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Student loans provided by the Government to the dumb and lazy are a disaster. It is a disaster for the student, for the Government and for society as a whole. One can only wonder how providing unqualified people with money they cannot afford to pay back, to be used for something that they should not be purchasing can end up. For starters - this is identical to subprime mortgages and the housing bubble. #FinancialMeltdown #Recession

Hash tags aside, let's take a look at some reasons why providing subsidized Government loans to the dumb and lazy to attend college is a horrible idea:

  1. It Provides Poor Incentives:
  2. When a dog pees in the house, do its owners throw him a bone? The Government, by providing student loans not based on intelligence or work ethic, is letting the student know that no matter how hard he/she does not work he/she will still be rewarded. Subsidized alcohol and sex (college) is that reward.

  3. It Is Simply Not Affordable:
  4. With an estimated amount of student debt nearing $1T, the weight on student's shoulders is just too much. People would like to make it sound insensitive to reject someone the chance at college. I believe that it is insensitive to put debt on these kids' shoulders that they cannot pay back. Roughly 60% of borrowers are still paying back student debt over the age of 30 with 17% older than 50 (asa).

  5. It Artificially Drives Up Price:
  6. Simple economics here. Providing subsidized student loans artificially drives up demand for college the same way subprime mortgages drove up the price of housing. The price for college is way above its fair market value because of this excess demand and is making tuition unaffordable to the vast majority of people. This is working in a vicious continuous cycle.

What happens when the $1T in debt outstanding in student loans is not able to be paid back? Currently with youth unemployment as high as it is, this is not a possibility but rather inevitability.

Riots in the streets? Chronic unemployment? A skipped generation?

Please share your thoughts.

Disclaimer: I am purposely not talking about the qualified individuals. Smart people, with strong work ethic from a poor family who proved themselves to have potential during high school should definitely be given aid to attend the college of their choosing.

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Comments (99)

  • AMLady's picture

    Actually gov't student loans are somewhat based on work ethic/grades.

    Students are required to pass/not withdrawal from at least 75% of their classes, and for stupid people that seems to be impossible. That said, universities have the option of not funding students whom they believe are not performing.

  • AMLady's picture

    But I will agree the price is artificially driven up due to the easy access to student loan money, and most people will not be responsible enough to pay back their student loans in a more timely manner.

  • GoldPeak's picture

    College has become a four year party funded by taxpayers. We're making an investment that will return pennies on the dollar (if we're lucky).

    I think a huge problem is the sheer number of schools in the US. I know this seems like a strange thing to say (schools=success, right?), but little Johnny has no incentive to work hard to get into a top 50 program if he knows he can graduate high school with no effort, and slide into "Bullshit University of *insert several cardinal directions*"

    I hate to be pessimetic, but I don't see an easy solution to this problem. In a decade or two, we'll have a country full of failures with no marketable skills leeching off the dwindling few that made something of themselves.

  • Augustus's picture

    And why not offer different interest rates to different individuals? Surely the electrical engineering major with a 3.8 at MIT has a better chance of not defaulting than the communications major with a 2.7 from ASU. Why not offer differentiated interest rates dependent on major, GPA, and university?

  • fearless's picture

    I do agree with the response above that loans are based already on merit. However, the standards to obtain a loan doesn't cull out the stupid people. Even some smart but lazy students or hard-working but stupid students aren't able to service their loans.

  • FormerHornetDriver's picture

    Augustus:

    And why not offer different interest rates to different individuals? Surely the electrical engineering major with a 3.8 at MIT has a better chance of not defaulting than the communications major with a 2.7 from ASU. Why not offer differentiated interest rates dependent on major, GPA, and university?

    Good point. If was going to invest in securitized student loans, structured similarly to a MBS, I would definitely want to know the quality of the assets contained therein. You could probably make some good money by 'prestige arbitrage.' What do I mean by that? Well, some idiots will probably pay more for an asset backed by loan payments from an MIT EE major than an NC State EE major, but, assuming the student whose human capital is going to be providing the cash flows to the investor graduated in four years with similar GPAs, the ultimate payout will probably be about the same.

  • fez's picture

    If you're admitted to a top tier institution, you deserve a loan to cover the complete cost of attending that school. Idc if you're lazy or stupid, but you obviously did something right to get accepted. Now if you're going to attend a second or third tier private school, you shouldn't get a loan to covert the FULL cost of your education. We shouldn't reward someone who got into Pepperdine or some shitty local private school with a $150k loan to cover their education cost. Everyone going to public universities should get a student loan (sadly). Yes, even those dumbasses from LSU and Ole Miss...

