Student loan forgiveness

[Poindexter]

State schools are a great option,

I fully agree with this, within some rational limits. At the undergraduate level with common majors, yes. Stay instate, save your money, and beef up your resume with actual activities outside of school to strengthen your grad school application.

You don't need to go to Harvard (I lived in Boston long enough to have typed "havud.edu" into my browser once upon a time) to get a bachelor's in English. You can get a bachelor's in English (just to stay on point) at "square state in the middle. edu" and then spend a couple years teaching inner city kids @square state in the middle to read, and then apply to Havud for your PhD.

When the admissions committee at ivy.edu is looking at PhD applications your couple years teaching underprivileged kids to put on a Shakespearean play is far more important than having a BA from otherivy.edu.

If it is a licensure thing, there is no good reason to not go to state schools. If you want to be a doctor, it doesn't matter if you go to Princeton or U of square state in the middle. If you want to be a great doctor you need to pass the licensure exam, and then get your butt in gear keeping up with the science. The ink on the wall in your waiting room isn't worth two hoots in a rain barrel six weeks after you get it framed.

A degree, even at the PhD level, is really just a license to learn whatever it is you just got a degree in. You got to run with it, you can't just sit on it.

 

[Poindexter]

You never say hello to you
Until you get it on a redline overload
You never know what you can do
until you get it up as high as you can go.

Just saying.

 

[EbS-P]

And then to know that national lab overhead rates are far, far worse than university ones...

That’s a concept the general public doesn’t realize.

 

[Ashful]

I look at this recent action as a better investment in the future than tax breaks for corporations.

Excellent post, Prof. Very informative. But I do have to take issue with this one sentiment, as I believe it is the core of nearly every government spending problem we have in this country. It's not "either/or", cutting spending on tax breaks for corporations doesn't mean we need to rob equal money from the taxpayers, to give to a bunch of people to not pay back the loan to which they've agreed.

There used to be a time when government (and voters) actually considered not spending money, now we've settled for just moving the spending, and calling it "savings".

 

[old greybeard]

Estimates are now up to a trillion, also heard $2000 per taxpayer to fund this.
What a fool I was to work full time while going to school. And pay my debts off early.
Great lesson we’ll be teaching.

 

[EbS-P]

You can pay for connections. My Brother in law has done very well for himself. Think 100s of millions. There are opportunities he will tell you he missed because he went the state school route. It’s what he could afford at the time. He will be the first to tell you it’s not what you learn it’s the connections that you are paying for. If you are choosing a field where connections are not important it doesn’t matter. There are circles he can’t buy his way into. There are deals he could not make because he didn’t have the pedigree to be present to make them.

 

[EbS-P]

Estimates are now up to a trillion, also heard $2000 per taxpayer to fund this.
What a fool I was to work full time while going to school. And pay my debts off early.
Great lesson we’ll be teaching.

Over 10 years. Or less than some/many people spend on coffee.

 

[stoveliker]

The point is that a full time job these days doesn't even bring in enough money for what college costs per year. (At least a full time job that a student with no papers qualifying him to do anything.)

One truly can't compare the situation as it is now with what we went through in the 90s.

 

[GrumpyDad]

Sorry to start a rant, but after putting myself through school while working full-time, it's hard to sit on this one.

My past: Worked full-time for 14 years, while doing a combination of full-time, part-time, and evening college. Started in 1993, received BS in 2004, and MS in 2007. Worked full-time to pay for my schooling for all of that period, excepting two 9-month windows when school had to take priority. Never took a single dime in student loans, and my parents did not pay for my schooling.

So now, I'm being asked to pay thru my taxes, for those who took an easier path, and now feel they shouldn't have to pay back what they borrowed? That's awful hard to stomach. What about the poor folks who have already scraped to pay back what they owed, and now have to (on top of what they've already paid) pay for someone else's borrowing, through their taxes? Unacceptable.

Stop voting for lunatics who believe they can print a utopia

 

[stoveliker]

I'm sorry, but again, things are being compared that are not equal.

