Student Loan Interest Rankles College Grads 1259
theodp writes "Like many recent college grads, Steven Lee finds himself unemployed in one of the roughest job markets in decades and saddled with a big pile of debt — he owes about $84,000 in student loans for undergrad and grad school. But what's really got Lee angry are the high interest rates on his government-backed student loans. 'The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%? The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?' Not only that, federal student loans are the only loans in the nation that are largely non-dischargeable in bankruptcy, have no statutes of limitations, and can't be refinanced after consolidation, so Lee can forget about pulling a move out of the GM playbook. And unlike mortgages on million-dollar vacation homes, student loans have very limited tax deductability. A spokeswoman for the Department of Education blamed Congress for the rates which she conceded 'may seem high today,' but suggested that students are a credit-unworthy lot who should thank their lucky stars that rates aren't 12% or higher. Makes one long for the good-old-days of 3% student loans, doesn't it?"
Experience from academia (Score:5, Insightful)
I worked at a mid size private university in the midwest and tuition rates were astronomical ($30k for undergrad). I think the loans are one thing but tuition rates are a larger issue. I wondered how they stayed in business especially these days.
Tough Shit. (Score:5, Insightful)
Re:Hmm.. must be some difference (Score:3, Insightful)
Yes, because clearly paying taxes isn't a return on the government's investment.
Barking up the wronf tree. (Score:5, Insightful)
Mortgages and car loans are secured loans, where the property or car that is bought with them is pledged as collateral. This makes a big difference for the interest rates. Student loans just ain't so.
Anyway, I've heard complaints like this about student loan rates before, and I've always had the same basic response: you're barking up the wrong tree. You don't really want lower interest rates on student loans; you want the government to spend more on making higher education affordable for those who qualify for it. There's a bunch of countries out there where if you get admitted into a university, the government picks up the tuition bill, period. Those countries ain't richer than the USA.
As a college student (Score:2, Insightful)
comparison with mortgage rates (Score:1, Insightful)
30-year fixed-rate mortgages are backed by the property itself as collateral, and usual require either a 20 percent down payment or private mortgage insurance to protect against market fluctuations. (Of course, banks and mortgage companies have been known to market more "creative" products such as subprime mortgages, but presumably they have either learned their lesson or have been shut down by Federal regulators).
So that's comparing apples with oranges. Part of the higher rate for the student loan goes into a pool against defaults, when the government has no collateral to seize.
credit-unworthy or just greedy? (Score:5, Insightful)
If students are a "credit-unworthy lot" then limit the amounts they can borrow or make it a fixed amount that they must repay. Charging a higher interest rate for "credit-unworthy" people makes it more likely that they'll default, making it a self-fulfilling prophecy. This holds true for all borrowers.
High risk for lenders = high interest rates (Score:3, Insightful)
Re:High risk for lenders = high interest rates (Score:3, Insightful)
OK I see why that makes sense from the lender's point of view (they're just trying to balance things) but it's absolutely insane from the borrower's point of view. The high interest rates are what are paid by the people who DIDN'T default. They punish the wrong people -- the actual expense of the moochers is borne by the people who turned out not to be moochers after all.
Re:tuition is insane. (Score:4, Insightful)
Grow up, go to state college, get a job.
The government subsidy on college loans is being able to get a loan in the first place. How else can you get a loan for $30-60k (or more) as an 18 year old with no credit history, no job, and no skills! You're an idiot to place yourself in that much debt with a very clear understanding of the terms and a strong plan on how exactly you're going to pay them off. The job market is weak right now, but companies are still hiring - go train yourself up and find one.
If you can live cheap you should be able to pay off state college as you go. If you do Co-ops or internships all the way through you can pay a quarter work a quarter and graduate with no debt and a better chance of getting a full time job when you get out.
Someone (god only knows why) decided that simply because you wanted to go to college you were worth tens of thousands of dollars at honestly a really low interest rate, compared to if you wanted that money to do anything else (go try to get a signature loan for ten grand from a bank and see what interest they give you, if they don't laugh in your face).
You got yourself in debt and you alone. If you decided to spend that money you acquired on something that isn't going to allow you to pay it back, it's nobody's fault but your own.
Nearly 50% of all fortune 100 CEO's graduated from a state university. There's no reason to think you need any better if you can't afford it.
Re:Experience from academia (Score:5, Insightful)
tuition prices are so high because kids keep getting approved for loans. I imagine schools might someday see the same thing the housing market has recently if the prices keep going up faster than inflation [miamiherald.com]. Can't sustain that forever.
Education should be a national right and pride (Score:2, Insightful)
No it doesn't.
A civilized nation should provide free education to the highest level each person wishes to attain, because that's part of believing that the nation's most most important resource is its people.
But when a government just wants dumb consumers, then it's a very different matter.
Reform is needed. (Score:2, Insightful)
Re:Experience from academia (Score:1, Insightful)
but tuition rates are a larger issue
Who the fuck lets these people in here? Rules of US higher education: 1st Rule: You do not talk about tuition rates. 2nd Rule: You DO NOT talk about tuition rates. Schools are hapless doers of good suffering under the yoke of capitalist oppression in an attempt to salvage at least some minds from a life of abject ignorance. You DO NOT question tuition rates or rate of increases, accreditation criteria, etc. Sufficient debt vehicles have been provided to fund your education.
How can you bring this up now, when so many wise and lucrative investments are having 'liquidity issues'?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHou7iMlBMN8
Re:Hmm.. must be some difference (Score:4, Insightful)
And when you default on the student loans your wages and other income gets garnished. That renders your point moot.
Provided that you have an income. If someone is defaulting on hist student loan (and given the generous forbearance and other options before the dishonorable default), what makes you think he actually still has his job?
If someone has a mortgage, then unless he's done something illegal he does have a house that can be repossessed—it may be worth less than the mortgage, but it's still something, unlike with education.
Re:Hmm.. must be some difference (Score:1, Insightful)
Exactly, why does he not just refinance through a secured load, oh thats right, he has no security (assuming).