  • Whgm45's picture

    There's a lot of high handedness in this discussion, not everyone is gifted with above average intelligence, good parents, or a privileged background. Education is the great equalizer, and everyone in the US should be given access to it. Denying funding to poor students looking to go to a local University in middle America is wrong in my opinion. These kids for the most part don't have ambitions of working in finance in NYC, they simply want a college degree to get a white collar job in their local community. I agree students need to be vetted before being given $50k in loans, but not because of the institution they attend (unless it's an online joke of a school).

  • Upper Left Quadrant's picture

    fez:

    If you're admitted to a top tier institution, you deserve a loan to cover the complete cost of attending that school. Idc if you're lazy or stupid, but you obviously did something right to get accepted.

    Hmm I don't think the world/government owes you shit.

    Few points:
    The reason universities are getting away with charging higher tuition is because they are going to get paid regardless. The government covers what you can't put up. If everyone wasn't getting a loan, kids might actually have to think twice about making the investment, which is basically what it is. The universities would also drop prices to make it more affordable.

    The top colleges already offer grants and financial aid to those who really need it. Private loans (as for everything else in this world) should make up the rest for those who can't afford. This would probably be more meritorious with lower rates for certain majors and universities - like it should be.

    "So who lost the hundy?"

  • IlliniProgrammer's picture

    I think we should fund the cost if in-state tuition.

    If you want to spend $60k/year to go to Princeton, fine, but do it with your own damned money, not with federal student loan guarantees.

    I did my undergrad at a state school. I'm now paying cash for a masters degree at a private school. I got lucky in some ways (we have a really strong engineering school in my state), but I went in-state because I could not afford private school. (My parents had money but did not want to spend it).

    The US needs strong state universities (which also happen to be the most efficient way to educate hordes of people), and we need to make it very easy to attend one. If you do well in undergrad, you can go to private school for a PhD or work for a few years and pay cash for a master's degree. If you suck in undergrad, now you are only $60k in debt instead of $200k.

    Also at some point schools no longer serve the public interest with regard to educating people and flattening the Gini curve as charities if they have an endowment of millions of dollars per student. At some point we need to limit the deductibility of donations to universities that have an endowment of say, more than $500k per student. This would force schools like Harvard, Yale, and Princeton to either admit more students or allow other schools to catch up.

  • kinghongkong's picture

    GoldPeak:

    College has become a four year party funded by taxpayers.

    College has become a four year party funded by taxpayers and international students.*

  • pacman007's picture

    This is precisely how the 1%-ers will become the .5%-ers.

    While I agree that some mechanics need to be in place to prevent handing out poor loans, I think everyone deserves a chance to better their life. If your mom is a crack whore and your dad is in the pen for consecutive life terms then I think you deserve some fucking slack. IMO a kid with this background with a 2.5 gpa is way better than a ivy league bound douche with a 3.8 whose had tutors his whole life.

    "Don't quit. Suffer now and live the rest of your life as a Champion" - Muhammad Ali

  • In reply to Upper Left Quadrant
    fez's picture

    cheme-ib:

    Deserve may not have been the right word, but they should be rewarded with a full loan. I would rather give a FULL loan to a kid who is studying political science at at ivy instead of the kid who screwed around in hs and will be majoring in finance at hofstra. I'm 99% sure that the kid at the ivy will not only pay back their loan, but is more likely to contribute to society.

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  • parctribe's picture

    There was a good post a few months ago on zerohedge about some douche canoe who managed to get his student loans discharged from bankruptcy. I always thought that was close to impossible, but apparently a precedent has been set to force the taxpayers to foot the bill for people attending subpar schools with outrageous amounts of debt.
    http://www.zerohedge.com/news/2013-05-28/student-l...

  • Scott Irish's picture

    fez:

    cheme-ib:

    Deserve may not have been the right word, but they should be rewarded with a full loan. I would rather give a FULL loan to a kid who is studying political science at at ivy instead of the kid who screwed around in hs and will be majoring in finance at hofstra. I'm 99% sure that the kid at the ivy will not only pay back their loan, but is more likely to contribute to society.

    Dollars to doughnuts that the Hofstra kid will contribute more to society. Also, why do all of your examples have only two types of people, Ivy Leaguers and dumb/lazy/screwed up etc.?

