Will The Student Loans Bubble Pop?

A WSO user not too long ago wrote a personal, almost poetic piece about his own experience with student debt titled, I Am The Toxic Debt. I can't help but think about the imminent dangers of unscrupulous student loans lending, as many institutions are still being chastised for easy lending which created the housing crash. Is our institutions doing the same thing, lending to students in a lack-luster economy? From Q4 2007 to Q1 2012, student loans have grown from $93 to $452.6 billion, a growth of 332%.

Student loans may be a liability on the consumer balance sheet, but they constitute an asset for Uncle Sam. Just how big? Nearly 35% of the total federal assets, over four times the 8.6% percent for the total mortgages outstanding.

This doesn't include private loans. Estimated total outstanding loans are estimated to be about one trillion dollars. But I get it, human capital and innovation is the driving force of economic growth. In a piece by Bloomberg:

Keep in mind that much of that $1 trillion is "good debt." Most borrowers have manageable loans, and workers with a bachelor's degree earn 84 percent more over their lifetimes on average than those with only a high school diploma. They also face much lower unemployment rates. So a college loan remains a very smart investment for many people.

Do you think student loans could be the next bubble? Is congress doing enough to contain the problem? Or do you think the level of debt will prove to be a worthy investment into the US economy?

Comments (417)

Jun 26, 2012

Student loans cannot be discharged in bankruptcy.

So the answer to your question is no, it won't (can't) pop.

Jun 26, 2012
mdk6c:

Student loans cannot be discharged in bankruptcy.

So the answer to your question is no, it won't (can't) pop.

That's not true at all. The bubble will pop one day. We cannot substain what we are currently doing with student loans. Just because a loan cannot be discharged, doesn't mean that the person has to pay on it. And I know a handful who aren't paying on them now.

Jun 26, 2012
Nobama88:

That's not true at all. The bubble will pop one day. We cannot substain what we are currently doing with student loans. Just because a loan cannot be discharged, doesn't mean that the person has to pay on it. And I know a handful who aren't paying on them now.

The government (which guarantees student loan ABSs) has all sorts of clever ways to get your friends to pay up (like garnishing their wages). So, even if they miss a few payments in the beginning, they will still be on the hook for the rest of their lives. There will never be the epidemic writedowns to student loan ABSs that there were to privately issued MBSs a few years ago.

Jun 26, 2012

Why are student loans so hard to discharge?

Jun 26, 2012
UFOinsider:

Why are student loans so hard to discharge?

Because some of our politicians believe education is a God give right and that everyone should be able to get a loan for college, regardless of a persons grades / ability / income / test scores / maturity, etc.

In order to allow a plethora of people to attend college, they had to open the flood gates for student loans. Banks wouldn't make loans to people who didnt have the ability / income / scores / correct major / maturity without acceptable collateral. Not being able to discharge loans in bankruptcy allows banks to make these loans without any underwriting done. Private or Public loans, dont matter.. same thing.

Jun 27, 2012
Nobama88:
UFOinsider:

Why are student loans so hard to discharge?

Because some of our politicians believe education is a God give right and that everyone should be able to get a loan for college, regardless of a persons grades / ability / income / test scores / maturity, etc.

In order to allow a plethora of people to attend college, they had to open the flood gates for student loans. Banks wouldn't make loans to people who didnt have the ability / income / scores / correct major / maturity without acceptable collateral. Not being able to discharge loans in bankruptcy allows banks to make these loans without any underwriting done. Private or Public loans, dont matter.. same thing.

Because the government does such a good job when it comes to modifying underwriting standards, right? They did such a good job with the housing market.

I can only say that the effects of the student loan bubble on this generation will be profound. If you are an engineer, going to Wall St, becoming a nurse, etc. the loans are no big deal. But how many of your classmates got a decent paying job like the above?

I don't think it will pop; the government seems hell-bent on subsidizing loans further. We are still at the point where a complete bailout would be doable. The government would be the only thing that could pop the bubble, by allowing student loans to be dischargeable.

More profoundly, I think we will see the rise of a college educated working class. You know those reddit people who complain about 80k of debt for their sociology degrees? Those are its new members. These people will barely be able to keep up with the minimum payments, then fall further behind when they default. Servicing this debt will likely keep them in the lower middle class for a majority of their careers.

Jun 26, 2012

not sure if this is a stupid question, but can student loans be sliced and diced into CDOs?

Jun 26, 2012
Moneyball:

not sure if this is a stupid question, but can student loans be sliced and diced into CDOs?

Sure, want to buy some?

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Jun 27, 2012

Someone mentioned how you cannot discharge student loans in bankruptcy.

Aside from that will you see an implosion like you did in subprime? No, because a majority of student loans are packaged into government guaranteed student loan ABS called FFELP loans where they are 97% guaranteed by the US government.

Private loans on the other hand which aren't backed by the government... I've seen some bonds that have up to 20% of the loans in some sort of default or delinquency. If they become dischargeable, then a majority of these bonds will be practically worthless

Attended a conference not too long ago about this, and was told that 44% of defaults are from students who attend for profit colleges (University of Phoenix, DeVry, etc) For them I see absolutely no good coming out of the debt they take on. Even for some private colleges unless it's a top 30 school, the debt is questionable.

And I'm sure this highly indebted generation I'm sure is just dying to take out just as big of loans with Fannie/Freddie several years down the line right? If anything I'm almost curious where the next generation of homebuyers will be to buy houses at current prices

Jun 27, 2012

I'm expecting some sort of radical change in the way college is priced in the next two decades. The bubble isn't in student loans, it's in the cost of tuition, whether private or public. Student loans are a big driver of this.

Jun 27, 2012
GoodBread:

I'm expecting some sort of radical change in the way college is priced in the next two decades. The bubble isn't in student loans, it's in the cost of tuition, whether private or public. Student loans are a big driver of this.

Interesting point. My father runs a major university and he has been saying for the last five years or so that higher education is the next bubble to pop. However, he feels most of the pain will be felt by university faculties of the future. What does this imply? Well, when the currently tenured full professors in subjects like English and Lit-type subjects retire, they will be replaced by non-tenure track adjunct instructors to teach students basic composition and writing skills. They will be hired at a fraction of the cost and without the pompous, entitled attitude that comes with most academics. Professors in totally worthless subjects (i.e. anything with the word "Studies" in it) will simply not be replaced at all.

Jun 27, 2012

So the question is how do we profit from this? The implication seems to be that young people won't be able to buy a house as they wont be able to save up money for a deposit. I guess this would suggest that there will be a strong demand for affordable rental property? My guess is that if your parents weren't able to help you through college they won't be able to help you with a deposit. Any thoughts on this?