The big question being asked is how come students lap up such loans - because we are all convinced you are
a failure without going to an expensive college, which is crap.
Re:All mine were cheap! (Score:0, Insightful)
The university attendance rate in the U.S. is way, way too high, and will get even worse if interest rates on student loans are lowered further below the free market rate. U.S. colleges are churning out hundreds of thousands of graduates with useless majors. Half of all recent graduates are unemployed, and half of those that are employed are working jobs that don't even require a college degree. The government is encouraging all this useless, non-productive "education" by subsidizing loans for high-risk borrowers who don't consider the risk of the investment.
Think about it-- an 18 year old student spending $200,000 to study basket-weaving for 8 years gets the same rates as a 25 year old getting a nursing certification at a community college, even though their risk/reward profile is completely different. It doesn't make any sense.
Re:Tough Shit. (Score:2, Insightful)
And if some shit hits you like a divorce, a company going under you committed years of effort to, and other 'snake-eyes' throws of the dice since you finished school, then what? And then 'null' level of flexibility is offered as short-term support, no adjustment other than upward of said interest rates due to missed payments .. then what. Lost wife, house, etc ... what is left? Not much ...
Life can be "tough-shit" for some, very accurate post. But, no, a bailout is not the answer ... some bullshit bankrupt maneuver is also deconstructive to the system. The future of education in America will continue to degrade in this process though. Some people will work hard their whole life, also while going to school, never draw a day of unemployment, and hope that things fall into place. For many it will, but for some it won't. When it does not fall into place quite like they hoped, hearing the wise words of some cockhoster like you saying, "Tough Shit" does not do much for anyone. Thanks for trying though.
Re:Tough Shit. (Score:4, Insightful)
Yes, but did they understand what the papers they signed meant, before they took the accounting classes?
Students are a gullible group.. if the banks convince them they need an 8% student loan, because for some reason they "are a poor credit risk", then the students who don't have the education yet are likely to sign, not even realizing there may be a possibility of finding another deal (or maybe there's not another option).
The claim students are a poor credit risk is one of the strangest... with a debt that cannot be discharged in bankruptcy, has no statute of limitations, has a government guarantee behind it, including an ability to garnish wages, and these people taking out student loans are generally young people....
It seems like student loan debt is less of a credit risk than most other types of even secured debt.
I declare that: "students are a credit-unworthy lot who should thank their lucky stars that rates aren't 12% or higher."
Is basically nonsense.
It makes no more sense than saying "30 year olds are an uncreditworthy lot."
It's credit history that relates to creditworthiness, not being a student or not.
We've taught them well haven't we? (Score:3, Insightful)
"The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?"
Why not, indeed?
Besides the fact that we have no money left, didn't before we started, and have been borrowing all of this, why not help the students?
Well, will someone else please tell them? I'm tired of it. Thanks.
ps - My wife and I paid off her student loans. She had a higher interest rate.
pps - No one is bailing me out of my mortgage on my home which is worth about half what I paid for it in 2005. I owe about %60,000 more than it is worth right now. My property taxes have not gone down a penny, cause everyone else around here is in the same boat. I can't afford to go back to college right now... Loans or not.
ppps - We are not doing a great job of bailing out big business. I work for one, and took a 15% pay cut in April. And I'm thankful to have my job still. Graduates should be thankful if they get a job at all before 2011.
We're teaching them well. Just the wrong lessons.
Loans are an option not a requirement. (Score:3, Insightful)
I worked my way through college.
It sucked. I didn't get to go ivy league (not a big problem since only a 1270 sat, 3.2gpa, and activities were computer club and D&D club).
Mainly, I didn't get to take a 4 to 5 year vacation. I studied 20 hours on top of 12 hours of classes on top of 40 to 55 hours a week of work.
But I graduated with no debt. It was my choice.
Students have the choice of going to public schools, or cheaper schools over seas, or on-line schools.
One of the reasons colleges have gotten so expensive is that children are willing to take on $200,000 debt to get a degree.
Look- if the professors were not making mid 100k incomes (yea, I know adjunct professors are poorly paid), if the universities were not funding research on the student's backs, if the university presidents were not making $350k!!! and if the universities JUST TAUGHT THE MATERIAL like they used to back in the 50's, then school wouldn't be so expensive.
Health care is super expensive for the same reason. People have shown that they *will* pay anything for it, so the providers have jacked up the bill.
You can get a good solid degree from a public university and graduate with little or no debt.
You can't get an idiot degree of course.
Given the work climate (that any INDIAN or CHINESE national can get a similar quality degree and take your job for $16,000 to $25,000 working in their companies for our corporations), you are an idiot to get a degree for something with that kind of exposure. At least get something that requires you be physically present, or that has national security implications.
Re:Typo in summary: detectability vs deductibility (Score:3, Insightful)
Re:Tough Shit. (Score:1, Insightful)
well, your idea will definitely mean there will be less lawyers. And doctors. And high level scientists. But who needs law, medicine or technology?
Re:Grad student with huge loans (Score:1, Insightful)
Maybe you should work for a few more years paying down your loans instead of going to grad school. What do you think grad school is, an entitlement!? Do you think the taxpayers should subsidize your pursuit of advanced knowledge even more than they have been already?
Re:Grad student with huge loans (Score:1, Insightful)
Nothing stopped you from postponing grad school for a few years to pay down the balance. Your loan papers clearly spelled out when and how interest would accumulate.
Lots of people do this. Others take 6+ years to get their degree part time or in night school to minimize borrowing.
Why should you get special treatment?
Re:All mine were cheap! (Score:5, Insightful)
That seems to be an argument to reduce university tuition costs, not reduce interest rates.
Re:Real world loans are going to really freak you (Score:2, Insightful)
Re:Grad student with huge loans (Score:1, Insightful)
Think about what you just said, you are spending nearly a decade being a net drain on society rather than contributing in some productive industry. Sure, you'll be more productive in the long run, but you're not being "fleeced left and right". You're *not* earning your keep right now, you are currently living off of someone else's productive efforts, which you'll have to pay back once you join the real world.