College cost has risen far far faster than income. I'd be glad if my kids go to college with the financial consequences of the 90s.

Maybe we should vote for folks who see the value in educating the people, and don't only pay lipservice to that but put their dollar to it.

I.e. that solve the problem so starting citizens don't start with a "college mortgage" to lay off. It remains a dumb idea to fix the symptom (cancel debt) when the debt accumulation is not being addressed.

 

[brenndatomu]

They used to teach basic household finances in high school...but very rarely now

 

[Prof]

Excellent post, Prof. Very informative. But I do have to take issue with this one sentiment, as I believe it is the core of nearly every government spending problem we have in this country. It's not "either/or", cutting spending on tax breaks for corporations doesn't mean we need to rob equal money from the taxpayers, to give to a bunch of people to not pay back the loan to which they've agreed.

There used to be a time when government (and voters) actually considered not spending money, now we've settled for just moving the spending, and calling it "savings".

Good point, I didn't mean to create a false dichotomy--the loan forgiveness and tax breaks are not related. The thing that worries me about any debt forgiveness is if there has been any behavioral change on the part of the borrower. I work with grad students who often have nicer cars, computers, phones, etc. than I do. So when they graduate with 200K plus in loans it is unfortunate, but largely self-inflicted. If the debt is forgiven, but people have a debt mentality, not much is accomplished. I guess the economy gets a bit of a bump with new spending, but this is temporary. There is something to be said for living within your means--including choosing better options for college choice (or even the choice to not go).

 

[Ashful]

There is something to be said for living within your means--including choosing better options for college choice (or even the choice to not go).

That’s what it boils down to. It’s no secret I’ve done well, but I still have some of the less expensive vehicles in my social circle(s), and I’m the only one I know who has paid off two mortgages on two homes in 10 years each. Watching those who drive a car more expensive than anything I’d ever dream of spending, or spend more per month on clothing or coffee than I do in a year or three, complain about the struggle of paying off their student loan debt, is more than a little frustrating. I can’t help but believe there was a time in the past when such luxuries came only AFTER satisfying obligations.

But I know that’s only a fraction of those carrying this debt. Others are scraping, and still having trouble making ends meet. I do wonder what fraction if this group are those who foolishly spent borrowed money on un-profitable degrees. Not that I want to hold anyone back from their dream of being a literature, music, or history major, we all have our dreams and hobbies, myself included.

But I do have an issue with being asked to pay for it. I’m not the Medici, and your kid isn’t Michelangelo.

 

[EbS-P]

I'm sorry, but again, things are being compared that are not equal.

College cost has risen far far faster than income. I'd be glad if my kids go to college with the financial consequences of the 90s.

Maybe we should vote for folks who see the value in educating the people, and don't only pay lipservice to that but put their dollar to it.

I.e. that solve the problem so starting citizens don't start with a "college mortgage" to lay off. It remains a dumb idea to fix the symptom (cancel debt) when the debt accumulation is not being addressed.

This^ !

 

[Montanalocal]

Under normal conditions, debt forgiveness is treated by the tax code as income. Will this debt forgiveness be treated thusly?

 

[bholler]

That’s what it boils down to. It’s no secret I’ve done well, but I still have some of the less expensive vehicles in my social circle(s), and I’m the only one I know who has paid off two mortgages on two homes in 10 years each. Watching those who drive a car more expensive than anything I’d ever dream of spending, or spend more per month on clothing or coffee than I do in a year or three, complain about the struggle of paying off their student loan debt, is more than a little frustrating. I can’t help but believe there was a time in the past when such luxuries came only AFTER satisfying obligations.

But I know that’s only a fraction of those carrying this debt. Others are scraping, and still having trouble making ends meet. I do wonder what fraction if this group are those who foolishly spent borrowed money on un-profitable degrees. Not that I want to hold anyone back from their dream of being a literature, music, or history major, we all have our dreams and hobbies, myself included.

But I do have an issue with being asked to pay for it. I’m not the Medici, and your kid isn’t Michelangelo.

