Study on underemployment for college grads.
https://www.burning-glass.com/research-project/underemployment/
With the $1 million difference over a career, why is paying student loans under $50,000 such a problem that it takes eons to repay?
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You’re likely correct that they’ll reduce their lending. That’s a good thing if it stops them from lending to people who are at high risk of not being able to pay the loans back.
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Here is a page about credential inflation, meaning employers wanting to see applicants with bachelor’s degrees even for jobs commonly done by those without bachelor’s degrees. The page says that “For example, 65% of postings for Executive Secretaries and Executive Assistants now call for a bachelor’s degree. Only 19% of those currently employed in these roles have a B.A.”
https://www.burning-glass.com/research-project/credentials-gap/
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If it was working, then why did the government change the program? What loans are you talking about in the 1990’s?
40 year ago, I had a Guaranteed Student loan. $5000 for everyone (not much qualifying). I got my loan through my local bank but the rate was set at 9% by the feds. NINE percent. Some lucky students had 7%, but mine was the year they were 9, so then I had 9 for all three years.
How was that better than what we have now? Same rules - I couldn’t have it discharged in bankruptcy, I wasn’t making much and repayment was a good chunk of my take home pay. I don’t know if there was IBR, I just paid what they told me to pay (with great difficulty).
If the bank had loaned to me directly without the government guarantee, the bank would have set the interest rate higher. Some mortgage loans at that time were higher. Car loans were higher. It was a nightmare.
There were national direct loans but the maximum per semester was very low, like $1000. Tuition was rising and so they added the $5000 available through GSL program.
People on this thread were saying to let the private lenders do things at their regular lending standards and rates. No way is a loan to an 18 year old going to be at a rate under 10% without a co-signer or government guarantee. It just isn’t.
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I know we’ve been talking about these things on the other thread, but I really wish that some of you guys who’re all up in arms about “credentials gaps” and “credential creep” would take a hard look at the work that goes on in universities that turns high school grads into employable people. It’s an enormous effort. I understand that the parents here put gigantic effort into their own children’s educations and general civilization, but know that you’re the exception. I don’t know what magic you’re expecting K12 is doing while it’s keeping the kids off the streets, covering mandates, and jumping through the testing hoops, but it ain’t just for fun that employers look for bachelor’s degrees now in jobs that you don’t think should require them.
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Here we go…
I read through that quickly, and as a person who “works on Wall Street”, it never fails to shock me just how ignorant some politicians are about how markets work, the reason transactions occur, and the invisible benefits that we have as a result of low transaction costs.
While this will hurt some businesses actually “on Wall Street”, the vast amount of this new tax will be paid by investors. This includes those with 401ks and pension funds.
Of course, accurately calling this the “robbing your parents retirement tax so others can go to college for free” doesn’t have quite the ring to it.
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There is no doubt that moving is hard. We moved 9 times in the first 11 years in our marriage. The last four when we had children. I was certainly underemployed as a result of all the moves but it’s what catapulted my H’s career. Not having family and friends was very tough but the willingness to relocate was absolutely essential for career advancement. I was fortunate that when my parents became older, they moved near us, and then when we had to relocate again, I had the means to fly to them regularly. Not ideal but it was the sacrifice we all made to provide a better life for our family.
My D expects to have the same path in her career. If she stays with her coop company, they will move her every single year for the duration of her ELDP program. People make hard choices to advance their careers. In some industries the willingness to relocate is essential unless you want to stay in the same job your entire career with limited advancement.
It’s disingenuous to suggest those of us who have picked up didn’t have other obligations, families and worries. It was just the choice we made to avoid having both of us underemployed. And yes, it is a choice, albeit a difficult one. .
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Yes, social workers needs a Masters degree. Most are also licensed.
Yes, most teachers who work in the public school system need to obtain a masters degree in order to remain employed
In NYC you now need 60 college credits to be come a police officer (NYPD).
Some of the trades in NYC also require 60 college credits.
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Honestly, different strokes for different folks. If there’s one thing I’ve learned seeing literally thousands of high school grads at this point in my career, one person’s love is another person’s hate. That actually works out well for our society. Different people really do want to do different jobs and are happy at it. I’ve even seen multiple kids pleased with low-pay factory work. If it suits them, fine. We need someone to fill those slots. Others start with those jobs in high school and it inspires them to work hard at finding something else.
You mentioned moving being a chore in an earlier post. Not for all of us. When I joined the AF the fact that you could move every two-four years was a pro, not a con. I’d wander the whole planet if I could. Neither of my parents lived close to their parents or siblings, and so far, my kids have their own corners of the world too.