By the way, nobody gets forced to go to college. If the numbers don't work out in your favor, you were pretty dumb to sign up for an extended 'fleecing' at the hands of that evil educational institution.
What do you expect? (Score:5, Insightful)
I was the oldest child of a middle class family of 3. I applied to 2 public and 3 private universities and was accepted to all of them, but with minimal financial aid. I chose to attend a nearby public university that offered a quality education that cost approximately $10,000/year in the late 90's.
Why did I make this choice?
- I could afford to finance about 75% of tuition via savings that my parents had set aside for me.
- I worked various jobs while in school, eventually hitting $15-17/hr, which more than covered the remaining tuition & expenses.
- I didn't want to screw my siblings out of an education or force my parents into debt. In the end, I was able to leave about $4,000 of my parent's savings for my brother or sister.
I have friends who are teachers who decided that they needed to attend small, private New England colleges with tuition and expenses over 350% more than my education. One of those friends and his wife makes $120k combined teaching, but after years of deferments owes over $300,000 a decade after graduation (not including graduate work form a private school which would have been FREE had they gone to the state university) -- my friend and his wife can barely afford rent, and will likely become homeowners when they inherit a house when one of their parents pass.
People don't need bailouts, they need to live within their means and not assume that they are entitled to a specific lifestyle or type of job due to the circumstances of their birth. If you can't afford four years of college, borrow money to go to trade school and work as a plumber, HVAC, electrician, etc. If you really want to go to college, you'll be able to earn the money to do so.
Re:All mine were cheap! (Score:2, Insightful)
Education should be FREE
Re:Tough Shit. (Score:4, Insightful)
If the system is broken (which it is) then you can't just sweep the problem under the rug just by declaring it the result of a character flaw and refuse to address the system its self.
Re:Experience from academia (Score:3, Insightful)
It is most certainly a root-cause. You're confusing desire with economic demand. The demand can only be realized because of the abundance of student loans. Decrease the availability of student loans and the demand that the be realized by the schools will go down, even while the desire for students to attend may stay the same.
Demand is only a useful term in that it is a desire for a product that can actually be acted upon.
Re:Experience from academia (Score:5, Insightful)
Pissed at the bail-outs (Score:1, Insightful)
Me, I'm PISSED at the bail-outs. We've done stupid idiotic things in order to financially support companies that have done stupid idiotic things, essentially giving them license to do more stupid, idiotic things. And we, lowly, powerless tax-payers are going to foot the bill.
"Stimulous money" should go to things that create wealth: Science exploration, improving education, infrastructure (roads, powerlines, maybe the "smart grid") pure research, space exploration. These are things that create wealth and set us up (as a country) for the next big wave of wealth. But instead, we prop up companies that are "too big to fail" who do stupid things like borrow money to buy derivatives that were created from borrowed money. A multi-trillion dollar industry created out of thin air and lots of pencil-pushing.
Meanwhile, our roads are clogged and crowded, our power grid is ancient and increasingly taxed/unstable by the more volatile alternative fuels being used to power it, and our schools lag so far behind that some are even considering teaching creation as "science".
Meanwhile, we squander our wealth with wild abandon, killing Iraqis and Afghans, spending a TRILLION DOLLARS PER YEAR just to send in planes and bombs.
Hey, I have a better idea. Let's take just 1% of that trillion dollars per year, and use it to feed EVERY SINGLE !@## STARVING KID THE WORLD OVER. Yes, that's all it would take. A Billion dollars per year could by a handful of rice, corn, or wheat to put into the hands of every single starving kid in the world. Can you imagine just how much goodwill this would cause? We'd be hailed the world over as harbingers of peace.
But, instead, we send the bombs and drone planes and guns, we violate international treaties by torturing people who haven't been accused of any crime, and do our damnedest to repeat the mistakes the Russians made when they invaded Afghanistan and spent their status as a world power trying to bring order to the same country we have so far failed completely to do.
Just !@#@ing stupid, and it's me, the smart, hardworking, disappearing upper middle class that gets to pay the !@#$ing bill.
Yes. I'm pissed.
Thank god I'm from Austria (Europe) (Score:1, Insightful)
University is free.
Re:Experience from academia (Score:0, Insightful)
I mean, how many societies have plumbers as heroes?
Well, we (America) did - at least during the 2008 election.
Well you can blame the press, the Obama supporters, and the Obama supporting press for that unless you'd prefer to blame the guy, a.k.a. Joe the Plumber, who dared question the Anointed One, a.k.a. Barrack Obama. Once they started to attack Joe the Plumber it was natural for their opposition to rally around him in support.
Hopefully Joe's fifteen minutes are finally over. Unfortunately Sarah Palin's fifteen minutes aren't.
Re:Tough Shit. (Score:3, Insightful)
Also, what did he study, and how well did he do at it?
I've just graduated with a lot of people, everyone I know who did a valuable subject (Something in commerce, Engineering, IT, or similar) has obtained a job straight out of Uni, even in this economy. Sure it was maybe a little more competitive, but if you've got a solid degree, and aren't beneath working in lower positions, or for less money, there's always work.
Though most of my friends have done well, and some have done awesomely (Damn Petroleum Engineers!).
Re:Experience from academia (Score:4, Insightful)
Re:Tough Shit. (Score:3, Insightful)
You can always walk away and not want the loan. Universities do not posess some secret knowledge, it's all in the books and if you can read you can learn. Smart employers will ignore your lack of degree if instead you present a lot of experience.
That's not the case if you want to be a professional engineer (a requirement in most places to be the engineer that signs off and takes liability for a project). Note the first requirement:
http://www.ncees.org/licensure/licensure_for_engineers/ [ncees.org]
Step 1: Graduation - The first step is graduating from an ABET-accredited engineering program at a college or university.
Sure, you can learn all this on your own, and to be a good engineer, you indeed have to keep learning on your own. But you NEED that piece of paper if you want to be anything more than an engineer technician.