  • Superlative's picture

    Strong elitist sentiment in this thread. Plenty of intelligent kids with bags of potential go to state schools.

  • moneymogul's picture

    There's zero reason college should cost anywhere near as much as it currently does. Solution? Take the most qualified teachers (their research aside) in the country, help them produce recorded lectures, put the entire course online, and let people test for credit. Can be free or can be for a small fee. Zero reason to let cost be a barrier to entry for the qualified among us.

    I really struggle to understand society sometimes.

    "Be a yardstick of quality. Some people aren't used to an environment where excellence is expected." - Jobs

  • IlliniProgrammer's picture

    Superlative:

    Strong elitist sentiment in this thread. Plenty of intelligent kids with bags of potential go to state schools.

    Bingo. If you live in CA or IL or TX and go to Princeton to study engineering, you might be smart but you're clearly not that wise. Why go to a #6 ranked school for $65k/year when you can go to a #5 or #1 ranked school for $18k/year?

  • IlliniProgrammer's picture

    moneymogul:

    There's zero reason college should cost anywhere near as much as it currently does. Solution? Take the most qualified teachers (their research aside) in the country, help them produce recorded lectures, put the entire course online, and let people test for credit. Can be free or can be for a small fee. Zero reason to let cost be a barrier to entry for the qualified among us.

    I really struggle to understand society sometimes.


    There's a lot of value in the on campus experience. Office hours, student projects, living as an adult with very mild supervision (albeit some) to name a few. When the cost of in-state tuition at most state schools is $4k/semester, arguing that people should stay at home and watch videos is a bit like saying that people can watch yoga videos on YouTube rather than paying for a $10/week class at the community center. Yes, it can be a hardship for some people, but an in-state education still makes sense in most cases for most people. And some of the stronger schools that charge private tuition are also still worth it for the signaling value.

    I think the videos have their place too, but I don't see cost effective, high quality factory style state educations going anywhere.

    I think the more marginal private schools will be hurt by this. (Both for profit and not for profit)

    I think that when state budget problems begin to attenuate in 10 years, the UC system will start getting a lot more funding and I would not be surprised to see USC or UC Berkeley outranking a couple of the weaker Ivies. Why go to the frozen northeast when you can get a higher quality lower cost education in sunny CA?

  • In reply to Superlative
    GoldPeak's picture

    You're missing the point - no one has said anything about state schools (except one poster).

    What I have a problem with, is the number of kids that go to no name private schools that cost $50K+ a year.

    I go to a top 20 U.S. News school in a pretty big city (relatively speaking) and I'm shocked at how many private schools there are around me with bigger student bodies and names that no one 5 miles outside of the city will have heard of.

  • Kiron's picture

    Some of you guys are absolute douches and obviously have never worked for anything in your lives. lliniProgrammer is spot on. And this is coming from someone who attended an expensive West Coast target. If you had your parents pay for any of your college, GFTO.

  • In reply to Kiron
    GoldPeak's picture

    What? How are you not getting this?

    I paid for my school via scholarships, and STUDENT LOANS. I have nothing against student loans. I encourage them!

    I have a problem with students attending expensive private schools that no one has ever heard of, majoring in communications, and graduating with a sub 2.0 GPA.

    These people have no chance of paying back the $50k they were borrowing each year.

  • In reply to GoldPeak
    yeahright's picture

    Retracted. You are an idiot.

    Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."

  • In reply to GoldPeak
    Superlative's picture

    GoldPeak:

    You're missing the point - no one has said anything about state schools (except one poster).

    Really? We've had multiple people in this thread rag on kids who choose to go to places like ASU or SEC schools. People's perceptions of those schools are skewed because those schools have very loud people who make a lot of noise. The average kid going to the average state school probably has a decent head on his shoulders and deserves the opportunity to get an education just as much as anybody else. This isn't fucking China where only the smartest and wealthiest get to go to school... we have plenty of schools here in the U.S. and people use that to level the playing field.

    What I have a problem with, is the number of kids that go to no name private schools that cost $50K+ a year.

    I go to a top 20 U.S. News school in a pretty big city (relatively speaking) and I'm shocked at how many private schools there are around me with bigger student bodies and names that no one 5 miles outside of the city will have heard of.