Many parents/kids restrict their college search to within 2-3 hours of home. For us, the restriction was they had to at least go 4+ hours from home. Not a single quibble from them. They’re willing explorers too.
Humans are different and that’s a good thing.
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My hypothesis? Colleges are eager to attract students. One college started sprucing up the gym and building a climbing wall. Another added a second pool. Then dining halls had to go modern. Landscaping needed to be improved. Dorm rooms were old and tired, fix them and/or build new. Sports areas needed to be improved or built.
Besides this are the “good” improvements in new tech centers, WiFi and other computer capability, various “real” academic improvements, etc.
All of these cost money - lots of money. Naming rights only bring in so much.
I’ve heard countless people say, “Skip the first! It’s needless and costing a ton!!!” Some colleges did or were late to get on board and what happened? Parents/students would return from visits comparing the two types and literally never pick the one that didn’t look better and offer more unless money was an extreme need. The better looking school was the “better” one, after all. Everyone could see that. It could be worth paying for.
If that’s going on in my neck of the woods, imagine how much it went on among CC’s target audience who had money to spend - or wished they did. The schools that didn’t improve certainly didn’t make a good impression. Who, among us, returns to their Alma mater and says, “Wow, it’s just like I remember!” H and I went to a state school and wish we could be attending now - the food, the gyms, the dorms, and the academic opportunities. My parents went to a different state school and couldn’t believe what they saw either. My dad loved boring current students with his stories. 
One of his stories was how little it cost back then (granted eons ago, but same principle).
One addition to all this? Some schools seemed to try to keep their costs lower even with improvements. The take on it with parents/students to this day is, “the cheaper the school, the worse it is.” In my area kids will still pick the cheapest option most of the time, but they’ll do so wishing they could go to the more expensive school, even when the cheaper school seems to fit them better. It seems to me that schools caught on to this and raised their prices to match their peers - just because. Nothing new suddenly appeared that would have cost money, but oddly more token merit awards appeared. That worked. Parents/kids love feeling like they are so good or so loved that they get a 10K merit award. It’s worth it to raise the price and then have a sale. But the sale still doesn’t get it back to the prices of the old days even comparing economies of the time periods.
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It would eliminate the need for all parents to save for college, and more or less force those who didn’t, but could have, to technically have done so.
Except for Purdue that hasn’t raised tuition in 12 years 
They are still building like crazy but it’s mostly partnerships with industry.
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That’s a great start. I googled average debt for Purdue and came up with $27,500 (according to them), which is below the national average and would fit in well with what I’d like to offer all students. 
Perhaps more colleges can follow their lead.
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My husband was a PHD/PT and taught at a PT program where he was also basically the “selection committee” for admissions. This was during the time when the shift was happening where programs were starting to add the DPT. His program spent a lot of time discussing doing this - but eventually they all went that way & now it is the norm. At the time, it was sold to students as "what the profession “needs” as it would allow direct access of patients to PT services without a Dr referral, thereby decreasing “boundaries to care”. Students were told, with direct access - there would be more revenue & thereby with the DPT, rather than just a PT degree, they would have greater earning potential. He was the only one in his department to say - look do you really think the government/insurance will pay more, won’t put barriers in place- or that honestly you think students will get paid more? He noted there would also be greater liability risks (in theory) with direct access. That means higher malpractice insurance and more overhead. Bottom line, the PT department was one of the bigger money making departments for the school, and having students on the hook for an additional 1-2 years of tuition was an amazing boon to the institution. They changed to the DPT and told all the students how wonderful this would be for their careers.
This whole switch happened 10-15 years ago. The end result is now those with DPT’s are doing the exact same jobs they used to do with PT degrees. Salaries have not increased solely because the provider has a DPT. Students now have more debt - but academic institutions make more money off of their “need” for extra years of education.
Higher education is a business. The consumer needs to be VERY thoughtful in how they spend their education dollars. The student is the consumer. Forgiving loans puts all of us (taxpayers) on the hook for the choices (many of them - not wise), made by very young adults who may not have any financial education. The academic institutions get paid either way & continue to raise costs. I feel the academic institutions need to have more accountability/ have skin in the game - for this current situation. Once the government took over student loans - that is when the academic intuitions saw all the “easy money” rolling in, and that is when many of these professions started to require more advanced degrees for jobs that never seemed to need them in the past.
