you are right there is no correlation to your message. CC gives a misleading indicator, whether you click reply of last message or just ‘normal’ reply to thread for your thoughts, it implies a response to previous message. Hopefully CC will fix these kinks.
1 Like
I object to canceling debt, but have no problem with cancelling the interest on the debt as a part of a partnership with the next generation.
I think there are a lot of reasons why we are where we are now, including kids going to college who shouldn’t be there for a variety of reasons…look at the drop-out rate, credential creep, college’s unrealistically increasing costs, etc.
There ARE a number of ways for a student who wants to keep costs down:
-2 years community college then final 2 years at state U
-commuting, or living in a cheaper situation than the dorms and eating cheap
-taking extra credits each semester to shave off time, or taking APs
-joining the military and having them pay
- working and having your employer pay for you to go to school part time
- getting scholarships
I’m not making the above suggestions lightly. My H dropped out of college and was never able to go back; at the time he didn’t have a defined goal and was very poor so had to work to contribute to his family; working too much interferes with finishing up your education. For me, I had a goal and finished college in 3 years to save tuition. I then went on to grad school on a half scholarship. For many of my relatives, they went the CC to local state directional route or went to a 4 year school on an athletic scholarship. Or went into the military and received their degree on their dime. My step-son worked at a local McDonalds and besides receiving several thousand dollars a year reimbursement for college, he also received a second degree for free through their collaboration with an on-line university. Many other employers like Starbucks, Chipotle, Walmart, Target, etc., also offer programs to help their employees get a college education. My sister-in-law had her undergraduate nursing degree paid for by the hospital she worked at as a nurses aid, my niece is having her graduate nursing degree paid for by the hospital where she works, and my best friend had her undergraduate business degree paid for by her employer, a utility company. About living and eating cheaper… my D now lives off campus and it is costing me half of room & board at school…she is perfectly safe and getting enough nutrition, but she is living cheap.
I think many people’s issues with a waive of the wand debt forgiveness program is that it doesn’t encourage people to look for ways to keep their costs down (as above), and it does nothing to encourage colleges to keep a tighter reign on their budgets. I know when I was in grad school my roommate chose to go an a summer study abroad program which she financed solely through student loans, whereas my family decided that was a luxury and that I needed to work that summer. That’s fine that my roommate made the choice that she did, because SHE is the one who paid for it. If it were the taxpayers paying for it, that’s another story.
I think part of the credential creep is that we don’t have enough GOOD jobs in the US, so more and more people are competing for the same limited decent paying jobs, and are trying to differentiate themselves from the competition by having a degree in something.
I hope we can focus on getting more good paying jobs for people who get a 2 year degree. And we ensure that community college is cheap (or free) and provides those skills.
5 Likes
Lifestyle / spending creep seems to play a factor in what people view as “good” jobs. Seems that a common view on these forums is that a $200k per year income (~$130k to ~$150k after income and payroll taxes, depending on state and local income taxes) is just barely enough and does not allow for saving for retirement or kids’ college (see the retirement savings thread). If a kid grows up in such an environment with parents role modeling this idea, and becoming accustomed to expensive luxuries as “necessities”, then the ~$30-40k entry level skilled trade apprentice pay does not look so good. The ~$50k median entry level BA/BS pay looks only slightly better (and is highly variable by major, region, type of employer, etc.), so there is likely some self-imposed pressure to seek an “elite major” (i.e. one with higher paid major-related jobs), an “elite school” (i.e. one preferentially recruited by higher paying employers, like management consulting and investment banking), or an extra-reach goal (i.e. something that requires an additional expensive professional degree like medicine, dentistry, top 14 law, etc.) to find the pay level that the kid grew up in and is accustomed to. So that increases the demand for, and willingness to pay more for, education that is seen as a stepping stone toward the goal of a “sufficiently” high pay level.
I can’t disagree with what you are saying. But I was thinking about all the decent middle income jobs that have disappeared either through the work moving overseas, or disappearing because of technology.
I think we have to be more proactive about making sure the kids going to college will have a career type job to go into. That’s why I’ve always been keen on internships, and strong advising.