    [

    To be fair, the kids who choose to go to no-name private schools and go very heavy on student loans are in the minority. Most kids who go to no-name privates like Pepperdine (as someone mentioned earlier) are either very rich to begin with and can afford their education or are on scholarship.

  • Scott Irish's picture

    Keep going GoldPeak, keep going

  • SlikRick's picture

    Kiron:

    Some of you guys are absolute douches and obviously have never worked for anything in your lives. lliniProgrammer is spot on. And this is coming from someone who attended an expensive West Coast target. If you had your parents pay for any of your college, GFTO.

    Ditto. There's been a fair amount of pretentious douche nonsense in this thread. This may shock some of you, but not everyone has private SAT tutors and college counselors in high school. The MAJORITY of high school students in this country have limited to no college guidance. For me, college admissions, school research, SAT / ACT, essays, recommendations, etc., was all 100% through self-study. I was fortunate enough to be driven, but still made some unwise college decisions as a 17 year old in high school. The result is $38K in student debt from a non-target private school, as opposed to staying in community college for two years, transferring to a target in-state public school, and perhaps graduating with zero debt. Of course, there's always a target MBA on my radar. But the point is, you can't criticize 16 to 17 year old high schoolers for wanting to pursue careers in Art History or Humanities at a non-target university. Further, charging different interest rates based on major or quality of school is elitist bullshit and borderline un-American. I'm not saying tax-payers should foot the bill for student loans, but forcing every student to become an engineer or scientist isn't the answer either.

    For me, the answer is financial education and literacy. Teach students the impact of debt and accumulating interest at a young age. Educate high schoolers about the importance of college, your major, and how it impacts your future income and career trajectory. Those of you attending Deerfield or Exeter can't relate to any of this. Step foot on a high school campus with a 30% drop out rate (which is probably good for California), and then you'll see what I mean...

  • fez's picture

    Superlative:

    GoldPeak:

    You're missing the point - no one has said anything about state schools (except one poster).

    Really? We've had multiple people in this thread rag on kids who choose to go to places like ASU or SEC schools. People's perceptions of those schools are skewed because those schools have very loud people who make a lot of noise. The average kid going to the average state school probably has a decent head on his shoulders and deserves the opportunity to get an education just as much as anybody else. This isn't fucking China where only the smartest and wealthiest get to go to school... we have plenty of schools here in the U.S. and people use that to level the playing field.

    What I have a problem with, is the number of kids that go to no name private schools that cost $50K+ a year.

    I go to a top 20 U.S. News school in a pretty big city (relatively speaking) and I'm shocked at how many private schools there are around me with bigger student bodies and names that no one 5 miles outside of the city will have heard of.

    [

    To be fair, the kids who choose to go to no-name state schools and go very heavy on student loans are in the minority. Most kids who go to no-name privates like Pepperdine (as someone mentioned earlier) are either very rich to begin with and can afford their education or are on scholarship.

    Everyone attending a public institution should have their education cost covered. I think we have all agreed on that. What OP is questioning is why would the government give out a $50K/year loan to a kid attending a crappy private school. Take Georgetown for example. Kids who get into G'town are smart, therefore they should be rewarded with a decent loan amount. Within close proximity, you have American, Howard, Hood College (yes Hood College) and Catholic (4 crappy private schools). Why the hell should these kids get a $50k/yr loan when they have public schools like UVA, VT, W&M and George Mason that offer better education at half the price? Yes, they may not have been admitted, but a $50K/yr loan is insane. Imagine this on a national scale... Dude, it's not that hard to understand he has a point.

  • In reply to GoldPeak
    yeahright's picture

    First, no one is graduating with a subpar of 2.0 from a private school considering the typical requirements to not be on probation is 2.0 GPA or above.

    Second, my girlfriend and I attended subpar private schools ranked in the 200s. She majored in communications, I majored in CS. We both have loans of about $60k left to payoff with a lot already paid off from working during school and internship pay. We both graduated with under 3.0 GPAs.

    She now works for the top public relations agency in NYC and I work in MO at a BB. We both will have no issue paying our loans off.

    Yet your argument is individuals who attend subpar expensive private school and get loans, then graduate with subpar gpa's and different degrees can't pay their $50k in loans back? This is untrue and just not the case.

    Also, believe me if either of us had known the decision we made prior to starting undergrad, I would have chosen to go to a state school and pay less while experiencing an easier curriculm. These are 17-18 year old kids making these decisions, often with limited to no guidance.

    Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."