Jun 27, 2012

Thread hijack: best ways to get rid of student debt? My current plan is to just ball out after grad school and pay that shit down or maybe just join the national guard / army (and I've always wanted to anyway). Other ways to knock that shit off quickly? I hate being in debt.

Jun 27, 2012

I think the SLABS "bubble" is 33% human interest, 33% hype, and 33% reality.

First - Human Interest: Post-secondary education is seen by many as a birthright, and people are going to get worked up when tons of kids, who were told to "pursue their dreams" with no regrets, graduate swimming in debt. It makes for good news, and more importantly it challenges the basic assumptions of the American Dream, socioeconomic mobility, etc. I.e., these poor kids deserve whatever educational advancement they can attain, and Student Loan lenders are taking advantage of them. Similar to the pathos with the housing bubble - I'm not saying I don't sympathize with borrowers, but they are not guiltless just because they were naive.

Second - Hype: The point of the FFELP backing is to put a floor on losses, enhancing creditworthiness (and subsequent SLABS rating), thereby facilitating a much larger market and subsidizing availability to ultimate borrowers. FFELP-backed deals comprise the vast majority of issuance, at least 80% last time I checked. Given this proportion, the 97% Uncle Sam guarantee effectively takes tail risk out of the picture. Barring the Federal Government cutting FFELP loose and abandoning the wraps, losses are a known quantity. This isn't to say that SLABS are a slam-dunk for investors - the guarantees are well priced in - but the market can't really implode.

Third - Reality: At the end of the day, there are probably too many loans which won't be paid, or their repayment will come at material personal and social cost. We aren't quite facing a generation of art-history majors with 50k in 6.8% loans, but we do need to rectify our attitudes towards university education (both among parents and university officials), encourage responsible decisions among youth, and make financial literacy a god-dammed national priority. How this didn't happen post-08 is beyond me.

Jun 27, 2012

Lots of good input on this thread so far, lets keep this going!

Here to learn and hopefully pass on some knowledge as well. SB if I helped.

Jun 27, 2012

College tuition is rising so quickly because states are cutting back on education funding. It is not because costs are spiralling out of control.

Jun 27, 2012

What this all comes down to is that many people are accumulating student loan debt without acquiring skills valuable enough to justify the expenditure. Racking up $200k in student loan debt in order to study some arcane course of study with little real world application.

Let's face it, going to NC State and getting a degree in Mech E has a hell of a lot more value added than an Art History degree from an Ivy. A friend of mine's younger brother and younger sister are respectively in those same two positions two and three years out of college. Guess who has an $80k a year job working 9-5 and guess who works as a receptionist?

Everyone involved (students, parents, and university folks) need to pay more due dilligence to make sure that the skills kids acquire for their huge outlays translate are justified by resulting in gainful employment.

Jun 27, 2012

Do you need good credit to get a student loan?

The Four E's of investment
"The greatest Enemies of the Equity investor are Expenses and Emotions."- Warren Buffet

Jun 27, 2012

For kmess024, I've heard that for private education colleges (DeVry, Apollo etc) they have been very unscrupulous in the past few years. it's incredibly easy. they practically push it on you, because the government pays the college, while saddling the students with debt. they've introduced regulations that's supposed to away this kind of behavior. not sure about state colleges though.

Jun 27, 2012

Thread hijack: best ways to get rid of student debt? My current plan is to just ball out after grad school and pay that shit down or maybe just join the national guard / army (and I've always wanted to anyway). Other ways to knock that shit off quickly? I hate being in debt.

Easy 9 step program for getting out of student debt:

Step 1: Apply for credit card.
Step 2: Repeat step 1 until the aggregate credit limit on the various credit cards is equal to that of your total student loan balance.
Step 3: Transfer balances of your student loans onto the various credit cards.
Step 4: Make minimum payments on credit cards for a few months.
Step 5: Stop payments on credit cards. Claim some sort of hardship.
Step 6: Find the finest lawyer $350 can get you in the yellow pages.
Step 7: Use lawyer from step 6 to declare chapter 7 bankruptcy.
Step 8: If step 7 is successful, you are now debt free. Congratulations! You may now stop the 9 step program. If not successful, continue onto step 9.
Step 9: You are going to jail for fraud. Make sure to keep your butthole tight at night.

May 30, 2013
Not_Quite_So:

Honestly, I wish all students whould just default on all those scammy predatory loans and send a message...

I'ved wondered about this as well. Theoretically, they pose every bit as much of a systemic risk as the banks collapsing. I'm wondering if things get too bad in the job market whether the gov't will act in the name of self preservation?

May 31, 2013
UFOinsider:
Not_Quite_So:

Honestly, I wish all students whould just default on all those scammy predatory loans and send a message...

I'ved wondered about this as well. Theoretically, they pose every bit as much of a systemic risk as the banks collapsing. I'm wondering if things get too bad in the job market whether the gov't will act in the name of self preservation?

I'm working on a comprehensive piece on this exact topic. I'll share it here when it's ready, hopefully today.

May 31, 2013

this is irresponsibility personified. i would never trust someone who borrows money and fails to repay it. If you can't formulate a plan for something as fundamental as a loan agreement and subsequent repayment in future years, then there are significantly larger problems in play here.

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May 31, 2013

Welcome to the future.

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May 31, 2013

Isn't it your fault millennials don't have jobs? I saw a bunch of your companies empty binders getting thrown out the other day at my office... and my dad says you fucked up his 401k

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May 31, 2013

i recently met a 32 y/o making $32k/year working in a museum and he has $100k in student loan debts which are starting to bury him. He was looking for an collateralized loan.

May 31, 2013

Delete

May 31, 2013

I've made it a personal goal to not open the comment section for anything that is public on facebook. The dumbest, loudest voice is rewarded the most. Don't waste your time trying to understand or argue with them.

On topic though, as an Australian, I can confirm that having a debt-free education system (or close to it) is quite inefficient.

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May 31, 2013
YoungHoe:

On topic though, as an Australian, I can confirm that having a debt-free education system (or close to it) is quite inefficient.

Could you expand on this? As an American, I'm not familiar with your system. How does it work and why is it inefficient?

May 31, 2013

That doesn't piss me off. Guaranteeing those lenders won't lose money, and the ensuing predatory lending that takes place pisses me off.

May 31, 2013

Debt has been around for millenia. And so have people defaulting on their debts.