Ucb. Didn’t you recently reply to one of my posts, supporting this “common view” that a high salary is necessary?
Capital is more mobile than labor, so it has a built-in advantage in being able to relocate to where labor is less expensive.
In addition, there are other trends that are making the US economy less favorable to labor. One of them is the increasing concentration of business so that many sectors are now dominated by oligopolies or even monopolies, due in part to less aggressive anti-trust or anti-monopoly regulation. For example, how many health insurance companies can you choose from at your non-government employer or ACA exchange, and how many medical groups are there in your area to choose your physicians from? Not only does this result in fewer choices and higher prices for consumers, it also results in fewer choices and lower pay for job seekers selling their labor to the smaller number of possible employers.
You may also want to see this post #10 by @blossom at The grim state of Pennsylvania's state system: news article today - #10 by Creekland where the changing situation of journalism jobs is likely related to the increasing concentration in media businesses.
Sorry but all of those issues can also be addressed by working two or three jobs to pay down debt or make money. Not easy. But not much is. I did that in my 20s. Had no debt. My older sister had lots of college debt. Worked hard at two jobs and paid it off as well. It took her a long, long time. College has always been expensive and kids have taken on large debt since the 1980’s. So why forgive debt now?
I haven’t met a kid yet who works more than 1 job. I’m sure there are people doing it and I would LOVE to meet them.
The idea of “waiving the wand debt” actually incents people to believe their debt will be forgiven because someone did it in 2020 ( or whenever). People need to be allowed to make choices and pay for their choices. As a taxpayer, I’m not going to support paying for college debt for someone and letting someone else pay their own way to open a business or become an electrician.
4 Likes
No. What I was writing in the other thread was questioning whether $200k was “necessary” by asking others why someone with a $200k income could not save large amounts of money by spending as if they had only the (much lower) median income for the region and saving the rest.
I totally agree with you about the concentration of business and want to mention the other side of the equation. Which is that it has become harder & harder for small businesses to exist as we become more regulated; the cost of compliance is high and is better absorbed by the big guys who can spread the costs over a larger amount of product/labor. I’m in total agreement that this provides fewer jobs, fewer opportunities to move up the ladder, and fewer choices for consumers.
3 Likes
Yes, as anti-trust and anti-monopoly regulation have been weakened, big companies find that other regulation often serves their desires by erecting or raising barriers to entry against new competitors. Some such other regulation may be justified on the basis of safety, consumer protection, etc., but incumbent business’ lobbyists can be expected to steer it toward erecting or raising barriers to entry against new competitors. Related are increasing occupational licensing, education, and credentialing requirements for some types of jobs; again, there is sometimes justification on the basis of safety, consumer protection, etc., but incumbent practitioners can be expected to favor erecting or raising barriers to entry against new competitors.
Waving the magic wand to eliminate some existing debt by itself will not solve these underlying problems that encourage students to take on more educational debt in the future.
1 Like
I agree that we shouldn’t waive the wand to eliminate debt. I do think, though, that the interest rate that some folks have been charged is tremendously greater than what the government charges other people for loans. Some of the more horrific stories you hear are due to the interest piling up and creating an overall debt many times the initial loan.
2 Likes
That is true and has always been the case sadly. Why can one get a car loan for 2.5% and it costs something crazy to get a student loan? I know there’s no collateral but they could lower the rates considerably ( and no or a much lower origination fee).
1 Like
College costs have drastically outpaced income. My husband graduated college, cost was $16,000 total, 1989. My oldest graduated from the same university in 2018, $110,000 total. Instate flagship. Both worked during college (my 22 year old worked 2 jobs in college). My husband had no debt, both he and my daughter lived off campus two years.
1 Like
Well, there were colleges that cost 18K in 1985 too and people went to them. My husband went to a college that cost almost 100K total in 1987. That was expensive! Parents and kids still made it work. There are many people who attended schools in the 80s and 90’s who have successfully paid off their debt.
Yes, costs have exceeded inflation. Yes, income was a lot lower too. The issue with debt is, people take it out and have no issue spending it, but it’s painful to pay back and they think others should pay it back for them. Or the debt should be canceled.
