The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: Daisyedwards800 on December 05, 2019, 07:12:17 AM
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https://thebaffler.com/salvos/looks-like-debt-to-me-miller
I don’t know why it didn’t occur to this fellow that no one was going to save him or forgive his debt and to just get to it.
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That's a pretty sad story. It's a lot of money to owe at a point in your life when you don't earn much yet. Sure, he made some bad decisions but when you think of the sheer number of people who are in similar situations, it's not just an individual failing, but a broken system.
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One line early on stuck out to me:
My debt was the result, in equal measure, of a chain of rotten luck and a system that is an abject failure by design.
If I'm understanding that correctly, the author is saying the student loan debt is 0% his/her fault. Even if the system is broken, people have to be able to accept some degree of responsibility. The hunger of a child in Yemen is 0% that child's fault. An American who decided to get a bachelor's & master's in English from New York University (a private school) needs to accept at least a little of the blame.
With that rant out of the way...
Per Pew Research (https://www.pewresearch.org/fact-tank/2019/08/13/facts-about-student-loans/), 49% of people aged 18-29 with a bachelor's degree reported having outstanding student loan debt. That is a heck of a lot of people. However, I'm more interested in the 51% who didn't report having outstanding debt from their degree. I'd love some research into how they managed to avoid the burden that the other half of people their age face.
What percentage had college paid for by their parents?
What percentage received full-ride scholarships?
What percentage paid their own way?
The system is certainly broken, and if there is a fix, I don't think it's a simple one or one that is likely to happen. So is it possible to replicate the results of those who aren't still indebted?
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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.
It seems like this person isn't going to be able to save $180,000 until 2032. My goal is to have saved $350,000 by that time. I remember the first time I surpassed one of the mental blocks preventing me from saving was when I first saved $8,000 in 5 months.
Because debt stunts peoples understandings of their earning/saving potential, I think it is bad for society to make it easy for students to take it on in large amounts. That said, I don't really feel like society caused any of this guys problems. Hopefully, he learns the lesson and doesn't get this kind of debt again for a house or his kids education.
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Eh, there's a lot of truth here, but there's also a decent pity party going on. There is little acknowledgement of personal responsibility from the writer.
@DadJokes, I highlighted the same quote as you.
My debt was the result, in equal measure, of a chain of rotten luck and a system that is an abject failure by design.
So bad luck and a bad system meant he was forced to get an English degree from NYU for big dollars? (Fellow English major here, incidentally). At least a little later he acknowledges (partially) that maybe he had a role in shelling out $200,000 for a degree with uncertain career prospects.
@Sanitary Engineer, the closing anecdote was pathetic. He writes of accepting the spiritual humiliation of wrapping up a restaurant meal like Primo Levi wrote of the degradations of Auschwitz.
I've been a bit harsh, and he does speak some important truths, especially this one:
The foundational myth of an entire generation of Americans was the false promise that education was priceless—that its value was above or beyond its cost.
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That's a pretty sad story. It's a lot of money to owe at a point in your life when you don't earn much yet. Sure, he made some bad decisions but when you think of the sheer number of people who are in similar situations, it's not just an individual failing, but a broken system.
Oh it's absolutely a broken system - but if you're in it you have to deal with it in the best way possible. Saying the system caused him to "have to" take loans for college is not true. He obviously was financially illiterate when he took them, and it shouldn't be allowed, but he didn't have to. The system doesn't force you to go to an expensive school. There are still other options to end up with less debt, a lot less debt.
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As an older millennial, who came out of school with big student loans, I agree with him that the perception of them has changed. Social media really didn't exist yet and no one was talking about it back then. Nor was forgiveness or repayment plans really talked about either. I just wanted to pay mine off. I realized that no one was in such a better position to me that was older than me to help me out. I don't understand why kids don't realize that most adults are drowning in debt also; their situation isn't special and they are definitely not the only ones struggling. Who exactly do they expect to help them?
Let's say this guy and his wife make $160k minimum (I bet they make more). By 2032, they will have earned $2,080,000. $180,000 is just 8.5% of that.
