My team hires plenty of liberal arts majors. It’s not as if the sole purpose or value in a degree in X is to have a career in X. Nobody majors in “consulting”, yet my company somehow exists. Liberal arts majors do have a somewhat higher default risk than STEM majors, but it’s smaller than the difference between any student at a selective school vs a less selective school. So I suspect a large component of that is selection bias.
And the spreads on compensation are huge. Yes, the median comms major makes less than the median chemE major, but there are still plenty of comms majors making more them chemE majors. And not everyone is good at engineering. And I’d make a shitty member of the communications team that we offer to clients.
One the one hand, you dont want young people to run up $100K in student loans, graduate, not get a job first year, then discharge. Especially as often those student loans are for a bogus learning institution, like trump univ.
First of all, let us make community college free- maybe a $25 registration fee, but basically free. So, not only can you knock off your bonehead english and other Frosh and Soph classes, you could instead take trade classes, such as nursing. In several states, such as CA it is free like that.
Subsidies for middle and lower income students for the next two years- only at not for profit colleges, like Cal State. You want to go to USC? Fine, pay for it. Otherwise, UCLA.
Then make student debt dischargeable after ten years.
The whole student loan crisis is somewhat overblown anyway, as it’s skewed by people who took out big money for, say medical school. Although while yes, it’s possible to borrow $100k for undergrad or for an MFA in puppetry, these aren’t the norm. So I guess the question is, what role should schools, the government, or the banks play in telling people they can’t borrow the money? I don’t feel I have a thoroughly thought-out answer for that.
Everyone should keep in mind that a huge number of people enroll in college and are never finish. So it’s not like everyone is even getting the value of a diploma out of it.
Yes, true, and that is another reason they should go to a 2 year college first. One freind of mine went to the same community college as i did, hated her liberal art classes, but hung out with the nursing students (90% women back then) who told her she could get a two year nursing cert and walk out with into a room full of job offers. She got her LVN, and indeed, got those offers. First year was tough, they made the new nurse do a lot of scut work, but she was making really good money, ( with shift differential ) , and later got nicer and nicer work, including RN.
In CA, starting salary for LVN can be $50K after only two years of college (can be less at a specialized nursing school).
You can get quite a few certs after only two years, leading to quite a number of high demand jobs. Criminal science for instance.
The government made one of the biggest mistakes by guaranteeing student loans. Their intention was to make financing of college debt easier and allow more people to go to college. They did not have the foresight to see the unintended consequences of their actions. If those in charge of the decision had gone to college and studied finance and economics they hopefully would have seen the consequences of their proposed actions and taken a difference course of action.
As the financing of student loans became easier, more and more people applied and enrolled in colleges and universities. These institutions saw huge increases in demand for their product, so what did they do? They raised tuition. It’s what you do when you have limited capacity and growing demand, you raise the price, it’s a matter of simple economics. Even non-profit universities like to add to their endowments with budget surpluses. And students accepted the higher prices because the Federal government was guaranteeing their loans.
You can’t fix the past, but you can fix the future. The government should STOP guaranteeing student loans. Those that already have loans that cannot pay according to current payment schedules, should have their loans adjusted, re-worked, etc. etc., so they can pay under longer terms, etc.
If the Federal government wants to see tuition decline, making the cost of getting a college degree more affordable, then they should begin making grants to state universities across the country to expand their campuses, allowing them to hire more professors, etc. As the supply increases, then tuition rates will decline, to draw more students to fill up the classrooms, dorms, etc. Again, a simple economic principal at work.
I think the best way to make college more affordable is to make college less expensive, not hiding the true cost of college behind student loans. Any time you shield the end-customer from the true cost of something and insert someone in the middle you can expect the amounts being charged to soar (car loans, home loans, health insurance, college loans). As said, colleges get their tuition and don’t care what happens between the student and the middleman - a good recipe for escalating costs and letting someone else take the risk. If colleges were pricing directly to their customers I would think they would be offering more competitive costs.
I agree with others here that using bankruptcy to get rid of student loans would result in a lot of young people finishing school and then just declaring bankruptcy.
The government doesn’t have a role in telling people that can’t take out loans, but the reason those loans are so available is because the lender/underwriter, is looking to the federal government guarantee if that borrower defaults. So the government can stop providing guarantees, and the loan availability will significantly decline.
All responses have been very good and I guess I would have to think about it. What about a modified proposal that you have to wait 10 years before a bankruptcy discharge of these loans? Would we have the same problem? Just people waiting until they are 32 and discharging the loans?
But the more I think about it, the colleges and the lenders need to be held somewhat to account. The bankruptcy laws are there to give debtors a fresh start. No need for a mistake that you made at 18 (and I mean a simple financial one, not where you murdered someone) to haunt you the rest of your adult life.