And what if you want to be a lawyer? There are only 4 states that allow you to sit the Bar exam without a law degree, but that's only if you work under a judge for an extended period of time.
While I would agree with you and go so far as to say that all learning must be done by the individual, there are indeed situations (and benefits) where you have to have that piece of paper from a school that says they've vetted you for a minimum amount of knowledge.
Maybe "smart" employers will ignore your knowledge without a degree, but they'll also pay you less. Someone doing the same job and with equivalent skills, who also has a degree, will almost always make more. The trick for them was to make sure they'll make enough more so that they can pay off the loans and still be ahead.
However, most employers aren't smart, they're safe. And hiring the graduate is the safe thing to do.
Re:All mine were cheap! (Score:2, Insightful)
But if it were free, then conservatives would have to throw up a bunch of other hurdles to keep the minorities that they don't like out of their little white world. Instead, they make it really damn expensive and declare that anybody who can't handle the debt is a loser who deserves to be poor and ignorant.
So you see, it can't be free. Republicans would cry.
Re:credit-unworthy or just greedy? (Score:3, Insightful)
Yeah, on the one hand, it makes sense: loaning money to someone unlikely to pay it back is a risky investment, and risky investments demand higher returns. If presented with a risky investment or a risk-free investment, both offering the same return, you'd never make a risky investment.
On the other hand, you're taking the very people who are least likely to be able to pay their loans off, and you're making it even harder. That makes no sense. It's just another example of it being more expensive to be poor [washingtonpost.com].
Re:Pissed at the bail-outs (Score:4, Insightful)
"Hey, I have a better idea. Let's take just 1% of that trillion dollars per year, and use it to feed EVERY SINGLE !@## STARVING KID THE WORLD OVER. Yes, that's all it would take. A Billion dollars per year could by a handful of rice, corn, or wheat to put into the hands of every single starving kid in the world. Can you imagine just how much goodwill this would cause?"
Ouch. While I'm enormously sympathetic and entirely on the same side of the political fence as you, your numbers here are tremendously screwed up. Pretty embarrassing, actually.
(a) 1% of a trillion dollars is not "a billion" -- it's 10 billion. (b) U.S. already donates over $22 billion per year in foreign aid *. (c) Highly skeptical that another billion (or 10) could feed all starving children -- citation needed. (d) Many locations are documented as not allowing US/UN personnel in, and/or have confiscated food donations in the past from the poor to the army, etc. -- would you be willing to force that with military action?
Get your facts straight and it will strengthen our campaign for social justice in the world.
* Source: http://en.wikipedia.org/wiki/Foreign_policy_of_the_United_States#Foreign_aid [wikipedia.org]
Re:Pissed at the bail-outs (Score:3, Insightful)
Hey, I have a better idea. Let's take just 1% of that trillion dollars per year, and use it to feed EVERY SINGLE !@## STARVING KID THE WORLD OVER. Yes, that's all it would take. A Billion dollars per year could by a handful of rice, corn, or wheat to put into the hands of every single starving kid in the world.
Ever think about what effect free food has on the target country's local agriculture economy? I'll give you a hint: Local farmers have to start competing with free. The answer isn't dumping free food onto people--it's investing in infrastructure so that functional and stable markets can develop.
Re:Experience from academia (Score:4, Insightful)
No again, they are high because the universities keep spending (on research programs, out of control construction projects, etc) more than they bring in, and they are bringing in (though endowment investment losses, decreasing alumni gifts, and less government support) less these days to boot. Almost all universites are non-profit, so "supply and demand" is irrelevant.
For example, Harvard has forecast over a $100M shortfall this year, and it has the largest endowment, one of the highest alumni donation rates, and,of course, one of the highest tuitions. They are not just raising tuition because "the students will pay", they are raising it because their costs are going up way too fast (which in the end is the thing that needs to be controlled to fix this problem...)
Re:All mine were cheap! (Score:2, Insightful)
Everything in life should be free, but it isn't. Grow up.
Re:All mine were cheap! (Score:3, Insightful)
Most ignorant post of the day award goes to you, Profane MuthaFucka (The name says it all, right?). How do you propose that College employees (Professors, Adjuncts, Non-teaching Staff, Maintanence, etc) get paid if education was free. I'm sure it's just a vast right-wing conspiracy to keep minorities out of college, right? Has nothing to do with economics, nahh that'd be nuts.
Re:Experience from academia (Score:3, Insightful)
This hilarious thing about the point you make is that when your financial ability to pay is determined, they factor in how much your parents make, even if they cannot afford to help you pay for school. I had this problem and they determined that I made too much to get grants even though my parents could only do so much to help me.
Re:Hmm.. must be some difference (Score:3, Insightful)
Maybe they shouldn't give loans for people to get worthless degrees...
Re:All mine were cheap! (Score:4, Insightful)
The university attendance rate in the U.S. is way, way too high, and will get even worse if interest rates on student loans are lowered further below the free market rate.
Yes but think of how good the youth unemployment figures look with so many young people studying!
Re:As a college student (Score:3, Insightful)
I am all in favor of helping out people who don't have healthcare, but in order for those people to have healthcare, someone else is going to get screwed. It isn't like this stuff comes from the Universal Rights God, it is from the noodly appendage of someone else's wallet that the benefit must come. Calling it a 'right' kind of hides that fact.
And I am happy to pay for it. I'm happy to help someone out whenever I can. But geez, if you worked hard through high school, isn't the knowledge you gained from that hard work enough? I mean, you're going to college, you are working hard, and YOU are going to be the primary beneficiary of all your hard work. Do you really want to force someone else to pay for it? If you don't think it's truly worth it, don't do it. If you don't want to penny pinch, then don't; go do something where you don't have to. If it is too costly, then it's probably not worth it. Go do something else.
But if it is worth it, then you're clearly getting your money's worth. Good job, keep it up.
yep, but it's not politically correct (Score:5, Insightful)
Every degree is valuable, you know? Every student must get a degree! (probably because we already watered down the high school diploma by insisting that every student must get one, no matter if they can't effectively understand math usage or the meaning of something they read)
Imagine the outrage if it were suggested that physics, engineering, and math were more worthy than black studies, women's studies, and LGBT studies. We're going to Hell in a very nicely woven handbasket.