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PTF
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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."
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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."
That last bit would be so helpful. Kids have no idea what rent costs.
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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?
Reminds me of the people that think they simply can't do without a 2 bedroom well-furnished apartment. The choices are clearly only that or a tent on the street.
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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.
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It is easy for 37 year-old me to see the folly of student loans for a non-lucrative degree. 18 year-old me had no clue about this stuff. Even with an accountant for a mother I just didn’t have the perpective or financial literacy to navigate student loans. I got lucky that I didn’t need them and I also got lucky to choose a lucrative major, but that was mostly all luck. No one was talking about that stuff to us students. All I had absorbed was that you needed a college degree to be successful in life, but no nuance to be able to distinguish a French degree from chemistry. Good thing I chose chemistry as I was tired of french at that point in life and wanted a change.
Yes, people need to make smart decisions, but I have a lot of sympathy and understanding for dumb decisions made by children who don’t know better and are getting crap advice by everyone in society around them. We need to reform the system so the right answer is easy and not something you have to have the secret handshake to learn about.
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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.
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Good idea
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It is easy for 37 year-old me to see the folly of student loans for a non-lucrative degree. 18 year-old me had no clue about this stuff. Even with an accountant for a mother I just didn’t have the perpective or financial literacy to navigate student loans. I got lucky that I didn’t need them and I also got lucky to choose a lucrative major, but that was mostly all luck. No one was talking about that stuff to us students. All I had absorbed was that you needed a college degree to be successful in life, but no nuance to be able to distinguish a French degree from chemistry. Good thing I chose chemistry as I was tired of french at that point in life and wanted a change.
Yes, people need to make smart decisions, but I have a lot of sympathy and understanding for dumb decisions made by children who don’t know better and are getting crap advice by everyone in society around them. We need to reform the system so the right answer is easy and not something you have to have the secret handshake to learn about.
Yes to all of this. My parents didn’t talk to me about money and actively discouraged me from working in high school because they wanted me to focus on my studies. I’m very, very lucky that my undergrad tuition was covered by a combo of scholarships and parental funds. I was one of those idiot 18-year-olds who signed up for credit cards on campus to get free crap. It was drilled into me since before I could form memories that college was not optional, so I would have taken out loans if needed to keep my family happy. Given my lack of financial knowledge, I probably would have signed up for really awful loans.
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It’s not that he took loans that is the issue. It’s that he chose not to try to rapidly pay them off.
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I’d rather see student loans capped at a modest amount. Want to go to an expensive school? Sure, but you’re paying the majority yourself.
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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.
I like this a lot! Maybe even offer 10% more for an in-demand field, might encourage kids to choose a field that will be easier to find a lucrative career vs. choosing to be an English major. Not that there's anything wrong with being an English major, but your job prospects are not as good as they are for someone with an engineering degree.
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
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Yes, I think your ideas there have merit.
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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
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
Step 3 seems unnecessary - parents should still be able to cosign and are supposed to be the responsible adults in this whole picture anyways. Everything else looks great, but it opens the big question of what happens to the 15 years of students that did increasingly stupid borrowing (while some of their peers did smart borrowing and paid off the debt).
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
Agreed.
College tuition is heavily subsidized so there is minimal market pressure to drive costs down. I think we're nearing an inflection point as free or very cheap online classes are eventually going to force traditional schools to cut costs to attract students. Alternatively the market will bifurcate. On the one hand will be colleges doubling down on an elite in-person traditional college experience with a price tag of $100,000+ to pay for that new world class fitness center and a third assistant dean of diversity affairs. On the other hand will be a much cheaper online version or free online classes ala MIT. The real question is will employers care? Maybe at first but if they start getting the same quality of talent from the online school as the traditional school it might upset the whole college racket. However, that's going to take years, probably a whole generation.
