So many of us are starting their first year in college. It's a new life of great freedom and fun, matched by new responsibilities. Especially, financial responsibilities. But, unfortunately for our freshman, things have taken a turn for the worse. The annual cost of attending a higher education at a public school has skyrocketed from $6320 in 1981 to $14 870 in 2010, and that's in 2009 dollars (source).

That increases the need for students to withdrawal loans to pay for it or obtain government assistance. Government assistance to attend what is already a public university.

According to my source, the amount of money in loans is between $902 billion to $1 trillion.

But it's difficult to pay off so many loans with a job market that is nearly falling apart, 70% of these graduates say they're having trouble just paying all of their bills, forget about thriving.

---

These facts are rather startling. It seems the technological advances in our culture and scientific knowledge has grown far too vast for a high school education to be sufficient. The median salary of males who just have a GED or high school diploma dropped from $44k to $32k, and for females, from $28k to $25k (source). The outlook for America looks grim.

What should be the solution for this crisis?

Stop putting huge prices on knowledge.

Thanks to the internet knowledge SHOULD be the cheapest commodity of all time.
But the job market and universities have perpetuated this scam where unless you pay 20 grand to get that piece of paper proving you're knowledgeable, you can forget about that job.

The school system - even upper ed - is already floodded with people who are not serious or studious, who are able to cry their way to the degree they want. If professors don't fail enough students (admittedly, it isn't hard when you see my above statements) their worth as a professor is called into question because a room of passing students is highly suspicious to the school board. Students that opt to take classes at a cheaper university that all degrees require are not always able to have those credits transfer, meaning that they retake classes. Tuiton continues to rise but where does the money go? I don't see changes in the schools I attended. Students are led to believe that their degrees regardless of field will help them land a job straight out of college - some even dellusional enough to think their first job will start at 50k yearly. They are coddled to believe that the degree is the only thing they need, even though eevery reputable interview I sat for asked more of my experience than of my pieces of paper. And, somehow, students are deluded into thinking that spending more money is better education. This isn't just with soft majors like the arts, which have no ready application to the world most humans operate out of. This is true of every field.


If you want to blame a faulty education system on something, blame it on those things, or that, in short, there are a lot of people who feel very entitled to a lot of money without doing a lot of work. High cost of tuition is a symptom of a much larger problem, and simply decrrasing it won't solve the educational problem.

The internet is a rather new invention, but online degrees are obtainable, there are even organizations that host one or two free accredited courses. It's still very early in its development.

The price is on the piece of paper, since MIT offers their classes for anyone to view. But how do we ensure that people know what they claim? Further, how would a chemist do lab work without a lab to work in? There are still benefits to be gained from a physical campus.

---


People should be permitted to pursue what they wish, academically. It is a shame that if a particular field of study has no immediate practical application then it is useless to the person. Clearly it demonstrates a conflict with the foundations of society, economics, and our growth as people and as a species. But that is a discussion for another time.

The statistics do demonstrate that a college degree will entail a higher paying job. Parents pressure their children to attend, as does society -- and that isn't necessarily a bad thing. As I have mentioned earlier, our technological and scientific advancement are quite vast, and a simple high school education is no longer sufficient to contribute much to a society except to perform the menial jobs that machines can't do -- yet.

Our lifespans, knowledge, and technology have reached new heights, but the foundation of our education remains the same, why?



Should they be entitled to an education? Or should we be forced to pay for every bit of our education? I feel that would be a step back.

It's easy to blame the people, but the belief that if only you work hard you'll achieve is a false one. And I doubt that the "lazy" people account for a majority of the statistics. Further, the system is supposed to serve the people who use it, not the other way around.

If we are going to ignore my other statements, namely how faulty the faculty 'rating' system is in this country...
Before the economic crash, it was estimated that for someone my age to be competitive in my job market I would need at least a master's degree due to the fact that 'everyone' has a college degree. I have competed for internships against people with degrees, certifications, and five years job experience and so naturally lost to them. I have competed for food service jobs against people with degrees and lost to them. Now, instead of it being 'everyone' has a college degree it is everyone that was employed before is out looking for any job they can take. And these people have degrees and experience, and usually in this day and age certifications.

I think of this rationally. What would possibly drive lobbyists against accessible higher education want that will make them back down? Probably more funding. If the government enforces rewards for having below average income (or poverty line, or any arbitrary measure) attendees at a selected percentage, or with graduation rates at a certain rate, universities will probably jump on it. The result? Many many many many more people pushes in and out of universities with a shiny piece of paper, many of which didn't do much with their time in university, and overall flooding an already flooded market. Instead of the unemployed uneducated fighting for jobs against the educated, it will be everyone 'looks' educated, diminishing the worth of the degree. That means one of two things: drastic drop in income, increase in skilled unemployment, and a necessity for graduate level completion to find entry level work. And if universities get screwed financially in this bargain (which is more than likely the case) they're going to take it on to the master's program costs, which is already outrageously expensive compared to undergrad...and you can see the cycle from there.

