Student debt "Crisis"

[ozyclint]

hell yeah colersu22 and MTNRCHR!
i'm a boilermaker. left school, was getting paid straight away. now i have a trade that is in demand and pays well AND i can throw a dart at a map and get a job there. i married a nurse, WOW, what a combo for travelling the country!

the older i get the plainer it is to see that most (but not all) bad luck that falls upon people isn't bad luck. it's poor choices.

 

[Midwest.Bushlore]

There’s a lot going on here. As faculty at a large university I see this everyday and there are many angles to this problem.
1. Getting useless degrees while taking out student loans, by useless I mean a degree that will never see a return on investment

As a faculty member, why do you think your school offers useless degrees that provide no value? I'm curious. Obviously even the crappiest product will survive if people continue to buy it but why does it even exist to begin with?

 

[Midwest.Bushlore]

I am a journeyman tool and die maker that went through a company paid 4 year apprenticeship program. I make twice what my brother and sister make, one with a bachelors in business the other with a master degree in something. I'll be pushing my kids towards a trade.

That's great if those trades still exist when your kids reach adulthood. I don't know much about your trade but I've read it's in the top 10 fastest declining industries in the US. In ten years or twenty there may well be other good paying trades (although they will likely require education). On the other hand in 20 years automation may have replaced 75% of the jobs that are now done by humans. There may be people already born now that will live to see a post-work world, one where jobs and we know them now don't really exist.

 

[ozyclint]

That's great if those trades still exist when your kids reach adulthood. I don't know much about your trade but I've read it's in the top 10 fastest declining industries in the US. In ten years or twenty there may well be other good paying trades (although they will likely require education). On the other hand in 20 years automation may have replaced 75% of the jobs that are now done by humans. There may be people already born now that will live to see a post-work world, one where jobs and we know them now don't really exist.

who makes the robots, and automated factories?
my PC doesn't even do what i tell it to alot of the time.

automation will replace non skilled work. there will still be demand for skilled labour. choosing the right field is the key.

 

[Midwest.Bushlore]

who makes the robots, and automated factories?

my PC doesn't even do what i tell it to alot of the time.

Let's examine that one! Three hundred years ago humans and animals did the work of farming and one person could farm a couple acres. Around the time of the American Revolution something like 85% of people worked in agriculture. Then came the Industrial Revolution and automation. Fast forward to today, circa 2019. According to my research only 2% of Americans work as farmers. The work that used to take millions of people is now done by about 790,000 people. Did all those farmers switch to making tractors? No, they did not.

New jobs did open up to replace farming. Some of them are what have been called "bulls**t jobs", just kind of make-work. Others are building houses, paving roads, etc. Increasingly though they're in 'service jobs', not building anything. America has largely switched to being a 'service economy'. Selling lattes, flipping burgers, listening to people complain about problems with their credit cards, etc. And those paving roads and building houses also suffer from increasing automation.

So who will make the robots? For now, people. But it doesn't take a lot of people to make the robots, and those that maintain the robots will need advanced skills. Tomorrow? The robots will be building the robots. Why? It will be cheaper. Americans don't so much worship God as they worship capitalism. That means a race to the bottom with little thought about the social impact. When a self driving truck hits the point where it's marginally cheaper than a driver, that driver is out on his butt. Every. Time.

At the time of the Industrial Revolution machines were simple, stupid. They could do only the simplest of jobs; digging holes, processing cotton, hammering a spike. Computers changed that ushering in the Information Age. Now computers running robots can do very advanced jobs.

Eventually they'll do more advanced jobs. Right now current diagnostic software is diagnosing illnesses more accurately than doctors. We've long since passed the point where humans had a chance against chess playing computers. No, in the future even white collar jobs will be on the chopping block. Already some finance firms are replacing some analysts with algorithms. Machine learning is creating computers that can read and 'understand' medical journals, allowing them to be more up to date than any human doctor ever could be. A computer doesn't sleep, it doesn't eat, and it can 'read' 24/7.

As computers become more advanced they'll inexorably replace many human jobs. Already computers do most of the flying. Computer-driven cars are in their infancy but already have less accidents per mile than human drivers. They never get tired, take sick days or go on strike.

I don't see any way to put the toothpaste back in the tube now, do you?

 

[Wan2BmountainMan]

Some will still be paying for them or be in collections 30 years later

 

[NDGuy]

Couldn't disagree any more with this sentiment. College education pricing is predatory as are the loans offered.

It is a massive failure by our government and education system to continue down this path. Young people (and their cosigning parents) shouldn't begin their careers with 40k+ 7% interest student loan debt. Seems to be a hell of a lot of old people bitching about young people bitching. Must have been rough being able to afford a house, a vehicle and have 5 kids all on one income back in the day..

I am 27 and am all for personal responsibility, but that goes out to more than just an individual. Government, business, and education administrators should be as well. When do we draw the line at the insane costs of everything with predatory payment plans? New trucks cost 40k and they are giving out 10 YEAR AUTO LOANS NOW. Mortgages are largely 30 year with 3%>down payments being extremely common. Healthcare prices, house prices, auto prices, daycare prices, all add up to a lot of people only being able to afford the bare essentials. People are delaying having children and getting married because they cannot afford it. I can count on one hand the people around my age I know who own a home.

