thread is based on is by someone who decided to not only get bachelor's and master's degrees in English, but to get them from NYU. He/she could have gotten the same (low potential) degree at a state school and taken on a lot less debt, and a lender who knows that the loans are bankrupt-able isn't going to let someone get into six figures of debt for a (nearly) useless degree in English.

Nooooot quite.

I'm operating under the very reasonable assumption that elite schools offer superior networking opportunities.

Whether students actually capitalize upon those opportunities is a whole other matter.

Elite schools that are household names despite being more than a thousand miles away can indeed provide networking opportunities especially if a person is applying at an employer that values prestigious credentials.

Unfortunately many of the most expensive colleges are private for-profit colleges that charge four to five times more than the local community college for the same credential, and do not provide a 4x or 5x advantage in terms of making the graduate marketable.

ericbonabike

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Re: Waiting for a savior. A student loan debt saga.
« Reply #67 on: December 12, 2019, 09:35:53 AM »
Guess they don't teach english in michigan??

tyrannostache

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Re: Waiting for a savior. A student loan debt saga.
« Reply #68 on: December 12, 2019, 11:27:19 AM »
Look, I am NOT defending the article author's choices. He made some bad ones, then doubled down on them. But to call English a "nearly useless" major is pretty short-sighted. From a purely utilitarian perspective, the workforce needs the kind of skills that humanities majors bring. I know a large number of medical doctors and high-powered attorneys who majored in English.

Recent NY Times article: "In the Salary Race, Engineers Sprint but English Majors Endure"

https://www.nytimes.com/2019/09/20/business/liberal-arts-stem-salaries.html

It does take quite a while for humanities majors to catch up in terms of earnings. If your goal is to FIRE as early as possible, you should go a different route. But it's hardly useless.

joleran

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Re: Waiting for a savior. A student loan debt saga.
« Reply #69 on: December 12, 2019, 02:08:21 PM »
On one hand, the current system of allowing teenagers to take on enormous debt that can't be discharged in bankruptcy for degrees ostensibly for career choices that most don't even remotely understand, is OBVIOUSLY a total disaster.

However, limiting funding puts you right back into a position where only the very wealthy can afford to attend the best schools, which structurally segregates the population, reinforces a class system, and promotes wealth inequality.
Also suboptimal.

There are cases where brilliant-but-broke kid A takes out 6 figure loans to go to an elite Ivy League school, hustles their ass off, networks like crazy, and uses that education as a launching pad to truly great things.

Hold on a second here - elite Ivy League schools are notorious for being ridiculously generous with student aid.  20% of Harvard students are full-ride and the overall average cost among students is $12k a year.

Limiting funding does not effect the brilliant, only the mediocre.

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #70 on: December 12, 2019, 02:57:59 PM »
On one hand, the current system of allowing teenagers to take on enormous debt that can't be discharged in bankruptcy for degrees ostensibly for career choices that most don't even remotely understand, is OBVIOUSLY a total disaster.

However, limiting funding puts you right back into a position where only the very wealthy can afford to attend the best schools, which structurally segregates the population, reinforces a class system, and promotes wealth inequality.
Also suboptimal.

There are cases where brilliant-but-broke kid A takes out 6 figure loans to go to an elite Ivy League school, hustles their ass off, networks like crazy, and uses that education as a launching pad to truly great things.

Hold on a second here - elite Ivy League schools are notorious for being ridiculously generous with student aid.  20% of Harvard students are full-ride and the overall average cost among students is $12k a year.

Limiting funding does not effect the brilliant, only the mediocre.

So then the entire problem boils down to these ultra expensive mediocre private schools??

FINate

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Re: Waiting for a savior. A student loan debt saga.
« Reply #71 on: December 12, 2019, 03:00:21 PM »
Look, I am NOT defending the article author's choices. He made some bad ones, then doubled down on them. But to call English a "nearly useless" major is pretty short-sighted. From a purely utilitarian perspective, the workforce needs the kind of skills that humanities majors bring. I know a large number of medical doctors and high-powered attorneys who majored in English.

Recent NY Times article: "In the Salary Race, Engineers Sprint but English Majors Endure"

https://www.nytimes.com/2019/09/20/business/liberal-arts-stem-salaries.html

It does take quite a while for humanities majors to catch up in terms of earnings. If your goal is to FIRE as early as possible, you should go a different route. But it's hardly useless.