May 31, 2013

obviously, but this is quite different wouldn't you say? An incoming student (and their parents), should know what they're getting into. Yes there should be more awareness spread about the FULL cost of taking out a loan to this extent, the cost/benefit analysis, etc etc. And obviously a lot more should be done to protect people from predator lending.

I'll respond to your other comment in a little bit, you raise a good point

What is the answer to 99 out of 100 questions?

May 31, 2013
David Aames:

DON'T TAKE OUT THE DEBT IF YOU CAN'T PAY IT BACK*, ESPECIALLY IF YOU'RE TAKING OUT DEBT TO STUDY PHILOSOPHY AT A LIBERAL ARTS SCHOOL (or any school for that matter).

Just testing how far you feel responsibility goes - would you be fine with piercing the corporate veil and making shareholders responsible for the unpaid debts of a bankrupt company? Or, say, removing the ability of borrowers to go into bankruptcy?

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Best Response
May 31, 2013
SSits:

David Aames:DON'T TAKE OUT THE DEBT IF YOU CAN'T PAY IT BACK*, ESPECIALLY IF YOU'RE TAKING OUT DEBT TO STUDY PHILOSOPHY AT A LIBERAL ARTS SCHOOL (or any school for that matter).

Just testing how far you feel responsibility goes - would you be fine with piercing the corporate veil and making shareholders responsible for the unpaid debts of a bankrupt company? Or, say, removing the ability of borrowers to go into bankruptcy?

This is the biggest issue that I have with student loans. Every other type of debt is forgivable through negotiations or bankruptcy except for student loans. For all of the piss and vinegar on this board about student loans, why isn't it the same with corporate/commercial debt, personal debt, commercial and residential mortgages, etc? I know student loans contain the language in the loan docs but it doesn't make sense to me why there's one type of debt that is not dismissible and it's the debt that's entered into at the youngest age that most people enter into debt. And the govt backing of the debt argument doesn't work for me any longer because our govt bailed out an implicit guarantee and turned it into an implicit guarantee with the agency bailouts.

When we structure funds or holding companies it's easy to go bk in one LLC and not have it affect the mother ship even though there may be ample funds to repay lenders, or an individual can go 13 and get rid of mortgages and credit cards but a student loan sticks with you forever. I know how it works legally, but it just kind of bullshit.

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May 31, 2013

Haha, this blame the victim stuff on student loans makes me laugh. You can't drink at 18, but you can decide to go to a 40k a year school to study your "passion" because your former-hippy burnout baby boomer parent won't say no to you.

Think for a second how stupid you were in high school, and then realize that you're probably well above average. I think the parent's of these kids still aren't getting enough heat. What high school student can possibly conceptualize what paying back $1k a month in student loans is actually like?

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May 31, 2013

as true as this is, I guarantee some of the high schoolers on WSO would make a 3 statement model with variables for exit opps, prestige, and job prospects and make their decision based upon that.

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May 31, 2013
coreytrevor:

Haha, this blame the victim stuff on student loans makes me laugh. You can't drink at 18, but you can decide to go to a 40k a year school to study your "passion" because your former-hippy burnout baby boomer parent won't say no to you.

Think for a second how stupid you were in high school, and then realize that you're probably well above average. I think the parent's of these kids still aren't getting enough heat. What high school student can possibly conceptualize what paying back $1k a month in student loans is actually like?

Stupid or not, people need to be held responsible for their actions and live with the consequences of their decisions.

There are plenty of high school seniors who are too stupid to realize they need to focus more on education in high school instead of partying and sports, and now their career opportunities are limited. Should we give them a second chance since they didn't know better? Or how about the senior who was too stupid to use protection and got his girlfriend pregnant? Or the senior who made the stupid decision to drink and drive and got arrested? Should they all get a pass because they were too young and stupid to know better? Should we just punish the parents?

We all live with our decisions the same as the guy who took out a $60k loan to get a British Literature degree and now works at Sam's club. If you are an adult who is smart enough to graduate high school and get accepted into college, then you are smart enough to google search "career prospects" or "average salary" for the major you are choosing. Blaming it on parents or stupidity just contributes to the entitlement problem.

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May 31, 2013

@coreytrevor Very good point. Also I want to hear a response to SSits inquiry

May 31, 2013

Predatory lending? By whom? The government has gobbled up the entire industry. So if you are blaming predatory lenders you have to blame the government. Sure schools that lend directly and private lenders exist, but if you are too stupid to even look into alternatives you are too stupid to be in a junior college.

It's really that simple, I'm ashamed to say that a good chunk of the people in my generation are worthless idealists that couldn't philosophize themselves out of a room with no walls.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

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May 31, 2013
heister:

Predatory lending? By whom? The government has gobbled up the entire industry. So if you are blaming predatory lenders you have to blame the government. Sure schools that lend directly and private lenders exist, but if you are too stupid to even look into alternatives you are too stupid to be in a junior college.

It's really that simple, I'm ashamed to say that a good chunk of the people in my generation are worthless idealists that couldn't philosophize themselves out of a room with no walls.

High school seniors ARE that stupid though. I don't think the government should be held accountable for that, these kids are still under the ward of their parents first and foremost.

May 31, 2013

Our society is the boiling frog--slowly but surely entitlement, coveting, and envy are being written into our cultural DNA. After a few more generations, every need and want will become an entitlement, an entitlement that will be paid for by those who "unfairly" became financially successful. Our nation's cultural evolution is pretty sad in some respects.

May 31, 2013
Virginia Tech 4ever:

Our society is the boiling frog--slowly but surely entitlement, coveting, and envy our being written into our cultural DNA. After a few more generations, every need and want will become an entitlement, an entitlement that will be paid for by those who "unfairly" became financially successful. Our nation's cultural evolution is pretty sad in some respects.

Trump 4 President

May 31, 2013

The entitlement I see on this forum from kids born on third base is sickening.

Almost every single kid I know that went to a target had wealthy parents, and those born poor were also born brilliant; it's not like everyone starts at zero and then the hardest working inevitably win.

I was lucky to be born with a proclivity for math (among other lucky breaks) which turned out to be very profitable... Many of my friends with language skills were sold on the idea that "education is always a good investment" and pressured into taking loans they couldn't understand from predatory institutions - they lacked the natural abilities and informed role models to succeed in our society.

I don't apologize for my own success, but I also recognize that fate largely determines success.

FYI you're a douchebag. Grow up.

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May 31, 2013

Lol ... be madder at the world

May 31, 2013

"Many of my friends with language skills were sold on the idea that "education is always a good investment" and pressured into taking loans they couldn't understand from predatory institutions".