I've only been involved in a couple of hiring decisions and a college degree was just one factor among many - definitely not a deal-breaker. I know that for my current job it was a requirement (federal government) but it made zero difference if I had a 4.0 from Harvard or a 2.5 from South Central Louisiana State University. The college degree block was checked and that was all.
I feel like that's something a lot of 18-year old kids need to hear. EMPLOYERS DON'T CARE WHAT SCHOOL YOU WENT TO! For many it is a block to check to help weed through potentially hundreds of applicants. It is a market signal that you were able to complete something substantial and that you are probably not a complete idiot. It might matter at the top end of the market what school you went to, but for the vast majority of people a state school vs. a private school won't make a difference. There's no reason to pay $40,000 a year for out-of-state tuition at a private college when an in-state school is $15,000, but there are plenty of kids who do it every day. And their parents subsidize it because it's "their dream school". Sorry, your dream is too expensive to go massively into debt for something with a poor return on investment.
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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.
I like this a lot! Maybe even offer 10% more for an in-demand field, might encourage kids to choose a field that will be easier to find a lucrative career vs. choosing to be an English major. Not that there's anything wrong with being an English major, but your job prospects are not as good as they are for someone with an engineering degree.
Not everyone is cut out to be an engineering major. Hell, I wasn't, and I have two degrees in a STEM field. We still need English teachers at all levels, journalists, technical writers, and other professions that require high-level language skills.
I'm afraid this approach of more highly valuing majors based solely on expected profit would result a situation similar to that in the medical field: med students are increasingly choosing lucrative specialty fields, resulting in a shortage of general practitioners and family medicine physicians.
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As someone who briefly worked in staffing, I'm always fascinated by this concept of seeing particular degrees as worth a particular amount. Most degrees don't feed into specific careers.
I mean, sure, you can do this with an engineering degree to an extent, but average income info for someone with a psych BA is pretty much less than useless in terms of an individual understanding their likely outcomes and what it will take to achieve the kind of career they want.
I *do* think it's incredibly important for young people to understand that only very few degrees will actually make them particularly employable, and that they really have to hustle on top of that to translate that degree into any kind of meaningful career success.
I hustled like crazy during my undergrad in psych and linguistics and I had multiple high 5 figure/low 6 figure jobs lined up before I decided to do a doctorate instead.
DH has a BA in philosophy and a master's in political science and he has a solid 6 figure career as well because he also hustled and specifically enrolled in a master's program where he would intern with the federal government, which funnelled directly into a permanent, pensioned role.
Degrees that don't lead directly to jobs are not some kind of career limitation, in fact, they tend to keep a lot more doors open than more specifically employable degrees that can leave people more vulnerable to fluctuations in demand, such as becoming a teacher or a hygienist.
There are TONS of careers that can be forged with an educational background in non-job-specific liberal arts, and what a degree does is make someone more well rounded, more generally skilled, and more suitable for higher level promotions.
So the value of that needs to be closely examined beyond "get a degree from a fancy school and you will be golden".
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I actually thought his piece was well written and I enjoyed it. I thought his description of the cultural and systemic influences were pretty good. His parents believed education was worth any cost, he was a young man who aspired to be a writer and didn't care about money, lenders were more than happy to throw money at them. I think it's clear that in retrospect, he can see the mistakes, but at the time, the choices they made seemed obvious.
I did not get the impression that he was waiting for savior at all. His family has consistently made debt payments whenever possible, except for when he deferred them by taking a community college class.
I don't know if it's fair, but I do think that we all have to pay for our mistakes. It sucks that a lender is basically allowed to add a non-bankruptible mortgage to a student's life with no consideration for ability to repay. In every other kind of lending, consumers are protected from themselves - lenders won't give you money if they don't think you'll pay it back. But for some reason, the government decided that 18 year olds going to college (and their parents) should not be afforded the same protection. But it happened, and now those students pay for it. It would be nice if the government would change the law so that it stopped happening though.
If a student can't take out $200,000 for a Masters in Fine Arts, then guess what? They probably won't get a Masters in Fine Arts. Which is a good thing. Truly talented students will continue to have access to scholarships, but otherwise demand will drop and most schools won't even have a Fine Arts program.