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Marketing is important. Speculating is bad so taxing it is good. After all, if you tax something you will get less of it. Investing is good but we will tax that too. And its a good thing that some many pension plans are overfunded with money to burn. LOL
Back when I took several tax classes decades ago, the idea of a tax loophole was a tax provision being used other than for its intended purpose. We want to encourage X activity so we give it a tax break. But some creative and smart people come along and use that very same tax provision to get the tax break for Y activity (one we didn’t want to encourage and may have wanted to discourage). There was a negative connotation with using loopholes. Fast forward to today and the tax loophole label is applied to every use of tax break (including those for which it was expressly intended). Hope is to continue to bring the negative connotation with the goal of taxing more.
As to credentials, there is a distinction that is very important. One, are employers requiring the credential to get the job. People are not arguing that isn’t the case in many instances. But the second point is whether its actually required to do the job at issue. And often times its the case it just isn’t.
Employers are using college as a sorting system. Evidences some smarts and discipline. Works well for them. Though anyone who hires or trains people knows that college grads require a lot of training when they get in the door which is ongoing.
Talking with a group of people a few years ago about this issue, someone said that they learned the importance of meeting a deadline in college. I responded to him that I learned the importance of meeting a deadline in second grade when Sister Mary Something or Other wouldn’t let me go outside for recess because I missed an assignment.
Problem with credential creep (and we already see it happening in certain fields) is once too many people have a given credential, employers start to look to something else as a sorting mechanism. So they now look to grad school as a differentiator. At some point there will be cries that grad school is too expensive and we need to make that “free” too because its “required.”
Going to college and getting an in demand degree makes a ton of sense on an individual level. As a society, it doesn’t work.
The only people I see talking about subsidies being the only cause of increased college costs are people who use the fact that they aren’t as a criticism that they play any role at all. The world is complicated and nuanced. Pretty much nothing has a single cause. But of course subsidies play a role. Subsidize something and you will get more of it and the price will increase. Basic economics. Another cause (amonst many) is increase demand. Aslo basic economics.
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I never really paid much attention to the change in student loan laws over the years. My guess is the laws on student loans were changed over time with the same good intentions that caused the government to loosen rules on mortgage loans to risky borrowers in the '90s. Home ownership was viewed as a good thing and the government wanted to make it easier to buy a home. Same thing with higher education. It was viewed as a good thing so the government wanted to make it easier to borrow money to go to school. One of the way they can encourage lenders to lend money is to reduce their lending risk, and making it harder over time to discharge those debts through bankruptcy is one way to do that. I’d also imagine that lenders had good lobbyists that tailored laws to their advantage. They both were examples of good intentions gone bad.
It sounds like you got a student loan about the same time I got mine, which was 1981. I can’t remember exactly what my loan rate was - I want to say in the 7%-9% range. My loan was from the state of Alaska to attend college in Alaska. In 1981, 30 year fixed mortgage rates reached 18.63%. There was nothing outrageous about a 9% student loan rate at the time.
You actually could have declared bankruptcy because of your student loan. You just had to wait five years after you started paying off your loan to do that.
"In 1978, the exception to bankruptcy discharge of student loans was moved from the Higher Education Act to the U.S. Bankruptcy Code at [11 USC 523(a)(8)]. While the bill written in the House of Representatives had proposed reversing the 1976 reforms, the Senate version prevailed. [An amendment] the next year clarified that the five year limit applied to loans backed “… in whole or in part by a governmental unit or a nonprofit institution of higher education.”
In 1984, the Bankruptcy Amendments and Federal Judgeship Act of 1984 further tightened the rules on bankruptcy discharge by dropping “of higher education” from the wording of the legislation. This broadened the restrictions on discharge to include private loans backed by non-profit institutions as well as government loans."
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If, as a country, we would let some high school students drop out (those who want to) without a stigma and start various jobs or trades earlier like many other countries do, a high school diploma would have meaning. Now, our focus is a super high graduation rate meaning the bar is really low to graduate. Thus, the switch to wanting a college degree to “prove” the basics should be there.
My D is a DPT student. There are new DPT programs opening up every year. Most of them are private schools which often cost over $100k for the three years plus living expenses. I suspect this will eventually contribute to a glut of PT’s many of which have a $100k or more of debt. I call this credential creep. I understand why it was done but I agree with your husband the outcome is going to be too many PT’s with too much debt and too little income and Doctor as a title. Luckily for my D, she was accepted to an instate public DPT program with reasonable costs and was given a graduate assistantship. She also has a relative that has given her enough money to graduate debt free. I am concerned for the field in general. They will always be needed but will the cost of the education be worth going into the field?
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