But offering "free" education (where is that money going to come from? Taxes, most likely. And the people who get taxed? Middle class. The same people who can't afford to put money aside for their children are going to lose that money anyways for someone else's) is, like I said, treating a symptom not a cause. Our professors aren't effective. Our training isn't effective. Hiring practices are getting better now that business owners realize that a degree only goes so far. Tie this into the taxation issues in the country and simple making education free is a bandaid fix. It is something that can be implemented before the end of a four year term so that they can get reelected, but the long term effects of it won't be felt until they are succeeded in office.

EDIT: And it isn't fair to attribute innovation to the education system or a lack thereof. The most innovative minds this century did not go to college or dropped out.

Why are universities jumping on this?



What else are they going to do? Return to an unskilled market being dominated by machines? Perhaps a bachelor's degree isn't as impressive as it once was, but neither is doing calculus. Perhaps this shift requires that we expand the system.



We can have unskilled unemployment or skilled unemployment, I don't see a way that we can pull out of this without a paradigm shift in our economy and society.



Clearly throwing more money on the problem isn't the solution. It's as you say, just a band-aid and will continually be a larger and larger money drain. This gives me the inkling that the failing education is not necessarily a failing of the education system, but a symptom of something deeper.



Those are statistical outliers, and I disagree. The brightest and most innovative minds did go to college. Hawking, for example. The engineers behind Curiosity all went to college.

Before asking "What is the solution to the crisis", can you explain the crisis to me? Do you think that public university cost is too high? Do you think that $1 trillion is too high a number for student debt (this statistic includes private university debt, which you're not otherwise discussing here)?

If you think that the cost of a public university education is too high, you really need to refine your case for that. Looking exclusively at the cost shifted directly to the student is incorrect. Funding to public universities comes from the government, and from tuition charges. You've (maybe?) shown that tuition charges have grown, but over the same period, the government funding may have decreased, meaning no greater strain is being put on the economy. On the contrary, I'd say that this situation would be preferable - shouldn't the people who benefit most from a system be the ones to pay for it? It forces people to choose whether or not to go to college, instead of going "just because it's cheap and I can". It's more efficient because of this - instead of using the resources on educating everyone, it uses the resources to educate that portion of the population that wants it more, and will thus get more out of it.

As for the $1 trillion figure, really, what about it? College is expensive. People take out loans to pay for it. If you don't want to take out loans, don't go to college, or go someplace cheap or free. What's the issue here? Do you want the government to cap the total student loans figure in the country?

I would like to discuss the point of "the only people who benefit are the students" point. Even if we don't factor in contributions to society, I'm not sure they're not the sole beneficiaries.

According to my sources, the median earnings of young adults with merely a high school education is $29k. The median earning of young adults with a bachelor's degree is $45k. This, of course, puts them in a separate tax bracket than their uneducated peers. They are paying more in taxes:

(US Income Tax)

$29k × 15% = $4350

$45k × 25% = $11 250


Thus, our college graduates are paying a median $6900 more in taxes every year. Not to mention the extra they'll be paying later in life and increased revenue from sales taxes from having more money to spend.

--

But more important to me is that I think people deserve to be given a proper education, and it's the duty of society to provide for it.

I certainly wouldn't suggest that college be free for anyone, but I am a strong advocate of helping out those who do. At the very least, the loans should not accrue interest.

Post has been edited 1 time(s), last time on Sep 8 2012, 8:20 am by Sacrieur.

Hi Cent

But seriously, the debate is more complex than this. There are competing ideologies at play. Are we entitled to a college education? Is it a right? If it's impossible to really get anywhere in this country without a degree, doesn't that mean we should have the opportunity to get one? Or, on the other hand: College is for people who are going to excel and can actually use their degree. There is no entitlement for the average person to have a college degree, it is not a right, but a paid privilege. These ideas conflict, and I believe neither one is perfectly accurate.

To some extent, they both have merit. If we aren't entitled to a college degree, this will perpetuate social inequality and a less skilled labor force resulting in a less prosperous country by means of only the rich (who aren't necessarily the most merited group, but they can afford it) being able to go to college and acquire these skills and knowledge. On the other hand, these institutions are (typically) private institutions. While the service they provide may be noble, I think everyone agrees education is a good thing, they are doing it for a price and deserve to be paid as they see fit for the services they render. I am no more entitled to the knowledge another man has gained than I am to his land or other property.