Perhaps the worst thing is that this perpetuates the idea that college education is generally worthless. When people see college graduates failing in the job market, they often conclude that education is not worth any effort. The correct conclusion is of course that your field of study matters, but that doesn't generally sink in.
Re:Skilled trades are not morons (Score:4, Insightful)
I'm very thankful to see this reply to the earlier post bashing plumbers, electricians, etc. I'm a math professor, so I certainly value education, but I know that there are plenty of "morons" that end up with college degrees just because their parents were rich enough to foot the bill.
There are skill sets and learned knowledge that don't come from college yet are still immensely valuable to society. If my house is flooding from a busted pipe, I don't want an engineering professor trying to fix it, I want a plumber! And, I sure as hell don't want an electrical engineering professor wiring my house... I want a licensed electrician.
Now, here's my opinion on paying for a university education: never take on a ridiculous debt burden to go to school unless your career options will allow you to quickly pay it off. Just got accepted to Harvard Law School, congrats, of course it's worth getting $300,000 worth of debt. But most people can get a good education at a public university while paying in-state tuition rates. I plan on sending my kids to an in-state public school. (Unless they get some amazing scholarships or I win the lottery.)
Re:All mine were cheap! (Score:5, Insightful)
Re:Tough Shit. (Score:3, Insightful)
You sound like an idealogue. The rightest of rightiests (aside from the libertarians) were all for the TARP funds with Bush/Cheney was handing them out.
There is a concept of sacrificing a few to save the sinking ship. The problem was already there and "bailing out" and most smart people understood that the "bailout" action prevented the Titanic.
In context, on September 18, 2008, the federal government froze credit markets in light of a $10 trillion run on banks during a 2 hour period.
Had they not done that, by 4pm, the US Dollar would have been worth less than the paper it is printed on and we would probably be trading Euros and gold coins right now, while burning those dollars for fuel to heat our dark, frozen houses.
But, context not appearing to be your strong point, I defer.
Re:Education should be a national right and pride (Score:3, Insightful)
A civilized nation should provide free education to the highest level each person wishes to attain, because that's part of believing that the nation's most most important resource is its people.
Paying for that "free" education is a key part of the educational experience. Besides as PPH and mysidia pointed out, having to pay for your education helps make the education worth something. It's not you, but earlier tonight a slashdotter was whining at me about his interpretation of the world as people creating climate change just so they could live in "convenience and comfort". I suppose the idea is that it is despicable for someone to not wish to sacrifice. I must admit I'm starting to see their point of vieww now that I am reading throughout this story about people who think that it's a good idea, for some reason, to dole out free education to people who haven't done anything to earn it.
My view is simple. An education can be pretty valuable. It'll make the student a bit of money in the future. How much benefit depends on the choices made. By making the college student pay for their education, they as the saying goes are "putting skin in the game". Namely, they now have a personal interest in getting a good education which to be blunt they would not otherwise have.
I see no reason to change this because, among other things, I think there is no right to go to college for free and pick up a degree, that there are already too many college graduates with weak educations, that the college degree is not that valuable in itself, and that a colossal and growing amount of waste goes on in the college environment which would only be aggravated by free education.
Re:Barking up the wronf tree. (Score:2, Insightful)
You don't really want lower interest rates on student loans; you want the government to spend more on making higher education affordable for those who qualify for it.
Who decides those qualifications? How will they be fair? Consider the FAFSA loans, which dangerously assumes your parents will pick up at least some of the tab of your education. But if your parents are well off and (*gasp*) tell you "son, you have to do this the hard way like we did" then you're up shit creek. I'm all for improving access to education for those who *deserve* it, but thinking everyone should go to college is as stupid as GWB's "No Child Left Behind" crap. Giving a generation of kids free money for college is just going to create a generation of baristas and wait{ers|resses} with communication degrees who are too busy daydreaming about their carefree glory days of the easy life in college to get your order correct.
My opinion: Improve access to science and engineering first and let the market handle the rest. Rich or poor, white or black, if you're smart and have the determination required to become a science or engineering student you shouldn't be concerned about how you're going to pay for it. Abort/drop out/fail and you're on the hook for the loan: discourage freeloaders. Scientists and engineers are the job creators: if it weren't for them we'd still be a agrarian society (or worse). So long as you give access to these loans based on ability, you'll probably never saturate or dilute the market with these skills or degrees, plus you'll still have ditch diggers and janitors.
The real problem now isn't access to or cost of higher education, it's that a bachelors degree has become the new high school diploma. This is not because we're any smarter now than we were 40 years ago, it's because everyone with a child thinks their child should go to college regardless of what their child wants and/or is capable of. Instead, a vast majority of college students are graduating with majors in communication, psychology, anthropology, etc, all of which I assume had some value 40 years ago but are now little more than very expensive consolation prizes. Even from relatively prestigious schools these degrees rarely mean little more than "I am able to google and write an essay on ______ the night before said essay is due". All we've done is cheapen what once were respectable degrees and careers, while raising a generation of people who feel entitled to success because it was given to them at such a young age. How sad is that?
Divert more kids to trade schools and community colleges. Free up Universities and private colleges for graduate programs and those dedicated and smart enough to get through community college. Don't give me that bullshit about the "college experience": the purpose of college is education, and the purpose of education is to learn; not to party, play online poker, or be promiscuous. Make science and engineering degrees available (but not free) for anyone willing and able to pursue it and you'll see the American economy take off like it did after WW2.
Finally, there's a lot more to life than school and work. Show some respect for the people who find happiness close to home or in the "simple" things in life. Don't presume that just because you've traveled all over Europe or have some initials after your name you have the right to tell someone else how to live or how to be happy: what made this country great is the freedom we have as individuals to choose our own destiny and make our own way. The more we treat people as individuals and not members of various social classes the better off our civilization will be.