Agee, I don't think an English degree should be called "nearly useless." We don't need to argue about the value of an English degree, however, because we have data:

  https://www.payscale.com/college-salary-report/majors-that-pay-you-back/bachelors?orderBy=Rank&search=english

English degrees of various flavors have a middling rank relative to other degrees, which is largely a function of pay. So starting pay for an EE or CS degree beats mid-career pay for English majors, and mid-career pay is almost double. Not everyone can be an EE or CS major, and I'm not trying to disrespect English majors, because their work is necessary and meaningful. But it seems reasonable to have a sense of what a degree will yield before going into massive debt.

For the Humanities there's a lot more variance in 20 year ROI per school. Top contenders, as expected, contain some of the elite Ivy League schools, but also a few surprises. Choose wisely, if you display all schools and look near the bottom of the list you will notice quite a few with negative ROI, which basically means you would have been better off, financially speaking, if you had skipped college altogether. Lies, damned lies, and statistics! YMMV.

joleran

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Re: Waiting for a savior. A student loan debt saga.
« Reply #72 on: December 12, 2019, 03:02:20 PM »
On one hand, the current system of allowing teenagers to take on enormous debt that can't be discharged in bankruptcy for degrees ostensibly for career choices that most don't even remotely understand, is OBVIOUSLY a total disaster.

However, limiting funding puts you right back into a position where only the very wealthy can afford to attend the best schools, which structurally segregates the population, reinforces a class system, and promotes wealth inequality.
Also suboptimal.

There are cases where brilliant-but-broke kid A takes out 6 figure loans to go to an elite Ivy League school, hustles their ass off, networks like crazy, and uses that education as a launching pad to truly great things.

Hold on a second here - elite Ivy League schools are notorious for being ridiculously generous with student aid.  20% of Harvard students are full-ride and the overall average cost among students is $12k a year.

Limiting funding does not effect the brilliant, only the mediocre.

So then the entire problem boils down to these ultra expensive mediocre private schools??

They certainly bear a good bit of the blame.  Students being driven to schools costing a decent multiple of a public university without any particularly greater prospects is not a good thing.  Most people agreed to crack down on private for-profit schools with terrible prospects and this is a similar problem at a different intensity.

Malcat

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Re: Waiting for a savior. A student loan debt saga.
« Reply #73 on: December 12, 2019, 03:16:37 PM »
On one hand, the current system of allowing teenagers to take on enormous debt that can't be discharged in bankruptcy for degrees ostensibly for career choices that most don't even remotely understand, is OBVIOUSLY a total disaster.

However, limiting funding puts you right back into a position where only the very wealthy can afford to attend the best schools, which structurally segregates the population, reinforces a class system, and promotes wealth inequality.
Also suboptimal.

There are cases where brilliant-but-broke kid A takes out 6 figure loans to go to an elite Ivy League school, hustles their ass off, networks like crazy, and uses that education as a launching pad to truly great things.

Hold on a second here - elite Ivy League schools are notorious for being ridiculously generous with student aid.  20% of Harvard students are full-ride and the overall average cost among students is $12k a year.

Limiting funding does not effect the brilliant, only the mediocre.

So then the entire problem boils down to these ultra expensive mediocre private schools??

They certainly bear a good bit of the blame.  Students being driven to schools costing a decent multiple of a public university without any particularly greater prospects is not a good thing.  Most people agreed to crack down on private for-profit schools with terrible prospects and this is a similar problem at a different intensity.

So where did all of these schools come from and why do people pay to attend them? What's the draw?

Was there a sudden deregulation that made them pop up, or were they always there and the issue just got blown up by the changes to bankruptcy policies?

I'm really trying to understand how this crisis haooened.

Daisyedwards800

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Re: Waiting for a savior. A student loan debt saga.
« Reply #74 on: December 12, 2019, 03:31:40 PM »
Remember those magazines that came out with college rankings?  A lot of these private schools are ranked 50-150 and they do have more credibility in the work world than some others, but not so much that it makes up for the obscene costs.  What happened to me (and I've paid mine off quickly) is that I didn't get into the top 2 state schools in my state even though I had a 1430 SAT score, so I went with the private school that was equivalent to the top state schools, instead of going to a middling state school.  It has helped my career though, unlike some of these other students.

Goldielocks

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Re: Waiting for a savior. A student loan debt saga.
« Reply #75 on: December 12, 2019, 03:36:34 PM »
... this guy has a poverty of creativity...

Phrase of the day!

Goldielocks

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Re: Waiting for a savior. A student loan debt saga.
« Reply #76 on: December 12, 2019, 04:14:33 PM »
With regards to the original article.   

I don't understand WHY the author pursued a MA degree in English when his vision for his career had him not making a lot of mony.