OP's may be lacking in understanding but I still take great issue with a couple points in the sentence: 1) "being sold" on a bad idea doesn't free of responsibility for your choices 2) If you're friends had such great language skills, I have trouble believing 'they couldn't understand' a student loan. As far as complexity goes, student loans are well within the 'simple' bucket.

TLDR; fate does largely determine success; however, claiming that fate largely determines whether you will take out debt for an unprofitable education seems like a stretch to me.

May 31, 2013

The more I read about student debt the more excited I get at the prospect of Securitzing and packaging it off based on where you graduated from and what your current/projected employment/salary will be. This will form the tranches.

this will be the next CMBS boom.

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May 31, 2013

Always bring this up in conversation. I think it would be interesting if the loans were underwritten based upon some metrics like highschool GPA, choice of major, school etc...

May 31, 2013

Well, I for one think that education should be free. We live in 2015...a College diploma is the new HS diploma, and it's been like that for the last 10-15 years.
A more educated population will benefit any country, and whatever fiscal losses a "free" education will bring, I'm sure will be repaid down the line by innovation, less crime, etc.

I'm no fan of unwarranted entitlement, but it's even worse how some peoples head will spin at the mere thought of others getting something "for free".

May 31, 2013

If the college degree is the new high school degree then we should do away with college because it has no benefit to anyone.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

May 31, 2013
tackytech:

Well, I for one think that education should be free. We live in 2015...a College diploma is the new HS diploma, and it's been like that for the last 10-15 years.A more educated population will benefit any country, and whatever fiscal losses a "free" education will bring, I'm sure will be repaid down the line by innovation, less crime, etc.

I'm no fan of unwarranted entitlement, but it's even worse how some peoples head will spin at the mere thought of others getting something "for free".

Nothing is free.

May 31, 2013

If college was free, it'd be as effective as HS education. So........not effective. You can't get something good for free.

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May 31, 2013

If college was free, it'd be as effective as HS education. So........not effective. You can't get something good for free.

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May 31, 2013

Do you think that 'College being the new HS' is indicative that the public HS system is effective / the best model? Also, since ~70% of HS graduates in the US currently matriculate to College, do you think that the remaining 30% aren't attending due to cost or lack of credentials?

May 31, 2013

I can tell you that my philosophy degree is more applicable at my current job than my crap econ degree which was in large part a waste of time.

I would say that what you major in is not as important as how resourceful you are afterwards.

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May 31, 2013

This is again a great example of why the government should't get involved in private markets. While the undergrad borrowing limit is fairly low, there's not cap on graduate school and this is where things get really fucked up. Current program has everyone getting loans at the same rate, irrespective of program / school attended, financial prospect, etc which enables students to overpay for degrees with poor ROI and had a significant upward impact on tuition, especially at lower ranked school. A Harvard law school student shouldn't pay the same tuition and get the same loan as someone attending a bottom tier private law school, yet this is what is happening. No lender in their right mind would lend to a significant portion of students getting federal loans. If the government got out of student lending, a pretty significant number of for profit institutions.

Private lending have become extremely competitive though for "high quality" students and private options are now significantly better than federal loan (I am a M7 2014 MBA grad and currently paying ~3.0% on an fully unsecured 100K loan). unfortunately, this means bad news for taxpayers.....

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May 31, 2013

We live in a new financial enviornment, the biggest problem I see now is people are going into this game as if it was 1970 and tuition was $500. People are doing a poor job adjusting, especially students because they have been told how to do things a certain way based off a time period that no longer applies. Just my thoughts on what I see.

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May 31, 2013
Banquero:

We live in a new financial enviornment, the biggest problem I see now is people are going into this game as if it was 1970 and tuition was $500. People are doing a poor job adjusting, especially students because they have been told how to do things a certain way based off a time period that no longer applies. Just my thoughts on what I see.

This is really the crux of the matter: the financial bonanza of student debt has made colleges much more expensive for the students especially with respect to the inflation of everything else. It has added a layer of admin pukes/unnecessary facilities to colleges to convince more people to go etc.

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May 31, 2013

I'm going to be candid.

If you take out more than 60K in student loans without a plan to pay them off then you literally do not deserve to live the good life. Even more than that you hear about people with 30K in loans (governmental limit for dependent stafford loan) complaining about their inability to pay off their loan. That's bullshit.

30-50K in loans with the extended stafford loan program will be at least $200 to up to $400 in a loan payment.

I hired laborer's with no skills other than work hard, for $13 an hour an overtime.
With 60 hours a week (lets assume no overtime) that's over $600 a week post tax.
Even the high end, $400 a month, you're still left with 2K a month to spend.

Not good or great money, but enough for a place to live (even better with roommates) the basic bills and going out money a couple times a month. People bitch because they have to pay back what they borrowed and can't live the traditional suburban life right out of college if they didn't work for it.

People don't have an ounce of grit in them, and have entitlement greater than I have ever seen in this day and age. I think the cost of education should go up a bit more, or have requirements of a specific GPA to continue studying with federal money. But too bad its a 'right' of the people.

"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller.

"Live fast, die hard. Leave a good looking body." - Navy SEAL

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May 31, 2013

It's no coincidence that government involvement in education and guaranteed federal loans have led to college tuition rates going through the roof. Too bad the majority of students are too dumb to understand the root causes of college prices and only want the debt forgiven or want other people to pay for it through higher tax rates. I'm currently in college at a four-year, in-state, public university and chose to attend because it was more economically feasible than going to a higher ranked, private college. My parents make decent money, but not enough to pay for my college and not enough to receive any federal grants for my education.

I chose a major in finance because it will allow me to earn money while doing something I love. I also love to read history in my spare time, but that doesn't mean I should have majored in history. If one enjoys to paint, write, act, etc. then do that shit in your spare time, but do not complain when you spend 100k on a degree you could have done as a post-graduation hobby or learned through Wikipedia for free.

I'm prepared to work many hours in order to pay off loans and I am fine with living in a shit hole apartment until I do so. The same people who complain about being in tremendous amount of debt will also live beyond their means while earning a salary half (or more than half) of what most people on this board make out of college. Some people should work first, skip college outright, travel, pick up a trade, etc. instead of going into outrageous debt for a worthless liberal arts degree. They only have themselves to blame... and yes, I'll have fries with that.

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May 31, 2013

@GuyFawkes agreed. The biggest problem with increasing tuition prices is on what the money is being spent on. Countless admins, deans, facilities, renovations etc...as you said.

IMO securitize student loans by the school. No more government loans. Each student has 20 years to pay back loans at 15% salary rate. If loans aren't paid back, then the school is in default. Seize their assets and close it down. Only universities that provide economic value will survive.