And even short of outright fraud, those college recruiters do misstate the evidence. They will tell an 18 year old that just barely qualified to get into college in the first place that getting a communications degree will lead to good job opportunities and they will cite their cherry picked statistics to “prove” it. Further, many posters have made great points. The reason college is so expensive and continues to become more expensive is because of the availability of these loans.
I guess I would like a more focused system. With lenders and colleges responsible you would see fewer loans. Sure, you have a bright kid from the inner city that studies show will make a great doctor, engineer, or lawyer, but he just can’t afford tuition? Then we help him out. We see that investing in this kid will make him a productive member of society. I’m all for that. The kid gets a good career, the college gets tuition money, and the lender makes money on the loan. Win, win, win.
But some kid jerking around just going to college to see how much beer he can drink? No, as a lender I’m not investing in that. You have to show me a plan where this degree will allow you to pay me back. If not, then I’m not paying for USC, I’m paying for trade school, or something else. And as harsh as it may sound, if I’m a lender and I see that this kid barely qualified for law school, will likely graduate near the bottom of his class, and have a hard time getting any legal job at all, why should we invest in that? Don’t fall for the Peter Principle. Tell the kid that as far as your money is concerned, he needs to pick something else.
Why not let the college loan the money directly to the student, and have the student pay back the college directly? Leave out the middle man lender. Right now, the college will always get their money, but the risk lies with the bank and ultimately with the student.
If the college shared more in the risk, they would ensure they are loaning money to students with decent prospects and ensure resources are in place to enhance that student’s every ability to succeed, in whatever major. If the student was unable to get a job to pay-off the college, well, they could take a job with the school and pay them off that way. Shared risk without the profit motive provided by the banks (and the colleges).
It’s going to be difficult to go back. Loans have made more people able to go to college. Colleges compete for students by having nicer dorm rooms, nicer student unions, etc. All that costs money. If you eliminate student loans or make colleges finance them, tuition will have to go up more to cover that cost, plus the cost of the “bankers” hired to assess students ability to pay.
Right now with the majority of the loans guaranteed by the government, there is no need to underwrite the debt by the college or the lender. It is the government guarantee that the lender is looking towards. The government guarantee is what got us in this situation.
If you get rid of the guarantee, then lenders will be more discriminating on who they make loans to. And the number of applicants will go down, as many people will not be able to qualify for such loans or they will carry such high interest rates, that no one will want to borrow.
I guess the main issue is that everyone agrees that the system is broken, but every solution touches a live electrical wire that makes it a non-starter. Suppose, for example, that I proposed that a gender studies major not be eligible for federal loans. Well, the left would come out of the woods with pitchforks saying that I just wanted to impose my conservative agenda on students and there would be studies showing how a better appreciation for gender has untold economic benefits, etc. so I just say fuck it and live to fight on a different hill.
I think I have posted this before, but the tuition increases are frankly massive and completely outpace inflation. I live in WV and the tuition at state schools are all the same and set by the state. My father started college in 1968. His tuition was $154 per semester. I started in 1994 and my tuition was $903.40 per semester. My daughter starts in 2021 and tuition this year (2020) is $4,423 per semester.
If you plug that into an inflation calculator, basing it from 1968 dollars, my tuition in 1994 should have been $657.25 and in 2019 it should be $1147.51.
If you take my tuition from 1994 and inflate it to 2019 dollars, it should be $1577.54.
What in the hell are they spending that increased tuition on? You could plate the classrooms in gold leaf and still not justify the extra money.
Note that colleges and universities come in many different types, sizes, missions, levels of solvency, and tuition rates, so that what is true of some is not necessarily true of others.
Of course not. But it shouldn’t be so wildly out of pace with it when their basic mission is the same. Have students come into a classroom and teach them things.
I could see your point if her tuition was $1,900 and I’m here complaining about why it should be $1,500 or $1,100. But this is orders of magnitude different, and I really don’t see any possible reason.
I don’t know why you have to drop this partisan bomb into your own thread, but just picking the first two cites for gender studies salary and mechanical engineer salary, I get this:
Since I had an approved major of electrical engineering I can do math, and I find that MEs seem to make less, on average, than gender studies majors according to those cites. I can’t vouch for either one, I just picked the first one that showed up in a search for gender studies salary and mechanical engineering salary.
On the gender studies site, it says:
I know, I know, those who can, do, and those who can’t, teach, and screw the next generation, but whoa, what’s that? They become lawyers and judges, etc., too!! Why, I think you might be a lawyer.
Exactly so. In a nutshell, the current system socializes the risk (the government = all of us backing those loans), and privatizes the benefits (colleges get to keep tuition, banks get to keep the interest on the loans).