That's the part that gets me with these.  I understand taking the undergrad major in English (or Fine arts, or Philosophy), a B.A. is actually terrific mind and skill builder for a whole host of careers.  The undergrad is also more affordable, usually than the Masters.... the kid is 17 when they are deciding this.... etc.

But why do people take Master's programs that are obviously expensive, require large loans when you already have debt, and especially when you don't have a career path thought out that requires it?

Help?

Sibley

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Re: Waiting for a savior. A student loan debt saga.
« Reply #77 on: December 13, 2019, 07:10:20 AM »
With regards to the original article.   

I don't understand WHY the author pursued a MA degree in English when his vision for his career had him not making a lot of mony.

That's the part that gets me with these.  I understand taking the undergrad major in English (or Fine arts, or Philosophy), a B.A. is actually terrific mind and skill builder for a whole host of careers.  The undergrad is also more affordable, usually than the Masters.... the kid is 17 when they are deciding this.... etc.

But why do people take Master's programs that are obviously expensive, require large loans when you already have debt, and especially when you don't have a career path thought out that requires it?

Help?

Because they're not thinking practically. When you're told to "follow your passion" and it's heavily implied that you'll get a good paying job right out of college, regardless of the major, it's not actually that easy to absorb reality. Go read my post above about Mary, perfect example.

And once you do have reality sink in and realize you've screwed up, there's often a period of despair or similar that further impairs judgement.

Sunk cost fallacy plays a role as well.

tyrannostache

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Re: Waiting for a savior. A student loan debt saga.
« Reply #78 on: December 13, 2019, 03:17:12 PM »
With regards to the original article.   

I don't understand WHY the author pursued a MA degree in English when his vision for his career had him not making a lot of mony.

That's the part that gets me with these.  I understand taking the undergrad major in English (or Fine arts, or Philosophy), a B.A. is actually terrific mind and skill builder for a whole host of careers.  The undergrad is also more affordable, usually than the Masters.... the kid is 17 when they are deciding this.... etc.

But why do people take Master's programs that are obviously expensive, require large loans when you already have debt, and especially when you don't have a career path thought out that requires it?

Help?

Because they're not thinking practically. When you're told to "follow your passion" and it's heavily implied that you'll get a good paying job right out of college, regardless of the major, it's not actually that easy to absorb reality. Go read my post above about Mary, perfect example.

And once you do have reality sink in and realize you've screwed up, there's often a period of despair or similar that further impairs judgement.

Sunk cost fallacy plays a role as well.

Man, I know quite a few Marys. I have a PhD in English. I did it largely because I bought hard into the "Follow Your Passion" message. If I'm being honest, it also had to do with prestige. However, I had the advantage of not going straight to the PhD from undergrad. I spent a few years trying out a lot of different fields, building work experience that helped me to realize how many marketable skills I had. When I started the PhD program, I was surprised at how many of my fellow students came straight from undergrad and had no experience outside of the classroom. As the academic job market plunged steadily downward, I watched a lot of these people just flounder. They were intelligent and well-meaning, but they had no idea what to do with their lives outside of academia.

In the years since I finished, a tiny percentage have gone on to tenure-track jobs in their fields. The creative ones have transitioned into some really interesting careers. The less creative and more practical have gone into academic administration or support positions. And plenty have ended up like Mary--scraping up adjunct jobs here and there while they try to find a full-time position. Meanwhile, their degree gets more and more stale each year.

I sympathize with "Marys" in a lot of ways. The year I entered grad school, there were about 1500 full-time jobs posted in English. The year I finished, there were about 800. I started to grasp this trend a few years before graduating, but there was simply no acknowledgement of it by the people running the program at my university or by the major academic societies. They just went on pretending that people who published decent papers and racked up good teaching reviews would be rewarded with a job. Once you're in that system as a PhD candidate, you are surrounded by great deal of pressure to treat scholarship like some kind of pure calling, and to feel it's unseemly to worry about jobs or obscene concerns like money, health, or life outside of your work. Just keep your head down and know that those who do good work will be rewarded. And even when the job market was cratering, a lot of students seemed to think that they would be exceptions to the trend, or that it was going to turn around someday soon (nevermind the pent-up supply of underemployed PhDs...).

I think it's a combination of a misguided commitment to an ideal of scholarly life and willful blindness. That can be a powerful combination.