  • SlikRick's picture

    Assuming each Ivy League college has 30K students per grade level, does this mean that only 240K students should be admitted to college every year? Morons...

  • IlliniProgrammer's picture

    My goal here is to help the middle class suburban public high school kid.

    He probably goes to a school with a 80% graduation rate.

    He is probably White or Asian. He probably plays one or two sports, is captain of one of the teams. He is probably good at what he does but isn't a state athlete. He is probably smart, but he doesn't think he is particularly special at anything.

    His parents have enough money to help him pay for college but aren't made of money. Like most families with two working educated parents in their early 50s, his earns $180-$250k, which is too much to benefit from tuition discounts at even HYP.

    This is a kid that needs a good in-state education.

    80% of these kids will go back to middle class lives like their parents, but 20% have a shot at significant wealth, boosting state and federal tax revenue. To be honest, these kids' chances of making it into the 39.6% bracket don't look much different than any ivy leaguer's aside from savvy marketing.

    I think it makes sense for everyone in the 25-39.6% tax brackets to pay an extra half a percent in taxes so more of these kids can get cost-effective, high quality college educations at state schools. State universities can be incentivized to deliver high quality, practical educations by getting 5% of all federal tax revenues from individual income tax paid by their graduates for 10 years following graduation.

    Seriously, I'd pay an extra 2% in taxes to know kids like I was can get an education that will help them compete globally. If we just paid 0.5%, though, that's all it would take.

  • IlliniProgrammer's picture

    fez:

    Everyone attending a public institution should have their education cost covered. I think we have all agreed on that. What OP is questioning is why would the government give out a $50K/year loan to a kid attending a crappy private school. Take Georgetown for example. Kids who get into G'town are smart, therefore they should be rewarded with a decent loan amount. Within close proximity, you have American, Howard, Hood College (yes Hood College) and Catholic (4 crappy private schools). Why the hell should these kids get a $50k/yr loan when they have public schools like UVA, VT, W&M and George Mason that offer better education at half the price? Yes, they may not have been admitted, but a $50K/yr loan is insane. Imagine this on a national scale... Dude, it's not that hard to understand he has a point.


    Why? We all pay the same taxes; we all deserve the same services. And the government shouldn't be in the business of picking private winners and losers.

    If we're going to pay for Georgetown, we should pay for George Washington, too.

    My view is that if you go to a private school, we should allow loan guarantees for 10th most expensive decile of in-state tuitions for public schools. After that, figuring out the rest of the loan should be between you, Georgetown, and the private sector.

    Sorry, but we're all equal under the law, we all pay the same taxes; getting into Georgetown, let alone an actual target like UVA or Berkeley, doesn't entitle you to special treatment.

  • ptverdov's picture

    There are many factors contributing to increased tuition, but subsidized students loans from Sallie Mae is a major one. Others induce qualifying for pell grant. The more the government meddles in Universities, the higher the costs go.

  • Anihilist's picture

    IMHO, I don't really see the government loans as the source of the problem. May create some moral hazards (still screws up your credit if you plan on graduating and not paying back gov't loans), but a lot of the problem stems from how we are educated and brought up in America. College is shoved down high school kids throats by all facets of society and most enroll into university, while having absolutely no clue what they're going to do afterwards, even if they do know what they want to study.

    People demand freedom of speech as a compensation for freedom of thought which they seldom use.

  • In reply to fez
    Superlative's picture

    fez:

    Superlative:
    GoldPeak:

    You're missing the point - no one has said anything about state schools (except one poster).

    Really? We've had multiple people in this thread rag on kids who choose to go to places like ASU or SEC schools. People's perceptions of those schools are skewed because those schools have very loud people who make a lot of noise. The average kid going to the average state school probably has a decent head on his shoulders and deserves the opportunity to get an education just as much as anybody else. This isn't fucking China where only the smartest and wealthiest get to go to school... we have plenty of schools here in the U.S. and people use that to level the playing field.

    What I have a problem with, is the number of kids that go to no name private schools that cost $50K+ a year.

    I go to a top 20 U.S. News school in a pretty big city (relatively speaking) and I'm shocked at how many private schools there are around me with bigger student bodies and names that no one 5 miles outside of the city will have heard of.

    [

    To be fair, the kids who choose to go to no-name state schools and go very heavy on student loans are in the minority. Most kids who go to no-name privates like Pepperdine (as someone mentioned earlier) are either very rich to begin with and can afford their education or are on scholarship.