I have clients in this situation. A lot of them deferred their student loans for as much as a decade, causing the balance to balloon. Eventually they put themselves on income based repayment and are praying for Bernie Sanders to come take their loans away. Or at least take away the tax trap that forgiveness will cause in 25 years. Of course, if they had gone on IBR from the start, they would be halfway through their payment plan by now. The problem with these students, is they tended to put a blindfold on and try to ignore their student loan problems. They consistently make decisions to hold back their income, because they don't want to pay more to their loans, which (they reason) will eventually be forgiven anyway.
The would-be opera singer with $250,000 in student loan debt who decided to become a stay at home mom, could have instead been working for the past 10 years and gotten her debt paid off. The guy with $300,000 of medical school debt could have made the decision to use his degree instead of deciding he'd rather be a writer - by now he could have paid the debt off, quit his job, and could still be a writer... one without $300k in debt.
I have sympathy for them because of the cultural and systemic influences that led them down this road. But I lack sympathy, because by refusing to face their debt and take responsibility, they have made their problem much worse.
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I agree CPA Cat. I don't know if he, too, is waiting for forgiveness ( I get the impression that he doesn't think he should have to pay it back because the system failed him) but he certainly isn't hustling to make extra payments or reduce the amount of lifetime interest he will pay.
It is crazy to me that educated people don't realize their loans will BALLOON if they go on these payment plans or defer.
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
Step 3 seems unnecessary - parents should still be able to cosign and are supposed to be the responsible adults in this whole picture anyways. Everything else looks great, but it opens the big question of what happens to the 15 years of students that did increasingly stupid borrowing (while some of their peers did smart borrowing and paid off the debt).
The reason Step 3 exists is because the "responsible adults" aren't really responsible. That's what happened in the story above. The parents just signed on the dotted line and prayed. They also didn't want to flush their kid's dreams down the toilet. This is a terrible approach to our educational system. I want banks to have NO collateral, NO ONE to bail them out if they provide loans to the wrong student/major/course of study.
For the students that did stupid borrowing in the old unfair system, I would wipe out the debt to a reasonable level. Maybe forgive 3/4's of it? They will still be stuck with the remainder (and a lesson about bad decisions and debt). For folks who already paid it off, I'd give them tax credits with a 20 year look back for the loans AND interest. Fair is Fair.
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what a degree does is make someone more well rounded, more generally skilled, and more suitable for higher level promotions.
That used to be the general point, but now many colleges are handing out degrees to anyone with a pulse and a financial aid package. When hiring people these days a college degree is either 1. like being polite in the interview, expected but not a bonus or 2. a negative for a job not requiring any critical thinking skills.
The reason Step 3 exists is because the "responsible adults" aren't really responsible. That's what happened in the story above. The parents just signed on the dotted line and prayed. They also didn't want to flush their kid's dreams down the toilet. This is a terrible approach to our educational system. I want banks to have NO collateral, NO ONE to bail them out if they provide loans to the wrong student/major/course of study.
For the students that did stupid borrowing in the old unfair system, I would wipe out the debt to a reasonable level. Maybe forgive 3/4's of it? They will still be stuck with the remainder (and a lesson about bad decisions and debt). For folks who already paid it off, I'd give them tax credits with a 20 year look back for the loans AND interest. Fair is Fair.
I like your tax credit idea for sure, but the idea that parents shouldn't be able to cosign for their kids just goes a bit too far for me. If the parents really want to screw themselves, let them. If the parents are actually making an informed decision the banks just don't agree with, definitely let them.
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what a degree does is make someone more well rounded, more generally skilled, and more suitable for higher level promotions.
That used to be the general point, but now many colleges are handing out degrees to anyone with a pulse and a financial aid package. When hiring people these days a college degree is either 1. like being polite in the interview, expected but not a bonus or 2. a negative for a job not requiring any critical thinking skills.
Ah, I'm in Canada where you can basically count on the same level of education from every single university.