Pull yourself up by your bootstraps only can take you so far, something has to give here. Healthcare is another topic, is it right that people need to start gofund me accounts to get cancer treatment? I know people personally that had to do so, people younger than 40. Do some of you believe you should have to depend on the generosity of others to not die? Or should they just work harder and not get cancer?

 

[zacattack]

As a faculty member, why do you think your school offers useless degrees that provide no value? I'm curious. Obviously even the crappiest product will survive if people continue to buy it but why does it even exist to begin with?

Supply and demand

 

[lundellhunting7]

I graduated from college with about 20k of student debt. My wife graduates in August also with a substantial amount of loans. The only reason we took out the loans is because we had to too get through and pay for college. Luckily our both of our chosen fields our degrees raise our earning potential by a lot. We are good with budgets. We bought a small starter house and I have a couple year old truck, she will be getting a new SUV when she graduates. What we have now for a house and vehicles are what we keeping until the loans are paid off. But we have budgeted so that we are putting 2k in the bank every month and paying more than minimum on student loans so that we can get them paid off sooner than later.

Now for the real tricky part...... Would I go back to college if i could do it over again.... No I would have learned a trade..... for the wife though 100% would spend that 60k again to get her through school 100000 times over.

 

[gburk]

Mike Rowe's (of Dirty jobs fame) message to kids: "Don’t follow your passion, follow the opportunity, and BRING your passion."
His foundation is trying to overcome our national fear of work (especially of the manual variety) and revitalize the trades - where more of our college bound high school really belong, numerically speaking.

mikeroweWORKS Foundation

America is profoundly disconnected. We’re working to change that.

www.mikeroweworks.org

It seems like good sense to me.

 

[flatlanderhuffandpuff]

High school guidance counselors should be sued for malpractice. I had to search out technical college and convince her that I wasn't meant to sit in on 4 more years of lectures.

I was lucky and had parents who worked hard for their money and saw fit to help pay a large part of my college expenses. Before I picked a field we had many long talks about what fields of study that money would be available for. There was no chance they would be paying half of the options available today. I'm 9 years out and could have easily paid off the full amount of loans in that time.

I'm a little fuzzy on the history of the federal government getting involved but didn't it stem from minorities not having the same private lending options? It might have started with good intent but it has grown to guarantee if you want to go to college you can. Unfortunately that gets a lot of people in a position they have no business being in.

If this madness is allowed to continue I think we should be allowing high school grads 100k in loans to start a business no questions asked. Makes about as much sense.

It also bothers me that people assume you need a 4 year degree, heck , any degree. I hired a guy a few years ago with no degree who was willing to work. He will likely pull down 60k this year not counting profit sharing. People think a little piece of paper is going to change their life.

 

[30338]

Supply and demand

The demand is artificially high due to the government giving loans to anyone with a heart beat. Thus the prices are being driven artificially high by the universities. Tuition inflation has been exploded due to the free money. Pretty disgusting situation really.

I paid for two kids to go to college and expected them to get degrees that were worthwhile and relatively low cost. At least I got what I paid for I think. That said, if your kid knows what hard work is all about, there are a ton of opportunities to make good money with no college. But don't think they don't take knowledge, skill and hard work to do it. The world is full of unskilled broke people.

 

[NDGuy]

The demand is artificially high due to the government giving loans to anyone with a heart beat. Thus the prices are being driven artificially high by the universities. Tuition inflation has been exploded due to the free money. Pretty disgusting situation really.

Exactly, they gave federally guaranteed loans and colleges took that and ran up their costs. Everyone can afford payments if you spread them out far enough just like the auto industry, construction industry, healthcare etc.

 

[Rich M]

Interesting.

No-one forced the people to go to college, some of the school sales people might have coerced folks into going further. They did use sales pitches about using the money for other stuff - my student loan interest rate is about 6%.

College degrees do result in more job opportunities and better paying jobs (and a lower unemployment rate during the recession we recently had). Brother & sister - one didn't do college and makes $20/hr, the other one did and bought a $350,000 house at 25 yrs old.

No-one is looking at why the colleges have raised the prices. Population increase. Supply & demand.

IF you make college free and open to everyone like regular school, then the employers will want folks with even more advanced degrees. Just a fact of life.

In my career choice, the guys with Masters Degrees make more, and are more likely to advance. The ones with just the basics are more likely not to advance. I have a BS and a management MBA, owe about $10K in student loans. Being in school for the MBA got me a job in the middle of the recession - and I've been in management since.

What would I do differently? I would have worked harder, gotten a masters right out of college, invested more regularly, and recognized that our choices in everything effect the rest of our lives - work-affiliated groups, spouses, investing, who you hang out with after work, etc. I also would have looked for a place to work that offered a pension.