Re:Education should be a national right and pride (Score:5, Insightful)
Your conclusion fails to follow from your premise. Paying for someone's degree in Advanced Featherbedding just because they want on does little for the nation but produce yet another idiot with a meaningless degree and a sense of entitlement.
A nice soundbite, but nothing else.
Personally, I think a system that makes people work to pay for their education works just fine. It sorts out the those with the skills and dedication to obtain an advanced education from those without - the same skills and dedication they will hopefully employ in whatever career that education prepares them for.
Re:All mine were cheap! (Score:4, Insightful)
Here in the UK our student loans are linked to inflation. My current APR is -0.40 :)
Re:As a college student (Score:5, Insightful)
Spoken like someone who cant think beyond their own pocket.
Because proper education systems increase your wealth as well, the same as proper health systems benefit your health as well. Let me ask you this, would you rather have a nation full of highly educated white collar workers or a nation full of barely educated blue collar slobs barely able to swing a hammer?
Well the white collar workers of course, you cannot compete with the third world on manufacturing whilst maintaining a first world economy. Now if education is difficult to afford then you will end up with a large section of your workforce earning low wages, low wages means that their contributions to tax will also be low as well as the amount of money they have to spend or invest. This means that YOU as the middle class will contribute MORE in tax to maintain the same quality of life or YOU will have to accept a LESS fortunate lifestyle.
If you have more highly educated workers you can attract and create high tech industries which pay higher wages and thus contribute more in tax. This means the as a net result of more people paying more tax YOU pay less tax over all. YOU also benefit from OTHERS spending more disposable income or INVESTING that income which in turn creates more wealth and REDUCES the tax burden on INDIVIDUALS.
I suggest you look at HECS [wikipedia.org], a scheme created by the Australian Federal Government which covers the cost of tertiary education for Australians. This is in turn paid back as it is factored into the amount of tax a receiver of HECS pays (I.E. you pay only for the HECS that you have used) at the end of each financial year. In effect the government extends a near zero interest loan with a flexible amortisation schedule, so the tax taken from mr to pay HECS gets returned in full later in life via a reduction in taxes and economic benefits. It's almost like, well like an investment and an investment that has been working for Australia for the last 20 years.
Re:All mine were cheap! (Score:5, Insightful)
I take it that you didn't notice you were living in a democracy. Degrees like history or philosophy that have no direct application to employment (although the skills developed in doing such a degree have a general application) are exactly the sort of degrees that engender an informed and capable citizenry capable of properly holding its representatives to account. A citizenry incapable of evaluating arguments and ignorant of history is more easily duped.
It has long been a dream of fascists to eliminate such forms of education for precisely that reason.
And before anyone starts, you should already have noticed that the same phenomenon occurs with science degrees. Some of those who think science degrees are great as long as science graduates are making useful widgets tend to get very agitated when science graduates start using their education to hold policy makers to account (climate change is an obvious example, as is teaching evolution in schools).
Beware those who say that all education must be "useful". They often have a hidden agenda.
Re:Pissed at the bail-outs (Score:3, Insightful)
I entirely agree with you on all of those items (A, B, C, and D). But you hurt our cause by looking sloppy and dumb and lacking communication skills.
Re:As a college student (Score:4, Insightful)
Spoken like someone who cant think beyond their own pocket.
Spoken like someone who doesn't give a shit about other peoples' pockets.
Because proper education systems increase your wealth as well, the same as proper health systems benefit your health as well. Let me ask you this, would you rather have a nation full of highly educated white collar workers or a nation full of barely educated blue collar slobs barely able to swing a hammer?
Would you rather have a nation of workers or of parasites?
Well the white collar workers of course, you cannot compete with the third world on manufacturing whilst maintaining a first world economy. Now if education is difficult to afford then you will end up with a large section of your workforce earning low wages, low wages means that their contributions to tax will also be low as well as the amount of money they have to spend or invest. This means that YOU as the middle class will contribute MORE in tax to maintain the same quality of life or YOU will have to accept a LESS fortunate lifestyle.
The question here is why is education difficult to afford? I think it's because government has been throwing money at education in the form of subsidized loans and overly generous financial aid. If education were free, there'd be two possible outcomes, either everyone would consume as much education as they could, driving costs up even further, or someone would have to regulate consumption. Either outcome is avoided by the third choice, making people pay for their education.
If you have more highly educated workers you can attract and create high tech industries which pay higher wages and thus contribute more in tax. This means the as a net result of more people paying more tax YOU pay less tax over all. YOU also benefit from OTHERS spending more disposable income or INVESTING that income which in turn creates more wealth and REDUCES the tax burden on INDIVIDUALS.
Except that the tax burden and future obligations aren't going down. Education won't fix what's wrong with the US because it's not the cause of the problem, and because the "investment" is consumed by those that had no part in it.
Re:All mine were cheap! (Score:3, Insightful)
It seems to me that most of the people who study philosophy, economics, politics and history are the people who go into politics and proceed to f**k everyone else. The less of them the better.
Re:Experience from academia (Score:5, Insightful)
No, they're high because it's a service where productivity can't increase very much.
Rubbish. Folks like you cry we need to spend more money on education, so we give state universities more money, and they blow it on administrators or programs that are ancillary to actually putting useful knowledge into someone's head.
Your argument is only an argument for tuition prices tracking with inflation- but they've been rising at double the inflation rate.
If your state's making money at its institutions, please have them contact mine so we can resolve our huge current deficit.
It's not a matter of profit, it's a matter of finding new and creative ways to blow taxpayer and tuition money on expenses arguably, vaguely related to education.
State universities don't spend money efficiently because they don't have to. There are too many idealists out there who think that pouring money into the universities guarantees getting better results out. This isn't the case.
State Universities are run by mortal men and women, who make the same mistakes and misteps as the rest of us. The letters after their names simply indicate the possession of specialized knowledge, which is entirely unrelated to the efficient operation of a university.