I still maintain though that the benefit of getting a degree is being more well rounded and skilled, *if* the person endeavours to use their degree to become more well rounded and skilled.
Even up here in fairly standardized Canada, I know plenty of morons who made their way through degrees while getting very little out of them other than a virtually worthless piece of paper.
I never said everyone becomes well rounded by getting a degree, I said that that is one of the main values in getting a degree.
It's the same way that the main benefit of volunteering is to give back and be a productive member of the community, but that doesn't mean that some idiot isn't just out there volunteering for the free t-shirt.
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I’d rather see student loans capped at a modest amount. Want to go to an expensive school? Sure, but you’re paying the majority yourself.
I have a child in dental school at the cost of $66,000 per yr, this is tuition plus the tools required.
Any kid that needs loans would end up with $264,000 plus any living expenses, say $20,000 a year.
I saw $20,000 because to live where the dental college is located, will cost a little more for rent.
I don't know if a person can be a full time dental college and work enough to pay for living expenses.
If they don't work, they are looking at almost $350,000 in loans. I don't know the answer.
I do know a mustachian could pay those loans off in 5 years, but I suspect most students will get out of dental school and expect to live on $150,000 a year and then complain about student loans.
91% of the students in my child's class are using student loans.
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
This would make the taxpayers foot a large portion of the bill. I'm not for that, I didn't sign the loan, I'm paying for my own kids, not interested in paying for someone else's.
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
[/quote]
I think the big idea in your suggestions is forcing the colleges to lower their costs.
And part of that is getting the easy money (taxpayer money) out of it, taxpayer money drives up the cost.
My healthcare insurance is 2.88 times more than it was before the start of Obamacare and it's taxpayer subsidies.
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
This would make the taxpayers foot a large portion of the bill. I'm not for that, I didn't sign the loan, I'm paying for my own kids, not interested in paying for someone else's.
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
I think the big idea in your suggestions is forcing the colleges to lower their costs.
And part of that is getting the easy money (taxpayer money) out of it, taxpayer money drives up the cost.
My healthcare insurance is 2.88 times more than it was before the start of Obamacare and it's taxpayer subsidies.
[/quote]
Out of curiosity, how does this align with the fact that so many countries have heavily subsidized universities and much, much lower tuition costs? At least in Canada, the more tax dollars that go to schools, the lower the tuition generally is.
Tuition at McGill is less than 5K, and Quebec fucking loves it's taxes.
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This would make the taxpayers foot a large portion of the bill. I'm not for that, I didn't sign the loan, I'm paying for my own kids, not interested in paying for someone else's.
Don’t kid yourself. There is over $1.4 trillion in student debt out right now.Do you think the banks will end up paying if all the students simultaneously decide to no longer pay? These loans are already government guaranteed. I believe the first step in this mess is to stop the bleeding.
I would also avoid confusing the student loan crisis with the healthcare crisis. College is a luxury, where as healthcare is a need IMHO
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I had a group of high school students complaining that "college should be free"!
I then asked them, "What if there was a program that college would be free to any student up to 6 years, where the requirements would be that you had to have a part time job in the field of your major, the content would be delivered online, and you would meet on campus once a month for discussion, but you didn't live in the dorms or have any of the typical college experiences like pep rallies and frat parties, but all of your classes were free?"
All of the students in this group of 20 were incredulous. Some were so upset, they jumped up and yelled, "No way!"
I asked them why wouldn't they take the debt free college route? They ALL replied that they wanted to go to football and basketball games and go to parties.
A book that hits this nail on the head is "Paying for the Party".