You also have to look at the fact that many degrees including mine in industrial design would have been pretty profitable at the time I started school but by the time I graduated there were very few jobs available in the US in that field. The same can be said for many other degrees as well.

 

[moresnow]

One more step down the "stupid" path this country is on.

 

[Ashful]

You also have to look at the fact that many degrees including mine in industrial design would have been pretty profitable at the time I started school but by the time I graduated there were very few jobs available in the US in that field. The same can be said for many other degrees as well.

Good point, and something that really keeps me awake at night now, thinking about what professions my children may choose. I fully expect a revolutionary change in the white-collar workforce, more disruptive even than what happened to the blue collars when we were kids. Artificial intelligence is going to replace or heavily augment so many of the professions for which people are going to college, now.

But don't let that ruin my good rant.

 

[old greybeard]

You also have to look at the fact that many degrees including mine in industrial design would have been pretty profitable at the time I started school but by the time I graduated there were very few jobs available in the US in that field. The same can be said for many other degrees as well.

And there are a ton a people getting degrees that have little to no value when they started the degree program and then graduated. For years I hired people for TV entry level jobs, overwhelming numbers of communication graduates. Most from State Colleges. Most should have been working in shirt or car part factories, If we hadn’t shipped them to China for the slaves to work in.
Some of the slowest people I ever met. But mommy and daddy and society said they had to have a degree. And the competition and desire to break into broadcasting kept the wages down. $10 to start until recently, now up to $15. And this is in a top 40 market. And now we have to pay for their stupidity.
Meanwhile HVAC, Auto tech, and hands on dirty, high paying jobs in our area, are desperate for workers.

 

[bholler]

And there are a ton a people getting degrees that have little to no value when they started the degree program and then graduated. For years I hired people for TV entry level jobs, overwhelming numbers of communication graduates. Most from State Colleges. Most should have been working in shirt or car part factories, If we hadn’t shipped them to China for the slaves to work in.
Some of the slowest people I ever met. But mommy and daddy and society said they had to have a degree. And the competition and desire to break into broadcasting kept the wages down. $10 to start until recently, now up to $15. And this is in a top 40 market. And now we have to pay for their stupidity.
Meanwhile HVAC, Auto tech, and hands on dirty, high paying jobs in our area, are desperate for workers.

That is absolutely true. Many people do get degrees with little hope of getting a job in their field. But there are plenty of jobs that you simply won't be eligible for without a degree. As far as hands on jobs many of them expect either experience or training as well though. And even the cost of trade schools has risen sharply

 

[festerw]

You also have to look at the fact that many degrees including mine in industrial design would have been pretty profitable at the time I started school but by the time I graduated there were very few jobs available in the US in that field. The same can be said for many other degrees as well.

I fell into this category as well. Degree in IT, completed in 03 so after the tech bubble burst.

Ended up being a Teamster janitor at PSU making well above what I would have with my degree in the region. By the time IT recovered my knowledge was out of date and (mostly) useless.

Like someone else mentioned earlier the overwhelming issue with student loans is the interest, kids are getting buried with it and that seems to be the biggest complaint from them. I've got coworkers who have been paying for 15 years and only managed to make a small dent in the actual principle of the loan.

You also have to consider you're asking 18 year olds to be responsible for basically an open checkbook for school costs, while there are some that are there's a majority that aren't responsible. You're also never going to be able to find a part time job to cover the majority of your tuition costs like you could 30 years ago, hell even a lot of full time jobs won't.

This problem doesn't only exist in colleges either. You've got parents going into debt to send their kids to private elementary/high schools, you've got newly enlisted soldiers buying $60k trucks at 15% interest, the list goes on.

 

[EbS-P]

That’s what it boils down to. It’s no secret I’ve done well, but I still have some of the less expensive vehicles in my social circle(s), and I’m the only one I know who has paid off two mortgages on two homes in 10 years each. Watching those who drive a car more expensive than anything I’d ever dream of spending, or spend more per month on clothing or coffee than I do in a year or three, complain about the struggle of paying off their student loan debt, is more than a little frustrating. I can’t help but believe there was a time in the past when such luxuries came only AFTER satisfying obligations.