    Everyone attending a public institution should have their education cost covered. I think we have all agreed on that. What OP is questioning is why would the government give out a $50K/year loan to a kid attending a crappy private school. Take Georgetown for example. Kids who get into G'town are smart, therefore they should be rewarded with a decent loan amount. Within close proximity, you have American, Howard, Hood College (yes Hood College) and Catholic (4 crappy private schools). Why the hell should these kids get a $50k/yr loan when they have public schools like UVA, VT, W&M and George Mason that offer better education at half the price? Yes, they may not have been admitted, but a $50K/yr loan is insane. Imagine this on a national scale... Dude, it's not that hard to understand he has a point.

    Did I ever say I disagree with that?

    OP has only posted once in this thread and nowhere did he say he was talking explicitly about private schools. My comment was directed at the people who took that as reason to go off on the state schools in this country and say that kids who go to state schools are "lesser" than kids who go to MIT to do EE or an Ivy.

    Also, kids who take out $50k/yr loans are in a very, very small minority in this country. The statistic was like 0-3% of college graduates are $100k-$200k in debt from student loans. Here's the source: http://www.asa.org/policy/resources/stats/

  • IlliniProgrammer's picture

    ptverdov:

    There are many factors contributing to increased tuition, but subsidized students loans from Sallie Mae is a major one. Others induce qualifying for pell grant. The more the government meddles in Universities, the higher the costs go.


    That's not really true. The public approach to education- funnel kids into gigantic lecture halls and let them organize their own projects (at least in engineering) and clubs in the evening is actually cheaper and more efficient than the private model.

    The USPS and flagship state schools are the two government institutions that run more effectively and efficiently than the private sector. The USPS allows me to overnight a package at half the cost of FedEx; UC Berkeley produces a higher quality engineer for $90k than Georgetown produces for $250k.

  • Thurnis Haley's picture

    fez:

    If you're admitted to a top tier institution, you deserve a loan to cover the complete cost of attending that school. Idc if you're lazy or stupid, but you obviously did something right to get accepted. Now if you're going to attend a second or third tier private school, you shouldn't get a loan to covert the FULL cost of your education. We shouldn't reward someone who got into Pepperdine or some shitty local private school with a $150k loan to cover their education cost. Everyone going to public universities should get a student loan (sadly). Yes, even those dumbasses from LSU and Ole Miss...

    Yeah those guys from LSU with degrees in petroleum engineering making $100k a year straight out of school after paying like $5k a year for college sure are dumbasses...

  • IlliniProgrammer's picture

    Etiquette for Gentlemen, 1950:

    "Never discuss politics or religion in polite company"

    Etiquette for WSO, 2013:

    "Any discussion about politcs, religion or college, will eventually turn into a flame war."

  • Thurnis Haley's picture

    IlliniProgrammer:

    Etiquette for Gentlemen, 1950:

    "Never discuss politics or religion in polite company"

    Etiquette for WSO, 2013:

    "Any discussion about politcs, religion or college, will eventually turn into a flame war."

    Because WSO is like the only place where its controversial to say that you can live a successful fulfilling life after graduating from a state school.

  • In reply to IlliniProgrammer
    Anihilist's picture

    *immediately

    People demand freedom of speech as a compensation for freedom of thought which they seldom use.

  • Harshman's picture

    this is extremely smart, this notion that everyone should go to college is so off base. If everyone gets a college degree then it becomes meaningless, people who aren't intelligent enough or don't work hard enough go to college get thousands of dollars of debt then blame the government and corporations when their classical literature studies major doesn't get them a job.

  • Harshman's picture

    Student Loans can be used in a good and bad way:

    Bad: my cousin went to an in state school for all four years as an education major and ended up with 50K in debt and making only 30k a year out of school, she needed to make more money to pay back her student loans so she got a masters degree so now she is 70k in debt making 50k a year, she complains about how it is unfair that she has to pay all this back how she should be helped by rich people. I always ask her, was it a secret that teachers only make 30 or 40k a year? did you not do the math of how much your loans would be and how much you would be making? I couldve told her before she started school she would end up in that situation.

    Good: Im taking out large loans and ill graduate at around 60K in debt, but I'm majoring in finance, graduating a year early, and saving as much money as i can, ill end up with a job paying me around 65K and ill have no problem paying my loans back in a relatively timely manner.

    if you take out a loan for a hummanities major thats not very smart, for STEM or a business degree from a legit school theres nothing wrong with it

  • In reply to Harshman
    Anihilist's picture

    So by your logic then, there should be no humanities majors? We should all be STEM and business majors?