Here's part of the review;
Drawing on findings from a five-year interview study, Elizabeth Armstrong and Laura Hamilton bring us to the campus of "MU," a flagship Midwestern public university, where we follow a group of women drawn into a culture of status seeking and sororities. Mapping different pathways available to MU students, the authors demonstrate that the most well-resourced and seductive route is a "party pathway" anchored in the Greek system and facilitated by the administration. This pathway exerts influence over the academic and social experiences of all students, and while it benefits the affluent and well-connected, Armstrong and Hamilton make clear how it seriously disadvantages the majority.
https://www.amazon.com/Paying-Party-College-Maintains-Inequality/dp/0674088026/ref=sr_1_1?crid=38T7C87DGNWZC&keywords=paying+for+the+party&qid=1575731632&sprefix=paying+for%2Caps%2C183&sr=8-1
Drunk college students tend not to do well in Calculus or BioChem. They then change their majors to Event Planning (yes, that is a major and has large enrollments) and graduating with a less-than viable major or not graduating and further diluting their ability to repay loans.
Loaned out students who get sucked into face-punch worthy behaviors to the detriment of their major/future are in for a world of hurt, and graduate with "worthless" degrees and staggering debt with few options. Students who practice face-punch worthy behaviors who come from wealth will be cushioned from answering to these behaviors with the safety net of parental wealth.
It appears that at least, my group of 20 want to go down the path of "hurt world".
Mustachians know better!
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What geographic area do these kids live in? I don't think even half of my high school class would've responded like that. A lot of people don't even join sororities or frats when they go to school.
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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.
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Per Pew Research (https://www.pewresearch.org/fact-tank/2019/08/13/facts-about-student-loans/), 49% of people aged 18-29 with a bachelor's degree reported having outstanding student loan debt. That is a heck of a lot of people. However, I'm more interested in the 51% who didn't report having outstanding debt from their degree. I'd love some research into how they managed to avoid the burden that the other half of people their age face.
What percentage had college paid for by their parents?
What percentage received full-ride scholarships?
What percentage paid their own way?
The system is certainly broken, and if there is a fix, I don't think it's a simple one or one that is likely to happen. So is it possible to replicate the results of those who aren't still indebted?
It's quitely like that the 51% that don't have student loan debt have already paid it off. Remember that the median debt is only $17,000 which tends to be very serviceable even in your early career ($188.73/mo for 120 months at 6%). Usually the cases we are reading about are the exceptions that drag up the average debt.
I think I finished paying off my student loans of about $12k at around 31. So I'd still have reported having some debt. We paid off my wife's similar size student loans first though so she could have answered no to that question.
The big problems for student debt are graduate school, or not graduating. With federally insured loans there is a maximum amount you are eligible for (though parents can wrack up a whole lot more debt). I don't recall how much but it's something like $15k per year. However, in graduate school you can wrack up $100k in debt to get a Master's in English Literature, Philosophy, Music, or some similar major that generally has very low earning prospects. Obviously $100k in debt for a graduate degree in electrical engineering, dental school, law, etc. is probably going to work out a lot better. Also, if you do accumulate $50k in debt but don't even graduate then that's going to be a lot harder to pay back as well.
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
This would make the taxpayers foot a large portion of the bill. I'm not for that, I didn't sign the loan, I'm paying for my own kids, not interested in paying for someone else's.
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
I think the big idea in your suggestions is forcing the colleges to lower their costs.
And part of that is getting the easy money (taxpayer money) out of it, taxpayer money drives up the cost.
My healthcare insurance is 2.88 times more than it was before the start of Obamacare and it's taxpayer subsidies.
Out of curiosity, how does this align with the fact that so many countries have heavily subsidized universities and much, much lower tuition costs? At least in Canada, the more tax dollars that go to schools, the lower the tuition generally is.
Tuition at McGill is less than 5K, and Quebec fucking loves it's taxes.
[/quote]
You answered your own question. We could raise taxes and send more money to universities, and they could pass that "savings" on the the US with lower tuition. It just means the tax payers are paying more of the tuition, not that it actually costs less.
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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.
That puts a ton of pressure on the kids too, to succeed and choose correctly. A noble idea in some ways but could be dangerous if it fails. Resentment could be a big problem between the parents and kids.
I like the idea of making student loans dischargeable and forcing banks to take/price the risk. I also feel like post-sec badly needs more price discovery and maybe this idea would help.