But I know that’s only a fraction of those carrying this debt. Others are scraping, and still having trouble making ends meet. I do wonder what fraction if this group are those who foolishly spent borrowed money on un-profitable degrees. Not that I want to hold anyone back from their dream of being a literature, music, or history major, we all have our dreams and hobbies, myself included.

But I do have an issue with being asked to pay for it. I’m not the Medici, and your kid isn’t Michelangelo.

There have always been services we pay for that we don’t use. Roads we don’t drive on. Programs we are not eligible for, or just don’t utilize. Going down line item by line item of a tax payer funded budget just isn’t worth it for me.

College builds basic skills. It’s not, with the exception of nursing and teaching (and other degrees that have some practicum component) training you for a specific job. There still exists a healthy bit of on the job training that should happen. The accreditation process for new degrees and programs likely is much slower than the evolving job market. We graduate a lot of bio and marine bio majors. It took us 5 years to get a costal engineering program on the book and a total of 7years to graduate students.

business schools have more direct pipelines and direct applications of course work to job work. their training is based around the generic widget. I don’t buy many of those these days

I fell into this category as well. Degree in IT, completed in 03 so after the tech bubble burst.

Ended up being a Teamster janitor at PSU making well above what I would have with my degree in the region. By the time IT recovered my knowledge was out of date and (mostly) useless.

Like someone else mentioned earlier the overwhelming issue with student loans is the interest, kids are getting buried with it and that seems to be the biggest complaint from them. I've got coworkers who have been paying for 15 years and only managed to make a small dent in the actual principle of the loan.

You also have to consider you're asking 18 year olds to be responsible for basically an open checkbook for school costs, while there are some that are there's a majority that aren't responsible. You're also never going to be able to find a part time job to cover the majority of your tuition costs like you could 30 years ago, hell even a lot of full time jobs won't.

This problem doesn't only exist in colleges either. You've got parents going into debt to send their kids to private elementary/high schools, you've got newly enlisted soldiers buying $60k trucks at 15% interest, the list goes on.

Appears we have a banking issue. “ We are happy to lend you more money than you can ever reasonably pay back”

 

[old greybeard]

That is absolutely true. Many people do get degrees with little hope of getting a job in their field. But there are plenty of jobs that you simply won't be eligible for without a degree. As far as hands on jobs many of them expect either experience or training as well though. And even the cost of trade schools has risen sharply

Vo-tech is free. My sil teaches at a local vo tech. They’ve turned into a dumping ground for students with learning disabilities. The hvac, Auto tech, plumbing, auto body classes aren’t filled. When I graduated you couldn’t get in vo tech without good grades, had a waiting list.
The hvac company we use will train on the job. As will the true unions, carpenters, plumbers. Capitol police in hbg just advertised paid intenships, 40k a year, they pay for your HAAC training while in the payed program. Can’t get workers.

 

[old greybeard]

Over 10 years. Or less than some/many people spend on coffee.

Please show where they actually have a plan to finance this trillion over 10 years. Meanwhile we pay interest on the debt WE assume. I guarantee there s no financially sound plan to pay for this.
Pandering.
Destroying the dollar and the savings of those of us who are responsible.

 

[bholler]

Vo-tech is free. My sil teaches at a local vo tech. They’ve turned into a dumping ground for students with learning disabilities. The hvac, Auto tech, plumbing, auto body classes aren’t filled. When I graduated you couldn’t get in vo tech without good grades, had a waiting list.
The hvac company we use will train on the job. As will the true unions, carpenters, plumbers. Capitol police in hbg just advertised paid intenships, 40k a year, they pay for your HAAC training while in the payed program. Can’t get workers.

Well vo-tech isn't free it is tax payer funded just like some want for higher education. But you are absolutely correct it has turned into. A dumping ground. And I have hired kids straight out of the vo-tech masonry course it honestly doesn't teach what is actually needed to do the job. And in some cases it was harder to retrain them than it would have been to just start from scratch.

It's really a shame that program isn't being used to it's potential.