    People demand freedom of speech as a compensation for freedom of thought which they seldom use.

  • Take_It_To_The_Bank's picture

    This thread is clueless. Your daddy paid for your education and used his contacts to get you that first internship. We all know it, you're not kidding anybody

  • Superlative's picture

    Bad: my cousin went to an in state school for all four years as an education major and ended up with 50K in debt and making only 30k a year out of school, she needed to make more money to pay back her student loans so she got a masters degree so now she is 70k in debt making 50k a year, she complains about how it is unfair that she has to pay all this back how she should be helped by rich people. I always ask her, was it a secret that teachers only make 30 or 40k a year? did you not do the math of how much your loans would be and how much you would be making? I couldve told her before she started school she would end up in that situation.

    See, that's what's fucked up about student loans. That you can go in-state and still be in deep shit.

  • In reply to Take_It_To_The_Bank
    Anihilist's picture

    Agree. Love how everyone bashes humanities majors as the clueless, lazy, and irresponsible ones who are leeches of the system. God forbid that anyone with a STEM or business major be categorized in with those worthless members of society.

    People demand freedom of speech as a compensation for freedom of thought which they seldom use.

  • In reply to pacman007
    SilvioBerlusconi's picture

    While I think the title of the OP's post is misleading, offensive and oversimplifies a complicated issue, you (along with many other's on this forum) are kind of missing the point.

    If you have a kid who is from a disadvantaged (or even middle class) background, the solution to helping him find a way to improve his situation isn't too saddle him with loads of debt coming out of college. This hurts him and the economy, as he can't contribute as a consumer as he's too busy paying off student loans.

    The fact of the matter is that more degrees have more merit than others in terms of total financial returns. NOTE: I am not saying that degree pedigree (whether or not you went to an ivy or similar) matters; rather it's what you study while in school.

    I am dating a girl who went to a relatively unknown private school and financed said education via loans and grants. She studied structural engineering, got a job at a major contractor, and now makes more per hourly than your average i-banking analyst.

    But she has plenty of friends who went to her school and got degrees in all sorts of mickey mouse disciplines and are now working at Outback Steakhouse as hostesses. To think that these kids should go into college thinking it's okay to finance these overpriced educations with debt is absolutely insane, mainly because of how harmful it is to the kids themselves.

    There needs to be more audit of degree subject matter and study, plain and simple. I am totally for more investment in public education, but we need to be methodical in how we provide loans to students. Kids studying engineering, computer science, and the like have much better career prospects than journalism and cultural studies majors usually, plain and simple.

    ANOTHER NOTE: I am not saying that banking jobs in NYC are the ultimate form of employment, since that seems to be an accusation that a lot of people on this forum are making: there are plenty of quality careers in other areas. Finance isn't needed to break into these fields, but something of equal or more difficulty usually is.

    "Yes. Money has been a little bit tight lately, but at the end of my life, when I'm sitting on my yacht, am I gonna be thinking about how much money I have? No. I'm gonna be thinking about how many friends I have and my children and my comedy albums."

  • IlliniProgrammer's picture

    Anihilist:

    So by your logic then, there should be no humanities majors? We should all be STEM and business majors?

    At the very least, we need to recognize the differences between STEM/Business and the arts.

    Arts majors should get grants; Engineers should get loans. The benefit should be the same, but an Art History major isn't capable of bearing $50k in loans while an engineer is. So the engineer should get a $5k subsidy on the loan interest while the art major should get a $5k grant for school.

    Irony of ironies, some of the best schools for teaching the practical disiciplines (Engineering, CS, Accounting) also charge in-state tuition.

    Bottom line is that we should be fair about education benefits, but we shouldn't make loans that people can't pay back just for the sake of sending them to college. We should just give them a grant instead, and let them figure out how to graduate from NYU as a starving artist without $100k in student loans.

    Artists, certainly teachers, serve an important public purpose. I have no problem giving them a little more net help than engineers. Just so long as we aren't writing loans people can't pay back, and we force them to be pragmatic about how they pursue their passion. If you want to be an artist, great, but can't you go in-state or spend a year or two at a community college? If this is something that really matters to you, you don't need to go to Stanford to get an art degree.

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