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I like the idea of making student loans dischargeable and forcing banks to take/price the risk. I also feel like post-sec badly needs more price discovery and maybe this idea would help.
Agree. Would also like the schools to have some skin in the game. Maybe a percentage clawback when a loan goes into default. This would give institutions an incentive to make sure they are steering kids into majors that have realistic career prospects and discouraging taking on too much debt.
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
This would make the taxpayers foot a large portion of the bill. I'm not for that, I didn't sign the loan, I'm paying for my own kids, not interested in paying for someone else's.
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
I think the big idea in your suggestions is forcing the colleges to lower their costs.
And part of that is getting the easy money (taxpayer money) out of it, taxpayer money drives up the cost.
My healthcare insurance is 2.88 times more than it was before the start of Obamacare and it's taxpayer subsidies.
Out of curiosity, how does this align with the fact that so many countries have heavily subsidized universities and much, much lower tuition costs? At least in Canada, the more tax dollars that go to schools, the lower the tuition generally is.
Tuition at McGill is less than 5K, and Quebec fucking loves it's taxes.
You answered your own question. We could raise taxes and send more money to universities, and they could pass that "savings" on the the US with lower tuition. It just means the tax payers are paying more of the tuition, not that it actually costs less.
[/quote]
I read the po's post to say that government subsidy would raise the tuition costs to the public, the same way their health insurance costs rose when the subsidies started.
I may have misinterpreted though.
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I think part of the reason these students were wanting all of the trappings of the college experience was that I taught at a high school an hour away from a Big Ten "Top Ten Party School"! I just checked it's ranking, and it's got an A+ rating...
My oldest graduated from that college post BS with a medical diagnostic degree. She was married and didn't take part in that culture. Said the two football games she went to were fantastic extravaganzas!
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I’d rather see student loans capped at a modest amount. Want to go to an expensive school? Sure, but you’re paying the majority yourself.
Isn't that the reason there is a limit to federal loans (subsidized and not)..?
If they put a limit on the student loans that could be privately lended, they would still be available... but called "car equity loans" or "personal loans".. I guess the major difference is that the lenders' "no bankruptcy" protections would be cut off.
Instead, just allow student loans to be subject to bankruptcy protections after say, 5+ years out of school. That would cut off a lot of the private lending of unwholesome amounts. Banks aren't in this business to help drive the future economy by educating the soon to be working class, after all.
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Instead, just allow student loans to be subject to bankruptcy protections after say, 5+ years out of school. That would cut off a lot of the private lending of unwholesome amounts. Banks aren't in this business to help drive the future economy by educating the soon to be working class, after all.
Word. Lenders do need some skin in the game. Put borrowers on an IBR. If they do that for 5 years, and truly are having a rough go of it, they can discharge the debt through bankruptcy. Hell, maybe put a maximum time on an IBR of, say, 25 years.
A lot of the tuition increase for public schools is due to lower state subsidies. 40 years ago, you could cover most of your schooling costs with a minimum wage summer job. That's not true anymore because 1) state contributions decreased substantially; 2) min wage hasn't kept up; 3) students, driven by their proxy wealth, demand more amenities. The money is there; it's just spent elsewhere.
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I'm not sure we could/should regulate ourselves out of this mess.
Why don't we just let the banks take care of their own interest?
Step 1 - change the law (like prior to 2004) to allow inclusion of student loans in bankruptcy proceedings
This would make the taxpayers foot a large portion of the bill. I'm not for that, I didn't sign the loan, I'm paying for my own kids, not interested in paying for someone else's.
Step 2 - no more government guarantees of loans. But continue to subsidize college with (much more generous) pell grants (that cover up to 300-400% of family poverty income levels)
Step 3 - no more cosigning of loans by parents (this is just holding them over a barrel)
Step 4 - banks can decide if they want to loan an unsecured X amount to X student in X major. Let those banks develop their own algorithms
Step 5 - "affordability" of undergraduate education will decrease dramatically. Colleges will have to adapt by providing their own loans, by contracting their administrative boat and salaries, and by decreasing tuition.