ETA:
I don't really regret going to grad school. But I was one of the lucky (or smart?) ones--I never paid a dime in tuition, and I built up some small savings and decent home equity thanks to fellowships, stipends and a side hustle. But even so, every time I hear someone considering grad school in the humanities I tell them to run far away. And if they insist, make sure they're getting tuition remission and a good living stipend.
« Last Edit: December 13, 2019, 03:24:59 PM by tyrannostache »

mm1970

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Re: Waiting for a savior. A student loan debt saga.
« Reply #79 on: December 13, 2019, 03:20:57 PM »
When I started college in 1975 there was no such thing as "social media".   There was lots of social expectation amongst my peers and their parents that we should go to college, though.  No one sat me down and discussed how expensive it was to repay a loan.

And yet, somehow, it was pretty damned obvious to me that taking out a huge loan meant repaying a huge loan, plus interest.

And that taking out a huge loan if my expected salary and job prospects weren't equally high was a damn fool thing to do.
Eh things were way different in 1975.  Fewer people went to college.  A degree - almost any degree - was a guarantee of a better paying job than without.  It was "the ticket".  And decent jobs were available WITHOUT degrees.  I know all this because I have many older siblings, none of them went to college (we couldn't afford it, and my father wouldn't pay for it, and loans were not nearly as available), but they were all able to get decent paying jobs without.  Sort of.  Mostly I have older sisters, so you know...the jobs available to them weren't quite as high paying as if they were men.

My mother was a frigging BANK TELLER and I had no idea how to math out the amount of money I was borrowing to go to my top 10 private school.  I joined ROTC because "hey free money and the Navy seems cool", so it all worked out (and I'm an engineer, and my class just missed the early 90's recession, so it prob would have worked out anyway).

The college pressure was a lot less back then, cost of university was not as high compared to average family income or starting salaries.  Whole different world.

I did the math recently with my alma mater, in fact.  Median family income in 1988 compared to the all in cost of 1 year of school?  2x.  Median family income in 2018 compared to the all in cost of 1 year of school?  0.8.

mm1970

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Re: Waiting for a savior. A student loan debt saga.
« Reply #80 on: December 13, 2019, 03:26:47 PM »
Ending the story with the reluctance to take free food example highlighted all the other times poor financial decisions were touched on in the story.  I don't believe for a second that this person went through their 20s in NYC without spending way too much money eating out.

Yeah, that's odd. The staff brought out to-go boxes and these people were too embarrassed to take leftovers?!? Wtf? And that's an example of how far they've fallen?

There was also the choice of school. Even at 17, I knew that NYU was a name-brand school kinda like a name brand shirt. There are plenty of quality shirts without the fancy logo. I guess if your dream is to work at the NYT, it helps to have gone to NYU.


Is there a way to to discourage lenders from making excessive loans to English majors at expensive schools? Maybe some truth-in-lending disclosures?

"Your degree (English Lit) yields an average of $35,000/year salary. Taking out this loan, combined with your other student loans, means you'll be paying $1100/month for 23 years. Based on the average salary, this will leave you with approximately $1300 take home."

I think some combination of the employment rates and the salary should be created for each major at each school.  Those should then be tiered, so that federal loans up to $x are available for tier 1 (highest employment rates and salaries), 90%X for tier 2, etc.  And at some point no federal loans would be available for majors from schools with dim prospects.

Something similar exists: https://www.payscale.com/college-roi/major
This is good.  Earlier this year I made a spreadsheet and did some math.  The answer I came up with is "1X" and "Maybe 2X depending on the major and school".

Step 1: calculate your expected salary your first year after graduating by looking at the average starting salary for your major at your university, and multiply that by the % placement (if only 50% of graduates get jobs, there's a 50% chance you won't).

Step 2: you cannot afford to borrow more than that amount, total, over the four years.  With some exceptions, maybe up to 2x.  You literally will not be able to pay them off.

The other way to do the math is to calculate how much you will need to borrow to go to your desired school.  What do you borrow year 1, multiply that by 4 and add 10-25% for inflation.

Then go onto the internet and calculate your monthly payment.  It should not be more than 20% of your gross income.  Can you make that income?
If not, you cannot afford it.   I wonder where I put that spreadsheet.

But as @ysette9 put it, I have sympathy.  Even with a mother who worked in banking (as a teller and trust officer), I couldn't do that kind of math.  I was dirt poor, so that actually helped me out.  I just did the math last year but I'm almost 50, so yeah.

mm1970

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Re: Waiting for a savior. A student loan debt saga.
« Reply #81 on: December 13, 2019, 03:29:07 PM »
It's not just kids but parents as well. As a society we've lost our collective mind at all levels when it comes to college. This shouldn't be a surprise to anyone here given the other consumerism we regularly point out.