Re:All mine were cheap! (Score:3, Insightful)
In the west from 1900-1980ish the ugliest forms of ideology; Marxism, Facism, Eugenics, Totalitarianism were at one stage or another broadly and openly supported and advocated for by student bodies, senior faculty and universities in the west. Unapologetic support for the methods and madness of Mao, Lenin, Stalin, and yes - even Hitler (in the '20s and '30s before it became a faux pas to support him) accompanied loving gazes and embarrassing wistful looks over to Russia and China.
It was the "citizenry incapable of evaluating arguments and ignorant of history" aka "the average person" who kept *them* in check - the "useful idiots" as Lennon so lovingly referred to them were born out of western higher education.
As I've constantly found in my life a university degree in philosophy or social history in the hands of someone who doesn't have the experience of life to temper what they're being told often by "true believer" lecturers who like to try and be evangelicals for their own radical political beliefs causes more harm than good. Radical, violent support for Mao during the 60s and 70s among privileged middle and upper class kids in western universities while he was starving 30 million or more of his own country men out of their farms proves this indisputably.
Beware those who say that all education must be politicised, they *always* have a hidden agenda.
Re:All mine were cheap! (Score:5, Insightful)
Degrees like history or philosophy that have no direct application to employment (although the skills developed in doing such a degree have a general application) are exactly the sort of degrees that engender an informed and capable citizenry capable of properly holding its representatives to account. A citizenry incapable of evaluating arguments and ignorant of history is more easily duped.
The problem isn't history/philosophy/sociology majors themselves. Quite a number of them do good, valuable things for the country and their fellow people (especially if their academic and intellectual experience is tempered with some real-world experience). The problem is the number of people who don't go to school for those things, but who go because "everyone needs to go to college" and they choose a major like that because they need to choose something. Coorectly or not, they pick something that sounds easy just so they can have a degree--and everyone knows that "you need to go to college to have a good job".
Part of the problem is that we're encouraging people to go to college when they aren't going to use it or even care about it. We've elevated the office job and made skilled trades a thing of contempt. The guy who sits in a cubicle churning out TPS reports a five-year-old could write is automatically elevated over a master CNC machinist and programmer simply because he has a degree and works in an office. There ought to be no shame in taking up a trade like machining or welding; a good machinist, for example, is as valuable to a company as any engineer.
Now don't get me wrong--it's always great for people to go and learn more. It's always a good thing to have a better-educated populace. But I think the current pushes of "everyone must go to college" and "you need a degree to get a decent job" force too many people to go befre they can afford it, and therefore take on piles of debt for something they don't need. Ideally, it would be far better to wait until they could afford it.
To put it another way, going tens of thousands into debt just to get a generic degree is stupid.
Re:All mine were cheap! (Score:4, Insightful)
Re:outrage noted :-) (Score:4, Insightful)
I think you need to consider a time scale. One could have made that same remark re practicalities 100 years ago. But when I look back at the math that was done 100 years ago, I find very little of it unused. Physics is similar. Quantum theory was basically useless when it was developed...until now. Evolution was useless, now we use it to predict the course of flu epidemics.
Science and math form a web, and it is impossible to predict just how those future practicalities correspond to any one particular theory. It isn't even clear how one does that with current practical devices, they rely on so much that went on before in very complicated relationships.
Re:All mine were cheap! (Score:5, Insightful)
The problem is the number of people who don't go to school for those things, but who go because "everyone needs to go to college" and they choose a major like that because they need to choose something. ....
The guy who sits in a cubicle churning out TPS reports a five-year-old could write is automatically elevated over a master CNC machinist and programmer simply because he has a degree and works in an office. There ought to be no shame in taking up a trade like machining or welding; a good machinist, for example, is as valuable to a company as any engineer.
As someone who lives in a Uni town, worked in a machine shop, got some college, and now sits in a cubical (well.. I do not to turn out TPS reports.. thank the FSM); I wholey endorse the parent and agree with what the comment said.
I see tons of people that think college is just a 4-year extension of High School, and the degradation of the K-12 US schooling system (or it seems like it's dumber then when I was in it), means that often HS grads are in fact not qualified for basic jobs.
Re:All mine were cheap! (Score:1, Insightful)
So maybe they were wrong. Or maybe they were just idealistic and didn't have all of the information about the true actions of those people. It's easy to point fingers in hindsight when you have all the facts and it's easy to look a name up on the wiki and see all the horrible things they've done.
Imagine a world where noone was allowed to possess those beliefs and was forced into whatever the government decided was right. It's those kids who dared to question the prevailing authority who are able to step back now and take a broader perspective of the world, and wonder how much of a distorted perspective the "average person" has. It's that education which allows them to question the things that our government is doing, like in the 60s and 70s regarding Vietnam, or something like Iraq.
Re:outrage noted :-) (Score:5, Insightful)
Tell that to someone who majored in medical physics and works at GE.
Tell that to the guys who work down the hall from me who design high performance motors for hybrid and electric vehicles.
Tell that to the mathematician doing model parameter estimation in our software.
You already told *me* - the software guy who uses math on nearly a daily basis.
Tell the business folks who employ these people.
BTW, I believe everyone mentioned here makes 6 figures. So no, there must not be economic value in math and physics.
Maybe you're one of those wall street guys that put the economy in the toilet because they all used the same flawed mathematical model for planning purposes - because they don't have too many math folks, because they have no economic value. Or the MBAs who say people in the US will just outsource and "manage" everything, because none of those things like engineering, design, manufacturing, distribution, etc... are "economically valuable".
Why are mortgages 5% and education loans 8.5%? (Score:5, Insightful)
Because you can't foreclose on someone's education. Next question.
You are the new slaves (Score:1, Insightful)
Because you students are who is needed to pay for the other bailouts. Now go procreate and create us some more slaves.
Answered his own question (Score:1, Insightful)
After bailing out wall street, the banks, and the UAW, why can't "they" bail out students now? Simple. "They" (we) are broke. Actually, we're worse than broke. It'll take a few more years of suffering before we can get back to being broke.