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May 31, 2013

Super ironic considering your forum handle.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

May 31, 2013

Another thought is that high school students aren't necessarily stupid, but they are more susceptible to social and peer pressure.

Having been a high school student myself not too long ago, I recall that my college decision was a mostly solely based know what my parents and peers though; my parents said I needed to attend a high ranking school of else I'd just be wasting my time, and my group of friends back then all thought the same thing; many even dismissing or state school to be garbage when it wasn't; sure it wasn't an Ivy but still had a decent business program. Ultimately I chose to attend the highest-ranking out of all the schools I got into, and I was also lucky enough to have a scholarship. But if I didn't I probably still would've chosen to go even if it meant downing in debt, because that's what was ingrained into my mind. In the end it seems to be just another case of as you mature, your perspective on everything expands, but I don't think it's necessarily right to the blame on high school students who probably couldn't know better.

And don't forget that higher education is a profit-driven industry in this country.

I don't know about the rest of you, but if I met an undergrad who told me he got into HYPS but chose to attend some no-name school because of financial reasons (or maybe even family reasons), I would never count that against him. In fact I'd [at least initially] view him more favorably than the kid who choose an ivy probably only because his parents are rich.

Array

May 31, 2013

Did I run over your dog or something? You seriously went to all my recent posts to MS me? For what?

May 31, 2013

For the most part you are all arguing the same side. Should students have access to recourse? Yes, however it should be the most difficult of all types of debt to discharge.

The media attention we are seeing now is that some institutions that were so shady someone with an IQ just above that of a dog should have been able to tell that a 100k degree for a dental hygienist job should be the biggest fucking red flag in the world. But hey since they advertised on daytime television to all of the unemployed losers out there they had a huge lazy and stupid audience to tap into.

But this completely ignores the real problem of kids taking 6 years to graduate, taking out loans for school, housing, food, trips, etc. Or those who spent 3 years in school and then dropped out and became a bartender, although any bartender good should be making more than some shitty entry level job holder does.

When you really get down to it of the total college population, about 20% of those people shouldn't even be in college because they can't make even mediocre decisions let alone good decisions. If we want to fix this problem we have to attack it from all sides. With things such as minimum GPA level for bankruptcy considerations, closing of for profit colleges that can't show a minimum value add for their graduates and former students. Educating the public that a lot of those specialty programs that they see advertised on television for medical assistants, mechanics, and other roles can be done at the local junior college. Hell I took a motorcycle engine repair class at a junior college because I wanted to restore an old bike I have. It's not that hard to figure this information out people just have to not be as lazy as they are.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

May 31, 2013
heister:

Yes, however it should be the most difficult of all types of debt to discharge.

I'm not clear why it should be harder to discharge then, say, an LBO debt package by a PE fund. For an LBO deal, the PE fund knows better than most the risks its taking etc. So would your idea of responsibility for borrowing extend to giving lenders recourse through the corporate veil of limited liability to both the PE fund (rather than just the portfolio company debtor) and also the LPs?

May 31, 2013

Who the hell thought it would be a good idea to give an 18 year old 200k to spend on a useless degree.

May 31, 2013

I completed my MBA a few years out of the Army and realized how much had changed since I finished undergrad 10+ year ago. These 'institutes of higher learning' have been transformed into debt factories full stop. The state school that I attended in NY has nearly doubled its tuition rate since 2003. With 60% GI bill, personal savings, 529 plan, and merit scholarship I still had to take out a few loans, not that much in comparison to many, to complete the MBA program with an all in final cost of ~120k. I have been on track with getting my loans squared away and still cannot understand how funding is being dispensed in this manner. Attending any academic programs without securing multiple sources of funding (I worked and had an ROTC scholarship in undergrad) should be a non-starter not to mention the massive distortion that the Federal government has caused in the market.

May 31, 2013

The solution is actually pretty simple, cut all federal loan programs and subsidies to lenders. Basically, if lenders have any risk in the equation they won't be lending 100k to an 18 year old art student majoring in pottery. Most people won't be able to afford school, and schools won't be able to milk students for every penny.

The way it is now, colleges basically put the price tag to the point where amortizing the sticker price equals what your average increased earnings would be over the lifetime of your career. And they do so on guaranteed government loans, what a scam.

That will never happen, but I think the next generation is going to be looking at the return on degree metrics. Times have changed.

May 31, 2013
ArcherVice:

The solution is actually pretty simple, cut all federal loan programs and subsidies to lenders. Basically, if lenders have any risk in the equation they won't be lending 100k to an 18 year old art student majoring in pottery. Most people won't be able to afford school, and schools won't be able to milk students for every penny.

The way it is now, colleges basically put the price tag to the point where amortizing the sticker price equals what your average increased earnings would be over the lifetime of your career. And they do so on guaranteed government loans, what a scam.

That will never happen, but I think the next generation is going to be looking at the return on degree metrics. Times have changed.

Exactly. And the group that profits from it the most are the colleges themselves and more specifically the administration. They're non-profits with a massive pricing power advantage and they get their customers to take out non-dischargeable, federally backed loans. There's no other debt that you can't discharge in a bankruptcy except for student loans. Tuition rates have risen at 7% annually on average for the last 30 years and the cost that has risen the fastest by far at colleges is in administration. Not professors, facilities, technology or something that could benefit the students. So the people who set the price and budget also are the fastest growing part of the organizations. And with the proliferation of technology and increased productivity, shouldn't administrative costs actually decrease?

I'd like to think things will change but who is going to be the first year(s) of people to take a stand?

May 31, 2013

Agreed in part, my first steps:

All while the following steps are being taken, slow down the amount of loans available through the federal government.

1) Strengthen the secondary school system so time in college can be shorter.
2) Immediately eliminate loans for majors that have no realistic job opportunity.
3) Prioritize loans to go to STEM major, then Business, and then Liberal Arts and Sciences.
4) Eliminate guaranteed loans for everyone and have a stronger application process.
5) Use the credit card limit system for student loans i.e based on one's credit, school, major, and etc; they cannot have more that $xx,xxx in loans at any point. Absolute limit of $60k, adjusting each year for inflation until the government is entirely out of the loan business.
6) Eliminate the college degree requirement for a lower jobs that have the requirement. I do not see why a manager at a local grocery store needs a degree.
7) Allow for the garnishment of wages for student loans because God knows there are people buying cars way out of their price range and then not being able to pay for their student loans
8) Get rid of some of the lucrative loan forgiveness programs.

Ultimately, I would like to see the federal government get out of the student loan business entirely and allow private banks to make the loans on their own risk analysis.