2 Likes
Loans were not commonly taken for public universities because they were not necessary for most - it’s a misperception that they were common. College has not “always” been expensive, there have not “always” been mandatory loans packaged into financial aid.
They were however very easily available from 1992 till about 2012, as were credit cards for college students. Yet, if you compare 1994 to 2014, borrowing by undergrads increased by about 75% because those few became families borrowing because they had no other choice. The exception so became the norm many seem to have forgotten it wasn’t the norm not so long ago.
I agree there was misjudgement by colleges (investing in fancy dorms, etc), kids not understanding the weigh of loans, etc. And we do need to improve things, with a serious plan so that HS '22 or 23 graduates aren’t in the same mess.
But none of that makes things better for the generational group of young people who did everything right* and still got screwed. And it needs to be done NOW because it’s been dragging down the economy when it was OK, and considering the dire situation we’re in right now, we can’t afford to know what drags the economy down and do nothing about it when we easily can.
It isn’t a long term solution nor is it a fix, it’s just like an injection to save a patient before you start treatment - I would think, however, that a quick shot of money (exactly like tax cuts, that are supposed to help the economy and go to specific groups) AND broad reform involving in particular Community Colleges + serious work on the rising cost of public university tuition would be win-win.
BTW, tax payers are ALREADY on the hook for college student loans due to defaults. Doing away with it all in one go would actually cost us less.
(* that’s why I think cancelling Federal loans for a specific group is ok, as a one-time tax break of sorts, but not private loans, not parent PLUS, etc. and therefore not 50K. 30K would cover 78% students who attend or have attended college.)
1 Like
My son had three jobs through high school. He did chores for seniors in town, worked at a local grocery store, and bussed at a restaurant. My daughter currently has two (retail and a restaurant) and was called to work at a third but couldn’t make the schedules work.
3 Likes
Yes, but they weren’t in state public universities. If you could afford expensive private universities, they were there. Funny, my sister who’s oldest is now a HS senior attended of university of Richmond, and when I told her the price tag for Villanova, she was shocked, and suggested m6 daughter look at Richmond, which she chose in 1988 because it was a reasonable private school (this was 2 years ago when Dd19 was looking). She was shocked when I to.d her the current tuition. It’s the public universities that are out of control.
2 Likes
General thoughts again…few threads are converging, CMU ED bail out, PA college situation, this Biden one…they all have common theme outrageous cost and far less guaranteed return/reward.
Fact: All college education do not have similar outcome.
If one takes long for eng, medicine, law etc…, it is highly likely the debt will be repaid because post-education student is likely to find rewarding career.
On other hand, one studies journalism, communication, hair saloon related skills (read a article sometime back that talks about IA schools involved in that business and how those students are buried in debt)… and takes tons of debt is highly likely to pay back as careers are relatively less rewarding.
To suggest college cost are high, states cuts the budget for schools, debt being spend lavishly is half-truth, as it all talks about mechanics, not the disconnect between cost and reward to begin with.
It is not students who made incorrect choices, rather predatory behavior of so called for profit schools who lured students into study that results in not a rewarding career rather a debt.
Tied student loan repayment directly to income, with provision to write it off after 10 years. This will prevent predatory lenders from lending to not so lucrative study market, which will bring cost of those area of study automatically down. A win-win for market (lenders) and consumer (student) and a taxpayer (less defaults overall). Why 10 years? Only loan that is larger than 10 years is mortgage, being an education necessity it shouldn’t be 2nd in line after mortgage.
Ofc, to achieve the permanent fix, clock has to reset, one time fix of 10K or 50K won’t solve the problem but just punt it further.
I am on board with one time relief with a reasonable permanent fix to the problem.
2 Likes
^very good point: if 78% undergraduates at public 4-year universities have borrowed within the federal debt limit… for-profit institutions push loans and most of their graduates are above (often well above) the debt limit even though most degrees at for-profit colleges are worthless.
I love your idea BTW because as you say, it’s win-win for markets and consumers as well as taxpayers.
1 Like
what a coincidence, we both bring the disconnect between cost and reward.