Re:Experience from academia (Score:3, Insightful)
No, the idea behind this argument is that inflation is measured against goods which can keep their costs down through productivity improvements, while college is not such a good, so it should see prices rise faster than inflation. I'm not sure I buy the argument, but it is indeed an argument that tuition prices should rise higher than the inflation rate.
We currently have good evidence that the inflation rate doesn't apply broadly to all types of goods - houses and cars are keeping it down while milk and bread are definitely going up more than the official inflation rate. No clue if college is more or less like milk and eggs, though, but it's pretty clear that you can't simply argue that everything should go up by the same inflation rate.
Re:All mine were cheap! (Score:3, Insightful)
"We've elevated the office job and made skilled trades a thing of contempt."
I agree absolutely. I think it is disgraceful that people hold trades in contempt. There is nothing degrading about being a plumber or an electrician.
Re:All mine were cheap! (Score:3, Insightful)
DUH, Public school was designed to churn out good factory workers. The world moved past the design and we no longer have lots of factories. so now our indoctrination system we call public school is failing.
Charter schools and private schools are picking it up, but very few people get to go to those compared to those that can only afford public school.
I know not ALL are set up badly, but most are. They squash children's free thought, creativity, and focus on things that make you a good worker.
Re:All mine were cheap! (Score:5, Insightful)
Have you been to a US college recently? The one near me is still on a building spree that it has been on at least since I started there, eight years ago (I graduated and found a job in town). They have spent AT LEAST a half a billion dollars since I started paying attention, with the largest chunk being the first 100 million dollar expansion of the stadium to build box seats for rich donors. All this for a school with 30,000 students.
Also, you don't think the housing boom was caused by freely available cheap credit? Hell, while I was still in school, I was able to get a mortgage while I didn't even have a job! The mortgage payment was cheaper than rent!
Re:I wonder why you're not considered credit-worth (Score:3, Insightful)
Your post points to the military a lot. The military is not for everyone. If every kid thought that joining the military was the best thing to do, we'd have more kids coming back in body bags. Would it be good for little Billy to learn discipline? Of course. Would little Billy die? Maybe. Would little Billy die for a cause he don't give a damn about? Probably. Would little Billy be safer simply taking out the damn loan? Definitely. It seems a bit extreme when possible death or physical injury is less of a hazard than having debt.
Just like not every high school student is going to be the next Einstein, not every high school student is going to be a soldier. We're all good at certain things, and we really need to stop trying to make everybody okay at everything.
Re:All mine were cheap! (Score:3, Insightful)
When the richest people make the most money by pushing buttons to move virtual pieces of paper, can you really blame them???
Re:Education should be a national right and pride (Score:1, Insightful)
>Personally, I think a system that makes people work to pay for their education works just fine. It sorts out the those with the skills and dedication to obtain
>an advanced education from those without - the same skills and dedication they will hopefully employ in whatever career that education prepares them for.
No, it does not work fine. If your familly is rich, you do start your working life with a debt of 0 and a risk near 0 too. Poorer have to start with a colossal debt and a very high risk.
The system is biased, flawed, the competition is unfair : the best are not necessary the one receiving the diplomas.
Re:credit-unworthy or just greedy? (Score:2, Insightful)
That's not how it works. "Credit unworthy" people (who are not necessarily unworthy, but risky) are assumed to have an inherent risk in lending to them at all. This is regardless of rate. So if you have people who have a high risk of default regardless of the rate of the loan, then you have to charge a higher rate of interest in order to possibly earn some money.
Now if you have a pool of these risky loans out, the idea is to set the rate high enough that the lender still earns money even after the expected defaults, all the while not making the loan too burdensome that they increase the default rate and start losing money.
Do you really think that lenders haven't thought long and hard about this? If just charging higher rates caused more defaults and thus caused the lenders to lose money, they would never increase the rate. The lenders have done the math on how much they can lend out and at what rates for them to make money. It's up to the individual taking out the loan to decide whether they can shoulder that burden or not.
College Administration=2 time losers (Score:1, Insightful)
Your average college administrator has burned out on teaching and burned out on research, so they went into administration seeking something different, and as a side benefit get double the salary they had before!
Re:credit-unworthy or just greedy? (Score:3, Insightful)
Charging a higher interest rate for "credit-unworthy" people makes it more likely that they'll default, making it a self-fulfilling prophecy
Not every one of them will default. Some of them will pay back the loan at the higher rate which compensates the lenders for the other defaults and the overall higher risk (and students are generally a higher risk). If the interest rates were limited, by law for example, then there would simply be NO student loans to anybody because no private lender will take a risk that doesn't pencil out (i.e. results in negative average returns). Would you rather that there be some student loans, albeit at higher rates, or none at all?
Re:yep, but it's not politically correct (Score:2, Insightful)
But why should the government pay for someone to sit on their a** all day and think abstract thoughts about women's studies? Especially when you have a bazillion people taking that because they can't handle the engineering, computer science, etc.? The only way the government's discounted loans make sense is when they help produce intelligent people who contribute back to society by e.g. building a bridge, starting a business, or inventing the internet.
Re:yep, but it's not politically correct (Score:4, Insightful)
Academia rightfully doesn't give a sh** about weather it's preparing you to shuffle work around or not. That's not it's goal, and I don't think it should be. It's goal is for you to learn things, and perhaps eventually further the field for the few that choose to continue. Learning for learning's sake is their goal and an admirable one.
I hate to break it to you, but I don't give a damn about the goal of learning. I am in college entirely for the hope of a better career. I wouldn't even consider college more than a formality. Knowledge is only valuable when it is useful. If you are a doctor you likely will not benefit any from studying Greek artwork career-wise. If you enjoy it then studying for the purpose of enjoying it might be worth it to you, but it likely won't be of any real use to spend the time and money studying it for no real reason.
Learning, like many things in life, requires the investment of time and money, both of which are finite resources with alternative options for use, therefore learning "for learning's sake" is not always a wise choice. Sometimes it is best to be rationally ignorant if your time and money would better be spent elsewhere.
I find it problematic that academia is much more concerned with idealistic views of learning and jumping through their hoops than with the pragmatic goal of preparing their customers for a career.