May 31, 2013
ArcherVice:

The solution is actually pretty simple, cut all federal loan programs and subsidies to lenders. Basically, if lenders have any risk in the equation they won't be lending 100k to an 18 year old art student majoring in pottery. Most people won't be able to afford school, and schools won't be able to milk students for every penny.

The way it is now, colleges basically put the price tag to the point where amortizing the sticker price equals what your average increased earnings would be over the lifetime of your career. And they do so on guaranteed government loans, what a scam.

That will never happen, but I think the next generation is going to be looking at the return on degree metrics. Times have changed.

you aren't wrong but that strongly favors the wealthy and good luck ever seeing that practiced. I think if colleges just started posting accurate employment/gradschool statistics, that 18 year old art student might reconsider his/her chances.

May 31, 2013

Get rid of bullshit classes making kids "well rounded." I am fortunate to be on scholarship at my non-target, but I hate taking liberal arts classes, when if they were eliminated, I could be graduating in a couple years and entering FT. Opportunity cost = $50,000 a semester, or about $10,000 a class. Plus, the experience I am not gaining. For the poor souls paying tuition as well...God help them.

"Everyone has a plan until they get punched in the face."

May 31, 2013

I studied in Europe before transferring here. We have 3year programs withouth the BS fluff american schools have such as First Year Seminars and Writing classes and stupid classes that are extensions of high school classes. I'm sorry, why do I need to know more history, biology or some random arts class? The way I look at it, it is just an excuse to keep kids in school for longer = + $$. Freshman year where I was, my classes were the regular business 200 and 300s you see here straight off the bat. Unfortunately the job market is nothing compared to the american one...

Either way, we should learn more from European schools regarding the academic program and tuitions costs (in this case Scandinavian ones, where until 2009 education was free for everyone, Currently they only offer it to EU citizens)

May 31, 2013

I studied in Germany for a year and i couldnt agree more with you. I do think at least for the Germans, that the way they split up education in high school also has a lot to do with the success.

For those who dont know they split high school/middle school into essentially 3 groups and based on that you can pretty much plan on doing certain jobs. If you like fixing cars and dont want to do geometry then when you take the placement tests that will show and theyll steer you to a vocational program that better suits you rather than trying to force classes taht you will ultimately not try in and fail. Definitely cuts down on the grocery store managers with college degrees becasue you cant really get into college unless you made it to the top level of schooling and proved that you actually want higher education.

It definitely wont happen tomorrow and you cant really compare Germany to the US for a laundry list of reasons, but thats neither here nor there. I think the overarching theme among most Americans is the stupid self righteous attitude that if someone else gets to do somethign that i have to be allowed to do it too otherwise no one should be allowed to do it.

    • 1
May 31, 2013

Full govt. subsidization of post secondary education is free and bears no burden on individuals or the economy?

I think the govt. should subsidize my Ferrari... Shit is getting way to expensive.

May 31, 2013

Maybe I am just annoyed with people today but I find your post to be very moronic. I do not think anyone said it was free and bears no burdens. Comparing education to a Ferrari is stupid, at least an argument could be made that education is a necessity for which Ferrari is not (comparing apples to oranges). Actually, a truly educated population/workforce is a good things. The problem is our way of teaching and our definition of education are flawed but we keep throwing money at it in the form of government backed loans and expecting it to become fixed.

May 31, 2013

Australia has low interest rates on its student loans, pretty much just match inflation, and depending who you ask it's becoming a big problem cause no one gives a shit about paying off cause you get higher rates in saving accounts or people pay off other debts with higher rates. I guess that's why the government is changing system... Our system here is definitely closer to europe though not US

May 31, 2013

A better system would be loans that are backed by the schools themselves, but I'm sure this would muddy up the admission process as schools would become less likely to admit students from low-income backgrounds.

May 31, 2013

Graduating December with over 60,000 in debt. I won't even think about owning a home until I get my debt down below 15k. I am shooting for 35.

Benjamin A Gilman Scholar
Economics & Finance, Mandarin Chinese & Japanese
Small Business VP

May 31, 2013

Student loans used to be dismissible through bankruptcy. Problem is people would jack up their debt, claim bankruptcy at 22 and be clean and good before 30. This had negative effects on lending (the kids have no income, no collateral and are so young that bankruptcy really can't hurt them). So it was made that student loans could not be discharged.

Now people are complaining.

I would allow more flexibility in the bankruptcy law for students. With that said, I would couple this with a cap and reduction in the maximum amount of student loans you can take. For an undergraduate degree I would limit federal loans to the cost of 4 years of tuition at a state university.

The government also offers programs where you do something that benefits society and after 7 years your loans are forgiven. A great way to get experience, give back and get rid of your loans. Might not be ideal, but it is a good option if you got a degree in something that is not in demand.

May 31, 2013
ANT:

Student loans used to be dismissible through bankruptcy. Problem is people would jack up their debt, claim bankruptcy at 22 and be clean and good before 30. This had negative effects on lending (the kids have no income, no collateral and are so young that bankruptcy really can't hurt them). So it was made that student loans could not be discharged.

Now people are complaining.

I would allow more flexibility in the bankruptcy law for students. With that said, I would couple this with a cap and reduction in the maximum amount of student loans you can take. For an undergraduate degree I would limit federal loans to the cost of 4 years of tuition at a state university.

The government also offers programs where you do something that benefits society and after 7 years your loans are forgiven. A great way to get experience, give back and get rid of your loans. Might not be ideal, but it is a good option if you got a degree in something that is not in demand.

Disagree. The government needs to get out of the student loan racket entirely; so long as it's involved, the price of higher education will be artificially inflated. Student loan debt should be dischargeable in bankruptcy like any other debt. The percentage of people who scammed the system by "strategically defaulting" was so small it was barely statistically significant.

May 31, 2013
ANT:

For an undergraduate degree I would limit federal loans to the cost of 4 years of tuition at a state university.

The current cap on federal stafford loans for dependant students is as follows:

-$5,500 (for the 2010-11 academic year) if you're a first-year student enrolled in a program of study that is at least a full academic year. No more than $3,500 of this amount may be in subsidized loans.
-$6,500 (for the 2010-11 academic year) if you've completed your first year of study and the remainder of your program is at least a full academic year. No more than $4,500 of this amount may be in subsidized loans.
-$7,500 if you've completed at least two years of study and the remainder of your program is at least a full academic year. No more than $5,500 of this amount may be in subsidized loans.