I know a family where the parents are about 10 years ahead of us and are now in the throes of getting kids through college. Dear friends, lovely, kind, intelligent people, and usually very frugal which has allowed them to be financially secure even though their income is low. And yet they insist on paying to send their kids away to private colleges. At 50k/year (if not more) that's 200k per kid. They've planned and saved so they are prepared, but they are really feeling the pinch. I didn't want to pry but when topic came up naturally in the course of conversation their reasoning basically came down to wanting their kids to have the "college experience." I respect them deeply and it's clearly a choice they've made because they value it. But, dang, that's a lot of money for an experience, especially since our local community college very solid and there are 3 wonderful state universities within commuting distance.
I can see this.  We aren't there yet, but kid #1 wants to go to Cal Tech, and has the chops to do it too.  I secretly hope he doesn't get in.  But we can afford it.

Goldielocks

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Re: Waiting for a savior. A student loan debt saga.
« Reply #82 on: December 14, 2019, 09:34:33 AM »
With regards to the original article.   

I don't understand WHY the author pursued a MA degree in English when his vision for his career had him not making a lot of mony.

That's the part that gets me with these.  I understand taking the undergrad major in English (or Fine arts, or Philosophy), a B.A. is actually terrific mind and skill builder for a whole host of careers.  The undergrad is also more affordable, usually than the Masters.... the kid is 17 when they are deciding this.... etc.

But why do people take Master's programs that are obviously expensive, require large loans when you already have debt, and especially when you don't have a career path thought out that requires it?

Help?

Because they're not thinking practically. When you're told to "follow your passion" and it's heavily implied that you'll get a good paying job right out of college, regardless of the major, it's not actually that easy to absorb reality. Go read my post above about Mary, perfect example.

And once you do have reality sink in and realize you've screwed up, there's often a period of despair or similar that further impairs judgement.

Sunk cost fallacy plays a role as well.

Thanks for the explanation.   I guess I remember most of my friends waking up to this reality in thier final year of undergrad...   but maybe most of them were science majors which actually is a much harder degree to translate to a career than general arts... especially if you are not looking to get into lab tech work.   At least with general arts there are lots of NGO and non-profits and businesses that value clear communication skills and working with people and clients... and the grads aren't looking for only "technical" types of jobs.

So, the idea that young people aren't figuring this out until they have entered a master's program is what is throwing me off.

Then again, people that graduate with a Bachelors and ZERO work experience are also a head scratcher for me.

bacchi

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Re: Waiting for a savior. A student loan debt saga.
« Reply #83 on: December 14, 2019, 11:15:57 AM »
But as @ysette9 put it, I have sympathy.  Even with a mother who worked in banking (as a teller and trust officer), I couldn't do that kind of math.  I was dirt poor, so that actually helped me out.  I just did the math last year but I'm almost 50, so yeah.

Require the university and lenders to show the math. We do it for mortgages. Why not for student loans that will drag on for just as long?


I need to do the math for my degree. It was a state school so the change is probably even more dramatic.

J.R. Ewing

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Re: Waiting for a savior. A student loan debt saga.
« Reply #84 on: January 17, 2020, 11:06:36 AM »
We need better counseling for high schoolers.  My counselors pushed me hard to apply for lots of prestigious private schools.  I had already been accepted to engineering at the University of Colorado, which at the time was dirt cheap for in state kids.  My counselor treated me like a moron for not applying to a bunch of schools that were similar or ever so slightly higher in prestige, but vastly more expensive.  At the time, I was 17 and couldn't help but think this is absolutely awful advice. 

Michael in ABQ

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Re: Waiting for a savior. A student loan debt saga.
« Reply #85 on: January 18, 2020, 09:23:18 AM »
We need better counseling for high schoolers.  My counselors pushed me hard to apply for lots of prestigious private schools.  I had already been accepted to engineering at the University of Colorado, which at the time was dirt cheap for in state kids.  My counselor treated me like a moron for not applying to a bunch of schools that were similar or ever so slightly higher in prestige, but vastly more expensive.  At the time, I was 17 and couldn't help but think this is absolutely awful advice.

Yep. Or going to a state school that's out of state and paying 3x. There are a few prestigious state schools, but overall for the vast majority a degree is a degree. The quality of education and the marketplace signal from a community college and state school is going to be about the same as all but the top few percent of schools (Harvard, Carnegie Mellon, Stanford, MIT, etc.)

I'm not sure how good the data is, but I strongly suspect that after you adjust for differences in location (students graduating a school in NYC and finding jobs in NYC will probably earn far more than those in Montana) and majors (a school with lots of finance majors versus one that has a large early childhood education program) you would find little difference in median earnings for graduates of schools in the 20th percentile or the 90th percentile. That top 5-10% probably does make a difference.