Anyway, I just think its important to recognize the complexity and consider both sides of the issue, and not boil it down into a simple dichotomy that doesn't reflect that, like "If you can't afford it, don't go".

(1) Not all people who would do well in college can afford to go to college.

(2) Not all people who can afford college will do well in college.

--

If we gave each person 20k a year to go to college, how many of them would squander it? How many good students must it benefit before it considered of value?

The reason I don't oppose the aforementioned is that the money isn't just evaporating. It's going to someone, and that someone is the universities, and I feel like there should be a system in place where squandering it doesn't mean you can get out easily. It shouldn't have to be repaid (or only partially repaid) if you graduate, for instance (since it would then be money well spent). But if you do not graduate, then it should have to be repaid in full.

All of that interest from private loans is going where? To banks? Yeah because they need so much more money. Why not eliminate the interest -- graduates are probably going to spend the extra on stuff they want, which does help the economy and not just one corner of it.

With just requiring 50% of the loans required to pay back, that 80k used to college would turn into 40k, and according to the figure above, the difference would be made up in a little under six years in taxes ($6900 × 6 = $41 400).

Because then the banks won't offer the loans at all. That's how they make money off it. If they didn't make money off it they wouldn't offer it seeing as they could only lose money (if a person died before repaying it, declares bankruptcy, etc). The government would then be the only loan-provider, and they don't provide enough loans to cover an entire four years of tuition at most schools.

I'm not sure providing a blanket government subsidy for college education is the answer either. If you take the 15-19 year old demographic from this wikipedia page: http://en.wikipedia.org/wiki/File:Uspop.svg
You get approximately 20 million people in the 15-19 demographic, so take 1/4 of that and we have 4 million ish college age students every year. 20,000 * 4 million = 80 billion dollars, which actually I think is somewhat reasonable. If the government just got rid of all the loans and grants and replaced it with this, it might work out better. The one huge caveat to this however, is that if this plan were enacted, schools would likely raise their tuition costs by $20,000, since thats 20 grand that every student definitely has available to them.

Edit: forgot, college takes 4 years, 320 billion**
Not quite as reasonable anymore.

Post has been edited 3 time(s), last time on Sep 8 2012, 9:34 am by Vrael.

Your model is very simplistic. Saying "College students earn more than non-college students, so we should make everyone to go to college" is unhelpful. Those that want to go to college, even expensive ones, can take out student loans, get scholarships, etc. Those that don't want to are pressured by the low price in a more subsidized model, and the effect of education on unmotivated students is questionable. As it is, students have the opportunity, in the current model, to go to college. Further subsidies would just make it easier on them (which is nice, but again, as it is, almost everyone has the opportunity to go), while at the same time slowing down the economy by increasing the taxation rate.

I'm not sure you understand why banks give loans.


I subscribe largely to the latter. I believe that the government has an obligation to ensure that as much of the population has access to higher education as possible, but that that should be the end of government intervention, so as much of the system as possible can be run according to efficient free market principles. The government has done its role in this, as almost all students, even those not particularly gifted, have access to public higher education across the country, be it through loans or otherwise. This has ensured that the education system is not a large obstacle to social mobility. From there on, intervention should be limited, as the free market leads to efficiency, and trying to even out the board further yields diminishing returns on the benefits, while being wasteful with government money.

If you actually want to try argue that people are "entitled" to a college education, go ahead. I don't think it's a very defensible point. If you're "entitled" to higher education, why not "entitled" to free housing (because it's impossible to really get anywhere in this country without somewhere to spend the night) or "entitled" to a free car (because it's impossible to really get anywhere in this country without a car)?


I don't think this is a useful post. You're just saying "Oh, yeah, but if we reduced what students had to pay, they'd have to pay less." This issue, like the vast majority of issues, is multidimensional, and focusing exclusively on benefits the students get (with a bad simplistic mathematical model for increased government revenue) is like saying that we should release everyone in Guantanamo Bay because it costs money and it'll make its former inmates happier.

Half of which would be paid back in the increased tax revenue in six years. If schools raised their tuition, then we'd have to revise it. Everything is subject to experimentation before implementation. Ideas that are proven not to work have no purpose outside of research. The amount given can even fluctuate based on a number of factors.

Banks wouldn't front the loans, but they're exploiting students with no interest now fine print high interest later. Education isn't a commodity to be profited in this manner.



I admit the mathematical model is simple, but the center holds, nonetheless. I wanted to attack from an economic view because people tend to warm up to the idea of something being profitable.