Advice for young folks - get a masters degree or learn a trade. Join work-related groups and be an active member. Take management classes and courses. Invest regularly. Marry someone with the same values as you. Take vacations. Retire early if at all possible. Simply put - put in some extra effort and reach your full potential.

 

[cuttiebrownbow]

There are too many universities which causes enrollment not to be 100% of capacity and that means tution sky rockets to keep up with costs. College being so expensive, housing being so expensive and wages not actually raising since the Reagan (or about that time) essentially means modern college grads have a lot more debt plus much higher cost of living on the 'same' salary that people in the 80s had.

I read a great article a couple years ago that compared avg. salaries for college graduates, rental costs and education costs from 1980s to the 2010s. Essentially, if you pay for college yourself there is very little chance you will be buying a house before your student loans are paid off and for a large majority that will take 10 years.

IMO yes, modern college grads are getting the short end of the stick but I don't think debt forgiveness is the solution.

 

[BluMtn]

I had it lucky. When I went to college I had to ride a horse and fight the Indians, besides going through 6' of snow year around. I could work all summer and pay for my next years schooling, tuition, books, room, and board. I have two degrees but my life took a different route being in the farming industry and I don't require either one. Fast forward to my kids and I have been fortunate in that my children played sports and had there schooling payed by their schools. My daughter left school debt free as did her husband and both have good paying jobs. On the other hand they both have friends that graduated or dropped out with massive loans and degrees that don't pay.

Some of you have bemoaned trade schools which I believe should be pushed more in highschools. It was also mentioned that robots will take over the trades. When was the last time you saw a robot on a wheat field hillside laying on their back welding up the broken frame of a combine so you could get it somewhere to repair it. I feel there will always be trades for those that are willing to work.

 

[rtaylor]

This crisis was manufactured by politicians. Liberal politicians need people to be dependent on them for their votes. Government creates problem, swoops in and plays messiah to save the day then then you have an entire generation that will vote democrat for the rest of their lives.

 

[ODB]

There’s a lot going on here. As faculty at a large university I see this everyday and there are many angles to this problem.
1. Getting useless degrees while taking out student loans, by useless I mean a degree that will never see a return on investment
2. Many people at college shouldn’t be there.
3. High school counselors are telling kids and parents that if you don’t go to college you will never amount to anything.
4. Not having a career path or goal when you decide on a major
5. Parents that are in massive amounts of debt, so students think that debt is normal, and have no idea how to live within or below your means
6. Keeping up with the Jones’s. Students lease/buy cars on student loans, buy insanely nice clothes, eat out constantly, new phones, etc.

/professor soapbox

Lotsa truth here and pretty much what I saw at UW. I’ll add some fuel to this: who is most likely to major in one of those low-paying degrees? My years at college tell me it’s women - based on THEIR preference... now extend that into the workforce and see where that leads.... But don’t say it out loud...you’ll be pilloried by the mob....

 

[DangerRanger]

I am hoping the future will see a balancing of the trade/university routes. Coming through public school in the 00s felt as though college was the only option for those excelling, and then those who didn't do well in school would get a HSD/GED and work for someone or at best develop a trade. I do feel people are moving back towards the trades, and I think that is extremely beneficial. College isn't for everyone, and plenty of intelligent people are phenomenal tradesmen. I was one of only 4 people in my class of a few hundred to do both the technical routes and the university prep routes in high school, it was lightly discouraged as all the normally unweighted GPA scores (4.0) would dilute the Honors/AP weighted scores (5.0/6.0) and bring ones GPA down. Though, in general it just wasnt suggested or spoken of, they found it weird I wanted to do it but let me.

My father worked extremely hard all his life and had every intention of me going to college, as he wanted it to be easier for me. Part of his commitment to me going was that I wouldn't have student debt and in reality it was the best gift of my life. I feel how college works is so radically different at each school and each student that its almost impossible to compare. My job was landed through connections, and while my degree was required to get my position it was the people I met while there that got me in. Many of my colleagues and friends still live with substantial debt, some of which carry it and make normal payments for the life of the loan, some make it their main goal to pay them off. Some went to out of state school for no good reason and ran up the tab because its in the future and not to worry about right now, some didn't. Its a complex problem but from the outside looking in I do think the loan system plays at least some fault in the situation.

As a young person this whole trope that young people aren't hard workers and just want handouts and this generation sucks is infuriating. Tons of young people I know are working their asses off to try to save a dime after the boomer generation put this country in outrageous debt. I know plenty of older folks that are worthless free ride collectors that sit around talking about kids these days while on their social security that we will pay into but never receive.

On a lighter note, I think the software and computer job boom will be interesting for this situation. Much more like a old world trade and even more so really, software developers only need the knowledge how to do their work not a degree. I have watched someone without a bachelors rise to an extremely high level in software development because he was good at it. Once kids figure that out it may be interesting to watch.

 

[Sccritterkiller]

We dont teach personal finance or personal nutrition in MS or HS and wonder why so many people are obese and in debt in this country...I took student loans to get my degree and it took me over a decade to pay them off after I graduated...its called life..learn to live it.