The current cap on federal stafford loans for independant students is as follows:

-$9,500 (for the 2010-11 academic year) if you're a first-year student enrolled in a program of study that is at least a full academic year. No more than $3,500 of this amount may be in subsidized loans.
-$10,500 (for the 2010-11 academic year) if you've completed your first year of study and the remainder of your program is at least a full academic year. No more than $4,500 of this amount may be in subsidized loans.
-$12,500 (for the 2010-11 academic year) if you've completed two years of study and the remainder of your program is at least a full academic year. No more than $5,500 of this amount may be in subsidized loans.

While cost of attendance at UTexas, a relatively cheap state university, is $24,000-25,000/Yr. So you are saying we should increase the cap on how much the federal government lends?

Private sector lenders, not the federal government, make up the lion's share of outstanding student loan debt, especially for private schools.

Consider the following:

USC has ~30,000 students total
NYU, the largest private shcool in the US, has ~50,000 students total
Harvard has ~20,000 students total
At an estimated cost of attendance of $50,000 total, that translates into $5B/Yr. You could generously assume that about 1/2 of that is funded w/o borrowing, yet the numbers are still astonishingly high for just 3 private universities. I think there are about +300 public and private colleges/universities in the US.

Regulators dont seem to be on top of this. This is subprime 2.0, without doubt. I am really sad to see this is actually happening post 2008. Really sad.

May 31, 2013

What's the optimal method to 'Paulson short' the market in the event that the student debt bubble pops? Never mind, there should be a Student Debt Double-Short ETF being formulated by iShares or ProShares as we speak.

May 31, 2013

Midas,

Simply put yes. We are watching a slow motion train wreck in progress. When you create an entire class of people who are subservient to the government,such that private companies profit off of the spread (because these loans are guaranteed by the government) and this debt cannot be discharged under bankruptcy, there is a huge problem. There will be hell to pay, as default will rise (and so too will the servitude of man), such that a crisis will be inevitable. The rising costs of secondary education go unchecked (Thanks Uncle Sam, for backstopping the debt with a federal guarantee so no one bothers realizing that the costs of education need to be realistic - and yes, even those Ivy League educations are extremely overpriced. there I said it!), which contributes to the rising necessity of student loans for those that can't afford to pay for school. It's not just about college from a cost point.

When you need a college degree to gain entry into an entry level job, you force people to go if they want any real career progression in a white collar world or they go the route of the manual labor. And even then, you need to get a college degree before you can even look at going to Law School and Medical School if you want to work in those fields. While I can't speak for medicine, in order to pass the Bar (the licensing exam for lawyers), it is essentially required for you to have attended a law school that is accredited by the ABA. There are a few states that allow non-ABA accredited students to take the bar. HOWEVER, only California, Virginia, Washington State and Vermont allow for people to sit for their respective Bar exams without having a formal legal education. What does it say when now everyone is required to spend 100K+, and continually rising, for three years of education to become a lawyer when what you learn in class has little to say about how practice actually is. So when you have 4 years of undergraduate loans and then another few years of post-graduate loans, it creates a system of indentured servitude you can't get out of.

When you add in the fact that we are in the midst of a recession, for which jobs for new graduates are not as readily available as they used to be, you create a very large group of people who owe money and can't pay it off without having a way out.

So, how do we get out of this? You allow the debt to be discharged via bankruptcy after 5 years from which payments start. You tie federal research funding grants for every school that wants them to the requirement for active means of the reducing costs of education. You abolish unpaid internships in order to stop the promotion of free labor and pay students for their time (in order to help reduce the cost of education or pay for living expenses, etc.). I'm sure there are other things we can do, but I'm blanking on them right now. Either way, the SS Titanic is here and on a collision course with an iceberg. It's not going to be pretty when the two collide.

May 31, 2013

Gotta love good intentions leading to misery and hell. Thanks Uncle Sam for getting into this business, which everyone now hates you for.

May 31, 2013

Ant, the road to hell is paid out with good intentions man...

May 31, 2013
Frieds:

Ant, the road to hell is paid out with good intentions man...

"Man is neither angel nor brute, and the unfortunate thing is that he who would act the angel acts the brute."

If the glove don't fit, you must acquit!

May 31, 2013

Self study?

Why do programs like the CFA require an undergraduate degree? Doesn't that defeat the purpose a bit? If there were more bonafide self study programs/exams out there that could be used in lieu of an undergrad degree I think it could put some downward pressure on the cost of university tuition. The whole "requirements: undergraduate degree from a top university" has become so entrenched that these undergrad degrees take on almost infinite value- there are no viable, low cost alternatives.

May 31, 2013

The firms that require an UG degree from a top university usually pay enough to justify $150K. Someone looking to teach 3rd grade in suburbia probably doesn't need to drop 40K in tuition a year for a private school.

And I believe you can do the first 2 levels of the CFA before graduating.

May 31, 2013
ANT:

The firms that require an UG degree from a top university usually pay enough to justify $150K. Someone looking to teach 3rd grade in suburbia probably doesn't need to drop 40K in tuition a year for a private school.

And I believe you can do the first 2 levels of the CFA before graduating.

Incorrect only the first level can be taken

May 31, 2013

Ant, just the first exam that can be done in college.

Duff, I would assume that has to do with the fact that you need relevant experience in order to get the charter and having an undergrad degree is required to get a job that affords relevant experience, ergo, the undergraduate degree is required.

May 31, 2013

Ahhh, thanks for the clarity.

May 31, 2013

Student loans are pushed like crack by everyone in the education system and it is made to seem like the loans are "no big deal". I know plenty of kids who used their student loans to subsidies the high flying party lifestyle and spring break trips in college. Some of these kids didn't even work while in college because they borrowed way over their head.

No one ever sits down and thinks about the cost and benefits of taking out a mortgage to attend college. Way too many people still have the idea that any ol degree from any college will land them a nice $60,000 a year(midwest $'s) job right out of school and those loans will be easy to pay back.

May 31, 2013
Cardinal:

Student loans are pushed like crack by everyone in the education system and it is made to seem like the loans are "no big deal". I know plenty of kids who used their student loans to subsidies the high flying party lifestyle and spring break trips in college. Some of these kids didn't even work while in college because they borrowed way over their head.

No one ever sits down and thinks about the cost and benefits of taking out a mortgage to attend college. Way too many people still have the idea that any ol degree from any college will land them a nice $60,000 a year(midwest $'s) job right out of school and those loans will be easy to pay back.

Much cheaper ways to blow money for 4 years if all those people ever do is get crunk.

High schools need to drill into college-bound students' minds that they need to get internships to get a job, not just a degree.

May 31, 2013

Mr. Hansen, Would you want those internships to be paid or would an unpaid internship suffice?