Step 6 - college/university enrollment will also drop dramatically, thereby leading to massive contraction in the industry and likely drop in number of universities and colleges themselves
Step 7 -trades will skyrocket in popularity
Thoughts?
JGS
I think the big idea in your suggestions is forcing the colleges to lower their costs.
And part of that is getting the easy money (taxpayer money) out of it, taxpayer money drives up the cost.
My healthcare insurance is 2.88 times more than it was before the start of Obamacare and it's taxpayer subsidies.
Out of curiosity, how does this align with the fact that so many countries have heavily subsidized universities and much, much lower tuition costs? At least in Canada, the more tax dollars that go to schools, the lower the tuition generally is.
Tuition at McGill is less than 5K, and Quebec fucking loves it's taxes.
[/quote]
Canadian universities are also screwed up when it comes to finances. Many adopted US models to make the universities act more like corporations.
The tuition difference is that now the foreign students pay full tuition for their unsubsidized costs... plus extra to fund the in-country costs and programs. As the university's costs grew with their new models (extra stuff), the in-country student tuitions and the government funding did not spike -- that money comes from somewhere.
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I like the idea of making student loans dischargeable and forcing banks to take/price the risk. I also feel like post-sec badly needs more price discovery and maybe this idea would help.
Agree. Would also like the schools to have some skin in the game. Maybe a percentage clawback when a loan goes into default. This would give institutions an incentive to make sure they are steering kids into majors that have realistic career prospects and discouraging taking on too much debt.
That's an interesting idea too. The administration/faculty would be forced to produce measurable results, almost like an apprenticeship, rather than simply dispense information(sometimes carelessly). Not a lot of attention being paid to students actually thriving on campuses from my experience ten years ago.
After getting into the trades, I was pretty happy with the apprenticeship model. It has its faults, but the training has to be efficient since it's brief, there is industry and public sector involvement in the success of students, and you learn in a hands-on way, where output also counts. It's a good middle ground between theory and applied education.
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Why not reverse it? The program gets increased government funding if the graduates exceed 85% FT employment within 1 year.
There is a technical school here that does graduate surveys to find out how their programs are doing for grads within 3 years of graduating. There is a 50-60% response rate to the surveys, pretty consistently.
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A case study:
I went to college with "Mary". Mary was an English major of some sort, I forget the exact degree. Her dream was to be a college professor. Nice person, good sense of humor. Mary graduated 12ish years ago, undergrad. She then went to grad school for a doctorate. Got her doctorate a couple years ago, maybe 2-3? I forget, I remember seeing it on Facebook though.
Mary has worked as an adjunct professor sporadically. Not sure how she's paying her bills, but she had a post on FB recently that she's sent out 150+ applications in the past 2 years. Can't find a permanent job in her preferred field.
Here's the thing. Leaving aside the problems with hiring adjuncts (and there are many), not knowing anything about her student loan situation - at what point does she accept reality? She isn't going to be a college professor. Mary is in denial. She would be much better off recognizing that what she's doing simply isn't working, and figure out plan B. Doesn't mean she can't write on the side, or whatever. But she hasn't, and shows no sign of doing so. The cultural and social push to "follow your dream" is so strong, she is ignoring 150+ rejections.
Mary isn't very hopeful from what I can tell. I doubt that makes things better. But the problem isn't solely in the banking or the educational fields. It's also cultural. So even if we were able to address the banking side and the college side, we also have to address the societal/cultural aspect. I think we've started to at least, it's very hard not to have a reaction when such a large portion of a generation is so badly impacted. But that's one generation - and it's not the generation that's driving so much of it.
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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?
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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.
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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.
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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.
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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.
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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.
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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.
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...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.
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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???
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...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.
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...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.
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...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.
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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.
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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!
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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.
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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.
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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.
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Guess they don't teach english in michigan??
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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.
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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.
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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??
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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.
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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.
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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.
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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.
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... this guy has a poverty of creativity...
Phrase of the day!
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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?
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.