---

If you wish to spice it up and only give money to those who need it offer a program where people are rewarded for academic success. Doing well in college should translate into more funding for college, requiring fewer loans. Achieving honors or maintaining a certain GPA should be rewarded in a sort of loan credit, or scholarship by the government, on a scale.

That way those students who work hard can pull out with little to no debt, while the ones who squander what they're given will be forced to take out more loans to pay for college.

Students that work hard do get scholarships and grants...

This isn't a matter of just banks profitting either. Take away the interest banks make and they end up losing money due to inflation and a lot of it.

Here's the problem with the $1 trillion figure:

Student Loans Could Be the Next Housing Bubble: Robert Reich
S&P Warns Student Loans May Be The Next Bubble To Burst In US Economy
Price of Admission: America's college debt crisis
Student Loans, The Next Bubble?

This one by The Economist in particular is good:
Nope, Just Debt: The next big credit bubble?

You might want to reflect further on exactly what it means to have this big swag of debt sitting there. It means young people with debt have less money for other things, like houses. Another interesting thing is that when people default on a student loan, there's no physical asset to repossess and sell: at least with a housing loan there's something physical the bank can seize.

Stop trying to use numbers from an extremely flawed mathematical model to prove your point.

Loans are simple things. If you want to make the claim that a statistically significant number of student loans are given to students took them just because they failed to read the fine print, then please provide citation.

What do you mean the "center holds"? Your model is crap. "attack from an economic view" here, as I see it, means "think up ways to play with numbers, to look more correct". Stop using your model to prove a point. Yes, there is the potential for enhanced government revenue due to higher availability of education. Fine. But you don't know nearly enough, based off of this, to accurately model it. So stop trying to use it as an argument except in the most general sense.

This is currently in place. There are certain selective institutions that provide all of their students with full tuition scholarships. Other expensive colleges, ranging from Reed to Harvard, provide exceptional students with scholarships ranging from nothing to full-tuition. Public universities do the same. Beyond that, there are a large number of college-independent organizations that provide scholarships, both merit-based and other-based.

No "spicing it up" needed.


Not reading five articles for you. Either way, I find it rather odd that you find it appalling that after getting an education, housing and food, people have less money to spend on other crap. Education costs money. Money can be delayed by getting a loan. A loan must be repaid. Yes, that means that until it is, the person is less able to spend. What of it? If you allow students to avoid paying off their debts, then banks will stop giving student loans. Then students who are unable to bear the cost will be unable to get an education. So the only solution at this point would be to make public education free, which has a host of inefficiencies attached. Inefficiencies that would cause more harm to the economy than people organically having to pay off their loans.

Post has been edited 1 time(s), last time on Sep 9 2012, 5:16 am by Centreri.

It's not to read them for me. It's to read them for yourself. So you can actually become informed about what you're talking about. But hey, your choice to argue from igorance.

Please show me where I am "appalled" that people should repay back their loans.

For the record, I paid back my $20k student loan. And I've paid $19,500 back on my $416,000 mortgage in the last 4 months. There's nothing wrong with debt if it's used for productive purposes. The problem is, people are taking out debt to get education which in turn ends up not benefiting them very much, for a variety of social reasons. The more debt you take on for your education, the more important it is that it ends up being useful.

In my country, student loans are given out by the government, not private banks. They are interest free as long as you are studying or working in New Zealand, with a minimum repayment rate. Seems to work quite well, without "being free" as you ridiculously assert is the only other alternative.

Freedom to choose. If it's a bad decision, then they pay for having made it. You seem to be advocating reducing choices because of the possibility of people making stupid ones.

Because money is worth more now than later, interest-free-loans are effectively grants or subsidies. This is the government spending money on you. Just like the governments make public schools cheap or free in other countries. The government may not be subsidizing higher education 100%, as in Sweden, but it's not a fundamentally different system than the US, where states subsidize education in public colleges. In NJ, for example, there's Rutgers, which is very cheap for in-state students.

I honestly have no idea what you're talking about.

I'm not entirely sure what you're even trying to say here, accept that you seem to agree with me that you were stupid to say the only alternative was to make education entirely free, when you've given examples showing that several US state universities already provide a subsidy programme.

Sure.



Not exactly. Those scholarships are often limited to a certain number of recipients. There is no universal scholarship system in place, at least not one I am aware of and on the scale needed.

Harvard pays for nearly all of the student's costs for attending. So does MIT. However, at MIT, only 29% of students come from families with an income less than $75k, which is disproportionate.

This is not to mention the incredible academics required to attain enrollment in those schools (even a 4.0 and perfect extremely high standardized test scores doesn't guarantee entry). They deserve accolades, but it is only benefiting the cream of the academic elite.