May 31, 2013

The CFA also requires four years of relevant work experience upon completion of the level 3 exam.

May 31, 2013

The problem isn't with kids who learn a trade (business, engineering, science). It is with liberal arts kids. These degrees are wonderful, but the do not prepare you for a certain job. Learning how to think (as if all business and engineering students are robots) is intangible at best.

If you have to pay for school with loans, you are going to have to pick something you might not want to study. Sucks, but it is better than serving coffee somewhere with $150K in debt.

May 31, 2013
ANT:

The problem isn't with kids who learn a trade (business, engineering, science). It is with liberal arts kids. These degrees are wonderful, but the do not prepare you for a certain job. Learning how to think (as if all business and engineering students are robots) is intangible at best.

If you have to pay for school with loans, you are going to have to pick something you might not want to study. Sucks, but it is better than serving coffee somewhere with $150K in debt.

I disagree, going to a ivy league and majoring in arts, history, you can get a job in finance like many do. My cousins girl majored in art history went to a target and has nice paying job on W.S. While me being a finance major going to a non-target I've only seen two banks recruit both for B.O and one for HR. There needs to be a change in way recruitment works. If majoring in finance at a non-target can't get you a job. I say recruitment needs to change.

May 31, 2013

Not to mention, the total cost for the entry fees and three tests is ~$4,000.00

May 31, 2013

My point was not specifically about the CFA- it was about the fact undergraduate degrees are a requirement for professional exams. Instead of offering an alternative entry into a certain industry, professional certifications and exams simply further entrench our dependence on a formal university education. Why can't a student, out of high school, teach themselves the ins and outs of a certain industry, take a comprehensive exam certifying they know what they are doing, and apply to jobs in that industry?

May 31, 2013
duffmt6:

My point was not specifically about the CFA- it was about the fact undergraduate degrees are a requirement for professional exams. Instead of offering an alternative entry into a certain industry, professional certifications and exams simply further entrench our dependence on a formal university education. Why can't a student, out of high school, teach themselves the ins and outs of a certain industry, take a comprehensive exam certifying they know what they are doing, and apply to jobs in that industry?

Is this a serious question? No one can profit from that which means it will never be an option.

May 31, 2013

Nefarious, that's how trade skills truly work. I know a number of master carpenters and a couple of master electricians, and they learned through apprenticeship. It's exactly how they learned their ply and trade from day one until they became Journeymen in their respective fields. All basic vocational training does (at vocational schools) is give you the bare minimum skills to go on and become an apprentice.

As far as Duff's point, that used to be the case in a number of areas but people got wise and required degrees.

May 31, 2013
Frieds:

Nefarious, that's how trade skills truly work. I know a number of master carpenters and a couple of master electricians, and they learned through apprenticeship. It's exactly how they learned their ply and trade from day one until they became Journeymen in their respective fields. All basic vocational training does (at vocational schools) is give you the bare minimum skills to go on and become an apprentice.

As far as Duff's point, that used to be the case in a number of areas but people got wise and required degrees.

I didn't relate the true trades to duff's question. I was thinking: what is stopping someone from studying something like finance on their own and fully mastering it to the point they don't need a degree or prior real world experience to land a job?

If, for example, that becomes an option in our society, does finance transition to a trade?

May 31, 2013

Wasn't finance always a trade? I mean Fuld and Grasso both started from the ground up. My dad was a runner on the NYSE way back in the day. It used to be almost an apprenticeship. Now it has moved far away from this.

May 31, 2013
ANT:

Wasn't finance always a trade? I mean Fuld and Grasso both started from the ground up. My dad was a runner on the NYSE way back in the day. It used to be almost an apprenticeship. Now it has moved far away from this.

I think we have to keep this conversation in terms of the present and future. If we start going back into the past it will get really hazy as college degrees weren't, essentially, a requirement.

May 31, 2013

Agree. All I am saying is that the government was criticized when only the rich could go to school, not it is criticized because poor people took out too much debt.

This is a perfect example of people getting what they want and then complaining about it. Government should just stick to a narrow range of duties and let people do the rest.

College has really gone from a place to get educated and learn to the "best 4 years of your life". Unfortunately, those 4 years go by fast and you will be paying for it for 10-15 years afterwards.

May 31, 2013

Also you can still get your student loans expunged in bankruptcy. Just extremely difficult, you better never be able to work a day in your life.

May 31, 2013

It's probably simpler than all this: the next generation of students need degrees that prepare them for the workforce. The contradiction is that while we have this huge education bubble, there's a severe shortage of engineers, programmers, accountants, doctors, and other professionals. Read about 18th Century Frenc Lit or MARX on your own time or do a double major, but get something that opens up actual employment....unless you come from money, and then do whatever the hell you want.

I got a psych degree and while I DO have a few tricks up my sleeve from studying the mind, I'll be focusing on a straight laced business / finance degree for grad school. I can read up on ancient religions and politics on my own time.

May 31, 2013

scrap government loan programs, deny guarantors and increase age of maturity to 22, so that students with no concept of credit/finances can live in the real world for a few years, understand how difficult it is and why signing up for every credit card/line of credit card before turning 20 is a surefire way to freezing your butt off in the cold Atlantic. The basic problem deals is sticker price, universities can charge a higher sticker price because customers don't have to face it immediately and thus place a higher preference on prestige versus cost/benefit.

Students (myself included) can benefit from having to live in the real world for the first few years. Having worked full-time since 16 taught me (A) how difficult it is to make money and (B) there bastards everywhere trying to take my money so I have to be careful. Most people lack common sense because they have never had to live a common life, everything was provided from birth till high school, of course the natural progression would be to assume everything would be provided for me in university and my career.

elimintate communism in the state or iceberg right ahead, no amount of hard to starboard can avoid it.

May 31, 2013

Requiring a degree for employment is not going to go away. It's far too late to wind back the clock on that one. With 10+% unemployment out there, why would you hire someone without a degree when you can get someone with a degree and likely internship experience gained while going to school? Even if something like the CFA or CPA exams could be taken without a degree, there is no fucking way you would get a job versus someone with a degree.

May 31, 2013
whatwhatwhat:

Requiring a degree for employment is not going to go away. It's far too late to wind back the clock on that one. With 10+% unemployment out there, why would you hire someone without a degree when you can get someone with a degree and likely internship experience gained while going to school? Even if something like the CFA or CPA exams could be taken without a degree, there is no fucking way you would get a job versus someone with a degree.

I would hire someone that passed the CFA exams with no degree (if it was possible) over someone with only a BA/BS any day.

May 31, 2013
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-O.K.

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